After a slight setback with Windows Edge and uploading posts…here are the latest.
BLOCKCHAIN, TRADE FINANCE AND SANCTIONS ISSUES
An article by 3 representatives of law firm Clifford Chance in Financier Worldwide explains how blockchain technology could help with trade finance, but then cautions that the export ad use of technology originating in the US could be subject to US sanctions, and/or sanctions imposed by the EU or other countries. It cautions that failure to enter all relevant information (i.e. relevant information that is currently in the bills of lading, letters of credit and other shipping documents, such as inspection reports, certificates of origin and the commercial invoices) could also create problems with sanctions controls (particularly OFAC’s “should have known” knowledge standard. The article proposes 4 sanctions-specific functionalities that we believe developers should consider when creating and building blockchain for trade finance, and although focused on trade finance, these same sanctions-specific functionalities could be used in the development of other blockchain solutions.
SAN MARINO AML/CFT AND THE IMF
On 17th January, in its concluding statement on the preliminary findings of a staff visit to San Marino, the IMF included a comment relevant to AML/CFT. It said that “San Marino’s continued efforts to engage with the international community and enhance transparency are crucial. The recently ratified regulatory update of the AML/CFT framework will help improve the credibility of the system. A framework for due diligence should be developed for the new residency programs to safeguard financial integrity. Further co-operation with Italy, including establishing a memorandum of understanding with the Bank of Italy, will be important to strengthen institutional capacity of San Marino”.
THE IMF ROLE IN AML SURVEILLANCE
Meanwhile, a factsheet from the IMF published in October outlines the IMF role in respect of AML/CFT.
NIGERIAN BUSINESSMAN JAILED IN UK FOR MONEY LAUNDERING
PM News in Nigeria reports that Nigerian businessman Walter Wagbatsoma, 47, has been sentenced to 3½ years imprisonment for money laundering in the UK, and disqualified from being a company director for 6 years. His fraudulently obtained funds in the UK were laundered through an account in Dubai under the control of a co-conspirator convicted in his absence at an earlier trial in April 2017 and sentenced to 7 years imprisonment. The investigation was conducted by Lincolnshire Police Economic Crime Unit under Operation Tarlac, in which over £12 million was defrauded from public bodies including hospital trusts, housing associations and councils around the UK. Wagbatsama was arrested in Germany in 2016; an oil and gas businessman, he was then already on trial in Nigeria and sentenced to 10 years in absentia for his part in a £1.9 billion oil subsidy fraud in January 2017. This conviction is the thirteenth following a 4-year investigation and 4 trials involving Operation Tarlac.
MULTILATERAL CONVENTION TO IMPLEMENT TAX TREATY RELATED MEASURES TO PREVENT BASE EROSION AND PROFIT SHIFTING (MLI)
An article from law firm Gowling WLG on 17th January discusses the above treaty in the context of Canada. In passing it mentions that to date only Austria and the Isle of Man have ratified the MLI, though the OECD had announced that 5 countries were expected to ratify the MLI by the end of 2017 (with 5-country ratification is the first step in the MLI’s coming into effect).
For more information on the MLI –
RUSSIAN COURT SAYS PARALLEL IMPORTATION IS LEGAL
An article from Gowling WLG on 17th January deals with a December court case in Russia where an appeals court that appears to indicate that attempts to prevent parallel importation of goods would amount to unfair competition. A parallel import (aka “grey imports” or “grey goods”) is a genuine, non-counterfeit product imported from another country without the permission of the intellectual property owner. The article concludes by saying that parallel importation has been a hot topic in Russia and in the Eurasian Economic Union for some time, and if this court decision is upheld and if the Constitutional Court aligns with it, parallel importation may become entirely legal in Russia.
