raytodd.blog

16^th December 2018

FERTILE SOIL BEING SMUGGLED OUT OF IRAN ON LARGE SCALE

Radio Farda from Rferl on 16^th December reported that an Iranian environmental official has admitted that fertile soil from farms and pastures is being smuggled abroad.  Several social media reports had raised the alarm in recent years about smuggling on a massive scale.  It is sold to UAE and other Arab states south of the Persian Gulf in flower pots, registered as “flower export”.  The soil smuggled is mainly from southern parts of Iran, including the province of Fars.  The head of Iran’s Society of Soil Sciences says 2 billion tons of Iranian fertile soil is lost annually through erosion leaving the country with $56 billion damage each year.  Excessive erosion and degrading have seriously endangered Iran’s soil resources, experts have repeatedly asserted.

https://en.radiofarda.com/a/iran-fertile-soil-smuggled-out-to-gulf-states/29658801.html

CAMBODIA’S LARGEST IVORY BUST SEES TONS OF ELEPHANT TUSKS SEIZED

Deutsche Welle on 16^th December reported that Cambodian authorities have seized 3 tons of elephant tusks from Mozambique following a tip from the US Embassy.  It says that the demand for ivory from China and Vietnam is a driving factor in Cambodia’s illegal wildlife trade.

https://www.dw.com/en/cambodias-largest-ivory-bust-sees-tons-of-elephant-tusks-seized/a-46761040

COCAINE CRUISE PENSIONERS’ 16 DRUG SMUGGLING TRIPS TO NORWAY

The Daily Mail reported on 16^th December that the British pensioners arrested on a cruise liner last week and accused of smuggling cocaine had previously been on at least 16 drug-smuggling trips to Norway in a battered old car.  It is said they acted as couriers for a cannabis smuggling ring.  It says that they were arrested in Oslo in 2004, after which they skipped bail and returned to England, where they changed their names and moved into sheltered housing.

https://www.dailymail.co.uk/news/article-6500205/Cocaine-cruise-pensioners-SIXTEEN-drug-smuggling-trips-Norway.html

MALTA: INFORMAL POSITIVE FEEDBACK BY EBA AND EU COMMISSION OVER ACTION PLAN FOR FIAU

The Malta Independent on 16^th December reported that the informal feedback provided by the European Banking Authority (EBA) and the EU Commission to the Financial Intelligence Analysis Unit (FIAU) on the latter’s action plan following scrutiny by the institutions is said to be “positive and encouraging”.  The FIAU action plan consists of 9 key actions, 8 of which are intended to directly address the EBA 8 recommendations.  The primary aim of the action plan, the FIAU said, is to serve the FIAU in ensuring that it strengthens its supervisory and enforcement functions.

http://www.independent.com.mt/articles/2018-12-16/local-news/Informal-feedback-by-EBA-and-EU-Commission-over-action-plan-positive-FIAU-6736200884

PAKISTANI BILLIONAIRE NAMED IN INSIDER TRADING CASE IN UK

Pakistan Today on 15^th December reported that multi-billionaire Pakistani national, Alshair Fiyaz, has been named in connection with allegations of market manipulation in a high-profile insider trading case at the Southwark Crown Court brought by the FCA.

https://www.pakistantoday.com.pk/2018/12/16/pakistani-billionaire-named-in-insider-trading-case-in-uk/

PANAMA: TRIAL OF FORMER PRESIDENT MARTINELLI POSTPONED

Kenneth Rijock in his blog reported that the trial of former President Martinelli, scheduled for 12^th December, was cancelled at short notice.  He is charged with conducting a massive unlawful surveillance program, using state-of-the-art equipment and his National Security Council staff, and procedural reasons were cited for the delay.

http://rijock.blogspot.com/

MALDIVES SEIZE $6.5 MILLION FROM FORMER PRESIDENT ABDULLA YAMEEN
The Economic Times on 16^th December reported that a court has ordered accounts holding $6.5 million to be frozen. Yameen was defeated in a September election.  He has been dogged by allegations that he received close to $1.5 million in illicit payments during his failed bid for re-election.

https://economictimes.indiatimes.com/news/international/world-news/maldives-seize-6-5-million-from-former-president-abdulla-yameen/articleshow/67115007.cms

14^th December 2018

NO END IN SIGHT FOR THE AL-SHABAAB THREAT TO SOMALIA

The December issue of CTC Sentinel carried an article which says that there has been no turning point in the fight against al-Shabaab.  The Somali group, affiliated with al-Qaida, has not been weakened in the past year as a terrorist force. Even though airstrikes have killed hundreds of al-Shabaab fighters, the group still has significant capability to carry out terrorist attacks. One reason the article gives is the group’s ability to finance its fighters.  According to UN monitors, the group’s taxation system has grown in sophistication and reach to the point where al-Shabaab is now likely running a budget surplus.  It has a highly effective domestic fund-raising system.  UN monitors stated the situation plainly in their November 2018 report, explaining their investigation found “the militant group generates more than enough revenue to sustain its insurgency”.  It uses road checkpoints, and employing “mafia-style” tactics of violence and intimidation where needed, as a shadow government even in areas it does not directly control, collecting taxes on agricultural produce, livestock sales, charcoal exports, goods in transport, and vehicles using the roads.  The UN says that the group’s system is more organised than those of the federal government.  It is said that a single road checkpoint generates $30,000 per day for the al-Shabaab coffers, or about $10 million per year.

https://ctc.usma.edu/no-end-sight-al-shabaab-threat-somalia

TRANSNATIONAL JIHADI LOGISTICAL NETWORK AND CROSS-BORDER FOREIGN FIGHTER RECRUITMENT NETWORKS IN THE US AND EUROPE, AND THE POTENTIAL THREAT THEY POSE

Another article in the December 2018 edition of the CTC Sentinel carries an article which says that the recent guilty plea in the criminal case against Aws Mohammed Younis al-Jayab, a resident of Arizona, Wisconsin, and California, makes public previously undisclosed information about a transnational jihadi logistical network with members located in Switzerland, Syria, Turkey, and the US.  He is amongst the rare few who returned to the US after fighting for a jihadi organization in Iraq or Syria.  The disclosures in related criminal cases in Chicago, San Francisco, and Switzerland shed new light on cross-border foreign fighter recruitment networks in the US and Europe, and the potential threat they pose.

https://ctc.usma.edu/united-states-v-aws-mohammed-younis-al-jayab-case-study-transnational-prosecutions-jihadi-foreign-fighter-networks

15^th December 2018

PLANS TO STRENGTHEN PROTECTIONS FOR BRITAIN’S MOST VALUABLE TREASURES AT RISK OF EXPORT

A news release from the Department of Digital, Culture, Media and Sport on 15^th December said that plans would strengthen the export deferral rules and give UK museums and buyers a greater opportunity to keep important artworks and artefacts in the country.  A new public consultation proposes a formal, legally binding agreement with private sellers, instead of the current ‘gentleman’s agreement’, and give museums and buyers in the UK first refusal on acquisitions.  It would mark the first significant change to the system in over 65 years.  The news release explains that, until 1939, the UK had no legal controls on the export of works of art, books, manuscripts and other antiques. The outbreak of the Second World War made it necessary to impose controls on exports generally in order to conserve national resources.  Items that are being sold abroad are assessed at the point of application for an export licence by the Reviewing Committee on the Export of Works of Art and Objects of Cultural Interest, which establishes whether it meets the ‘Waverley criteria’ to be regarded as a national treasure.  The public consultation ends on 24^th February.

https://www.gov.uk/government/news/plans-to-strengthen-protections-for-britains-most-valuable-treasures-at-risk-of-export

JAPANESE BOAT OWNERS CHARGED IN HAWAII WITH HELPING SMUGGLE NEARLY 1,000 SHARK FINS

The Japan Times on 15^th December reported that prosecutors in Hawaii are accusing the owners and officers of a Japanese fishing boat of helping Indonesian fishermen smuggle nearly 1,000 shark fins, worth about $58,000 on the black market.

https://www.japantimes.co.jp/news/2018/12/15/national/crime-legal/japanese-boat-owners-charged-hawaii-helping-smuggle-nearly-1000-shark-fins/#.XBS9bvZ2t9A

SEC ENFORCES ITS “IDENTITY THEFT RED FLAGS RULE” AND PUNISHES FIRM FOR ALLEGEDLY LACKLUSTRE DATA SECURITY PRACTICES

An article from the New York University Program on Corporate Compliance and Enforcement says that a  little-noticed consent decree entered into by the SEC earlier this year should be setting off alarm bells for financial firms and their boards of directors.  The SEC charged that hackers were able to access sensitive client information called out the company’s board of directors for failing to “administer and oversee” compliance with the rule.  The article explains that the SEC adopted the red flags rule 5 years ago, and it requires investment firms to pay attention to identity theft by developing and implementing a written programme to “detect, prevent and mitigate” identity theft and fraud, and to provide “red flags” or other warning signs when hackers might be trying to steal customer information or customer identities.  The rule also requires that a firm’s board of directors or senior leadership administer the programme.  However, until recently, the SEC did not enforce the rule.

https://wp.nyu.edu/compliance_enforcement/2018/12/06/secs-first-red-flags-enforcement-case-focuses-on-boards-role/

LUXEMBOURG: NEW MANDATORY REGISTER OF BENEFICIARIES SPARKS CONTROVERSY

RTL on 14^th December reported that the coalition government is set to pass a new draft law to facilitate the fight against money laundering but, in parliament, a new mandatory register of true beneficiaries sparked controversy.

https://today.rtl.lu/news/luxembourg/1280639.html

RUSSIAN TYCOON IN DIVORCE SETTLEMENT LOSES ISLE OF MAN-REGISTERED HELICOPTER

The Khaleej Times on 15^th December reported that a Russian tycoon, Farkhad Akhmedov, whose superyacht is under arrest in Dubai over a divorce settlement case, has lost his helicopter as part of the settlement.  The helicopter, which used to be engaged in regular shift work travelling to and from the superyacht MV Luna was sold in the Isle of Man – having been seized in Turkey.  The helicopter was formerly owned by Lucy Ltd, a Manx company controlled by Akhmedov.  In 2016, a UK court awarded his wife £453 million plus interest as part of a divorce settlement, and enforcement arrangements have ever since been made to track down all his assets, including a private jet and a motor vessel.

https://www.khaleejtimes.com/news/crime-and-courts/russian-tycoon-loses-dh207m-helicopter-over-divorce-settlement-in-dubai-

BRAZIL’S LULA DA SILVA REJECTS NEW MONEY LAUNDERING ACCUSATIONS

Telesur on 14^th December reported that Brazilian prosecutors have filed a new lawsuit against ex-President Lula da Silva, this time accusing him of money laundering involving businesses with Equatorial Guinea.  Prosecutors claim that in 2011-12, businessman Rodolfo Giannetti Geo asked Lula to convince President Teodoro Obiang to help the Brazilian ARG Group get a contract in the African country, making use of his “international prestige” even though he wasn’t in office anymore. In exchange, the company donated more than $255,000 to the Lula Institute.  It notes that Giannetti is also being investigated for money laundering and influence peddling in international businesses.

https://www.telesurenglish.net/news/Brazils-Lula-da-Silva-Rejects-New-Money-Laundering-Accusations-20181214-0016.html

TAX EVASION CASE AGAINST SAMOA CHURCH MINISTERS ADJOURNED TO 2019

Radio New Zealand on 15^th December reported that the first hearing of a tax-evasion case against church ministers of the Congregational Christian Church of Samoa has been adjourned until February 5^th to allow counsel to take instructions.  The case is the first under new laws introduced this year that requires church ministers to pay tax on donations received from their congregation.

https://www.radionz.co.nz/international/pacific-news/378348/first-tax-evasion-case-against-samoa-church-ministers-adjourned-to-2019

EU COURT REJECTS APPEAL BY HAMAS AGAINST ASSET FREEZE SANCTIONS LABELLING IT A TERRORIST ORGANISATION

On 14^th December, a news release from the CJEU announced that the General Court had dismissed the action brought by Hamas against the decisions to maintain the freezing of its funds as an entity involved in acts of terrorism.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-12/cp180203en.pdf

ISLE OF MAN: DORMANT ASSETS BILL

This Bill would provide for the establishment of a fund into which the balances of certain dormant assets may be transferred; and for the distribution of money in that fund for charitable and other purposes, subject to a right to reclaim those balances from the fund.

https://legislation.gov.im/cms/images/LEGISLATION/BILLS/2018/2018-0011/DormantAssetsBill2018.pdf

https://consult.gov.im/treasury/dormant-assets-bill-2018/results/dormantassetsconsultationresponsedocument.pdf

HOW CURTIS WARREN TAUGHT THE LIVERPOOL MAFIA TO THINK GLOBAL AND TAKE ON THE WORLD

On 15^th December, the Liverpool Echo published an article saying that the local crime boss taught Liverpool criminals to think on an international scale – by befriending the Colombian cartels seen in the recent hit Netflix drama Narcos.  He has been linked to international drug deals worth hundreds of millions of pounds over the decades.  In 2013 Warren was hit with another 10-year sentence after declining to pay a £198 million confiscation order to the authorities.  A recent book, “Drug War The Secret History”, charts the emergence of the UK’s first drug importers, and ascent of men like Curtis Warren.

https://www.liverpoolecho.co.uk/news/liverpool-news/how-curtis-warren-taught-liverpool-15552429

HISTORY OF US-NORTH KOREA RELATIONS

On 14^th December, 38 North published the first part of a 2-part history of the troubled relationship between the two countries, at least since the 1991 announcement by President George HW Bush of the removal of all US nuclear weapons from Korea.

https://www.38north.org/2018/12/lsigal121418/

On 15^th December, law firm Latham published an article about the mutual evaluation review of the effectiveness of the UK’s AML/CFT measures.  It notes that, whilst the report is largely positive, areas for improvement are highlighted –

• FATF observes that it is unclear whether the level of prosecutions and convictions for high-end money laundering is or will be commensurate with the UK’s risk profile. The article translates this as meaning that the UK may be doing a good job with easier cases, but not the more complex and potentially more serious ones
• FATF notes that the UK is not taking full advantage of its financial intelligence data, largely because of the policy decision that the FIU should have a limited remit — noting this is despite similar concerns being raised “over a decade ago in the UK’s previous FATF evaluation”;
• whilst the volume of SAR is increasing year on year, 80% of these continue to be from 4 banks. Meanwhile, the number of SAR filed by the accountancy and legal sectors, as well as money services businesses is decreasing;
• under the UK’s supervisory and regulatory framework, only a small population of firms are subject to regular, periodic review;
• the FCA risk-based approach to supervision requires substantial improvement and should be based on a more nuanced understanding of firms’ risk profiles rather than their size alone.

