On 18th April, the Council of Europe reported that an on-site visit by a panel of experts as part of the mutual evaluation of the AML/CFT system in Gibraltar took place on 1st to 12th April. The report is due to be presented to a plenary in December.
On 22nd April, a news release from the UN advised that the entry for FETHI BEN HASSEN BEN SALEM AL-HADDAD was deleted after the relevant Sanctions Committee concluded its consideration of the delisting request for this name submitted by the designating State.
Nyman Gibson Miralis on 15th April published an article concerned with possible defences to a proposed new corporate offence of ‘failing to prevent bribery of a foreign public official’ which makes corporations liable for the actions of their associates. It says that decisions in the UK and US have considered what constitutes ‘adequate procedures’ to prevent the commission of a bribery offence, and these cases provide useful guidance within the Australian context, together with guidance materials from the International Standards Organisation. The article details the factors that have been identified. It also links to a factsheet from the Australian Trade and Investment Commission (Austrade) on “failure to prevent” bribery offences ands the meaning of “adequate procedures” for a defence. The factsheet also refers to the UK Bribery Act, and and US cases involving bribery, and the guidance issued by both and case law.
The factsheet is available at –
22nd April 2019
US REPORT: ADHERENCE TO AND COMPLIANCE WITH ARMS CONTROL, NONPROLIFERATION, AND DISARMAMENT AGREEMENTS AND COMMITMENTS
The US State Department has published a report which assesses US compliance with and adherence to arms control, non-proliferation, and disarmament agreements and related commitments in 2018, including Confidence- and Security-Building Measures (CSBM), as well as the compliance and adherence in 2018 of other nations to arms control, non-proliferation, and disarmament agreements and commitments, including CSBM and the Missile Technology Control Regime (MTCR), to which the US is a participating State. The report mentions chemical, biological and conventional weapons, as well as nuclear and missile control agreements.
TANZANIAN MINISTER ORDERS SUSPENSION OF GOLD-PROCESSING IN SOUTHERN REGION
The Chinse news service, Xinhua, reported on 22nd April that a Tanzanian Minister has ordered all gold-processing plants in the southern highland region of Songwe to suspend production following reports of smuggling out of the country. The mining sector contributes around 4.8% to Tanzania’s GDP, according to the government.
TURKMENISTAN HAS APPLIED FOR MEMBERSHIP IN THE EGMONT GROUP
Baker McKenzie reported on 22nd April that a deputy minister made the remarks at the OSCE Regional Conference on Countering Terrorist Financing and Organized Crime in Ashgabat.
US OFFERING $10 MILLION FOR INFORMATION ON HEZBOLLAH FINANCIAL MECHANISM
On 23rd April, the Jerusalem Post reported that the US State Department will offer $10 million for information leading to the disruption of the global finances of Hezbollah – estimated by Forbes magazine in December 2017 as having as much income as $1.1 billion – said to be from Iranian support, money laundering, donor support and business investments. It is offering $10 million for information on 3 of its financiers: Mohammed Bazzi, Adham Tabaja, and Ali Charara.
The Malta Independent on 22nd April reported that the 43 year-old Italian businessman is allegedly suspected of laundering mafia funds has been denied bail after he was arrested on a European Arrest Warrant. A court order means he cannot be named. The man is understood to be wanted by the Italian authorities to answer to charges that he laundered cash belonging to the Mafia through his i-gaming company.
On 22nd April, AA.com reported that authorities have detained 4 business tycoons close to recently-resigned President Abdelaziz Bouteflika – businessmen known locally as “the Coninav brothers”, along with Algerian billionaire Issad Rebrab, on corruption charges. The 4 were reportedly detained for “allegedly misusing their influence and failing to fulfil their obligations as laid down in contracts concluded with the state”. Rebrab, owner of Algeria’s Cevital Group and reputedly Algeria’s richest man (Rebrab is currently worth some $3.8 billion), has been detained to answer allegations that he “made false statements, imported sub-standard equipment, and was exempted from paying custom fees”. Late last month, Ali Haddad, another prominent Algerian businessman and former head of Algeria’s Business Leaders Forum, was similarly detained on corruption charges. The move comes as the army chief announced that members of the ruling elite would soon be prosecuted for corruption.
Energy Voice on 22nd April reported that the Trump administration will not renew waivers that let countries buy Iranian oil without facing US sanctions. The current set of waivers — for China, Greece, India, Italy, Japan, South Korea, Taiwan and Turkey — expire on May 2nd. It is expected that other suppliers, including Saudi Arabia and UAE, will offset the loss of Iranian crude on the market. Meanwhile, the Business Standard reports a Bloomberg story that the move threatens to squeeze supplies further in a market that is already facing supply disruptions from Venezuela to Libya and Nigeria.
20th April 2019
EU TARGETING ART “FREEPORT” CUSTOMS WAREHOUSES
On 19th April, Forbes published an article saying that some of the facilities used to store things like fine art and wines, classic cars and other luxury items have informal ties to people involved in the Danske Bank fraud, namely those from Azerbaijan. It says that an October EU government study by the European Parliamentary Research Service (EPRS) shined a spotlight on them as a sort of de facto offshore bank account that could be used by anonymous shell companies to execute financial transactions with little oversight, and zero taxes. Geneva Freeport and Le Freeport in Luxemburg were the 2 warehouses cited in the report – both of them are partially owned by Swiss art dealer Yves Bouvier, who used to be the largest private shareholder of the Geneva port until he sold his stake in 2017 after the government tightened rules on customs warehouses. He also has free ports in Singapore and China. Le Freeport’s other owners include French nationals Jean Marc Peretti and Olivier Thomas. It is claimed that owners of goods in Le Freeport can no longer use offshore companies, trusts, their lawyers, nominees or galleries to shield their ownership.
UK: FURTHER MEMBER OF A FORGERY GANG RESPONSIBLE FOR MAKING AND SUPPLYING FALSE IDENTITY DOCUMENTS JAILED FOR 6 YEARS
A news release from the NCA said that Ukrainian national Oleksandr Sukhoviy, 39, was arrested by NCA officers in October 2018. The arrest followed an investigation into an industrial-scale forgery factory operating in Stratford, East London, and run by fellow Ukrainian Sergiy Mykhaylov and which was set up with computers and printers capable of producing tens of thousands of documents. Officers recovered over 3,000 completed identity documents, 3,500 passport style photos and 300 Construction Skills Certificate Scheme (CSCS) cards, as well as 40,000 blank cards and £15,000 in cash.
TRUSTS v FOUNDATIONS: WHAT ARE THE DECIDING FACTORS?
On 29th March, Carey Olsen published an article which asks which should one use, and is one preferable to the other? This article sets out to take a brief look at how trusts and foundations differ and the circumstances in which one might be used instead of the other. One advantage that foundations provide as an alternative to trusts for wealthy individuals from civil law jurisdictions where the concept of a trust is not familiar.
A GUIDE TO GUERNSEY’S NEW ILS HYBRID VEHICLE
On 26th March, Carey Olsen published a short guide to the world’s first hybrid vehicle for Insurance Linked Securities (ILS) fund managers.
21st April 2019
SUDAN’S EX-PRESIDENT OMAR AL-BASHIR INVESTIGATED OVER SUITCASES STUFFED WITH CASH
ABC News in Australia reported on 20th April that millions of dollars’ worth of cash in US dollars, euros and Sudanese pounds has been found in suitcases at the home of former Sudanese president Omar al-Bashir, according to a judicial source – suitcases loaded with more than $10 million in 3 currencies.
TUNISIA STRUGGLES WITH SCOURGE OF TAX EVASION
The Arab Weekly on 21st April reported that official figures indicate that there are only 1,600 inspectors assigned to the tax authority, one-quarter of whom do not carry out field inspections.
SPANISH REAL ESTATE NEW FOCUS IN MAJOR EUROPEAN MONEY LAUNDERING SCHEME
The Real Deal on 21st April said that Spanish real estate has become the focus of the probe into the money laundering case linked to the death of Russian attorney Sergei Magnitsky. It claims that a portion of the $230 million at the heart of the scheme, which started in Russia and moved through bank accounts in other European countries, was eventually poured into Spanish real estate.
19th April 2019
CRACKDOWN ON PUERTO RICO BANKS FOLLOWING VENEZUELA SANCTIONS
KYC 360 on 19th April reported that US sanctions on Venezuela have led the New York Federal Reserve to crack down on Puerto Rico’s $50 billion offshore banking industry. Offshore banks in Puerto Rico are able to open accounts with the Federal Reserve since the island is a US territory, and that gives them a competitive advantage over other offshore banking jurisdictions like the BVI.
US ANNUAL ASSESSMENT OF FOREIGN TRADE BARRIERS
On 17th April, White & Case published an article about the most recent US Trade Representative (USTR) annual National Trade Estimate (NTE) Report on Foreign Trade Barriers, which “highlights significant foreign barriers to U.S. exports, U.S. foreign direct investment, and U.S. electronic commerce”. This was published on 29th March. The report aims to shed light on these issues by reviewing key developments in this year’s NTE with respect to major US trading partners, namely China, Japan, the EU, Canada, Mexico, Brazil, and Korea.
The report is available at –
THAI SENIOR MONK GETS 26 YEARS FOR MONEY LAUNDERING
Benar News on 18th April reported that a court in Thailand has sentenced Kitti Patcharakun, 55, a senior Buddhist monk to 26 years in prison after finding him guilty of money laundering when he and another monk embezzled almost $1 million of government funds earmarked for temples. The conviction took place 8 months after another court ordered a former jet-setting member of Thailand’s Buddhist clergy to serve 114 years in prison for fraud, money laundering and computer crimes. Prosecutors said Kitti and the former director of the National Buddhism Office (NBO), Nopparat Benjawatananan, siphoned off $903,225 by collaborating and falsifying projects for 12 temples in 4 provinces.
ARMED GROUPS SEIZING WEAPONS AND AMMUNITION FROM NON-UN PEACE OPERATIONS
A report from the Small Arms Survey details efforts to improve weapons and ammunition management in non-UN peace operations in order to enhance force protection and mandate implementation. It says that more than 25 organisations apart from the UN have deployed more than 100 peace operations to date. Thousands of small arms and light weapons as well as millions of rounds of ammunition have been lost in recent years as a result of attacks on fixed sites, patrols, and convoy movements. Forced abandonment of equipment, burglary, theft, corruption, as well as poor discipline and practices also contribute to diversion of materiel.
2 FORMER EXECUTIVES OF A LAS VEGAS INVESTMENT COMPANY EXTRADITED FROM JAPAN OVER A $1.5 BILLION PONZI SCHEME
A news release on Mondo Visione on 18th April reported that Japanese authorities have extradited to the US 2 former executives of a Las Vegas, Nevada, investment company in connection with their alleged roles in a $1.5 billion Ponzi scheme. Junzo Suzuki, 70, and Paul Suzuki, 40, are father and son and are both Japanese nationals, and were each charged in a July 2015 indictment. The alleged fraud involved a company called MRI. MRI purportedly specialised in “factoring,” whereby the company purchased accounts receivable from medical providers at a discount, and then attempted to recover the entire amount, or at least more than the discounted amount, from the debtor.
