On 12th March, the European Sanctions Blog reported that Australian Federal Police is said to be investigating a Sydney-based company, Brigt Australia, and its director, Livia Wang, over accusations that they had violated UN sanctions against North Korea involving North Korean coal misdescribed as being Russian.
n 12th March, a news release from the European Council advised that it had decided to continue the sanctions regime for a further 6 months, saying that an assessment of the situation did not justify a change in the sanctions regime.
An unusual article from the Atlantic Council’s Digital Forensic Research Lab tracks down statutes erected as tributes to Russian mercenary soldiers in Syria and Ukraine. It reports that on February 22nd images of a statue dedicated “to Russian volunteers” in Luhansk, eastern Ukraine appeared on a Russian social media platform. This monument appeared to be an exact copy of a statue erected outside of Palmyra in Syria as early as January 2018. Furthermore, both statues had a military insignia similar to the “Wagner Cross” of the infamous Russian Wagner Group mercenaries (Группа Вагнера).
10th March 2018
CHINESE DRONES IN NORTH KOREAN ARSENAL
On 9th March, the Manila Times carried an AFP story about a Chinese businessman called Wang Dewen, who the UN believes is one of those who UN experts believe is one of several Chinese traders who may have helped Pyongyang build a fleet of around 300 military drones. In 2017, the UN said the drone transfers illustrate the North’s “continued reliance on Chinese middlemen and cash transactions to procure commercial items for military purposes”. Chinese companies have also sold the North trucks used to transport artillery rockets, rocket parts, and special types of aluminium useful for its banned nuclear programme, researchers have found. The article says that his Hong Kong-registered company, HK Conie Technology, attempted to procure the military-grade parts from a UK-based supplier in 2014, UN experts said in the report, saying in a licence application that the cameras would be used for security at a major Chinese company.
LATVIAN BANKING ASSOCIATION DRAWS UP EMERGENCY “TO DO” LIST
On 8th March, LSM in Latvia reported that the Association of Latvian Commercial Banks (ALCB) is proposing several legislative amendments that need to be reviewed “as soon as possible” as a result of “taking into consideration recent events and debates about the situation in the Latvian financial sector”. This follows the collapse of the ABLV bank. ALCB represents most, but not all, of the Latvian banking sector. Much of what is included in the proposals is concerned with the exchange of information, with authorities and between banks, but also limiting co-operation with shell companies and setting up a directory of PEP.
ILLEGAL FISHING GOES HAND IN HAND WITH SMUGGLING
The Latin American Herald Tribune reports that a former Costa Rican president and co-founder of the organisation Ocean Unite has said that illegal fishing not only harms the oceans, but trails other objectionable activities in its wake, and that, in addition to damaging the ocean and over-fishing species, it comes with other illicit activities, such as arms, human and drug trafficking. He said that people engaged in clandestine fishing – a business that generates an estimated $23.5 billion a year – tend to pursue other illegal activities to boost their income.
YOU WILL NOT BELIEVE HOW MANY EELS HAVE BEEN SMUGGLED FOR FOOD
Food & Wine on 9th March carried an article containing a claim from the Sustainable Eel Group (SEG) that at least 110 million juvenile glass eels have already been trafficked out of Europe and into Asia’s eel farms this season. It points out that illegal eel fishing and smuggling is actually a serious problem, in the US as well as Europe. But, it says, in Europe, the stakes are even higher, with overconsumption of eel is threatening the species.
EU: FIGHTING FRAUD WITH NON-CASH MEANS OF PAYMENT
A EU Council news release announced that, on 9th March, the Council had agreed its position on a proposed Directive on combating fraud and counterfeiting of non-cash means of payment. The Directive aims at updating the current rules to ensure a clear, robust and technology-neutral legal framework is in place. It also eliminates operational obstacles that hamper investigation and prosecution as well as foresees actions to enhance public awareness of fraudulent techniques such as phishing or skimming. The draft includes provisions that –
- Expand the scope of the offences to include, for example, transactions through virtual currencies;
- Harmonise the definitions of some online crime offences, such as hacking a victim’s computer or phishing;
- Introduce minimum level for the highest penalties for natural persons;
- Clarify the scope of jurisdiction to ensure cross border frauds are better dealt with;
- Improve EU-wide criminal justice co-operation; and
- Improve prevention and awareness-raising to reduce the risk of becoming a victim of fraud.
The Directive was proposed by the Commission in September 2017 as part of the EU’s response to the challenge of cybersecurity, and replaces the Council Framework Decision 2001/413/JHA. The next stage is for EU Parliament consideration of its position later this year.