UPPER TRIBUNAL REFUSES PERMISSION FOR JUDICIAL REVIEW OF HMRC’S POLICY ON PRIOR MISAPPLICATION OF LAW
On 12th January, RPC published a briefing reporting that the Upper Tribunal has refused an application for permission to judicially review HMRC’s decision not to compensate the taxpayer beyond the scope of its published policy. The claimants ran residential care homes for profit and until 2002 HMRC had erroneously treated the supplies of services provided by residential care homes as being exempt from VAT. Business Brief 28/04 in 2004 said that care homes did not have to register for VAT for the period prior to 2002, but that a care home could register if it so wished and it would then have to account for VAT to HMRC. The Upper Tribunal found there was no representation that HMRC would apply a more favourable policy than had been published, and the only legitimate expectation created was that supplies made before 2002 would be treated as exempt. That expectation had been fulfilled by HMRC’s policy of not insisting that care homes register for VAT.
UPPER TRIBUNAL REJECTS APPLICATION FOR DISCLOSURE RELATING TO INTERNAL FCA DECISION-MAKING
On 16th January law firm Dentons reported that the Upper Tribunal dismissed an application for disclosure of materials relating to the FCA’s internal decision-making processes around initiating and pursuing action against approved individuals. The Complaints Commissioner did, however, say that the FCA’s failings in the case had been considerable but he did not believe the complainant’s request for damages was justified.
CE MARKING AFTER BREXIT
Squire Patton Boggs on 16th January in its Trade Practitioner newsletter reported that on 10th January, the European Commission published an important notice warning of the consequences that Brexit will have in the field of industrial products, which are subject to CE Marking requirements when placed on the EU market. Companies that wish to continue placing products on the EU market after Brexit day in 2019, and that previously relied on conformity assessments carried out by a UK Notified Body, will no longer be able to rely on those – but would need conformity carried out by a body on one of the other 27 Member States. The article also lists those products requiring CE marking.
SWISS CONSULTATION ON BEARER SHARES
Reuters on 18th January reported that the Swiss government, wary of being branded a tax avoidance pariah, said it was launching a public consultation on measures to convert anonymous bearer shares in private companies into registered shares which have owners’ names attached.
HEZBOLLAH BOMBING IN ISRAEL: TRIAL BEGINS IN BULGARIA
Novinite ON 18TH January reports that the trial in absentia of 2 Hezbollah operatives, who allegedly blew up an Israeli tour bus in 2012, killing 5 Israelis and their Bulgarian bus driver and injured 32 others, has begun in Sofia. The suspects Lebanese-Australian Meliad Farah and Lebanese-Canadian Hassan El Hajj Hassan fled to Lebanon but authorities there refused to extradite the men to Bulgaria, though Interpol has issued arrest warrants for them.
GHANA: “MISSING” BILLIONS OF GOLD EXPORTS
Pulse in Ghana reports that $5 billion were unaccounted for in gold exports from Ghana to the United Arab Emirates. According to a statement by the President, Ghana’s estimated gold exports to the UAE amounted to over $7 billion – however, official records suggest only $2 billion was accounted for in the government coffers. He blamed unscrupulous persons were also criminally disposing the nation off the value from illegal mining.
SINGAPORE TO CRACK DOWN ON WHITE COLLARE CRIME
Bloomberg on 18th January reported that Singapore says it is getting more serious about tackling white-collar crime. The police force’s financial crime-fighting unit — the Commercial Affairs Department – has declared a goal to target ill-gotten gains “more proactively,” especially those from overseas. This follows several high-profile cases, notably involving troubled Malaysian state fund 1MDB. The article also provides useful briefs on the 1MDB case, the Commercial Affairs Department, etc.
UK COURT OF APPEAL CONSIDERS DISCLOSURE AND BARRING SERVICE (DBS)
On 15th January the Law Society Gazette carried an article reporting on 2 recent cases the Court of Appeal which considered the application of ECHR Article 8 (the right to respect for private and family life) to Disclosure and Barring Service (DBS) checks undertaken on persons applying for certain jobs and positions. Both considered the interface of 2 important rules of public policy: an individual’s right to privacy in relation to events which have occurred in the past; and the public’s right to protection from harm through the regime for the disclosure of criminal records in relation to those working in certain professions, including with children and vulnerable adult. The Court of Appeal held that certain aspects of the current scheme were not ‘in accordance with law’.
