Day: February 14, 2018

14^th February 2018

 DEPARTMENT OF FINANCE REVIEWING CANADA’S AML/CFT REGIME

On 12^th February, Blakes in Canada published an article concerned with a consultation paper from the Canadian Department of Finance linked to the 5-year review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and which sets out policy considerations that call for amendments to the current AML/ATF regime.  Responses are required by 30^th April.  The consultation includes including proposals to considerably widen the scope of the regime, bringing in many sectors not covered, or currently partially covered.  It also proposes a great many amendments, clarifications and new or revised powers, requirements and controls.

The consultation is at –

https://www.fin.gc.ca/activty/consult/amlatfr-rpcfat-eng.asp

http://www.blakesbusinessclass.com/department-of-finance-reviewing-canadas-anti-money-laundering-and-anti-terrorist-financing-regime/

VALENTINES DAY WARNING ON “TRANSACTION LAUNDERING”

Payments Source on 13^th February warns businesses that Valentines Day is a perfect cover for launderers to use “transactions laundering” – a form of money laundering that occurs when an unknown business uses an approved merchant’s payment credentials to process card payments for unknown products and services.  The sophisticated, merchant-based fraud scheme takes advantage of the e-commerce ecosystem by funnelling illegal, illicit or unknown transactions through legitimate merchant accounts.

https://www.paymentssource.com/opinion/transaction-launderers-love-valentines-day

THE WORLD’S WORST MONEY LAUNDERING COUNTRIES

In coverage of the latest Tax Justice Network Financial Secrecy Index, the blog site Boing Boing says that the US has moved up in the Index to number 2, behind Switzerland; in reality, though, the UK is the world’s worst money-laundry, but because its laundering activities are spread out over its overseas territories — taken as a whole, the UK leads the world in helping criminals and looters hide their fortunes.

https://boingboing.net/2018/02/13/1-6-trillion-per-year.html

UK SUB-POSTMASTERS LEGAL FIGHT TO CLEAR NAMES BACKED

Manx Radio reports that hundreds of sub-postmasters in the UK have secured funding for a class action lawsuit against the Post Office following an IT fiasco which left them accused of false accounting or theft, with an allegedly faulty computer system which mistakenly showed their branches to be in financial deficit. The Post Office has previously said that it intends to defend the sub-postmasters’ claim and denied any general issues with the system, Horizon.  It reports that Sky News has said that Therium Capital Management, a specialist litigation funder, has agreed to back the ‎claim, which has attracted more than 550 participants to date.

http://www.manxradio.com/news/uk-business/postmasters-land-funding-for-legaland8206-clash-over-post-office-it-fiasco/

UK HAULAGE DIRECTOR DISQUALIFIED FOR REMOVING ASSETS

On 13^th February, CCH Daily reported that the director of a Perth-based haulage company has been disqualified for 7 years for selling company assets for his own benefit, leaving creditors including HMRC unpaid, following an Insolvency Service investigation.  Gilmour McFarlane was the sole director of Garden Haulage Ltd.

https://www.accountancylive.com/haulage-director-disqualified-removing-assets

BULGARIA ADOPTS NEW ANTI-CORRUPTION LEGISLATION

On 9^th February, CMS Law published a briefing relating that, on 19^th January, a new Anti-corruption and Forfeiture of Assets Act (AFAA) entered into force in Bulgaria, replacing 2 existing pieces of legislation – the Prevention of Conflict of Interest Act, and the Forfeiture of Illegally Acquired Assets Act.  In addition, the AFAA creates a single commission to enforce the law from the various commissions that existed before.

http://www.cms-lawnow.com/ealerts/2018/02/bulgaria-adopts-new-anti-corruption-legislation?cc_lang=en

FAQ: HOW CUSTOMS UNIONS WORK

In the light of the ongoing Brexit discussions, Politico has provided its guide to how customs union work.

https://www.politico.eu/article/brexit-customs-unions-faq/?utm_source=POLITICO.EU&utm_campaign=7dc93c564f-EMAIL_CAMPAIGN_2018_02_14&utm_medium=email&utm_term=0_10959edeb5-7dc93c564f-190081609

FINCEN ISSUES REQUESTS FOR COMMENTS ON RENEWAL OF BSA CURRENCY TRANSACTION REPORTING (CTR) AND SAR REQUIREMENTS

On 12^th February, Buckley Sandler published an article which says that FinCEN has issued 2 notices and requests for comments in the Federal Register seeking renewals without change of currently approved Bank Secrecy Act regulatory requirements for covered financial institutions – concerning the continuance of currency transaction reporting (CTR) requirements, and the addressing suspicious activity reporting requirements. Comments must be received by April 10^th

https://buckleysandler.com/blog/2018-02-12/fincen-issues-requests-comments-renewal-bsa-currency-transaction-and-suspicious-activity-reporting-requirements#page=1

ONE-STOP SECURITY ARRANGEMENT BETWEEN EU AND SINGAPORE ENTERS INTO FORCE

The Transportwatch blog posted an entry on 13^th February about the One-Stop Security arrangement provides for the mutual recognition of security screening rules at airports, so that passengers and baggage originating from Singapore airport can transfer onto a connecting flight in the EU and in the EEA without going through security checks a second time.  The arrangement will also reduce time and costs for airport operators and airlines.

http://www.transportwatch.eu/en/the-one-stop-security-arrangement-between-the-european-union-and-singapore-has-entered-into-force/#page=1

CANADA ANNOUNCES 2 NEW INITIATIVES TO HOLD COMPANIES ACCOUNTABLE FOR HUMAN RIGHTS VIOLATIONS ABROAD

On 13^th February, Littler Mendelson published a briefing about initiatives to strengthen Canada’s approach to responsible business conduct for Canadian companies doing business and operating abroad – an independent Canadian Ombudsperson for Responsible Enterprise, and the creation of a multi-stakeholder Advisory Body comprising civil society and industry experts to advise the Government and the Ombudsperson on corporate conduct abroad.

https://www.littler.com/publication-press/publication/canada-announces-two-new-initiatives-hold-companies-accountable-human

HOW DOES INTERPOL DEAL WITH REQUESTS TO DELETE RED NOTICES ON POLITICAL AND OTHER GROUNDS?

Nyman Gibson Miralis on 9^th February published a briefing that summarises 2 cases in 2017 in which the Commission for the Control of Interpol’s files (CCF) reviewed requests to delete an Interpol Red, and which illustrate a range of factors taken into consideration by the CCF in the decision-making process, including the existence of political factors.

A Red Notice is an electronic alert published by the INTERPOL General Secretariat seeking the detention, arrest or general restriction of movement of a wanted person, and is often used to detain a person for the purpose of extradition.

https://ngm.com.au/interpol-requests-to-delete-red-notices-political/

19^TH ANNUAL REPORT FROM EU ON THE CONTROL OF EXPORTS OF MILITARY TECHNOLOGY AND EQUIPMENT

On 14^th February, the EU published this report which covers statistics on licences and exports of conventional arms from EU Member States during the 2016 calendar year, and non-exhaustive information on intra-EU transfers of defence-related products.  It lists the third countries that have aligned themselves with the EU rules and established an information-exchange arrangement – Albania, Bosnia and Herzegovina, Canada, the former Yugoslav Republic of Macedonia, Georgia, Iceland, Montenegro and Norway.  Member States have also put in place separate arrangements for the exchange of information on arms brokers’ licences granted and denied.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2018.056.01.0001.01.ENG&toc=OJ:C:2018:056:TOC

