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BULK CASH TRANSFERS FROM RUSSIA TO NORTH KOREA

On 20th March, a post on Arms Control Wonk was concerned to an article the author had written for NK News.  She refers to the Korea General Corporation for External Construction (GENCO), as it is termed in the recent UN Panel of Experts report (and which she says she called the Korean General Corporation for External Construction in her NK News article).  The UN Panel links this company to North Korea’s intelligence apparatus, the Reconnaissance General Bureau (RGB) – which is subject to sanctions.  She says that the cash transfers from Russia were presented as a form of remittances from North Korean workers in Russia to their relatives in the DPRK.  Yet, when the workers’ money was to be reclaimed in a recent court case, the court records list a GENCO representative as the intended recipient and nominally responsible for its return to its rightful owners.  This may provide a typology for how representatives of DPRK entities assert control over foreign workers overseas, she says.  Various Russian companies are authorised to employ North Korean workers.  If GENCO is the actual recipient of the cash, the method of transfer would be as follows –

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https://www.armscontrolwonk.com/archive/1206977/cashing-in-on-the-construction-industry/

The NK News article she refers to is available at –

https://www.nknews.org/2019/03/judge-juche-how-russian-courts-punish-north-korean-cash-smuggling/?c=1552893419868

Providing North Korean workers in return for hard currency is a useful and important source of funds for the regime.  The article says that in Russia, undeclared cash transfers are illegal if they are the undeclared import or export of currency valued over $10,000.  Russian authorities have caught several such individuals, and the way Russia has handled their prosecutions sheds light on the country’s implementation of the UN sanctions regime.  The article analyses some recent cases, which appear to show sanctions enforcement is not a priority.

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US/CANADIAN AID ORGANISATION GIVEN PERMISSION TO SEND ITEMS TO NORTH KOREA

On 21st March, NK News reported that the Mennonite Central Committee has been granted sanctions exemption, receiving approval from the UN to deliver items to North Korea such as hygiene kits and water filters prohibited under international sanctions.  Metal components were included that were technically prohibited under sanctions.  The items include 360 water filter buckets, 2,500 hygiene kits with metal nail clippers, 1,000 relief kits with metal nail clippers and metal bucket handles, and 1,250 infant care kits that include safety pins.  The metal and steel contained in items are prohibited under UN SCR 2397, , which covers a broad range of metals under HS Codes 72 through 83.

https://www.nknews.org/2019/03/mennonite-central-committee-wins-sanctions-exemption-to-bring-metals-into-dprk/

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OTHER THINGS YOU MAY HAVE MISSED – MARCH 20

20th March 2019

US DoJ CLARIFIES GUIDANCE ON USE OF MESSAGING SYSTEMS BY COMPANIES IN BRIBERY INVESTIGATIONS

On 20th March, the Wall Street Journal commented on revised guidance from the DoJ on its attitude to rewarding co-operation in foreign bribery investigations.  It had said that evidence of good practice that could be rewarded included that companies should prohibit the improper destruction of business records, with steps such as “prohibiting employees from using software that generates but does not appropriately retain business records or communications” – this was taken to refer to messaging systems such as WhatsApp.  The revised guidance does not use the word “prohibiting”.  Instead it refers to “appropriate guidance and controls on the use of personal communications and ephemeral messaging platforms that undermine the company’s ability to appropriately retain business records or communications or otherwise comply with the company’s document retention policies or legal obligations”.

https://www.justice.gov/jm/jm-9-47000-foreign-corrupt-practices-act-1977

US: SUMMARY OF ARMS AND NON-PROLIFERATION TREATIES

On 19th March, USNI News published a US Congress report on both bilateral (US-Russia) and multilateral (e.g. Biological Weapons Convention) treaties and conventions to which the US is (or was) party.

https://news.usni.org/2019/03/19/summary-arms-nonproliferation-treaties

USDA STEPS UP FIGHT AGAINST THREAT OF AFRICAN SWINE FEVER

Successful Farming on 19th March reported that the highly contagious and deadly African swine fever (ASF) that is spreading throughout China is becoming more of a concern every day for US officials, and that recently officials seized 1 million pounds of pork smuggled from China.  Now the Secretary of Agriculture has released pdfs of information about the risk pathways, biosecurity on farms, signs and symptoms of the disease, and traveller tips.

https://www.agriculture.com/news/livestock/usda-steps-up-fight-against-threat-of-african-swine-fever

SWINE

https://www.aphis.usda.gov/animalhealth/swine/asf

KENYA: “FAKE $2 MILLION” SEIZED AT BARCLAYS BANK BRANCH

On 20th March, Business Daily reported that police had seized what was described as $20 million in what they said was fake currency at the Barclays Kenya Queensway Branch in Nairobi.  Barclays said that one of its customers at the branch had kept the fake currency in a safe deposit box.  The seizure came day after the Central Bank of Kenya issued a tough directive to banks on handling of illicit cash.

https://www.businessdailyafrica.com/news/539546-5033372-5u71nmz/index.html

CHAIRPERSON AND COUNCILLOR AT THE INDEPENDENT COMMUNICATIONS AUTHORITY OF SA (ICASA) REMOVED AFTER LANDBANK CONVICTION

Times Live on 20th March reported that Rubben Mohlaloga has been removed from holding the positions of chairperson and councillor at the Independent Communications Authority of SA (Icasa).  This follows his February sentence – an effective 20 years behind bars – for money laundering and fraud linked to a Land Bank scam.

https://www.timeslive.co.za/news/south-africa/2019-03-20-legalities-sorted-rubben-mohlaloga-loses-icasa-gigs/

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LATVIA MAKING GOOD PROGRESS WITH IMPLEMENTATION OF MONEYVAL RECOMMENDATIONS, SAYS PRIME MINISTER

A news release from the Latvian Information Agency on 19th January reported that Latvia has been making good progress with implementation of recommendations offered by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval), Prime Minister Krisjanis Karins told reporters.  The Financial Sector Development Council had a meeting to discuss progress with implementation of Moneyval’s recommendations and other financial matters.

http://www.leta.lv/eng/home/important/134146F1-ABEC-1930-67B0-724EF589A29D/

A PROBLEM FOR SINGLE-MEMBER US LLC

On 18th March, Greenspoon Marder published an article saying that under state law in many US states if an LLC is wholly-owned (i.e., a single member LLC) by one person, then not only can a creditor bypass any charging order protections under state law, but may also compel a transfer of the LLC interest to the creditor.  However, if an LLC has at least a second member, then foreclosure is forbidden and the creditor may only seek a charging order.

https://www.gmlaw.com/news/think-twice-if-you-own-100-of-a-limited-liability-company/

CONSPIRACY THEORISTS AND CRIMINALITY

An article from Sydney Criminal Lawyers in Australia on 19th March reported that recent research by psychologists from the universities of Kent and Staffordshire has found that those who subscribe to conspiracy theories are more likely to commit low-level crimes, such as larceny.

https://www.sydneycriminallawyers.com.au/blog/conspiracy-theorists-and-criminality/

TRUMP ADMINISTRATION OPENS DOOR TO PRIVATE LAW SUITS AGAINST CUBA

On 19th March, Greenberg Traurig published an article saying that, on March 19th, a never-before-used Cuban embargo measure goes into effect that makes it possible for US claimants to sue the Cuban government in US courts for confiscated Cuban property.  The measures could be further expanded on April 17th to permit lawsuits against non-Cuban entities operating in Cuba.

https://www.gtlaw.com/en/insights/2019/3/trump-administration-cracks-open-door-to-private-law-suits-against-cuba-with-partial-libertad

NO COMMON LAW RULE AGAINST SET-OFF IN FREIGHT FORWARDING CONTRACTS

Forwarder Law on 19th March published an article about a recent High Court case which has further defined the limits of the common law rule against set-off from freight.  It says that the rule against set-off from freight is a long standing and well-established rule that prevents a party from withholding freight, payable in respect of a carriage contract, on the basis of counter claims.  The rule means that if a party wants to claim for damage to goods, they are required first to pay the freight and then pursue their claim separately.  The rule has its origins in sea carriage but has since been extended to carriage by road and, more recently, air.  In the recent case the Commercial Court refused to “extend” the rule to sums due under a freight forwarding contract.  The article concludes that the decision demonstrates the continued judicial scepticism over the rule against set-off.  That scepticism is likely to ensure that the rule will, as far as possible, be narrowly construed.

http://forwarderlaw.com/2019/03/19/no-common-law-rule-against-set-off-in-freight-forwarding-contracts/

PRESSURE MOUNTS ON HONG KONG TO REMOVE ECONOMIC CRIMES FROM NEW CHINA EXTRADITION LAW

The Hong Kong Free Press on 20th March reported that a member of the Standing Committee of China’s top legislature has said that Beijing has no opinion over whether the Hong Kong government should remove economic crimes from a list of offences included in extradition law reform.  The business sector has voiced concern about the proposal, which would allow the city to accept extradition requests from the mainland and Taiwan, including for offences relating to financial crime.   The 46 crimes listed in the plan include offences relating to fiscal matters, taxes or duties, offences relating to securities and futures trading, as well as crimes relating to false or misleading trade descriptions, among others.

https://www.hongkongfp.com/2019/03/20/pressure-mounts-hong-kong-remove-economic-crimes-new-china-extradition-law

GUATEMALAN JUDGE ORDERS ARREST OF FORMER ATTORNEY GENERAL ON CHARGES INCLUDING EMBEZZLEMENT

Reuters on 20th March reported that the warrant for the arrest of Thelma Aldana cited charges of embezzlement, lying and tax fraud. Aldana has denied wrongdoing.  She said that her presidential candidacy, approved by electoral authorities, had granted her immunity and that she would not take action against the arrest order.  The President, Jimmy Morales, has fought back against an UN-backed anti-corruption body that, along with Aldana, sought to impeach him in a campaign financing investigation.

https://www.reuters.com/article/us-guatemala-aldana/guatemalan-judge-orders-arrest-of-former-attorney-general

NEW ZEALAND PONZI SCHEME: FOREX TRADER ADMITS DEFRAUDING CLIENTS OF $7 MILLION

The New Zealand Herald on 20th March reported that Kelvin Clive Wood, 69, an Auckland foreign exchange broker has admitted running a Ponzi scheme to defraud his clients of more than $7 million.

https://www.nzherald.co.nz/crime/news/article.cfm

JUNCKER UNDER ATTACK FOR DISMISSING CONCERNS THAT CONTROVERSIAL ART STORAGE FREE PORTS MAY BE ENABLING MONEY LAUNDERING

The BBC on 20th March reported that MEPs have criticised the response of the European Commission president to allegations about “freeports” – tax-exempt warehouses for high-value goods close to ports and airports.  They include one in Luxembourg which was authorised when Mr Juncker was prime minister of Luxembourg. Freeports were originally designed as bonded warehouses to exempt goods in transit from import duties or sales taxes such as VAT., but they are now used to store high-value items such as paintings, precious stones, gold and antiquities for indefinite time periods.  Ownership of the goods can also legally be traded, transferring large sums without any public disclosure of information about transactions.

https://www.bbc.co.uk/news/business-47626281

UN PEACE OPERATIONS AND ORGANISED CRIME

On 20th March, ETH Zurich published a paper which said that, despite organised crime being recognised as a serious threat to international peace and security, UN missions still lack clear mandates to tackle the problem.  It said that several studies and UN reports over the past 2 decades have demonstrated how armed groups — including extremist movements — resort to illicit trafficking to finance their activities and detailed how organised crime can be an important driver of conflict and instability, particularly when it penetrates and/or co-opts States institutions at the local and national levels.  Organised crime, it says, is recognised as a serious threat to international peace and security.  It remarks that a 2016 external review of the UN Police Division also suggested that a better evaluation of organised crime at headquarters was needed to help support field missions.  In eventually created in MINUSMA its first dedicated (but multinational) serious organised crime (SOC) Support Unit.  This consisted of more than 20 individual police officers dedicated to supporting the Malian authorities with training and equipment.  Similar units have been created in the UN operations in the Central African Republic (MINUSCA) and the Democratic Republic of the Congo (MONUSCO).  However, it says that going forward, peace operations need to be both more ambitious and more realistic about their approach to organised crime.

https://isnblog.ethz.ch/peace/still-flying-blind-peace-operations-and-organised-crime

UK REGULATOR TARGETS HUNDREDS OF LAW FIRMS IN NEW AML ASSAULT

The Law Society Gazette on 20th March reported that the Solicitors Regulatory Authority is to demand that hundreds of firms explain exactly what they are doing to comply with money laundering rules – with tough penalties promised for those falling short, with plans to write to an initial 400 firms asking them to demonstrate compliance with the government’s Money Laundering Regulations 2017.

https://www.lawgazette.co.uk/news/sra-targets-hundreds-of-firms-in-new-anti-money-laundering-assault/5069675.article

SINGAPORE REJECTS SRI LANKAN LEADER’S ALLEGATION ON TRADING SCAM SUSPECT

The Daily Mail on 20th March reported that Singapore has rejected the Sri Lankan President’s allegation that it was sheltering a former central bank chief wanted for fraud, saying it had failed to provide documents to support its extradition request.  Sri Lanka had accused Singapore of sheltering Arjuna Mahendran, wanted in connection with a high-profile $74 million insider trading scam.

https://www.dailymail.co.uk/wires/afp/article-6829773/Singapore-rejects-Sri-Lankan-leaders-allegation-trading-scam-suspect.html

