1st March 2018
FEAR OF US SANCTIONS PREVENTED REFUELLING OF IRANIAN MINISTER’S AIRCRAFT IN GERMANY
The Jerusalem Post on 28th February reported claims that energy and oil companies in Germany refused to refuel Iranian Foreign Minister Javad Zarif’s airliner ahead of his trip to the Munich Security Conference in mid-February to avoid violations of US sanctions targeting the regime in Tehran, according to German media reports. To avoid a serious diplomatic crisis, Chancellor Merkel’s administration ordered the Luftwaffe to refuel his plane in order to assure Zarif that he could leave the country.
ALAND ISLAND GAMING COMPANY FINED €50,000 FOR MONEY LAUNDERING DEFICIENCIES
YLE in Finland on 28th February reported that Åland-based betting company Paf has been fined €50,000 for failing to investigate the origins of a client’s money. One of the company’s clients had placed bets with Paf for years using money she had defrauded, and it was held that it had acted negligently by not looking into where the money originated from even though it was known to the company that the client was employed as a bookkeeper. Paf first noticed the woman’s excessive gambling habit in May 2011 and contacted her. Only in January 2012 did Paf alerted authorities about its suspicion of money laundering, but nevertheless allowed the woman to continue betting. In October 2012 the woman’s account was closed by the customer herself. She has been convicted of fraud and embezzlement.
ULTRA-WEALTHY ELITE FLOCK TO ITALY AFTER IT INTRODUCES FLAT-RATE TAX OF €100,000 A YEAR FOR THE RICH
The Mail Online on 27th February reported that millionaires from Russia, Norway and the US have moved looking to take advantage of the nation’s flat-rate tax of €100,000 a year. The measure lets wealthy individuals taking up residency pay a flat tax regardless of their income, and it appears to have worked with around 150 people, including some with wealth in the ‘hundreds of millions,’ inquiring about the measure. This was revealed by Fabrizio Pagani, head of the office of the Minister of Economy and Finance, during an interview
USING GOOGLE TO VERIFY SHIPPING MOVEMENTS AND SPOT NORTH KOREAN ONES
On 28th February, the Export Law Blog points out that when trying to exercise the due diligence required by FATF and others to determine the identity of the ship receiving a transfer at sea, Google and other online resources are your friend. In a recent case highlighted in OFAC sanctions advisory, had the IMO website been checked it would have revealed that identifying number IMO 8660909 belonged to a cargo ship named ZHI KUN 6 (not a tanker named KUS). It also would have revealed that there was no ship named KUS. Finally, onet could have used one of many marine traffic sites, such as https://www.marinetraffic.com/ to determine the location of the ZHI KUN 6, which appears to have been elsewhere at the time of the cargo transfer.
EMCDDA–EUROPOL JOINT REPORT ON A NEW PSYCHOACTIVE SUBSTANCE: CYCLOPROPYLFENTANYL
On 28th February, the EU published a report following a joint assessment by the EMCDDA and Europol launched in September 2017 to examine the available information on the new psychoactive substance N-phenyl-N-[1-(2-phenylethyl)piperidin-4-yl]cyclopropanecarboxamide (cyclopropylfentanyl). The Joint Report was submitted to the Council, the Commission and the European Medicines Agency on 19th December.
MARITIME ENFORCEMENT POWERS FOR POLICE IN NORTHERN IRELAND
The Policing and Crime Act 2017 (Commencement No. 1) Order (Northern Ireland) 2018 (SR 2018/34) makes amendments to the law in Northern Ireland re the extension of police powers to vessels in British waters.
CROWDFUNDING FRAUD: HOW TO SPOT FAKE ONLINE FUNDRAISING CAMPAIGNS
WKYC3 in the US published an article on 28th February saying that from phoney funerals to fake cancer, there is a dark side to crowdfunding that can turn generous donors into victims of fraud. It makes a few suggestions of simple checks you can make.
ARISEBANK ICO FRAUD CASE MAY ENSNARE ADDITIONAL PARTIES
Coindesk on 1st March reports that the receiver for AriseBank, the Texas ICO issuer at the centre of a securities fraud case, suspects the firm’s co-founders have not been entirely forthcoming with asset disclosures. He alleges that the co-founders, Jared Rice Sr. and Stanley Ford, initially failed to comply with a court order requiring them to disclose all of their property as well as assets owned by AriseBank itself. The SEC issued a cease-and-desist order to AriseBank, a self-described as a “decentralized banking platform” in February. The receivership report also indicates that the case could expand its reach beyond AriseBank and its co-founders.