The article concludes with a set of recommended action points for firms.

https://www.latham.london/2018/12/uk-scores-highly-on-anti-money-laundering-review/#page=1

On 14^th December, NBC News and others reported that a secret US military assessment is said to report that North Korea is still evading UN sanctions by transferring oil at sea, and that a 8-nation coalition of US-led naval and air forces deployed to disrupt the movements has failed to dent the overall number of illegal transfers.  The report does say that patrols have forced North Korea to adjust its tactics at sea, including transferring oil farther away from the Korean Peninsula and often in other countries’ territorial waters.  The article also says that North Korea has honed techniques to skirt international prohibitions, using shell companies, illicit financing, stealthy shipping movements, and partners in China and Russia to smuggle in prohibited goods, according to experts and former officials.  Even without such subterfuge, the article says that 2 ships identified in a UN report earlier this year for smuggling coal to Russian ports (Sky Angel and Sky Lady) continue to operate and recently made port visits to Japan — even obtaining insurance paperwork, according to maritime and shipping sites.

https://www.nbcnews.com/news/north-korea/top-secret-report-north-korea-keeps-busting-sanctions-evading-u-n947926

A news release from the Department of Digital, Culture, Media and Sport on 15^th December said that plans would strengthen the export deferral rules and give UK museums and buyers a greater opportunity to keep important artworks and artefacts in the country.  A new public consultation proposes a formal, legally binding agreement with private sellers, instead of the current ‘gentleman’s agreement’, and give museums and buyers in the UK first refusal on acquisitions.  It would mark the first significant change to the system in over 65 years.  The news release explains that, until 1939, the UK had no legal controls on the export of works of art, books, manuscripts and other antiques. The outbreak of the Second World War made it necessary to impose controls on exports generally in order to conserve national resources.  Items that are being sold abroad are assessed at the point of application for an export licence by the Reviewing Committee on the Export of Works of Art and Objects of Cultural Interest, which establishes whether it meets the ‘Waverley criteria’ to be regarded as a national treasure.  The public consultation ends on 24^th February.

https://www.gov.uk/government/news/plans-to-strengthen-protections-for-britains-most-valuable-treasures-at-risk-of-export

14^th December 2018

HIGHER STANDARD SET FOR FINDING VICARIOUS LIABILITY IN FRAUDULENT MISREPRESENTATION

A post from Harneys on 11^th December reported that the Court of Appeal had recently reaffirmed the test to be applied in determining whether a principal could be vicariously liable for the deceit of an agent.  The Court found that there needed to be more than just a close connection between the principal and agent; the agent had to have the actual or ostensible authority to make representations on behalf of the principal.

http://harneysoffshorelitigation.com/raise-the-bar-a-higher-standard-set-for-finding-vicarious-liability-in-fraudulent-misrepresentation/

HOW PROTECTIVE IS THE CLOAK OF LITIGATION PRIVILEGE?

Another post from Harneys on 11^th December concerns another Court of Appeal case and the decision confirming that “litigation privilege” means no more than obtaining information or advice in relation to that litigation (including settlement of that litigation).  The post explains that litigation privilege applies to communications between a party or their lawyers and third parties while obtaining information in connection with existing or contemplated litigation, subject to restrictions which it also explains – including that any communications at issue must have been made for the sole or dominant purpose of conducting the litigation.  Hence, communications that are about the settlement of litigation but which are not created, sent or received for the dominant purpose of obtaining advice or information about that litigation, will not be covered by litigation privilege and would be disclosable to an opponent.

http://harneysoffshorelitigation.com/just-how-protective-is-the-cloak-of-litigation-privilege/

JERSEY COURT ORDERS BANKS TO OPEN ACCOUNT FOR CONVICTED FRAUDSTER

KYC 360 on 13^th December reported that the Royal Court in Jersey has ruled that a trust for a convicted fraudster should be allowed to open a bank account in Jersey, despite being denied banking services in other jurisdictions.  The case is linked to the Bernie Madoff fraud.  As part of the victim compensation programme, M Trust holds an undrawn cheque from the Madoff Victim Fund (overseen by the US SEC) for £211,379.27, with the possibility of more payments to come, but the trustee has been unable to open a bank account for the M Trust to receive the funds.  In 2009 the settlor of the trust pleaded guilty for his role in a scandal involving New York State’s $122 billion pension fund, and received a $12 million fine, and was banned from the securities industry for life.  However, the court held that there was no implication that the funds from the M Trust are not from legitimate sources.

https://kyc360.com/article/financial-crime-court-orders-banks-to-open-account-for-convicted-fraudster/

ALLEGED KICKBACK SCHEME LEADS TO MURDER-FOR-HIRE, MONEY-LAUNDERING CHARGES AND RUSSIAN MILITARY CONTRACTS

On 13^th December, the Wall Street Journal reported that a man living in North Carolina who allegedly laundered part of $150 million in kickbacks related to Russian military contracts was charged in a plot that authorities say involved an extramarital affair, a murder-for-hire plan, immigration fraud and bribing a public official.  Leonid Teyf, 57, originally from Belarus, was charged along with his wife and 3 others.  The article says that authorities seek to seize more than $39 million in assets related to the case, including a mansion in Raleigh, artwork, vehicles, and a Ruger pistol with an obliterated serial number.

https://www.wsj.com/articles/alleged-kickback-scheme-leads-to-murder-for-hire-money-laundering-charges-11544738203?mod=searchresults&page=1&pos=2

BELGIANS WITHDREW €18 BILLION FROM TAX HAVENS IN LAST 4 YEARS

On 14^th December, the Brussels Times reported that a report by the Banque Nationale says that, in 2013, the Banque Nationale had calculated that €47 billion had been traced as being in tax havens outside of the EU, but now the daily publication says this total is some €29 billion.  The most significant decrease is in the Cayman Islands (a reduction of €26 billion), in Hong Kong (down by €4.5 billion) and in Jersey (reduced by €2 billion).  On the other hand, an increase was noted in the UAE (up by €6.3 billion).

http://www.brusselstimes.com/belgium/13466/belgians-withdraw-18-billion-from-tax-havens

ESTONIA: E-RESIDENTS, ADDRESS SERVICES BEHIND MOST LETTERBOX COMPANIES

ERR in Estonia on 14^th December said that the Estonian media recently reported that there are several thousand companies registered to just a handful of addresses.  While letterbox companies have long been a common phenomenon in tax havens around the world, they are a relatively recent novelty in Estonia.  For example, some 5,000 businesses are registered at just 3 Tallinn addresses.

https://news.err.ee/884885/e-residents-address-services-behind-most-letterbox-companies

MALDIVES COURT FREEZES EX-PRESIDENT YAMEEN’S BANK ACCOUNTS

Al Jazeera on 14^th December reported that police have summoned the ex-leader for questioning as court freezes accounts over allegations of ‘illicit financial transactions’.  Yameen suffered a decisive defeat in a presidential election in September.  He is expected to be questioned over allegations that he received $1.5 million in cash as campaign funds days before the contentious vote.

https://www.aljazeera.com/news/2018/12/maldives-court-freezes-president-yameen-bank-accounts-181214091920719.html

HIGHLAND CASTLE OWNER ARRESTED IN MOSCOW OVER AN ALLEGED MULTIMILLION-POUND FRAUD

The Press & Journal on 14^th December reported that Sergey Fedotov, 41, a Russian tycoon who bought former Glasgow Rangers owner Craig Whyte’s Highland castle for £1 million has been arrested over an alleged fraud for the second time. He has already served a prison sentence for a £3.6 million property fraud which he committed while head of the Russian Authors’ Society (RAO), and he has now been accused of embezzling £9 million worth of funds from the organisation, which collects royalty payments on behalf of writers.

https://www.pressandjournal.co.uk/fp/news/highlands/1632630/highland-castle-owner-arrested-over-an-alleged-multi-million-pound-fraud/

HM TREASURY ISSUES FORMAL NOTICE REVOKING ERITREA SANCTIONS

14^th December, HM Treasury issued a Notice about the publication on 11^th December of Council Regulation 2018/1932/EU, repealing the financial sanctions, including asset freezes, which had been imposed under the Eritrea regime.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/763853/Notice_Eritrea_2018_1932.pdf

GUANGZHOU CUSTOMS CRACK DOWN ON SMUGGLING

Customs Today on 14^th December reported that Customs officers in Guangzhou, capital of Guangdong province, earlier this year seized more than 170,000 live aquatic products and 620,000 cans of milk powder.  The seizures came as part of a crackdown on 2 major cross-border, e-commerce smuggling cases.  A total of 17 suspects were detained in the 2 cases.

http://www.customstoday.com.pk/guangzhou-customs-crack-down-on-smuggling/

THE WAYWARD MILLIONS OF LITHUANIA’S RUNAWAY BANKER

OCCRP on 14^th December carried an article saying that Lithuania’s Vladimir Romanov absconded to Russia more than 4 years ago, leaving investigators grasping to recoup millions they believe he stole from Ukio Bankas, and they are still chasing the money today.  Investigators say evidence contained in the Paradise Papers leak of offshore financial data points to how it was done.

https://www.occrp.org/en/28-ccwatch/cc-watch-indepth/9036-the-wayward-millions-of-lithuania-s-runaway-banker

GUATEMALA: NO REDUCTIONS EXPECTED IN BUSINESS-TARGETED EXTORTION IN 2019 FOR CARGO AND TRANSPORT COMPANIES

Janes.com on 14^th December reported that anti-gang interventions in Guatemala unlikely to reduce business-targeted extortions in 2019, particularly with cargo and transport companies.  So-called “imitators” who pose as gang members to extort over $439,000 in 2018, and 3 police officers from the National Division against the Criminal Development of Gangs (DIPANDA) also were arrested for allegedly extorting taxi drivers in Guatemala City.

https://www.janes.com/article/85227/anti-gang-interventions-in-guatemala-unlikely-to-reduce-business-targeted-extortions-in-2019-particularly-with-cargo-and-transport-companies

AUTHORISED PUSH PAYMENT FRAUD – EXTENDING THE JURISDICTION OF THE FINANCIAL OMBUDSMAN SERVICE

On 14^th December, the FCA published Policy Statement PS 18/22 which summarises and provides a response to the consultation on extending the jurisdiction of the FOS to cover cases of APP fraud.  Access will be available to dispute resolution through the Financial Ombudsman Service for complaints against payment service providers (PSP) who receive payments relating to the alleged fraud, under final rules which take effect on 31^st January.  It explained that APP fraud is where a fraudster tricks a payer into making an APP to an account controlled by that fraudster.   It differs from other kinds of fraud, such as where a fraudster steals money from an account without the owner of the account knowing, because in APP, the account owner authorises the payment, albeit under false pretences.

https://www.fca.org.uk/publications/policy-statements/ps18-22-authorised-push-payment-fraud-extending-jurisdiction-financial-ombudsman-service

http://www.mondovisione.com/media-and-resources/news/uks-financial-conduct-authority-introduces-new-rules-on-handling-complaints-abo/

TRANSNATIONAL CRIME CONVERGING ACROSS AFRICA – INTERPOL

ENACT Africa on 14^th December reported that an INTERPOL report has found crimes are increasingly converging across Africa, underlining how transnational threats cannot be treated in isolation.  The report consists of a continental and 5 regional overviews which highlight the relationships between different types of organised crime across Africa’s regions.  Its findings suggest crime syndicates remain highly connected across borders on the continent and are active in a number of illicit markets.  Amongst its finding are that, operating in the shadow of the global economy, traffickers are progressively diversifying and interconnecting their activities, including drug trafficking, people smuggling, arms trafficking, wildlife crime, illegal logging, as well as fake medicines; and trafficking in cultural artefacts increasingly involves criminal organisations across the continent.  Criminals, terrorists and armed insurgents alike are profiting from crime and, through illicit trafficking routes and networks, are moving people and products, creating fault lines from one region to the next across Africa.

https://enactafrica.org/press/press-releases/transnational-crime-converging-across-africa-undefined-interpol

ALGERIAN COCAINE BUST POINTS TO ALARMING TRENDS

ENACT Africa on 10^th December reported that a seizure of 710 kg of cocaine in the port of Oran, Algeria’s second largest city, suggests an increase in narcotics trafficking along North African routes.  The shipment reportedly started its journey in Brazil, then stopped in the Spanish ports of Las Palmas and Valencia before reaching Oran.

https://enactafrica.org/enact-observer/algerian-cocaine-bust-points-to-alarming-trends

UK GOVERNMENT COMMITS TO REVIEW OF E-CIGARETTE REGULATIONS AND SNUS AFTER BREXIT

The Pharmaceutical Journal on 12^th December reported that, in response to a parliamentary report on e-cigarettes, the government has agreed to review e-cigarette regulations once EU legislation ceases to apply.  The government also committed to “consider reviewing the position on snus” — a moist powder tobacco product currently banned across the EU – and it will consider whether snus would promote “proportional harm reduction”.

https://www.pharmaceutical-journal.com/news-and-analysis/news/government-commits-to-review-of-e-cigarette-regulations-after-brexit/20205881.article

EU PROPOSES SANCTIONS REGIME FOR HUMAN RIGHTS VIOLATIONS AND CORRUPTION

On 10^th December, Transparency International reported that EU foreign ministers have agreed on introducing the EU Global Human Rights Sanction Regime, and over the next few months, the European External Action Service will develop a framework for the proposed regime.  Possible sanctions could include, for example, asset freezes and travel bans on individuals and entities who are known to have committed serious human rights violations.  Similar regimes, usually termed “Magnitsky” sanctions, are in place in the US and Canada and elsewhere.

https://voices.transparency.org/fighting-back-eu-sanctions-for-human-rights-violations-and-corruption-f9455480fe5e

POLITICAL ASYLUM FOR EX-PRESIDENTS

An article from Transparency International on 14^th December looks at 2 recent cases of ex-presidents who have applied for political asylum to evade justice, and the countries which handled these requests in very different ways.  Firstly, Last month, former Peruvian president Alan García entered the Uruguayan embassy in Lima and filed a request for political asylum, only hours after being banned from leaving the country while under investigation for allegedly receiving bribes from Odebrecht (as part of the “Car Wash” bribery and corruption scandal).  Uruguay rejected his application, saying that there are no signs of political persecution in his case.  In the second case there was a different result.  Nicola Gruevski, the former Prime Minister of Macedonia, applied for asylum in Hungary after fleeing his home country in what seems to be an attempt to avoid a prison sentence.

https://www.transparency.org/news/feature/political_asylum_for_ex_presidents_an_easy_way_to_impunity

HOME OFFICE AND THE FAILURE TO SUSPEND THE ‘GOLDEN VISA’ SCHEME

An article in the Guardian on 11^th December says that the UK’s controversial scheme selling UK visas to wealthy foreigners was due to be suspended in anti-corruption drive, but the decision was quickly reversed.

https://www.theguardian.com/uk-news/2018/dec/11/home-office-fails-to-suspend-golden-visa-scheme

HMRC DELAYS MTD EXPANSION FOR BUSINESS DUE TO BREXIT

On 14^th December, Accountancy Daily reported that, while HMRC is to continue rolling out Making Tax Digital (MTD) for VAT but has warned that the wider extension of the MTD programme for businesses will be delayed as IT developers are refocused on Brexit customs delivery.  However, HMRC has also confirmed that MTD for VAT will continue as planned, with businesses with a turnover of £85,000 or more being required to keep digital records from 1^st April.

https://www.accountancydaily.co/hmrc-delays-mtd-business-due-brexit

SOLDIERS ON BORDER PROTECTION FIND A NEW “PRODUCT” BEING SMUGGLED INTO SOUTH AFRICA – DAGGA SEED

On 14^th December, Defence Web reported this story and speculated that it could be legalisation decriminalising personal possession of cannabis in September that has triggered a new market for smugglers who traditionally brought large quantities of the narcotic into South Africa.  Dagga is the South African term for Marijuana or Cannabis.  In one instance it is said that soldiers on border protection duty found and confiscated a 200-litre drum of dagga seed.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=54039:op-corona-soldiers-confiscate-new-product&catid=87:border-security&Itemid=188

UK: ONLINE RIGHT TO WORK CHECKS

On 14^th December, the Home Office announced that employers will be able to rely on an online Right to Work Checking Service to demonstrate compliance with illegal working legislation.  It says that the Right to Work Checking Service is secure and free to use.  It was launched in April, but until now employers have still needed to request paper documents alongside using the service.  The changes will mean that employers can use the online service to demonstrate they conducted the necessary right to work checks on migrants and avoid a penalty if they are found to be employing illegal workers.

https://www.gov.uk/government/news/online-right-to-work-checks

WHY DO WE COLLUDE WITH CORRUPTION?