AMERICAN BUREAU OF SHIPPING (ABS) AND CARGO INCIDENT NOTIFICATION SYSTEM (CINS) JOINT VENTURE TO DEVELOP BEST PRACTICES FOR MOVING DANGEROUS GOODS
On 18th April, Port Technology reported that the American Bureau of Shipping (ABS) and Cargo Incident Notification System (CINS) have joined to make actionable recommendations to shippers and mitigate the risks of stowing dangerous goods aboard container ships. By establishing a comprehensive set of guidelines, ABS and CINS hope to lead a focused application of existing risk assessment processes. This follows a number of recent incidents involving dangerous cargo.
OPERATION CAR WASH – WHAT HAPPENED TO COMPLICIT SWISS BANKS?
On 6th April, Transparency International published an article which was an abridged version of a presentation delivered at ‘Dark Havens: Confronting Hidden Money & Power’, a conference held in Berlin on 5th–6th April. Lava Jato, in Portuguese, was first uncovered by Brazilian prosecutors in 2014 and continues to be the subject of investigations. 2 Swiss banks played a key role in facilitating this scheme: BSI and Julius Baer (formerly Merrill Lynch). The article looks at the role of the Swiss banks, saying that there is no publicly available information indicating that these 2 Swiss Banks were punished by Swiss authorities for their role in these schemes.
ODEBRECHT: GIGANTIC CORRUPTION SCANDAL SHOWS NO SIGN OF WANING
A BBC article on 18th April says that the suicide of former Peruvian president Alan Garcia, just as he was being arrested on allegations, he received bribes from Odebrecht, shows that one of the greatest corporate corruption scandals in the world is not going away. The article examines the background of the company and corruption scandal.
ENGLISH HIGH COURT CASE ON FIDUCIARY DUTIES OF DISSENTING DIRECTORS
On 18th April, Cadwallader published a memorandum about a recent High Court case decision involving a shareholder and executive director of the Stobart Group, and which took a restricted view of the freedom of a dissident director to take his case outside the confines of the boardroom. Simultaneously, the High Court endorsed the freedom of the board to silence that director regarding public statements. The firm concludes that: a dissident director who is also a shareholder must be careful in public communications to make clear that he is writing as a shareholder and not a director; a director should not disclose confidential information without express permission from the Board; and a dissident director should refrain from taking any steps that can subsequently be considered as damaging the company.
OSCE SAYS BOSNIA PROSECUTORS ARE DOING A POOR JOB AGAINST CORRUPTION
Reuters on 18th April reported that the Organisation for Security and Cooperation, in a report on corruption cases in 2017-2018, found the country’s 2 prosecution offices specialising in dealing with the most serious graft cases did not initiate the majority of such cases, but that indictments were filed by lower-level prosecution offices. Only 1 in 3 high-level corruption cases resulted in conviction while the conviction rate in medium level graft cases was still low at 74%, according to the report.
CYPRUS HAS MADE ‘ENORMOUS PROGRESS’ ON MONEY LAUNDERING CLAMPDOWN
The Cyprus Mail and US media on 19th April reported that US Treasury Assistant Secretary for Terrorist Financing Marshall Billingslea has praised Cyprus’ “enormous progress” on issues relating to AML.
ECUADOR ISSUES ARREST WARRANT FOR FORMER MINISTER WHO BACKED ASSANGE
Zero Hedge on 19th April reported that Ecuadorian President Lenin Moreno appears to be cracking down on opposition voices, including outspoken supporters of Julian Assange. Moreno is himself facing a corruption scandal – the revelations contained within the so-called INA papers – which threatens his administration. Ricardo Patino is being sought by the government because of his links to Swedish software developer Ola Bini, arrested on hacking charges related to his alleged relationship with Wikileaks. Patino fled Ecuador, and is believed to be hiding in Peru.
THE PORT OF BUENAVENTURA IN COLOMBIA: COCAINE PATH OF LEAST RESISTANCE
On 19th April, an opinion piece in Insight Crime claimed that drug traffickers are moving record amounts of cocaine through Buenaventura, facilitated by industrial scale corruption. It says that it is claimed that checks on containers could total around 8% (74,000) of the total daily throughput. For a drug trafficker, it says, assuming an 8% risk of seizure is a risk he will gladly take – losing 8% of his shipments is simply the cost of doing business. The truth, however, is that perhaps as little as 3% of all containers are really checked – and this is only if one assumes corrupt staff are not simply waving through containers already “contaminated” with cocaine.
On 19th April, OCCRP carried an article about the alleged theft of $5.5 billion from PrivatBank, once Ukraine’s largest commercial lender. The suspected masterminds are the bank’s 2 oligarch owners, who stand accused of absconding with an amount roughly equal to 5% of the country’s GDP. OCCRP claims that it has traced the mechanism that appears to have allowed the oligarchs to funnel such vast wealth out of Ukraine, saying that the money was moved through a PrivatBank subsidiary in Cyprus. Officials in Ukraine, treating the Cyprus branch as if a domestic branch, never detected that cash transferred to Cyprus was leaving Ukraine; and Cypriot regulators either failed to detect that the various bank transfers totalling $5.5 billion were backed by bogus contracts, or did not take the necessary action to stop them. The article also says that another route the Ukrainian funds took via Cyprus led to Latvia, with some of an IMF loan to Ukraine being sent via Cyprus to accounts at PrivatBank Latvia – the ownership arrangements at the Latvian bank later being altered making it difficult to trace the missing funds.
A DoJ news release on 18th April reported that Hitesh Madhubhai Patel, 42, an Indian national has been extradited to the US from Singapore to face charges related to his role as an operator of a call centre network that targeted US victims. The massive India-based telephone impersonation fraud and money laundering conspiracy defrauded thousands of US residents out of hundreds of millions of dollars using the IRS impersonation scam. The indictment alleges that Patel operated the HGlobal call centre conglomerate and participated in a complex fraudulent scheme involving a network of call centres based in Ahmedabad, India. Using information obtained from data brokers and other sources, India-based conspirators allegedly called potential victims while impersonating officials from the IRS or US Citizenship and Immigration Services.
Private Eye in its latest edition carries an article saying that a trial lasting more than 3 years would rightly be rejected as absurd. That such a legal marathon should still be running and have only reached the halfway stage, with the defendants yet to give evidence, would justly be laughed out of court – but this case, involving alleged corruption, fraud and money laundering, is continuing. It points out the that the $30 million cost to date represents almost $1,000 per head of the 35,000 population of the small country.
Real Clear Defense on 18th April carried an article saying that between 2013 and 2017, US special operations forces saw combat in at least 13 African countries. Those countries are said to have included Burkina Faso, Cameroon, Central African Republic, Chad, Democratic Republic of Congo, Kenya, Libya, Mali, Mauritania, Niger, Somalia, South Sudan and Tunisia. It reports that Yahoo News has put together a list 36 such operations across Africa – a variety of different military missions, ranging from psychological operations to counterterrorism.
On 18th April, the UN advised that the entry for ABDOULAYE HISSENE, a former Minister of Youth and Sports and a leader of armed militias in Bangui, has been amended.
18th April 2019
PRIORITY IN INSOLVENCY –THE HMRC CROWN PREFERENCE PROPOSALS
Dentons published an article on 4th April about a consultation paper from HMRC on 26th February that proposes legislation that will give HMRC the elevated status to secondary preferential creditor in a company’s insolvency. If this is implemented, HMRC will have priority to recover certain taxes from insolvent businesses ahead of other creditors from 6th April 2020. This article sets out to consider if this would mean a return to the position abolished in 2003 (it determines that it is not a full return to that position), and the scope and rationale of the proposals, focusing on the impact on secured creditors in an insolvency. The consultation closes on 27th May.
A GUIDE TO THE LABUAN IBFC
The company that administers the Labuan International Business and Finance Centre in Malaysia has published a guide to the Centre, which has a 3% basic tax rate for businesses’ trading activity.
PRESIDENT ASSAD’S UNCLE WILL STAND TRIAL IN FRANCE ACCUSED OF USING SYRIAN STATE FUNDS TO BUILD UP $100 MILLION PROPERTY EMPIRE
The Daily Mail reported on 17th April that Rifaat al-Assad, 81, a former vice-president of Syria is accused of using funds from Syrian state coffers to build up a $100 million property empire. It says that his reported French fortune includes 2 Paris townhouses, a stud farm and chateau near the French capital and 79,000 square feet of office space in Lyon. He has been under investigation by French authorities since April 2014, and left Syria in 1984 after mounting a failed coup against his brother Hafez al-Assad, Bashar’s father.
2 UK AGENCIES OUTLINE PLANS TO FIGHT FINANCIAL CRIME IN 2020
KYC 360 on 18th April reported that the FCA said in a 2019/2020 business plan that its Office for Professional Body Anti-Money Laundering Supervision (OPBAS) would ratchet up pressure on associations and other organisations that don’t adequately police their members for failing to implement checks on financial crimes. FCA will separately extend its Senior Managers and Certification Regime (SMCR) to all entities in December, according to the plan. The regime, which already applies to banks, attempts to hold executives, including senior compliance officers, accountable for institutional violations of financial regulations. The NCA has published a 2019/2020 business plan under which it would “maximise new powers, for example Unexplained Wealth Orders and Account Freezing Orders, across all agencies to tack illicit finance”. NCA will also prioritise an ongoing overhaul of its technical capabilities to process and analyse SAR filed by British banks and other firms.
POLICE RECOMMEND INDICTING CZECH PM FOR FRAUD
On 18th April, EurActiv reported that Czech police believe billionaire Prime Minister Andrej Babiš should be indicted for alleged involvement in EU subsidy fraud worth €2 million, a spokesman said.
EUROPEAN BORDER AND COAST GUARD: STRONGER EU BORDERS WITH A NEW STANDING CORPS OF 10,000 BORDER GUARDS
A EU news release on 17th April reported that the European Parliament has adopted the proposal of the EU Commission to reinforce the European Border and Coast Guard Agency with a standing corps of 10,000 border guards by 2027. The Agency will also have a stronger mandate on returns and will cooperate more closely with non-EU countries, including those beyond the EU’s immediate neighbourhood. This reinforcement will give the Agency the right level of ambition to respond to the common challenges facing Europe in managing migration and its external borders. The EU Council now has to adopt the Regulation. The enhanced mandate of the European Border and Coast Guard will enter into force 20 days after publication of the text in the Official Journal. The new European Border and Coast Guard standing corps will be available for deployment from 2021, once it becomes fully operational and will reach its full capacity of 10,000 border guards by 2027.
EU COMMISSION WELCOMES EUROPEAN PARLIAMENT ADOPTION OF STRONGER AND MORE SECURE EU VISA RULES
A news release from the EU on 17th April said that the European Parliament has adopted the Commission’s proposal to reform the rules on Schengen visas, making it easier for bona fide travellers to obtain a visa to come to Europe for short stays, whilst strengthening security standards and reducing irregular migration risks.