ELECTRONIC SALES SUPPRESSION: RESPONSE TO A CALL FOR EVIDENCE

On 19th March, the Chartered Institute of Taxation published its response to a HMRC call for comments on electronic sales suppression fraud affecting VAT.

https://www.tax.org.uk/policy-technical/submissions/electronic-sales-suppression-call-evidence-ciot-response

JERSEY ECONOMIC SUBSTANCE REQUIREMENTS – THE COMPANY AND BANKING AND FINANCE PERSPECTIVES

On 19th March, Olswang published 2 new articles.

https://www.ogier.com/publications/jersey-substance-proposals-the-company-perspective

https://www.ogier.com/publications/jersey-substance-proposals-the-banking-and-finance-perspective

MALTA: CUSTOMS OFFICIALS MAKE €32.4 MILLION COCAINE SEIZURE AT FREEPORT

Newsbook in Malta on 19th March reported that it is understood that during an inspection, officials from the Container Monitoring Unit flagged up of 12 refrigerated containers going through Malta Freeport.  Follows scans of the fruit containers, 3 contained a number of hidden packages, while a fourth was also discovered to contain a further suspicious package hidden within an inner compartment.  Officials found a total of 240 packages of a combined weight of 288 kg.  It is understood that the 4 containers had all originated from South America, transiting through Malta to another EU Member State.

https://www.newsbook.com.mt/artikli/2019/03/19/customs-officials-make-e32-4m-cocaine-seizure-at-freeport/?lang=en

VIETNAM: CUSTOMS WILL STRICTLY CONTROL GOODS TRANSITED AND TEMPORARILY IMPORTED FOR RE-EXPORT TO CAMBODIA

Customs News in Vietnam on 18th March reported that the Customs agency will strengthen the control acts of transiting and temporarily importing for re-export of a number of key commodities from Vietnam to Cambodia, to promptly detect the abuse of incentive policies for these commodities that implement trade frauds, smuggling and transportation of banned goods and goods infringing intellectual property rights into Vietnam; prevent the act of partly withdrawing goods transited and temporarily imported for re-export to be consumed in Vietnam.  This, it said, is after loopholes were detected in current controls.

https://customsnews.vn/customs-will-strictly-control-goods-transited-and-temporarily-imported-for-re-export-to-cambodia-10065.html

ARGENTINA DISMANTLES PILL RING THAT SOLD OPIOIDS TO US CUSTOMERS

Insight Crime on 19th March reported that authorities in Argentina have dismantled an organisation illegally selling opioids and counterfeit medicines online to US customers, revealing a number of legal loopholes exploited by these criminal groups.  It mainly operated from Buenos Aires, illegally sold opioids without prescriptions — as well as counterfeit medicines from Romania and India — through its website named Goldpharma.  The drugs were bought by US customers, and, more recently, local clients.

https://www.insightcrime.org/news/brief/argentina-dismantles-intricate-illegal-opioid-network/

VENEZUELA SUSPENDED OIL EXPORTS TO INDIA: VIEWS RUSSIA AND CHINA AS ITS MAIN EXPORT DESTINATIONS

On 20th March, the Hellenic Shipping News reported claims that Venezuela has suspended its oil exports to India and views Russia and China as its main export destinations.  The Indian market has been crucial for Venezuela’s economy because it has historically been the second-largest cash-paying customer for the OPEC country’s crude, behind the US.

https://www.hellenicshippingnews.com/venezuela-suspends-oil-exports-to-india-azeri-energy-ministry/

UK OFFSHORE TAX EVASION CLAMPDOWN PRODUCES 5.67 MILLION FINANCIAL RECORDS

Accountancy Daily on 20th March reported that the crackdown on tax avoidance and evasion by individuals with offshore financial interests has resulted in over 3 million reports from overseas tax authorities to HMRC about UK residents holding funds offshore as a result of data generated through the Common Reporting Standard (CRS) – which sees over 100 jurisdictions automatically exchanging financial account information between tax authorities, with the intention of making it harder for people to hide money abroad as it gives HMRC much more detailed insight into offshore non-compliance.

https://www.accountancydaily.co/offshore-tax-evasion-clampdown-produces-567m-financial-records

UK: ‘CONVOLUTED’ FINANCIAL TRANSACTIONS SEE 2 CHARITY TRUSTEES REMOVED

Accountancy Daily on 20th March reported that the founding trustees of The Suyuti Institute, a Birmingham based charity, have been disqualified by the Charity Commission, and following their removal, and after an investigation it found them responsible for misconduct and mismanagement in its financial affairs.

https://www.accountancydaily.co/convoluted-financial-transactions-see-two-charity-trustees-removed

PODCAST: ADDRESSING DOPING IN SPORT 

In the latest TRACE podcast, Paul Massaro of the Helsinki Commission discusses the scope of doping in international sport, the foreign policy implications and the Rodchenkov Anti-Doping Act (RADA) offered in response.

https://traceinternational.org/bribe_swindle_or_steal

KARADZIC HANDED LIFE SENTENCE FOR BOSNIA WAR CRIMES

EurActiv on 20th March reported that former Bosnian Serb leader Radovan Karadzic, 73, will spend the rest of his life in jail for the “sheer scale and systematic cruelty” of his crimes in the war that tore his country apart a quarter of a century ago, judges at the UN war crimes tribunal said.

https://www.euractiv.com/section/politics/news/karadzic-handed-life-sentence-for-bosnia-war-crimes/

UK: EXPORT DRUGS AND MEDICINES – SPECIAL RULES

The Home Office on 20th March published updated guidance explaining how you must get permission to export certain drugs and medicines.  You need permission to export controlled drugs like opioids, certain stimulants or psychotropic substances; certain drugs that can be used in lethal injections outside the EU (such as in the US); and medicines for humans or animals.  It explains that there is a different process if you ravel with controlled drugs for personal use. For example, taking medicine with you on holiday.

https://www.gov.uk/guidance/export-drugs-and-medicines-special-rules

ITALY’S 5-STAR PARTY HIT AS ROME PARTY FIGURE ARRESTED FOR GRAFT

Reuters on 20th March reported that – Marcello De Vito, the president of Rome’s city council and de facto deputy mayor – a senior figure in Italy’s ruling 5-Star Movement was arrested on suspicion of corruption, dealing an embarrassing blow to group that has always tried to project a squeaky clean image.

https://uk.reuters.com/article/uk-italy-5star/italys-5-star-hit-as-rome-party-figure-arrested-for-graft-idUKKCN1R11LT

UK SUPREME COURT ALLOWS ‘REASONABLE DILIGENCE’ APPEAL IN FRAUD CLAIM

The Law Society Gazette on 20th March reported that a person who applies to set aside a judgment on the basis of fraud does not have to demonstrate that the fraud could not have been spotted with reasonable diligence, the Supreme Court has ruled – resolving a conflict between the principles that fraud unravels all and that there must come an end to litigation.  The case involved a Coventry property owner who had been defrauded by a cousin in an agreement transferring the ownership of dilapidated buildings to a company.

https://www.lawgazette.co.uk/law/supreme-court-allows-reasonable-diligence-appeal-in-fraud-claim/5069689.article

7 TERRITORIES RECEIVE CLEAN BILL OF HEALTH ON TAX TRANSPARENCY

Low Tax from Wolters Kluwer reported on 20th March Hong Kong, Liechtenstein, Luxembourg, the Netherlands, North Macedonia, Spain, and the Turks and Caicos Islands have been rated “Largely Compliant” with international tax transparency standards following a peer review by members of the OECD Global Forum.  This comes as the OECD published 7 new peer review reports assessing the territories’ efforts to comply with international tax transparency standards on the exchange of information on request.

https://www.lowtax.net/news/Seven-Territories-Receive-Clean-Bill-Of-Health-On-Tax-Transparency-97051.html

GUERNSEY SIGNS MoU WITH FCA TO ENSURE FUNDS ACCESS AFTER BREXIT

Low Tax from Wolters Kluwer reported on 20th March that Guernsey FSC has signed a MoU with the UK’s Financial Conduct Authority to ensure market access for Guernsey investment funds into the UK after Brexit.

https://www.lowtax.net/news/Guernsey-Signs-UK-MoU-To-Ensure-Funds-Access-After-Brexit-97050.html

HIGH COURT: YEAR-LONG WAIT IN TAX FIRST-TIER TRIBUNAL CASE ‘FRANKLY UNACCEPTABLE’

Out-Law on 20th March published an article saying that a wait of up to a year for a case to be heard in the First-tier Tribunal (FTT) was described as “frankly unacceptable” by the High Court.  It also says that the backlog of tax disputes waiting to be heard by the FTT reached 28,800 last year, more than double the 2009-10 figure – the third year in a row that the number has increased.  The judge made the comments as he granted an injunction requiring HMRC to temporarily reinstate an approval that a wholesaler of alcohol needed in order to trade.

https://www.out-law.com/en/articles/2019/March/high-court-year-long-wait-in-tax-first-tier-tribunal-case-frankly-unacceptable/

ARGENTINA’S FORMER PRESIDENT FACING MORE GRAFT CHARGES

On 20th March, Baker McKenzie reported that former president Cristina Kirchner was charged with a new corruption case for the second day running, this time related to irregularities in the concession of subsidies for train and bus operators.  The 66-year-old senator was already facing numerous allegations before she was indicted on Monday for the fraudulent import of liquid gas.

http://www.riskandcompliancehub.com/argentinas-scandal-hit-ex-leader-facing-more-graft-charges/

ASIAN FISHING FLEETS COMMIT YET ANOTHER ILLEGAL FISHING INCIDENT IN ARGENTINE WATERS

On 20th March, the Center for International Maritime Security reported on an incident, an operation that highlights how Asian fleets are willing to travel long distances in order to make a profit, and how Latin American navies and coast guards need to be more focused than ever before on combating unauthorised fishing.  It says that the incident highlights one obvious fact: illegal, unauthorised and unregulated (IUU) fishing does not occur simply because Latin American and Caribbean fishing vessels break the law, but vessels from elsewhere, particularly large fleets from Asian nations, are willing to travel long distances in order to make a profit and satisfy their nation’s demands.

http://cimsec.org/asian-fishing-fleets-commit-yet-another-illegal-fishing-incident-in-argentine-waters/39817

ART AND MONEY LAUNDERING WHY THE GLOBAL ART MARKET NEEDS REGULATION

On 20th March, the Artlyst website published an article by Peter D. Hardy a partner at Ballard Spahr, writing for the firm’s blog.  He says that high-end art, antiquities, and antiques have become more and more attractive to money launders.  Prices for paintings and objects have seen an upward growth trend as more vigilant global enforcement agencies crack down on previously unregulated markets such as real estate.  The article asks if AML controls should go beyond banks and the stock market and be applied to Sotheby’s, Christie’s and Phillips the world’s leading auction houses as well as the major art fairs which have dominated the art market for many years.

https://www.artlyst.com/news/art-money-laundering-global-art-market-needs-regulation/

LITHUANIAN PLEADS GUILTY IN US TO MASSIVE FRAUD AGAINST GOOGLE, FACEBOOK

Reuters on 20th March reported that a Lithuanian man, Evaldas Rimasauskas, 50, pleaded guilty to US charges that he helped orchestrate a scheme to defraud Facebook Inc and Alphabet Inc’s Google out of more than $100 million.

https://uk.reuters.com/article/us-cyber-fraud-tech/lithuanian-pleads-guilty-in-u-s-to-massive-fraud-against-google-facebook-idUKKCN1R12FB

BANGLADESH: SHIPMENT DELAYS RAISE FRAUD RISKS

In its 21st March edition, the Daily Star reported that shipment delays and late presentation of documents in the export-import process raise the risks of fraudulence and money-laundering in Bangladesh, according to a survey.  In 47% of cases, nominated banks in Bangladesh received discrepancy notices whereas local issuing banks served such notices on their foreign counterparts in 48% of cases in 2018.  The Bangladesh Institute of Bank Management (BIBM) conducted the survey.  Due to the concerns over issues of trade-based money laundering, compliance requirements, and other financial crimes, the central bank has toughened requirements to enhance trade quality, a deputy governor of the Bangladesh Bank said.

https://www.thedailystar.net/business/news/shipment-delays-raise-fraud-risks-1718173

 

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UK COUNTER-TERRORISM SANCTIONS: GUIDANCE

On 20th March, the Home Office published guidance on the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019, which is intended to assist people in implementing and complying with the Regulations.  It covers the prohibitions and requirements imposed by the regulations. It also provides guidance on best practice for complying with the prohibitions and requirements, enforcing them, circumstances where they do not apply.  The guidance should be read alongside more detailed sanctions guidance published by OFSI.

https://www.gov.uk/government/publications/counter-terrorism-sanctions-guidance

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UK FORMALLY REMOVES 4 ENTRIES FROM IRAQ SANCTIONS LIST

On 20th March, a Notice from HM Treasury advised that following changes made by the UN and EU, the GENERAL ESTABLISHMENT FOR MAIN OUT PALL DRAIN; the NATIONAL TOBACCO STATE COMPANY, the STATE ENTERPRISE FOR PETROCHEMICAL INDUSTRIES; and the STATE ENTERPRISE FOR PULP AND PAPER INDUSTRIES have been removed from the UK Consolidated List.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787666/Notice_Iraq_2019_432.pdf

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UK AMENDS SANCTIONS LISTING OF HAMZA USAMA MUHAMMAD BIN LADEN

On 20th March, a Notice from HM Treasury advised that the UK Consolidated List had been amended in accordance with changes made to the EU listing of Hamza Usama Muhammad BIN LADEN by means of EU Regulation 2019/431/EU.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787659/Notice_ISIL_2019_431.pdf

