ALLEGED BRIBERY SCANDAL AT ISRAELI CONSTRUCTION GIANT BLOWS COVER OFF ITS BUSINESS PRACTICES IN AFRICA

On 9th March, Haaretz reported about allegations concerning the Shikun & Binui construction group.  It points out that most of its projects in Africa are governmental.  Following an amendment of Israeli law that came into force in 2010, bribing foreign officials is just as illegal as bribing Israeli ones.   The article says that if it were not for the media swirl surrounding Netanyahu, the S&B case would probably have made front pages, especially as the company is controlled by billionaire Shari Arison, who also controls Bank Hapoalim.  There is a claim that police suspect that 8 people, current and former executives at S&B, were involved in, or knew about, methodical bribery of government officials in several African countries to get infrastructure projects.  Solel Boneh Overseas (Engineering Services) is the most substantial, profitable company in the S&B group, and is heavily involved in projects in Africa, and began operations there in the 1960s.  Projects in Africa have usually been sponsored by the World Bank and various UN bodies.  The contract is made with the state but the international institutions are the ones that in practice transfer the money from the government to the company.  The article concludes with denials from S&B, saying that the claims arise from a lawsuit by one former worker of a foreign group company operating partly in Africa.

https://www.haaretz.com/israel-news/bribery-scandal-at-israeli-construction-giant-blows-cover-off-its-busi-1.5888180?src=ilaw

GLOBAL BRIBERY AND CORRUPTION OUTLOOK 2018

On 5th March, law firm Hogan Lovells published this briefing which begins by saying that, for the most part, 2018 will see countries do more to enforce their anti-bribery and corruption laws.  How authorities plan to go about this — from co-operating with foreign counterparts to adapting others’ regimes — differs by jurisdiction.  The topics covered include China’s new Anti-Unfair Competition Law which redefines commercial bribery, with wider coverage to include parties with influence over a transaction, for example, though who these are remains unclear and increased penalties.  It also asks if the Trump Administration will adhere to the same policy as the Obama one – only time will tell, it concludes, but the signs are that it will.  It also points out that in many corporate US Foreign Corrupt Practices Act (FCPA) resolutions with the DoJ, the company must agree to an independent compliance monitor, in addition to a monetary penalty.  Having a monitor appointed is intrusive – it signals the enforcement authorities neither trust a company’s compliance programme nor believe the company can behave without outside oversight.

http://www.hoganlovells.com/en/publications/global-bribery-and-corruption-outlook-2018

REMITTANCES TO FRAGILE COUNTRIES: US TREASURY SHOULD ASSESS RISKS FROM SHIFTS TO NON-BANKING CHANNELS

On 8th March, the US Government Accountability Office issued a news release and a 65-page report saying that remittances and other global payments can be used to hide money laundering and other financial crimes.  It says –

  • that there has been an increase in shipping cash across borders, due to controls on banking movements.
  • the loss of banking access for money transmitters is a key challenge, although remittances continue to flow to selected fragile countries.
  • all 12 of the money transmitters GAO interviewed, which served Haiti, Liberia, Nepal, and particularly Somalia, reported losing some banking relationships during the last 10 years.
  • 9 of the 12 money transmitters reported using channels outside the banking system (hereafter referred to as non-banking channels), such as cash couriers, to move funds domestically or, in the case of Somalia, for cross-border transfer of remittances.
  • several banks reported that they had closed the accounts of money transmitters because of the high cost of due diligence actions.
  • despite some money transmitters losing bank accounts, they see no evidence that the volume of remittances is falling.
  • the US Treasury cannot assess the extent to which money transmitters are shifting from banking to non-banking channels to transfer funds due to loss of banking access.

The GAO recommends that the US Treasury should assess the extent to which shifts in remittance flows to non-banking channels for fragile countries may affect Treasury’s ability to monitor for financial crimes and, if necessary, should identify corrective actions. GAO requested comments from the Treasury on the recommendation, but none were provided.

https://www.gao.gov/products/GAO-18-313

OTHER THINGS YOU MAY HAVE MISSED – MARCH 8

8th March 2018

WESTMINSTER COUNCIL DEPUTY LEADER STANDS DOWN AMID INVESTIGATION OVER GIFTS

The Guardian on 8th March reported that the deputy leader of Westminster Council, Robert Davis, chair of the planning committee for 17 years, has stepped aside after the Guardian revealed he had received hospitality or gifts 893 times over 6 years, frequently from property developers seeking planning permission.  An independent QC is to undertake an investigation of his conduct.