THIRD COUNTRIES ALIGN WITH EU SANCTIONS IN RESPECT OF UKRAINE SANCTIONS
3 news releases on 17th April reported that Montenegro, Albania, Iceland, Norway, Moldova had agreed to align with various EU sanctions in respect of Ukraine.
UK ANTI-CORRUPTION ACTIVITY
On 17th April, the Home Office released a collection of material which brings together documents related to the government’s work to combat domestic and international corruption. It includes the first Anti-Corruption Newsletter, as well as legislation, strategy and progress updates.
IRELAND: CAB RAIDS ARE ‘A MAJOR DISRUPTION’ TO CORK GANG
On 17th April, the Irish Examiner reported that the Criminal Assets Bureau seized 10 vehicles, 4 Rolex watches, and more than €30,000 in cash in a series of early morning raids targeting a Cork-based organised crime gang. The operation has been described as “a major disruption” to the activities of a gang known to be involved in fraud, theft, and deception and is suspected of extorting large sums of money from elderly and vulnerable people. The raids were carried out as part of Operation Thor, the ongoing Garda operation which targets organised crime gangs.
BOX LINES LAUNCH DIGITAL CONTAINER SHIPPING ASSOCIATION
Lloyds Loading List on 17th April reported that 4 of the world’s largest container lines are joining forces to establish standards that can be used across the industry. The aim is to develop a blueprint for developing new services. The association, which will be based in the Netherlands, has been established by Maersk, Hapag-Lloyd, Mediterranean Shipping Co and Ocean Network Express with the intention of setting standards for the digitalisation of container shipping.
$20 BILLION OF US EXPORTS ON THE EU RETALIATION LIST IN AIRCRAFT SUBSIDY DISPUTE
Sandler Travis Rosenberg on 18th April reported that the EU Commission has published a preliminary list of US products on which the EU could impose additional tariffs of up to 100% in a long-running transatlantic dispute over aircraft subsidies involving Airbus and Boeing. The list covers hundreds of items, including aircraft, auto parts, tractors, handbags, video game consoles, chemicals, and food products, with an annual import value of $20 billion. Comments on this list may be submitted through May 31st.
CORRUPTION ALLEGED IN KYRGYZSTAN PASSPORT DEAL
On 18th April, OCCRP reported that the winning bid of $13.4 million for production of new biometric passport is at the centre of a major corruption probe. Early this month, Kyrgyzstan’s state security agency, known as the GKNB, accused both current and former government officials of accepting bribes from the winner in the form of payment for international travel. The focus of the investigation is the State Registry Service, the agency that issues passports to citizens and put out the tender. 3 officials from the agency have been detained, and 1 of them, according to Kyrgyz media, is also the head of the tender commission that decided on the bid, though this has not been officially confirmed. Investigations also involve Garsu Pasaulis, the Lithuanian company that won the contract, and a Belgian company (Semlex Europe) and Belgian citizen behind the company – said to be under investigation in Belgium and the Comoro Islands.
SHIP SUSPECTED OF CARRYING NORTH KOREAN COAL IS UNDER INVESTIGATION
The Yonhap News Agency on 18th April reported that a Togo-flagged ship has been under investigation in South Korea on suspicion of carrying North Korean coal in a potential violation of UN sanctions, an opposition lawmaker said. It is believed to have come from Russia’s Nakhodka, entered the South Korean south-eastern port of Pohang in February to unload 3,217 tons of North Korean coal. It has become the 6th ship whose departure from a South Korean port was suspended or denied due to suspected shipments of North Korean coal or ship-to-ship oil transfer in international waters.
FORMER AIR CHINA FLIGHT ATTENDANT PLEADS GUILTY TO SMUGGLING MYSTERY PACKAGES THROUGH JFK FOR CHINESE MILITARY OFFICIALS
The New York Daily News on 17th April reported that Ying Lin, who was employed by the international air carrier from 2002 to 2016, pleaded guilty to acting as an agent of a foreign government at a hearing held in federal court. She admitted she and her colleagues smuggled packages, whose contents remain a mystery, from JFK to Beijing “at the direction of officials and my employer, Air China”. A naturalised US citizen, Lin faces a maximum sentence of 10 years in federal prison and possible immigration consequences.
SPANISH NAVY RESCUES STRICKEN VESSEL FROM PIRATES
On 18th April, Ports Technology reported that a warship has rescued the crew of a cargo ship held captive by pirates in the Gulf of Guinea for 4 days. The captain and the 12 crewmembers, all Nigerian, had been held hostage by the AK-47 wielding pirates for 4 days, during which all on-board money and valuables had been stolen.
PAKISTAN TERRORISM SANCTIONS GUIDELINES PUBLISHED
The Ministry of Foreign Affairs has published guidelines for compliance with UN SCR 1267 and 1988 that target ISIL/Da’esh/Al-Qaida and the Taliban. It is said that the Guidelines would particularly help officials in various Ministries, Departments and Agencies at the Federal and Provincial levels to understand the provisions of the sanctions regimes; understand the domestic enabling legislation to implement the resolutions in Pakistan; and provide a common understanding of the obligations of each stakeholder and of the operational issues for implementation of relevant UN SCR.
SUDAN: FORMER PRESIDENT OMAR AL-BASHIR MOVED TO PRISON
The Guardian reported that the recently-ousted former President, 75, had been moved to Khartoum’s grim high-security Kobar prison from the presidential residence, as military rulers announced steps to crack down on corruption.
UK: HIGH VALUE DEALER GUIDANCE FOR MONEY LAUNDERING SUPERVISION
On 18th April, HMRC published updated guidance designed to help high value dealers meet their requirements for money laundering supervision, including customer due diligence, record-keeping and reporting suspicious activity.
REGULATION OF ESTATE AGENTS IN UK
On 18th April, the House of Commons Library published a briefing paper which provides an outline of the current regulation of estate agents in England and Wales only. The situation is very different in Scotland, where there are different property laws – in Scotland, there is a much earlier legally binding agreement between the buyer and seller of a property.
UK COMPANY AUDITS: PROBLEMS AND SOLUTIONS
On 18th April, the House of Commons published a briefing paper which explains how audit works, the problems the industry faces and how it is being reformed after recent scandals.
UK OFFICIAL SECRETS ACT 1989: DISCLOSURE OF OFFICIAL INFORMATION
On 18th April, the House of Commons published a briefing paper which says that 11th May marks 30 years since the Official Secrets Act 1989 received Royal Assent. Among other provisions, replaced section 2 of the Official Secrets Act 1911 that had made it an offence to disclose any official information without lawful authority. The 1989 Act replaced the ‘catch-all’ section 2 and created offences associated with the unauthorised disclosure of information in a number of categories.
US AUTHORITIES CLAMP DOWN ON $2.3 MILLION CRYPTOCURRENCY MONEY LAUNDERING IN NEW YORK
On 18th April, FX Street reported on charges for 3 suspects who were using debit cards preloaded with Bitcoin and withdrawing large sums of cash at ATM in New York and New Jersey. The men were also charged with operations of bogus storefronts on the dark web that sold illegal drugs. When they mailed the counterfeit drugs to purchasers, the defendants had used return addresses that falsely identified the sender as a New York City business, including multiple Manhattan law firms.
SENIOR ARMENIAN OFFICIAL INDICTED IN CORRUPTION PROBE
On 18th April, Azatutyun reported that the National Security Service (NSS) has brought corruption charges against a senior government official and political ally of Prime Minister Nikol Pashinian who actively participated in last year’s “velvet revolution”. The NSS said that Davit Sanasarian, the head of the State Oversight Service (SOS), will therefore be suspended pending investigation – but it decided not to arrest him for now.
ANGER IN GAMBIA AS THE EXTENT OF JAMMEH-ERA CORRUPTION AND BRUTALITY SURFACES
Deutsche Welle on 18th April reported that the extent of corruption and brutality during Gambia’s Yahya Jammeh-era is starting to surface via a truth and reconciliation commission. Ex-strongman Yahya Jammeh amassed a fortune while the people of the small West African state went without even the basics. An investigation by OCCRP has revealed that he and his cronies had looted or misappropriated at least $975 million in public funds. The Ministry of Justice puts the figure at $304 million.
IRELAND: MAN WANTED IN HUNGARY OVER FRAUD MAY ESCAPE EXTRADITION
The Irish Times on 18th April reported that a Judge refused to extend period as reasons for delay offered by Budapest were ‘vague’.
FOREIGN OFFICE STATEMENT ON TITLE III OF THE HELMS-BURTON ACT ON CUBA
A news release from the FCO on 18th April says that the UK shares the concerns expressed by the EU about the US announcement that it will lift the waiver of Title III of the Helms-Burton Act. It says that the extraterritorial application of Title III sanctions is considered to be illegal under international law, and threaten to harm UK and EU companies doing legitimate business in Cuba by exposing them to liability in US courts.
RUSSIA’S PRESSURE ON GEORGIA CONTINUES
A RUSI Commentary on 18th April says that Russia’s pressure on Georgia continues, both through the gradual seizure of more territory and through massive propaganda campaigns – more than a decade after the war that saw Russia occupy some 20% of the country. It says that Russia continues to violate Georgian sovereignty and territorial integrity with its aggressive ‘borderisation’ policy, a strategy which entails the gradual annexation of further Georgian territory through the expansion of its already illegal occupation zones.
US: CHARGES AGAINST 60 MEDICAL PERSONNEL FOR ILLEGAL PRESCRIBING AND DISTRIBUTING OF OPIOIDS DEMONSTRATES CONTINUED FOCUS ON COMPLIANCE THROUGHOUT SUPPLY-CHAIN
On 18th April, an article from Dorsey & Whitney LLP says that the Federal Government announced enforcement actions against 60 defendants in eleven federal districts, including 31 doctors, 7 pharmacists, 8 nurse practitioners, and 7 other licensed medical professionals for allegedly prescribing and distribution opioids and other dangerous narcotics and for health care fraud schemes. The charges involve over 350,000 controlled substances prescriptions and over 32 million pills. The action was led by the ARPO Strike Force was formed in December and includes a team of federal agents and prosecutors to combat the opioid epidemic in the worst hit area of the country.
SCOTLAND: NEARLY 30 PEOPLE CHARGED IN A POLICE CRACKDOWN ON “MONEY MULES” WHO KEEP CASH IN THEIR BANK ACCOUNTS FOR CRIMINALS
The BBC on 18th April reported that the operation was initially into vishing fraud, where people are duped into revealing their bank details. Detectives found that children were being recruited through social media sites to launder money for the gangs. Police Scotland has now sent a warning to all schools in Scotland saying young people are increasingly being asked by fraudsters to receive and send money through their own accounts.
DOES CORRUPTION IN MOZAMBIQUE FOLLOW THE PATTERN?
An article on Real Clear World poses this question on 18th April. It reflects on the background to the scandal, saying that the story starts in 2010. The government decided, based on its intelligence service findings and endorsed by the World Bank, that Mozambique needed to build a modern fishing fleet and a coastal monitoring and surveillance security system to control its offshore Exclusive Economic Zone – and no-one argued with this decision, it seems. It also said that Mozambique also needed to protect territorial waters from piracy, illegal fishing, and drug and arms traffickers, not to mention terrorists.