HONG KONG SECURITIES AND FUTURES COMMISSION IMPOSES US$63 MILLION IN FINES LAST YEAR
On 1st March, the South China Morning Post reported that although the SFC imposed higher fines it also conducted fewer investigations, focusing instead on big cases involving corporate fraud and misconduct of listing sponsors, according to a study by law firm Freshfields Bruckhaus Deringer. The fines last year increased by 632% compared to 2016, mainly because of the record HK$400 million penalty imposed on HSBC Private Bank (Suisse) in November, after the bank lost its appeal against a 2015 ruling for misconduct relating to the sale of structured products linked to Lehman Brothers. This was the largest-ever fine imposed on a single case by the SFC since the regulator was set up in 1989.
GUIDE: ANTI-CORRUPTION & BRIBERY IN FRANCE
On 27th February, Reed Smith published a structured guide to anti-corruption and bribery laws in France.
CORRUPTION AND BRIBERY OFFENCES IN INDIA
In the light of the recent PNB Bank scandal, this briefing from J Sagar Associates might be seen as timely. It provides a structured guide to corruption and anti-bribery laws in India.
ISRAEL SUPREME COURT: DIGITAL CURRENCY COMPANIES CAN CONTINUE OPERATING THROUGH BANK ACCOUNTS
Barnea reported on 28th February that cryptocurrency trader, Bits of Gold Ltd, had succeeded (at least for now) in its struggle to have its bank handle its business. Although the Supreme Court did not deliberate the material question(i.e. is a bank allowed to deny banking services to cryptocurrency traders) the court ruled in favour of Bits of Gold’s motion and issued a preliminary injunction that prohibits the bank from restricting activities relating to bitcoin trading in the company’s account. This overturned a lower court’s decision that the bank did have the discretion to refuse the type of business.
THE NEW COMPUTERISED TRANSIT SYSTEM: SUPPORTING GUIDANCE
On 1st March, HMRC published detailed guidance on how to get access to and use the online New Computerised Transit System (NCTS) – a system of electronic declaration and processing that traders must use to submit Union Transit (UT, formerly called Community Transit or CT) and Transports Internationaux Routiers (TIR – for road transport movements that begin or end outside the EU) declarations electronically. It also covers the Common Transit procedure that can be used for movements between the EU and the Common Transit countries (i.e. EFTA countries – Switzerland, Liechtenstein, Norway and Iceland – plus Turkey, Macedonia and Serbia).
COMMONS LIBRARY ANALYSIS OF THE UK DATA PROTECTION BILL
On 28th February, the House of Commons Library produced a briefing in advance of the 2nd Reading of the Bill on 5th March. The Bill implements the GDPR and the EU Law Enforcement Directive in UK law, update the laws governing the processing of personal data by the intelligence services, repeal the Data Protection Act 1998, and aims to ensure that the UK would be able to freely exchange data with the EU post-Brexit.
5 PEOPLE BEING HELD BY GARDAI OVER €500,000 DUBLIN ZOO FRAUD PLOT
On 1st March, the Herald in Ireland reported that 5 Asian nationals were being questioned at 3 separate garda stations over an alleged “invoice redirection” fraud valued at almost €500,000, which targeted at Dublin Zoo. The 3 men and 2 women were also being quizzed about a similar theft of more than €250,000, which happened at an education company.
GERMAN REGULATOR PUBLISHES STATEMENT ON ICO AND TOKEN REGULATION
On 28th February, Latham & Watkins reported that BaFin, the German Federal financial services supervisory authority, has joined global regulators in releasing guidance for German ICO issuers and advisors. In conclusion, the firm says that, in line with BaFin’s supervisory practice so far, the BaFin statement makes clear that ICO are generally feasible in Germany provided that they comply with existing regulatory requirements. However, uncertainties remain regarding the exact classification of a given token design as a specific financial instrument. Therefore, careful structuring of the ICO is imperative to avoid undesired regulatory implications.
