THINGS YOU MAY HAVE MISSED – FEBRUARY 19

19th February 2018

YALE BUSINESS SCHOOL HOSTS CANNABIS CONFERENCE

Yale News on 19th February reports on a single-day conference was entirely student-run and brought together participants from all sectors of the legal cannabis industry to comprehensively analyze how the industry has performed in the infancy of its legality and where it is headed.  Exchanging business cards decorated with marijuana leaves, venture capitalists, entrepreneurs, legal experts and cannabis enthusiasts alike descended on the Yale School of Management for the first cannabis-oriented conference organized by a US business school.

https://yaledailynews.com/blog/2018/02/19/som-hosts-first-ever-cannabis-conference/

 

EUROPEAN CENTRAL BANK STOPS ALL ABLV BANK PAYMENTS AMID US SANCTIONS PROBE

Reuters on 19th February reported that the European Central Bank stopped all payments by Latvian lender ABLV Bank as its liquidity position has deteriorated after accusations by US authorities of breaching sanctions against North Korea.

https://uk.reuters.com/article/uk-ablvbank-sanctions-ecb/ecb-stops-all-ablv-bank-payments-amid-u-s-corruption-probe-idUKKCN1G30CR?src=ilaw

TAX EVASION STILL CAUSES PROBLEMS IN SLOVAKIA

The Slovak Spectator reports that without tax evasion, Slovakia might have collected more than €2 billion in taxes, according to the VAT Gap report published by the European Commission in late September 2017, assessing the data for 2015.  Though the country improved its gap from the previous year by 1.13 percentage points to 29.39%, it still belongs among the countries with the largest gaps. The only country with a larger gap is Romania at 37.18%.

https://spectator.sme.sk/c/20763511/tax-evasion-still-causes-problems.html

THE WORLD’S MOST TRAFFICKED MAMMAL

A blog post from the Foreign & Commonwealth Office concerns World Pangolin Day on 17th February, about the small, scaly anteaters which may be the world’s most trafficked animal, and the position in Laos, which is home to 2 of the 8 varieties.

https://blogs.fco.gov.uk/hughdevans/2018/02/15/the-worlds-most-trafficked-mammal/

AUSTRALIAN DIRECTOR BANNED FROM FINANCIAL SERVICES FOR 5 YEARS

On 16th February, International Adviser reported that The Australian Securities & Investments Commission (Asic) said that it has accepted an “Enforceable Undertaking” from the director of a financial services firm, Real Wealth, David Orth that requires him to cease to provide financial services for 5 years and has agreed to pay £225,786, after his business failed to give appropriate advice to its clients..  In addition, Orth will make a community benefit payment in the amount of A$400,000 to Financial Literacy Australia to support the financial capability of vulnerable people.

https://international-adviser.com/financial-services-director-banned-five-years/

PORT OF DOVER: CIGARETTES SEIZED BY BORDER FORCE

Kent Online on 16th February reported that Around 5.8 million cigarettes were discovered as an attempt to smuggle them into the UK was foiled by the Border Force at Dover’s Eastern Docks.  The discovery was made after officers stopped a Polish lorry on a ferry from Calais.  The paperwork for the vehicle’s load declared it as being laden with pallets of insulation and “eco wood”.  On closer inspection officers found only six pallets of insulation and 24 pallets of cigarettes.

http://www.kentonline.co.uk/dover/news/millions-cigarettes-seized-dover-160250/

EU REGULATION IMPOSING ADDITIONAL DUTIES ON CERTAIN US PRODUCTS AS A RESULT OF THE BYRD AMENDMENT (CDSOA)

On 16th February, Baker McKenzie reported on the imposition of additional duties against certain products originating in the US as a result of the Continued Dumping and Subsidy Offset Act (CDSOA – also known as the ‘Byrd Amendment).  The WTO had found the CDSOA incompatible with various US obligations under the WTO agreements, and the WTO permitted the EU to impose additional duties in retaliation. The new EU Regulation in 2018/196/EU and it revises and codifies the arrangements.