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RUSSIAN TYCOON KERIMOV BACK UNDER INVESTIGATION IN FRANCE OVER TAX

Reuters on 20th March reported that a French judge has placed Russian tycoon Suleiman Kerimov – whose family controls Russia’s largest gold producer Polyus – back under formal investigation on suspicion of complicity in aggravated tax fraud, the prosecutor in the southern city of Nice said.

https://af.reuters.com/article/worldNews/idAFKCN1R11B5

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EXPANDING THE CAPABILITY OF FINANCIAL INFORMATION-SHARING PARTNERSHIPS

An Occasional Paper from RUSI on 20th March says that public–private financial information-sharing partnerships have become increasingly useful in understanding and mitigating economic crime.  This Occasional Paper examines how these partnerships’ role can be expanded for greater impact.  It says that a research programme asked public and private partnership leaders and other expert stakeholders in 22 high-level events, held over 12 months in 13 jurisdictions a number of questions.  The Paper says that several partnerships have already stated ambitions to increase their scope, membership or capacity.  The Australian Fintel Alliance, for example, has described an operational ambition to introduce new members to the partnership, including: casinos; fintechs; foreign banks; foreign law enforcement agencies; second-tier banks; and second-tier remitters.  UK policymakers have also described an intention to include accountancy and professional perspectives in UK Joint Money Laundering Intelligence Taskforce (JMLIT) information sharing.

https://www.rusi.org/publication/occasional-papers/expanding-capability-financial-information-sharing-partnerships

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WHAT YOU NEED TO KNOW ABOUT THE WTO

On 25th January, the UK Institute of Export and International Trade published a short briefing that explains 9 key things you need to know about how WTO rules work and their potential impact on the UK’s trading position.

https://www.export.org.uk/news/352415/What-you-need-to-know-about-the-WTO.htm

WHAT WOULD ‘TRADING ON WTO TERMS’ MEAN?

wto

The Institute has also produced this short briefing paper.  It concludes by saying that WTO terms provide a basic floor for world trade. Most obviously, there are the schedules describing the market access all members receive in terms of the tariffs they pay on goods, the conditions under which they can provide services in other territories, along with measures to limit barriers at borders.  Taken together, these provide a basic level of predictability and non-discrimination.  Members cannot discriminate against others by charging them higher tariffs or putting in place specific measures, for example discriminating against UK foodstuffs, without specific grounds to justify this behaviour.  However, it says, the inadequacies of these arrangements provide incentives for countries to go further and seek preferential access to tackle issues inadequately covered through WTO rules.  The UK will, as other members do, want to seek the closest relationship possible with the EU given political constraints.  The WTO option alone would have a significantly disruptive impact on trade between the UK and the EU, and even on some UK trade with other parts of the world.  Falling back on WTO terms would be, to say the least, suboptimal politically, economically and socially.

https://cdn.ymaws.com/www.export.org.uk/resource/resmgr/media/news/what-would-trading-on-wto-te.pdf

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US EXTENDS WAIVER TO ALLOW IRAQ TO BUY IRANIAN ENERGY SUPPLIES

Rferl on 20th March reported that the US is extending a waiver to allow Iraq to continue to buy electricity from Iran, despite sanctions imposed by Washington targeting Iran’s energy sector.  The original waiver, issued in December 2017, expired on March 19th.

https://www.rferl.org/a/us-extends-waiver-iraq-iran-energy-purchases/29831340.html

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INDIA: SUPREME COURT QUASHES CRIMINAL CASES, LOOKOUT NOTICES AGAINST PRAMOD MITTAL

On 20th March, the Economic Times reported that the Supreme Court has quashed all criminal cases and lookout notices against NRI businessman Pramod Mittal, his wife and children after he paid up all his dues to public sector enterprise State Trading Corporation (STC).
The younger brother of steel magnate Lakshmi Mittal, was facing multiple court proceedings in India and abroad.  STC has also agreed not to pursue winding up proceedings against Mittal’s company Global Steel Holding Ltd (GSHL) in the Isle of Man courts.  The bench invoked its extraordinary powers to quash all proceedings, possibly a first in a corporate debt case.
https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/supreme-court-quashes-criminal-cases-lookout-notices-against-pramod-mittal/articleshow/68490420.cms

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VERIFYING THE BENEFICIAL OWNER OF COMPANIES – WHY AND HOW

An article from Transparency International on 19th March is triggered by the Troika Laundromat scandal.  It refers to a recent report from the Tax Justice Network (TJN) which proposed a way of checking the validity of data provided: an information technology system combined with advanced analytics to identify red flags.

Adapted from “ Beneficial ownership verification: ensuring the truthfulness and accuracy of registered ownership information”, Tax Justice Network.

https://voices.transparency.org/verifying-the-beneficial-owner-of-companies-why-and-how-d6e24bd9f99f

The report from TJN on 19th January is available at –

https://www.taxjustice.net/wp-content/uploads/2019/01/Beneficial-ownership-verification_Tax-Justice-Network_Jan-2019.pdftjn

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AML/CFT EVALUATION REPORT ON CAYMAN ISLANDS

On 19th March, the Caribbean Financial Action Task Force released its 4th round mutual evaluation report on the Cayman Islands.  It highlights local efforts to combat money laundering and terrorist financing, but it said gaps in resources at the financial crime unit, as well as, limited legislative oversight have left the country’s financial services sector open to abuse.  The report mentions that, in 2015, the Cayman Islands concluded its first AML/CFT National Risk Assessment (NRA).  However, it says that the NRA did not include an assessment of legal persons or arrangements, nor did it conduct sufficient analysis of the risks present in parts of the financial sector not subject to supervision (e.g. lawyers and excluded persons under the Securities Investment Business Law (SIBL).  Further, the assessment did not fully address the international components of risk faced by the jurisdiction as a significant international financial centre or provide evidence that sufficient analysis was conducted with respect to the jurisdiction’s TF risks.  This has resulted in major deficiencies that have inhibited the jurisdiction’s ability to analyse and understand its risks.

https://cayman27.ky/2019/03/cfatf-ci-evaluation-report-points-to-gaps-in-local-resources-legislation/

https://cayman27.ky/wp-content/uploads/sites/7/2019/03/cfatf-4meval-Cayman-Islands.pdf

The Cayman Compass reported on 18th March that the Government has responded to what appears to be a damning evaluation of the effectiveness of Cayman’s AML framework by launching an action plan that aims to address any deficiencies within a year.  The Premier announced the appointment of a dedicated task force, made up of several government agencies, to oversee the implementation of a “comprehensive action plan”.  Actions it says are required by the CFATF report include that information on the directors of Cayman companies and limited liability companies should be publicly available.  In addition, government should introduce provisions that will allow the General Registry to share information with other competent authorities.  Meanwhile, fines for failure to maintain accurate beneficial ownership registers should be increased.  The fact that partnerships are not subject to Cayman’s beneficial ownership regime is incompatible with the evaluation report’s requirements, and competent authorities should have the power to access beneficial ownership information for partnerships, the CFATF said.

https://www.caymancompass.com/2019/03/18/government-new-anti-money-laundering-plan-under-way/

https://www.internationalinvestment.net/news/4001404/cayman-amends-money-laundering-rules

https://www.caymancompass.com/2019/03/19/money-laundering-report-finds-major-deficiencies-in-cayman/

The Cayman Government has issued a press release in response to the report –

https://cayman27.ky/wp-content/uploads/sites/7/2019/03/Cayman-Islands-committed-to-CFATF-progress-v2.docx

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MALAYSIA: MAS LAYS OUT ENFORCEMENT ACTIONS AND PRIORITIES IN INAUGURAL REPORT

On 20th March, Channel News Asia reported that the Monetary Authority of Singapore had issued its first enforcement report, which outlines cases – including S$16.8 million in fines and compositions on 42 financial institutions, S$698,000 in civil penalties for 2 insider trading cases and 1 case of unauthorised trading, 19 prohibition orders, 37 reprimands, 223 warnings, 31 letters of advice and 444 supervisory reminders issued to various individuals, companies and financial institutions.  The cases include those linked to the 1MDB scandal.  On the AML/CFT front, the report mentioned that MAS has shut down BSI Bank and the Singapore branch of Falcon Private Bank and imposed S$30 million of fines on financial institutions, including on DBS, UOB and Standard Chartered Bank Singapore.  MAS said it focused on three key areas for enforcement, namely market abuse, financial services misconduct and money laundering-related breaches.  Financial services misconduct had the greatest number of outstanding cases as of end-December 2018.  For this year and next, MAS will prioritise enforcement efforts in 5 areas to better protect consumers and safeguard public trust in Singapore’s financial institutions, it said.
https://www.channelnewsasia.com/news/business/mas-lays-out-enforcement-actions-priorities-in-inaugural-report-11361578

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DRUG COUNTERFEITING COMES TO THE US

Healthcare Packaging in the US has published an article which says that, as interdiction efforts at the border have been successful, counterfeiters have shifted strategy.  A cheap pill press, coloured binding ingredient (sold legally in the US), some tool and die sets to press brand name and numbers on the pills, as well as some sophisticated packaging materials is all that is needed to set up a counterfeiting operation.  It says that API (Active pharmaceutical ingredient) smuggled in this country from China, India and Pakistan is manufactured into pills and are “pre-positioned” for sale and distribution.  It says that even Chapsticks have been counterfeited, and sold cheaply at such places as filling stations.  It says that it is relatively cheap to produce pills, and even with only a small table press a counterfeit operation may turn out 50,000 pills a month, and margins are huge and there is a lot of money to be made.

https://www.healthcarepackaging.com/article/drug-counterfeiting-comes-us

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US VOWS TO PURSUE SHIP OWNERS WHO VIOLATE IRAN OIL SANCTIONS – CASES OF SHIP-TO-SHIP TRANSFERS IDENTIFIED

Eurasia Review on 20th March reported that a senior US official said that the US is monitoring ships involved in clandestine transfers of Iranian oil and will hold anyone involved in such transfers responsible for violating US sanctions against Iran.  It also reported that TankerTrackers.com had said that it identified in February 2 cases of clandestine ship-to-ship transfers of Iranian oil with the transponders of the vessels involved being disabled.

https://www.eurasiareview.com/20032019-us-vows-to-pursue-ship-owners-who-violate-iran-oil-sanctions/

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OTHER THINGS YOU MAY HAVE MISSED – MARCH 19

19th March 2019

REPORT: PANAMA PAPERS LEAK LED TO REFORM IN 1 OUT OF 5 COUNTRIES

On 19th March, the Irish Times carried an article on research undertaken at Oxford University.  Nearly a fifth of countries in which the investigation was reported saw at least one instance of concrete reform, researchers found.  The reform included a new law or policy designed to address problems exposed.  “Gauging the global impacts of the ‘Panama Papers’ three years later” – found that 147 distinct outcomes arose from the investigation.

https://www.irishtimes.com/business/economy/panama-papers-leak-led-to-reform-in-one-out-of-five-countries-1.3830625

The report can be found at –

https://reutersinstitute.politics.ox.ac.uk/our-research/gauging-global-impacts-panama-papers-three-years-later

TIGHTEN NORTH KOREA SANCTIONS BY TARGETING BANKS, EXPERTS SAY

VoA on 18th March reported that the US needs to target banks that facilitate illicit transactions for Pyongyang to increase sanction pressure on North Korea to the maximum, according to the recent UN panel of experts’ report.  The report indicated foreign banks facilitate North Korea’s financial transactions for “illegal ship-to-ship transfer of petroleum products and an increasing number of ship-to-ship coal transfers”.  The report said “financial sanctions remain some of the most poorly implemented and actively evaded measures”.

https://www.voanews.com/a/tighten-n-korea-sanctions-by-targeting-banks-experts-say/4837202.html

TOKYO RETAILER ARRESTED (AGAIN) FOR ALLEGED SMUGGLING FAKE MARC JACOBS WATCHES FROM HONG KONG

Tokyo Reporter on 19th March reported that the president of an apparel retailer in custody over the alleged sale of fake brand-name watches has been arrested again for smuggling.  In February, police first arrested him for selling fake wristwatches by labels Armani and Burberry.  It says that Tokyo Customs are aware of 60 such smuggling operations conducted by the man.  “I did it because it is profitable,” the suspect was quoted in admitting to the allegations.

https://www.tokyoreporter.com/japan/tokyo-retailer-accused-of-smuggling-fake-marc-jacobs-watches-from-hong-kong/

TANZANIA TRADING CENTRES TO CURB GOLD SMUGGLING

Business Day on 18th March reported that new centres will give small-scale miners, which currently illegally export 90% of their output, access to the formal market.  Tanzania has ordered all mineral-producing regions to set up government-controlled trading centres by the end of June, accelerating efforts to curb illegal exports of gold and other precious minerals.  The first mineral trading centre was inaugurated in the north-western town of Geita, close to the country’s biggest gold mine.  Small-scale miners produce about 20 tonnes of gold a year in Tanzania, but an estimated 90% of the output is illegally exported.  Tanzania is Africa’s fourth-biggest gold producer and gold exports are a key source of foreign exchange.  Tanzania has also been locked in a prolonged conflict with London-listed Acacia Mining after authorities banned exports of gold and copper concentrates and accused the miner of tax evasion, which it denies.

https://www.businesslive.co.za/bd/world/africa/2019-03-18-tanzania-trading-centres-to-curb-gold-smuggling/