AN INDIAN BANK JUST UNCOVERED A $1.7 BILLION FRAUD AT A SINGLE BRANCH

Quartz Media on 14^th February reported that Punjab National Bank (PNB), India’s second-largest government-owned lender, has discovered a fraud worth $1.77 billion at one of its branches in Mumbai. This amount is nearly a third of the bank’s market value.   It reports that PNB was already under scrutiny, after the Central Bureau of Investigation (CBI) booked billionaire diamond merchant Nirav Modi, his business partner, and his family members for allegedly cheating the bank in 2017, with 2 employees also alleged to have colluded with Modi.

https://qz.com/1206812/punjab-national-bank-duped-of-nearly-a-third-of-its-market-value-from-a-single-branch/?src=ilaw

CHINESE PROVINCE SAYS FORMER LEADER’S GRAFT CASE INVOLVES HUGE SUMS

Reuters on 14^th February reported that the corruption case against former senior Chinese official Sun Zhengcai involves massive sums rarely seen in the country’s modern history, the government of one of the provinces he used to run said.  Chinese prosecutors this week charged Sun with bribery during various posts going back 15 years in Chongqing, Beijing, Jilin province, and as Minister of Agriculture, the latest development in a corruption probe into a man once considered a contender for top leadership.

https://www.reuters.com/article/us-china-corruption/chinese-province-says-former-leaders-graft-case-involves-huge-sums-idUSKCN1FY0QC?feedType=RSS&feedName=worldNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FworldNews+%28Reuters+World+News%29&src=ilaw

SRI LANKA LAUNCHES PROGRAMME TO COMBAT FRAUD AND CORRUPTION

Eurasia Review on 14^th February reported that Sri Lanka’s Presidential Secretariat has made arrangements to implement a wide programme to combat bribery, corruption, fraud, malpractices and waste, and will function under the centre for combating corruption, bribery, fraud, malpractices and waste set up at the Presidential Secretariat.

http://www.eurasiareview.com/14022018-sri-lanka-launches-program-to-combat-fraud-and-corruption/?src=ilaw

FCA FLEXES MUSCLES WITH FIRST ‘SERIOUS CRIME’ ORDER

On 14^th February, the Law Society Gazette carried a report on the first use of a Serious Crime Prevention Order (SCPO) in the UK, against an illegal moneylender.  The order prevents him from conducting any business in the credit sphere, limits the number of bank facilities he is permitted to operate, and requires him to make disclosures of those banking facilities to the FCA. Breaching the terms can result in a 5-year jail term.

https://www.lawgazette.co.uk/law/fca-flexes-muscles-with-first-serious-crime-order-/5064751.article

UK REPORT ON KURDISH ASPIRATIONS

On 11^th February, the House of Commons Library published a report about aspirations of the Kurds and UK interests, and saying that there’s a clear risk of new fighting in the Middle East.

https://www.parliament.uk/business/committees/committees-a-z/commons-select/foreign-affairs-committee/news-parliament-2017/kurdish-aspirations-report-published-17-19/

FROM 2020, RUSSIA WILL INTRODUCE A COMPULSORY SYSTEM FOR TRACKING PHARMACEUTICALS FROM MANUFACTURER TO END-USER

On 13^th February, Dentons published an article saying that to ensure effective quality-control for pharmaceuticals and afford protection against fake and counterfeit medicines in Russia, a federal state IT system is going to be set up in Russia for monitoring the movement of pharmaceuticals from manufacturer to end-user.

https://www.jdsupra.com/legalnews/from-2020-russia-will-introduce-a-73953/

GIBRALTAR GOVERNMENT AND GIBRALTAR FSC ANNOUNCE PLANS FOR TOKEN LEGISLATION

On 12^th February, a news release formally announced that the parties are developing legislation relating to tokenised digital assets (tokens), essentially those created and traded using distributed ledger technology (DLT).  It says that after taking into account stakeholder feedback, work has now started on drafting legislation to regulate: the promotion, sale and distribution of tokens by persons connected with Gibraltar; secondary market activities relating to tokens, carried out in or from Gibraltar; and the provision, by way of business, in or from Gibraltar of investment advice relating to tokens.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2018/Press%20Releases/82-2018.pdf

COCAINE WORTH NEARLY £1 MILLION SEIZED IN ‘TRUMP’ BRANDED PACKAGES AT HARWICH PORT

The East Anglian Daily Times on 14thFebruary reported that more than 12 kg of cocaine packaged with “Trump” branded American flags was seized.  Border Force officers discovered the Class A drugs in a lorry load of paper towels at Harwich International Port after an X-ray scan revealed an anomaly.

http://www.eadt.co.uk/news/border-force-seize-trump-branded-cocaine-at-harwich-port-essex-1-5391670

WHY NORTH KOREA AND IRAN GET ACCUSED OF NUCLEAR COLLUSION

On 12^th February, the Bulletin of Atomic Scientists carried this article saying that recent allegations have run the gamut from speculation about new political ties between the 2 countries to claims that they are building a nuclear weapon together.  At first glance, it would seem that Iran-North Korea military or even nuclear co-operation makes sense.   However, this article says that while this logic seems to suggest that Iran and North Korea are meant for each other, the record of the last 3 decades points to a different conclusion, and it quotes a source that interviews with Russian and Ukrainian specialists aiding the Iranian missile program during the late-1990s suggest that co-operation between Pyongyang and Tehran was isolated and not comprehensive, and on the nuclear front, there appears to have been no co-operation.  The article suggests there may be deliberate attempts to mislead about the level of co-operation.

https://thebulletin.org/why-north-korea-and-iran-get-accused-nuclear-collusion11504

FIFTH AMENDMENT AND FINANCIAL CRIME:  CAN STAYING SILENT PREVENT ASSET FORFEITURE?

KYC 360 on 14^th February carried an article in which Stefan Cassella of Asset Forfeiture Law, LLC summarises a recent case in which the US Government’s attempts and queries to seize the alleged criminal funds of a Defendant were met with ‘silence’ – the Defendant refused to discuss them, saying requiring him to respond in greater detail would violate his 5^th Amendment right against self-incrimination.  The defendant argued that requiring him to respond in greater detail would violate his 5^th Amendment right against self-incrimination, but the court held that the defendant had waived that right when he gave a partial answer to the questions put to him.

https://kyc360.com/article/fifth-amendment-financial-crime-can-staying-silent-prevent-asset-forfeiture/

FINANCIAL INTELLIGENCE UNIT (TIPPING OFF) REGULATIONS 2018

On the agenda for the February sitting of Tynwald in the Isle of Man are these Regulations (SD 2018/37) which, from 1^st March, have the effect of making “tipping off” an offence.  The FIU has identified there is a need to deter persons in receipt of requests for information made by the FIU from tipping off by making tipping off an offence.

http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2018-SD-0037.pdf

ISLE OF MAN UPDATES SOMALIA SANCTIONS LEGISLATION

Also on the agenda for the February sitting of Tynwald in the Isle of Man are the European Union (Somalia Sanctions) (Application) (Amendment) Order 2018 (SD 2018/ 0016) and Somalia Sanctions (Amendment) Regulations 2018 (SD 2018/17) which, with effect from 11^th January, gave full effect in the Island to Council Regulation (EU) 2017/2415.

http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2018-SD-0016-MEMO.pdf

GAMBLING (ANTI-MONEY LAUNDERING AND COUNTERING THE FINANCING OF TERRORISM) ACT 2018 AND CASINO (AMENDMENT) ACT 2018 IN THE ISLE OF MAN

Also on the agenda for the February sitting of Tynwald in the Isle of Man was the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018 (Appointed Day) Order 2018 (SD 2018/42) which brings into operation the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018 which provides the Gambling Supervision Commission the necessary powers to conduct regulatory oversight of the gambling sector’s compliance with AML/CFT legislation; to provide sanctions for non-compliance; and for connected purposes, with effect from 24^th January.