http://www.internationaltradecomplianceupdate.com/2018/02/16/eu-codifies-regulation-imposing-additional-duties-on-certain-us-products-as-a-result-of-the-byrd-amendment-cdsoa/

AUSTRALIA: CBA BLOCKS CREDIT CARD PURCHASES OF VIRTUAL CURRENCIES

On 16th February, Banking Tech reported that The Commonwealth Bank of Australia (CBA) is following in the wake of other banks by stopping credit card purchases of virtual currencies.  Lloyds, Bank of Scotland, Halifax, MBNA, Bank of America, Citigroup, Capital One, Discover and JP Morgan, as well as Virgin Money, have all taken similar action.

http://www.bankingtech.com/2018/02/cba-blocks-credit-card-purchases-of-virtual-currencies/

COURT OF APPEAL UPHOLDS POCA CONFISCATION ORDER SOUGHT BY LOCAL AUTHORITY FOR PLANNING OFFENCE

Local Government Lawyer on 19th February reported that the UK Court of Appeal has rejected claims that a fine of £3,500 and a confiscation order of £59,000 for breach of planning laws were excessive.  Following enforcement action by West Lancashire Borough Council Timothy Edwards was ordered in February 2016 at Preston Crown Court to pay the confiscation order under the Proceeds of Crime Act2002 – the first time West Lancashire had sought such an order.  He was also hit with the £3,500 fine and ordered to pay prosecution costs £6,000. Edwards’ wife Susan was also fined £500 for illegally storing a large number of caravans on 2 fields at their property.

www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=34222%3A2018-02-18-19-16-49&catid=63&Itemid=31

STAFFORDSHIRE TRADING STANDARDS SECURE £567,000 CONFISCATION FOR SALE OF COUNTERFEIT DVD

On 19th February, Local Government Lawyer reported that Staffordshire Trading Standards has secured its largest-ever confiscation order at £567,000, against a defendant convicted of selling counterfeit DVD on eBay.  Paul Michael Foster, 53, had pleaded guilty to one offence of fraudulent trading and 9 offences infringing the Trade Marks Act 1994 in November 2015.  At a confiscation hearing on 12th February at Stafford Crown Court, Foster was ordered to pay back £567,000 and prosecution costs of £36,858.72.

http://www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=34233%3A2018-02-18-20-59-41&catid=190&Itemid=122

ERDOGAN’S FATAL BLIND SPOT” OVER ISLAMIC STATE

On 16th February, the RAND Blog carried an article saying that countering the growing terrorist threat appears to be low on Erdogan’s agenda. Turkey has been accused of recruiting thousands of former Islamic State fighters to help fight the Kurds.  But it warns that Turkey could serve as a logistics hub to plot future attacks.  It says that in early February, more than 10 high-profile Islamic State members — including militants who had been involved in bombing attacks in Turkey itself — were abruptly released by judges.  In many cases, Turkish intelligence officials who did not see the group as the primary threat pressured the judiciary to let dangerous suspects go despite the fact that prosecutors had sought extremely long prison sentences for them.  Since Turkey has been accused of recruiting thousands of former Islamic State fighters to attack Kurds in Syria, some speculate that the release of Islamic State members without explanation could be the result of a backdoor deal with the Turkish intelligence service.

https://www.rand.org/blog/2018/02/erdogans-fatal-blind-spot.html

VENEZUELA CRYPTOCURRENCY “TO DRAW INVESTMENT FROM ABROAD”

KYC 360 on 19th February reported claims that Venezuela’s new “petro” cryptocurrency will attract investments from Turkey, Qatar, the US and Europe, the country’s cryptocurrency regulator has said.

https://kyc360.com/news/venezuela-cryptocurrency-draw-investment-turkey-qatar-official/

