On 21st November Finextra published a useful guide to “merchant fraud”. It identifies 3 types used to acquire or launder funds –
- “Bust out fraud” – a merchant applies for a merchant account without any intention of actually operating a legitimate business. These merchant accounts are then used to process fraudulent transactions or to acquire lines of credit before abandoning the account altogether;
- “Identity swap” – merchants who use a fake or stolen identity or set up a bogus online storefront in order to secure a merchant account, because they are on sanctions or other watch lists; and
- “Transaction Laundering (a.k.a. Factoring)” – occurs when an unknown business uses an approved merchant’s payment credentials to process payments for products and services that the acquirer is not aware of, and the article reports that $352 billion is estimated as being laundered this way every year in the US alone.
Bright Line Law reports on the recent case of Serra & Another v Republic of Paraguay  EWHC 2300 (Admin) in which, although principally concerned with extradition, the Queen’s Bench Division of the High Court also addresses the question head-on. The Paraguayan offence of money laundering did not exist when the appellant’s companies obtained, allegedly fraudulently, $35 million from another company, Cajubi. The appellants submitted that although they may have been engaged in a money laundering offence post-July 2009 (when money laundering became an offence in Paraguay), but their conduct did not constitute an offence in the UK and thus, they should not be extradited to face that charge. The lower court had disagreed, finding that the conduct would have amounted to offences contrary to sections 327 and/or 329 of POCA 2002 in the UK. The appellants’ argument was that “a person cannot possess criminal property within section 329 of the 2002 Act if all that occurs is that he retains property which it was not unlawful for him to possess in the requesting state until a change in the law.” In response to the proposition, the High Court’s decision included that: “[W]e see no difficultly with the concept that the possession of property which was not unlawful at a particular point in time may become unlawful by virtue of a prospective change in the law with the consequence that as from the date of the law change a person who retains such property or continues to possess it commits a criminal offence.”
HM Treasury and Department of International Trade announcement 21st November. The Bill will allow the UK to set and collect its own duty on goods coming into the country and will allow the government to implement different outcomes of the EU negotiations, including an implementation period.
Explanatory Notes, Impact Assessment etc at
EU Regulation 2017/2153 and Council Decision 2017/2163/CFSP add Dmitry Vladimirovich Ovsyannikov, mayor of Sevastopol, to its list of persons designated respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine with effect from 21st November.