https://www.theguardian.com/society/2018/mar/08/westminster-deputy-leader-stands-down-amid-investigation-over-gifts

HOW BRAZIL’S ‘LORD OF GUNS’ ARMED RIO’S DRUG WAR WITH US WEAPONS

On 7th March, the Huffington Post carried an article about Frederik Barbieri, a 46-year-old Brazilian who had been raised outside Rio de Janeiro before becoming a millionaire by smuggling guns from the US to Brazil.  By 2012 he had fled to the United States and settled in South Florida, from which, Brazilian police allege, he spent 5 years smuggling more than 1,000 rifles and thousands of rounds of ammunition into Brazil.  He set up a pool supply company in Miami and operated it as a seemingly legitimate business that sold pool heaters and other equipment primarily for export to Brazil.  Once he had procured the weapons to be shipped to Brazil, according Brazilian police, he’d fill the pool heaters with guns.  Barbieri’s case highlights a phenomenon that is rarely discussed: the fact that American guns often find their way out of the US via smugglers looking to make an easy profit by selling cheaply bought contraband at a sizable mark-up.  In the last 3 years, Brazil’s Federal Police have seized more than 1,500 American-made guns, most of them from people the police say are drug traffickers and members of drug gangs.  However, the former hotline between Brazil and the US no longer exists, and the relevant law enforcement agency (ATF), which holds trace agreements with various foreign countries to help it track US firearm seizures, appears to have let its pact with Brazil lapse years ago.  Since 2010, the US DoJ and the ATF have prosecuted only 2 cases of alleged gun smuggling between the US and Brazil, according to public records.  In February, Barbieri was arrested and faces 4 separate charges, including conspiracy, firearms smuggling from the US to Brazil, and exporting firearms without a legal licence.

https://www.huffingtonpost.com/entry/weapon-smuggling-us-brazil_us_5aa053d8e4b0d4f5b66d14e8

INTERNATIONAL ARMS SMUGGLING LEADERS ARRESTED IN GERMANY

On 8th March, Prensa Latina and others reported that German, French, Austrian and Swiss police investigators made arrests connected to international arms smuggling.  In Germany, 3 of the leaders of the group were arrested and saw the seizure of an important number of weapons, including pistols and rifles.  German police had been investigating the activities by the smuggling group since June 2017 following an investigation in Toulouse, France.  Simultaneous raids were carried out in 4 countries in November led to several arrests and the seizure of large numbers of firearms.

https://www.breakingnews.ie/world/police-seize-large-number-of-arms-and-hundreds-of-kilos-of-ammo-in-europe-weapons-smuggling-crackdown-831325.html

US TURTLE SMUGGLERS WRAPPED THEM IN CANDY AND NOODLES

The State in South Carolina on 8th March reported that 3 South Carolinians and a North Carolinian have been indicted by a federal grand jury on charges of operating an illegal scheme to smuggle tiny turtles in and out of the US.  The turtles were shipped in the mail and by FedEx, packaged in socks and covered up with little pieces of candy or noodles, according to the indictment.  The article says that smuggling turtles, many endangered and federally protected, is a little known but profitable illegal business – collectors in the US will pay thousands of dollars for exotic Chinese turtles, and collectors in China will pay thousands for US turtles.

http://www.thestate.com/news/local/crime/article203961044.html#storylink=cpy

MALAYSIA’S 1MDB FUND SPAWNS WORLDWIDE PROBES

On 7th March, Bloomberg provided an update on the 1MDB case – where the state-run investment company is said to have been involved in at least $4.2 billion in irregular transactions.  Investigators have been trying to trace whether money flowed through and around 1MDB and illegally into personal accounts, and investigations are underway in at least 10 countries.  The US DoJ has sought about $1.7 billion in assets that it says were illegally acquired through money diverted from 1MDB, including real estate, art, a superyacht, and proceeds from the film “The Wolf od Wall Street”.  The article also details who is involved, or allegedly involved.

https://www.bloomberg.com/news/articles/2018-03-07/malaysia-s-1mdb-fund-spawns-worldwide-probes-quicktake