NEW ZEALAND FAKE ONLINE GAMBLING WEBSITES
On 18th April, Calvin Ayre reported that there are now at least 13 international gambling sites that use New Zealand website addresses, according to authorities, and at least one is using the official coat of arms of the country, making it appear to be more legitimate to unwitting gamblers. They are all registered as “nz” domains; but none are run from with the country. The Department for Internal Affairs (DIA), it has already reached out to the website hosting providers in order to try and have the sites taken down. There is talk of New Zealand adopting a policy similar to that of Australia, which requires anyone requesting an “au” domain to provide proof of address, physical or legal, in Australia.
SRI LANKA TO SLASH CUSTOMS INSPECTIONS AFTER BLOCKING IDENTITY THEFT
The Economy Next website on 18th April reported that Sri Lanka Customs will halve the number of physical inspections at the border but all importers, exporters, forwarding and clearing agents must re-register on a new computer system. Sri Lanka Customs is proposing to identify highly compliant and low risk traders and provide them preferential treatment during cargo clearance. It is said that re-registration, in tandem with online document processing and e-signatures will minimize the misuse of Trader Identification Numbers (TIN) by third parties.
CHINA CUSTOMS SEIZE 670 FROGS BEING SMUGGLED FROM HONG KONG
On 18th April, China.org reported that Customs seized 670 White’s tree frogs from 2 men who tried to bring them in from Hong Kong. The frogs were stored in 67 plastic boxes, with 10 frogs in each box. The men claimed they caught the frogs in the river in Sheung Shui, which is part of the Hong Kong Special Administrative Region, and decided to use them as bait for fishing.
FinCEN PENALISES P2P VIRTUAL CURRENCY EXCHANGER FOR VIOLATIONS OF AML LAWS
A news release from FinCEN on 18th April reported that a civil penalty has been imposed against Eric Powers for wilfully violating the Bank Secrecy Act’s (BSA) registration, program, and reporting requirements. He failed to register as a money services business (MSB), had no written policies or procedures for ensuring compliance with the BSA, and failed to report suspicious transactions and currency transactions. He operated as a peer-to-peer exchanger of convertible virtual currency. FinCEN notes that this is its first enforcement action against a peer-to-peer virtual currency exchanger and the first instance in which it has penalized an exchanger of virtual currency for failure to file CTR
On 17th April, the Evening Standard reported claims that a father and son laundered more than £10 million from the illegal sale of Viagra and slimming pills through charities they set up to tackle Jewish poverty. Investigators claim £10.2 million of a total income of £18.7 million between 2012 and 2014 can be identified as laundered money – profits from illegally selling Viagra, slimming pills, anti-smoking tablets and other prescription drugs online to customers across Europe.
Local Government Lawyer on 18th April reported that the Information Commissioner’s Office has issued a reminder to public and private organisations that the GDPR and the Data Protection Act 2018 do not stop them from disclosing personal data to assist police forces or other law enforcement authorities. It says that organisations are hesitant to share people’s personal data with the police and in some cases are refusing to share with anyone, citing data protection as the problem. In cases of serious or violent crime, this can mean that essential information needed to safeguard individuals is not being passed to the relevant law enforcement authorities.
The relevant blog post from the ICO is at –
OCCRP on 18th April reported that Alexander Manolev, Bulgaria’s Deputy Minister of Economy resigned following the publication of an investigation that suggested he used a guesthouse built with EU money as his own private vacation home.
The Hill reported on 18th April that the US has arrested and charged a Guatemalan presidential candidate in connection with a plot to allegedly traffic cocaine and have rival candidates assassinated. It is alleged that Mario Estrada, along with accomplice Juan Pablo Gonzales, allegedly sought between $10 and $12 million from Mexico’s Sinaloa drug cartel in campaign funds in return for allowing the cartel to move cocaine though Guatemalan airports. Estrada is a member of the centre-right National Charge Union party and polls far behind other candidates in the nation’s general election, which is set to be held June 16th.
Capital News in Kenya reported on 18th April that a team of British specialists and financial investigators based in the High Commission in Kenya and back in the UK are following, tracking down bank accounts and operations of those suspected to have stolen from the Kenyan people.
A news release from the UN on 17th April reported that 1 entry on its ISIL/Al-Qaida sanctions list has been amended.
Customs Today on 18th April reported a scam where sand mixed with gold was being smuggled out of Sri Lanka. A special audit report on the matter, first reported in 2018, has been made public. According to the report, 51 containers with gold mixed sand were smuggled overseas through the Customs. 23 containers were seized in 2017, 19 of them are still in the custody of the Customs.
A news release from the US Attorney in Southern Florida reported that the Miami-based gold refinery company, Republic Metals Corporation (RMC) has agreed a non-prosecution agreement after co-operating in an investigation focusing on money laundering and violations of the Bank Secrecy Act in the gold importation and refining industry. Under the terms of the agreement, RMC agreed to continue co-operating in the ongoing investigation, as well as to make improvements in its AML and compliance programmes. RMC is the second US gold refinery that has been implicated in investigation into the gold importation and refining industry. Previously, Elemetal LLC pled guilty to failing to maintain an adequate AML programme.
On 17th April, the National Law Review reported that South Africa’s Financial Intelligence Centre FIC periodically releases financial crime typologies and case studies. Recently it published information about typologies in 2 different lines of business: casinos and the gambling industry, and the property sector, including the activities of what it terms a prominent influential person (PIP) investing in property.
The Independent on 17th April reported that new rules will open door to lawsuits against European companies that do business in Cuba, as the US announced it would allow US citizens to sue foreign firms that do business deals involving property seized during the 1959 Cuban revolution. The restrictions were included in the 1996 Helms Burton Act signed into law by Bill Clinton, but were never actually activated. France 24, in reporting EU and Canadian reaction to the move, reported that US airlines and cruise lines that bring hundreds of thousands of travellers to Cuba each year appear to be exempt from the key provision of the Helms-Burton Act. Separately, it is also reported that US citizens sending remittances to Cuba will be limited t $1,000 per person per quarter, and non-family travel will be restricted to reduce “veiled tourism” that benefits the Cuban government and military.
17th April 2019
SUPREME COURT RULES THAT UK COURTS THE CORRECT JURISDICTION TO BRING CLAIM AGAINST ZAMBIAN MINING SUBSIDIARY
On 17th April, Gowling WLG published an article saying that, in a judgment that could have far reaching effects for UK incorporated companies with foreign subsidiaries, the Supreme Court has decided that 1,826 Zambian citizens are entitled to bring a group action in the UK courts in respect of alleged harm to their health and farming activities arising out of toxic discharges into waterways from the nearby Nchanga Copper Mine over many years.
GUIDANCE: ARRESTED AND DETAINED VESSELS, AND ABANDONED SEAFARERS
The International Seafarers’ Welfare and Assistance Network (ISWAN) is a membership organisation which works to promote and support the welfare of seafarers all over the world. It has produced guidance which aims to assist port welfare committee members and welfare agencies dealing with incidents of seafarers being abandoned and vessels being arrested or detained. It outlines the responsibilities of the authorities and other organisations that might become involved when problems are identified aboard a vessel whilst in port.
MEXICAN PRESIDENT SAYS HE WILL RETURN STOLEN WEALTH TO THE PEOPLE
KYC 360 on 17th April reported that Mexican President Andres Manuel Lopez Obrador has said he will create a “Robin Hood” institute to return to the people the ill-gotten wealth seized from corrupt politicians and gangsters – and would put confiscated goods such as real estate, jewellery and cars into the public’s hands.
CANADA HITS VENEZUELAN GOVERNMENT WITH MORE SANCTIONS
The Gleaner in Jamaica on 17th April reported that Canada has imposed more sanctions on the government of Venezuelan President Nicolás Maduro – against 43 high-ranking Venezuelan officials, including regional governors, allegedly implicated in the undermining of democratic institutions. Canada had already sanctioned 70 other people linked to Maduro’s government.
DERIPASKA SAYS HIS GAZ MOTOR GROUP MAY COLLAPSE DUE TO SANCTIONS
Bloomberg on 16th April reported that Oleg Deripaska, the Russian billionaire, said his GAZ Group may not survive if the company is not removed from the US sanctions lists. The main plant of the group in Nizhniy Novgorod was started in 1932 by the Soviet Union with the help of the Ford Motor Company, and Deripaska took control in the 2000s. GAZ is still working with Volkswagen AG and the 2 companies recently held talks to deepen an 8-year-old car-making partnership.
ISLAMIC STATE REPORTEDLY HAS AS MUCH AS $300 MILLION
On 17th April, the website Celebrity Net Worth reported that a UN report from business intelligence consulting firm, Alaco says that the remaining money, much of it derived from “taxation, extortion, theft, oil smuggling,” and various other activities may allow it to maintain its operations into the future despite its officially proclaimed military defeats.
UPDATE ON CAYMAN ISLANDS SUPERVISORY INSPECTIONS
On 9th April, Walkers published an article about a recent Advisory from the Cayman Islands Monetary Authority summarising its findings from the on-site inspections it conducted of licensed entities last year. It provides a summary of the key points. There were 164 inspections in 2018, a 40% increase from 2017. It says that the largest percentage inspected were banks with a class B licence (23%), while mutual fund administrators (17.7%), company managers (13.1%) and trusts (12.8 %) – together making up almost 50% of all inspections. It is expected that as a result of the recent CFATF mutual evaluation report there will be changes to CIMA’s supervisory regime, the article says.
FULFILMENT HOUSE DUE DILIGENCE SCHEME REGISTERED BUSINESSES LIST
On 17th April, HMRC published a list allowing one to check if the business that stores your goods in the UK is registered with the Fulfilment House Due Diligence Scheme if you’re a trader based outside of the EU.
THIRD COUNTRIES ALIGN WITH EU EGYPT SANCTIONS
A news release from the EU on 17th April reported that North Macedonia, Montenegro, Serbia, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway, Moldova and Georgia have agreed to align themselves with the EU sanctions regime in respect of Egypt.
THIRD COUNTRIES ALIGN WITH EU SYRIAN SANCTIONS
A news release from the EU on 16th April reported that North Macedonia, Serbia, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway, Moldova and Georgia have agreed to align themselves with the EU sanctions regime in respect of Syria.
THE ANGLOPHONE CAMEROON CRISIS: APRIL 2019 UPDATE
On 17th April, the House of Commons Library published a briefing paper providing an update, saying that relations between the largely Anglophone regions of Cameroon and the country’s dominant Francophone elite have long been fraught. Over the past 3 years, tensions have escalated seriously and since October 2017 violent conflict has erupted between armed separatist groups and the security forces, with both sides being accused of committing human rights abuses.
PERU’S EX-PRESIDENT ALAN GARCIA ‘SHOOTS HIMSELF’ MOMENTS BEFORE POLICE ARREST AMID MONEY LAUNDERING PROBE
The Daily Mail on 17th April reported that the former President of Peru has reportedly shot himself in the neck just moments before police barged down his front door to arrest him. Alan Garcia, 69, was supposed to face questioning for alleged money laundering but has been rushed to Casimiro Ulloa hospital in Lima after putting a bullet in himself, a police source has said. He is currently under investigation after allegedly accepting bribes from Brazilian construction titan Odebrecht in return for contracts during his most recent spell in office.