At the same time, the Casino (Amendment) Act 2018 (Appointed Day) Order 2018 (SD 2018/43) brings into operation the Casino (Amendment) Act 2018 which permits the revocation of a licence in cases of non-compliance with AML/CFT legislation; to permit the premises in which casinos are located and the facilities and amenities provided under casino licences to be varied; to permit the Council of Ministers additional discretion in relation to deposits for concessions; and for connected matters, with effect from 24^th January.

http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2018-SD-0042.pdf

ISLE OF MAN CUSTOMS AND EXCISE BILL TO BE SIGNED

Finally, also on the agenda for the February sitting of Tynwald in the Isle of Man is for the Customs and Excise Bill to be signed.  To come into operation on a date to be announced, the Bill makes various amendments to customs and export control law.  Amongst other things, the Bill implements a Moneyval recommendation that the Treasury be obliged to maintain full records of cash declarations made to the customs service, and will require an annual report to Tynwald of cash declaration and cash seizures by the service.  It also extends the ability of the service to co-operate with authorities outside the Island where civil (as opposed to criminal) inquiries or civil penalties are involved.  Finally, it makes a small amendment to existing legislation to facilitate the submission of sanctions-related reports to the FIU (to enable it to fulfil the role of a “one-stop shop” for all forms of financial crime reports).

https://consult.gov.im/treasury/customs-and-excise-bill-2017/supporting_documents/customsandexcisebill.pdf

OFAC TARGETS COLOMBIANS LINKED TO OFICINA DE ENVIGADO CRIME BOSS

On 14^th February, OFAC designated longtime Colombian criminal Javier Garcia Rojas (aka “Maracuya”) and 2 other Colombian nationals as Specially Designated Narcotics Traffickers (SDNT) for their links to previously designated SDNT, Jose Bayron Piedrahita Ceballos, and the Colombian criminal group La Oficina de Envigado (aka “La Oficina”).  OFAC also designated 4 Colombian companies owned, controlled, or directed by the designated individuals.  The designations are said to be for their attempts to undermine joint US-Colombian investigations into the criminal activities of La Oficina and Jose Bayron Piedrahita Ceballos.  The 4 companies designated include 2 Medellin-based agricultural businesses owned by Javier Garcia Rojas (Agroconstrucciones Las Palmeras S.A.S. and MMAG Agricultural Global S.A.S.) as well as an investment company controlled by Ruth Garcia Rojas (Pinzon & Garcia S. En C.S.) based in Cali.  Also designated is a small automotive repair business in Medellin called Euromecanica, owned by Wilton Cesar Hernandez Durango.

https://home.treasury.gov/news/press-release/sm0289

GAME-CHANGERS AND WHISTLE-BLOWERS: TAXING WEALTH

A posting on the IMF blog on 13^th February puts forward some possible solutions to how tax systems can assist in addressing excessive increases in wealth inequality, as recently discussed at the World Economic Forum in Davos.  These include – Go after the big money, with a risk-based approach to high net wealth individuals; the design of the tax system matters, it may make sense to tax different types of wealth in different ways; go after the hearts and minds to get to the pockets; bring in coalitions for support, utilise civil society, journalism etc; and think about the wealth managers, intermediaries who help hiding wealth care about their reputations.

https://blogs.imf.org/2018/02/13/game-changers-and-whistle-blowers-taxing-wealth/

SOUTH AFRICA: GUPTA NEPHEW AMONG 5 ARRESTED FOLLOWING POLICE RAIDS

Times Live in South Africa on 14^th February reported that at least 3 close Gupta associates‚ including the nephew of controversial brothers Atul‚ AJ and Rajesh Gupta‚ are to appear in the Bloemfontein Magistrates Court on charges of money laundering‚ corruption and theft of state money. They include Gupta lieutenants Ashu Chawla and Ronica Ragovan‚ and nephew Varun Gupta – and were among 5 people arrested in raids by the specialist police unit, the Hawks, on 14^th February.  The raids were carried out on the Gupta family’s Saxonwold compound‚ homes in Bedfordview and Houghton‚ as well as at the Sahara Computer head office in Midrand‚ Johannesburg. Simultaneous raids were also carried out at Free State provincial government offices.

https://www.timeslive.co.za/politics/2018-02-14-gupta-nephew-among-five-arrested-following-hawks-raids/?src=ilaw

Meanwhile, Baker McKenzie reports that the ANC on 14^th February unveiled plans to sack South African President Jacob Zuma via a parliamentary no-confidence vote, hours after armed police raided the luxury home of his friends the Gupta brothers, investigating corruption allegations.  The raid marked a dramatic escalation in the pressure on Zuma and the political faction around him accused of milking state resources for their own ends. Zuma, 75, denies any wrongdoing and it remains unclear whether he will throw in the towel or dig in deeper.

http://www.riskandcompliancehub.com/south-african-police-raid-gupta-home-anc-to-sack-zuma-via-parliament/

GUATEMALA EX-PRESIDENT, 10 CABINET MEMBERS ARRESTED ON CORRUPTION CHARGES

Jurist on 14^th February carried a report on the arrest of Guatemala’s former president Álvaro Colom and 10 former cabinet members on corruption and graft charges, including Alberto Fuentes Knight, the former finance minister who is now the chairman of Oxfam International.

www.jurist.org/paperchase/2018/02/guatemala-ex-president-10-cabinet-members-arrested-on-corruption-charges.php

BANK NEGLIGENT AFTER PAYING OUT CLIENT MONEY ON FRAUDULENT INSTRUCTION FROM SOLE DIRECTOR

Out-Law on 14^th February reported on a Court of Appeal case where a bank which made payments from a client account on the fraudulent instruction of the client’s director and sole shareholder was liable in negligence after the client company went into liquidation.  However, it is stressed that this was an unusual case; and it was unlikely that banks would face a “flurry of similar claims”, according to financial litigation.  In the decision, the first to go against the general rule that banks are not liable if the customer authorised the payment, it was said that where a bank has concerns about a customer being in financial difficulty it should pay close attention to any unusual payment instructions received from one director of it.

https://www.out-law.com/en/articles/2018/february/bank-negligent-after-paying-out-client-money-on-fraudulent-instruction-from-sole-director/

INTEROPERABILITY BETWEEN EU INFORMATION SYSTEMS FOR SECURITY, BORDER AND MIGRATION MANAGEMENT

A briefing paper has been produced for the EU Parliament as the initial appraisal of a European Commission Impact Assessment of 12^th December.  The EU has an initiative which aims to make information exchange and data sharing between the various EU information systems more effective and efficient, fully upholding fundamental rights, so as to boost the protection of the EU’s external borders, improve migration management and enhance internal security.  However, the Impact Assessment says that there are 2 basic problems – first, information provided by EU systems is not always complete, accurate and reliable; and second, end-users do not always have fast and systematic access to all the information they need to perform their tasks. It identified 2 problem drivers:  a fragmented architecture of data management for borders and security where information is stored separately in unconnected systems, leading to blind spots; and a complex landscape of differently governed information systems.  The appraisal criticises the Impact Assessment, ad says that the range of options offered are limited.

www.europarl.europa.eu/RegData/etudes/BRIE/2018/615649/EPRS_BRI(2018)615649_EN.pdf

SWISS BANKING REGULATOR IDENTIFIES VIDEO CLIENT ON-BOARDING ABUSE RISK

KYC 360 on 14^th February reported that the Swiss Financial Market Supervisory Authority (Finma) has launched a consultation (until 28^th March) towards updating the due diligence requirements for client on-boarding through digital platforms, 2 years after its video and online identification procedures were enacted.  Although the digital identification experience has been ‘positive’ and financial intermediaries have adapted their processes, new risks of misuse have also emerged, Finma has explained, with suggestions that such risks could be linked to money laundering.  Finma proposes that video identification process may still be carried out despite evidence of a higher risk level. However, the business relationship may be established only after the consent of the line manager, a superior instance or senior management, and other changes to processes are proposed.