INTERNATIONAL COUNTER ISIS FINANCE GROUP LEADERS MEETING

On 15th February, the US Treasury issued a news release saying that, on February 11th, the Counter ISIS Finance Group (CIFG) convened its 49 member states and observers to discuss the future of ISIS financing.   The CIFG, which the US, Italy, and Saudi Arabia co-chair, was established in January 2015 as one of the 5 working groups within the Global Coalition to Counter ISIS, a broad international group formed to degrade and ultimately defeat ISIS.  This meeting marks the 3-year anniversary of the creation of the CIFG and the 9th meeting of this group.  A joint statement had been issued which noted that while the coalition has successfully retaken over 98% of the territory ISIS once controlled in Iraq and Syria, the fight is not over, and that ISIS’s revenues have significantly declined, but so have its expenses, making the work of the CIFG more important than ever.

https://home.treasury.gov/news/press-release/sm0294

HMRC CONSULTATION ON TIME LIMITS FOR OFFSHORE TAX ASSESSMENTS ETC

On 19th February, HMRC launched a consultation asking for views on the design principles for legislation to implement a new minimum tax assessment time limit of 12 years for HMRC to make assessments or notices of determination in cases involving offshore income, gains or chargeable transfers.  HMRC is extending the time limit because it can take much longer to establish the facts about offshore transactions, particularly if they involve complex offshore structures. More time is needed to address situations where the current assessment time limits of 4 and 6 years for offshore non-compliance are not long enough to establish the facts, and determine and assess the amount of tax due.  The consultation runs to 14th May.

https://www.gov.uk/government/consultations/extension-of-offshore-time-limits

LATVIA’S BANKING SECTOR ROCKED BY US PROBE, CENTRAL BANK CHIEF’S DETENTION

On 19th February, Reuters reported on how one of Latvia biggest banks, ABLV, was forced to seek emergency help after it was destabilised by money laundering allegations, hours after the separate detention of the central bank governor on suspicion of soliciting bribes.

https://uk.reuters.com/article/us-latvia-banking/latvias-banking-sector-rocked-by-u-s-probe-central-bank-chiefs-detention-idUKKCN1G30ZP

POLICE SAY TO PROSECUTE SLOVAK BUSINESSMAN

The Slovak Spectator reports that police have concluded their investigation into suspected tax fraud by the highly publicised businessman Ladislav Bašternák, recommending that a special prosecutor press charges.  It reports that Bašternák, who is linked to Real Forum Invest, the company which constructed the Bonaparte residential building in which Prime Minister Robert Fico lives, paid almost €2 million to the tax office a few days ago in an attempt to invoke the so-called “active repentance” provision (i.e. an additional payment of tax with the aim of securing impunity).

https://spectator.sme.sk/c/20764136/police-recommend-that-basternak-faces-charges.html

IMF – UKRAINE SHOULD IMMEDIATELY PASS LAW ON ANTI-CORRUPTION COURT

112 UA in Ukraine on 19th February reported that the IMF has urged the Ukrainian government to pass the bill about the anti-corruption court as soon as possible, and continue the other delayed reforms.

https://112.international/politics/ukraine-should-immedieately-pass-law-on-anti-corruption-court-imf-25779.html?src=ilaw

UK NUCLEAR SAFEGUARDS BILL: FACTSHEETS

On 19th February, the Department of Business, Energy and Industrial Strategy released factsheets on the main topics related to the Nuclear Safeguards Bill.

https://www.gov.uk/government/publications/nuclear-safeguards-bill-factsheets

SHISHA FIRM BOSS IN COURT AFTER TRYING TO PASS TOBACCO OFF AS YOGURT AND INCENSE TO DODGE TAX

Leeds Live on 19th February carries a report about the boss of a Shisha firm based in Leeds has been given a suspended prison sentence after dodging tax on hundreds of kilos of the tobacco.  Mehdi Jahani, 35, ran a business called Rose Supply UK which sold the flavoured tobacco.  However, during a raid by HMRC at his home and storage unit 629 kg of Shisha tobacco was hidden in containers labelled as yogurt, sports goods and incense.  Packaging equipment was also found at the storage unit.  He admitted buying illegally imported Shisha tobacco for which he should have paid £65,233 in duty and tax.

https://www.leeds-live.co.uk/news/leeds-news/shisha-firm-boss-court-after-14308448

BVI REVAMPS LIMITED PARTNERSHIP REGIME

On 19th February, CCH Daily reported that the BVI has launched a new limited partnership regime in a bid to increase the jurisdiction’s attractions for investment funds, particularly private equity funds and joint ventures.

https://www.accountancylive.com/bvi-revamps-limited-partnership-regime

COUNTERFEIT DRUGS ARE A BILLION-DOLLAR INDUSTRY. COULD BLOCKCHAIN – THE TECHNOLOGY BEHIND BITCOIN – BE THE ANSWER?