A BBC Radio World Service podcast asks why do we collude with corruption when it is unfair and costs billions of dollars?  Nastaran Tavakoli-Far examines the moral quandaries we face when asked to take part in bribery.  She examines the moral quandaries we face when asked to pay a bribe. She talks to a whistle-blower, a businessman imprisoned for corruption and experts and ordinary people affected by bribery in different parts of the world.  It is said that it is estimated that 1.6 billion people have to pay bribes just to access public services.  When so many countries have signed up to fight corruption, why is it so difficult to stamp out?

https://www.bbc.co.uk/programmes/w3cswrl0

ATO NOW MONITORING SWISS BANK ACCOUNTS OF WEALTHY AUSTRALIANS

Baker McKenzie reported on 14^th December that the Australian Tax Office is now accessing Swiss bank accounts for the purpose of ensuring Australians are meeting their tax obligations.

http://www.riskandcompliancehub.com/ato-now-monitoring-swiss-bank-accounts-of-wealthy-australians/

BANKS TOLD TO WATCH FOR SIGNS OF ‘EXTREMIST TRAVELLERS’ RETURNING TO CANADA

Baker McKenzie reported on 14^th December that Canada’s financial intelligence agency has warned banks to watch for signs that foreign terrorist fighters may be trying to return home from places like Syria and Iraq.  An example given is reactivation of a dormant bank account linked to an “extremist traveller”, which may indicate that he or she is preparing to come back to Canada.

http://www.riskandcompliancehub.com/banks-told-to-watch-for-signs-of-extremist-travellers-returning-to-canada/

On 14^th December, OFAC announced that 3 individuals – 1 Israeli and 2 South Sudanese (though one having the seemingly un-Sudanese name of Gregory Vasili DIMITRY – and 6 entities – including Israeli concerns GLOBAL IZ GROUP LTD (aka ZIV HG LTD), GLOBAL LAW ENFORCEMENT AND SECURITY LTD (aka GLS), and GLOBAL NTM LTD (aka CST GLOBAL; GLOBAL CST; GLOBAL GROUP; and GREEN HORIZON),

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181214.aspx

https://home.treasury.gov/news/press-releases/sm574

 

On 14^th December, FATF published an update report which says that Recommendations 16 (wire transfers) and 17 (reliance on third parties) have been re-rated from Partly Compliant to Largely Compliant.  This follows the original May 2017 mutual evaluation report which, in turn was based on an on-site visit in late 2016.

http://www.fatf-gafi.org/publications/mutualevaluations/documents/fur-ghana-2018.html

On 14^th December, a news release advised that European Union (Somalia Sanctions) (Application) (Amendment) (No. 2) Order 2018 and the Somalia Sanctions (Amendment)(No. 2) Regulations 2018 came into operation on 13^th December.  These apply and implement EU Regulation 2018/1933/EU in Island law.

https://www.gov.im/news/2018/dec/14/financial-sanctions-somalia/

A 5-digit alphanumeric code is used for goods and technology to list dual-use goods.  The list is divided into 10 categories and each category is further divided into 5 product groups.

https://www.customs.gov.sg/businesses/strategic-goods-control/strategic-goods-control-list/list-of-dual-use-goods

The Leyland Guardian on 13^th December carried an article about Truffle Sales Ltd, which has been wound up by the High Court and was one of several in the UK and Seychelles involved in targeting people and their pensions savings using unregulated investment schemes.  Investors were told that funds would pay for tree saplings carrying truffle spores that would eventually yield a lucrative crop of truffles.

https://www.leylandguardian.co.uk/news/crime/lancashire-company-in-9m-fake-truffle-farm-scam-1-9491485

On 14^th December, the EU published EU Regulation 2018/1922/EU which amends Regulation 428/2009/EC to replace the list of goods covered.  The amendments are chiefly changes to the control lists adopted by the international non-proliferation regimes and export control arrangements in 2017.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.319.01.0001.01.ENG&toc=OJ:L:2018:319:TOC

13 December 2018

ISLE OF MAN SANCTIONS UPDATE – SOUTH SUDAN, ERITREA, UKRAINE

On 12 December, 3 separate news releases advised of updates to sanctions regimes in the Isle of Man – adding 1 name to the South Sudan sanctions list and 9 names to the Ukraine sanctions list, and notifying the coming into operation of the European Union Eritrea (Sanctions Revocation) Order 2018 and Eritrea Sanctions (Revocation) Regulations 2018.

https://www.gov.im/news/

DOCUMENTS REVEAL AUSTRALIA’S SECRET ARMS DEALS WITH NATIONS FIGHTING YEMEN’S BLOODY WAR

ABC News on 13 December reported that internal Defence Department documents obtained under Freedom of Information (FOI) and from parliamentary hearings reveal since the beginning of 2016, Canberra has granted at least 37 export permits for military-related items to the UAE, and 20 to Saudi Arabia.  This news comes as Australia will spend $200 million between now and 2028 in order to make Australia the 10th-largest arms exporter in the world. It is currently the 20th largest.

https://www.abc.net.au/news/2018-12-13/australias-secret-backing-for-nations-fighting-bloody-yemen-war/10600912

CANADA: CIGARETTE SMUGGLER DODGES ‘UNPAYABLE’ MULTI-MILLION DOLLAR FINE

The Windsor Star on 12 December reported that a judge refused to impose the minimum fine on a man caught with a truckload of cigarettes being smuggled from the US,  because the judge said he’d have to win the lottery jackpot to pay the nearly $4 million penalty.  He said that by imposing a fine that is so significant, it’s unlikely to ever be paid, and hence the offenders effectively suffers no real penalty.

https://windsorstar.com/news/local-news/cigarette-smuggler-dodges-unpayable-multimillion-dollar-fine

IRISH REVENUE COLLECTS EXTRA €213 MILLION IN TAX CRACKDOWN – 25% FROM ISLE OF MAN AND SWITZERLAND ALONE

The Irish Independent on 13 December reported that the Revenue Commissioners took a €213 million tax haul last year as a result of a crackdown on defaulters that was backed by the recruitment of extra staff.  It says that of disclosures of offshore assets made under the increased Revenue scrutiny, 9 were for more than €1 million, while 18 were for between €500,000 and €1 million.  However, most of the disclosures of offshore assets – 2,828 in total during 2017 – were for amounts of less than €5,000.  The largest proportion of disclosures, more than 1,300, were made in respect of assets in the UK, and almost 14% related to assets in the US.

https://www.independent.ie/business/irish/revenue-collects-extra-213m-in-tax-crackdown-37620731.html

UK: PUBLISHED DETAILS OF DELIBERATE TAX DEFAULTERS

On 13 December, HMRC published its latest list of tax defaulters –  people who deliberately get their tax affairs wrong, and where HMRC has carried out an investigation and the person has been charged one or more penalties for deliberate defaults and those penalties involve tax of more than £25,000.  However, information will not be published if the person earns the maximum reduction of the penalties by fully disclosing details of the defaults.

https://www.gov.uk/government/publications/publishing-details-of-deliberate-tax-defaulters-pddd

REGULATOR DID NOT SHARE DOCUMENTS WITH POLICE WHO WERE INVESTIGATING FRAUD ALLEGATIONS IN NORTHERN IRELAND

The Belfast Telegraph on 13 December reported that Northern Ireland’s gas and electricity regulator did not share all of its information with police probing allegations of fraud by a former government special adviser.

https://www.belfasttelegraph.co.uk/news/northern-ireland/regulator-did-not-share-documents-with-police-who-were-investigating-fraud-allegations-rhi-inquiry-is-told-37621257.html

JAILED FORMER VENEZUELA OIL MINISTER DIES IN STATE CUSTODY

The Miami Herald on 12 December reported that Nelson Martinez, the jailed former head of Venezuela’s state-run oil giant PDVSA who was arrested last year as part of anti-corruption purge, has died in state custody.

https://www.miamiherald.com/latest-news/article223025480.html

BALANCING HMRC POWERS AND TAXPAYER SAFEGUARDS: HOUSE OF LORDS REPORT

On 12 December, Berwin Leighton Paisner published an article saying that while HMRC has to strike a balance between controlling tax non-compliance and treating taxpayers fairly, a Lords’ Committee has issued a report saying that the balance has tipped too far in favour of HMRC.

http://www.blplaw.com/expert-legal-insights/articles/balancing-hmrc-powers-and-taxpayer-safeguards-house-of-lords-report

FORMER JERSEY LAWYER JAILED FOR FRAUDULENTLY USING CLIENTS’ MONEY

This is Jersey on 13 December reported that a former lawyer, Kevin Robert Manning, who was barred from his profession after an investigation by the Jersey Law Society found he was fraudulently moving money around his client and business accounts, has been jailed for 3 and a half years.

https://jerseyeveningpost.com/news/2018/12/13/former-jersey-lawyer-jailed-for-fraudulently-using-clients-money/

EU REPORT: 63% OF COUNTERFEIT CUSTOMS SEIZURES ARE SMALL PARCELS

The World Intellectual Property Review on 12 December reported that a report from the EU Intellectual Property Office revealed that 63% of all EU customs seizures of counterfeit and pirated goods are of small parcels sent through postal or courier services.  While figures show that these small shipments tend to be in packages of ten or fewer items, over 50% of all global seizures of counterfeits sent by post contained just one item.  Fake consumer goods including shoes, sunglasses and jewellery were among the list of items most likely to be sent in small parcels.  The report stated that small parcels used by counterfeiters for trafficking are shipped either through postal or express services, creating “significant challenges” for customs authorities.

https://www.worldipreview.com/news/eu-report-63-of-counterfeit-customs-seizures-are-small-parcels-17135

MISUSE OF SMALL PARCELS FOR TRADE IN COUNTERFEIT GOODS

http://www.oecd.org/gov/risk/misuse-of-small-parcels-for-trade-in-counterfeit-goods-9789264307858-en.htm

SPANISH CIVIL GUARD OPERATION AGAINST ARMS TRAFFICKING: SEIZED MORE THAN 300 WEAPONS

A news release from the Spanish civil guard on 12 December reported that it has seized 322 firearms and more than 50,000 cartridges.  Weapons include guns AK47 assault, submachine guns, guns and more than 250 fully functional handguns, and there were 4 arrests.

http://www.guardiacivil.es/es/prensa/noticias/6847.html

BARCLAYS BANK GIVES CUSTOMERS POWER TO BLOCK GAMBLING TRANSACTIONS

Ekklesia on 12 December reported that Barclays has become the UK’s first high street bank to give its customers the power to block gambling transactions and other retail payments using their debit cards.

http://www.ekklesia.co.uk/node/27358

TRENDSPOTTER MANUAL: A HANDBOOK FOR THE RAPID ASSESSMENT OF EMERGING DRUG-RELATED TRENDS IN THE EU

On 13^th December, the European Monitoring Centre for Drugs and Drugs Addiction published this user-friendly guide, taking the reader, step by step, through the trendspotter methodology developed by the EMCDDA to explore emerging drug trends, new patterns of use, developing drug markets and technologies.

http://www.emcdda.europa.eu/publications/manuals/trendspotter-manual_en

ORDER BRINGS THE COMPOUNDS KNOWN AS PREGABALIN AND GABAPENTIN UNDER PERMANENT CONTROL AS CLASS C DRUGS IN UK

The Misuse of Drugs Act 1971 (Amendment) Order 2018 brings the compounds known as Pregabalin and Gabapentin under permanent control as Class C drugs under the 1971 Act.  Gabapentin and pregabalin are drugs used to treat epilepsy but misuse of these drugs has been associated with avoidable deaths. The Advisory Council on the Misuse of Drugs has recommended additional safeguards.  The Order comes into force on 1^st April.

http://www.legislation.gov.uk/uksi/2018/1356/contents/made

KENYA AND JERSEY SIGN DEAL FOR RETURN OF GRAFT MONEY

On 13^th December, VoA carried an article saying that Kenyan officials have signed an agreement with Jersey that will pave the way for the return to Kenya of about $5 million stolen from government coffers.

https://www.voanews.com/a/kenya-jersey-island-sign-deal-return-graft-money/4697844.html

NIGERIA FILES $1.1 BILLION LONDON LAWSUIT AGAINST SHELL, ENI OVER OIL DEAL

Reuters on 13^th December reported that lawyers for the Nigerian government said they had filed a $1.1 billion lawsuit against Royal Dutch Shell and Eni in a commercial court in London in relation to a 2011 oilfield deal.  The OPL 245 oilfield is also at the heart of an ongoing corruption trial in Milan in which former and current Shell and Eni officials are on the bench.

https://uk.reuters.com/article/uk-shell-nigeria-eni-oil/nigeria-files-1-1-billion-london-lawsuit-against-shell-eni-over-oil-deal-idUKKBN1OC1JL

LEBANON: WASTE MANAGEMENT CRISIS

On 13^th December, Deutsche Welle carried a video report saying that the waste crisis in Lebanon is a constant problem.  It is said to be due to the combination of corruption, poor governance and weak infrastructure seen in many countries.  The article asks what can be done with the massive amounts of garbage, produced in a globalised world?