https://kyc360.com/news/banking-swiss-regulator-identifies-video-boarding-abuse-risk/

In the latest podcast from TRACE International in its series, “Bribe, Swindle or Steal”, Roman Borisovich of ClampK discusses going undercover to film his documentary, “From Russia with Cash”, which exposes exploitation of the London real estate market by kleptocrats and money-launderers. He is also the architect of London’s “Kleptocracy Tours”.

https://www.traceinternational.org/bribe_swindle_or_steal

OCCRP on 14^th February reported that the mayor of Odessa and his deputy were arrested at the Boryspil international airport near Kyiv on suspicion of embezzling state property.  The National Anti-Corruption Bureau (NABU) had been investigating 4 officials of the city hall of Odessa, including mayor Hennadiy Trukhanov, on suspicion of “Acquisition of property by abuse of office”.  Border guards detained Trukhanov as he landed from Warsaw after a 7-week vacation in Greece, Switzerland, the Czech Republic and Poland.  Ukrainian media reported that the director of the communal property department and the head of the standing commission on communal property of the Odessa City Council were also under investigation.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7643-ukraine-mayor-arrested-in-us-7m-embezzlement-probe

Law 360 on 14^th February reported that a UK-based e-retailer of luxury cashmere and fashion apparel, Pure Collection Ltd, and its CEO, Samantha Harrison, have agreed to pay more than $900,000 to resolve allegations the company evaded US customs duties on merchandise shipped to the US, in that it violated the False Claims Act by failing to pay import tariffs on orders it shipped to US customers.

https://www.law360.com/articles/1012217

On 14^th February, OFAC designated longtime Colombian criminal Javier Garcia Rojas (aka “Maracuya”) and 2 other Colombian nationals as Specially Designated Narcotics Traffickers (SDNT) for their links to previously designated SDNT, Jose Bayron Piedrahita Ceballos, and the Colombian criminal group La Oficina de Envigado (aka “La Oficina”).  OFAC also designated 4 Colombian companies owned, controlled, or directed by the designated individuals.  The designations are said to be for their attempts to undermine joint US-Colombian investigations into the criminal activities of La Oficina and Jose Bayron Piedrahita Ceballos.  The 4 companies designated include 2 Medellin-based agricultural businesses owned by Javier Garcia Rojas (Agroconstrucciones Las Palmeras S.A.S. and MMAG Agricultural Global S.A.S.) as well as an investment company controlled by Ruth Garcia Rojas (Pinzon & Garcia S. En C.S.) based in Cali.  Also designated is a small automotive repair business in Medellin called Euromecanica, owned by Wilton Cesar Hernandez Durango.

https://home.treasury.gov/news/press-release/sm0289

Courtesy of ETH Zurich.

http://www.css.ethz.ch/en/services/digital-library/articles/article.html/d3aa5f60-e908-41e8-9e7b-1591cfe87841

 

On 13^th February, the International Business Times reported that a Brazilian man attempting to travel through Lisbon Airport in Portugal was detained by police for allegedly carrying 1 kg of cocaine in a fake bum.  The unnamed 32-year-old was travelling into the city from northern Brazil, and a second man, aged 40, was arrested at a train station in the city on suspicion of being the intended recipient of the drug haul.

http://www.ibtimes.co.uk/brazilian-man-caught-trying-smuggle-kilo-cocaine-large-fake-arse-1660989

Quartz Media on 14^th February reported that Punjab National Bank (PNB), India’s second-largest government-owned lender, has discovered a fraud worth $1.77 billion at one of its branches in Mumbai. This amount is nearly a third of the bank’s market value.   It reports that PNB was already under scrutiny, after the Central Bureau of Investigation (CBI) booked billionaire diamond merchant Nirav Modi, his business partner, and his family members for allegedly cheating the bank in 2017, with 2 employees also alleged to have colluded with Modi.

https://qz.com/1206812/punjab-national-bank-duped-of-nearly-a-third-of-its-market-value-from-a-single-branch/?src=ilaw

12^th February 2018

 2 NEW FAQ ABOUT US VENEZUELA SANCTIONS

On 12^th February, OFAC published 2 new FAQ relating to its Venezuela sanctions.  They provide additional guidance on the debt-related prohibitions in Executive Order 13808, including the meaning of “new debt” and the receipt of certain late payments from the Government of Venezuela, including Petroleos de Venezuela, S.A. (PdVSA).

OFAC does not consider debt that was created prior to August 25^th 2017 to be “new debt” so long as the terms of the debt instrument (including, for example, the length of the repayment period or any interest rate applied) agreed to by the parties do not change on or after August 25^th 2017.  Such pre-existing debt does not need to conform to the 30- or 90-day limits, and US persons may collect and accept payment for such debt regardless of whether the relevant segment of the Government of Venezuela, including PdVSA, pays during the agreed-upon payment period.

The second new FAQ is: for debt created on or after August 25^th 2017, are US persons permitted to accept payment from PdVSA or other segments of the Government of Venezuela if payment for a debt is not received within the applicable period specified in EO 13808 (90 days for PdVSA, 30 days for other segments of the Government of Venezuela)?  The basic answer is no, unless a licence is held or authorised by OFAC.

https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#553

US CHARGES 5 VENEZUELANS IN PDVSA BRIBERY CASE

The Seattle Times on 12^th February carried an AP story saying that US prosecutors have unsealed charges against 5 former Venezuelan officials in connection with an alleged major bribery scheme at Venezuela’s state-run oil giant PDVSA.  Among those charged with money laundering are Rafael Reiter and Deputy Energy Minister Nervis Villalobos. The indictment alleges that PDVSA vendors sent more than $27 million in bribes to Swiss accounts controlled by Villalobos and another former official, Luis Carlos Leon, who was also charged.  All 3 men were arrested in Spain last year and are facing extradition.  The DoJ has now announced charges against a total of 15 individuals as part of a larger probe into bribery at PDVSA.

https://www.seattletimes.com/business/us-charges-5-ex-venezuelan-officials-in-oil-bribery-probe/?src=ilaw

 

UKRAINE DEPORTS OPPOSITION LEADER SAAKASHVILI TO POLAND

Deutsche Welle on 12^th February reported that the Ukraine had deported former Georgian president Mikheil Saakashvili, 4 years after he had moved to Ukraine and become a leader of anti-corruption protests there.

http://www.dw.com/en/ukraine-deports-opposition-leader-saakashvili-to-poland/av-42557409?src=ilaw

HONG KONG ISSUES REVISED GUIDELINES FOR “VIRTUAL BANKS”

On 12^th February, Hogan Lovells reported that, on 6^th February, the Hong Kong Monetary Authority published draft revisions to its “Guideline on Authorization of Virtual Banks”.  The framework will support the authorisation in Hong Kong of ‘virtual banks’, defined as banks which deliver retail banking services primarily, if not entirely, through the internet or other electronic channels rather than through physical branches. Consultation on the Draft Guideline is open to the public to 15^th March.

https://www.jdsupra.com/legalnews/hkma-reboots-virtual-banking-55255/

INTERNET GAMBLING, CRYPTOCURRENCY AND IRS ENFORCEMENT

On 12^th February, Millar Law asked if the reported plans for the IRS to investigate whether Bitcoin and other cryptocurrencies are being used to cheat the taxman could be extended to online gambling.

