POLITICAL BATTLE OVER PLANS TO AMEND US ARMS EXPORT CONTROLS
On 11th January The Hill in the US reported that the Trump Administration’s expected plan to transfer the licensing of gun exports from the State Department to the Commerce Department has Democratic lawmakers and foreign policy advocates readying for a fight amid fears it will lead to less oversight of commercial sales of assault weapons like submachine guns and flame throwers to foreign buyers. The State Department said the goal of the change is to reduce regulatory burdens on manufacturers, small gunsmiths, and exporters.
KEY FINDINGS FROM THE EUROPEAN PARLIAMENT’S REPORT ON RULE OF LAW IN MALTA
Malta Today on 11th January published excerpts of what key witnesses told MEPs on a fact-finding mission to Malta in November 2017. They include –
- what are described as 2 conflicting positions on what the Police Commissioner told MEPs about investigations into reports of money laundering drawn up by the Financial Intelligence Analysis Unit;
- the Attorney General defending his position as to why no criminal investigations were initiated on money laundering allegations against PEP;
- Chief Justice Silvio Camilleri told MEPs “reasonable suspicion” was not a requirement to initiate an investigation;
- Malta Financial Services Authority told MEPs it intensified its supervision of Pilatus Bank, a wealth management bank that catered for 130 clients, including PEP and Azerbaijani clients; and
- FIAU worked on a ‘document’ concerning allegations on an offshore structure in Dubai that was to receive payments from a company managing the LNG terminal in Delimara but this was not conclusive.
Meanwhile, Politico on 12th January reports that MEPs refer to a “culture of fear,” criticise the soft-ball approach to corruption allegations against senior officials and urge the creation of an independent prosecutor. It has obtained a full copy of the report by the MEPs.
COSTA RICA INVESTIGATION INTO SANCTIONED NICARAGUAN POLITICIAN
The Havana Times on 11th January reported that the Costa Rican Attorney General’s Office had opened an investigation against the president of the Supreme Electoral Council (CSE) of Nicaragua, Roberto Rivas, for what it considers the possible crime of money laundering in that country, where Rivas has several properties. The US imposed sanctions on Rivas on December 21st, accusing him of corruption and electoral fraud.
HMRC COMPLIANCE FACTSHEET UPDATED RE ACCESS TO OPEN SOURCE MATERIAL
HMRC compliance checks factsheet CC/FS1f, which contains general information about compliance checks into tax advantage schemes, has been updated to include a “More information” section that explains what information HMRC may use when dealing with compliance checks. HMRC may observe, monitor, record and retain “open source” material on the Internet which is available to anyone, such as news reports websites, Companies House and Land registry records, blogs and social networking sites where no privacy settings have been applied.
FRENCH ANTI-CORRUPTION AGENCY COMPLIANCE CHARTER
On 28th November White & Case issued a briefing about a Charter published by the new French Anticorruption Agency which has the power, inter alia, to inspect companies in order to assess the compliance of their anticorruption programmes with the provisions of the Sapin II Law since 9th December 2016. The Charter specifies the rights and duties of both the Agency and the companies being controlled, and is clearly inspired by existing texts published by other authorities in the banking, financial and antitrust sectors.
COULD THE CRYPTO-ROUBLE SPELL CRYPTO-TROUBLE FOR SANCTIONS?
On 10th January Sheppard Mullin published a briefing about the state-backed cryptocurrency that President Putin has apparently asked to be developed. The briefing asks could Putin’s dream come true, and could Russia evade US sanctions through the establishment of a state-sponsored cryptocurrency? It argues that the ability of a crypto-rouble to help Russia evade US sanctions is limited, if only because prohibited transactions would remain prohibited regardless of the means of exchange or currency used.
COURT OF APPEAL TELLS FCA – THE MORE SERIOUS THE ALLEGATION THE MORE COGENT THE EVIDENCE
In an article dated 9th January, Allen & Overy report on a judgment handed down just before Christmas by the Court of Appeal in which it took the opportunity to remind the UK FCA that the more serious the allegation it makes about the conduct of a subject, the more cogent the evidence must be in order to overcome the ‘inherent improbability’ that it occurred. It recounts the background to Burns v The Financial Conduct Authority.