https://www.dw.com/en/lebanon-waste-management-crisis/av-46627171

UK: FIRST-EVER FRAUD PROSECUTION FOR PENSIONS REGULATOR

On 12^th December, ICAEW reported that an accountant, Roger Bessent, has been charged with fraud and for making employer-related investments.  The Pensions Regulator (TPR) claims that Bessent, ACCA, used his position as director of pension scheme trustees Gleeson Bessent Trustees to transfer more than £200,000 to accounts controlled by him.

https://economia.icaew.com/news/december-2018/first-ever-fraud-prosecution-for-pensions-regulator

UK: INTERCEPTION OF NON-COMPLIANT SOLID WOOD PACKAGING MATERIAL AND OTHER MATERIAL IMPORTS

On 13^th December, the UK Forestry Commission published an updated guide, an infographic illustrating the top British ports and associated top international trading supply regions, where non-compliant wood-based material has been intercepted.  They show where non-compliant solid wood packaging and other wood-based materials have been intercepted during import inspections carried out by the Forestry Commission Plant Health Service.  They are intended to help traders consider their own supply and import compliance arrangement to prevent quarantine pests and diseases from spreading to our forests and woodlands.

https://www.gov.uk/government/publications/interception-of-non-compliant-solid-wood-packaging-material-and-other-material-imports

EU: NEW RULE TO MAKE LARGE ONLINE MARKETPLACES RESPONSIBLE FOR CALCULATING, COLLECTING AND REMITTING VAT ON CERTAIN B2C CROSS-BORDER TRANSACTIONS BELOW €150

VAT Live on 13^th December reported that on 12^th December, the European Commission published details of the new rule.  Where goods are imported by an EU or non-EU merchant, and then sold via a marketplace in another EU country, the marketplace will become the principal, and take over the sales VAT settlement.

https://www.avalara.com/vatlive/en/vat-news/eu-moves-b2c-vat-liabilities-marketplaces-2021.html?sessionId=1544729225769&referrer=&lastReferrer=www.avalara.com

ITALY HITS MULTI-MILLION DOLLAR GOLD SMUGGLING OPERATION

OCCRP on 13^th December reported that authorities had arrested 14 alleged members of a transnational gold smuggling ring in Italy, Romania and Turkey for criminal association, money laundering and trafficking stolen goods.  The organisation is said to have 29 members of Turkish, Italian, Chinese and Romanian origins.  Police said the organization was headed by a Turkish citizen.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9035-italy-hits-multi-million-dollar-gold-smuggling-operation

GERMAN POLICE DISMANTLE AN ORGANISED CRIME GROUP SUSPECTED OF INTERNATIONAL MOTOR VEHICLE CRIME

On 13^th December, Europol reported that the operation revealed the registration of vehicles in addition to falsified Slovenian and Austrian documents as well as falsified registration certificates from Belgium, France, the Netherlands, and Sweden. The investigations covered various EU Member States (Austria, Belgium, France, Italy, Lithuania, Poland, the Netherlands, and Sweden) as well as Algeria. Overall 23 suspects of different nationalities were identified and accused of different crimes; among them theft, fraud, falsification of documents and violations of the arms act as well as bribery.

https://www.europol.europa.eu/newsroom/news/international-motor-vehicle-crime-in-germany

BANK IS ENTITLED TO ‘ARREST’ A SHIP WITHOUT PROVIDING THE SAME CROSS-UNDERTAKING IN DAMAGES TYPICALLY REQUIRED BY THE COURTS WHEN GRANTING A FREEZING ORDER

An article from Out-Law on 13^th December reported that NatWest had seized a vessel belonging to Stallion Eight Shipping Co SA as part of a dispute over the outstanding balance of a substantial mortgage over the ship.  The right to ‘arrest’ a ship in order to obtain security for a claim against the ship’s owner, or against the vessel itself in some circumstances, is long established in England and in many other countries.

https://www.out-law.com/en/articles/2018/december/bank-entitled-to-arrest-ship-without-providing-damages-undertaking/

ADVISING INDIVIDUALS IN CROSS-BORDER INVESTIGATIONS: THE LIMITS OF DOUBLE JEOPARDY

A blog post from Corker Bining on 12^th December was concerned with situations where an individuals may be tempted (or advised) to enter into plea negotiations in one jurisdiction on the basis that a guilty plea in that jurisdiction will act as a barrier to prosecution elsewhere.  Unfortunately, it says, the doctrine of double jeopardy does not always protect individuals in this black and white fashion.  It warns, for example, that where the previous trial occurred overseas, the offence for which the defendant was convicted or acquitted will nearly always be different from the offence under investigation in the UK – but the accused can argue that the UK court should exercise its discretion to stay the proceedings as an abuse of process.  Similar protection is found in UK and EU law.  However, the post warns that taking advantage of one country’s enthusiasm for expediting its investigation or entering plea deals, the UK courts will never regard an overseas conviction alone as an insurmountable obstacle to a new prosecution in the UK on the same or similar facts. Double jeopardy has its limits.

https://www.corkerbinning.com/advising-individuals-in-cross-border-investigations-the-limits-of-double-jeopardy/

UK GETTING TOUGH ON REPORTING MONEY LAUNDERING AND SANCTIONS BREACHES?

A further post from Corker Bining on 12^th December commented on the recent launch of the multi-agency National Economic Crime Centre (NECC), and the speech by Ben Wallace, the Minister of State for Security, where he declared a crackdown on “professional facilitators” of money laundering and sanctions offences.  In the light of a low level of prosecutions, the blog post asks how are the offences of failure to report money laundering and sanctions breaches interpreted in practice, and what are the proposals for reform?  It calls for better guidance and interpretation from Government and the appellate courts, so that those burdened with the obligation to report have clarity and do not produce low quality reports generated from a fear of being exposed to criminal liability.  It also refers to the Law Commission suggestion that the interpretation of “reasonable grounds to suspect” should be regarded as a cumulative test, incorporating both subjective and objective elements (as explained in the Saik case), and it would require a defendant to be proved to have actually suspected that the property was criminal in order to be convicted, and for that suspicion to be based on objective grounds.

https://www.corkerbinning.com/getting-tough-on-reporting-money-laundering-and-sanctions-breaches/

BROADER IMPLICATIONS OF SEC CHARGES AGAINST CELEBRITIES FOR UNLAWFULLY TOUTING ICO

An article from Paul Hastings on 13^th December on the cases involving professional boxer Floyd Mayweather Jr. and music producer and actor Khaled Khaled, (aka DJ Khaled) for promoting investments in Initial Coin Offerings (ICO) without properly disclosing their financial ties to the ICO issuers.  It says that the SEC has a long history of bringing actions against promoters of securities of various types and now applies that same enforcement of unlawful touting to the sphere of cryptographic tokens.  It cautions that those in such situations run the risk of being charged with scalping, investment adviser registration violation, broker registration violation, and/or, most serious, pure securities fraud.

https://www.paulhastings.com/publications-items/details/?id=b87d196c-2334-6428-811c-ff00004cbded

FinCEN ISSUES REVISED PROPERTY GTO INCLUDING LOWER PURCHASE THRESHOLDS AND VIRTUAL CURRENCIES

Crowell Moring on 11^th December published an article saying that FinCEN issued revised Geographic Targeting Orders (GTO), in November, once more expanding its scrutiny of “all-cash” purchases (i.e., those without bank loans or other external financing) in the luxury residential real estate market.  FinCEN broadened the geographic scope of the orders, lowered the purchase amount threshold for each covered area, and added purchases that involve virtual currencies to the mandatory reporting list.  Along with the GTO, FinCEN also released FAQ to clarify, among other things, the methods of payment covered and requirements for verification of beneficial ownership information.  The article details the extended scope of the GTO and considers some practical considerations.

https://www.cmtradelaw.com/2018/12/fincen-issues-revised-gtos-including-lower-purchase-thresholds-and-virtual-currencies/

THE IMPACT OF ILLICIT TRAFFICKING AND JIHADIST INFILTRATION INSIDE ITALIAN SEAPORTS

A report, now available in English, resulted from research activity that allowed the research group to highlight some of the illicit entry activities that take place in the Italian seaport infrastructure –  recent cases have indicated an increase in this kind of trafficking of cigarettes (especially of the illicit/cheap whites kinds) through seaport border points; cocaine trafficking (said to have been  monopolised by the Calabrian mafia ‘Ndrangheta, thanks to the solid ties that the organisation was able to establish with the South American drug cartels); heroin trafficking, which it says has thrived particularly in the Adriatic area; marijuana trafficking; hashish trafficking from North Africa; and the infiltration of illegal immigrants on trucks on cargo and container ships is said to be relatively widespread.  However, firearms trafficking is affected by the fact that shipments of weapons would be easily uncovered with the use of the X-ray scanner technology in use with the customs authorities that operate in the ports, during the inspection of goods – and so more likely takes place away from the major ports and control points.  The report considers terrorism threats, in the ports and at sea.  The report makes various recommendations and says that that cross-border as well as internal co-operation is essential to address the criminal activities outlined in the report.

http://italianportsecurity.com/wp-content/uploads/2018/12/REPORTENGversion.pdf

MONEYVAL COMMENCES AML/CFT MUTUAL EVALUATION PROCESS IN GEORGIA

On 13^th December, the Council of Europe announced that MONEYVAL has commenced its 5^th round mutual evaluation of Georgia with a 2-day training on the evaluation process for the authorities and representatives from the private sector – such training is provided by the MONEYVAL Secretariat 1 year in advance of the onsite visit.

https://www.coe.int/en/web/moneyval/home

WHITE HOUSE RELEASE OF ITS FIRST-EVER NATIONAL STRATEGY FOR COUNTERING WMD TERRORISM

Homeland Security Today on 11^th December reported that the Administration pledged to shore up efforts at home while providing equipment, training and “related assistance as appropriate” to foreign countries.  The strategy warned that artificial intelligence and other technology poses unforeseen security implications “beyond our current understanding”, and said that it will need to share technology and intelligence with foreign partners in the fight against WMD.

https://www.hstoday.us/subject-matter-areas/wmd/national-strategy-for-countering-wmd-terrorism-focuses-on-detection-deterrence-defeat/

US STATE DEPARTMENT NEEDS TO REVIEW US APPROACH TO COUNTER-NARCOTICS ASSISTANCE TO OTHER COUNTRIES

Homeland Security Today on 13^th December reported that US watchdog, the Government Accountability Office, was asked to review US counter-narcotics assistance to Colombia, which has cost some $10 billion since 1999.  Despite this, according to the DEA, over 90% of cocaine found in the continental US is of Colombian origin and cocaine use in the US is concurrent with production increases in Colombia.  The GAO recommended that the State Department evaluate the effectiveness of eradication and interdiction in reducing the cocaine supply in Colombia and undertake a comprehensive review of the US counter-narcotics approach in Colombia that considers the relative benefits and limitations between eradication, interdiction, and alternative development efforts.

https://www.hstoday.us/industry/latest-from-gao/gao-state-needs-to-review-u-s-approach-to-counternarcotics-assistance/

A news release from the Isle of Man on 13^th December reported that identifying information for 14 individuals had been updated.

https://www.gov.im/news/2018/dec/13/financial-sanctions-democratic-republic-of-the-congo/

HM Treasury notified similar changes by means of a Notice on 13^th December –

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/764511/Notice_DRC_2018_1931.pdf

The European Centre for International Political Economy has published a paper, saying that, as the US maintains its block on appointments of new members to the Appellate Body, there is growing concern about the pending incapacitation of the dispute settlement function of the WTO.  If the WTO can no longer offer effective dispute resolution, some argue, there is a risk that the whole WTO system of rules will collapse.  The paper concludes that the best way forward is for WTO members to pursue constructive and inclusive co-operation in order restore trust in the trade rules and in the good faith of other members.

https://ecipe.org/publications/impasse-in-the-wto-dispute-settlement-body/

THE US AND THE WTO

Meanwhile, on 13^th December the House of Commons Library published a briefing paper which explores what is happening in the WTO in 2018, and how this relates to the current US administration’s trade policy. This briefing paper explores these issues, and considers what consequences they might have for a post-Brexit UK.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8465

The World Intellectual Property Review on 12 December reported that a report from the EU Intellectual Property Office revealed that 63% of all EU customs seizures of counterfeit and pirated goods are of small parcels sent through postal or courier services.  While figures show that these small shipments tend to be in packages of ten or fewer items, over 50% of all global seizures of counterfeits sent by post contained just one item. Fake consumer goods including shoes, sunglasses and jewellery were among the list of items most likely to be sent in small parcels.  The report stated that small parcels used by counterfeiters for trafficking are shipped either through postal or express services, creating “significant challenges” for customs authorities.

https://www.worldipreview.com/news/eu-report-63-of-counterfeit-customs-seizures-are-small-parcels-17135

MISUSE OF SMALL PARCELS FOR TRADE IN COUNTERFEIT GOODS

http://www.oecd.org/gov/risk/misuse-of-small-parcels-for-trade-in-counterfeit-goods-9789264307858-en.htm

12 December 2018

GUIDANCE ON CONTRACTUAL SANCTIONS CLAUSES IN COMMERCIAL MARITIME AGREEMENTS

Wikborg Rein on 12 December published an article saying that the High Court recently considered the wording “exposure to sanctions” and ruled that the underwriters of a marine insurance policy could not rely on that wording to avoid a claim on the basis of a “risk of exposure” to the US-Iran sanctions.  There would need to be an actual prohibition on paying the claim in question.  As with any clause that exempts a party from what would otherwise be its contractual obligations, sanctions exclusion clauses must be clearly worded and provide for the consequences of a breach.  This judgment deals with a number of key points for drafting effective sanctions exclusion clauses in commercial maritime agreements.

https://wr.no/en/news/news/guidance-on-drafting-and-interpreting-contractual-sanctions-clauses/

COMPENSATION ORDER MADE BEFORE CONFISCATION PROCEEDINGS WERE COMMENCED AND CONTRARY TO RULE THAT IF CONFISCATION PROCEEDINGS ARE POSTPONED, THE COURT MUST NOT MAKE CERTAIN SORTS OF FINANCIAL ORDERS

On 12 December, law chambers 6KBW published a report on an appeal where the issue was whether a compensation order, made before confiscation proceedings were commenced and contrary to section 15(2) of the Proceeds of Crime Act 2002, was rendered a nullity.  The Court held that it was not.

https://blog.6kbw.com/posts/weekly-digest-12-december-2018

STRENGTHENING NATIONAL AND INTERNATIONAL PLUTONIUM MANAGEMENT APPROACHES

A paper from the Middlebury Institute on 7 December is concerned with issues relating to separated, or unirradiated, plutonium in civilian nuclear programmes, i.e. plutonium that has been chemically separated from spent nuclear reactor fuel by reprocessing but has not been reintroduced into a nuclear reactor after separation and subjected to further irradiation.  Efforts to limit the spread of reprocessing in the civilian sector emerged in the 70s. Saying that current safeguards are insufficient, and even if diversion of plutonium is detected immediately the plutonium could be weaponised too quickly for effective preventive measures, the paper recommends steps to address the risks posed by existing reprocessing programmes and stocks as well as ways to discourage potential new programmes.