In its March 2018 edition, Pharma Times asks this question.  It says that the market for fake drugs is booming – estimates suggest global sales in the realm of a couple of hundred billion dollars a year, where about 1% of all drugs in circulation in Western markets (and about 10% on average globally) are believed to be fake; and that the US and EU have both introduced legislation that requires an electronic system to trace and authenticate medicines as they move through the distribution network- but some critics have claimed that these supply chain solutions aren’t interoperable and will, in fact, do little to prevent counterfeits and protect patients.  The article says that whether counterfeit medicines could become a thing of the past if blockchain transforms pharma’s supply chain is still one for debate.

http://www.pharmatimes.com/magazine/2018/march_2018/securing_the_supply_chain

CHICAGO TRADER CHARGED WITH CRYPTOCURRENCY THEFT

Joseph Kim, a 24-year-old Chicago-based trader, was charged by US authorities on 15th February with stealing over $2 million worth of bitcoin and litecoin from his employer, Consolidated Trading LLC.  He held the position of an assistant trader at the firm and was responsible for handling cryptocurrency trades on behalf of the firm’s clients. He is said to be the first person to be taken to court in Chicago on account of trading in cryptocurrency.

https://btcmanager.com/chicago-trader-faces-jail-time-bitcoin-litecoin-theft/

COMPANIES WARNED ON INTERNAL INVESTIGATIONS AFTER UK COURT OF APPEAL REJECTS PRIVILEGE CLAIM

On 19th February, Out-Law reported that statements made by an employee in the context of an internal investigation did not attract litigation privilege, and therefore could be referred to by the UK Health and Safety Executive (HSE) in a subsequent prosecution, the Court of Appeal has ruled in a case involving waste company, Gaskells NW Ltd.

https://www.out-law.com/en/articles/2018/february/companies-warned-on-internal-investigations-after-court-of-appeal-rejects-privilege-claim/

UK GOVERNMENT RULES OUT GRANTING MEDICAL CANNABIS LICENCE TO BOY, 6, WITH ‘DEATH SENTENCE’ EPILEPSY CONDITION

On 18th February, the Telegraph reported that the government has ruled out issuing a medical cannabis licence to a 6-year-old boy whose rare form of epilepsy improved after taking the drug abroad. Only 9 boys have been diagnosed worldwide and at one point he had 3,000 seizures and 48 hospital visits in a year.  Some forms of cannabis oil treatments are allowed in the UK with a special licence from the Home office. But not if they contain the compound tetrahydrocannabinol (THC), which is the element of cannabis that creates the high. Whilst in the Netherlands the boy was prescribed the drugs Bedica and Bendrolite, which contain small amounts of THC.  The Home Office can issue licences for drugs containing THC to enable clinical trials, and will amend regulations if trial drugs are approved.

http://www.telegraph.co.uk/news/2018/02/18/home-office-rejects-mps-call-grant-medical-cannabis-licence/

 

2,000 ILLEGAL WEAPONS CROSS US-MEXICO BORDER PER DAY, CLAIMS REPORT

On 22nd January, Insight Crime carried an article saying that according to a recent report on arms trafficking by Mexico’s governmental research service, known as the CESOP, an estimated 2,000 weapons illegally enter Mexico from the US every day. The report says 85% of the approximately 15 million weapons that were in circulation in Mexico in 2012 were illegal.  The report identifies straw purchasing — in which individuals legally buy weapons in the US, before smuggling them into Mexico and selling them on the black market — as the most common form of arms trafficking.  It says that the report does not, however, mention Mexican security forces, which Insight Crime had found in 2011 to be a large source of black market weapons.   However, the article questions the 2,000 figure, saying that a 2013 study by the University of San Diego and the Igarape Institute in Brazil (and a follow-up in 2014) estimated that, on average, 212,887 firearms were bought in the US every year between 2010 and 2012, by purchasers who intended to traffic them.  This represents some 580 weapons a day — just 29% of the figure provided by the new report.

https://www.insightcrime.org/news/analysis/2000-illegal-weapons-cross-us-mexico-border-every-day/

SINGAPORE’S NEW CYBERSECURITY ACT – A RELIEF AND LEADING THE WAY FOR OTHERS?