WHEN AN OWNER CAN SELL CARGO TO SETTLE A DEBT OWED BY THE CHARTERER OF A SHIP
On 10th January, Wikborg Rein of Norway reported on an English High Court judgment that recently confirmed when it will order the sale of cargo under a lien which is the subject of arbitration proceedings. An owner’s lien on cargo does not typically afford it the right to sell the cargo in order to satisfy debts due from charterers. However, in Dainford Navigation Inc v PDVSA Petroleo SA (Moscow Stars) the Court confirmed that it has the power to order the sale of cargo in certain circumstances. The authors say that this decision may be of interest to shipowners that are faced with a situation in which cargo belonging to a charterer remains on board a vessel for a long period without the owners receiving hire, while still incurring operating costs.
EU AMENDS AL-QAIDA/ISIL SANCTIONS LIST
On 12th January EU Regulation 2018/50/EU comes into force, amending 2 entries on the Al-Qaida/ISIL sanctions lists under Regulation 881/2002, deleting Zayn Al-Abidin Muhammad Hussein and replacing the entry for Seifallah Ben Hassine with one for Seifallah Ben Omar Ben Mohamed Ben Hassine.
NEW CHINESE WASTE PAPER IMPORT REGULATIONS NOW IN EFFECT
On 12th January HKTDC in Hong Kong issued an article providing some detail of the new Chinese restrictions on imports of waste.
BANKS & BUILDING SOCIETIES IN UK START IMMIGRATION CHECKS
On 12th January a Home Office news release advises that banks and building societies have started carrying out checks on the immigration status of all personal current account holders under government measures to encourage those in the UK illegally to leave. The checks will be done against the details of known illegal migrants which the Home Office is sharing with Cifas, an anti-fraud organisation.
ANOTHER FORMER MEXICAN GOVERNOR ACCUSED OF CORRUPTION
Prensa Latina reports that the former Governor of Nayarit, Roberto Sandoval, faces an impeachment before the state Congress for alleged diversion of resources of about $150 million. The ex-leader (of the ruling Institutional Revolutionary Party or PRI) is accused of improper handling of public resources, illicit enrichment, cover-up and bribery.
HONG KONG GOVT ADVISER RESIGNS OVER ILLEGAL IVORY
On 11th January Customs Today reported that a Hong Kong ivory trader fined for illegal possession of ivory resigned from a government advisory panel to protect endangered species, a potentially embarrassing blow for a city fighting to stamp out smuggling of ivory. The territory is a prime transit and consumption hub, with more than 90% of consumers from mainland China. Hong Kong has the largest retail market for ivory, which it has traded for more than 150 years. Lau Sai-yuan was a member of the Endangered Species Advisory Committee of Hong Kong‘s Agriculture, Fisheries and Conservation Department (AFCD).
US CUSTOMS TOLD TO TIGHTEN RADIOLOGICAL MATERIAL IMPORT CONTROLS
On 12th January, US law firm Sandler Travis & Rosenberg reported that US Customs and Border Protection should develop a monitoring system and take other steps to help ensure that imported radiological material, which is used for medical, industrial, and research purposes, is being properly licensed, according to a recent report from the Government Accountability Office. It points out that possession of radiological material requires a license from the Nuclear Regulatory Commission or one of the 37 states to which NRC has relinquished licensing authority. In response, CBP says it plans to updates procedures etc by the end of August.
TRUMP SIGNS BILL TO ENHANCE OPIOID SCREENING TECHNOLOGY AT BORDER
The Jurist website reports that President Trump signed the International Narcotics Trafficking Emergency Response by Detecting Incoming Contraband with Technology, or INTERDICT ACT which is intended to afford border protection agents enhanced opioid screening technology.
EXCHANGE OF OVER 1 MILLION MESSAGES USING EUROPOL SYSTEM IN 2017
Europol reports that, over the course of 2017, more than 1 million SIENA messages were exchanged among Europol, Member States and third parties. SIENA is the Secure Information Exchange Network Application, managed by Europol which enables a swift and secure communication and exchange of operational and strategic crime-related information and intelligence. SIENA, as an operative instrument allows law enforcement authorities to collaborate effectively on a daily basis, and more than 20,000 SIENA messages were exchanged per week in 2017 on thousands of investigations within the EU and beyond.
SICILIAN SUPERMARKET CHAIN LINKED TO MAFIA SEIZED
On 11th January Xinhua reported that Italian authorities in the Sicilian city of Catania have seized a supermarket chain worth €41 million from a businessman with ties to a local Cappello-Bonaccorsi mafia clan. The seizure of 13 stores belonging to a chain called G.M. Supermercati and other assets was carried out on orders of the anti-mafia division of the Catania prosecutor’s office. It is alleged that the supermarkets and other assets belong to 48-year-old Michele Guglielmino, who built a retail empire by laundering money for the mob.