UK: FRC TO TARGET AUDITORS’ WORK ON FRAUD
On 17th April, ICAEW reported that auditors can expect to come under greater pressure from the Financial Reporting Council (FRC) in the coming year over their work on going concern and fraud risk, and will include “addressing the need for auditors to do more work now to assess whether companies are a going concern and to address the risk of fraud”.
LEBANON SEIZES 142 KG OF ILLICIT DRUGS IN MAJOR BUST WITH HELP FROM SAUDI AUTHORITIES
On 15th April, Customs Today reported that police in Lebanon have seized more than 800,000 pills of the stimulant Captagon worth about $12 million in an operation co-ordinated with Saudi authorities. It says that Captagon is commonly used in the Syrian war, where fighters say it helps them stay awake for days and numbs their senses. The drug is classified by the UN Office on Drugs and Crime as an “amphetamine-type stimulant” and usually blends amphetamines, caffeine and other substances.
7 PEOPLE ARRESTED FOR ATTEMPTING TO SMUGGLE 16 MILLION COUNTERFEIT CIGARETTES FROM POLAND TO DENMARK
Customs Today on 17th April reported that Danish law enforcement arrested the people, who are thought to be connected to a wider-ranging smuggling network.
MEMBER OF HONG KONG’S ENDANGERED SPECIES BOARD FINED FOR IVORY TRADING
On 15th April, Customs Today reported that a Hong Kong ivory trader fined for illegal ivory possession sits on a government advisory group for protecting endangered species, records showed, potentially an embarrassing blow as Hong Kong fights ivory smuggling.
HIGH COURT REFUSES TO REMOVE CHARGE DESPITE MORTGAGE FRAUD AND VOID TRANSFER
An article from Walker Morris on 16th April reported that, in a recent case, the High Court considered ‘exceptional circumstances’ which may justify a court not making an order for alteration of HM Land Register despite a transfer being void for fraud. It says that lenders will welcome this High Court decision which emphasises how difficult it can be for a claimant – even a clear victim of fraud – to have a registered legal charge removed from the register.
THE GHOST SHIPS OF LAGOS: HOW WRECKS HAVE BECOME A HAVEN FOR CRIME ON NIGERIA’S COASTLINE
Hellenic Shipping News on 17th April carried an article about the (perhaps “hundreds” of) wrecks of ships are found in Lagos. It says that experts say the wrecks act as groynes, halting the flow of sand down shore and accelerating erosion. There are also suspicions that amid lax marine laws, companies treat Lagos’ waters as a ship graveyard, avoiding the expense of properly disposing of old vessels. Lack of regulation has also helped illicit activity thrive, turning the ghost ships into hideouts for sea criminals.
PODCAST: SURPRISING BRIBERY SCHEMES
In the latest TRACE podcast, Rupert Younger of Oxford’s Centre for Corporate Reputation and Alexandra discuss some novel bribery schemes at Berkeley’s 2019 “Fraudfest”. (The sound quality reflects the conference setting).
On 17th April, a news release advised that OFAC had designated Laureano Ortega Murillo, the son of Nicaraguan President Daniel Ortega and Vice President Rosario Murillo, as well as Nicaraguan bank Banco Corporativo SA (BanCorp), pursuant to an Executive Order which targets corrupt financial operations and Ortega regime support networks.
On 17th April, OFAC advised a number of changes to licensing arrangements for transactions involving Venezuela. It also lists the Central Bank of Venezuela. A new FAQ asks: will the designation of Banco Central de Venezuela, or the Central Bank of Venezuela, restrict the ability of US persons to engage in or facilitate the provision of humanitarian assistance or non-commercial, personal remittances to Venezuela? The basic answer provided is no, as OFAC is committed to ensuring that humanitarian assistance and non-commercial, personal remittances can flow to the people of Venezuela. Also designated was Iliana Josefa Ruzza Terán, a director of Banco Central de Venezuela.
Following the publication of the mutual evaluation report on China, FATF has issued an update schedule of AML/CFT ratings for those countries that have been evaluated.
On 17th April, FATF published the mutual evaluation report on the AML/CFT regime in China. An IMF staff-led assessment comprehensively reviews the effectiveness of China’s measures and their level of compliance with the FATF Recommendations. The FATF adopted this report at its February 2019 Plenary meeting. Hong Kong and Macau were not included in the evaluation. It says that the lack of coverage of designated non-financial businesses and professions (DNFBP) by the AML/CFT framework is a significant vulnerability. The absence of coverage of domestic politically exposed persons (PEP) is another significant vulnerability, which is particularly noteworthy in the context of a country where corruption is a major predicate offence and state-owned-enterprises play a dominant role in the economy. It also notes that a large amount of illicit proceeds flows out of China annually. An incomplete understanding of risk impacts negatively on the effectiveness of several aspects of China’s AML/CFT arrangements, and there are significant weaknesses in both technical compliance and effectiveness with respect to the transparency of legal persons and legal arrangements and the framework and practices related to targeted financial sanctions. Shortcomings in the AML/CFT legal framework related to the coverage of online lending institutions, DNFBP, domestic PEP, terrorism financing sanctions, and the criteria for reporting suspicious transactions should be addressed. Also amongst the report findings is that China should review the functioning of its FIU to ensure that all information received, analysed and disseminated by all 3 FIU components is readily available and accessible both at the central and provincial levels
This Guide is from TerraLex and draws together contributions from tracing experts across a number of territories. It covers a number of countries, plus Hong Kong and a number of individual US states. It is arranged in Q&A form, asking: Is any information about assets publicly available?; What steps can be taken to obtain information to identify asset holders (whether third party or wrongdoer/adverse party) or the assets?; Can steps be taken to protect/preserve assets on an interim basis?; What are the requirements for obtaining a freezing injunction (if available)?; What assets can be frozen and do they have to be within the jurisdiction?; What about a search order?; Can a freezing injunction or search order be obtained in support of proceedings outside of the jurisdiction?; and Can a freezing injunction obtained from a foreign court be enforced against assets in the jurisdiction?
In an article published on 12th April, Bryan Cave Leighton Paisner commented on corporate hospitality; a problematic area that remains wholly untouched by any case law despite the implementation of the Bribery Act almost 8 years ago. It says that a vacuum of legal precedent exists in relation to corporate hospitality. The Act does not directly refer to the topic nor has any relevant case law emerged since it came into force. The sole source of guidance on which companies can reasonably rely is the guidance issued by the MoJ of March 2011.
The MoJ guidance is available at –
On 29th March, Allen & Overy published an article saying that the Directive entered into force on 9th July 2018, with an implementation deadline of 10th January 2020 (which may include the UK, depending on the terms of the Brexit transition period) and an implementation date of 10th January 2019 for provisions relating to anonymous safe deposit boxes. Among the changes introduced by the Directive is the requirement to provide wider access to each Member State’s central register of beneficial ownership of corporate entities – so that they can now be accessed by the general public without the need for them to show a ‘legitimate interest’. The article includes a table that provides an overview of how some Member States are implementing the requirement to maintain UBO Registers in their national law.
On 19th January, an article in the Americas Quarterly, sponsored by Philip Morris International, sets out to show how illegal tobacco has become a vehicle to finance organised crime and terrorist groups. It says that worldwide the OECD estimates that trade in counterfeit and pirated goods alone is an almost $500 billion business a year globally and the number continues to increase. The article says that, according to a report from KPMG, 15.6% of the cigarettes consumed in the Americas are illegal, representing a volume of almost 40 billion illegal cigarettes, and governments in the region are losing an estimated $4.6 billion in tax revenue every year due to the illegal tobacco trade. By avoiding taxes, illegal tobacco products are vastly profitable. The article points the finger at free zones, saying that criminals based in Panama’s Colon Free Zone supply up to 80% of all illegal cigarettes consumed between the Rio Grande and the Amazon rivers. It also says that new players in the illicit trade arena intend to smuggle smoke-free products, mainly through e-commerce platforms and social media channels.
On 10th April, the DoJ announced the publication of a White Paper on the Clarifying Lawful Overseas Use of Data Act (aka the CLOUD Act). The CLOUD Act was enacted in March 2018 and updates the legal framework for how law enforcement authorities may request electronic evidence needed to protect public safety from service providers while respecting privacy interests and foreign sovereignty. The CLOUD Act has 2 elements –
- the Act authorises the US to enter into bilateral agreements to facilitate the ability of trusted foreign partners to get the electronic evidence they need to combat serious crimes; and
- the Act makes explicit in US law the established principle – longstanding in both the US and in many foreign countries – that a company subject to US jurisdiction can be required to produce data within its custody and control, regardless of where it chooses to store that data at any point in time. In doing so, it reverts the legal situation in the US to that prior to the Supreme Court Microsoft decision of 2016.
The White Paper describes the interests and concerns that prompted the enactment of the CLOUD Act and provides a concise point-by-point distillation of the effect, scope, and implications of the Act, as well as answers to FAQ.
The White paper itself is available at –
The DoJ also has a dedicated CLOUD Act resources page –
15th April 2019
AUSTRALIA: WINE LABEL DIRECTORY CLAMPS DOWN ON COPYCAT EXPORTERS
On 15th April, Food Processing reported that the federal government is developing an Australian Wine Label Intellectual Property Directory to prevent copycat wine being sold overseas and better protect Australian wine producers – with exports wort more than $2.8 billion in 2017–18. The Directory aims to improve the transparency of exported labels, identify copycat labels and ensure fraudsters are held accountable. Copycats could be stripped of their export licence, and those being copied could also take legal action under the Trade Marks Act 1995.
AUSTRALIA: MAN CAUGHT ALLEGEDLY SMUGGLING EXOTIC FISH IN BAG AROUND HIS NECK
Travel Weekly on 15th April reported that a 34-year-old Vietnamese man landed in Adelaide from Malaysia and was selected for a baggage examination. The fish was identified as a Fully Red Asian Arowana, the trade of which is controlled under CITES.
THE 10 MOST COUNTERFEITED PRODUCTS IN AMERICA
On 14th April, the Coloradoan published an article listing the top 10 most counterfeited goods seized on import into the US. Top was clothing, then watches and jewellery, footwear, consumer electronics and other consumer products, handbags and wallets, pharmaceuticals and personal care items, optical media, computer parts and accessories, and toys.
HOW SOME CRYPTOCURRENCY EXCHANGES INCENTIVISE WASH TRADING
On 14th April, the Cryptoslate website reported that there is evidence that some exchanges are structured to encourage wash trading – being eager to increase their trading volume which results in more liquidity, attracts more traders and ultimately results in higher revenue. “Wash trading” is a form of market manipulation in which an investor simultaneously sells and buys the same financial instruments to create misleading, artificial activity in the marketplace. Such activity can be illegal in the US and other jurisdictions to protect retail investors.