FORMER ROCK BAND GUITARIST ARRESTED FOR FRAUD IN US
On 18th January the Guardian reported that the former bassist of the rock band the Ataris a woman were indicted on federal conspiracy and fraud charges in the US. Michael Sean Davenport, 49, was arrested last month and accused him of running a telemarketing business in Santa Barbara, California, for 8 years. The indictment alleges the business advertised houses and apartments it did not own at low prices and defrauding more than 100,000 people out of $27 million. He and Cynthia Rawlinson, his sales manager, are charged with wire and mail fraud and conspiracy to commit wire fraud.
BUSINESSMAN JAILED FOR SELLING THOUSANDS OF COUNTERFEIT SKY REMOTE CONTROLS
Business MK in Milton Keynes reports that a businessman has been jailed for 28 months after a raid by trading standards officers made the biggest seizure of counterfeit Sky products in the UK. Stephen Usher, director of Super Satellite Man Ltd and Sky Satellites Ltd, was sentenced at Luton Crown Court after previously pleading guilty to 4 offences including fraudulent trading.
NORTH KOREAN MALWARE HIJACKS COMPUTERS TO MINE MONERO CRYPTOCURRENCY
On 17th January a briefing reported that researchers at cybersecurity firm AlienVault have discovered a computer virus of North Korean origin which infects and hijacks computers in order to mine Monero, a private digital currency which styles itself as “secure, private and untraceable.”
COMORO ISLANDS “CANCELS 170 PASSPORTS ON GROUNDS OF ABUSE”
On 17th January, Kenneth Rijock reports that the Minister of Foreign Affairs of the Comoros Islands has revoked and cancelled 170 Comoros passports, all issued by Albert Karaziwan’s Semlex Group, to foreign nationals, on the grounds of abuse. Additionally, he has cancelled Karaziwan’s diplomatic passport, which names Karaziwan as a traveling Ambassador and Counselor to the President of the Comoros Islands, as well as all those passports issued to his wife and child. Rijock has previously Cast doubts on the credibility of Semlex.
BARCLAYS FOREX TRADER CHARGED WITH FRAUD IN US
Law 360 on 17th January reported that Robert Bogucki, 45, the former head of foreign currency exchange trading for a New York office of Barclays PLC has been charged with fraud and conspiracy for a purported scheme to defraud Hewlett-Packard out of millions of dollars by manipulating the market for foreign exchange options.
US CUSTOMS FIRST SALE RULE ENFORCEMENT
Sandler Travis & Rosenberg on 18th January advised importers to review transactions taking advantage of the first sale rule to ensure they are consistent with US Customs requirements. CBP is scrutinising imports using this valuation methodology more closely as part of a broader increase in enforcement efforts. Under the first sale rule, the entered value of a qualifying transaction may be based on the purchase price between the middleman/vendor and the manufacturer rather than the importer and the middleman/vendor.
PORTUGAL/SPAIN CRACK PINEAPPLE COCAINE GANG
Reuters on 17th January reported that Police in Portugal and Spain said they had seized hundreds of kilograms of cocaine hidden inside fresh pineapples, and arrested 9 members of a gang that had transported the drug from South America. The seizure, from shipping containers, was said to be part of an ongoing investigation across both countries that started April 2017.
TERRORISTS USING DARK WEB TO SOURCE WEAPONRY
Cipher Brief on 17th January reports that terrorists are turning to the Dark Web’s crypto-bazaars, social media channels and e-commerce sites to buy more coveted military equipment than the usual rocket launchers and AK-47 in the traditional black market. These digital black markets are also allowing terrorist organizations from Iraq, Syria, Libya and Yemen, as well as self-radicalized individuals in the West, to access a larger assortment of arms, explosives material and expertise from the comfort and anonymity of their home computers.
UK REVIEW OF THE NATIONAL SECURITY IMPACT OF FOREIGN INVESTMENT
On 18th January, Clifford Chance reported an article concerning the fact that the UK government has published proposals to strengthen its powers to review, and potentially block or unwind, investments on national security grounds. The impacts for infrastructure assets and projects can be significant. What should investors and investment managers know about this process and how to manage it going forward? The article takes the form of an interview with a partner from Clifford Chance.