AUSTRIA PLANS TO ALLOW CLAIMS AGAINST UNAUTHORISED ONLINE GAMBLING SITE TO GO BACK 30 YEARS
Calvin Ayre on 28th February reported that Austria is proposing new measures to block unauthorised online gambling operators and to allow their customers to reclaim all gambling losses suffered over the past 3 decades.
IRAN BANS USE OF DOLLARS IN IMPORT DOCUMENTS
Customs Today on 1st March carries this report, saying that the policy was said to be in line with an official request by the Central Bank of Iran (CBI) and was specifically meant to address fluctuations in market rates of the dollar. US banks are still banned from dealing with Iran as part of an old US trade embargo that still remains in place. Accordingly, this is believed to have already effectively blocked any transactions with Iran which is based on US dollars because they would ultimately have to be cleared in the US.
ARE IRAN’S BALLISTIC MISSILES DESIGNED TO BE NUCLEAR CAPABLE?
The International Institute for Strategic Studies has issued a briefing which says that Iran has the largest and most diverse ballistic-missile arsenal in the Middle East – could these systems one day be used to launch nuclear weapons? In a new report, IISS analysts Michael Elleman and Mark Fitzpatrick offer a detailed assessment of the design intentions behind each missile within Iran’s inventory. The result is a clear picture as to which platforms the US and its allies should seek to remove, and which ones can be discounted.
HOW NORTH KOREA USES BITCOIN TO GET AROUND US SANCTIONS
CNBC on 28th February reported on the Pyongyang’s apparent skill at using cryptocurrencies. It claims that North Korea can partially skirt financial restrictions with cryptocurrencies, an online form of money, according to Priscilla Moriuchi, formerly a top National Security Agency official charged with overseeing cyber threats from East Asia. Moriuchi estimates that North Korea earns between $15 million and $200 million by creating and selling cryptocurrencies and then turning it into hard cash.
IRAN’S BURGEONING STRATEGIC MISSILE FORCES
CSIS Missile Defence on 1st March reported that the American Foreign Policy Center had published a paper on Iran’s strategic forces, which says that Iran has invested significantly in the development of its strategic forces, which today includes the region’s largest and most diverse arsenal of ballistic missiles, increasingly sophisticated cruise missiles, as well as an array of shorter-ranged anti-ship missiles and air defences. Iran has also established the technological basis for a nuclear weapons programme. This effort has included a blend of overt activities under the auspices of a civilian nuclear energy programme, and covert activities aimed at expanding Iran’s nuclear weapons potential without international blowback.
PUTIN THREATENS US ARMS RACE WITH NEW MISSILES DECLARATION
The Guardian on 1st March reported President Putin’s news conference, where he announced that Russia has developed and is testing a new line of strategic nuclear-capable weapons that would be able to outmanoeuvre US defences, including hypersonic missiles.
THREAT FROM NORTHERN IRELAND-RELATED TERRORISM TO GREAT BRITAIN
On 1st March, the Home Office issued a news release saying that the Security Service, MI5 has reduced the threat level to Great Britain from Northern Ireland-related terrorism from substantial to moderate.
GUERNSEY SHUNS ‘RISKY’ DIGITAL CURRENCY BUSINESS
On 1st March, Tax News reported that Guernsey FSC said recently that while it has a policy of encouraging innovation it would be cautious about approving the establishment of a digital currency exchange on the island. The FSC said that virtual currencies or cryptocurrencies could interact with Guernsey’s regulatory laws in a number of ways, and that any application would be assessed on its individual merits, using the same criteria for other asset types or structures. This means the FSC would look to ensure that key controls are appropriate – for example around custody, liquidity, valuation of assets, and investor information.
HM TREASURY CORRECTS ITS VENEZUELAN SANCTIONS LIST
On 1st March, HM Treasury published a news release correcting the entry for Gustavo Enrique GONZALEZ LOPEZ (formerly mistakenly referred to as “Ganzalez”).
GLOBAL BRIBERY AND CORRUPTION OUTLOOK 2018
On 1st March, law firm Hogan Lovells published its guide to trends and developments in anti-bribery and corruption, saying that for the most part, 2018 will see countries do more to enforce their anti-bribery and corruption laws. How authorities plan to do this — from co-operating with foreign counterparts to adapting others’ regimes — differs by jurisdiction.