On 19th February, Baker McKenzie carried an article which focuses on the amendments that have since found their way into the Cybersecurity Act as passed by Parliament and that address quite a number of concerns raised during the public consultation exercise.  Summarising the main changes, it says that it will be interesting to watch whether these jurisdictions take a similar approach to Singapore and narrow down their Cybersecurity legislation to cover just critical information infrastructure (CII) owners and not any network operators.

https://globalcompliancenews.com/singapore-cybersecurity-act-20180219/

NORTH KOREA’S LARGEST OVERSEAS RESTAURANT CLOSED DOWN

38 North on 16th February carried an article. The article by a researcher says that these restaurants are (or were?) an interesting phenomenon, and existed I such places as Vietnam, Cambodia, and China.  The article referred to a story in the Daily NK about the recently-closed North Korean restaurant called Pyongyang Koryo Pavilion in the Chinese border city of Dandong, said to have been the largest of North Korea’s overseas restaurants, and originally employing 200 people. The restaurant shut down in November due to intensifying international sanctions targeting North Korea for its nuclear and missile development. Its employees have continued to return to North Korea in groups.

https://www.38north.org/articles/affiliates/north-korean-economy-watch/14626/

RUSSIAN LAWMAKER REZNIK CLAIMS INNOCENCE AS MAFIA TRIAL OPENS IN SPAIN

Rferl on 19th February reports that Russian lawmaker Vladislav Reznik and 17 other suspects have gone on trial in Spain accused of money laundering for 2 Russian organised-crime groups.  Prosecutors believe more that €50 million of Russian mafia money was laundered by the Tambov and Malyshev gangs – 2 of Russia’s largest and best-known criminal organisations.  Reznik is a member of the ruling United Russia party, and previously was the first deputy chairman of the Finance Committee in the lower house of Russia’s parliament, the State Duma.  His wife, Diana Gindin, also went on trial, but the alleged gang bosses, Gennady Petrov and Aleksandr Malyshev, are still at large.  The case dates back to 2008, when Spanish police detained 20 Russian suspects.

https://www.rferl.org/a/russia-spain-lawmaker-reznik-denies-charges-mafia-trial/29049099.html?src=ilaw

IRAQI PM PROMISES CORRUPTION CRACKDOWN TO REASSURE FOREIGN INVESTORS

Shafaaq on 19th February reports that the PM gave the undertaking at a Kuwaiti-sponsored conference that drew representatives from more than 70 countries, 51 international aid organizations, and several hundred businesses.

http://www.shafaaq.com/en/En_NewsReader/f65b15f4-6811-49c0-97e9-a6e81301de02?src=ilaw

FRANCE URGES UN COURT TO DROP EQUATORIAL GUINEA CASE

News 24 on 19th February reported that France accused Equatorial Guinea of wanting to “paralyse” French criminal procedure in a top-level corruption probe, as it urged judges to throw out a case against it before the UN’s International Court of Justice.  In a bitter diplomatic row, Equatorial Guinea is accusing France of violating the diplomatic immunity of its vice president Teodorin Obiang, 48, the son of the long-time president, and who has been prosecuted by a French court on charges of embezzling $180 million of public funds to finance his jet-set lifestyle. He was tried in absentia and sentenced in October to a 3-year suspended sentence for corruption, and was also given a suspended fine of $35 million for money laundering, corruption and abuse.

https://www.news24.com/Africa/News/france-urges-un-top-court-to-dump-e-guinea-case-20180219?src=ilaw