ISIS IS STILL IN BUSINESS
On 17th January, Chatham House published a thought-provoking and important briefing claiming that, despite its defeat on the battlefield, ISIS is using Iraq’s black market to stockpile millions of dollars to fuel its coming insurgency. Once dubbed ‘the world’s richest terrorist organization’ by the UN, it has also lost an estimated 80% of the funds it acquired by conquering territory and mimicking the functions of a state, collecting taxes and tariffs from the citizens under its control; but the corrupt war economies of Iraq and Syria will allow ISIS to continue on and finance a dangerous insurgency. For example, it is claimed that ISIS has smuggled an estimated $400 million out of Iraq and Syria during its recent retreat. As ISIS returns to its insurgent roots, it has invested at least $250 million in legitimate businesses. Both in Baghdad and in recently liberated areas, it is relying on middlemen who are inspired not by its ideology but by the prospect of economic gain. It is claimed that many of the middlemen are tribal leaders or businessmen who have clean records and can hide their links to the terrorist organization. They are given a lump sum of cash to invest in a given business, and ISIS then takes a cut from the profits. Front companies include car dealerships, electronics shops and pharmacies — but the business of choice is currency exchanges.
MUTUAL TRADE RESTRICTIONS BETWEEN THE RUSSIAN FEDERATION AND UKRAINE WERE BROADENED AND EXTENDED FOR 2018
A briefing from Sayenko Kharenko from Ukraine reports on ongoing restrictions that were mutual restrictions, which had been snowballing between countries since 2015, were due to expire by 31st December 2017. It rehearses how both countries reached the current situation, how they continue and concludes that, the renewal of the active trade between Ukraine and the Russian Federation is not likely to be forthcoming in 2018 [which seems rather an understatement…].
CAPITAL FLIGHT FROM RUSSIA SOARS
On 18th January, rferl in its “Morning Vertical” email alert reported that the Russian Central bank claimed that capital flight soared to $31.3 billion in 2016, a 160% increase from 2016, and that foreign investors continued to flee Russia in 2017, withdrawing nearly $1 billion – claiming that this points to shaky economic foundations of the Russian economy.
RUSSIA PREPARES SANCTIONS AGAINST WADA OFFICIAL
It is reported via rferl that a preliminary sanctions list is circulating in the Federation Council that targets World Anti-Doping Agency President Craig Reedie and US Special Counsel Robert Mueller, and others involved in the removal of Russia from the 2018 Olympics.
SFO INVESTIGATION INTO DEFENCE COMPANY
On 18th January, the Independent reported that the SFO has opened a bribery, corruption and money laundering investigation into Hampshire-based defence company Chemring, saying that it would investigate Chemring as well as its subsidiary, Chemring Technology Solutions Limited (CTSL), after a self-report was made by the latter. Chemring, in a statement, said that the investigation relates to 2 historic contracts. The first was awarded to CTSL prior to the group’s ownership of the business concerned, it said. The second dates back to 2011.
REGISTER TO CRACK DOWN ON CRIMINALS LAUNDERING DIRTY MONEY THROUGH UK PROPERTY MARKET TO GO LIVE BY EARLY 2021
A news release from the Department for Business, Energy and Industrial Strategy on 18th January reports that a world-first register revealing owners of overseas companies buying property in the UK will go live by early 2021 to crack down on criminal gangs laundering dirty money in the UK, the government has announced, and will publish draft laws this summer and the register will go live by early 2021.
“NO EVIDENCE OF WRONGDOING BY GERMAN BANKS” INVOLVED IN PANAMA PAPERS
Expatica reports that Germany’s financial watchdog has said it has found no evidence of any large-scale wrongdoing by the German banks identified in the “Panama Papers” scandal.
US SEEKS DENATURALIZATION OF MAN WITH ALLEGED PARTICIPATION IN EXTRAJUDICIAL KILLINGS DURING THE BALKANS CONFLICT
In a DoJ news release of 18th January about action against a 51-year old man who allegedly obtained his naturalized US citizenship by fraud. Eso Razic, a native of the former Yugoslavia and subsequently a citizen of the Republic of Bosnia and Herzegovina, allegedly concealed his service in multiple paramilitary organizations during the conflict in the Balkans in the early 1990s. It is alleged that while serving as a member of those combatant groups, Razic participated in the extrajudicial killing of 3 individuals, including a wounded prisoner of war.