ESTONIA TO ESTABLISH AML CENTRE FOR STRATEGIC ANALYSIS

ERR on 19th March reported that Estonia is to establish a centre for strategic analysis that would operate under the FIU.  The centre will be granted access to the databases and registers of various institutions, and the developing of smart IT solutions in particular will be a very important.

https://news.err.ee/921469/estonia-to-establish-anti-money-laundering-centre-for-strategic-analysis

PNB FRAUD: ARREST WARRANT ISSUED AGAINST NIRAV MODI IN UK

Huffpost in India on 19th March reported that, after the arrest, Modi will be brought before the court to secure bail and the legal proceedings for his extradition will begin.

https://www.huffingtonpost.in/entry/pnb-fraud-arrest-warrant-issued-against-nirav-modi-in-uk_in_5c905e95e4b071a25a85de55

SPAIN “SUSPECTED LATE EX-ADVISER TO RUSSIAN PRESIDENT MIKHAIL LESIN OF MONEY LAUNDERING”

The website Crime Russia on 18th March claimed that former Russian Press Minister and ex-Head of Gazprom Media Mikhail Lesin was suspected of money laundering in Spain.  It says that Spanish authorities have discovered many items of properties in Spain that belonged to Mikhail Lesin, his family, and people associated with him, including through offshore companies.  Lesin was founded dead in a Washington hotel room in 2015.

https://en.crimerussia.com/gromkie-dela/spain-suspected-late-ex-adviser-to-russian-president-mikhail-lesin-of-money-laundering/

INVESTORS IN 19 COUNTRIES SUE DANSKE BANK OVER MONEY LAUNDERING SCANDAL

PYMNTS.com on 19th March reported that an international coalition of pension funds, government entities and asset managers is suing Danske Bank over a far-reaching money laundering scheme tied to Russia, and its subsequent cover-up.  The lawsuit alleges that Danske knew about the problem since 2013, but failed to take any action, deciding instead to continue to keep the issue covered up.

https://www.pymnts.com/news/security-and-risk/2019/danske-bank-investors-lawsuit-money-laundering/

SOUTH AFRICA POLITICIAN ARRESTED IN KILLING OF WHISTLEBLOWER

The New York Times on 18th March reported that a high-ranking politician in South Africa’s governing ANC was arrested in connection with the assassination of a party member who had exposed corruption in a public works project, officials said.  Mluleki Ndobe is one of the most influential ANC power brokers in KwaZulu-Natal Province.  The victim was shot inside his car in 2017 by 2 hit men who sprayed the car with gunfire; and a man suspected of being one of the killers was arrested in September.

https://www.nytimes.com/2019/03/18/world/africa/south-africa-anc-magaqa-killing-arrests.html

US: FORMER HIGH-RANKING UNION OFFICIAL CHARGED IN CORRUPTION PROBE AT FIAT CHRYSLER

The Wall Street Journal on 19th March reported that a former UAW vice-president is accused of accepting illegal payments from Fiat Chrysler Automobiles executives.

https://www.wsj.com/articles/former-high-ranking-union-official-charged-in-corruption-probe-at-fiat-chrysler-11552929164

WHEN AN IRANIAN OIL COMPANY IS DEFRAUDED IN A FAILED ATTEMPT TO CIRCUMVENT EU SANCTIONS – DOES ITS CLAIM SURVIVE THE ILLEGALITY TEST?

An article from RPC on 19th March was concerned with a claim by the Iranian Offshore Engineering and Construction Company (IOEC), which was a contractor in the offshore oil and gas sector.  In 2012, it paid $87 million to a company established in the BVI and controlled by one of the defendants, Dean, as an advance payment for an oil rig.  Dean failed to acquire the relevant oil rig the payment was misappropriated by several of the defendants, including IOEC’s managing director at the time.  The English High Court found in favour of IOEC in almost all respects. The then MD had been central to the fraud and the other defendants in the proceedings had provided wide-ranging assistance.  Some of the defendants used an illegality defence, and argued that IOEC should not succeed due to the sanctions on trading with Iran in place at the time, which they said made the transactions involved illegal.  The article says that the case involved considerations of illegality and of public policy, and required the court to ask itself whether such considerations defeated the otherwise good claims brought by IOEC.  To decide the questions, the High Court applied the test laid out in Patel v Mirza.  RPC says that this case provides an interesting example of the extent to which entities complicit in the breach of EU sanctions are still able to bring legal proceedings relating to matters arising out of those breaches.

https://www.internationallawoffice.com/Newsletters/Litigation/United-Kingdom/RPC/Circumstances-in-which-acting-in-breach-of-EU-sanctions-will-kill-claims

AND ANOTHER “ILLEGALITY DEFENCE” CASE – IN THE CAYMAN ISLANDS

An article on 14th March from Ogier is concerned with unpicking what was said about the illegality defence in a complex case, and what lessons can be derived for future Cayman Island cases where this defence might be engaged.  The Court found that the fraud perpetrated was an enormous, long standing scheme (and was effectively a Ponzi Scheme) which had defrauded more than a hundred banks.  Whilst the circumstances of the case meant that there was no need for the Court to find that the defendant Cayman companies (represented by a number of different official liquidators) could invoke an illegality defence, perhaps in anticipation of the appeal to be heard in 2019, said that if its factual finding of complicity was overturned then the illegality defence would have been engaged.  Consequently, the Court gave useful guidance on how to approach the ‘notoriously knotty’ defence of illegality.  The article goes on to explain the defence of illegality.  It says that a new test confirmed in the case goes some way to clarify the law in an area which has traditionally been marked with considerable confusion.  This new “tripartite” test involved 3 stages –

  1. the underlying purpose of the prohibition which has been transgressed and whether that purpose will be enhanced by denial of the claim;
  2. any other relevant public policy on which the denial of the claim may have an impact; and
  3. whether denial of the claim would be a proportionate response to the illegality.

The conclusion says that the case appears to confirm that the defence of illegality will be successfully invoked where the claimant is complicit in the wrongful act of the defendant -but that is unlikely to be invoked in circumstances where the company seeks redress against the fraudulent insider itself and such defence would permit the fraudster to defeat the claim by reliance on his own wrongdoing.

http://www.mondaq.com/article.asp?articleid=788652

EU AMENDS SANCTIONS LISTING FOR HAMZA USAMA MUHAMMAD BIN LADEN

From 20th March, EU Regulation 2019/431/EU amends the listing of Hamza Usama Muhammad bin Laden under the ISIL/Al-Qaida/Da’esh sanctions, bringing its listing into line with that of the UN.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.075.01.0068.01.ENG&toc=OJ:L:2019:075:TOC

UK: TOBACCO PRODUCTS (TRACEABILITY AND SECURITY FEATURES) REGULATIONS 2019

These Regulations implement Articles 15 and 16 of the Tobacco Products Directive (2014/40/EU) to provide for a track and trace system for the supply chain of tobacco products and a system of security features to authenticate tobacco products.  This means that each pack of tobacco will carry a unique code to track it from the producer to the retailer, and a label incorporating security features that can be used to check the product is genuine.  They also set out sanctions for non-compliance and make consequential amendments to existing legislation to allow packs of tobacco products to carry traceability codes and security features.  The introduction of a track and trace system is a requirement of the WHO Framework Convention on Tobacco Control Illicit Trade Protocol, which the UK has ratified, and the track and trace system along with new security features are introduced by the EU Tobacco Products Directive.  The track and trace system aims to contribute to reducing the circulation of non-compliant tobacco products (products which do not meet all legal requirements in terms of content, packaging and duty payable), reduce artificially cheap supplies of illegal tobacco products, and protect public health, state budgets, and legitimate businesses.

http://www.legislation.gov.uk/uksi/2019/594/contents/made

PERSONAL SERVICE COMPANIES & IR35

On 18th March, the House of Commons Library published a briefing paper which says that the so-called ‘IR35’ rules to prevent the exploitation of personal service companies for tax avoidance were introduced in April 2000, following a long and contentious consultation exercise.  This legislation, it says, remains unpopular among freelancers who use this corporate form to provide services.  The publication looks at debates as to the effectiveness of these rules and wider concerns about the use of employment intermediaries to avoid tax, before discussing recent developments as to their application in the public and private sector.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN05976

IRELAND: MEN “TOOK IN €5.5 MILLION IN FORESTRY INVESTMENT FRAUD”

On 19th March, RTE reported that 2 men who ran a multi-million euro ‘Ponzi Scheme’ took in over €5.5 million in a forestry investment fraud, the Dublin Circuit Criminal Court heard.  More than 140 people from Northern Ireland, the UK and Europe invested in Arden Forestry Management which the court heard was a fraudulent investment scheme.  Investors were sent a welcome pack with false timber certificate and land folio documents endorsed by legitimate companies without their knowledge.

https://www.rte.ie/news/courts/2019/0319/1037377-forestry-fraud-case

HEAD OF JAPAN’S OLYMPIC COMMITTEE STEPS DOWN AMID TOKYO 2020 CORRUPTION PROBE

NPR reported on 19th March that the president of the Japanese Olympic Committee said he will step down amid allegations of corruption into the successful bid for Tokyo to host the 2020 Olympics.  He maintains his innocence and intends to serve out the rest of his 10th term as president, resigning in June.

https://www.npr.org/2019/03/19/704760604/head-of-japans-olympic-committee-steps-down-amid-tokyo-2020-corruption-probe

BRAND-NEW EUROPEAN PUBLIC PROSECUTOR STARTS HIRING IN LUXEMBOURG

The Luxembourg Times on 19th March reported that the EU’s first public prosecutor, an independent body which will investigate crimes against the EU budget, is about to start hiring 117 staff for its Luxembourg headquarters.  The European Public Prosecutor’s Office (EPPO) will open in November 2020 and is now looking to elect a chief prosecutor and supporting staff to fight crimes such as fraud and cross-border VAT fraud.

https://luxtimes.lu/european-union/36797-brand-new-european-public-prosecutor-starts-hiring-in-luxembourg

GRECO PUBLICLY DECLARES BELARUS NON-COMPLIANT WITH THE COUNCIL OF EUROPE ANTI-CORRUPTION STANDARDS

On 19th March, the Council of Europe’s Group of States against Corruption, in an unprecedented move, has publicly declared Belarus non-compliant with its anti-corruption standards.

https://www.coe.int/en/web/portal/-/council-of-europe-s-anti-corruption-body-greco-publicly-declares-the-country-non-compliant-with-the-coe-anti-corruption-standards

NCA LAMENTS ‘DEARTH’ OF SUSPICIOUS ACTIVITY REPORTS FROM LAWYERS

On 19th March, the Law Society Gazette reported that lawyers have not been forthcoming in reporting suspected suspicious activity related to money laundering, NCA director Donald Toon told MPs, saying that the majority of SAR come from banks.

https://www.lawgazette.co.uk/law/crime-agency-laments-dearth-of-suspicious-activity-reports-from-lawyers/5069674.article

UK REGULATORS HOST THE FIRST MEETING OF THE NEW CLIMATE FINANCIAL RISK FORUM

Shearman & Sterling published an article on 19th March saying that the FCA and the Prudential Regulation Authority have published press releases following the first meeting of the Climate Financial Risk Forum on March 8th.  The CFRF aims to encourage financial sector approaches towards managing the financial risks from climate change as well as supporting green finance.  The CFRF will develop practical tools and approaches to reduce the barriers for firms looking to adopt a strategy for minimizing financial risks from climate change.  The regulators are concerned with both the impact of climate change itself and the transition to supporting a low carbon economy.

https://www.jdsupra.com/legalnews/uk-regulators-host-the-first-meeting-of-97620/

https://www.fca.org.uk/news/press-releases/first-meeting-pra-and-fcas-joint-climate-financial-risk-forum

WOMAN BELIEVED TO HAVE HELPED ALBANIAN ORGANISED CRIME GROUPS OBTAIN AROUND 500 UK PASSPORTS ARRESTED BY NCA

A news release from the NCA on 19th March reported that a 37-year-old Albanian woman from Ilford was apprehended during an NCA-led multi-agency day of action, targeting a criminal network suspected of facilitating British citizenship and passports, false accounting and money laundering for criminals.  Officers believe the network have provided services to criminals involved in drug trafficking, people smuggling, human trafficking, child abuse, kidnapping and serious violence.

http://www.nationalcrimeagency.gov.uk/news/news-listings/1584-multi-agency-operation-leads-to-arrest-of-woman-suspected-of-facilitating-hundreds-of-uk-passport-applications-for-criminals

BUSINESS AND HUMAN RIGHTS: NAVIGATING A CHANGING LEGAL LANDSCAPE

On 19th March, law firm Clifford Chance published a paper in which the Global Business Initiative on Human Rights and Clifford Chance consider developments around the world, focusing on what companies need to know to position themselves to navigate the changing legal landscape.  It says that elements of the corporate responsibility to respect human rights are now embedded in legal requirements in several jurisdictions – new laws in this area are likely to emerge in the coming years.  It also says that businesses that are already working seriously to implement respect for human rights in their organisations are likely to be well-placed to meet new legal requirements, and those that are not already working to implement respect for human rights should start now.  The paper summarises the key human rights-related legal initiatives to date.

https://www.cliffordchance.com/briefings/2019/03/business_and_humanrightsnavigatingachangin.html

AMERICAN BAR ASSOCIATION WHITE PAPER ON CRYPTOCURRENCIES AND DIGITAL ASSETS

On 19th March, the ABA issued a news release saying that a research group of the ABA had released a comprehensive white paper addressing jurisdictional issues associated with digital products, such as cryptocurrencies, and digital processes, including blockchain.  It says that the white paper tackles a number of topic areas relevant to the ever-changing cryptocurrency and digital asset landscape.  These include FinCEN regulation of digital assets, in relation to AML and KYC requirements; and international regulation of digital assets and blockchain technology throughout Europe, Asia, Australia, and globally.