GUPTA BROTHERS ARE IN DUBAI NOW

The Hindu newspaper reported on 19th February that the Gupta brothers, accused of corruption in South Africa, are now in Dubai after a brief visit to India, and it is said that they will continue to fight the legal case from there.

http://www.thehindu.com/news/national/gupta-brothers-arein-dubai-now/article22801134.ece?src=ilaw

ISRAEL CONFIRMS IT WILL TAX BITCOIN AS PROPERTY

Coindesk on 19th February reported that Israel’s government confirmed that it would treat bitcoin and other cryptocurrencies as a kind of property for tax purposes.  This confirms past indications that the Tax Authority will regard cryptocurrencies as “a property, not a currency”, making it therefore taxable as such, and this was detailed in a draft circular issued in January 2018 of this year.  Profits from cryptocurrencies will be subject to capital gains tax, while individuals mining or trading cryptocurrencies in connection with businesses must pay VAT in addition to capital gains tax.

https://www.coindesk.com/israel-confirms-will-tax-bitcoin-property/

IF IRS WANTS TO OBTAIN RECORDS HELD IN ANOTHER COUNTRY, DON’T IGNORE ITS REQUEST

Foodman CPA & Advisers published an article on 19th February saying that, at a certain point during an income tax examination, if the IRS determines that it needs documents or items located outside the US, it may issue a Formal Document Request (FDR).  The article details the consequences and says that taxpayers that make a decision to not respond to an FDR should to understand the consequences of litigating against the IRS without documentation that could be instrumental to a positive and beneficial outcome.

https://www.jdsupra.com/legalnews/if-irs-wants-to-obtain-records-held-in-47333/

 

LITHUANIAN LAWMAKER FACES IMPEACHMENT

OCCRP on 19th February reported that a Lithuanian lawmaker is facing impeachment after a parliamentarian investigation confirmed media reports claiming he was financially benefiting from renewable energy businesses whose interests he was protecting as a legislator.  Investigations showed that the family of Arturas Skardzius – a veteran in Lithuanian politics – has been renting out land to a wind farm for much more money than the owners of neighbouring plots were getting. And this even though the wind farm only used 1% of the Skardzius plot.  At the same time, he was blocking amendments that may have prevented the business group his family rented the land to from building a major offshore wind farm in the Lithuanian part of the Baltic Sea.  Skardzius‘ wife co-owns a solar energy business in Belarus, together with Sergey Beliy, the former CEO of Belenergo, the Belarus state-owned energy company.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7668-lithuanian-lawmaker-faces-impeachment-after-occrp-probe

COUNTERFEIT EURO PRINT SHOP DISMANTLED IN PORTUGAL WITH SUPPORT FROM EUROPOL

Europol on 19th February reported that Portuguese Judiciary Police, in co-operation with the Spanish National Police and Europol, detained 2 men and 1 woman suspected of producing counterfeit euro currency responsible for producing thousands of banknotes, mainly €20 and €50, with the distribution particularly affecting Portugal and Spain.  These counterfeits were detected in 8 other European countries: Germany, France, Italy, Austria, Belgium, Estonia, the Netherlands and Switzerland.  A complete illegal print shop was dismantled which included the seizure of guillotines, press dies, holographic tape rolls, computer and printers. Computer files related to this illegal activity were also identified.

https://www.europol.europa.eu/newsroom/news/counterfeit-euro-print-shop-dismantled-in-portugal-support-of-europol

SANCTIONED IRANIAN AIRLINE BOUGHT ENGINES AND PARTS THROUGH TURKISH FRONT COMPANIES

On 19th February, the Wall Street Journal reported that an Iranian airline, Mahan Air, under sanctions by the US for ferrying weapons and fighters into Syria repeatedly bought US-made jet engines and parts through Turkish front companies over the past several years, most recently in December 2017, federal investigators said in a new US government filing.  This could cause complication for plans to sell Boeings to Iranian airlines.

https://www.wsj.com/articles/iranian-airline-under-sanctions-bought-u-s-jet-parts-through-front-firms-1519041600?mod=e2tw

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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