RUSSIAN FIRM AGREES ON HOW TO PAY US IN LAUNDERING CASE

Bloomberg on 7th March reported that a Russian-backed has finally agreed with the US authorities on how to pay a multi-million dollar settlement of a US lawsuit.  Prevezon Holdings Ltd will make good on its $6 million obligation using escrowed funds from the seizure and sale of New York apartments, according to a filing in Manhattan federal court.  The dispute stemmed from $230 million in stolen Russian tax funds that were laundered out of the country and placed in bank accounts and other assets around the world, including a handful of New York luxury apartments.  It says that the theft used an American-backed investment fund in Russia, Hermitage Capital. Its founder, Bill Browder, backed an investigation into the web of shell companies that moved the money.  One of the lawyers he hired, Sergei Magnitsky, died in a Russian prison after being arrested and beaten. The US and several other countries have since adopted so-called Magnitsky Act sanctions against countries that engage in human rights abuses.  The US case was settled in May 2017 on the eve of trial, with Prevezon agreeing to pay the judgment once some of its funds frozen in the Netherlands were unlocked.  The money was released by the US but then immediately re-frozen by the Dutch, who had launched their own investigation.

https://www.bloomberg.com/news/articles/2018-03-07/russian-firm-reaches-new-accord-with-u-s-in-laundering-case

VIJAY MALLYA’S ABANDONED LUXURY YACHT SEIZED OVER UNPAID WAGES

Money Control, and others, reported that Isle of Man-registered, 95-metre superyacht, ‘Indian Empress’, has been detained in Malta as a trades union makes attempts to recover over $330,000 in unpaid wages and other costs on behalf of its members.  Indian liquor tycoon and F1 team-owner Mallya reportedly abandoned it last year after his arrest on an extradition warrant in the UK on the request of the Indian authorities.

https://www.moneycontrol.com/news/business/vijay-mallyas-abandoned-luxury-yacht-seized-over-unpaid-wages-2523361.html

http://www.superyachtnews.com/crew/my-indian-empress-arrested-over-wage-dispute

£28 MILLION CLAIM AGAINST LAW FIRM LINKED TO HEATHER CAPITAL CASE IS DROPPED

The Times on 8th March reported that a claim against a Glasgow law firm linked to a failed hedge fund has been dropped.  Paul Duffy, a liquidator with Ernst & Young, had been suing Levy & McRae solicitors after the collapse of Heather Capital, amid allegations that £90 million had gone missing.  However, the last action in the case has been abandoned in the Court of Session in Edinburgh.  The Heather fund was established on the Isle of Man in 2005 by Gregory King, a lawyer turned financier.  After it failed 5 years later, an Isle of Man court judgement likened it to a Ponzi scheme.

https://www.thetimes.co.uk/article/28m-claim-against-law-firm-is-dropped-fv39ql6bk

ISLE OF MAN UPDATES ITS CENTRAL AFRICAN REPUBLIC, UKRAINE AND NORTH KOREA SANCTIONS LISTS

On 7th March, 3 news releases in the Isle of Man announced that changes to the various lists had effect in the Island, thus meaning that the Island’s lists were in line with those used by the UK.

https://www.gov.im/news/2018/mar/07/financial-sanctions-central-african-republic/

https://www.gov.im/news/2018/mar/07/financial-sanctions-democratic-peoples-republic-of-korea-north-korea/

https://www.gov.im/news/2018/mar/07/financial-sanctions-ukraine-misappropriation-and-human-rights/

PRODUCTION ORDERS: WHAT THEY ARE, HOW YOU RESPOND AND WAYS TO CHALLENGE THEM

On 7th March, English solicitors Rahman Ravelli published this briefing.

https://www.lexology.com/library/document.ashx?g=500f7f1b-7854-491b-8020-95ee430bc211