https://www.americanbar.org/content/dam/aba/administrative/business_law/buslaw/committees/CL620000pub/digital_assets.pdf

https://www.paulhastings.com/publications-items/details/?id=7800b36c-2334-6428-811c-ff00004cbded

FRANCE ‘SEEKING ARREST’ OF 2 RUSSIAN EX-ATHLETICS OFFICIALS

Rferl on 19th March reported that France has issued arrest warrants for 2 former Russian athletics officials as part of an investigation into doping cover-ups – Valentin Balakhnichev, a former president of the Russian athletics federation, and Aleksei Melnikov, an ex-coach of Russia’s national long-distance-running team.  Both were banned for life in January 2016.  French magistrates have also issued an arrest warrant for Papa Massata Diack, whom the Senegalese government refuses to extradite to France – he is the son of ex-IAAF chief, Lamine Diack, who was arrested in 2015 over charges that he had received millions of dollars to cover up doping violations by Russian athletes.

https://www.rferl.org/a/france-seeking-arrest-of-two-russian-ex-athletics-officials/29830795.html

REVENUE SEIZE OVER A MILLION CIGARETTES IN DUBLIN PORT

A news release from the Irish Revenue Commissioners on 19th March reported that, during routine operations, Revenue seized just over 1 million smuggled cigarettes in Dublin Port.  The cigarettes, labelled as “Marlboro” were shipped from Rotterdam.

https://www.revenue.ie/en/corporate/press-office/press-releases/2019/pr-190319-revenue-seize-over-a-million-cigarettes-in-dublin-port.aspx

KUWAIT ARRESTS SYRIAN TYCOON LINKED TO ASSAD AND ON EU SANCTIONS LIST

On 19th March, the Kuwait Times reported that Mazen Al-Tarazi, a long-time Kuwaiti resident, and a prominent Syrian businessman with close ties to Syrian President Bashar Al-Assad has been arrested in Kuwait, his lawyer said.  Kuwaiti newspaper Al-Qabas, citing unnamed informed sources, reported that the businessman is accused of money laundering and printing texts without authorisation.  He is on the EU sanctions lists.

https://news.kuwaittimes.net/website/kuwait-arrests-syrian-tycoon-linked-to-assad/

EAG TO PRESENT EVALUATION REPORT ON BELARUS’ AML SYSTEM IN NOVEMBER

Belarus News reported on 19th March that the FATF-style regional body, EAG, is to present the evaluation report on the country’s AML/CFT system at the EAG Plenary in November.

https://eng.belta.by/society/view/eag-to-present-report-on-belarus-anti-laundering-system-in-november-119559-2019/

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KENYA’S HIGH COURT STRIKES DOWN TAX AGREEMENT WITH OFFSHORE HAVEN MAURITIUS

ICIJ on 19th March reported that Kenya’s High Court has struck down a tax agreement with offshore haven Mauritius, describing it as a potentially significant precedent for other African nations’ efforts to staunch billions of dollars in lost revenue.  Tax Justice Network-Africa had argued that that the double tax avoidance agreement was unconstitutional, and Kenya’s government had failed to follow constitutional requirements for ratification.

https://www.icij.org/blog/2019/03/treaty-to-dodge-kenyan-tax-deemed-unconstitutional/

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EU VAT FRAUD: ECONOMIC IMPACT, CHALLENGES AND POLICY ISSUES

On 19th March, the EU Parliament Research Service published a briefing paper which seeks to take stock of the current state of play; assess the current regulatory framework and the proposals under discussion; and to offer a selection of recommendations.  An initial conclusion is that, while the European Commission has put a considerable amount of work into the modernisation of the EU VAT system, remaining risks of fraud cannot be ignored.  A second substantial conclusion is that a different approach and the use of new technologies would allow the Member States to remove significant obstacles that currently impede an effective fight against VAT fraud.  It lists what it says are the main types of cross-border VAT fraud, including:

  • Missing trader fraud (‘MTIC fraud’) and ‘carousel fraud’;
  • import fraud and more broadly e-commerce related fraud, in the sectors of electronically supplied services, intra-EU distance sales and imports;
  • VAT fraud related to cars;
  • reduced rates fraud; and
  • a new VAT avoidance scheme in the sector of aircraft leasing.

http://www.europarl.europa.eu/cmsdata/156408/VAT%20Fraud%20Study%20publication.pdf

vat

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PIRACY AND ARMED ROBBERY AT SEA OFF EAST AFRICA – EU REPORT

On 19th March, the EU Parliament Research Service published a briefing paper which focuses on maritime piracy and armed robbery at sea.  It examines the legal aspects and societal implications of these forms of violence.  Maritime piracy and armed robbery off the African coast are also a threat for the EU’s security and economy.  Since 2008, the EU has been implementing a maritime security strategy (MSS) via distinct regional strategies in the Gulf of Aden and the Gulf of Guinea.

http://www.europarl.europa.eu/RegData/etudes/IDAN/2019/635590/EPRS_IDA(2019)635590_EN.pdf

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BUSINESS AND HUMAN RIGHTS: NAVIGATING A CHANGING LEGAL LANDSCAPE

On 19th March, law firm Clifford Chance published a paper in which the Global Business Initiative on Human Rights and Clifford Chance consider developments around the world, focusing on what companies need to know to position themselves to navigate the changing legal landscape.  It says that elements of the corporate responsibility to respect human rights are now embedded in legal requirements in several jurisdictions – new laws in this area are likely to emerge in the coming years.  It also says that businesses that are already working seriously to implement respect for human rights in their organisations are likely to be well-placed to meet new legal requirements, and those that are not already working to implement respect for human rights should start now.  The paper summarises the key human rights-related legal initiatives to date.

https://www.cliffordchance.com/briefings/2019/03/business_and_humanrightsnavigatingachangin.html

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MAN WAS CAUGHT AT GUERNSEY FERRY WITH £150,000 IN CASH

On 19th March, the Guernsey Press reported that a man from London, who had never visited Guernsey before, was caught at the ferry terminal arriving from Poole in 2017 carrying more than £150,000 in cash – half of which was in Channel Island notes.  He admitted not making a cash declaration, but denied acquiring, using or possessing the money, which he knew represented the proceeds of another person’s criminal conduct.  He had 7 heat-sealed bags containing £153,200, which he claimed was his life savings.

https://guernseypress.com/top-stories/homepage/2019/03/19/ferry-visitor-had-over-150k-in-cash/

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JERSEY TOLD TO SAVE AN EXTRA £600 MILLION IN CASE FINANCE SECTOR FAILS

The Jersey Evening Post on 19th March reported that Jersey should pump at least £600 million into the ‘rainy day fund’ as a precaution against a collapse in the finance industry, a panel of independent economic experts has said – the Fiscal Policy Panel made the comment when publishing its advice for the 2020-23 Government Plan.

https://jerseyeveningpost.com/news/2019/03/19/island-told-to-save-an-extra-600m-in-case-finance-fails/

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EU METHODOLOGY AND CRITERIA FOR THE ASSESSMENT AND RECOGNITION OF SUPPLY CHAIN DUE DILIGENCE SCHEMES CONCERNING TIN, TANTALUM, TUNGSTEN AND GOLD

EU Regulation 2019/429/EU of 19th March supplements EU Regulation 2017/821/EU and sets out rules on the methodology and criteria allowing the EU Commission to assess whether supply chain due diligence schemes concerning tin, tantalum, tungsten and gold facilitate the fulfilment of the requirements of 2017 Regulation by economic operators and to recognise such schemes.  The 2018=7 Regulation sets out due diligence obligations for EU importers of tin, tantalum and tungsten, their ores, and gold which will apply from 1st January 2021; and is designed to provide transparency and certainty as regards the supply practices of EU importers and of smelters and refiners sourcing from conflict-affected and high-risk areas.  However, a number of voluntary supply chain due diligence schemes with the same or similar objectives and it is necessary to establish the methodology and the criteria to be used by the EU Commission to determine whether such a scheme should be granted recognition by the Commission.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.075.01.0059.01.ENG&toc=OJ:L:2019:075:TOC

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UK IMPORT VAT ON PARCELS IN THE EVENT OF A NO DEAL EU EXIT

On 19th March, HMRC published materials designed to help stakeholders inform their customers about changes to the rules for reporting and paying import VAT on parcels for sellers outside the UK if it leaves the EU without a deal.

https://www.gov.uk/government/publications/communications-pack-import-vat-on-parcels-in-the-event-of-a-no-deal-eu-exit

 

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EU REMOVES 4 FURTHER ENTRIES FROM ITS IRAQ SANCTIONS LISTS

On 19th March, EU Regulation 2019/432/EU confirmed the removal from the Iraq sanctions lists of the GENERAL ESTABLISHMENT FOR MAIN OUT PALL DRAIN; the NATIONAL TOBACCO STATE COMPANY; the STATE ENTERPRISE FOR PETROCHEMICAL INDUSTRIES; and the STATE ENTERPRISE FOR PULP AND PAPER INDUSTRIES.  This followed the decision of the relevant UN sanctions committee on 13th March.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.075.01.0070.01.ENG&toc=OJ:L:2019:075:TOC

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EU AMENDS SANCTIONS LISTING FOR HAMZA USAMA MUHAMMAD BIN LADEN

From 20th March, EU Regulation 2019/431/EU amends the listing of Hamza Usama Muhammad bin Laden under the ISIL/Al-Qaida/Da’esh sanctions, bringing its listing into line with that of the UN.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.075.01.0068.01.ENG&toc=OJ:L:2019:075:TOC

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WHEN AN IRANIAN OIL COMPANY IS DEFRAUDED IN A FAILED ATTEMPT TO CIRCUMVENT EU SANCTIONS – DOES ITS CLAIM SURVIVE THE ILLEGALITY TEST?

An article from RPC on 19th March was concerned with a claim by the Iranian Offshore Engineering and Construction Company (IOEC), which was a contractor in the offshore oil and gas sector.  In 2012, it paid $87 million to a company established in the BVI and controlled by one of the defendants, Dean, as an advance payment for an oil rig.  Dean failed to acquire the relevant oil rig the payment was misappropriated by several of the defendants, including IOEC’s managing director at the time.  The English High Court found in favour of IOEC in almost all respects. The then MD had been central to the fraud and the other defendants in the proceedings had provided wide-ranging assistance.  Some of the defendants used an illegality defence, and argued that IOEC should not succeed due to the sanctions on trading with Iran in place at the time, which they said made the transactions involved illegal.  The article says that the case involved considerations of illegality and of public policy, and required the court to ask itself whether such considerations defeated the otherwise good claims brought by IOEC.  To decide the questions, the High Court applied the test laid out in Patel v Mirza.  RPC says that this case provides an interesting example of the extent to which entities complicit in the breach of EU sanctions are still able to bring legal proceedings relating to matters arising out of those breaches.

https://www.internationallawoffice.com/Newsletters/Litigation/United-Kingdom/RPC/Circumstances-in-which-acting-in-breach-of-EU-sanctions-will-kill-claims

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THE ISLE OF MAN ANNOUNCES AMENDMENT OF ITS SYRIA AND UKRAINE SANCTIONS LISTS

 

On 19th March, the Isle of Man announced that Wael Abdulkarim remained subject to financial sanctions, despite earlier incorrect statements to the contrary.

https://www.gov.im/news/2019/mar/19/financial-sanctions-syria/

It also announced that Alexander Vladimirovich Zakharchenko had been removed from sanctions lists.

https://www.gov.im/news/2019/mar/19/financial-sanctions-ukraine-sovereignity-and-territorial-integrity/

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GERMAN GOVERNMENT ANNOUNCES AGREEMENT TO REPATRIATE LOOTED COLONIAL-ERA ARTEFACTS

The Art Law & More blog reported on 19th March that culture ministers from 16 states have agreed to repatriate artefacts looted in the colonial era from Africa, Asia, Australia, and the Pacific.  The committee of ministers aims to create clearer regulation for the restitution of colonial objects from public collections.  In Germany, items were often acquired from former German colonies in Africa or from territories under the rule of European nations.

https://artlawandmore.com/2019/03/19/german-government-announces-agreement-to-repatriate-looted-colonial-era-artefacts/

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US IMPOSES SANCTIONS ON VENEZUELA GOLD MINING COMPANY AND ITS PRESIDENT, AND MAKES OTHER DELETIONS AND CHANGES

On 19th March, OFAC announced that it had designated CVG Compania General de Mineria de Venezuela CA, or Minerven, the Venezuelan state-run ferrous metals mining company, and its President, Adrian Antonio Perdomo Mata, targeting the illicit gold operations that have continued to prop up the illegitimate regime of former President Nicolas Maduro.  OFAC says that Maduro and regime insiders turned to gold mining as they sought new means by which to enrich themselves at the expense of the Venezuelan people.