PORTUGUESE GOVERNMENT CRITICISED OVER PLANS TO OUST PROSECUTOR
Politico reports that the Portuguese government is under fire over plans to oust a prosecutor, Joana Marques Vidal, with a reputation for rooting out corruption among the political and business elite, after it said it would not renew his mandate. This followed criticism by the president of Angola – and anxious to avoid harming relations with that oil-rich former colony and major trading partner.
CZECH GOVERNMENT RESIGNATION EXPLAINED
Hromadske in Ukraine reports on the future of the 2 top positions in Czech politics — the prime minister and the president after the government of Prime Minister Andrej Babis failed a vote of confidence. As a result, the government has resigned and assumed an acting role until the new government can be appointed. He was named in an OLAF report into alleged misuse of EU funds.
SRI LANKA TO SET UP ACTION PLAN ON BRIBERY AND CORRUPTION
Colombo News in Sri Lanka reports that a gathering has been held to discuss setting up of an action plan for elimination of bribery and corruption, chaired by Secretary to the President. The action plan is aimed at ensuring sustainable development in economic, social, cultural, legal and environment fields in Sri Lanka through the elimination of bribery and corruption.
MALTESE BLOCKCHAIN REGULATOR TO LAUNCH WITHIN WEEKS
Tax News on 18th January reported that Malta is to introduce a dedicated legal framework and regulator for the blockchain, artificial intelligence, and Internet of things industries. The Unlock Blockchain conference at the Dubai International Financial Centre was told that Malta’s Government had worked closely with industry to come up with a legal framework that satisfies AML/CFT regulations without stifling technological innovation.
FORMER RUSSIAN BANKER DETAINED IN MONACO OVER $8.8 MILLION FRAUD
TASS in Russia reports on 18th January that former Investtorgbank management board chairman Vladimir Gudkov has been detained in Monaco on fraud charges, a law enforcement source told TASS.
LATVIAN LOGISTICS COMPANY BOSS DETAINED UNDER POLISH-ISSUED ARREST WARRANT
Radio Poland reports that the former chairman of the board of LDZ Logistics, a subsidiary of Latvian Railways, has been detained in Lithuania under a European Arrest Warrant issued by Poland. Verners Lūsis may have been detained over suspected involvement in an organized crime ring that was smuggling oil products and in fraud against Poland.
REPORT: UNDERSTANDING THE COSTS OF CYBER CRIME
On 18th January the Home Office released a report that outlines the development of an overarching framework for estimating costs and makes a number of recommendations on the design of future research into the costs of cyber crime. It results from the findings from the Costs of Cyber Crime Working Group, which ran between Autumn 2014 and Spring 2016. The Working Group was set up following a commitment in the Serious and Organised Crime Strategy (2013) to improve data quality associated with the costs of the cyber crime. The Working Group involved academics, officials from government departments, representatives from law enforcement and other industry bodies responsible for helping to tackle cyber crime.
COUNCIL OF EUROPE: ROMANIA MADE LITTLE PROGRESS AGAINST CORRUPTION
On 18th January Reuters reported that Romania has made little progress against corruption in state institutions in 2017 and concern persists about lack of transparency in the legal process, according to the Council of Europe’s anti-corruption agency, GRECO.
ALL THE SCANDALS INVOLVING NETANYAHU, AND WHERE THEY STAND
On 18th January Haaretz published this article summarizing the current position.
CLAIM THAT NORWAY VIOLATED PRIVACY LAWS IN ONLINE GAMBLING CRACKDOWN
On 18th January, Calvin Ayre reported that Europe’s online gambling industry trade group, EGBA, is challenging Norway’s efforts to block payments between gamblers and internationally-licensed gambling sites, as it announced that it had asked the Norwegian Data Protection Inspectorate (DPI) to investigate efforts by the Norwegian Gaming Authority (NGA) to prevent local gamblers from funding their online activity. The Norwegian Payment Act formally banned unauthorized online gambling transactions in 2010, but it wasn’t until last May that the NGA ordered Norwegian banks to stop processing transactions for 7 companies deemed to be facilitating online gambling transactions. The EGBA claims the NGA violated Norway’s privacy protection rules in order to obtain the account info that led them to the offending payment processors.