https://www.nonproliferation.org/op-42-the-other-fissile-material-strengthening-national-and-international-plutonium-management-approaches/

WAIVE PRIVILEGE TO SHOW CO-OPERATION – THE LATEST GUIDANCE FROM THE SFO

On 10 December, MacFarlanes published an blog post saying that various senior members of the SFO have been giving guidance on how companies can go about agreeing deferred prosecution agreements (DPA) and co-operating properly with the SFO when subject to investigations.  This included reminding companies that they will receive credit for waiving privilege over factual accounts and sharing them with the SFO voluntarily.

https://blog.macfarlanes.com/post/102f72c/waive-privilege-to-show-co-operation-the-latest-guidance-from-the-sfo

US SANCTIONS ON VENEZUELA

On 11 December, Bracewell LLP published an article on the sanctions that have been imposed by the US on Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state‑owned national oil company which accounts for about 98% of Venezuela’s export revenues.  The sanctions on PDVSA are less stringent than those on the Iranian or Russian energy sectors, it says, but still merit consideration.

https://bracewell.com/insights/international-sanctions-and-energy-sector-–-part-3-venezuela

WHY SINGAPORE’S PROPOSED IVORY BAN MAY NOT SOLVE PROBLEM OF ILLEGAL TRADE

An article on Today Online on 12 December discussed the proposed ban, the author arguing that a ban on ivory has been tried by other governments before, with limited success. Reporting by the BBC is said to show that, despite an international ban on ivory trade, elephant poaching has persisted.  He says a ban reduces the supply on the market without necessarily changing the underlying demand for it, therefore raising perceptions of scarcity and driving up prices. When prices are high, poachers, especially in poor countries, remain highly incentivised to poach and this further fuels black market sales.

https://www.todayonline.com/commentary/why-banning-ivory-may-not-solve-problem-illegal-trade

ONLINE MARKETPLACES TO BE LIABLE FOR MISSING VAT IN EU

Accountancy Daily on 12 December reported that the European Commission has announced new measures, due to come into force in January 2021, which will allow for a smooth transition to an updated VAT structure for dealing with online selling and will make online marketplaces liable for VAT not recovered by tax authorities.

https://www.accountancydaily.co/online-marketplaces-be-liable-missing-vat

http://europa.eu/rapid/press-release_MEX-18-6789_en.htm

TRACE PODCAST: MEASURING CORRUPTION

In the latest TRACE podcast, Robert Clark, Manager of Legal Research at TRACE, discusses the challenges associated with measuring something as widespread and varied as corruption and refinements to the 2018 TRACE Bribery Risk Matrix after another year of research.

https://www.traceinternational.org/bribe_swindle_or_steal

ARGENTINA, PANAMA, PARAGUAY AND URUGUAY TO SHARE TAX INFORMATION

International Investment on 12 December reported that the countries have agreed to “consider the possibility” of making a wider use of the information provided through exchange of tax information channels for other law enforcement purposes.  The article says that the declaration, signed by participating ministers on November 19 in Uruguay, also sets forth that these 4 countries would also carry out a self-assessment.

https://www.internationalinvestment.net/news/4000172/argentina-panama-paraguay-uruguay-share-tax-information

ISLE OF MAN LINK TO FIRST PANAMA PAPERS PROSECUTION IN US

IOM Today on 12 December reported on Isle of Man links, saying that the indictment alleges that one of those accused, a Panamanian attorney who worked for Mossack Fonseca, opened 2 offshore accounts in the Isle of Man for a client.  These accounts were nominally held by offshore shell companies formed by Mossack Fonseca and which conducted ’no real operations’.

http://www.iomtoday.co.im/article.cfm?id=44457&headline=Manx%20link%20to%20Panama%20Papers%20prosecution&sectionIs=NEWS&searchyear=2018

EU MONEY LAUNDERING AND TERRORIST FINANCING: COUNCIL ACTION PLAN 2018

Eversheds Sutherland on 11 December published an article saying that, on 28 November, the EU Council agreed an action plan, and this article  examines a number of the short-term non-legislative actions that will be carried out over the course of the next year.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Fraud_and_financial_crime/Money_Laundering_and_Terrorist_Financing-The_Council_s_Action_Plan_2018

BRITAIN FREEZES BANK ACCOUNT LINKED TO AZERBAIJANI LAUNDROMAT

Reuters on 12 December reported that British investigators have frozen a bank account linked to a multi-billion dollar Azerbaijani money-laundering scheme that a network of investigative reporters has alleged rinsed dirty money mainly through 4, UK-registered shell companies.  However, the NCA declined to give further details or divulge whether the frozen account was also linked to Danske Bank.

https://www.reuters.com/article/britain-moneylaundering-azerbaijan/britain-freezes-bank-account-linked-to-azerbaijani-laundromat-idUSL8N1YH5E5

JERSEY: CONFISCATED FUNDS AGREEMENT WITH KENYA

A news release from the Jersey Government on 12 December announced that External Relations Minister, Senator Ian Gorst, has signed an asset-sharing agreement to return confiscated assets to Kenya as part of ongoing work to tackle financial crime.  The Jersey Evening Post reported that this could see £3 million confiscated in Jersey returned to the African country.

https://www.gov.je/News/2018/Pages/kenyafunds.aspx

NEW ZEALAND HAS PASSED A LAW THAT REMOVES MANY RESTRICTIONS ON MEDICAL CANNABIS

Jurist reported on 11 December that the new law which will take up to a year for the new regulations and licensing policies required.

https://www.jurist.org/news/2018/12/new-zealand-passes-new-medical-cannabis-law/

UK FINANCIAL REPORTING COUNCIL HAS PUBLISHED THE FINAL VERSION OF NEW CORPORATE GOVERNANCE PRINCIPLES FOR PRIVATE COMPANIES

Out-Law on 12 December reported that the 6 principles are largely unchanged from the June consultation and deal with the same areas: purpose and leadership, board composition, board responsibilities, opportunity and risk, remuneration, and stakeholder relationships and engagement.

https://www.out-law.com/en/articles/2018/december/frc-private-company-corporate-governance-principles/

4 ACCUSED OF SMUGGLING TONNES OF CANNABIS OIL TO EUROPE

The Bangkok Post on 6 December reported that 2 Thais and 2 “foreigners” hid the cannabis in compressed coconut peat, or coir, and exported it to Belgium, with a shipment intercepted in Antwerp.  Police have raided the source warehouse in Thailand.

https://www.bangkokpost.com/news/crime/1588730/four-accused-of-smuggling-tonnes-of-cannabis-oil-to-europe

TAXPAYERS HAVE NO RIGHT TO ATTEND HEARING TO APPROVE HMRC INFORMATION NOTICES

An article from Out-Law on 12 December reported that UK taxpayers and third parties have no right to attend a tax tribunal hearing to consider the issue of notices by HMRC requiring the provision of information relevant to tax enquiries, the first-tier tax tribunal has decided.

https://www.out-law.com/en/articles/2018/december/taxpayers-hmrc-information-notices/

PARAGUAYAN EX-PRESIDENT SUBPOENAED IN MONEY LAUNDERING PROBE

Baker McKenzie on 12 December reported that former President Horacio Cartes was subpoenaed by lawmakers who are investigating money laundering allegations against a Brazilian currency trader.

http://www.riskandcompliancehub.com/paraguayan-ex-president-subpoenaed-in-money-laundering-probe/

MORE VENEZUELA DRUG PLANE SEIZURES SIGNAL TRAFFICKING INCREASE

Insight Crime on 12 December reported that the seizure of 28 alleged drug planes this year may indicate an uptick in narcotics smuggling throughout the country.  Venezuela’s seizure of the 28 aircraft this year represents an astounding 460% increase over a mere 5 taken in 2017.

https://www.insightcrime.org/news/analysis/venezuela-drug-plane-seizures-signal-trafficking-increase/

EU: MUTUAL RECOGNITION OF FREEZING AND CONFISCATION ORDERS

On 12 December, the EU Parliament Research Service published a briefing paper on a proposed Regulation on the mutual recognition of freezing and confiscation orders in criminal matters.  The directly applicable instrument removes the need for national transposition, broadens the scope of the current rules to cover new types of confiscation and includes provisions on victims’ rights to restitution and compensation.   The Regulation will apply from 19 December 2020.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2018/628225/EPRS_BRI(2018)628225_EN.pdf

FORMER BIRMINGHAM CITY FOOTBALL CLUB OWNER ORDERED TO PAY $43 MILLION IN MONEY LAUNDERING CASE

KYC 360 on 12 December reported that a Hong Kong court has reportedly ordered Carson Yeung Ka-sing, the former owner of Birmingham City FC to pay up HK$338 million (US$43.2 million) worth of criminal proceeds.

https://kyc360.com/news/money-laundering-ex-birmingham-city-football-club-owner-ordered-to-pay-43-million/

The Hindu on 12 December reported that campaigners have condemned the British Home Office’s decision to backtrack on plans to suspend a “golden” visa scheme for wealthy investors, just days after announcing the suspension.  After no formal announcement was made to Parliament, with no mention of the scheme or changes to it in an update from the Home Office, a statement from the Home Office sais that,. “The Tier 1 (Investor) visa is not currently suspended, however we remain committed to reforming the route. A further announcement will be made in due course”.

https://www.thehindubusinessline.com/news/world/uk-govt-slammed-for-u-turn-on-suspension-of-golden-visa-scheme-for-super-wealthy/article25727025.ece

On 12 December, a Notice from HM Treasury advised of amendments to the entry relating to Gabriel JOK RIAK.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/763841/Notice_South_Sudan_2018_1934.pdf

On 12 December, a news release from HM Treasury advised that the 9 names contained in EU Regulation 2018/1929/EU had also been added to the UK Consolidated List.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/763849/Notice_Ukraine_2018_1929.pdf

A news release from the EU on 12 December reported that the EU is to make access to explosive precursors by the general public subject to even tighter controls.  Explosives precursors are chemical substances that can be used for legitimate purposes, but can also be misused for the manufacture of illegal homemade explosives.  The proposed regulation provides for 2 distinct categories of explosive precursors: “restricted”, which cannot be made available, introduced, possessed or used by members of the general public above certain concentration levels, and “regulated”, for which suspicious transactions should be reported by economic operators, including online marketplaces.

https://www.consilium.europa.eu/en/press/press-releases/2018/12/12/explosive-precursors-eu-tightens-controls/

On 12 December, EU Regulation 2018/1931/EU advised that the information on those persons subject to EU sanctions in respect of the situation in the DRC should be updated.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.314.01.0001.01.ENG&toc=OJ:L:2018:314:TOC

An article from Out-Law on 11 December said that a new appeals process for failed dual-use export licence applications in Ireland has been established.  The article points out that the rules on the exporting of dual-use items are set at EU-level under the Dual-Use Regulation, which provides for common EU control rules, a common EU control list and harmonised policies for implementation.  However, Member States have some discretion to set their own national rules on licence procedures and enforcement.

https://www.out-law.com/en/articles/2018/december/dual-use-export-control-appeal-rules-ireland/

A news release from the US Treasury on 12 December reported a $2,774,972 settlement with Yantai Jereh Oilfield Services Group Co. Ltd, a Chinese-based company, and its affiliated companies and subsidiaries worldwide to settle potential civil liability for 11 apparent violations of the Iranian Transactions and Sanctions Regulations.  The apparent violations involved the exportation or re-exportation, and attempted exportation or re-exportation of US-origin goods ultimately intended for end-users in Iran; with 2 of the 11 shipments were seized by US Customs and Border Protection prior to exiting the US.

https://content.govdelivery.com/accounts/USTREAS/bulletins/2220bb3

11 December 2018

STANDING COMMITTEE ON FINANCE RECOMMENDATIONS ON CANADA’S AML/CFT REGIME

On 6 December, McCarthy Tetrault LLP published an article saying that the Report was released pursuant to a mandate which directed the Committee to study the Proceeds of Crime (Money Laundering) and Terrorist Financing Act  and was issued pursuant to the consultation paper issued earlier in this year in respect of the Act.  The Committee provided various recommendations to the Government, including that the Government work with provinces and territories to create a pan-Canadian beneficial ownership registry for all legal persons and entities, who have at least a 25% total share ownership or voting rights, and amend the Act to require all reporting entities to identify beneficial owners, determine if their customers are  PEP or are associated with any, and prohibit opening accounts or completing financial transactions until beneficial ownership has been ascertained. It also recommended that the Government consider prohibiting or licensing nominee shareholders.

http://www.mondaq.com/canada/x/761750/Money+Laundering/Standing+Committee+On+Finance+Releases+Recommendations+On+Canadas+AntiMoney+Laundering+And+AntiTerrorist+Financing+Regime

EUROPE IS LEAST RISKY CONTINENT FOR BRIBE DEMANDS

Law.com on 6 December reported that the top 5 least risky countries in which to do business and avoid bribe demands are New Zealand, Sweden, Norway, Denmark, and Finland, according to the latest research from TRACE International.  The study names the least and most risky of 200 countries evaluated as well as the least and most risky continents.

https://www.traceinternational.org/trace-matrix

KOREA DUMPS MOUNTAINS OF PLASTIC WASTE IN PHILIPPINES

On 11 December, Korean news site, Chosun Ilbo reported allegations by Greenpeace that a Korean recycling business was exporting large amounts of plastic waste to the Philippines misdescribed as recycled waste.

http://english.chosun.com/site/data/html_dir/2018/12/11/2018121101731.html

BRITISH PENSIONERS ARRESTED ‘FOR SMUGGLING COCAINE ONTO CRUISE SHIP’

The Metro on 10 December reported that an elderly couple have been arrested in Lisbon  after a ‘large amount of cocaine’ was found in their luggage as they returned from a cruise in the Caribbean.

https://metro.co.uk/2018/12/10/british-pensioners-arrested-for-smuggling-cocaine-onto-cruise-ship-8227855/

SERBIAN COURT CONVICTS ALLEGED CRIME BOSS OF DRUG SMUGGLING

Balkan Insight on 10 December reported that a Belgrade court has jailed Darko Saric for 15 years for smuggling several tons of cocaine – though the first-instance verdict may be appealed.  Alleged crime boss Darko Saric was found guilty of smuggling 5.7 tons of cocaine from South America to Europe and jailed for 15 years – after a 4-year trial marked by speculation, intrigues and suspicions.  He was on the run from 2010 until surrendering himself in 2014.

http://www.balkaninsight.com/en/article/serbian-court-convicts-alleged-balkans-drug-lord-12-10-2018

GIBRALTAR: AML/CFT FINE FOR WAVE CREST E-MONEY BUSINESS

The FT Alphaville on 10 December reported on Regulatory Settlement Agreements h between the Gibraltar FSC, Wave Crest Holdings Limited (Wave Crest), Brent Almeida, John Racine and Colin Piri re failings identified with Wave Crest’s AML/CFT systems and controls.  Wave Crest is a Gibraltar company licensed as an electronic money institution since 2010.

https://ftalphaville.ft.com/2018/12/10/1544439535000/Gibraltar-slaps–250k-fine-on-WaveCrest–CEO-stands-down-/

IRELAND: LAWYERS ASK COURT OF APPEAL FOR GUIDANCE ON ‘COMPLEX’ MONEY LAUNDERING LEGISLATION

Irish Legal News on 10 December reported that lawyers for a man found guilty of money laundering have asked the Court of Appeal to set guidance on how the “complex legislation” should be explained to juries.  It is said he will appeal his conviction on grounds that the trial judge “confused” the jury on the presumption of innocence and the onus of proof. The defence barrister is quoted as saying that everybody found the legislation “very difficult”, as it was “complex” and the language was “very dense”.  However, the jury took just 27 minutes to convict. It was obvious, she said, that the judge himself found the legislation “difficult” and only lawyers had the legislation in front of them.

https://www.irishlegal.com/article/lawyers-ask-court-of-appeal-for-guidance-on-complex-money-laundering-legislation

VIETNAM ARRESTS SHIPBUILDING EXECUTIVES FOR EMBEZZLING $4.5 MILLION

The Strait Times on 11 December reported that 2executives from a near-bankrupt state-run shipbuilding company Vinashin have been arrested in Vietnam on accusations of embezzling $4.5 million in collusion with a scandal-plagued bank, as the one-party state broadens its corruption crackdown.  Dozens of bankers, businessmen and former officials have been jailed as part of the anti-graft campaign waged by a conservative leadership in charge since 2016.

https://www.straitstimes.com/asia/se-asia/vietnam-arrests-ship-firm-execs-for-embezzling-us45-million

On 11 December, EU Regulation 2018/1933/EU amended the listing criteria for the EU Somalia sanctions regime.