Also on 19th March, 12 deletions were made to the Venezuelan sanctions list, with amendments made to 7 other entries.

https://home.treasury.gov/news/press-releases/sm631

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190319.aspx

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REPORT: PANAMA PAPERS LEAK LED TO REFORM IN 1 OUT OF 5 COUNTRIES

On 19th March, the Irish Times carried an article on research undertaken at Oxford University.  Nearly a fifth of countries in which the investigation was reported saw at least one instance of concrete reform, researchers found.  The reform included a new law or policy designed to address problems exposed.  “Gauging the global impacts of the ‘Panama Papers’ three years later” – found that 147 distinct outcomes arose from the investigation.

https://www.irishtimes.com/business/economy/panama-papers-leak-led-to-reform-in-one-out-of-five-countries-1.3830625

The report can be found at –

https://reutersinstitute.politics.ox.ac.uk/our-research/gauging-global-impacts-panama-papers-three-years-later

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OTHER THINGS YOU MAY HAVE MISSED – MARCH 18

18th March 2019

PANAMA DEFLAGS 59 SHIPS LINKED TO IRAN

Ships & Ports reported on 16th March that the Maritime Authority of Panama (AMP) has revoked the registration of no fewer than 59 Iranian ships after the restoration of the US sanctions targeting transportation, oil and banking sectors.

http://shipsandports.com.ng/u-s-sanctions-panama-deflags-59-ships-linked-iran/

MURMANSK RAISES FUNDS FOR SAILORS DETAINED IN CAPE VERDE FOR ALLEGED DRUG SMUGGLING

Rferl on 17th March reported that the Russian city of Murmansk has begun raising funds in support of the sailors who have been detained in Cape Verde since February 1st on suspicion of smuggling nearly 10 tons of cocaine aboard their vessel.  9 of the 12 sailors being detained are from Murmansk.  The drugs were seized during the night after the cargo ship ESER docked at the port of Praia for legal reasons following the death of a crew member. The vessel had been travelling to Morocco from South America.

https://www.rferl.org/a/russia-s-murmansk-raises-funds-for-sailors-detained-in-cape-verde-for-alleged-drug-smuggling/29825995.html

RE-DOMICILIATION OF FOUNDATIONS TO MALTA

On 14th March, Mamo TCV published a briefing saying that Maltese law allows for the continuation of foreign foundations and associations in Malta.

https://www.mamotcv.com/resources/news/re-domiciliation-of-foundations-to-malta

EU RULES OF PROCEDURE FOR JOINT COMMITTEE ON THE AGREEMENT FOR CO-OPERATION VAT FRAUD AND RECOVERY OF CLAIMS BETWEEN NORWAY AND THE EU

EU Council Decision 2019/415/CFSP sets out the rules of procedure for the joint committee established under the agreement that entered into force in September 2018.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.074.01.0067.01.ENG&toc=OJ:L:2019:074:TOC

COUNTER-TERRORISM (INTERNATIONAL SANCTIONS) (EU EXIT) REGULATIONS 2019

These Regulations made under the Sanctions and Anti-Money Laundering Act 2018 to establish a sanctions regime to further the prevention of terrorism in the UK and elsewhere and to implement international obligations under UN SCR 1373 (2001).  Following the UK’s withdrawal from the European Union, these Regulations replace 2 EU sanctions regimes in respect of terrorism.

http://www.legislation.gov.uk/uksi/2019/573/contents/made

REGISTERS OF BENEFICIAL OWNERSHIP

On 15th March, the House of Commons Library published a briefing paper which looks at the development of beneficial ownership registers in the UK and around the world.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8259

LAWYERS PREDICT EXTENSION OF BRIBERY CURBS TO OTHER ECONOMIC CRIME

The Law Society Gazette on 18th March reported that the ‘failure to prevent’ offence created by the Bribery Act 2010 is likely to be extended to other forms of economic crime by any review of the act, lawyers predicted after peers described the act as an ‘exemplary piece of legislation’.

https://www.lawgazette.co.uk/news/lawyers-predict-extension-of-bribery-curbs-to-other-economic-crime/5069649.article

ISRAEL’S BANK HAPOALIM PROFIT SINKS ON US TAX PROBE PROVISION

Reuters on 18th march reported that Bank Hapoalim reported sharply lower quarterly net profit, weighed down by a large provision for an ongoing US tax evasion investigation – with a US DoJ investigation of the bank’s business with US clients, with a total provisions of $611 million.

https://uk.reuters.com/article/us-bank-hapoalim-results/israels-bank-hapoalim-fourth-quarter-profit-sinks-on-u-s-tax-probe-provision-idUKKCN1QZ0DW

HONG KONG: KETAMINE HAUL IN AIR PARCELS FROM GERMANY AND THE NETHERLANDS MARKS NEW SMUGGLING TREND

On 18th March, Customs Today reported that about US$1.3 million worth of ketamine concealed in food packages was found air mailed from Germany and the Netherlands over 5 weeks this year, prompting Hong Kong authorities to boost intelligence exchange with European forces.  The 20kg marked a new smuggling trend for the drug – a switch from traditional sources such as mainland China and SE Asia.

http://www.customstoday.com.pk/hk10-million-ketamine-haul-in-air-parcels-from-germany-and-the-netherlands-marks-new-smuggling-trend/

HOW RUSSIAN COURTS PENALISE NORTH KOREAN CASH SMUGGLING

On 18th March, an article from NK News in Customs Today informs use that in Russia, undeclared cash transfers are criminalised if they are undeclared imports or exports of currency valued over $10,000.

http://www.customstoday.com.pk/judge-juche-how-russian-courts-penalize-korean-cash-smuggling/

TRINIDAD & TOBAGO: SEX DOLL SEIZED BY CUSTOMS – SEIZURE TO BE CHALLENGED

On 17th March, Trinidad & Tobago Newsday reported that an e-commerce consultant is suing the Comptroller of Customs after a sex doll he tried to import was seized by customs officials in December. The local law says that, among other things, it is prohibited to import “indecent or obscene prints, paintings and photographs, books cards, lithographic and other engravings, gramophone records or any other indecent or obscene articles or matter”.  In August, a sexologist challenged a similar decision to seize sex toys he had imported, saying that there was no legal basis for a ban on sex toys, and launched proceedings after local courier companies began informing their customers that a list of items, including adult toys, are illegal to import.

https://newsday.co.tt/2019/03/17/sex-doll-seized-by-customs/

US DOJ REVISES FCPA CORPORATE ENFORCEMENT POLICY TO ENCOURAGE ADOPTION OF GUIDANCE AND CONTROLS AROUND WECHAT, WHATSAPP AND OTHER MESSAGING SERVICES

On 18th March, Baker McKenzie reported that the DoJ has modified the FCPA Corporate Enforcement Policy.  A key change is to now allow the use of “ephemeral messaging platforms”, such as WeChat and WhatsApp, for business communications as long as controls are put in place to ensure appropriate retention of business records.

https://globalcompliancenews.com/us-doj-revises-fcpa-corporate-enforcement-policy-encourage-adoption-guidance-wechat-whatsapp-20190314/

http://www.fcpablog.com/blog/2019/3/18/doj-refines-stance-on-ephemeral-messaging-apps.html

SFO OPENS INVESTIGATION INTO LONDON CAPITAL & FINANCE PLC

A news release from the SFO on 18th March reported that the SFO, working in conjunction with the FCA, has opened an investigation into individuals associated with London Capital & Finance Plc.   On 4th March, 4 individuals were arrested in the Kent and Sussex areas.   All 4 individuals have been released pending further investigation.  London Capital & Finance collapsed into administration at the end of January, taking £236 million of cash with it, some of which was pension savings and money from risk-averse savers or first-time investors.

https://sfo.gov.uk/2019/03/18/sfo-opens-investigation-into-london-capital-finance-plc/

https://www.thisismoney.co.uk/money/investing/article-6821885/SFO-joint-investigation-mini-bond-firm-London-Capital-Finance.html

AFTER 10 YEARS OF PIRACY IN THE INDIAN OCEAN REGION, IS SOMALI PIRACY STILL A THREAT?

Hellenic Shipping News on 18th March reported that in November the UN Security Council renewed the authorisation for international naval forces to carry out anti-piracy measures off Somalia’s coast.  It is now 10 years since the first Resolution was passed in 2008 to respond to piracy and robbery against humanitarian and commercial ships in the region.  A recent attack was only the second piracy attack off the coast of Somalia reported this year, which is dramatically down from the 160 piracy incidents reported during the height of the problem in 2011. A recent Secretary General’s report on piracy and armed robbery off Somalia’s coast attributes the low number of attacks to successful global collaboration and the ongoing work of regional organisations like the Contact Group on Piracy off the Coast of Somalia.  The report also cites the continued enforcement measures of international naval forces.  However, while many of Somalia’s pirate foot soldiers languish in jail, the kingpins remain at large.  It says that the activities of pirate groups must be understood in the broader context of Somalia’s ongoing crisis.  The crisis has allowed the root causes for the emergence and proliferation of these groups to continue.

https://www.hellenicshippingnews.com/after-ten-years-of-piracy-in-the-indian-ocean-region-is-somali-piracy-still-a-threat/

WHY PHONE NUMBERS STINK AS IDENTITY PROOF

In his blog on 17th March, Krebbs on Security posted that phone numbers stink for security and authentication.  They stink because most of us have so much invested in these digits that they’ve become de facto identities.  At the same time, when you lose control over a phone number — maybe it’s hijacked by fraudsters, you got separated or divorced, or you were way late on your phone bill payments — whoever inherits that number can then be you in a lot of places online.  The post asks how exactly did we get to the point where a single, semi-public and occasionally transient data point like a phone number can unlock access to such a large part of our online experience?

https://krebsonsecurity.com/2019/03/why-phone-numbers-stink-as-identity-proof/

ISRAELI BANK POLICY CRITICISED OVER SHUT DOWN OF BITCOIN MINING FIRM’S ACCOUNT – BUT STILL WAS ENTITLED TO CLOSE SUCH ACCOUNTS

The Coin Telegraph on 18th March reported that Israminers had sued Bank Igud (the Union Bank of Israel Ltd.) in May 2018, and had faced problems with cash flow due to the bank blocking deposits which it said was against its terms.  Following a lengthy appeals process, a Tel Aviv district court judge argued that the bank’s policy on cryptocurrency clients was too broad, and should not include automatic rejections.

However, the court ruled that the bank can refuse to deposit funds originating from cryptocurrency conversions.  The court found that the bank’s arguments against depositing such funds were justifiable for fear of money laundering but denied the bank’s request to close the account of Israel-based crypto mining company Israminers Ltd.  Last year, the Supreme Court ruled in favour of Tel Aviv-based cryptocurrency exchange Bits of Gold Ltd., whose bank account had been restricted by Bank Leumi, one of Israel’s largest banks.

https://cointelegraph.com/news/israeli-bank-policy-should-not-have-shut-down-bitcoin-mining-firms-account-court-rules

https://www.calcalistech.com/ctech/articles/0,7340,L-3758501,00.html

HONG KONG TOP JURISDICTION FOR OFFSHORE COMPANY REGISTRATIONS

On 18th March, Accountancy Daily reported that Hong Kong has toppled the UK as the top international financial centre (IFC) for global corporate services, while the trend towards moving business to onshore and mid-shore jurisdictions continues to increase, according to research by Vistra.  Hong Kong is now the most popular jurisdiction, while the BVI and the UK are ranked second, followed by the US and Singapore.  In the latest survey, only 35% of respondents expect the UK to become more open to the industry and IFCs after Brexit.

https://www.accountancydaily.co/hong-kong-leapfrogs-uk-offshore-company-registrations

LEXIS NEXIS 2018 CYBERCRIME REPORT

LexisNexis has published its 2018 cybercrime report.  The ThreatMetrix® Cybercrime Report: H2 2018 is based on actual cybercrime attacks from July – December 2018 that were detected by its ThreatMetrix® Digital Identity Network®.  One of the key highlights identified is that the ThreatMetrix now sees a strong networked pattern of fraud, with the same cybercriminals working across different organisations in the same industry, as well as across different industries, illustrating the global and ever-more connected nature of online fraud. This cross-organisational fraud is particularly strong within banking, gaming and gambling, lending and retail.  It also says that, in some regions, fraudsters are shifting focus from desktop to mobile attacks. While mobile attacks still make up less than half the attack volume seen in The Network, financial services is experiencing a growth in attacks, particularly in Brazil, US, Canada and Italy.  The most noticeable growth in mobile attacks is on account logins, as fraudsters attempt to infiltrate user accounts by brute force (using mobile bots) or stealth.  As consumers increasingly adopt a mobile-first approach, it is also likely that fraudsters could adopt a similar mindset, following this volume shift with evolved and highly targeted attacks. The Network has already seen evidence of this during 2018 as what have traditionally been more desktop-based attack vectors – for example bot and remote access attacks – move across onto mobile.

https://risk.lexisnexis.co.uk/insights-resources/white-paper/h2-2018-cybercrime-report

VAT IT SYSTEM CHANGES FOR BUSINESSES OUTSIDE THE UK IF THE UK LEAVES THE EU WITH NO DEAL

On 18th March, HMRC published information on how a business will pay VAT on digital services, reclaim VAT, and check UK VAT numbers if the UK leaves the EU with no deal.

https://www.gov.uk/guidance/vat-it-system-changes-for-businesses-outside-the-uk-if-the-uk-leaves-the-eu-with-no-deal

UK: AUTHORISED ECONOMIC OPERATOR (AEO) STATUS FOR IMPORTS AND EXPORTS

On 18th March, HMRC issued updated information about the benefits of Authorised Economic Operator (AEO) status, who can be an AEO and how to apply.  One now can only apply online for AEO status.  AEO status is an internationally recognised quality mark that shows your role in the international supply chain is secure, and that customs controls and procedures are efficient and meet EU standards.  It can lead to “fast track” clearance, and may be mandatory (or advantageous) for customs special treatments and concessions.

https://www.gov.uk/guidance/authorised-economic-operator-certification#history

SHIPMENTS OF RADIOACTIVE SUBSTANCES (EU EXIT) REGULATIONS 2019

These Regulations revoke the EU Euratom Regulation and replaces it with similar provisions so that the system of prior written declarations continues to function as it does now insofar as possible.  The Euratom Regulation has 2 key aspects –

  • the requirement to obtain a prior written declaration, which only extends to sealed sources. Under this requirement, before any shipment of sealed sources can take place, source holders are required to obtain a prior written declaration from the consignee of the source (the source receiver) to demonstrate that the consignee complies with national requirements for their safe storage, use and disposal; and
  • requires source holders to submit a quarterly return detailing all the shipments made during the preceding quarter to the competent authority in the destination Member State. This part of the Euratom Regulation extends to both sealed and unsealed sources.