NEW ZEALAND: FURTHER ARRESTS IN COMANCHERO MOTORCYCLE GANG OPERATION
Stuff on 15th April reported further drugs and money laundering linked to the Australian biker gang, which is said to have connections with the Mexican cartel formerly controlled by “El Chapo” Guzman. Police said the original operation targeted senior members of the gang and a number of professionals, namely a lawyer and an accountant, who were believed to be linked to the alleged offending. The Commancheros (named for a gang in a – rather good – John Wayne Western) are one of 2 Australian biker gangs (the others being the Bandidos), which are vicious rivals.
DOJ CHARGES PROPERTY FIRM FOUNDER, FORMER EXECUTIVES IN HUGE ALLEGED PONZI SCHEME
KYC 360 on 15th April reported that prosecutors had charged the owner and two former executives of Woodbridge Group of Companies LLC with orchestrating a $1.3-billion Ponzi scheme involving 10,000 victims.
TAX AND VAT: INITIAL COIN OFFERING (ICO) THROUGH CYPRUS
Kinanis LLP on 5th April published a second article on ICO using Cyprus. The first publication dealt with general issues of ICO through Cyprus. The second article deals with the “unclear and highly unstable” issue of the TAX and VAT treatment of ICO from the issuer company’s perspective.
The first article is available at –
IRELAND: BENEFICIAL OWNERSHIP REGISTER OF TRUSTS – APPLICATION TO AIRCRAFT LEASING AND STRUCTURED FINANCE TRANSACTIONS
On 20th March, Mason Hayes & Curran published an article about 2019 Regulations which transpose into Irish law the requirements under the 4th AML Directive (as amended) regarding the creation and holding of beneficial ownership registers for trusts. The 2019 Regulations apply to express trusts whose trustees are resident in Ireland or which are otherwise administered in Ireland and has a very broad application. This article focuses on the potential application to the aircraft leasing and financing sector.
CAN A DIRECTOR BE A PSC (PERSON WITH SIGNIFICANT CONTROL) IN RELATION TO THEIR COMPANY?
On 11th April, Brodies LLP published an article which explains that the aim of the PSC regime is to establish who ultimately owns and controls UK companies. Under the PSC regime, UK companies are required to find out if they have any PSC; maintain a register of PSC; and provide information about their PSC position to Companies House (where it is publicly available). It explains when a director may also be a PSC – but that is more likely to be because of the level of their shareholding or voting rights – and all relationships that the director has with the company must be analysed before reaching a final conclusion.
LATIN-AMERICAN NATIONALS LODGE RECORD NUMBERS OF ASYLUM APPLICATIONS IN FEBRUARY 2019
On 12th April, the EU announced that, in February 2019, some 57,000 applications for international protection were lodged in the EU+. Despite a small decrease compared to the first month of the year, this monthly figure remained higher than the average over the past 12 months, and considerably higher than applications in February 2018 (46,000 applications). Most applications were lodged by nationals of Syria, Venezuela, Afghanistan, Iraq and Nigeria. These 5 together made up one third of all applicants in February. Colombian and Nicaraguan applications recorded significant increases.
CHINESE TYCOON’S SON BUYS $3.8 MILLION BUGATTI IN VANCOUVER WITH DAD’S CREDIT CARD, AND COMPLAINS ABOUT TAXES
Zero Hedge on 14th April has published an article which followed up its article from 2 years previously – “The Rich Chinese Kids of Vancouver”. This was at the time of the Vancouver housing bubble with unprecedented money laundering funds from Chinese oligarchs and tycoons in the Western Canadian real estate market. It says that, every now and then we get a stark reminder of just how much funds China’s “0.1%“ transfer overseas – such as the story of the son of a Chinese tycoon buying a C$5.1 million custom Bugatti sports car in Vancouver, using his daddy’s Union Pay credit card, according to a picture of the invoice the young man posted on Instagram to complain about Canadian taxes.
VEHICLE DOCUMENTS DRIVERS NEED TO LEGALLY CROSS INTERNATIONAL BORDERS IN A UK-REGISTERED VEHICLE
On 15th April, the UK Department for Transport published updated guidance, for goods vehicles and coaches etc, and provides information about the main documents a driver needs to make sure that the vehicle is legally able to cross international borders.
REAL ESTATE AGENT & BROKERS, PROPERTY DEVELOPERS AND CERTAIN OTHERS ETC MUST REGISTER AS DNFBP IN THE CAYMAN ISLANDS
On 12th April, Ogier published an article saying that real estate agent and brokers, property developers and certain other Designated Non-Financial Businesses and Professions (DNFBP) must register their businesses with the Department of Commerce and Investment by close of business on 29th May. The requirement for such registration arises under the Anti-Money Laundering (Designated Non-Financial Business and Professions (Amendment) (No 2) Regulations 2017.
TURKISH DEFENCE EXPORTS TO 2023: GRAND AMBITIONS
The International Institute for Strategic Studies published an article on 10th April saying that Turkey’s growing defence industry is making significant progress in the export arena – but the industry still faces a number of challenges. Turkish defence exports over the past decade have typically been of wheeled armoured vehicles. However, defence export contracts signed over the last 12 months reflect the growing capability of the Turkish defence industry. Frigates, attack helicopters and armed uninhabited aerial vehicles are more complex than armoured vehicles and require a larger supply chain, as well as a more demanding post-sales logistics and support service. Of the 13 countries Turkey has reported delivering armoured vehicles to since 2010, 11 are both Muslim and diplomatically friendly and Turkey has yet to secure any significant defence exports to fellow NATO members. It says that many platforms currently entering service with the Turkish armed forces are being licence-produced or imported, but it is probable that over the next two decades a higher proportion of equipment will be of a local design – many of these systems may then be offered for export.
IMO “SINGLE WINDOW” MARITIME DATA SOLUTION AVAILABLE AFTER LAUNCH IN ANTIGUA AND BARBUDA
The International Maritime Organisation on 11th April reported that a successful IMO project promoted by Norway to establish a maritime “single window” in Antigua and Barbuda has been completed – and the source code for the system will now be made available to other countries who need it. New requirements which came into effect on 8th April require national governments to introduce electronic information exchange between ships and ports. The maritime single window is recommended for this. The generic Maritime Single Window system is a software that will perform many different tasks within the realm of ship reporting and information exchange. The generic system is not customised to any particular country, application or process, but will provide basic services to support the general acknowledged processes within any country that seeks to meet the obligations of the FAL Convention. These services typically relate to registering port calls and facilitating the clearance of ships, passengers and crew members. The facility will allow submission of standardised information covered by the FAL Convention to a single-entry point, including the ability to upload several spreadsheets (including crew and effects, passenger and ship stores lists).
PREPARING THE UK NUCLEAR INDUSTRY FOR A POST-BREXIT WORLD
On 15th April, Gowling WLG published an article outlining where are we now since the announcement of the Government’s draft European Union (Withdrawal) Bill on 26th January, safeguarding measures, Nuclear Co-operation Agreements (NCA) with the US, Australia, Canada and Japan, and where next for the nuclear industry? The UK government has interpreted EU comments as confirming that the UK will not be able to use the NCAs and so has sought to put alternative arrangements in place (including the underpinning safeguarding framework) so that there is no gap in the UK’s ability to conduct international nuclear trade from the eventual date of departure.
EU MULLS VAT CHANGES FOR FINANCIAL SERVICES
Accountancy Daily on 15th April reported that there are signs that the EU could be about to reconsider the VAT treatment of financial and insurance services, removing their exemption, partly because of recent changes to cost-sharing arrangements, and the challenges of taxing the digital economy. In a briefing paper, the EU’s group on the future of VAT points out that the current rules date back to 1977 and are believed to be complex and difficult to apply in practice. The group says a study, which is scheduled to begin shortly and could conclude in a year’s time, should develop possible options for the review of the provisions in the VAT directive and prepare an analysis of impacts in respect of each.
MALTA: €10.3 MILLION IN COCAINE SEIZED IN 19-HOUR OPERATION BY CUSTOMS
Newsbook on 15th April reported that 76 packets of cocaine weighing 91.25 kg were seized by customs Officials from 3 containers at the Malta Freeport.
STATE DEPARTMENT SECURITY ASSISTANCE TO EGYPT
The Security Assistance Monitor newsletter from the Center for International Policy reported, as its Data Fact of the Week, on how much security aid that Egypt receives from the US. After Israel, Egypt receives more State Department-administered security aid than any other country, principally through Foreign Military Financing (FMF).
16th April 2019
UK AML LAW AFTER EXIT DAY
Bright Line Law on 15th April published an article saying that in the AML arena, efforts are well underway to minimise the impact of a UK departure. The EU Exit Regulations amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 which transposed the 4th Money Laundering Directive into UK law, and they ensure the continuation of the AML obligations once the Directive ceases to be enforceable in the UK subject to some subtle differences. In the coming months, the article says, it will be prudent for regulated firms to review their AML policies.
AUSTRALIAN ATTORNEY GENERAL ANNOUNCES REVIEW OF CORPORATE CRIME LAWS
On 10th April, the Attorney General announced a comprehensive review by the Australian Law Reform Commission into the laws dealing with corporate criminal responsibility, saying that it is essential that the laws are effective in holding corporations to account for criminal misconduct by their officers. The terms of reference for the review are included in the news release and information about the review will be available on the Commission website. The Commission’s report will be delivered to the Government by 30th April 2020.
CRIMINAL FINANCES ACT 2017 – BEING CRIMINALLY LIABLE FOR FAILING TO PREVENT ANYONE REGARDED AS AN “ASSOCIATED PERSON” FROM FACILITATING UK OR FOREIGN TAX EVASION
On 2nd April, DAC Beachcroft published an article about the Act which, inter alia, makes “relevant bodies”, which includes solicitor corporates and partnerships, criminally liable for failing to prevent anyone regarded as an “associated person” from facilitating UK or foreign tax evasion. The Act is, it says, highly relevant to solicitors and other professionals providing any form of tax advice. HMRC and Law Society have published guidance, and the Law Society has set out questions and scenarios to supplement the guidance.
FRANCE TO ASK EU PARTNERS TO ADOPT ITS CRYPTOCURRENCY REGULATION
KYC 360 on 16th April reported that France will push for the EU to adopt a regulatory framework on cryptocurrencies similar to the one adopted at a national level. The new French law will allow companies that want to issue new cryptocurrencies or trade existing ones to apply for a certification.
THE 6th MONEY LAUNDERING DIRECTIVE
On 11th April, KPMG Malta re-published an article (first published on 31st January) about an EU Directive published in October, which complements and reinforces the 4th and 5th Directives. The article says that it contains 5 amendments that EU business should look out for – a harmonised definition of a “predicate crime”; it extends the criminal liability to legal persons such as companies or partnerships, including persons acting on their behalf; introduces investigative tools and rules to determine which Member State would have jurisdiction when an offence falls within the jurisdiction of more than one Member State; introduces the requirement for the offence to be unlawful in both jurisdictions, the country where the offence takes places and the jurisdiction in which the offence of money laundering is committed; and punitive measures are enhanced for individuals and certain punitive measures were introduced for legal organisations.