US TREASURY EXPANDS “SAFE HARBOR” LIST OF OPPORTUNITY ZONES
On 1st March, Ballard Spahr reports that a new tax law, known as the Tax Cuts and Jobs Act, allows states, the District of Columbia, US possessions, and Puerto Rico to designate “Qualified Opportunity Zones” to encourage new capital investment in low-income communities (LIC Tracts) and contiguous census tracts (Eligible Non-LIC Contiguous Tracts). Each Qualified Opportunity Zone must be nominated by a state for designation as an Opportunity Zone by March 21st.
EXXONMOBIL EXITS ROSNEFT JOINT VENTURES
European Sanctions Blog on 1st March reports that ExxonMobil Corporation has announced that it will be withdrawing from a number of joint ventures with Rosneft – Russia’s largest state-owned oil and gas company – due to US sanctions on Russia. It reminds us that in 2017, OFAC fined ExxonMobil $2 million for violating US sanctions against Russia, for matters linked to its relationship with Rosneft.
HONDURAS’ FORMER FIRST LADY ARRESTED IN GRAFT CASE
On 1st March, Baker McKenzie reported that former first lady Rosa Elena Bonilla and her brother-in-law Mauricio Mora were taken away by police after they had searched the home of former Honduran President Porfirio Lobo. It also says that investigators for the National Anti-corruption Council NGO have told prosecutors that Bonilla, 48, deposited $600,000 in government funds into her personal bank account 5 days before Lobo ended his 4-year term in January 2014. They also say she hasn’t accounted for at least $6 million in government funds for her office during Lobo’s administration.
INTERNATIONAL NARCOTICS CONTROL BOARD EMPHASISES PREVENTION AND TREATMENT OF DRUG USE
Insight Crime on 1st March reported that the UN agency in charge of monitoring compliance with international drug control agreements released a report urging countries around the world to improve efforts to prevent and treat problematic drug use, underscoring a continuing shift away from traditional counter-narcotics policies. The annual report of the International Narcotics Control Board (INCB) places a heavy emphasis on the importance of ensuring access to treatment for people with drug use disorders, even going so far as to describe drug disorder treatment as a “human right.”.
The report is at –
BOLIVIA BUST SHOWS DEMAND FOR WILDLIFE FROM CHINA
Insight Crime on 1st March says that a recent case in Bolivia involving Chinese nationals demonstrates how the trade in exotic animal parts is being fuelled by Asian buyers. The operation followed months of monitoring and investigation and resulted in police confiscating parts from an estimated 54 animals including jaguars, leopards, snakes and armadillos. 2 Chinese nationals and a Bolivian were arrested.
US MAY EASE ARMS EXPORT RULES
Arms Control Today reports that the Trump administration is expected to unveil changes to US conventional arms transfer policies and rules that could speed arms exports. It reports that, in January, Reuters reported that the administration is working on a “Buy American” plan that would include a push to sell US weapons abroad and steps to amend export controls. Nothing has been publicly presented by the administration, but revisions to presidentially declared conventional arms transfer policies, as well as rules on the exports of firearms and ammunition, are likely to be among the first changes proposed.
ISIS LOOKS TO REBOUND IN THE PHILIPPINES
The Cipher Brief on 1st March reports that although the Philippine army managed to suppress an ISIS-affiliated rebellion in the country’s southern island of Mindanao last summer, ISIS fighters fleeing Syria and Iraq continue to trickle into the country and pose a growing jihadist threat throughout SE Asia.
BBC DOCUMENTARY ON ACTIVITIES OF LONDON-LISTED MINING COMPANY IN SIERRA LEONE
On 1st March, BBC Radio broadcast a documentary on its World Service about the activities of a UK company involved in mining in Sierra Leone, African Minerals Ltd (or AML). The reporter investigates some of the untold stories of one of West Africa’s most dramatic recent abuses of corporate power. Was there any corporate governance or oversight by the UK authorities? And how, it asks, did someone with a chequered history manage to be able to raise large amounts of money to fund his projects. Frank Timis, the largest shareholder and executive chairman of African Minerals, was/is often described as a controversial figure – in 2007, the Toronto stock exchange declared Timis “unsuitable as director” after he had failed to report that he was convicted twice for heroin possession. In October 2017, the Guardian carried an article about a case brought against Tonkolili Iron Ore Ltd, formerly a subsidiary of African Minerals Ltd on behalf of 41 people from Bumbuna, in the north of the country. Though the allegations relate to events several years ago, the documentary says that only now are details coming out.