Without action, the obligation for source holders and consignees to obtain prior written declarations and submit quarterly returns falls away in practice as the retained law would not apply to shipments to/from the UK when it is no longer a Member State.  These Regulations revoke the EU Euratom Regulation and replaces it with similar provisions so that prior written declarations are still required. This also provides important continuity and clarity for operators.

http://www.legislation.gov.uk/uksi/2019/571/contents/made

US-SANCTIONED VENEZUELAN GENERAL “DEFECTS TO COLOMBIA”

Reuters on 18th march reported that General Carlos Rotondaro, former head of a government agency that provided medicine for chronic health conditions, and subject to US sanctions since 2018, is said to have fled to Colombia amid growing pressure on President Nicolas Maduro.

AUSTRALIA’S TOP TAX DODGERS LISTED

On 18th March, The New Daily reported on the list of the Top 40 tax dodgers.  The top of the list if EnergyAustralia, which is now controlled by a company in the BVI, which is in turn controlled by a Hong Kong energy conglomerate, which is controlled by Chinese shareholders and the billionaire Kadoorie family.  This is said to be a company whose assets used to be owned by Victoria and New South Wales States, by taxpayers, until they were privatised.

https://thenewdaily.com.au/money/finance-news/2019/03/18/top-10-tax-energy-australia

VIETNAM’S GRAFT HUNTERS ZERO IN ON VENEZUELA OIL PROJECT

Nikkei Asian Review on 18th March reported that Vietnam’s Ministry of Public Security is investigating a loss-making oil and gas project in Venezuela, as Vietnam probes corruption involving state enterprises.  Vietnamese authorities have asked state-run Vietnam Oil and Gas Group (PVN) to “provide all documents relating to the implementation of the project” to tap and upgrade the Junin-2 oil field in Venezuela’s Orinoco Belt, an area thought to contain the world’s largest oil reserves.  PVN terminated the contract in December 2013, determining that little progress had been made, but the ministry is looking into suspected legal violations before the termination.

https://asia.nikkei.com/Business/Companies/Vietnam-s-graft-hunters-zero-in-on-Venezuela-oil-project

LAWLESS DEVELOPMENT, CORRUPTION, FRAUD CAST BIG SHADOWS ON KYIV REAL ESTATE

The Kyiv Post on 18th March reported that, despite a rebounding real estate sector, lawless land development, corrupt schemes and property scams continue to stifle growth and create victims as Ukrainian authorities face accusations of manipulating laws to ensure that, one way or another, new developments are illegal, creating rich opportunities for blackmail and corruption.

https://www.kyivpost.com/business/lawless-development-corruption-fraud-cast-big-shadows-on-kyivs-real-estate-industry.html

UK: POLICE BEGIN CRIMINAL INQUIRY INTO FAILED TRAINING FIRM 3aaa

The Guardian on 18th March reported that police have launched a criminal investigation into allegations of fraud at the UK’s largest government-funded apprenticeship provider, which was training 4,216 apprentices at companies including Ocado, Volkswagen and the National Grid.  The company received £31 million of government money last year, but was placed into compulsory liquidation in October 2018 after the DfE withdrew all funding.

https://www.theguardian.com/uk-news/2019/mar/18/derbyshire-police-criminal-inquiry-failed-training-firm-3aaa-fraud-allegations-department-education

ALEXANDER VLADIMIROVICH ZAKHARCHENKO REMOVED FROM UK UKRAINE SANCTIONS LISTS

On 18th March, a Notice from HM Treasury advised that Alexander Vladimirovich ZAKHARCHENKO had been from the consolidated list and are no longer subject to an asset freeze.  This followed Council Implementing Regulation (EU) 2019/408 of 15th March.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/786870/Notice_Ukraine__Sovereignty__2019_408__002_.pdf

ISRAEL AN INTERPOL PURPLE NOTICE RE TELEGRASS ONLINE DRUGS NETWORK – OUTLINING ITS MODUS OPERANDI AND METHODS FOR DETECTION

On 18th March, a news release from Interpol said that the Purple Notice follows an international Israeli police operation which led to the arrest in 4 countries of 42 people on suspicion of running the drugs distribution network.  The arrests were made in Germany, Israel, US and Ukraine, including the alleged leader of the crime ring who was arrested in Ukraine.  In addition to selling drugs such as marijuana, hashish, cocaine and ecstasy, those arrested are suspected of running an international organised crime ring, also involving money laundering and tax offences.  Investigators say the Telegrass drugs ring was run like a business.

https://www.interpol.int/News-and-Events/News/2019/Online-drugs-ring-Israel-requests-INTERPOL-Purple-Notice

IN JAPAN’S FIRST CASE OF ITS KIND, 18-YEAR-OLD SENT TO PROSECUTORS OVER CRYPTOCURRENCY THEFT

On 18th March, Baker McKenzie reported that an 18-year-old boy was referred to prosecutors for allegedly stealing about $134,300 worth of cryptocurrency last year by hacking a digital currency storage website.  The case is the first in Japan in which criminal charges have been pursued against a hacker over cryptocurrency losses, the police said.

http://www.riskandcompliancehub.com/in-japans-first-case-of-its-kind-18-year-old-sent-to-prosecutors-over-¥15-million-cryptocurrency-theft/

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ALEXANDER VLADIMIROVICH ZAKHARCHENKO REMOVED FROM UK UKRAINE SANCTIONS LISTS

On 18th March, a Notice from HM Treasury advised that Alexander Vladimirovich ZAKHARCHENKO had been from the consolidated list and are no longer subject to an asset freeze.  This followed Council Implementing Regulation (EU) 2019/408 of 15th March.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/786870/Notice_Ukraine__Sovereignty__2019_408__002_.pdf

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UK ISSUES CORRECTION TO SYRIA SANCTIONS LISTINGS

On 18th March, a Notice from HM Treasury said that on 21st July 2017, Wael Abdulkarim was removed from the UK Consolidated List, following the Adbulkarim vs Council ECJ court judgement.  However, the annulment of EU Council Decision (CFSP) 2015/383 insofar as it related to Mr Abdulkarim, did not result in Mr Abdulkarim being delisted.  He was therefore removed from the Consolidated List in error in July 2017.  Mr Abdulkarim has therefore remained subject to financial sanctions since July 2017 and continues to be.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/786866/Notice_Syria_Error.pdf

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VIETNAM’S GRAFT HUNTERS ZERO IN ON PVN VENEZUELA OIL PROJECT

Nikkei Asian Review on 18th March reported that Vietnam’s Ministry of Public Security is investigating a loss-making oil and gas project in Venezuela, as Vietnam probes corruption involving state enterprises.  Vietnamese authorities have asked state-run Vietnam Oil and Gas Group (PVN) to “provide all documents relating to the implementation of the project” to tap and upgrade the Junin-2 oil field in Venezuela’s Orinoco Belt, an area thought to contain the world’s largest oil reserves.  PVN terminated the contract in December 2013, determining that little progress had been made, but the ministry is looking into suspected legal violations before the termination.

https://asia.nikkei.com/Business/Companies/Vietnam-s-graft-hunters-zero-in-on-Venezuela-oil-project

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VLADIMIR ANTONOV: FORMER PORTSMOUTH FC OWNER JAILED IN RUSSIA

The BBC reported on 18th March reported that a former owner of Portsmouth Football Club has been jailed for 2½ years in Russia for bank fraud.  Vladimir Antonov was involved in a £1.75 million loan from Sovetsky bank to a front company, knowing that it would not be repaid.

https://www.bbc.co.uk/news/uk-england-hampshire-47609147

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AUSTRALIA IMPOSES FURTHER RUSSIAN SANCTIONS, INCLUDING OVER ATTACK IN SEA OF AZOV

On 18th March, 112 UA reported that Australia had followed the UK, US and EU on those connected with the Kerch Strat incident in November.  Targeted financial sanctions and a travel ban were also applied to the 3 ‘leaders’ from separatist-controlled parts of the Donetsk and Luhansk regions.

https://112.international/ukraine-top-news/australia-imposes-anti-russian-sanctions-over-attack-in-sea-of-azov-37931.html

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EUROPEAN COMPANIES CONNECTED TO ILLEGAL DRC TIMBER

On 18th March, OCCRP reported that 10 European companies trading in timber have sourced $2.26 million of wood from a company engaged in illegal logging in the Democratic Republic of the Congo, according to a report from Global Witness.   The findings are especially worrying because most of the world’s second-largest tropical rainforest is in the DRC, said the report.  The report tracks the logging of a concession owned by Industrie Forestière du Congo (IFCO), a timber trader which operates 2 concessions in the Congo Basin forest.  It claims that IFCO bought those concessions from Cotrefor, a logging company long accused of illegal logging, alleged to be controlled by financiers of Hezbollah.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9392-european-companies-connected-to-illegal-drc-timber

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GIBRALTAR PUBLISHES BREXIT DETAILS FOR THE FINANCIAL SERVICES SECTOR

On 18th March, the Government of Gibraltar published a detailed Brexit Statement for the Financial Services Sector.  The Statement sets out the framework for the post-Brexit environment and addresses a range of topics including the status of Gibraltar under EU law, arrangements between the UK and Gibraltar and Gibraltar’s Temporary Permissions Regime.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2019/Press%20Releases/187-2019.pdf

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TRADE IN FAKE GOODS IS NOW 3.3% OF WORLD TRADE AND RISING

On 18th March, a news release from the OECD said that the trade in counterfeit and pirated goods has risen steadily in the last few years – even as overall trade volumes stagnated – and now stands at 3.3% of global trade, according to a new report by the OECD and the EU’s Intellectual Property Office.  The report puts the value of imported fake goods worldwide based on 2016 customs seizure data at $509 billion, up from $461 billion in 2013 (2.5% of world trade).  For the EU, counterfeit trade represented 6.8% of imports from non-EU countries, up from 5% in 2013.  These figures do not include domestically produced and consumed fake goods, or pirated products being distributed via the Internet.

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http://www.oecd.org/newsroom/trade-in-fake-goods-is-now-33-of-world-trade-and-rising.htm

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JAPANESE MAN ARRESTED AT ECUADOR AIRPORT FOR SMUGGLING INSECTS

On 18th March, Customs Today reported that Ecuadorean authorities say they have arrested a Japanese man for attempting to illegally traffic wildlife out of the country as he tried to board his flight out of Quito with over 250 specimens of spiders and insects, both living and preserved.  The biologist has been arrested.  An expert at the initial hearing said that he identified a variety of spiders, scorpions, cockroaches, leaf insects, beetles, wasps, bees, and butterflies amongst the animals found in the luggage, saying that the species “aren’t threatened or protected by international agreements”.

http://www.customstoday.com.pk/japanese-man-arrested-at-ecuador-airport-for-smuggling-insects/

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OTHER THINGS YOU MAY HAVE MISSED – MARCH 17

17th March 2019

US SEIZES 1 MILLION POUNDS OF SMUGGLED PORK FROM CHINA

Feedstuffs on 16th March reported that US federal agents have seized 454 tonnes of pork smuggled from China to a port in New Jersey amid fears the meat could contain traces of the African swine fever virus.   The Action marks the largest-ever seizure of agricultural products in the US.  The pork was smuggled in various different ways including in ramen noodle bowls to Tide detergent.

https://www.feedstuffs.com/news/us-seizes-1m-pounds-smuggled-pork-china

IRELAND: REVENUE DOG ‘KELLY’ SNIFFS OUT €500,000 OF SMUGGLED CIGARETTES

The Irish Times reported on 16th March that the seizure was made at Dublin Port during routine examination of freight from Rotterdam.  The seized cigarettes, branded “Marlboro”, have a retail value of almost €500,000.

https://www.irishtimes.com/news/crime-and-law/revenue-dog-kelly-sniffs-out-500-000-of-smuggled-cigarettes-1.3828862

$1 MILLION LOBSTER SMUGGLING ATTEMPT FOILED IN INDONESIA

The Jakarta Post on 17th March reported that Indonesian authorities had foiled an attempt to smuggle $1.31 million lobster “seeds” in 4 suitcases destined for Singapore.

https://www.thejakartapost.com/news/2019/03/17/lobster-smuggling-attempt-thwarted-at-soekarno-hatta-airport.html

INDIA TO POST CUSTOMS OFFICERS IN CHINA TO CHECK BLACK MONEY AND FRAUDS

The Business Standard on 17th March reported that the move has been initiated by the Directorate of Revenue Intelligence to curtail incidents of trade-based money laundering and other financial frauds originating from China.  2 posts of the Customs Overseas Intelligence Network (COIN) have been created in the Indian Embassy in Beijing and in the Consulate General Guangzhou.  COIN officers have been posted in several countries, including Nepal, Singapore, Brussels, the US and the UK, to help Indian authorities check smuggling, the officials said.

https://www.business-standard.com/article/pti-stories/india-to-post-customs-intelligence-officers-in-china-to-check-financial-frauds-119031700146_1.html