DOJ GUIDELINES FOR COMPLIANCE SYSTEMS

On 13th February, Taylor Wessing in Germany published this interesting and useful briefing, saying that, despite being based on US procedures, it was a useful tool for compliance officers in Germany.  It starts by saying that German courts and authorities do not offer a clear map for compliance officers to follow. The characteristics of an effective compliance programme are currently vague and need to be specified.  One important point it makes is that a compliance system that exists only on paper will not stand up in an investigation, and in the worst case, the US authorities may even regard this “fig leaf” as an attempt of the company to cover up risks by issuing one stylised policy after the other but failing to actually address the given problems.  The DoJ guidelines clearly focus on the practical implementation of the compliance requirements.  The briefing includes a checklist based on a summarised, systematic overview of the compliance questions put to corporate entities by the DoJ – in fact, the DoJ has a total of 119 questions in its guidance on the evaluation of corporate compliance programmes  at –

https://www.justice.gov/criminal-fraud/page/file/937501/download

https://deutschland.taylorwessing.com/en/doj-s-guidelines-for-compliance-systems

EU SHOULD STOP ILLEGAL LOGGING BY STEPPING UP ENFORCEMENT OF TIMBER REGULATION

EurActiv on 8th March carried an article by a lawyer for ClientEarth.  He said that illegal harvesting and trading of timber has a devastating impact on forests ecosystems and the people who rely on them for their livelihoods.  As one of the world’s largest timber consumers, the EU can play a major role in stopping illegal logging through trade.  This weekend marked the 5-year anniversary of the EU Timber Regulation (EUTR), which aims to prevent illegal timber from entering the EU market and help international efforts to halt deforestation, protect nature and fight climate change.  It requires companies to check the risk of illegally harvested wood in their supply chains and is one of the EU’s major legal tools to defend the world’s forests.  He says that when the EUTR bites, it can really help strengthen forest governance in timber-producing countries, but some major challenges still exist.  Very little information about enforcement of the EUTR by member states is made available to the public. More information is essential to show the EUTR’s progress – or lack of progress – and to keep the system credible, both within the EU but in timber producing countries too.  Strong enforcement of the regulation will motivate companies to act.

https://www.euractiv.com/section/energy-environment/opinion/eu-should-stop-illegal-logging-by-stepping-up-enforcement-of-timber-regulation/

MYANMAR: GEMS AND PRECIOUS STONES NOW SUBJECT TO EXPORT LICENCES

HK TDC on 7th March reports that an export licence is now required for a list of 3,345 products before they could be exported from Myanmar.  Gems and precious stones, along with animal products, forestry products, unprocessed mining goods, vehicles, heavy machinery, paddy, oil-producing plants, seeds, chemicals, fertilisers, explosives and antiques, are included in the list.

http://economists-pick-research.hktdc.com/business-news/article/Economists-Pick-Regulatory-Alert-Asia/MYANMAR-Gems-and-Precious-Stones-Now-Subject-to-Export-Licences/raasean/en/1/1X34B7KV/1X0AD9KP.htm

JAPAN REGULATOR PENALISES 7 CRYPTOCURRENCY EXCHANGES OVER SECURITY

The Nikkei Asian review on 8th March reported that Japan’s financial watchdog had announced that 7 cryptocurrency exchange operators (Tech Bureau, GMO Coin, Bicrements, Mr. Exchange and Coincheck) have been penalized for failing to adequately protect customers and prevent money laundering and handed business improvement orders.  2 unregistered operators, FSHO and BitStation, have received business suspension orders.  Coincheck lost roughly $550 million worth of NEM cryptocurrency in a hacking attack in January.

https://asia.nikkei.com/Politics-Economy/Economy/Japan-regulator-punishes-7-cryptocurrency-exchanges-over-security?src=ilaw

https://www.bloomberg.com/news/articles/2018-03-08/japan-expands-cryptocurrency-crackdown-after-coincheck-hack?src=ilaw

INTEGRITY IS ‘MORE THAN MERE HONESTY’, COURT OF APPEAL TELLS SOLICITORS

On 8th March, the Law Society Gazette reported on the comments of the UK Court of Appeal that dishonesty and lack of integrity cannot be treated as synonymous for the purposes of assessing a solicitor’s conduct.  Lord Justice Jackson concluded that integrity for solicitors was about more than simply acting honestly.  Instead, professional people should have a duty to adhere to higher moral standards not only in what they say but what they do.  His conclusion formed the basis of 2 appeals handled together concerning the prosecution of solicitors by the Solicitors Regulation Authority.

https://www.lawgazette.co.uk/law/integrity-is-more-than-mere-honesty-coa-tells-solicitors/5065144.article

https://www.legalfutures.co.uk/latest-news/solicitors-integrity-means-ethical-rather-just-honest-behaviour-says-court-appeal

UK TRADE WITH IRELAND

On 7th March, the House of Commons Library published a briefing paper that provides some key statistics on the UK’s trade with Ireland.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8173

SYRIA: WHAT NEXT?