EU Regulation 2018/1934/EU has amended the information provided for Gabriel JOK RIAK MAKOL, who is one of those persons listed under the EU South Sudan sanctions regime.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.314.01.0009.01.ENG&toc=OJ:L:2018:314:TOC

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.314.01.0011.01.ENG&toc=OJ:L:2018:314:TOC

EU Regulation 2018/1932/EU follows the decision of the UN Security Council on 14 December and formally revokes the Eritrea sanctions regime.

See also Council Decision 2018/1944/CFSP.

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2018.314.01.0008.01.ENG&toc=OJ:L:2018:314:TOC

EU Regulation 2018/1931/EU has amended the information on 8 persons listed by the EU.

See also EU Council Decision 2018/1940/CFSP.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.314.01.0001.01.ENG&toc=OJ:L:2018:314:TOC

Food & Drink Business in Australia on 11 December reported that a high profile New Zealand winemaker has been fined for adding sugar to wine that was for sale in the EU.  It also falsified documents to conceal the addition of the sugar. Yealands Estate was fined $NZ400,000, its former general manager winery operations and former chief winemaker were each also fined, as was the winery’s former owner Peter Yealands.

http://www.foodanddrinkbusiness.com.au/news/nz-winemakers-fined-under-wine-act#X2LlhEEVCzlRyHWS.99

10 December 2018

AUSTRALIA: 2 MEN CLEARED OVER $2.25 MILLION TOBACCO SMUGGLING PLOT

On 10 December, 9 News reported that the son of “colourful” nightclub owner, John Ibrahim, has been cleared of any involvement in an alleged international tobacco smuggling plot.   He had allegedly handed $2.25 million to an undercover police officer in a car. The magistrate agreed that while he was in the car there was no evidence he knew the money was in the 2 bags in the car and no evidence of how they got there.

https://www.9news.com.au/national/2018/12/10/16/49/daniel-taylor-john-ibrahim-son-cleared-illegal-tabacco-smuggling-ring

ANOTHER SPRAWLING MONEY LAUNDERING AND BRIBERY SCHEME INVOLVING VENEZUELA – THE CASE AGAINST THE FORMER NATIONAL TREASURER OF VENEZUELA, ALEJANDRO ANDRADE CEDENO

National Law Review on 9 December provided an article detailing the case against the former national treasurer of Venezuela, Alejandro Andrade Cedeno.  Andrade pleaded guilty last year to a single-count information charging him with conspiracy to commit money laundering. Although he retired to Florida after having served as the head of the Venezuelan treasury, Andrade did not begin his career in the world of high finance – instead his climb to power and wealth began as a bodyguard to former President Chavez.

https://www.natlawreview.com/article/another-sprawling-money-laundering-and-bribery-scheme-involving-venezuela-currency

JAPAN BANS HUAWEI AND ITS CHINESE PEERS FROM GOVERNMENT CONTRACTS

Nikkei Asian review on 10 December reported that Japan had followed the US lead with Japan’s central government ministries and Self-Defense Forces adopting guidelines that effectively bar them from buying personal computers, servers and telecommunications equipment from Huawei Technologies and other Chinese companies.  The guidelines, which do not single out any company by name, are designed to prevent leaks of sensitive information.

https://asia.nikkei.com/Economy/Trade-War/Japan-bans-Huawei-and-its-Chinese-peers-from-government-contracts

US TO STANDARDISE CONTAINER DETENTION AND DEMURRAGE PRACTICES

Loadstar on 10 December reported that US shipping regulatory body, Federal Maritime Commission (FMC), is to introduce revised rules covering container detention and demurrage practices across the country after a commissioner released the results of an 8-month investigation into how carrier and container terminal apply the charges.

https://theloadstar.co.uk/fmc-standardise-container-detention-demurrage-across-us/

CHINA’S NEW LAW ON JUDICIAL ASSISTANCE IN CRIMINAL MATTERS WILL IMPACT INVESTIGATIONS

On 7 December, an article from Herbert Smith Freehills says that China recently enacted a new law that will impact foreign authorities, corporations and individuals involved in overseas criminal enforcement actions.  The Law on International Judicial Assistance in Criminal Matters allows Chinese authorities to block requests for documents, testimony and assets requested in international criminal investigations; and introduces new procedures governing how and when assistance should be provided with approval from a “Chinese competent authority” before a Chinese entity or individual provides assistance to a foreign body or person.  The law’s stated goal is simultaneously to curb corruption and stem extra-territorial claims by foreign authorities, some of whom approach Chinese counterparts/contacts direct for evidence.

https://sites-herbertsmithfreehills.vuturevx.com/268/18906/compose-email/china-s-new-law-on-judicial-assistance-in-criminal-matters-will-impact-investigations-.asp

REPORT: £250 BILLION FRAUD IN UK TAX HAVENS GREATER SUM THAN 20 YEARS OF UK FOREIGN AID BUDGET

The Common Space website reported on 10 December that a Transparency International report has identified over £250 billion in fraudulent funds directed through UK tax havens, more than over 20 years of the UK Government’s foreign aid budget.  The report, by Transparency International, examined the UK’s overseas territories, many of which act as tax havens for companies around the world to launder illegally obtained funds through.  There are said to be “£250 billion worth of funds diverted by rigged procurement, bribery, embezzlement and the unlawful acquisition of state assets across 79 different countries”. The report identified 1,107 companies registered in British Overseas Territories involved in 237 cases of economic crime, 90% of which were on the BVI.

https://www.commonspace.scot/articles/13636/report-250-billion-fraud-uk-tax-havens-greater-sum-20-years-foreign-aid-budget

2 NUNS STOLE $500,000 FOR TRIPS TO LAS VEGAS – BUT THE CHURCH DOESN’T WANT THEM PROSECUTED

In its 11 December edition, the New Zealand Herald reported a vast fraud that was allegedly conducted by  Sister Mary Margaret Kreuper and Sister Lana Chang, another nun and longtime school teacher. School officials recently told parents the 2 nuns stole around $500,000 from the school.  The school said that the women, reportedly best friends, used the pilfered funds on trips and casino visits. The complex feelings working through the church are compounded by the archdiocese’s refusal to pursue criminal charges against the nuns.  There remains a question about whether Kreuper and Chang will face legal consequences. Because the order is willing to repay the lost funds, the archdiocese has decided not to pursue criminal charges against the pair.

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

EX-HEAD OF EGYPT’S CUSTOMS AUTHORITY FACES GRAFT CHARGES

Reuters reported on 10 December that Gamal Abdelazim, the former head of Egypt’s Customs Authority, has been referred for trial in a criminal court on charges of accepting bribes to facilitate entry of goods without custom duties.

BRITISH MAN CHARGED IN ALLEGED £239 MILLION INVESTMENT FRAUD

The Belfast Telegraph on 10 December reported that Pavandeep Bakhshi, 41, has been charged in the US for allegedly participating in a $300 million scheme to defraud investors in a deal to take a London-listed healthcare company private.  The DoJ alleges that Mr Bakhshi, along with Parmjit “Paul” Parmar, Sotirios “Sam” Zaharis, and Ravi Chivukula allegedly used fraudulent methods to inflate the value of the AIM-listed healthcare services company and trick others into believing that it was worth substantially more than it actually was.

https://www.belfasttelegraph.co.uk/business/uk-world/british-man-charged-in-alleged-239-million-investment-fraud-37612746.html

UK COURT ORDERS INDIAN TYCOON MALLYA TO BE EXTRADITED ON FRAUD CHARGES

Reuters on 10 December reported that Indian tycoon Vijay Mallya should be extradited from Britain to India to face fraud charges resulting from the collapse of his defunct Kingfisher Airlines.

https://uk.reuters.com/article/uk-india-mallya-britain/uk-court-orders-indian-tycoon-mallya-to-be-extradited-on-fraud-charges-idUKKBN1O91DQ

IRELAND: COUPLE TO VACATE HOUSE DEEMED BY COURT TO BE PROCEEDS OF CRIME

The Irish Times reported on 10 December that  a couple – Kenneth Carpenter and Elaine Byrne – have agreed to vacate a property in west Dublin which the Criminal Assets Bureau claims was acquired with the proceeds of crime.

https://www.irishtimes.com/news/crime-and-law/courts/high-court/couple-to-vacate-house-deemed-by-court-to-be-proceeds-of-crime-1.3726644

FORMER MALAYSIA PRIME MINISTER DETAINED FOR CORRUPTION

Telesur reported on 10 December that US officials say former Malaysian Prime Minister, Najib Razak, skimmed $4.5 billion from a public fund, laundering billions in real estate and luxury goods as part of the 1Malaysia Development Berhad (1MDB) scandal.  The former prime minister may be faced with an additional 38 charges of corruption, including money laundering and abuse of power when he allegedly committed between 2009, when Razak founded 1MDB, and the end of his tenure in 2018.

https://www.telesurenglish.net/news/Former-Malaysia-Prime-Minister-Detained-For-Corruption-20181210-0009.html

UK EXPORT CONTROL TRAINING SCHEDULE TO MARCH 2019

On 10 december, the UK Department for International Trade published the schedule for export control training sessions in January-March 2019.  These training events are aimed at exporting and trading companies of all sizes, from the sole trader to the multinational. They cater for a wide range of knowledge levels and exporters can choose the Learning Path that suits them.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/763129/Export_control_training_bulletin__January_to_March_2019.pdf

REFORM OF UK LIMITED PARTNERSHIP LAW – RESPONSE TO CONSULTATION

On 10 December, the Department for Business, Energy and Industrial Strategy published the official response to the submissions in the consultation on reforms of the law on limited partnerships.  The government response sets out a range of proposals, including the tightening of registration requirements for limited partnerships; requiring limited partnerships to demonstrate a firmer connection to the UK; increasing transparency requirements; and enabling the Registrar to strike from the register limited partnerships which are dissolved or which are no longer carrying on business.

https://www.gov.uk/government/consultations/limited-partnerships-reform-of-limited-partnership-law

NEW MEASURES TO TACKLE INTERNATIONAL MONEY LAUNDERING USING LIMITED PARTNERSHIPS

On 10 December, the Department for Business, Energy and Industrial Strategy published a news release detailing a package of transparency and anti-corruption measures to address the abuse of Scottish Limited Partnerships (SLP) that has been linked to money laundering; measures will bring greater transparency and more stringent checks to those registering a Limited Partnership; and annual filing requirements will ensure Companies House has accurate information on all UK limited partnerships.

https://www.gov.uk/government/news/new-measures-to-tackle-international-money-laundering

AUSTRALIA AND OTHERS’ NEW TAX OBLIGATIONS FOR OFFSHORE SUPPLIES OF LOW-VALUE GOODS

Customs Today on 10 December reported that  Australia, as well as many other jurisdictions including New Zealand and Switzerland, are implementing new rules regarding the application of the goods and services tax (GST) or VAT to the supply of low-value goods to consumers.  In Australia, the ATO is now taking compliance action with all available enforcement powers. Increased media attention regarding potential non-compliance may also increase ATO scrutiny.

http://www.customstoday.com.pk/new-tax-obligations-for-offshore-supplies-of-low-value-goods/

DPA AND ASSOCIATED GUILT: HOW THE RECENT SFO TESCO CASE COLLAPSED

In an article from TLT Solicitors on 7 December, it is  said to be now apparent that an admission of guilty by a corporate body does not necessarily result in guilt for individuals.

https://www.tltsolicitors.com/insights-and-events/insight/dpas-and-associated-guilt-how-the-recent-sfo-case-collapsed/

AUCTION HOUSE HAS FAILED TO ESTABLISH LITIGATION PRIVILEGE OVER CORRESPONDENCE WITH EXPERTS ABOUT WHETHER OR NOT A PAINTING IT SOLD WAS COUNTERFEIT

Out-Law on 7 December reported that an auction house has failed to establish litigation privilege over correspondence with experts about whether or not a painting it sold was counterfeit, in a case brought by the seller of that painting.  the correspondence failed the ‘dominant purpose’ test, in that it was not created for the sole or dominant purpose of conducting litigation. The correspondence had instead been created for two purposes: deciding whether the contract for sale should be rescinded on the grounds that the painting was counterfeit, which was a commercial, rather than a litigation, purpose; and preparing for related litigation.

https://www.out-law.com/en/articles/2018/december/auction-house-loses-dual-purpose-art-litigation-privilege-case/

BERMUDA ECONOMIC SUBSTANCE LEGISLATION

On 10 December, Appleby published an article about newly-tabled legislation from Bermuda. Like their counterparts in BVI, Cayman, Guernsey, Jersey and Isle of Man, Bermuda has been working closely with the EU Tax Code of Conduct Group to ensure that those concerns are adequately addressed.  As a result of this engagement, a Bill entitled the Economic Substance Act 2018 was tabled on 7 December.

https://www.applebyglobal.com/insights/insights-2018/bermuda-tables-economic-substance-legislation.aspx

ODEBRECHT PERU AGREES TO PLEA DEAL WITH PERUVIAN AUTHORITIES OVER BRIBERY SCANDAL

Baker McKenzie on 10 December reported that the Peruvian arm of the Brazilian company has signed a deal with Peruvian authorities to pay a multimillion dollar fine that will allow it to continue operating in the country in return for providing evidence about officials it bribed – with £182 million (or more)  said to be payable.