UK MINISTER ATTEMPTS TO CLARIFY DATA PROTECTION PLANS AFTER WATCHDOG’S CONCERNS
On 18th January, the Out-Law website reported that concerns that proposed new UK data protection laws threaten the independence of the country’s data protection watchdog are “misplaced”, a government minister has said.
ESMA CONSULTS ON POTENTIAL CFD AND BINARY OPTIONS MEASURES TO PROTECT RETAIL INVESTORS
The European Securities and Markets Authority (ESMA) has published a call for evidence on 18th January on potential product intervention measures relating to the provision of contracts for differences (CFD), including rolling spot forex, and binary options to retail investors. For binary options, it is proposed to prohibit the marketing, distribution or sale of binary options to retail investors.
ITALY’S “CHINESE MAFIA” PROBLEM
IBT Times reports that Italian anti-mafia police swooped on 33 suspected Chinese gang members involved in gambling, prostitution, drugs and the transport of Chinese goods across Europe. Detectives launched a series of dawn raids, codenamed Operation ‘China Truck‘, targeting the group who they say use mafia methods, such as intimidation, extortion and violence. The gang is based in Prato, Tuscany, but police said it had managed to extend its influence to Rome, Florence, Milan, Padua and Pisa. The criminal network also operates in parts of France and Germany. The network is “a dangerous organisation that had used force to take control of trucking, and was financed by its illegal activities,” said Italian Interior Minister Marco Minniti. The suspects originally come from the Zhejiang and Fujian eastern coastal provinces in China.
DIRTY GOLD IS THE NEW COCAINE IN COLOMBIA
The Bradenton Herald in the US reports that Colombia’s illicit mining industry, like the far-flung operation that police raided late last year, generates about $2.4 billion a year in criminal cash — 3 times more than the country’s notorious cocaine industry, according to some intelligence estimates; and like cocaine, the vast majority of illegal gold is being sent overseas to cities in Europe and the US. In the process, the precious metal has become the lifeblood of gangs and guerrillas and is turning once-pristine jungles into toxic landscapes tainted with mercury and cyanide. Criminal mining brings more money to criminal groups, to guerrilla groups, to mafias … than drug trafficking, the president of Colombia claimed in 2015.
19th January 2018
SRI LANKA GLYPHOSATE IMPORT BAN
Eurasia Review on 19th January reported that Sri Lankan tea workers are being affected by a government import ban on a popular weedicide as large plantations become overgrown with weeds. The country banned the import of glyphosate in 2015 under the Import and Export (control) Act over concerns that it could cause chronic kidney disease. Environmental groups say commonly used pesticides including glyphosate have been blamed for the deaths of more than 20,000 farmers in Sri Lanka over the past 2 decades because of their higher levels of cyanide, mercury and arsenic.
INDIAN BANK RAIDED ON ALLEGED MONEY LAUNDERING SUSPICIONS
On 18th January, the Hindustan Times in India reported that Central Bureau of Investigation (CBI) officers had searched the Pune Muslim Co-operative Bank headquarters, with simultaneous searches were conducted at the bank headquarters in Bhavani peth and its Azam campus branch. A CBI spokesperson from New Delhi said that the action was carried out on the basis of a complaint related to alleged money laundering in the aftermath of demonetization in India.
CURRENCY RESTRICTIONS EASED FOR RUSSIAN CITIZENS
Baker McKenzie has published a briefing advising that on 28th December the President of the Russian Federation had signed a law which eases certain Russian currency control restrictions for Russian citizens living abroad by amending a law of December 2003. The changes including use of funds from foreign accounts in Russia, and transfers of funds to accounts in OECD/FATF member states.