The House of Commons Library published a briefing on 7th March which says that the battle against ISIS in Syria has been largely won, yet the violence may even be getting worse.  With almost all its territory in Syria gone, ISIS/Daesh has become more like a “normal” insurgent group – ISIS has lost 98% of the territory it once held in Iraq and Syria and in December 2017 the Iraqi government declared military victory over ISIS; and with the unifying enemy of ISIS largely side-lined, violence is, if anything, increasing, as involved countries compete for influence in a post-conflict Syria.  It notes that there have been continuing reports of chemical weapons being used: mustard gas, chlorine and even Sarin.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8247

Also published was –

ISIS/DAESH: WHAT NOW FOR THE MILITARY CAMPAIGN IN IRAQ AND SYRIA?

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8248

THE UK TRADE BILL: UPDATE

On 7th March, the House of Commons Library published an updated briefing paper on this Bill following its Committee Stage in the House of Commons.  The Bill is one of a series of “Brexit Bills” intended to adjust UK legislation for Brexit.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8073

UK PLANT HEALTH CONTROLS

On 8th March, DEFRA published updated information on plant health controls, imports and exports, certification schemes, plant passporting and listed quarantine plant pests.  It reminds one that – for imports: some plants and plant produce are prohibited from entering this country from outside the EU while others must meet certain requirements and be accompanied by a phytosanitary certificate; and importers must check if a plant or plant product requires phytosanitary certification to be allowed entry into the EU.  For exports: The relevant agency provides a range of chargeable services to help you export plants, plant products, fruit and vegetables, seeds, soil or agricultural machinery to countries outside the EU. All material must satisfy the plant health requirements of the importing country.  More detailed information on importing and exporting is available.

https://www.gov.uk/guidance/plant-health-controls

SHIPPING COMPANIES FEAR SURGE IN COSTS IF IMO RULES CONTAINER SHIPS MUST SLOW DOWN

On 7th March, Loadstar reported that while shippers have been warned that low-sulphur regulations to be enforced globally in 2020 will see bunker costs added to their freight bill, they could also face a huge upswing in freight rates if new proposals to cut vessel speeds, due to be discussed at the International Maritime Organisation (IMO), turn into regulation.

https://theloadstar.co.uk/shippers-fear-huge-surge-costs-imo-rules-box-ships-must-slow/

OMAN’S BID TO BE MAJOR REGIONAL TRANSPORT HUB

On 7th March, Loadstar reported that Oman is gearing up – having political neutrality, a good locality for world trade and a government determined to invest in logistics – to fulfill its ambitions to become a major transport hub.  Logistics has been identified as one of the 6 main sectors in the country’s Tanfeedh initiative to reduce reliance on oil and boost employment, and as a result, it has a “linked-up” approach to logistics, via national logistics body Asyad.

https://theloadstar.co.uk/oman-perfectly-placed-runway-success/

US CUSTOMS E-COMMERCE STRATEGY

On 8th March, Sandler Travis & Rosenberg reported that US Customs and Border Protection has issued an electronic commerce strategy aimed at addressing the growing volume of small package imports as well as the challenges and opportunities that direct-to-consumer e-commerce presents for the economy and security of the US.

https://www.strtrade.com/news-publications-CBP-ecommerce-strategy-030818.html

The Strategy can be found at –

https://www.cbp.gov/newsroom/national-media-release/cbp-releases-e-commerce-strategy

Sourcing Journal Online’s report on the Strategy concentrates on a perhaps unexpected extension of the surge of e-commerce around the world has been the security threat it presents.  In an effort to shore up that security, US Customs and Border Protection released an e-commerce strategy that addresses the growing volume of imported small packages and the challenges and opportunities it presents for the country’s economy and security.

https://sourcingjournalonline.com/us-customs-unveils-security-strategy-deal-e-commerce-surge/

IMF: IRELAND RECOVERING STRONGLY BUT WEAK PRODUCTIVITY AND BREXIT CLOUD OUTLOOK

On 8th March, the IMF released its latest Economic Survey of Ireland.

http://www.oecd.org/newsroom/ireland-recovering-strongly-but-weak-productivity-and-brexit-cloud-outlook.htm