http://www.riskandcompliancehub.com/odebrecht-peru-agrees-to-plea-deal-with-peruvian-authorities-over-bribery-scandal/

NEW NAMING AND SHAMING RISK FOR UK BUSINESSES PUBLISHING THEIR 2018 MODERN SLAVERY STATEMENTS

Eversheds Sutherland on 10 December reported that the UK Government is increasingly concerned that “…too many [businesses] are still failing to meet their basic legal obligations” when it comes to tackling modern slavery in supply chains. Over the last few months it has stepped up its pressure on companies, stating its intention to name and shame non-compliant employers and to strengthen existing legislation.  In the article the firm considers recent developments and how business should respond.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Employment_and_labour_law/New-naming-and-shaming-risk

 

World Intellectual Property Review on 10 December reported that the EU has published its first “watch list” of websites and physical marketplaces that reportedly engage in the creation and distribution of counterfeit goods and pirated content.

https://www.worldipreview.com/news/eu-publishes-first-counterfeit-and-piracy-watch-list-17123

The list is at –

http://trade.ec.europa.eu/doclib/docs/2018/december/tradoc_157564.pdf

The New York Times on 10 December reported that South Korean prosecutors have charged 4 people with illegally importing millions of dollars worth of North Korean coal in violation of international sanctions, by trying to disguise it as imports from Russia.

https://www.nytimes.com/reuters/2018/12/10/world/asia/10reuters-northkorea-southkorea-coal.html

On 10 December, the Department for Business, Energy and Industrial Strategy published a news release detailing a package of transparency and anti-corruption measures to address the abuse of Scottish Limited Partnerships (SLP) that has been linked to money laundering; measures will bring greater transparency and more stringent checks to those registering a Limited Partnership; and annual filing requirements will ensure Companies House has accurate information on all UK limited partnerships.

https://www.gov.uk/government/news/new-measures-to-tackle-international-money-laundering

Ekathemerini on 10 December reported that more than 20,000 foreign accounts have been closed by Cypriot banks since 2014 as a result of efforts to enforce the AML Directives, according to information provided by the Central Bank of Cyprus.

http://www.ekathimerini.com/235543/article/ekathimerini/business/russian-deposits-down-by-5-billion-in-cyprus-as-banks-close-20000-accounts

On 10 December, FATF issued an up-to-date overview of the ratings on both effectiveness and technical compliance for all countries assessed against the 2012 FATF Recommendations and using the 2013 Assessment Methodology.

http://www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf

On 10 December, FATF published the Moneyval report on Israel, saying that Israel is achieving good results in identifying and responding to its money laundering and terrorist financing risks, but needs more focus on supervision and preventive measures.  The report was adopted at the FATF Plenary in October and, with the publication of this assessment, Israel has met the FATF’s membership requirements and has become an official member of the FATF with immediate effect.

 

http://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-israel-2018.html

EU Regulation 2018/1929/EU says that, following the organisation, of ‘elections’ in the so-called ‘Donetsk People’s Republic’ and ‘Luhansk People’s Republic’, the EU Council has added 9 persons to the list of persons, entities and bodies subject to restrictive measures as set out in Annex I to EU Regulation 269/2014/EU.

See also EU Council Decision 2018/1930/CFSP.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.LI.2018.313.01.0001.01.ENG&toc=OJ:L:2018:313I:TOC

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.LI.2018.313.01.0005.01.ENG&toc=OJ:L:2018:313I:TOC

https://www.consilium.europa.eu/en/press/press-releases/2018/12/10/ukraine-eu-adds-nine-persons-involved-in-elections-in-donetsk-people-s-republic-and-luhansk-people-s-republic-to-sanctions-list/

On 27 November, Quadrant Chambers published an article about what it says is a decision which appears to have escaped the law reports until now, but where the often undervalued and neglected remedy of a ship arrest has been given new impetus by the judgment.  It has confirmed that an arrest of a vessel within the Admiralty jurisdiction of the English High Court (in support of specified maritime claims) is not subject to the same rules and protections afforded to those faced with freezing injunctions at general law.  The article concludes that, if a defendant has a vessel which is likely to visit English shores, it would be worth considering an arrest in England as the perfect weapon to secure a claim rather than the more usual freezing injunction.

https://www.quadrantchambers.com/news

On 10 December, OFAC listed 3  individuals in response to the North Korean regime’s ongoing and serious human rights abuses and censorship.  The US Treasury says that it is taking this action in conjunction with the State Department’s “Report on Serious Human Rights Abuses and Censorship in North Korea,” which is being submitted in accordance with the North Korea Sanctions and Policy Enhancement Act of 2016 (NKSPEA).  They are – Jong Kyong Thaek, the Minister of State Security; Choe Ryong Hae, the Director of the OGD; and Pak Kwang Ho, the Director of the PAD.  Any property or interests in property within (or transiting) US jurisdiction of those designated by OFAC are frozen.  Additionally, transactions by US persons involving the designated persons are generally prohibited.

https://home.treasury.gov/news/press-releases/sm568

9 December 2018

SIPRI REPORT – GLOBAL ARMS INDUSTRY: US LEADS, RUSSIA SECOND

On 9 December, SIPRI released its latest report on the global arms industry: US companies dominate the Top 100; Russian arms industry moves to second place; UK tops arms exporter in Europe.  It also notes that arms sales of Turkish companies rose by 24% 2017; arms sales of the 4 Indian companies ranked in the Top 100 totalled $7.5 billion in 2017, representing a 1.9% share of Top 100 arms sales; and sales of the top 15 manufacturing companies listed in the Fortune Global 500 totalled $2311 billion in 2017 – almost 10 times greater than the total arms sales of the top 15 arms producers ($231.6 billion) in 2017, and almost 6 times greater than the total combined arms sales of the Top 100 ($398.2 billion).

https://www.sipri.org/publications/2018/sipri-fact-sheets/sipri-top-100-arms-producing-and-military-services-companies-2017

SUSPECTED BRITISH DRUG LORD GOES ON TRIAL IN PARIS

The Telegraph on 9 December reported that Robert Dawes, 46, denies charges that he ran an operation that smuggled 1.3 tons of cocaine, worth £45 million, to France on a flight from Venezuela in 2013.  2 other Britons, named as Nathan Wheat and Kane Price, are also charged with involvement in trafficking, along with 3 Italians allegedly linked with the Camorra.  4 agents of France’s anti-trafficking agency, OCRTIS, posed as corrupt baggage handlers at Charles de Gaulle airport to intercept 31 suitcases containing cocaine belonging to “ghost’ passengers that arrived on a flight from Venezuela.  They found evidence indicating that Dawes and his British associates had organised the shipment using encrypted phones.

https://www.telegraph.co.uk/news/2018/12/09/suspected-british-drug-lord-goes-trial-paris/

IRISH COUPLE ACCUSED OF PEOPLE SMUGGLING ARE REFUSED BAIL IN WALES

The Irish Sun on 9 December reported that the Dublin couple arrived at Holyhead from Ireland in a car with 4 Albanian passengers.

https://www.thesun.ie/news/3494656/irish-couple-people-smuggling-refused-bail-wales/

US LISTS LUXURY ITEMS SEIZED IN 1MDB CORRUPTION CASE

A yacht, a see-through grand piano, a Monet, a $31 million penthouse and a private jet: US government reveals the list of lavish items seized in Jho Low case.  Includes $200 million in artwork.

https://www.dailymail.co.uk/news/article-6476597/US-government-reveals-list-lavish-items-seized-financier.html

AUSTRALIAN TAXATION OFFICE CONTRACTOR HAS HISTORY OF BANKRUPTCY AND LINKS TO TAX HAVENS

ABC News on 9 December reported that a privately owned call centre and “business process outsourcing” business with ties to a Texan millionaire family with a controversial corporate history.  However, it was recently awarded a $77 million contract to handle Centrelink calls for the Department of Human Services.

https://www.abc.net.au/news/2018-12-10/ato-contractor-has-a-history-of-bankruptcy-and-tax-minimisation/10595884

 

The Wall Street Journal on 9 December carried an article about how North Korea’s special-operations division, are covertly training Uganda’s elite troops in skills from martial arts to helicopter-gunnery operations.  This is only one example of North Korean soldiers, companies, contractors and arms dealers operating around the world in violation of UN sanctions. North Korean operatives or DPRK-controlled companies in African countries offer cut-price military training, weapons, workers or other services, generating foreign exchange for DPRK.  For African nations, incentives range from thrift to geopolitics, say defence analysts and government officials, and the military contracts offer inexpensive equipment and expertise and opportunities for official corruption.

https://www.wsj.com/articles/secret-workforce-funds-north-koreaand-defies-sanctions-1544379764

8 December 2018

ISRAEL AUTHORISED NSO SALE OF SPYWARE TO SAUDI ARABIA

Haaretz on 8 December reported that former U.S. officials have told the Washington Post that Israel authorised cyber-company NSO to sell surveillance software to Saudi Arabia in return for Saudi discreet support for the Israeli struggle against Iran; and that the deal was reportedly made through NSO’s affiliate Q Cyber Technologies, located in Luxembourg.

https://www.haaretz.com/israel-news/report-israel-authorized-nso-s-sale-of-spyware-to-saudi-arabia-1.6725044

SUDAN ALLOWS GOLD EXPORTS AFTER 6-YEAR GOVERNMENT MONOPOLY

On 8 December, Asharq Al-Awsat reported that the Central Bank of Sudan has agreed to allow foreign and domestic mining companies and individuals to export gold after a government monopoly of more than 6 years.  It says that Sudan produces 150 tons of gold per year, but the Central Bank managed to export no more than 37 tons in 2018; with some 113 tons having been smuggled into neighbouring countries.

https://aawsat.com/english/home/article/1495861/sudan-allows-gold-exports-after-6-year-monopoly

HESTON BLUMENTHAL, THE TAX HAVENS AND THE RIPPED-OFF WORKERS

The Brisbane Times on 8 December saying that international restaurant empire fronted by world-renowned chef Heston Blumenthal is run through a series of notorious offshore tax havens while also substantially underpaying staff at its high-end  high-end Australian eatery. It says that the Australian businesses are routed through the volcanic Caribbean island of Nevis where foreign companies pay zero tax on their worldwide earnings. Directors are based on the Isle of Man and shares directors with its ultimate owner Lowenthal Corporation, also based on Isle of Man.  Fat Duck and the group’s other UK restaurants are routed through a separate Nevis-based company and are also ultimately owned by Lowenthal Corporation.

https://www.brisbanetimes.com.au/business/workplace/heston-blumenthal-the-tax-havens-and-the-ripped-off-workers-20181207-p50ksz.html

CORPORATE LAND GRAB EXPLOITS PAPUA NEW GUINEA’S INDIGENOUS PEOPLE

Ekklesia on 8 December reported that private companies are illegally occupying land in Papua New Guinea for logging and palm oil plantations, according to a new report published by War on Want and Act NOW!, its partner in Papua New Guinea.  The report, The SABL land grab: Papua New Guinea’s ongoing human rights scandal, is said to reveal the devastating impact of corporate land grabs on the indigenous population. Foreign companies are exploiting Special Agricultural Business Leases (SABL), without due process, to illegally lease land from indigenous customary landowners. The land and its inhabitants are then exploited for profit, the rich natural resources exported to countries like China, and the indigenous peoples forced to work on their own land for poverty wages.

http://www.ekklesia.co.uk/node/27333

The report is at –

https://waronwant.org/sites/default/files/SABL_PNG_LANDGRAB.pdf

On 7 December, iGB reported that the European Gaming and Betting Association (EGBA) is urging countries across Europe to bolster their protection measures in the online gambling sector after a new report found that Denmark is the only EU Member State fully embracing consumer protection guidelines; and claims that they are putting the safety of consumers at risk with inadequate levels of protection.

http://www.igamingbusiness.com/news/eu-states-failing-protect-gambling-consumers-egba-warns

The report itself is available at –

https://www.egba.eu/uploads/2018/12/181206-Consumer-Protection-in-EU-Online-Gambling-EGBA-Executive-Summary.pdf

On 8 December, ICIJ looked back into the Panama Papers files to see if it could identify the unnamed accused in the recent indictments lodged in the US.  These are the 4 of 5 American clients whom the DoJ alleges played key roles in offshore tax schemes but have not been charged.

https://www.icij.org/investigations/panama-papers/what-the-panama-papers-tell-us-about-the-clients-in-the-latest-bombshell-charges/

7 December 2018

SOMALIA REMAINS THE HIGHEST BRIBERY RISK IN TRACE INDEX

On 7 December, the Wall Street Journal reported that business compliance group Trace International’s latest edition of its anti-bribery index, finding for the second consecutive year that Somalia poses the highest risk.  The 2018 index found that New Zealand, Sweden, Norway, Denmark and Finland are among the least risky countries, while Somalia, Libya, Venezuela, Chad and Turkmenistan are among the most.

ASIAN EXPORT NATIONS SOFT ON CORPORATE BRIBES OF FOREIGN OFFICIALS

Nikkei Asian Review on 7 December reported that Asia’s largest export countries show scant interest in holding their companies accountable for bribing foreign civil servants, according to a recent report from Transparency International, a Berlin-based NGO: “Exporting Corruption — Progress Report 2018”.  The paper showed that 5 countries and 1 territory practice “little or no” enforcement against companies suspected of paying off officials.

https://asia.nikkei.com/Politics/International-Relations/Asian-export-nations-soft-on-corporate-bribes-of-foreign-officials

NEED HELP LAUNDERING MONEY? WHAT ABOUT BUYING YOUR OWN BANK?