STORIES OF COLLABORATION: SCOURING THE PARADISE PAPERS, WITH THE HELP OF ALMOST 400 NEW FRIENDS
On The ICIJ website, on 11th January Michael Forsythe, an investigative reporter with The New York Times who worked on ICIJ’s most recent project, Paradise Papers, reflects on what it was like to collaborate across the world.
DEVELOPMENTS IN THE AUSTRALIAN MEDICINAL CANNABIS INDUSTRY
On 12th January Dentons carried a briefing which included mention of the change allowing the export of medicinal cannabis.
FLYING WITH FIREARMS IN THE USA
Something different, from the Firearms Blog in the US a 3-part feature on how to fly with firearms in and around the USA…parts 1 and 2 are below. Federal regulations state that a passenger who is transporting a firearm in their checked luggage must declare, either verbally or in writing, that they are doing so. In practice, you can reliably expect to do both.
Part 3 will follow in due course.
US EXERCISE BUYING PROHIBITED WEAPONS ON THE DARK WEB
Also in the Firearms Blog on 11th January, an account of a US Government Accounting Office investigation last year when it was tasked with seeing how it got on when trying to buy weapons on the Dark Web areas of the Internet. In In the course of the study, agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE, incidentally the agent that employed Elliot Ness) attempted to purchase firearms from different sources on the internet, after announcing they were a ‘prohibited person’ as defined by US law (which they achieved).
CLAIM RE CHINA “ETHNIC CLEANSING” OF UYGHUR MUSLIMS
In Extra News Feed, a crowdfunded investigative journalism feature claims that China is carrying out a systematic campaign to ethnically cleanse up to 15 million Uyghur Muslims in Xinjiang, or rather what was East Turkistan until China began occupying and colonizing the region in 1949.
US SENTENCES 3 FOR EXPORT OF AVIATION PARTS TO SYRIA (INCLUDING COMPANY’S EXPORT COMPLIANCE OFFICER)
On 20th December the US DoJ issued a news release advising that 3 Miami-Dade residents had been sentenced for their roles in a conspiracy to illegally export aviation parts and equipment to Syria. The exports were sent to Syrian Arab Airlines. Ali Caby ran the Bulgaria office of AW-Tronics, a Miami export company that was managed by Arash Caby, and which shipped and exported various aircraft parts and equipment to Syrian Arab Airlines. Marjan Caby, as AW-Tronics’ export compliance officer and auditor, facilitated these exports by submitting false and misleading electronic export information to federal agencies.
HOME OFFICE UPDATED MODERN SLAVERY AWARENESS GUIDANCE
On 12th January the Home Office issued updated training and awareness-raising resources available to public sector organisations to help their staff understand modern slavery and learn to spot the signs.
IRISH BONDED WAREHOUSE FIRMS WIN CASES OVER EXCISE DEMANDS FOR DRINK THAT WENT MISSING
On 12th January, Breaking News in Ireland reported that 2 bonded warehouse companies – Citywest Logistical Ltd (formerly Cassidy Wines) and Monaghan Bottlers – have won High Court cases in Ireland over excise demands for €2 million and €1 million respectively which arose after they said they were the innocent victims of fraud committed when consignments of alcohol leaving their premises did not arrive at their mainland Europe destinations.
LAW ENFORCEMENT AND PRIVATE SECTOR JOIN FORCES TO SHUT DOWN ILLEGAL STREAMING NETWORK IN EUROPE
On 12th January a Europol news release reported that a crime group suspected of hosting a large-scale illegal IPTV streaming business has been dismantled. The investigations were led by the Cypriot Police – Intellectual Property Crime Unit, with the support of the Cybercrime Division of the Greek Police, the Dutch Fiscal Investigative and Intelligence Service (FIOD), the Cybercrime Unit of the Bulgarian Police, and Europol, and with the support of members of the Audiovisual Anti-Piracy Alliance (AAPA). In total, 4 individuals have been arrested and 17 houses searches have been carried out in Cyprus, Bulgaria and Greece.
FORMER SOUTH KOREAN PRESIDENT PARK HAS ASSETS FROZEN
The Korea Times reports that a Seoul court on 12th January accepted prosecutors’ request to freeze assets owned by ousted President Park Geun-hye who is on trial for corruption.