UN COMMITTEE TO DECIDE ON SANCTIONS WAIVER FOR RELICS EXCAVATION PROJECT IN KOREA
On 16th April, Yonhap reported that the UN Security Council sanctions committee on North Korea is expected to grant South Korea’s request for a sanctions waiver for a cross-border project to excavate relics from a historical site in North Korea. The exemption is to allow goods to be used for the excavation project in the Manwoldae site in the North’s border town of Kaesong.
JAPAN VEHICLES IN CHINA SMUGGLED INTO NORTH KOREA
The Japan Times on 16th April reported that Japanese-made luxury vehicles that were used by Chinese military forces are being smuggled into North Korea through the Chinese border city of Dandong. It says that it is believed that many banned items are secretly being brought into the reclusive country through informal channels at the China-North Korea border.
NIGERIA: DRAMA IN COURT AS OFFICIALS APPREHEND JUDGE AFTER CORRUPTION CHARGES STRUCK OUT
On 16th April, the Daily Post reported on drama at the premises of an Ikeja High Court as officials of the Economic and Financial Crimes Commission (EFCC) apprehended Justice Rita Ofili-Ajumogobia, a dismissed judge of the Federal High Court, after corruption charges against her were struck out.
MARITIME ANTI-CORRUPTION AGENDA ANNOUNCED
On 16th April, Government Europa reported that the International Maritime Organization (IMO) has announced it will begin work on official guidance to combat maritime corruption. The article says that more than 28,000 individual incidents of corruption – predominantly bribery and “facilitation payments”, where shipping operators pay onshore officials to accelerate or circumvent administrative processes – have been reported since 2011. The IMO has agreed to include the formation of a maritime anti-corruption agenda in the work programme for its Facilitation Committee in response to requests from several states, with support from the International Chamber of Shipping (ICS). The proposed maritime anti-corruption agenda is expected to draw on the UN Convention Against Corruption (UNCAC), which came into force in 2005 and has been adopted by 186 countries. The UNCAC is currently the world’s only legally binding instrument combatting corruption.
US CHOCOLATIERS JAILED FOR TRAFFICKING COCAINE TO AUSTRALIA
SBS News on 16th April reported that brothers Nathan and Andrew Dulley have been sentenced by a US judge to prison after admitting to using their California-based fine chocolate business to traffic large quantities of cocaine to Australia. The Dulleys linked up with Owen Hanson, the former University of Southern California gridiron player who was the kingpin of the violent gang involved in drug trafficking, money laundering and illegal gambling.
AN OPPORTUNITY FOR ENTREPRENEURS AND INVESTORS TO PRODUCE MEDICINAL CANNABIS IN MALTA
A Dixcart briefing on 16th April says that a new legislative initiative in Malta means that it is now possible to grow and process cannabis (marijuana) in Malta, as long as it is for medical use. This presents an opportunity for entrepreneurs and investors. Entities need to apply to produce and/or process medicinal cannabis in Malta and must comply with the legal criteria as specified in the Production of Cannabis for Medicinal Use Act 2019.
UK: APPEALS TO THE FIRST-TIER TAX TRIBUNAL SOAR
On 16th April, Taxation reported that disputes between HMRC and taxpayers are surging, according to information obtained by Price Bailey. The number of appeals to the First-tier Tribunal has jumped by 43% over the past 2 years with 7,377 cases in 2017-18, up from 6,559 in 2016-17 and 5,161 in 2015-16.
LITTLE-KNOWN US LAW ALLOWS DISCOVERY FOR FOREIGN PROCEEDINGS
On 15th April, an article from Sheppard Mullin about what it describes as the often-overlooked provisions of a US statute from 1948 that authorises US courts to order discovery for use in certain foreign legal proceedings.
UK: ORGANISED CRIME GROUP BOSS WHO FLED BEFORE CONVICTION HUNTED
On 16th April, a news release from the NCA said that it had released CCTV footage of an organised crime group boss who fled before he was convicted and sentenced to 11 years. Richard Wakeling, 52, from Brentwood, Essex, tried to import £8 million of liquid amphetamine into the UK in April 2016. He is aid to have caught a bus from Heathrow to Glasgow, and the following day he took a ferry from Stranraer to Belfast. Wakeling has family and friends in Northern Ireland, the Republic of Ireland, Canada and Thailand.
TROPICAL HIDEAWAY IN BRAZIL REVEALS ROMANIA’S POLITICAL SECRETS
On 16th April, OCCRP published an article about Liviu Dragnea, president of Romania’s ruling Social Democratic Party, and the claim that Dragnea illegally benefitted from business carried out by Tel Drum SA, a Romanian company that has received millions of euros in EU road construction money. Dragnea maintains he has had no relationship with Tel Drum executives for at least a decade (and that he never profited from the company’s lucrative business).
PERU RESTORES AUTONOMY OF AGENCY FIGHTING ILLEGAL LOGGING
OCCRP on 15th April reported that the Peruvian government published a decree restoring the independence of OSINFOR, its agency in charge of combating illegal logging in the Peruvian Amazon, reversing a decision from a few months ago that had placed the organisation under ministerial control. NGO Global Witness called the decision a “dramatic U-turn”. A 2015 report from a UK-based NGO, found rampant violations of timber regulations leaving port cities on Peru’s Pacific Coast. OSINFOR verified that at least 45 companies exported illegally-sourced timber from the city of Callao, accounting for 41% of Peru’s timber exports for the entire year. Verified illegal wood was exported to 18 countries.
LITHUANIAN LINKED TO MONEY LAUNDERING ALSO FUNDS KREMLIN’S CHURCH
OCCRP on 15th April reported that Marine Services and Repairs Pte, a company owned by a Lithuanian businessman, Vladimir Stefanov, who allegedly was part of a network that laundered money looted by the dictator of Equatorial Guinea has donated funds for the construction of the third-highest church in Russia that will serve as the principal temple of Russia’s armed forces.
CLAMPDOWN PLANNED FOR BRITISH ONLINE PHARMACIES
On 16th April, the BBC reported that new rules to keep people safe when buying medications from online pharmacies have been described as a “big step forward” by Britain’s pharmacy regulator. The General Pharmaceutical Council has issued guidance for providers – it will help regulate access to addictive medication, such as strong painkillers. The way some online pharmacy websites operate will change, and more checks will be done on medications.
MAN CONVICTED OF BRIBERY SENTENCED TO EDUCATING OTHERS ON CORRUPTION
Baker McKenzie on 16th April reported that a former executive at T&M Associates in New Jersey was sentenced to a year of house arrest and 5 years of probation over bribery charges. He will also be required to educate others who do business with public officials on issues of corruption. T&M Associates made large and frequent political contributions to officials in New Jersey and Pennsylvania, and the defendant was charged with bribing mayors to get public works contracts.
COCAINE HAUL SHOWS SOPHISTICATED TRAFFICKING ROUTE THROUGH HONDURAS’ LA MOSQUITIA REGION
Insight Crime on 15th April reported that authorities in Honduras arrested 4 Colombian citizens caught in an attempt to smuggle over 100 kg of cocaine into the US through a remote region of the country’s eastern coast, an example of increased drug flow through Honduras. This trafficking operation was based in La Mosquitia (“the Mosquito Coast”), a region of dense rainforest and swamps, which is almost inaccessible by land. It extends along Honduras’ Caribbean coast as far as Nicaragua and has been used for the smuggling of drugs by plane and boat from South America to the US.
EU: ELECTRONIC FREIGHT TRANSPORT INFORMATION – PROPOSAL FOR A FULLY DIGITAL AND HARMONISED ENVIRONMENT FOR INFORMATION EXCHANGES BETWEEN TRANSPORT OPERATORS AND AUTHORITIES
The EU Parliament has published a briefing document on the proposal for an EU Regulation on electronic freight transport information, saying that the digitalisation of information exchange on the movement of goods within the EU could make the transport of goods much more efficient and reliable, and yield significant savings. In May 2018, the European Commission adopted a proposal for a Regulation on electronic freight transport information. The European Parliament adopted its position on the proposal on 12th March, but interinstitutional negotiations cannot begin until the EU Council reaches a common position on the file. The document says that discussions on the file are ongoing in the Council working party on ‘Transport – intermodal questions and networks’, but the Council has not yet reached a common position on the file.
MALICIOUS COMMUNICATIONS v HARASSMENT
On 16th April, Corker Bining published an article looking at the misuse of social media as a platform which enables the commission of a number of criminal offences such as making threats to kill, harassment and controlling or coercive behaviour. It says that these types of behaviour may also involve the commission of communications offences contained within the Malicious Communications Act 1988 and the Communications Act 2003 – a common example of this being the sending of a malicious communication during the course of harassment. It explains what is a “malicious communication” and what is harassment, and the charging practices of the CPS. It then looks at what one might to do protect oneself.
NCA PUBLISHES ANNUAL PLAN 2019/20
On 16th April, the NCA published its Annual Plan.
ISLE OF MAN CONFIRMS REMOVAL OF 13 NAMES FROM IRAQ SANCTIONS LIST
On 15th April, the Isle of Man confirmed the removal of 13 entities from the Iraq sanctions list, following the decision of the UN and EU.
HMRC DIRECT RECOVERY OF DEBTS INTERVENTION – REVIEW
On 16th April, HMRC published a review of Direct Recovery of Debts activity between April 2016 and December 2018. Direct Recovery of Debts came into effect in November 2015 and gives HMRC the power to recover established debts directly from debtors’ bank and building society accounts. The report considers whether the key policy objectives – reducing tax debt owed by securing payment in full, ensuring a fairer tax system and providing better value for money – have been achieved, focusing on effectiveness in collecting tax debt, and the impact on debtors, including vulnerable taxpayers. When announced at Budget 2014, ministers agreed HMRC would provide Parliament with a full review of the functioning of the policy after it had been operational for 2 years. The report says over 22,000 debts were considered, but only 19 of recoveries were actually used, collecting £361,678. However, findings demonstrate that the policy has had a significant deterrent effect, leading to improved recovery of tax debts, and the intervention was introduced to target those taxpayers who actively choose not to pay or delay paying, even though they have sufficient funds to do so – additional tax revenue totalling £178 million was recovered through the intervention, reducing any unfair advantage those debtors have over the compliant majority.
2 NEW EU REGULATIONS ESTABLISHING THE FRAMEWORK FOR THE INTEROPERABILITY OF EU INFORMATION SYSTEMS FOR SECURITY, BORDER AND MIGRATION MANAGEMENT
On 16th April, the EU announced the adoption of a legislative initiative by the Parliament by the Commission that will allow EU information systems for security, migration and border management to work together more intelligently. When in force it will allow –
- border guards and police, using a single screen, will be able to carry out and cross-check identity documents against all the relevant EU information systems, in line with their existing access rights; and
- they will also be able to identify dangerous criminals more easily through a shared biometric matching service that will use fingerprints and facial images to search across existing information systems, and through a common identity repository which will store biographical data of non-EU citizens. In addition, a multiple-identity detector will cross-check and immediately flag anyone who is using fraudulent or multiple identities.