CHICAGO SUES 3 LARGEST OPIOID MANUFACTURERS

Jurist on 8th March reports that the Chicago mayor Rahm Emmanuel has said that his administration has filed a federal lawsuit against the 3 largest manufacturers of opioid narcotics.  The complaint names, companies that collectively account for about 90% of all prescription drug revenue in Chicago and are colloquially known as the “Big Three,” as defendants.  Attorneys for the city allege that the defendant’s distribution of opioids into Chicago has been “unfettered and unlawful,” further claiming that opioid prescriptions had tripled between 1999 and 2015. In that span, more than 183,000 Americans died from opioid overdoses, according to research by the Center for Disease Control cited in the complaint.

http://www.jurist.org/paperchase/2018/03/city-of-chicago-sues-three-largest-opioid-manufacturers.php

PROPOSAL FOR AN EU REGULATION ON EUROPEAN CROWDFUNDING SERVICES FOR BUSINESS: FAQ

On 8th March, the EU published this FAQ factsheet.

http://europa.eu/rapid/press-release_MEMO-18-1423_en.htm

COLOMBIA SEIZES 5 TONNES OF COCAINE IN BANANA SHIPMENT

World News Report on 7th March reported that Colombia has seized around 5 tonnes of cocaine hidden in a shipment of bananas destined for export to Belgium.

http://world.einnews.com/article/435659951/w2tz2-U-bM5KiHGi

TRACE PODCAST: HOW COMPANIES GET CAUGHT

In the latest TRACE podcast, Chuck Duross, partner with Morrison Foerster and former head of the DoJ FCPA (foreign corruption and bribery) unit, discusses lures, stings, wiretaps and INTERPOL Red Notices.

https://www.traceinternational.org/bribe_swindle_or_steal

PUTIN CONFIRMS RUSSIA’S $15 BILLION 2017 DEFENCE EQUIPMENT EXPORTS

Janes.com on 7th March reported that Russian president Vladimir Putin has confirmed that the country had delivered $15 billion in defence equipment exports during 2017.

http://www.janes.com/article/78420/putin-confirms-russia-s-2017-export-results

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FULFILMENT HOUSE DUE DILIGENCE SCHEME GUIDANCE

HMRC has reissued its November 2017 guidance enabling businesses to find out if they need to be registered to store goods in the UK for sellers established outside the EU.

https://www.gov.uk/guidance/fulfilment-house-due-diligence-scheme

and

FULFILMENT BUSINESSES REGULATIONS 2018

These regulations, SI 2018/326, set out the detailed framework for the Fulfilment House Due Diligence Scheme. The scheme applies to fulfilment houses operating in the UK that handle imported goods on behalf of third parties located outside the EU.

http://www.legislation.gov.uk/uksi/2018/326/contents/made

FATF FINTECH AND REGTECH INITIATIVE

On 8th March, FATF published a webpage that said that FATF strongly supports responsible financial innovation that is in line with the AML/CFT requirements found in the FATF Standards, and will continue to explore the opportunities that new financial and regulatory technologies may present for improving the effective implementation of AML/CFT measures.  The webpage seeks to help identify these opportunities. It is a platform for the FATF’s global AML/CFT network to present their initiatives and developments in this area from an AML/CFT perspective, raise awareness, and centralise this information for the mutual benefit of governments and the private sector more broadly.  It includes a video of FATF President Santiago Otamendi talking about the need to develop a constructive dialogue with the Fintech and Regtech industry.  The page include input from Gibraltar and Jersey, and the November 2017 statement of the FATF position.

http://www.fatf-gafi.org/fintech-regtech/?hf=10&b=0&s=desc(fatf_releasedate)

EX-PETROBRAS CEO CONVICTED OF CORRUPTION IN BRAZIL

On 8th March, Reuters reported that Aldemir Bendine, the former CEO of state-controlled oil firm Petroleo Brasileiro SA and Banco do Brasil, was found guilty of corruption charges and sentenced by a federal judge to 11 years in prison.

https://www.reuters.com/article/us-brazil-corruption-bendine/ex-petrobras-ceo-bendine-convicted-of-corruption-in-brazil-idUSKCN1GJ37B