https://www.jdsupra.com/legalnews/internet-gambling-cryptocurrency-and-79424/

DEBTS AND INSOLVENCY: THE RULE IN GIBBS

On 12^th February, law firm Orrick published an article about the English common law rule that a debt governed by English law cannot be discharged or compromised by a foreign insolvency proceeding.  This rule is derived from a Court of Appeal case: Antony Gibbs and sons v La Société Industrielle et Commerciale des Métaux (1890).  The article says the rule has been criticised, but remains extant, and then goes on to provide some advice and notes that it has been disapplied in the context of EU insolvency proceedings (how will Brexit affect this?),and that the rule appears out of step with trends in modern insolvency law.

https://www.jdsupra.com/legalnews/the-rule-in-gibbs-safeguarding-61531/

ADVISER GOT TIP FROM TIPSY LAWYER, ACTED ON IT AND JAILED FOR INSIDER TRADING

Law 360 on 12^th February reported that a financial adviser who admitted to trading King Pharmaceuticals stock after a tipsy lawyer shared inside information with him at dinner was sentenced to 6 months in prison by a federal judge in New York, harsher than the sentence faced by the attorney.

https://www.law360.com/articles/1011752/adviser-who-traded-on-tip-from-atty-gets-6-months-in-prison

MADOFF FEEDER FUND SETTLEMENT

On 12^th February, Law 360 reported that the trustee for Bernie Madoff’s closed investment firm announced that the bankrupt estate has settled Ponzi scheme profiteering allegations against a feeder fund, Bermuda-based Alpha Prime Fund Ltd, for just over $76 million, saying the sum covers all transfers received by the fund in the 2 years preceding the collapse of Madoff’s fraud.

https://www.law360.com/articles/1011471

13^th February 2018

PROLIFERATION OF MANPAD MISSILES IN SYRIA “A THREAT TO THE WORLD”

On 12^th February, Ahval reported that the proliferation of portable anti-aircraft missiles in Syria could lead to large numbers of civilians being killed if the militant groups use them against passenger planes.  Hayat Tahrir al-Sham, a group that said last year it had split from al Qaeda, but nevertheless retains its hardline Islamist ideology, shot down a Russian Su. 25 warplane over the Syrian province of Idlib this month, using a shoulder-held missile.

https://ahvalnews.com/military/proliferation-manpads-missiles-syria-threat-world

 

UKRAINE RAILWAYS COMPANY DENIES TRANSPORTATION OF MILITARY CARGO FROM RUSSIA TO TRANSDNIESTRIA

Ukrainian railways, Ukrzaliznytsia, has denied information that the company was allegedly involved in transportation of military cargo from Russia to Transdniestria by rail.  Portal azov.press had posted information that in 2017 Ukraine unimpededly passed 131 cars to Transdniestria.

http://en.interfax.com.ua/news/economic/484282.html

LEBANON: IMF STAFF CONCLUDING STATEMENT OF THE 2018 ARTICLE IV MISSION

On 12^th February the IMF released this Statement.  Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF’s Articles of Agreement. Amongst other things, the Statement said that the authorities should strengthen the crisis management framework and AML/CFT framework in line with the 2016 FSAP advice.

It also said that the anti-corruption regulatory framework should be made effective, significantly enhanced and made operational.  This should include passage of legislation to protect whistleblowers; making the illicit wealth law more effective by making the asset declaration system for senior public officials (and their family members and associates) public, with a system of audits, and combined with measures for banks to control and report suspicious activities related to politically exposed persons; establishing and adequately resourcing the planned anti-corruption body with sufficient enforcement powers; and enhancing fiscal transparency including by strengthening governance in the revenue and customs administrations, improving revenue compliance, making the procurement system transparent, and introducing an external audit agency.

http://www.imf.org/en/News/Articles/2018/02/12/ms021218-lebanon-staff-concluding-statement-of-the-2018-article-iv-mission

AMENDMENTS TO HONG KONG AML/CFT REGIME INCLUDING FOR TRUST COMPANIES

Deacons in Hong Kong reported on 12^th February that amendments to Hong Kong’s principal AML legislation were passed by the Legislative Council on 24^th January.  This will take effect on 1^st March and are part of the Hong Kong Government’s efforts to address perceived deficiencies in Hong Kong’s AML/CFT regime prior to a FATF review due this year.  It explains that primary objectives include applying statutory CDD and record-keeping requirements to solicitors and foreign lawyers, accounting professionals, estate agents, and trust or company service providers (TCSP) (collectively called designated non-financial businesses and professions or DNFBP) when these professionals engage in specified transactions (as described); and introducing a licensing regime for TCSP to require them to apply for a licence from the Registrar of Companies and satisfy a “fit-and-proper” test before they can provide trust or company services as a business in Hong Kong.

http://www.deacons.com.hk/news-and-insights/publications/a-new-regime-for-hk-trust-companies.html

BILL TO IMPLEMENT THE RECOMMENDATIONS OF THE GLOBAL FORUM IN SWITZERLAND: PROPOSED ABOLITION OF BEARER SHARES AND FURTHER TRANSPARENCY PROVISIONS

On 12^th February, Lenz & Staehelin reported that on 17^th January the Swiss Federal Council opened the consultation process for the proposed law to implement the recommendations of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes. In particular, the Bill proposes the abolition of bearer shares (respectively their conversion into registered shares) and criminal fines for breaches of the duties to notify the ultimate beneficial owner and to keep a corresponding register of ultimate beneficial owners. Companies would under the proposed bill also be required to have an account with a Swiss bank.  The consultation process lasts until 24^th April, following which the Bill will be revised and is expected to be submitted to parliament for deliberations in Winter 2018/19.  This article briefly summarises the main points of the Bill.

https://www.lexology.com/library/document.ashx?g=5202c686-7ab8-46ee-8bdf-145e7569765c

PROPERTY DEALS ACCOUNT FOR ONE-THIRD OF ALL UK MONEY LAUNDERING ALERTS

On 13^th February, Estate Agent Today reported that almost a third of all SAR concerning possible AML infringements and reported to the NCA have involved property deals.  32% of all SAR ‘red flag alerts’ for the years 2014/15, 2015/16 and 2016/17 have involved residential conveyancing.  This is far larger than any other industry; by comparison, just 4% of the red flag alerts in the same period involved commercial conveyancing.

https://www.estateagenttoday.co.uk/breaking-news/2018/2/conveyancing-triggers-one-third-of-alerts-over-money-laundering-problems?source=newsticker

UK COURT AWARDS $90 MILLION CLAIM AGAINST VIJAY MALLYA

The Indian Express on 12^th February reported that a UK court had awarded a Singapore aircraft leasing company $90 million in a claim against “liquor tycoon” Mallya, who is currently fighting an extradition request to the UK by India over charges relating to alleged defaults on bank loans to his Kingfisher Airlines.

http://indianexpress.com/article/india/uk-court-awards-boc-aviation-usd-90-million-against-vijay-mallya-5061197/

UK TRUST REGISTER UPDATE

On 9^th February, Boodle Hatfield provided an update on the introduction of a trust register in the UK.  It said that HMRC had extended the effective deadline for UK trusts from 31^st January to 5^th march, and had issued updated guidance.  It also reported that a HM Treasury minister has confirmed that once the UK leaves the EU, the UK will oppose any EU pressure to grant public access to the register, in order to protect individual privacy rights.

https://www.boodlehatfield.com/the-firm/articles/trust-register-an-update/

CAN THE EU DELIVER?  THE EU REGULATION ON CROSS-BORDER PARCEL DELIVERY

On 8^th February Morrison Foertster published a briefing saying that the EU has reached a provisional agreement on a proposed new Regulation on cross-border parcel delivery services.  The Commission’s aim is to make pricing and tariffs more transparent and give national regulators increased monitoring rights over the cross-border parcel delivery market.  This reform is part of the EU’s Digital Single Market (DSM) strategy designed to accelerate the creation of a digital single market across the EU.

https://www.mofo.com/resources/publications/180208-eu-cross-border-parcel-delivery.html