See the following factsheet on how the EU plans to plug interoperability gaps in the various system in use or planned –
See also this EU factsheet on existing EU information system for use in security and at the borders – the Schengen Information System (SIS), the Visa Information System (VIS), Eurodac fingerprint database; the European Criminal Records Information System (ECRIS), ECRIS-TCN for third country nationals expected in 2022, the Entry/Exit System (EES) expected 2021, and the European Travel Information and Authorisation System (ETIAS) expected in 2022.
EU AIR SAFETY LIST: Q&A ON AIR CARRIERS THAT ARE RESTRICTED FROM OPERATING WITHIN THE EU
On 16th April, a news release from the EU on the “EU blacklist” – a list of air carriers from non-EU countries which do not fulfil the necessary international safety standards. As of April 2019, on the list are 114 airlines (certified in 16 states), due to a lack of safety oversight by the aviation authorities from these states; 6 airlines, based on safety concerns with regard to these airlines themselves; and 4 airlines are subject to operational restrictions and can only fly to the EU with specific aircraft types.
ANGOLA’S AENERGY IS FIRST AFRICAN BUSINESS TO RECEIVE ANTI-BRIBERY CERTIFICATE
All Africa on 16th April reported that Angola-based Aenergy, which operates the country’s largest thermal power plant and provides locomotive engines for the nation’s railways, has been awarded an ISO 37001 Anti-Bribery Management System Certificate. Certification agency Bureau Veritas also noted that Aenergy, based in the capital Luanda, is guided by international standards of safeguarding and commercial activity. Aenergy is said to have 3 offices in Africa and 1 in Portugal, and is currently engaged in several projects across Africa and the world including Ghana, Cameroon, Namibia, Singapore, the UK and US.
For information on ISO 37001 see –
THE DAUGHTER OF REPUBLIC OF CONGO’S PRESIDENT AND A $7 MILLION APARTMENT IN NEW YORK
On 16th April, a blog post relates a Global Witness claim that the daughter of Denis Sassou-Nguesso, president of the Republic of the Congo (Brazzaville), purchased an apartment for $7 million in a Donald Trump-developed building in New York. It is claimed that ownership of the apartment has been traced to a shell company owned by Claudia Sassou-Nguesso and involving a money trail including Republic of the Congo contracts awarded to a Brazilian company to a shell company in Cyprus to the purchase of the apartment. Separately, it is said, the French government is actively investigating Sassou-Nguesso for corruption and has identified €60 million of various types of property that the family has acquired in France.
NIGERIA SIGNS UP FOR WEST AFRICAN POLICE INFORMATION SYSTEM (WAPIS) PROGRAMME
On 16th April, Interpol reported that Nigeria and Interpol had signed an agreement formalising Nigeria’s support for WAPIS. The WAPIS Programme, implemented by Interpol and funded by the EU, will see the creation of national criminal data systems in each of the 15 ECOWAS (Economic Community of West African States) countries, plus Mauritania and Chad, along with the development of a regional platform for stronger criminal data exchange. Gambia, Liberia, Sierra Leone and Togo have already signed MoU with Interpol as part of their undertaking to establish electronic police information systems shared by national law enforcement authorities.
RUSSIA’S HISTORY OF USE OF IRREGULAR FORCES AND PRIVATE MILITARY GROUPS
On 16th April, Real Clear Defense published a fascinating paper from the Jamestown Foundation saying that Russia’s growing employment of non-linear forms of warfare (including private military contractors or “PMC”) has long historical traditions. The paper seeks to discuss the main milestones of historical evolution of Russia’s use of mercenary and irregular forces from Tsarist Russia to the final days of the Soviet Union. It points out that Russia’s use of private military contractors dates all the way back to the Livonian War (1558–1583) and reflected Russia’s traditional weakness in the realm of naval operations. The most famous of irregular or semi-irregular forces were probably the Cossacks – which a footnote to the paper explains were militarised and initially ethnically non-Russian people, first mentioned in official correspondence in 1550, and throughout Russian history, until 1917, this group was actively employed by the Russian Imperial government for mainly paramilitary services. The paper traces use of irregular forces and/or tactics into the evolution of the Spetznaz, and the use of “advisors/instructors” during the Cold War – sometimes officially labelled as “tourists”.
E-CIGARETTE MAKER JUUL SUED FOR ALLEGEDLY TARGETING YOUNG USERS IN US
The Daily Business review from Law.com on 16th April reported that a complaint alleges the e-cigarette company and Altria Group knowingly withheld information from consumers, specifically teenage users, about the addictive nature of JUULs, and of illegally underplaying the dangers of its product to expand its appeal among underage users.
AL-QAEDA AND THE ISLAMIC STATE WILL BE THE WINNERS OF THE LIBYAN CIVIL WAR
On 15th April, Homeland Security Today reported that the multi-year civil war is creating conditions that will allow Islamic State and al Qaeda-linked militants to regain strength in the country. It says that Salafi-jihadi groups are seizing the opportunity to recoup their losses during the standstill in the conflict(s).
ISIS DEVELOPMENT OF SUICIDE CAR BOMBS 2014-19
A paper from the Middle East Institute looks at the development and use of the suicide vehicle-borne improvised explosive device (SVBIED), aka the “car bomb”. It says that ISIS consistently adapted the SVBIED design based on operational environment and other factors, with modifications in armour, payload organisation, colour, and detonation technology, and that it “exported” the technology to such places as Nigeria and the Philippines. It argues that ISIS’s research and development of SVBIED technology presents a continued threat, even after the collapse of the territorial caliphate, due to the group’s ability to export its designs and enable nascent ISIS provinces to launch powerful attacks on unsuspecting communities globally. Included in its chilling details are such facts that IED or anti-tank mines could be deliberately mounted in specific directions in order to direct explosive energy outwards toward the target, rather than produce a simple explosion, or including oil to cause fire as well as blast in the target area. It explains the distinction between the SVBIED and the unmanned VBIED – there are also covert SVBIED and other variants.
On 15th April, the Task & Purpose website reported on a leaked memo from February and from the Department of Homeland Security, saying that it is considering designating the painkiller drug fentanyl as a weapon of mass destruction “when certain criteria are met”. The memo offered background on the drug and how some elements of the US government see fentanyl as a potential “mass casualty weapon”. Roughly 50 to 100 times more powerful than morphine, fentanyl is a synthetic opioid that is medically-prescribed to treat severe pain. Illegal versions — usually from China or Mexico — is sometimes manufactured and sold as powder, put in small candies and eye droppers, or mixed into other illicit drugs to increase their potency, which has led to a significant increase in overdoses for unknowing drug users. In 2017, President Trump declared the opioid crisis a public health emergency as tens of thousands of American deaths were traced to fentanyl overdoses in recent years.
On 15th April, Superyacht News provided an overview of customs schemes available to US-built yachts entering the EU, which face a 25% custom import duty.
Deutsche Welle on 16th April reported that 4 men have been found guilty of falsely labelling horsemeat as beef. The convictions stem from a Europe-wide scandal in 2013 in which the meat was used in frozen lasagne and other industrial food products. The court found Jacques Poujol, the former director of the meat processing company Spanghero in southwestern France, to 2 years in jail and confiscated €100,000 seized at his home, and it banned him from working in the meat industry for 2 years. Spanghero manager Patrice Monguillon was given a 1-year suspended sentence. Dutch middleman Johannes Fasen was given a 2-year sentence and his partner, Hendricus Windmeijer, received a 1-year suspended sentence, both men having been previously convicted of similar crimes in the Netherlands in 2012.
On 16th April, the EU Parliament adopted a draft Regulation proposed by the Commission that will strengthen EU rules on explosive precursors. The new Regulation will –
- add to the strict rules already in place on the access to chemical precursors that can be used to produce homemade explosives, and will ban additional chemicals – adding sulphuric acid, an ingredient in the explosives used in the attack at the airport and the subway of Brussels in March 2016, as well as ammonium nitrate; and
- strengthen licensing and screening – requiring a Member State to check the legitimacy of a request and perform a careful security screening, including a criminal background check.
The EU Regulation takes immediate effect.
The EU put in place rules to restrict access to explosive precursors that could be used to make home-made explosives in 2013. However, the security threat has been constantly evolving with terrorists using new tactics, and developing new recipes and bomb-making techniques.
See this EU factsheet on existing EU information system for use in security and at the borders – the Schengen Information System (SIS), the Visa Information System (VIS), Eurodac fingerprint database; the European Criminal Records Information System (ECRIS), ECRIS-TCN for third country nationals expected in 2022, the Entry/Exit System (EES) expected 2021, and the European Travel Information and Authorisation System (ETIAS) expected in 2022.
On 13th April, the UN announced the de-listing of DJAMAT HOUMAT DAAWA SALAFIA (DHDS).
A briefing paper from the EU Parliament says that Cambodia is one of nearly 50 developing countries that enjoy duty-free access to EU markets under the “Everything but Arms” scheme. In response to the country’s deteriorating human rights situation, the EU is now considering whether to withdraw trade preferences. Established in 2001, the scheme gives 49 of the world’s poorest countries duty-free access to EU markets. As the name suggests, it applies to all of their exports except for arms and ammunition. It is part of the EU’s wider Generalised Scheme of Preferences (GSP), which includes 3 sub-schemes for developing countries. The paper looks at why Cambodia faces losing access, and the pros and cons for reaching such a decision.
A Dixcart briefing on 16th April says that the Portuguese Government has introduced a new investment vehicle, exclusively dedicated to real estate investment. Introduced in February 2019, the ‘Sociedades de Investmento e Gestao Imobiliaria’, (SIGI) introduces a number of features generally associated with Real Estate Investment Trusts (REIT). It is a new type of real estate company designed to acquire and/or manage, commercial or residential, properties within the rental market.
On 16th April, following the publication of the mutual evaluation report on Finland, FATF has issued an updated consolidated schedule of AML/CFT ratings.
On 16th April, FATF published the review of Finland saying that measures to combat money laundering and terrorist financing are delivering good results, but the country needs to improve supervision. There are some areas to improve the effectiveness of the country’s framework, especially with regard to the AML/CFT supervision of financial and non-financial institutions. It says that the money laundering risk in Finland comes primarily from the grey economy, but also from domestic and foreign frauds and the proceeds of drug crimes. The main terrorist financing risks in Finland stem from sympathisers of terrorist causes and foreign terrorist fighters, in particular ISIL’s foreign terrorist fighters and returnees.
On 15th April, OFAC announced a number of names being added to its terrorism sanctions lists – including the IRGC, the AL-ARD AL-JADIDAH MONEY EXCHANGE COMPANY in Iraq, and 7 individuals. It designated key financial facilitators and conduits for ISIS operating in Europe, Africa, and the Middle East. 6 individuals, located in Iraq, Turkey, and Belgium, and the entity, an Iraq, Turkey, and Syria-based money services business, are part of the Rawi Network, a key ISIS financial facilitation group based out of Iraq, which was the target of a joint US Treasury-DoD action in October 2018.
On 15th April, HM Treasury published a Notice confirming the removal of 13 entities from its Consolidated List, following the decision of the UN and EU.