US EXPORT CONTROLS FAQ
Available on the US Department of Commerce’s Bureau of Industry and Security (BIS) website is this short FAQ guide to help one understand US export controls of the Commerce Department, the Export Administration Regulations (EAR)
FinCEN SAR RULES UNAFFECTED BY ATTORNEY GENERAL STATEMENT ON MARIJUANA
On 12th January law firm Fox Rothschild said it had received confirmation that, despite the recent statement by the US Attorney General on enforcing the federal law on marijuana even if individual states had legalized possession or use, that the pre-existing FinCEN rules on SAR etc from 2014 continue in force (at least for the time being).
PARADISE PAPERS – HEAD OF ANGOLA SOVEREIGN WEALTH FUND SACKED
Risk & Compliance Hub on 12th January reported that the head of Angola’s sovereign wealth fund has been sacked, 2 months after he was named in connection with the Paradise papers. José Filomeno Dos Santos, the son of the previous president, was fired after 6 years as chairman of the board of the Fundo Soberano De Angola (FSDEA) – having been appointed then by the then president, i.e. his father. Leaked files showed how Dos Santos appointed a firm belonging to his friend, Jean-Claude Bastos, to manage the fund’s capital – who then invested in projects in which had an interest.
ISLE OF MAN TWEAKS ITS SOMALIA SANCTIONS
A news release from the Isle of Man confirmed that and a new order and regulations have given effect to EU Regulation 2017/2415, which amends EU Regulation 356/2010 to refer to the “United Nations Humanitarian Response Plan for Somalia” for the purposes of extending to it an exemption to the restriction on providing financing in the Somalia.
FCPA END OF YEAR REVIEW
Wilmer Hale on 12th January published its Foreign Corrupt Practices Act Alert – a Global Anti-Bribery Year-in-Review: 2017, Developments and Predictions for 2018. It identifies as key takeaways –
· Statistics for enforcement actions may be slightly lower in 2017 than in years past, but significant activity continues and 2017 saw several blockbuster cases.
· Prosecution of individuals was high in 2017, and individuals continue to be charged long after corporations settle.
· Non-U.S. companies were predominantly the targets, intentionally or unintentionally, of FCPA enforcement in 2017.
· International co-operation continues to be a hallmark of corruption enforcement worldwide, and non-U.S. enforcement continues to rise.
· The new 2017 FCPA Corporate Enforcement Policy is not a game changer, but it places more value on voluntary disclosure.
· Recent enforcement cases indicate that bribery schemes continue to evolve and become more sophisticated.
BULGARIA’S PARLIAMENT OPENS WAY FOR AN ANTI-CORRUPTION UNIT
Reuters on 12th January reported that Bulgaria’s parliament has overturned a presidential veto on anti-graft legislation, clearing the way for the creation of a special unit to investigate individuals occupying high public office as well as assets and conflicts of interest.
US CONGRATULATES LIBYA FOR DESTROYING REMAINING CHEMICAL WEAPONS
Defence Web on 12th January reported that the White House had congratulated Libya for destroying its remaining chemical weapons stockpile and called on Syria to eliminate its chemical weapons programme.
US RENEWS IRAN NUCLEAR DEAL
The Washington times on 12th January reported that President Trump has certified the JCPOA Iranian nuclear for another 120 days but warned that this is the last time, and the Administration imposed with fresh sanctions unrelated to the agreement.
ADDITIONAL US SANCTIONS, MOSTLY INVOLVING IRAN
On 12th January, OFAC in a news release added 5 new individuals and 9 new entities to its sanctions lists. Most were persons and entities in Iran, but also included were BOCHUANG CERAMIC INC of China, GREEN WAVE TELECOMMUNICATION of Malaysia, and Shi Yuhua and Yuequn Zhu from China.
MALTA MINISTER WELCOMES TAX CO-OPERATION REPORT
Tax News on 12th January reported that Malta’s Minister of Finance has welcomed the OECD’s 2017 International Tax Co-operation Report saying it shows the island is amongst the world’s most tax-compliant countries.
GRENADA HOPES TO BE OFF EU TAXBLACKLIST BY END OF JANUARY
On 12th January, Tax News reported that Grenada’s Prime Minister has said he expects the island will be removed from the EU’s tax “blacklist” by the end of the month. It was included on the list published on 5th December because it had yet to sign and ratify the OECD’s Multilateral Convention on Mutual Administrative Assistance, and had not committed to do so by 31st December 2018.