DISCLOSURE IS CHANGING: GET READY
On 18th January, law firm Clyde & Co issued a briefing saying that proposals have been announced in the UK for a 2-year pilot scheme, starting later this year, involving the introduction of new disclosure rules in the Business and Property Courts in England and Wales. The Disclosure Working Group (was established in May 2016 by the then Chancellor of the High Court) is currently seeking views on the proposals in a consultation which is open until the end of February 2018. The briefing outlines the key defects with the current system found by the Working Group, and the key points of interest of the new proposals. The briefing concludes that the Working Group’s reference to the need for a “wholesale cultural change” suggests that the proposed new rules will require a major shift in professional attitudes towards disclosure and entail a move towards more proactive, robust judicial management of this part of the litigation process; and, if the proposals are implemented, litigants will no longer be automatically entitled to search-based disclosure.
The Law Society Gazette on 19th January reported that the “radical new disclosure regime” for the Business and Property Courts will have a ’far-reaching effect on civil litigation’, a leading City lawyer has claimed. Ed Crosse, president of the London Solicitors Litigation Association and a member of the working group behind the proposals for disclosure reform, said the changes went ‘to the heart’ of civil litigation.
FRAUD: CRIMINAL CONDUCT – A PRIMER
On 17th January, Canadian law firm Blakes published the latest in its 6-part series of articles on corporate and financial crimes that seek to outlines basic principles of criminal and quasi-criminal law that may arise in the running of a business. The series consists of – 1. Criminal Law 101; 2. Criminal Fraud; 3. Bribery & Corruption Offences; 4. Money Laundering; 5. Securities-Related Offences; and 6. Competition.
This article is designed as a primer on criminal fraud, and it deals with what conduct gives rise to criminal liability for fraud.
Other articles can be found at http://www.blakesbusinessclass.com/
COUNCIL OF EUROPE: ROMANIA, LITTLE PROGRESS ON CORRUPTION
The Council of Europe’s anti-corruption body, GRECO, in its latest report concludes that Romania has made very limited progress to implement its recommendations to prevent and combat corruption in respect of members of parliament, judges and prosecutors.
NEW UN FRAMEWORK TO MEASURE AND EVALUATE ORGANISED CRIME
The Emirates News Agency reports that the UN Office on Drugs and Crime (UNODC) has announced the creation of a new framework for measuring and evaluating organised crime based on a set of indicators used to collect and analyse data on the activities and methods of criminal groups, the size of illegal markets, and factors that help to enable organised crime such as corruption, obstruction of justice. The analysis of such data will lead to more focused preventive methods to combat crime.
POLAND CRACKDOWN ON TAIWAN/CHINESE TELECOMS FRAUD RING
Taiwan News on 19th January reported that Poland has announced a crackdown on a fraud ring comprised of 48 Taiwanese and 2 Poles, who have been arrested. The ring was said to have made €1.8 million in a year from phone scams targeting Chinese nationals, pretending to be local police officers and threatening to initiate tax investigations if the victims refused to transfer money at their request. It reports that Polish police searched 5 villas in the capital city Warsaw, Krakow and Lublin to bust the ring. 1 Taiwanese and 1 Polish female are reportedly the ringleaders and are now under questioning.
POLICE ARREST AUTHENTICATORS, AUCTION STAFF IN COUNTERFEIT ART CASE
China.org on 19th January reports that Chinese police have arrested 24 suspects, including art authentication and auction personnel, in a case involving the production and sale of counterfeit copies of artworks by well-known Chinese painters and calligraphers. They are said to have cracked 3 art fraud rings and seized 1,165 counterfeit works and more than $4 million. The network covered the production, authentication, brokerage and auction of counterfeit copies of works by prestigious Chinese painters and calligraphers.
US COURT IMPOSES PENALTIES IN EXCESS OF $83 MILLION ON COMPANIES RUN BY BITCOIN SCAMMER
Finance Feeds on 19th January reported that the US SEC has secured an important victory against Bitcoin fraud. On January 18th a judge of the New York Southern District Court signed a number of orders granting SEC’s applications for final default judgements against 3 entities run by Bitcoin scammer Renwick Haddow: Bar Works, Bitcoin Store and Bar Works 7th Avenue.