 

TARGETED TERROR: THE SUICIDE BOMBERS OF AL-SHABAAB

On 13^th February, the Counter-Terrorism Center (CTC) published an article that starts by saying that one tactic that al-Shabaab uses in its reign of terror is suicide bombing.  Despite recognition of the seriousness of the threat that al-Shabaab’s suicide bombers pose, very little is known about how, when, and why al-Shabaab elects to employ the tactic of suicide bombings.  This report from CTC seeks to answer these questions.  It also reveals information about just who serves as al-Shabaab’s suicide bombers; where they target; al-Shabaab’s suicide bombing delivery tendencies; and timing trends along months and days of the week.  In conclusion, the authors offer suggestions about how to combat the group’s suicide bombing efforts in the future.

https://ctc.usma.edu/targeted-terror-suicide-bombers-al-shabaab/

ESTONIAN INTELLIGENCE SERVICE SECURITY ANALYSIS 2018

Something different to read.  The Estonian Foreign Intelligence Service has issued a report “International Security and Estonia 2018”.  As one might expect, it spends a great deal of time considering Russia and Russia’s impact on the country, looking at the domestic political situation in Russia in this election year, the Russian military and its foreign policy (including the use of companies like energy producer, Rosneft).  One section deals with the effect of sanctions on Russia.  It considers information warfare units targeting NATO and the use/misuse of events, including historical events (as sorts of “fake news” propaganda).  It says that 2017 showed that the cyber threat against the West is growing and claims that most of the malicious cyber activity originates in Russia.  It considers the general terrorism threat to Europe, and the continuing North Korean missile programme.  On North Korea, it considers that due to the sanctions, North Korea has been forced to find alternatives to guarantee the flow of hard currency, and it is therefore possible that cyberattacks with economic motives from Pyongyang may increase – and it cautions that North Korea may want to (continue) selling weapons and technology to terrorist groups.

https://www.valisluureamet.ee/pdf/raport-2018-ENG-web.pdf

MISSION ACCOMPLISHED?  WHAT NEXT FOR IRAN’S AFGHAN FIGHTERS IN SYRIA?

On 13^th February, War on the Rocks carried an article asking this question after the Iranian Revolutionary Guards sent thousands of Afghan refugees and immigrants to fight in Syria.  It asks, what Iran will do with these tens of thousands of battle-hardened fighters.  Will it deploy them elsewhere in the Middle East?  Initial indications are that Iran is actually downsizing the contingent of Afghan fighters, sending them back to Iran where their families — mostly refugees or undocumented immigrants — have been promised permanent residency.  This gives the fighters’ families a secure future, but it also gives the leadership in Tehran the security of knowing that it can, if needed, draw again on these veteran fighters who are now indebted to the government.

https://warontherocks.com/2018/02/mission-accomplished-whats-next-irans-afghan-fighters-syria/

HOW BUSINESS CAN HELP OFAC FIGHT NORTH KOREAN SANCTIONS VIOLATIONS

On 13^th February, the US Treasury published the speech given by Treasury Under-Secretary Sigal Mandelker at the Securities Industry & Financial Markets Association AML and Financial Crimes Conference.  In this speech, in the context of North Korean sanctions, she commended efforts for institutions to delve deeper, to seek to identify shell and front companies used in sanctions violations, money laundering etc.  The sort of information that might be sought, and passed to authorities included –

• If you find transactions involving entities listed on UN, OFAC, or other public lists, who are the counterparties to those transactions?
• Who are the beneficial owners of these entities? And what other accounts have they set up?
• Where do these entities bank?
• What are some common physical or email addresses associated with these entities?
• What other characteristics do they share? And can you identify other entities that share those same characteristics or engage in similar activities or typologies?
• When you exit a customer because of these or other risks, where do those customers go?  Do you see them try to access the financial system in some other way, such as indirectly through other financial institutions?

She also recommend a review of the FinCEN advisory of November, which describes how North Korea uses complicated trade-based payment schemes to launder funds, and ensure that the institution is working to identify these schemes, typologies, and the actors behind them.
Being proactive, answering these types of questions, and then conducting additional analysis is, she said, where compliance programmes can add additional value to our efforts to disrupt North Korea’s illicit financial networks.

https://home.treasury.gov/news/press-release/sm0286

FIRMS IN BVI OWN 23,000 UK PROPERTIES

On 13^th February the BBC reported that a quarter of property in England and Wales owned by overseas firms is held by entities registered in the BVI, BBC analysis has found.  It is the official home of companies that own 23,000 properties – more than any other country – owned by 11,700 firms registered in the BVI.  BBC analysis was conducted at HM Land Registry data, and showed that there are around 97,000 properties in England and Wales held by overseas firms, as of January 2018.

www.bbc.co.uk/news/business-42666274

MALAYSIA WILL RETALIATE AGAINST EU GOODS IN CASE OF PALM OIL BAN

On 13^th February, EurActiv reported that the European Parliament’s decision to ban palm oil, Malaysia’s biggest export item, is “drastic and discriminatory” and Kuala Lumpur is ready to retaliate with its own trade measures against Europe’s products if the ban takes effect, Malaysia’s Minister Datuk Seri Mah Siew Keong said.

https://www.euractiv.com/section/agriculture-food/interview/minister-malaysia-will-retaliate-against-eu-goods-in-case-of-palm-oil-ban/

NEW TECHNOLOGY REVEALED TO HELP FIGHT TERRORIST CONTENT ONLINE

On 13^th February a news release announced that the Home Office has announced the development of new technology to automatically detect terrorist content on any online platforms.  Tests have shown this new tool can automatically detect 94% of Daesh propaganda with 99.995% accuracy.  It has an extremely high degree of accuracy, for instance if it analyses one million randomly selected videos, only 50 would require additional human review.  The tool can be used by any platform, and integrated into the upload process, so that the majority of video propaganda is stopped before it ever reaches the internet.  Developed by the Home Office and ASI Data Science, the technology uses advanced machine learning to analyse the audio and visuals of a video to determine whether it could be Daesh propaganda.  The Home Office and ASI will be sharing the methodology behind the new model with smaller companies, in order to help combat the abuse of their platforms by terrorists and their supporters.  Many of the major tech companies have developed technology specific to their own platforms and have publicly reported on the difference this is making in their fight against terrorist content. Smaller platforms, however, are increasingly targeted by Daesh and its supporters and they often do not have the same level of resources to develop technology.

https://www.gov.uk/government/news/new-technology-revealed-to-help-fight-terrorist-content-online

US PUSHES MOTION TO PUT PAKISTAN ON FATF WATCHLIST

On 13^th February, Reuters reported that the US has put forward a motion at FATF to place Pakistan on a global terrorist-financing watch list, according to a senior Pakistani official.

https://uk.reuters.com/article/uk-pakistan-militants-financing-exclusiv/u-s-pushes-motion-to-put-pakistan-on-global-terrorist-financing-watchlist-idUKKCN1FX2IY?src=ilaw

HOW TO SPOT FAKE GOLD AND AVOID FRAUD

On 13^th February, Forbes published an article saying that there are many safeguards to protect yourself from buying fake gold.  The best way to ensure the authenticity of gold products is buying gold bars and coins strictly from LBMA (the London Bullion Market) approved dealers, mints and refineries. This way, their authenticity is guaranteed.

https://www.forbes.com/sites/oliviergarret/2018/02/13/how-to-spot-fake-gold-and-avoid-fraud/#803f2701646d

CUBA AND US SECOND MEETING ON MONEY LAUNDERING

Prensa Latina on 13^th February reported that authorities from Cuba and the US met in Washington for their second technical meeting to prevent and fight money laundering.

http://www.plenglish.com/index.php?src=ilaw&o=rn&id=24549&SEO=cuba-and-u.s.-exchange-on-fighting-money-laundering