On 7 December, an article on Medium saying that to further their bribery and laundering schemes, 3 Venezuelans had bought the Banco Peravia  in the Dominican Republic   for the purpose of laundering money and paying bribes to Venezuelan officials.  A number of Peravia’s executives have been under investigation since 2015 for allegedly defrauding the bank. Meinl Bank Antigua was also said to have been purchased by the Brazilian construction company Odebrecht and reportedly used to move dirty money and pay bribes to officials in at least 12 different countries.

https://voices.transparency.org

UK: PUBLISHED DETAILS OF DELIBERATE TAX DEFAULTERS

On 7 December, HMRC published the latest list of the details of deliberate tax defaulters, these are people who have received penalties either for deliberate errors in their tax returns or deliberately failing to comply with their tax obligations.

https://www.gov.uk/government/publications/publishing-details-of-deliberate-tax-defaulters-pddd

EU COMMISSION STEPS UP FIGHT AGAINST ILLICIT TOBACCO TRADE

On 7 December, the European Commission announced that it had adopted an Action Plan to enable the European Union to continue fighting illegal tobacco trade, a phenomenon that deprives it and its Member States of roughly €10 billion of public revenue every year.  The Action Plan outlines concrete steps to address both the supply of and the demand for illegal tobacco products. The new Action Plan builds on the EU’s 2013 Strategy on fighting the illicit tobacco trade.  With the recent entry into force of the WHO Framework Convention on Tobacco Control (FCTC) Protocol and the roll-out of the new EU traceability system, required under the Protocol, the Action Plan proposes further initiatives to ensure the effective fight against illicit tobacco products. They include actions to fully exploit the potential of the FCTC Protocol as a global instrument, to engage key source and trade countries, thus limiting the supply arriving at EU’s borders, and to raise awareness among consumers.

https://ec.europa.eu/anti-fraud/policy/preventing-fraud_en

MYSTERY FUNDER IN BILLION-POUND OLIGARCH FISHING BATTLE

The Law Society Gazette on 7 December reported on a row in which 2 Russian oligarchs are wrestling for a stake in one of the world’s largest fishing businesses took another twist this week as lawyers for one of the men sought assurances over a mystery funder.  Russian businessman Alexander Tugushev is against Vitaly Orlov in the High Court for a stake in the $1.5 billion Norebo Group. Orlov is challenging the jurisdiction of the English courts and resisting the continuation of a freezing order.

https://www.lawgazette.co.uk/law/row-over-mystery-funder-in-billion-pound-oligarch-fishing-battle-/5068630.article

HOW DOES IRS DEFINE TAX EVASION ETC?

An article from Foodman CPAs and Advisors on 7 December starts by saying that the IRS Tax Crimes Handbook states that there are 2 kinds of tax evasion: the wilful attempt to evade or defeat the assessment of a tax, and the wilful attempt to evade or defeat the payment of a tax.  The article looks at how the important terms are defined by the IRS, including what is an “attempt”.

https://www.jdsupra.com/legalnews/what-is-tax-evasion-39001/

KASSIM TAJIDEEN, BEIRUT MONEY LAUNDERER WORKING IN AFRICA AND LEBANON, AND WHO WAS FUNDING HEZBOLLAH, PLEADS GUILTY IN US

On 7 December, Kenneth Rijock in his blog reported this case and said that Tajideen and his co-conspirators allegedly moved over $1 billion through the US financial system, and he apparently has a long history of providing financial support to Hezbollah. he was named a Specially Designated Global Terrorist by OFAC in 2009.  Rijock also provided illustrations of the networks used.

http://rijock.blogspot.com/2018/12/africa-based-lebanese-businessman-who.html

JERSEY: NEW LAWS DESIGNED TO PROTECT JERSEY’S INTERNATIONAL INTERESTS AND ENSURE IT IS ABLE TO RESPOND EFFECTIVELY TO THE POTENTIAL IMPACTS OF BREXIT

A news release from Jersey on 7 December reported on the successful enactment of the Taxation (Companies – Economic Substance) Law – which provides the means to fulfil the commitments made by the Government to the EU Code of Conduct Group in November 2017; the Sanctions and Asset-Freezing Law preserves Jersey’s power to impose EU sanctions and also allows Jersey to impose UK sanctions; and the EU Legislation (Customs Union, Import and Export Control) regulations that create the powers necessary to implement the landmark Jersey/UK Customs Arrangement, agreed in November, which establishes a customs union between Jersey and the UK.

https://www.gov.je/News/2018/Pages/newlawspassed.aspx

EU-WIDE ACTION AGAINST BUYERS OF COUNTERFEIT MONEY ON THE DARKNET

Europol on 7 December reported on how law enforcement agencies performed actions against suspects who bought counterfeit euro banknotes on illegal platforms on the Darknet.  These actions, coordinated by Europol, started on 19 November and the majority of interventions took place from 3 to 6 December. Almost 300 house searches were conducted in 13 different countries and 235 suspects were detained.  Law enforcement also seized around 1,500 counterfeit euro banknotes.

https://www.europol.europa.eu/newsroom/news/eu-wide-action-against-buyers-of-counterfeit-money-darknet

IRELAND LEGISLATES FOR NEW CORPORATE CRIME AGENCY

Out-Law on 7 December published an article saying that a new agency with powers to investigate and prosecute cases of corporate crime is to be set up in Ireland, with the existing Office of the Director of Corporate Enforcement (the ODCE) will be replaced by a new Corporate Enforcement Authority (CEA).

https://www.out-law.com/en/articles/2018/december/ireland-legislates-for-new-corporate-crime-agency/

ECONOMIC SUBSTANCE REQUIREMENTS IN THE CAYMAN ISLANDS

On 7 December, Appleby published an article saying that the Cayman Islands government has published draft legislation that will require certain Cayman Islands entities carrying on specified activities to have ‘adequate substance’ in the Cayman Islands.  Any relevant entity that may be impacted by this legislation will wish to monitor these developments closely. The government of the Cayman Islands has been working closely with the EU Code Group to ensure that its concerns are adequately addressed.

https://www.applebyglobal.com/insights/insights-2018/economic-substance-requirements-in-the-cayman-islands.aspx

AUTHORITIES IN COLOMBIA HAVE DISMANTLED SEVERAL INTERNATIONAL MONEY LAUNDERING ORGANISATIONS THAT EMPLOYED DRUG MULES FOR DIRTY MONEY FOR MEXICAN CARTELS

On 7 December, Insight Crime published an article saying that the operations provided further details on the relationship between criminal organisations in both countries.  Authorities arrested 27 suspected members of 4 transnational money launder organisations for transporting money from Mexico into Colombia.

https://www.insightcrime.org/news/brief/colombia-drug-mules-swallowing-dirty-money-transport/

US GRAIN EXPORTER UNDER INVESTIGATION FOR ALLEGED BRIBERY OF MEXICO CUSTOMS OFFICIALS

On 7 December, Buckley Sandler reported that US-based agriculture company, CHS Inc., disclosed that it is co-operating with an investigation being conducted by the SEC and DoJ involving payments made to Mexican customs officials.  The payments were made in connection with grain shipments crossing the Mexican border by train. CHS Inc is owned primarily by farmer and rancher co-operatives and has extensive operations in the energy sector in addition to agriculture.

https://buckleysandler.com/blog/2018-12-07/us-based-agriculture-company-discloses-investigation-0

BOGUS ISLE OF MAN FSA EMAILS

On 7 December, the FSA said that it had recently become aware that businesses in the Isle of Man have received emails purporting to be from the Financial Services Authority.  These bogus emails have the heading styled, “December Sanctions Update – Payroll Providers” with the sender being listed as Isle of Man Financial Services Authority survey@financial-survey.com

https://www.iomfsa.im/fsa-news/2018/dec/bogus-iomfsa-emails-survey-financial-surveycom/

UK: FCA PROPOSING PERMANENT MEASURES FOR CFD AND BINARY OPTIONS

On 7 December, the FCA said that it is proposing rules to address harm to retail consumers from the sale of certain complex derivative products with the publication of 2 consultation papers.  New rules would ban the sale, marketing and distribution of binary options to retail consumers; and restrict the sale, marketing and distribution of contracts for difference (CFD) and similar products to retail customers.

http://www.mondovisione.com/media-and-resources/news/uks-financial-conduct-authority-proposes-permanent-measures-for-retail-cfds-and/

SEC HALTS ALLEGED INSIDER TRADING RING SPANNING 3 COUNTRIES

On 7 December, the SEC said that it has filed insider trading charges against an IT contractor and 2 others he illegally tipped with confidential client information that he stole while working in the Singapore branch of an investment bank.  It also obtained a freeze of assets in 3 US brokerage accounts and a US bank account connected to the alleged trading.

http://www.mondovisione.com/media-and-resources/news/sec-halts-alleged-insider-trading-ring-spanning-three-countries/

IRELAND: REVENUE SEIZES HERBAL CANNABIS WORTH €1.36 MILLION AT DUBLIN PORT

A news release on 7 December announced that Irish customs during routine operations involving the deployment of Revenue’s mobile x-ray scanner and with the assistance of detector dog, Meg, Revenue officers in Dublin Port seized 68 kg of herbal cannabis with an estimated street value of €1.36 million. The drugs were found concealed in a consignment of goods which had arrived into Dublin Port originating in Spain.

https://www.revenue.ie/en/corporate/press-office/press-releases/2018/pr-071218-herbal-cannabis-dublin-port.aspx

GLOBAL WITNESS: MANAGEMENT OF DIAMOND INDUSTRY ‘TEST OF ZIMBABWE’S COMMITMENT TO ECONOMIC REFORM’

On 7 December, NGO Global Witness issued a briefing called “Leaving no stone unturned here”, saying that, 1 year on from the inauguration of President Emmerson Mnangagwa, management of Zimbabwe’s diamond industry is the litmus test of the new government’s commitment to economic reform, and calls on the Zimbabwean government and companies in the diamond industry to implement a raft of transparency measures, which are essential if the diamond industry is to realise its potential for the people of Zimbabwe.

http://www.ekklesia.co.uk/node/27325

https://www.globalwitness.org/en-gb/campaigns/conflict-diamonds/leave-no-stone-unturned/

CLEANING UP CLOSER TO HOME – WHY THE CROWN DEPENDENCIES NEED TO GO PUBLIC

On 4th December, NGO Global Witness published an article saying that, as ministers from the Overseas Territories will be sitting down with the FCO to figure out how they are going to follow through on the UK Parliament’s historic vote to require them to create public registers of the real owners of their anonymous companies, “what of the UK’s tax havens closer to home?”.  

https://www.globalwitness.org/en-gb/blog/cleaning-up-closer-to-home-why-the-crown-dependencies-need-to-go-public/

REPORT: CANNABINOIDS HAVE LIMITED IMPACT ON MS SYMPTOMS

On 3rd December, the Pharmaceutical Journal reported that cannabinoids have limited efficacy in improving the symptoms of multiple sclerosis (MS), authors of a systematic review and meta-analysis have concluded.  Researchers used data from 17 randomised controlled trials looking at the effects of oral or oromucosal medicinal cannabinoids involving a total of 3,161 patients with MS.  They describe the study as the most complete systematic review and meta-analysis of the effect of cannabinoids on MS.

https://www.pharmaceutical-journal.com/news-and-analysis/research-briefing/cannabinoids-have-limited-impact-on-ms-symptoms/20205824.article

BOEING CANCELS CONTROVERSIAL SATELLITE ORDER FUNDED BY CHINA

On 7 December, the Daily Caller reported that Boeing had decided to cancel an order for a satellite that uses sensitive technology used by the US military and was reportedly being funded by a state-owned Chinese financial firm – citing non-payment and saying it was a business decision.  A Wall Street Journal article had revealed the web of financial transactions that skirted around US export laws, which would ban Boeing from selling satellites to China, and resulted in the Chinese government funnelling nearly $200 million to the project and obtaining a large stake of the company responsible for the satellite.

https://dailycaller.com/2018/12/07/boeing-satellite-china/

JAPANESE GOVERNMENT CONSIDERING A BAN ON GOVERNMENT PURCHASES OF EQUIPMENT FROM CHINESE VENDORS HUAWEI TECHNOLOGIES AND ZTE

RCR Wireless News on 7 December reported that it was considering the move with the aim of preventing intelligence leaks and cyberattacks.  According to the reports, the Japanese government does not plan to specifically name Huawei and ZTE in the revision, but will put in place measures aimed at strengthening security that apply to these vendors.  Australian authorities in August said it would prevent certain vendors from taking part in the roll out of 5G mobile networks across the country, effectively banning Chinese companies Huawei and ZTE from involvement, and UK’s BT Group said it was removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations.

https://www.rcrwireless.com/20181207/5g/japan-ban-chinese-vendors-government-contracts-report

SCOTTISH DIRTY MONEY CONVICTIONS ‘NOTABLY LOWER’

The Herald in Scotland on 7 December reported that Scotland convicts far fewer people under money-laundering laws than the rest of the UK, according to the FATF report on the UK.  However, insiders in Scotland are not convinced that the comparison is fair – because Scottish prosecutors have other options for charging launderers and because they face a higher evidential bar, with the requirement for corroboration.

https://www.heraldscotland.com/news/17284859.scottish-dirty-money-convictions-notably-lower-report/

GERMAN REAL ESTATE MARKET A HOTBED OF MONEY LAUNDERING

Deutsche Welle on 7 December reported that about €30 billion of dubiously-sourced money was funnelled into German real estate in 2017.  Transparency International is calling for a series of reforms to combat the problem.

https://www.dw.com/en/german-real-estate-market-a-hotbed-of-money-laundering-transparency-reports/a-46637937

On 7 December, OFAC extended further the expiration date of certain general licences related to EN+ Group plc (EN+), United Company RUSAL PLC (RUSAL), and GAZ Group (GAZ).  General Licenses 13H, 14D, 15C, and 16D amend their previous versions by extending the expiration date from January 7 to January 21, for transactions related to the companies and their subsidiaries.

https://home.treasury.gov/news/press-releases/sm567

 

On 29 November, EU states agreed to modernise company law rules with a view to facilitating the use of digital tools and online processes in a company’s contacts with public authorities throughout its lifecycle.  The proposed Directive complements the existing rules on EU company law and is one of the 2 proposals tabled by the EU Commission in April 2018 for the modernisation of EU company law.  An article in EU Business summarises the proposals and provides a link to the proposed Directive.

https://www.eubusiness.com/news-eu/digital-company.51dj

 

Out-Law on 7 December published an article saying that a new agency with powers to investigate and prosecute cases of corporate crime is to be set up in Ireland, with the existing Office of the Director of Corporate Enforcement (the ODCE) will be replaced by a new Corporate Enforcement Authority (CEA).

https://www.out-law.com/en/articles/2018/december/ireland-legislates-for-new-corporate-crime-agency/

 

Kenneth Rijock in his blog reports that a judge in the Republic of Panama has set the trial of the criminal case pending against the country’s former president, Ricardo Martinelli, for December 11. Martinelli is charged with conducting illegal video and audio surveillance to spy upon more than 150 of Panama’s elite, using the staff of his National Security Council.  Martinelli is also charged with embezzlement, for authorizing the purchase of expensive surveillance equipment.

http://rijock.blogspot.com/2018/12/trial-of-panamas-former-president-to.html

 

On 7 December, EurActiv reported that EU Ministers backed plans on that will allow law enforcement authorities to bypass EU Member States when making judicial orders for electronic evidence in criminal matters abroad. Germany, the Netherlands, Hungary, Sweden, Finland, Greece, Latvia, and the Czech Republic all voted down the plans.  The rules oblige service providers to respond to requests for electronic evidence within 10 days, or in an emergency, 6 hours. If service providers are found to be in breach of the regulation, sanctions of of up to 2% of total worldwide annual turnover of the preceding financial year may be imposed.  The move follows in the footsteps of the CLOUD Act in the US that aims to further simplify the process for law enforcement agencies to access digital evidence.

https://www.euractiv.com/section/digital/news/council-makes-half-hearted-agreement-on-e-evidence/