SWITZERLAND CONSULTS ON TAX TRANSPARENCY MEASURES
Customs Today on 19th January reports that the Swiss Federal Council is consulting on recommendations made by the Global Forum on Transparency and Exchange of Information for Tax Purposes, to improve the transparency of beneficial ownership information. In 2016, the Global Forum rated Switzerland “largely compliant” with international standards for tax transparency and the exchange of information. The Federal Council has now proposed the conversion of bearer shares into registered shares. It has also proposed the introduction of a system of sanctions for shareholders who fail to comply with their duty to report beneficial ownership and for companies that breach their obligation to keep a register of shareholders and beneficial owners.
US IMPORT RESTRICTIONS SOUGHT ON URANIUM PRODUCTS
Sandler, Travis & Rosenberg on 19th January reports that the US Department of Commerce has received a petition requesting an expedited investigation of uranium products. The petition asserts that “excessive levels of imports” of such products, particularly from China, Kazakhstan, Russia, and Uzbekistan, are threatening US national security by destroying the domestic uranium mining industry.
UKRAINE PARLIAMENT PASSES BILL TO RECOVER REGIONS OCCUPIED BY RUSSIA
Jurist reports that the Ukraine parliament (Verkhovna Rada) passed a Bill that recognises regions currently under Russia-backed separatist control as “occupied” and supports retrieving those areas through political and diplomatic means while allowing for military action.
WORLDWIDE FREEZING ORDER: BANK CAN NOTIFY THIRD PARTIES
Out-Law on 18th January reports a case where a worldwide freezing order, obtained by a Cypriot bank in Cyprus, was fully enforceable immediately upon registration in England and Wales, the Court of Appeal has confirmed. Notifying third parties of the terms of the freezing order was not in breach of a Brussels 1 Regulation provision preventing the applicant from taking ‘measures of enforcement’ other than protective measures before the subjects of the order had exercised their right to appeal. The appeal court confirmed that notifying other banks of the existence of the freezing order was not a ‘measure of enforcement’.
DIRTY ENTANGLEMENTS: CORRUPTION, CRIME AND TERRORISM
In the latest TRACE podcast, Louise Shelley, founder of the Terrorism, Transnational Crime and Corruption Center, discusses her book about the links between the 3 international scourges.
CZECH BENEFICIAL OWNERSHIP CHANGES
On 18th January, Eversheds Sutherland reported the second phase of registering beneficial ownership in the Czech Republic that was implemented on 1st January. In order for entities to comply with these new duties, the company must register information on its beneficial owners, including the reasons why a particular person is considered beneficial owner. This information will be captured in the special Register of Beneficial Owners. The record will not be made public and will only be available to legally stated persons/state bodies. Companies have until 1 January 2019 to register this information.
TRUMP REBUKED CHINA FOR NORTH KOREA’S OIL SMUGGLING. IT’S MORE COMPLICATED.
The New York Times on 18th January ran a story about the alleged involvement of Chinese ships in illegal trade with North Korea. Trafficking on the high seas has become what these officials regard as a pernicious subversion of the sanctions, as North Korea turns more and more to illicit means to support itself. A United Nations diplomat said transfers were happening frequently in the Yellow Sea, the East China Sea and possibly the Sea of Japan. But the article claims that the “opaque” nature of the shipping industry complicates things – in one case, the ship’s flag showed that it was from Hong Kong, the oil originated with a multinational commodities trader, Trafigura Group, and was sold first to a company in Hong Kong, then to a company in Taiwan, the shipowner was a Hong Kong company whose owner lives in Mainland China, but the ship was leased by a Taiwanese fishing magnate whose company until last month was registered in the Marshall Islands.
US REPORT ON TERRORISM CONVICTIONS OF FOREIGN NATIONALS TO MAKE CASE FOR ENHANCED VETTING, SCREENING
On 18th January, Homeland Preparedness reported that 75% of those convicted of international terrorism or related charges in US federal courts from 2001 to 2016 were born in foreign countries, according to a report released by the Department of Homeland Security (DHS) and DoJ.