AUTHORITIES CRACK DOWN ON ‘GOLDFINGER’ TAX EVASION IN GERMANY

Handelsblatt in Germany on 13^th February reported that a tax loophole, which used fake gold-trading companies to avoid tax, may have cost Germany billions, but now the law is cracking down hard, with tax lawyers and investors facing prosecution following police raids.  It says that the scheme involved wealthy taxpayers setting up their own gold-dealing companies to have gold transactions reclassified as “professional dealing”.  That allowed them to pay a 0% professional rate, rather income tax or capital gains tax on their earnings. The loophole was originally legal, but was outlawed in 2013. However, some lawyers involved in the tax avoidance scam kept it up even after it became illegal.

https://global.handelsblatt.com/finance/germany-crackdown-gold-tax-evasion-886563

OVERSEAS BUSINESS RISK – COLOMBIA

On 13^th February, the UK Department for International Trade released updated information on how UK companies can control risks when doing business in Colombia.

https://www.gov.uk/government/publications/overseas-business-risk-colombia

TRADER ORDERED TO PAY BACK £567,000 FOR SELLING COUNTERFEIT DVD

The Sentinel on 13^th February reports that Paul Foster, 53, has been ordered to pay more than £567,000 for selling counterfeit DVD on eBay.  He was caught out by an investigation from Staffordshire Trading Standards, which caught him buying the counterfeit DVD from China and selling them worldwide.  In January 2016 he was jailed for 16 months, and an investigation was launched to find out how much he had earned from the sales.  He also has to pay £36,000 costs.

https://www.stokesentinel.co.uk/news/local-news/man-ordered-pay-back-567000-1210336

2 ARRESTED IN UK NATIONWIDE WASTE CRIME INVESTIGATION

Let’s Recycle on 13^th February reported that 2 men have been arrested for questioning in London, in connection with alleged waste crime, fraud and money laundering offences across the country, as part of a nationwide waste crime investigation, a joint operation by the Environment Agency, the Metropolitan Police and the Government Agency Intelligence Network (GAIN).  The pair, who have not been identified, are believed to be involved in organised crime across the country, including in Lancashire, Middlesborough, Lincolnshire, Cambridgeshire and Kent.

https://www.letsrecycle.com/news/latest-news/two-arrested-nationwide-waste-crime-investigation/

CAYMAN “A TOP DOMICILE FOR BLOCKCHAIN ENTREPRENEURS”

Tax News on 13^th February reported a speech by the Cayman Islands Premier in which he claimed that Cayman were one of the top 3 jurisdictions for blockchain start-ups.

https://www.lowtax.net/news/Cayman-A-Top-Domicile-For-Blockchain-Entrepreneurs_76379.html

US TREASURY TO REVIEW FINCEN’S CRYPTOCURRENCY PRACTICES

Proskauer on 13^th February published an article referring to both the annual plan of FinCEN and a recent interview of the Secretary for the Treasury where he expressed concern about the use of bitcoin (and presumably other cryptocurrencies) for the illicit transfer of funds, and emphasised that although the US Treasury still does not have an official position on cryptocurrencies, working groups have been deployed for that purpose and the subject matter is one that the Treasury will “be watching very carefully”.

https://www.jdsupra.com/legalnews/u-s-treasury-to-review-fincen-s-25977/

HONG KONG SECURITIES COMMISSION LAUNCHES INQUIRY INTO 7 CRYPTO EXCHANGES

Reed Smith on 13^th February published an article saying that, in February, the Hong Kong Securities and Futures Commission released a statement which, among other things, said that it had sent letters to 7 cryptocurrency exchanges warning against listing instruments that qualify as “securities” under the Securities and Futures Ordinance without a required licence, and it had sent letters to 7 crypto token issuers inquiring about compliance with the securities laws.

https://www.jdsupra.com/legalnews/hong-kong-securities-commission-24305/

UK FROZE £580 MILLION DR CONGO ASSETS 2005-2016

HM Treasury has reported that from 23^rd July 2005 to 30^th September 2016, it froze approximately £580 million of funds in the UK under the EU DRC sanctions regime when 38 people and 9 entities were subject to EU asset-freezing measures. The figures for 2017 have yet to be finalised.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2018-02-05/126713/

TURKEY DETAINS 100 PEOPLE IN ONLINE GAMBLING RAIDS

Calvin Ayre on 13^th February reported that Turkey’s Hurriyet Daily News had said that over 1,000 police officers had staged a series of simultaneous raids across 9 provinces in Turkey in an operation targeting illegal online sports betting operators. Launched by Turkey’s cyber-crime unit, they targeted 140 different house addresses in Istanbul, Ankara and other major cities. The report failed to specify the names of the gambling sites targeted in the police action.  Roughly 100 individuals were detained during the early morning raids and taken to police stations for questioning.

https://calvinayre.com/2018/02/13/business/turkey-arrests-100-online-gambling-crackdown/

EX-NOMURA TRADER CANNOT DITCH SEC FRAUD SUIT

Law 360 on 13^th February reports that a former head trader at Nomura, former Nomura Securities International Inc MD James Im, must face a US SEC lawsuit accusing him of lying to customers about the prices he hadd paid for commercial mortgage-backed securities he was reselling, a New York federal judge has ruled.

https://www.law360.com/articles/1011840

BANNED GUAM SOCCER CHIEF “STEERED SUCCESSOR’S ELECTION”

OCCRP on 13^TH February repeated a New York Times report that the “disgraced” former head of soccer in Guam, who was banned from the sport after he admitted taking bribes in exchange for his support in FIFA elections, tried to influence the election of his successor.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7637-nyt-banned-guam-soccer-chief-steered-successor-s-election

CAN ONE BE SO RECKLESS AS TO BE FRAUDULENT?

On 13^th February, law firm Allen & Overy provided an analysis of the obiter comments in Celtic Bioenergy Ltd v Knowles Ltd.  In that case, the judge set aside an arbitration award on the grounds of fraud.  She decided that the arbitrator had been deliberately misled by the defendant and that the award had, therefore, been obtained by fraud.  This case is being cited as one of the few examples where an application to set aside an award on the grounds of fraud has actually succeeded.  It concludes that it remains to be seen whether the obiter comments might represent a deviation from the prior jurisprudence pointing towards a lowering of the extremely high threshold, or whether such comments will be re-evaluated as and when a “recklessness case” proper reaches the court.  Lowering the threshold will inevitably increase the potential for challenges against arbitral awards and for tactical litigation.

www.allenovery.com/publications/en-gb/Pages/Can-one-be-so-reckless-as-to-be-fraudulent-An-analysis-of-the-obiter-comments-in-Celtic-Bioenergy-Ltd-v-Knowles-Ltd.aspx

35% OF INDIA’S STATE AND TERRITORY CHIEF MINISTERS FACE CRIMINAL CHARGES

The Jurist website on 13^th February reveals that a new report by the Association for Democratic Reforms and National Election Watch claims that 11 of the 31 chief ministers of the various states and union territories of India, representing 35% of these chief ministers, have declared criminal charges against themselves in self-sworn affidavits. The chief ministers represent the heads of the various state governments and are responsible for the day-to-day operations of the state. These affidavits were the latest filed by the individuals prior to contesting in assembly elections of the various states.  8 of these 11 chief ministers have declared charges as serious as murder, attempted murder and criminal intimidation.

http://www.jurist.org/paperchase/2018/02/new-report-reveals-35-percent-of-indias-chief-ministers-have-criminal-charges-1.php