MORE THAN £100 BILLION OF UK PROPERTY IS SECRETLY OWNED

The Guardian on 17th March reported that a study by Global Witness showed that shows 87,000 properties – 40% of them in London – are anonymously owned by firms registered in tax havens.  40% of the properties are in London.  It says that the combined value of the properties was at least £56 billion, according to historical Land Registry data at the time of their acquisition.  Once inflation is factored in this would exceed £100 billion.

https://www.theguardian.com/uk-news/2019/mar/17/100-billion-of-uk-propert-secretly-owned-anonymous-firms-tax-havens

INDIAN AUTHORITIES RAIDS OFFICES OF GLENCORE, EXPORT TRADING GROUP AND EDELWEISS GROUP OVER PROBE INTO COLLUSION ON PULSE PRICES

Business Today on 17th March reported that the Competition Commission of India has been investigating allegations that the companies formed a cartel to discuss the pricing of pulses while importing and selling them in the Indian market at higher prices in 2015 and 2016, when India faced an acute shortage.  2 years of drought pushed up prices of pulses such as chickpeas and black grams, which are a staple of Indian cuisine, in 2015 and forced New Delhi to offer duty-free imports, encouraging foreign and Indian traders who imported pulses to sell locally.

https://www.businesstoday.in/current/corporate/cci-raids-offices-of-glencore-export-trading-group-edelweiss-group-over-probe-into-collusion-on-pulse-prices/story/328426.html

TUNISIA SEEKS EXTRADITION OF TUNISIAN EX-PRESIDENT’S BROTHER-IN-LAW

The Local on 17th March reported that Tunisia said it was seeking the extradition of deposed president Zine El-Abidine Ben Ali’s brother-in-law, who has been arrested in France and is wanted at home for alleged fraud.  It says that the millionaire businessman left Tunisia in January 2011 when the Arab Spring uprising forced the veteran leader to flee to Saudi Arabia.  Trabelsi — whose holdings included an airline and hotels — has denied the allegations against him, saying he accumulated his wealth from being a successful entrepreneur.

https://www.thelocal.fr/20190317/tunisia-seeks-extradition-of-tunisian-ex-presidents-brother

SRI LANKA: NATIONAL PLAN TO COMBAT BRIBERY AND CORRUPTION TO BE LAUNCHED

On 17th March, the official government news portal reported that the National Action Plan for Combating Bribery and Corruption in Sri Lanka will be launched on 18th March.  It says that the National Action Plan was prepared with the participation of all the institutions including the Commission to Investigate Allegation of Bribery or Corruption, the Presidential Secretariat and the Ministry of Public Administration and Home Affairs.

https://www.news.lk/news/political-current-affairs/item/24564-national-plan-to-combat-bribery-and-corruption-launched-tomorrow

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https://www.ecfr.eu/publications/summary/the_displacement_dilemma_should_europe_help_syrian_refugees_return_home

SUSPECT IN ALLEGED MONEY LAUNDERING, SANCTION-BUSTING CASE REJECTS ALL CHARGES

On 17th March, Rferl reported that one of the accused in the controversial Petrochemical Commercial Company (PCC) in Iran has insisted on her innocence and rejected all the charges, including money laundering and mishandling of funds brought against her at a Tehran court.  Marjan Sheikholeslami left Iran in 2009 and is based in Canada.  The case involves more than a dozen people and revolves around Iranian efforts to export petrochemicals in face of international sanctions put in place in 2011.  The accused are said to have either failed to reimburse government companies in hard currency – converting the proceeds to local currency before returning the money, making a profit – or outright embezzlement.

https://en.radiofarda.com/a/suspect-in-alleged-money-laundering-sanction-busting-case-rejects-all-charges/29826068.html

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BANCA D’ITALIA ORDERS CLIENT STOP AT ING IN FIGHT AGAINST MONEY LAUNDERING

US News & World Report on 16th March reported that the Italian central bank on Saturday said Dutch lender ING is not allowed to take on new customers in Italy as long as it has not improved its monitoring of client behaviour.  ING paid a record €775 million fine in a settlement with Dutch prosecutors in September for failing to spot criminal use of its Dutch accounts for years.

https://money.usnews.com/investing/news/articles/2019-03-16/banca-ditalia-orders-client-stop-at-ing-in-fight-against-money-laundering

http://www.mondovisione.com/media-and-resources/news/bank-of-italy-ing-bank-anti-money-laundering-measures/

 

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OTHER THINGS YOU MAY HAVE MISSED – MARCH 16

16th March 2019

TURKEY: 3 DETAINED FOR SMUGGLING ARTEFACTS AND RADIOACTIVE CALIFORNIUM

On 15th March, Brinkwire reported that Turkish gendarmerie had seized 7 grams (0.24 oz) of radioactive californium and 1,195 historical artefacts during an anti-smuggling operation in south-eastern Diyarbakir province.  Californium is a radioactive chemical element first synthesised at the Lawrence Berkeley National Laboratory of California University in 1950.  It is considered to be highly hazardous and is used in nuclear reactors as well as oil wells.

http://en.brinkwire.com/news/turkey-three-detained-for-smuggling-artifacts-californium/

JADE AND GEM SMUGGLING COSTS MYANMAR BILLIONS

The Diplomat on 15th March reported that, according to a new report by the Natural Resource Governance Institute (NRGI), Myanmar’s poorly-regulated jade and gemstones production means up to two-thirds of all the country produces is possibly not subjected to tax, and also suffers from chronic undervaluing of registered jade and gemstones.  Myanmar produces 90% of the world’s jade and is a leading producer of rubies, sapphires, and other varieties of coloured gemstones.  China buys most of Myanmar’s jade, with high-end jade sometimes exceeding the price of gold.

https://thediplomat.com/2019/03/jade-and-gem-smuggling-costs-myanmar-billions/

UK: LEGAL REGULATORS OUTPERFORMING ACCOUNTANCY ON AML SUPERVISION

On 15th March, the Law Society Gazette reported that, according to OPBAS, regulators of law firms have had more success than their accountancy counterparts in ensuring that AML rules are observed.  However, it also concludes that almost half of legal regulators are not doing enough supervision.  54% of accountancy regulators and 44% of legal regulators did not have sufficient supervisory activity, the report said, and many had ‘underdeveloped, or neglected, procedures for reporting and escalating potential AML issues’.

https://www.lawgazette.co.uk/law/legal-regulators-outperforming-accountancy-on-aml-supervision/5069639.article

SWEDBANK LAUNDERING CASE GROWS AS $10 BILLION FOUND IN REVIEW

Bloomberg Law on 15th March reported that Swedbank AB, which dominates financial markets in the Baltic region, and which is Sweden’s oldest bank, may have handled considerably more in suspicious transactions tied to an Estonian money laundering scandal than first reported.  This was according to Sweden’s main television broadcaster, SVT, which cited a 2018 internal review by the bank.

https://news.bloomberglaw.com/white-collar-and-criminal-law/swedbank-laundering-case-grows-as-10-billion-found-in-review

CONVICTED BIRMINGHAM FRAUDSTER ORDERED TO PAY £1.52 MILLION

Birmingham Press on 15th March reported that the SFO has secured the forfeiture of over £1.5 million from convicted fraudster Nisar Afzal, 61, and which came from the sale of 2 properties in Birmingham, which Afzal originally bought with the funds from a series of long-firm frauds.  He had been convicted in 2011.

http://thebirminghampress.com/2019/03/convicted-birmingham-fraudster-ordered-to-pay-1-52-million/

PWC INVESTIGATION FINDS $7.4 BILLION ACCOUNTING FRAUD AT STEINHOFF

Reuters on 15th March reported that South African retailer Steinhoff said an independent report had found it had overstated profits over several years in a $7.4 billion accounting fraud involving a small group of top executives and outsiders.

https://uk.reuters.com/article/us-steinhoff-intln-accounts/pwc-investigation-finds-7-4-billion-accounting-fraud-at-steinhoff-company-says-idUKKCN1QW2C2

SINGAPORE: 6,000 CARTONS OF CONTRABAND CIGARETTES HIDDEN IN GAMING MACHINES

On 15th March, Customs Today reported that the Immigration & Checkpoints Authority (ICA) confiscated 6,000 cigarettes hidden in gaming machines at a warehouse, hidden in 10 “Game Machines” in a 40-foot container at the warehouse.

http://www.customstoday.com.pk/ica-seizes-6000-cartons-of-contraband-cigarettes-hidden-in-gaming-machines/

ARREST OF ELN ARMS DEALER IN COLOMBIA REVEALS GLOBAL NETWORK

Insight Crime on 15th March reported on an intricate international arms trade extending from the US to Colombia.  José Alexander Peláez Mejía, aka “Zeus” or “Mono,” was arrested March 8th at Bogotá Airport after being deported from Honduras, where he lived.  He is accused of being the top arms dealer for members of the National Liberation Army (Ejército de Liberación Nacional – ELN) in the Colombian department of Antioquia.  His arrest was part of an operation co-ordinated by Interpol, which concluded with 560 arrests in 8 countries of Latin America.

https://www.insightcrime.org/news/brief/colombia-arrest-eln-arms-dealer/

WILL US EXTEND IRAN OIL WAIVERS?

On 13th March, the Center for a New American Security provided a link to an interview on S&P Global Platts with Elizabeth Rosenberg, director of the energy program at CNAS and a former senior sanctions adviser at the US Treasury.  She predicted continuing significant reduction exemptions to China and India because it would be economically and politically difficult, perhaps impossible, for them to get to zero.

https://www.spglobal.com/platts/en/market-insights/podcasts/spotlight/031519-ceraweek-fuel-diversity

LEBANON SPEEDS UP MEASURES TO CREATE ‘NATIONAL ANTI-CORRUPTION COMMISSION’

Asharq Al-Awsat on 16th March reported that the Lebanese Parliament is expected to give the green light to the creation of a National Anti-Corruption Commission after it was approved by both the Finance and Budget, and Administration and Justice Committees.  It will the power to prosecute those engaged in corruption offences, and it has the right to impose travel bans and lift bank secrecy in cases where corruption is detected.

https://aawsat.com/english/home/article/1636596/lebanon-speeds-measures-create-‘national-anti-corruption-commission

VIETNAM: FORMER ANZ BANK EMPLOYEE TO STAND TRIAL IN $4 MILLION FRAUD CASE

On 16th March, VN Express reported that Nguyen Pham Gia Tho, and his sister-in-law Nguyen Tuong Vi, director of an agricultural product export/import company, have been charged in connection with for allegedly falsifying customers’ signatures and misappropriating over $4 million. He was head of customer relations at ANZ’s in Saigon.

https://e.vnexpress.net/news/business/companies/former-anz-employee-to-stand-trial-in-4-million-fraud-case-3895508.html

GLOBAL WITNESS: CROWN DEPENDENCIES ‘PROVIDE GETAWAY CARS FOR TERRORISTS’               

On 16th March, the Guernsey Press reported that the NGO, Global Witness, which campaigns against corruption, has  said that Guernsey and the other Crown Dependencies can act as ‘getaway cars for terrorists, dictators, money launderers and tax evaders all over the world’, and had been a jurisdiction of incorporation for companies that the NGO had investigated and it urged the Prime Minister to act over financial transparency rules and the plan to create a public beneficial ownership register.

https://guernseypress.com/news/2019/03/16/crown-dependencies-provide-getaway-cars-for-terrorists/

CONNECTICUT SUPREME COURT ALLOWS LAWSUIT AGAINST FIREARMS MANUFACTURERS OVER SANDY HOOK MASSACRE

Jurist on 15th March reported that the Connecticut Supreme Court had reversed a lower court decision to dismiss a lawsuit brought by the families of victims from the 2012 Sandy Hook elementary school shooting to sue firearms manufacturers.

https://www.jurist.org/news/2019/03/connecticut-supreme-court-allows-sandy-hook-shooting-victims-families-to-proceed-in-firearms-industry-lawsuit/

 

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CANADA TO SET UP NEW AML TASK FORCE TO IMPROVE INVESTIGATIONS AND SUCCESSFUL PROSECUTIONS

The Province on 16th March reported that the forthcoming Budget will include funding for a new task force that will bring together several federal agencies – RCMP, Canadian Revenue Agency, Canada Mortgage and Housing, justice department and the FINTRAC FIU.

https://theprovince.com/news/local-news/feds-to-launch-anti-money-laundering-task-force-as-part-of-2019-budget/wcm/cbb446ea-8bca-4033-bd41-44e46230f47f

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JERSEY: COURT GRANTS ANONYMITY TO COMPANY CEO IN PROCEEDS OF CRIME JUDICIAL REVIEW HEARING

On 16th March, the Jersey Evening Post reported that anonymity has been granted to a CEO, who has declined to provide evidence about the origin of assets suspected to be the proceeds of crime, as it would stain his business reputation ‘immeasurably’.  The company has had its funds effectively frozen by the States police and he argued that publicity would cripple the business’s day-to-day operations.  The company is said to be an adviser to a hedge fund, and already been named in civil class actions in the US in which they are alleged to have been involved, along with others, in a series of manipulative share issuance.  The CEO is a discretionary beneficiary of a Jersey proper law trust which through a wholly-owned BVI company has invested in, and received dividends, from the hedge fund.  The Jersey administrators of the BVI company filed a SAR and the States police decided to withhold consent to the normal operation of its accounts; and the CEO applied for judicial review of that decision.

https://jerseyeveningpost.com/news/2019/03/16/court-grants-anonymity-to-company-ceo/