 BSG REOURCES MINING COMPANY ENTERS ADMINISTRATION

Mining company BSG Resources (BSGR) has said it had voluntarily entered into administration, adding it had taken the decision to protect itself as it faces legal action.  The mining arm of Israeli billionaire Beny Steinmetz’s businesses is caught up in legal disputes in relation to the vast Simandou iron ore project in Guinea.  BSG Resources is a private company registered in Guernsey whose subsidiaries also include the Koidu diamond mine in Sierra Leone.  The Wall Street Journal also says that the company is facing unproved bribery allegations on multiple contients.

http://www.mining.com/web/beny-steinmetzs-mining-firm-bsgr-enters-administration-protect/

JOINT OPERATION AGAINST DRUG TRAFFICKING IN FINLAND AND THE NETHERLANDS

A news release from Eurojust on 8th March reported that since October Eurojust has been supporting the Finnish authorities in one of the largest investigations of drug trafficking in Finland.  It says that a larger organised crime group established both in Finland and the Netherlands, which has been trafficking drugs, mainly amphetamine, in those countries, was dismantled by the Finnish and Dutch authorities. The estimated value of the drugs (approximately 50 kg) amounts to €2.8 million.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2018/2018-03-08.aspx

EU CHALLENGES YACHT VAT AVOIDANCE IN 3 MEMBER STATES

On 8th March, Tax News reported that the European Commission has sent letters of formal notice to Cyprus, Greece, and Malta for not levying the correct amount of VAT on yachts.  The article details what triggered the action.  The states have 2 months to respond to the arguments put forward by the Commission. If they do not act within those 2 months, the Commission may send a reasoned opinion to their authorities, after which it could refer the states to the ECJ.

https://www.tax-news.com/news/EU_Challenges_Yacht_VAT_Avoidance_In_Three_States____76512.html

See also the Cyprus Mail –

http://cyprus-mail.com/2018/03/08/174680/

JERSEY TO PROBE FIRMS IN MONEY LAUNDERING REVIEW

On 8th March, Tax News reported that Jersey FSC says it intends to start collecting data from regulated persons in connection with its planned money laundering and terrorist financing national risk assessment (NRA).  The NRA is necessary to comply with international AML/CFT standards, which require all countries to identify, assess, and understand money laundering and terrorist financing risks, and take action and apply resources to effectively mitigate these risks. It is also incumbent on all countries to explain how this will be done.

https://www.lowtax.net/news/Jersey-To-Probe-Firms-In-Money-Laundering-Review-76514.html

SPANISH POLICE SEIZE 10,000 FAKE HARRY POTTER ITEMS

Deadline News on 8th March reported that police in Barcelona have uncovered thousands of counterfeit Harry Potter wands, scarfs and other goods in a huge raid on a toy shop, including fancy dress costumes and even a replica of Hedwig, the young wizard’s Owl.  The total street value of the merchandise was over €305,000.

http://www.deadlinenews.co.uk/2018/03/08/spanish-police-seize-10000-fake-harry-potter-items-including-replica-of-the-pet-owl-hedwig/

EU STARTS PROCEEDINGS AGAINST BRITAIN OVER CUSTOMS FRAUD SHORTFALL

Reuters on 8th March reported that the European Commission demanded that Britain pay €2.7 billion of customs duties that should have been collected on imports of Chinese footwear and textiles but were not due to fraud. The infringement procedure said the UK had failed to address the scam between 2011 and 2017, even though it had been warned of the risks of fraud in 2007.  A spokesman for the PM said that the UK did not recognise the EU estimates.

https://uk.reuters.com/article/us-britain-eu-fraud/eu-starts-proceedings-against-britain-over-customs-fraud-idUKKCN1GK1WK

https://uk.reuters.com/article/uk-britain-eu-fraud-may/britain-does-not-recognise-eu-estimate-of-customs-fraud-mays-spokesman-idUKKCN1GK2AY?rpc=401&

LITHUANIAN MINISTER ADMITS ABUSE IN ISSUING RESIDENTIAL PERMITS

OCCRP on 8th March reported that Lithuanian public servants issued resident permits to non-EU citizens knowing the submitted data on the requests were false, Interior Minister Eimutis Misiunas said.  Other officials said that there is evidence that are right to reside in Lithuania – and freely travel across the Schengen Area – could be obtained this way for fees up to €10,000.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7750-lithuanian-minister-admits-abuse-in-issuing-residential-permits