INFRAUD OWNER, ACCUSED OF $530 MILLION FRAUD, ARRESTED IN BANGKOK

BTC Manager reports that a Russian national, Sergey Sergeyevich Medvedev, accused of being the co-founder of the dubious Dark Web marketplace Infraud has been arrested in Bangkok at the request of US authorities.  He had fled Moscow, where he had been the co-founder of the Infraud Organization along with Svyatoslav Bondarenko.  After Bondarenko went missing in 2015, Medvedev became the sole owner and administrator.  Infraud was a cybercrime organisation that had been operating since October 2010, its motto was “In Fraud We Trust” and was primarily involved in stealing personal credit card and online banking information and also selling this information over the Dark Web.

https://btcmanager.com/infraud-organization-co-founder-cccused-530-million-fraud-arrested-bangkok/

IRELAND’S CYBERCRIME STRATEGY ‘RUDDERLESS’

The Irish Examiner on 13^th February reported that the body tasked with overseeing cybersecurity for the Irish Government has issued a public warning that some websites are being used to illegally mine cryptocurrencies.  The National Cyber Security Centre said it was “aware that a number of websites using software from a third-party vendor is causing visitors to those sites to mine cryptocurrency without their express permission”.

https://www.irishexaminer.com/breakingnews/business/irelands-cybercrime-strategy-rudderless-827769.html

US: WHEN BORDER SEARCHES BECOME UNREASONABLE
In the US, National Review argues that allowing warrantless searches everywhere within 100 miles of the US border leads to much abuse.  Under a 1946 law, US Customs and Border Protection CBP claims the right to search people and places without a warrant if the purpose of the search is to find illegal aliens and the search occurs within a “reasonable distance” of an international border
http://www.nationalreview.com/article/456282/border-patrol-warrantless-searches-often-unconstitutional

NO POWER TO GRANT IMMIGRATION BAIL IF NO POWER TO DETAIN

The UK Human Rights Blog from One Crown Office Row carries a posting on 13^th February reporting on a case where, on 8^th February, the Supreme Court held that the power (in an immigration case) to grant bail and impose bail conditions in respect of a person pending deportation ceases to be lawful if there is no legal basis for detaining that person.  The power to impose bail conditions is inextricably linked to the power of detention.  Once the Home Secretary ceases to have the power to detain a person under immigration law, she can’t then impose conditions on that person’s freedom through bail conditions.

https://ukhumanrightsblog.com/2018/02/13/no-power-to-grant-immigration-bail-if-no-power-to-detain-jake-richards/

RETRIAL OF FORMER FRENCH MINISTER FOR TAX DODGING BEGINS

On 13^th February, the Risk & Compliance website reported that the retrial of France’s former budget minister Jerome Cahuzac is due to start.  He received a 3-year jail sentence in 2016 for tax fraud in one of the biggest scandals of Francois Hollande’s presidency and resigned in 2013 after being given the job was to crack down on tax dodgers.

www.riskandcompliancehub.com/france-retrial-of-former-budget-minster-for-tax-dodging-starts/

WIKILEAKS CABLES ARE ADMISSIBLE IN ENGLISH COURT PROCEEDINGS

CMS Law on 13^th February reported that the Supreme Court has held that the High Court was wrong to exclude a Wikileaks cable from evidence in judicial review concerned with a challenge by the Chagos Refugees Group (CRG) to the British Government’s decision to establish a marine protected area around the Chagos islands, preventing Chagossians from continuing their commercial fishing businesses in the region. However, the issues raised are of wider application.  A leaked cable from the US Embassy in London to the State Department in Washington summarising a conversation between British and US officials regarding the reasons for establishing the protected area was involved, and the FCO had argued that the cable formed part of the US Embassy’s diplomatic archive, which was protected by the 1961 Vienna Convention, and was therefore inadmissible.

http://www.cms-lawnow.com/ealerts/2018/02/wikileaks-cables-are-admissible-in-english-court-proceedings

A PROTECTION PROGRAMME TO RESCUE WOMEN AND CHILDREN OF THE ’NDRANGHETA

An article from Chatham House on 13^th February details a radical programme by an Italian judge that provides a protection programme to rescue women and children of the ’Ndrangheta, a mafia clan that kills those who dare to betray it.  The judge reasoned that since courts intervene to protect children from drug-addicted or alcoholic parents, it would be possible to remove them from homes where their only option was to join a dangerous criminal organization, describing it as a form of child abuse.  He used the UN Convention on the Rights of the Child, which says children can be removed if their human rights are not respected and their well-being is at risk.  Changes meant that if a mother fled into witness protection, her children could be taken to join her so they would not be used as blackmail to make her recant.

https://www.chathamhouse.org/publications/twt/italian-judges-radical-plan

LEGAL PROFESSIONAL PRIVILEGE AND THE DATA PROTECTION BILL 2018

An article from LK Shields explores the impact of the Data Protection Bill 2018, which implements the GDPR, on legal professional privilege (LPP) in Ireland.

https://www.lkshields.ie/news-insights/publication/legal-professional-privilege-and-the-data-protection-bill-2018

AEB RELEASES NEW BREXIT REPORT ON GLOBAL TRADE RISKS, CHALLENGES, INVESTMENTS, AND OPPORTUNITIES

CILT on 13^th February said that software and adviser company, AEB, has released a report (free to download) with details of the results of a survey of businesses involved in global trade and includes a global trade action plan template with useful check-points of preparation that every business needs to have on screen.

https://ciltuk.org.uk/News/Latest-News/ArtMID/6887/ArticleID/15432/AEB-releases-new-Brexit-report-on-global-trade-risks-challenges-investments-and-opportunities

The report is at –

https://www.aeb.com/uk/media/uk-brexit-conference-results-2017.php

GIBRALTAR CREATING “WORLD’S FIRST RULES” FOR INITIAL COIN OFFERINGS

KYC 360 carries an article on 13^th February that says that Gibraltar has started working on what it says are the world’s first rules for initial coin offerings (ICO), following feedback on a consultation on digital assets.  A Bill is expected to be considered by Parliament in the second quarter of this year.

https://kyc360.com/news/gibraltar-creating-worlds-first-rules-initial-coin-offerings/

UK PROPOSES TOUGHER RULES ON INVASIVE SPECIES

Dentons on 13^th February reported that the UK Government’s intention to introduce a broader range of penalties for offences involving invasive non-native animal and plant species in England and Wales has been outlined in a new consultation document.

https://www.dentons.com/en/insights/alerts/2018/february/13/tougher-enforcement-rules-for-invasive-species

SINGAPORE GUILDEINES TO PROTECT E-PAYMENT USERS

Monde Visione on 13^th February reported that the Monetary Authority of Singapore (MAS) has launched a public consultation on proposed guidelines to protect users of electronic payments.  The proposed E-payments User Protection Guidelines aim to encourage wider adoption of e-payments by setting standards on the responsibilities of financial institution^s1 and e-payment users.

http://www.mondovisione.com/media-and-resources/news/monetary-authority-of-singapore-guidelines-to-protect-users-of-electronic-payme/

 

 

 

 

 

 

 

 

 

 

On 13^th February, KYC 360 carried an analysis of further measures progressing through the Brussels legislative machinery to enhance the fight against money laundering, and which are labelled as the “6^th Money Laundering Directive”.  In particular, the EU Commission suggests that with national differences in the definition, scope and sanctioning of money laundering offences, co-operation between national police forces is sub-optimal and are exploited.  It says that probably, the most significant element of 6AMLD is to provide a harmonised list of 22 predicate offences, including environmental crimes and cybercrimes.  Aiding, abetting and attempting to commit an offence of money laundering will also be illegal.  Offences committed by organised criminal gangs are deemed to be aggravating circumstances for the purposes of sentencing as are those offences committed by individuals in the course of their professional activities.  Corporate liability is also envisaged.

https://kyc360.com/article/eu-sixth-anti-money-laundering-directive-6amld-whats/