SHOULD DOMINICA BE REGARDED AS A HIGH-RISK JURISDICTION?
After reading Kenneth Rijock’s blog entries about Dominica, the reported unfreezing of assets that had been frozen at the request of the US SEC, and issue of passports, should one regard the island nation as a high risk?
UK GOVERNMENT RESPONDS TO CONCERNS OVER SANCTIONS AND AML BILL
On 12th January the always useful European Sanctions Blog reported that the UK Government had responded to concerns expressed by the House of Lords Constitution Committee on constitutional grounds about the Sanctions and Anti-Money Laundering Bill. The blog posting includes a link to the letter sent to the Committee.
RUSSIA DETAINS MAN AT BORDER WITH 1.5 TONNES OF COINS
Customs Today on 12th January carried a story about Russian customs detaining a foreigner of unspecified citizenship tried to take 25-ruble World Cup and 10-kopek coins with a total worth of approximately €61,200 and weighing 1.5 tonnes out of Russia INTO Estonia. He had acquired the coins legitimately from Moscow banks, but had not declared them.
BANGLADESH TO TEST IMPORTED FISH FOR HEAVY METALS
Customs Today on 12th January reported that Bangladesh Food Safety Authority has instructed testing of all imported fish for heavy metal from now after finding hazardous levels of lead, chromium and mercury in almost all the fishes brought in from abroad.
EUROPOL AND SOCIAL MEDIA DAY OF ACTION AGAINST TERRORIST MATERIAL ONLINE
Europol reports that on 11th January Europol’s Internet Referral Unit (EU IRU) organised the 8th joint Referral Action Day with colleagues from the national referral units of Belgium, France and the UK, to identify and secure the swift removal of terrorist and violent extremism content uploaded on Facebook and Instagram. It targeted content by terrorist groups and terrorist sympathisers, aiming at radicalising, recruiting and propagating terrorist activities.
FCA SERIOUS CONCERNS OVER CFD
Law news site Out-Law reports that in the UK the FCA has set out its “serious concerns” with contracts for difference (CFD) after a year-long review, and the way they are being promoted and sold to unsophisticated investors, which it has warned have the potential to cause “significant consumer harm”. The piece notes that CFD are currently under review by EU regulators, as well as those in the UK.
UK TO BE THIRD COUNTRY FOR DATA PROTECTION PURPOSES AFTER BREXIT
Out-Law on 12th January reports that a note from the European Commission has said that the UK will be a “third country” for personal data transfers from the point of Brexit, and so the flow of personal data from countries in the EU to the UK could be interrupted.
US-SAUDI TALKS ON NUCLEAR CO-OPERATION TO RESUME
On 12th January the Bulletin for Atomic Scientists carried an article saying that negotiations will soon resume between the US and Saudi Arabia on an agreement for civil nuclear co-operation. This, it points out, would enable US companies to participate in the ambitious plans of Saudi Arabia to build nuclear power reactors to meet its growing electricity requirements. Previous negotiations stalemated over the treatment of uranium enrichment, with the US insisting on a legally binding commitment not to engage in enrichment or plutonium reprocessing and the Saudis refusing to foreclose what they regard as their sovereign right to pursue nuclear technologies of their choosing for peaceful purposes.
RUSSIA REPORTS FIRST MASS-DRONE ATTACK IN SYRIA
Janes.com on 12th January provided further details about a previously-reported drone attack in Syria. Russian bases in Syria were subject to the first mass attack by unmanned aerial vehicles (UAV) – fitted with IED by the insurgents – on the night of 5th/6th January, the Russian Ministry of Defence said in a statement.
EMBRAER EXECUTIVE PLEADS GUILTY TO BRIBERY CHARGE IN US
On 12th January, AIN Online reported that Colin Stevens, 61, a former vice president of sales and marketing with Embraer Executive Jets and a UK national living in UAE, has pleaded guilty in the US in connection with a scheme to bribe a high-level Saudi Arabian government official in 2010 in exchange for assistance in selling Embraer aircraft to the country’s national oil company. See the DoJ news release on 21st December.
MORE ON CONVICTION OF NEPHEW OF FORMER UN SECRETARY GENERAL
On 12th January, law firm Buckley Sandler carried a detailed article about the case involving the nephew of former UN Secretary General Ban Ki-Moon.