100 KG COCAINE AND 150 KG MARIJUANA SEIZED IN OPERATION DISMANTLING BALKAN DRUG CARTEL

On 8th March, Europol reported that an organised crime group was dismantled and 9 suspects arrested in a major operation in Europe and South America. Operation NANA was led by the Croatian Police.  The network was suspected of transporting multi-kilogram quantities of cocaine from Colombia, Ecuador and Panama to Europe.  A container ship legally carrying scrap metal from Panama to the port of Rijeka, Croatia, was found to be transporting more than 100 kg of cocaine and 150 kg of marijuana.

https://www.europol.europa.eu/newsroom/news/100kg-of-cocaine-and-150kg-of-marijuana-seized-in-major-international-operation-dismantling-balkan-cartel

CORRUPTION ON THE RISE IN THE CARIBBEAN

On 8th March, Baker McKenzie reported that corruption is on the rise in Latin America and the Caribbean, says Transparency International, an organisation dedicated to fighting corruption on a global scale.

http://www.riskandcompliancehub.com/corruption-on-the-rise-in-the-caribbean/

APPARENT INCREASE IN IRANIAN MATERIAL SUPPORT FOR BAHRAINI MILITANTS

Janes.com on 8th March reported that, whilst there is no independent verification of Bahraini claims, nor the scale and nature of Iranian support for Bahraini militants, the suspected militants’ possession of such an arsenal, if confirmed, would indicate an improvement in capability to inflict greater casualties and property damage.  Such improvements in militant capability, if confirmed, would increase risk of more sophisticated attacks on state security forces.

http://www.janes.com/article/78450/apparent-increase-in-iranian-material-support-for-bahraini-militants-likely-intended-as-deterrence-against-saudi-escalation

NORTH KOREAN ICBM DESIGN SHOWS EVIDENCE OF EXTERNAL INFLUENCE

In a feature, Janes.com reports that North Korea’s ballistic missile programme made unprecedented advances during the course of 2017.  In the feature, the authors examine the new Hwaseong-15 and determine that it is evidence of external support to North Korea’s missile development.

http://www.janes.com/images/assets/014/78014/2_North_Korean_ICBM_design_shows_external_influence.pdf

TERROR FUNDING: EU PARLIAMENT URGES BANKS TO SCRUTINISE ACCOUNTS OF RELIGIOUS GROUPS

On 5th March, KYC 360 reported that the European Parliament has endorsed measures requiring the financial services sector to closely monitor the banking transactions of religious and other charities in an effort to curb terror funding.

https://kyc360.com/news/eu-urges-banks-monitor-transactions-counter-terror-drive/

TSA TESTS NEW AIRLINE PASSENGER SCREENING TECHNOLOGY IN US

Homeland Preparedness on 8th March reported that the Transportation Security Administration (TSA) recently joined the Los Angeles Metropolitan Transportation Authority in testing new passenger screening technology designed to detect suicide vests and other metallic and non-metallic concealed weapons.  Officials said the effort involves analysing waves naturally emitted by the human body, noting when an object is hidden in a person’s clothing or strapped to the body, the waves are blocked.

https://homelandprepnews.com/stories/27198-tsa-tests-new-passenger-screening-technology/

UK GUARANTEES GIBRALTAR ACCESS TO UK FINANCIAL SERVICES AND ONLINE GAMBLING POST-BREXIT

The Gibraltar Chronicle on 8th March reports that the UK Government has guaranteed Gibraltar’s continued access to the UK market for financial services and online gaming against the backdrop of Brexit, sending a clear message of reassurance to a critical sector of the Rock’s economy.

http://chronicle.gi/news/

PHONE FRAUD SCHEMES WORSEN BEIJING-TAIWAN TENSIONS

On 8th March, KYC 360 reported that gangs operating from bases as far flung as Cambodia and Kenya, taking advantage of closer global connections and falling technology costs, are a growing source of tension between Beijing and the self-ruled island of Taiwan.  The Taiwanese gangs have been operating the fraud rings for four decades, recruiting university students and others who need extra cash.  They give recruits like Liu a script to memorize and pay them a commission of 1 to 2% of what is stolen. The alleged fraudsters are not always aware they have been hired to commit crimes, said Chan Chih-wen, an anti-fraud researcher for the Taiwan Criminal Investigation Bureau.

https://kyc360.com/news/phone-fraud-schemes-worsen-beijing-taiwan-tensions/