MARINE INSPECTORS AND ABALONE SMUGGLERS IN COURT IN SOUTH AFRICA
On 9th March, Defence Web reported that 9 marine inspectors from the South African Department of Agriculture Forestry and Fisheries (DAFF) have appeared in court for alleged involvement in an abalone-poaching syndicate. They appeared in court along with 8 abalone smuggling syndicate members facing charges ranging from racketeering, corruption and defeating the ends of justice. The abalone is a marine gastropod mollusc subject to large-scale smuggling to the Far East.
RUSSIA ON ZIMBABWE MILITARY AND MINING CO-OPERATION ETC
Defence Web on 9th March reported that Russian Foreign Minister Sergey Lavrov said his country was pursuing military co-operation with Zimbabwe and looking at opportunities in the diamond sector as well as implementing a $3 billion joint platinum project near Harare. A Russian consortium including arms conglomerate Rostec in 2014 partnered a Zimbabwean group to develop a $3 billion platinum operation near the capital but the project had stalled.
NEW OBLIGATION FOR HONG KONG COMPANIES TO MAINTAIN A “SIGNIFICANT CONTROLLERS REGISTER”
On 9th March, Latham & Watkins published an alert concerned with changes that mean, from 1st March 2018, all Hong Kong incorporated companies (except for companies listed on the Hong Kong Stock Exchange) are required to maintain a register of significant controllers (the SCR), which will be accessible to persons whose names are entered in the register or on demand made by any law enforcement officer. Even if a company does not have a significant controller, the company is still required to keep an SCR, but the regime does not apply to any non-Hong Kong incorporated companies.
NESTLE CANCELS PALM OIL CONTRACT WITH TAINTED GUATEMALAN SUPPLIER
In its Anti-Corruption Digest for March, Dorsey reports that following Guatemala’s prosecutor accusing Reforestadora de Palmas del Peten S.A. (Repsa) of paying bribes to receive tax credits, Nestlé decided not to renew its contracts with Repsa for the supply of palm oil because of these allegations. The commercial relationship will terminate later this year.
SINGAPORE: KEPPEL EXECUTIVES ARRESTED AS INVESTIGATION CONTINUES
In its Anti-Corruption Digest for March, Dorsey also reported that Singapore’s Corrupt Practices Investigation Bureau (CPIB) had arrested several former high-level executives of Keppel Corp, including several executives of its Offshore & Marine unit (Keppel O&M). The arrests took place as part of CPIB’s investigation into individuals who were involved in the scandal in which Keppel O&M paid millions in bribes to obtain contracts with Brazilian oil conglomerate, Petrobas, and saw it pay $422 million in penalties.
For more information on the Keppel case, see –
UKRAINE TO SEIZE ASSETS GAZPROM
Customs Today on 9th March reported that Ukraine is to seize assets belonging to Russian state-controlled energy giant Gazprom in a deepening legal dispute that has stoked fears of supply disruption among EU states. Gazprom is appealing against the decision, but in the meantime Kiev has ordered officials to seize Gazprom property and shares in Ukraine under separate rulings by the country’s anti-monopoly authorities. Ukraine’s foreign ministry also ordered its embassies to find Gazprom assets around the world with a view to potential legal action to seize them.
HONG KONG: SHARK FIN IMPORTS HALVED SINCE 2007
On 9th March, Customs Today reported that, thanks to tighter regulations and shipping bans, shark fin imports into or through Hong Kong had halved.
EXPORTING CORRUPTION: BEYOND BRAZIL’S “CAR WASH” SCANDAL
On 10th March, Al Jazeera carried a feature providing a good primer to the “Car Wash” scandal that started in Brazil, involved Petrobas oil company and the “Odebrecht bribery machine”. Odebrecht is the largest construction company in Latin America, founded in 1944. According to authorities, Odebrecht had a division of “Structured Operations” that ran an intricate off-the-books accounting system and a bank to bribe not only company executives, but also politicians.
HMRC WINS FIGHT TO CLOSE £55 MILLION DIRECTORS’ BONUSES TAX LOOPHOLE
The Dundee Courier on 10th March reported that more than 100 businesses were using the dodge to avoid paying tax and NI on their company directors’ awards. Officials had successfully challenged 2 companies, Cyclops Electronics and Graceland Fixing, a building company. Specially created companies had issued bonuses to directors in £10 loan notes, taking advantage of legislation that provides tax relief for genuine commercial transactions. The law has now been amended to close the loophole and prevent further attempts to exploit the rule.
JURISDICTION AND LIABILITY OF PARENT COMPANIES FOR INTERNATIONAL SUBSIDIARIES
On 7th March, law firm Walker Morris produced this briefing which begins by asking: when can a parent company be liable for the acts of an international subsidiary? It offers some practical conclusions arising from key cases on the complex questions of jurisdiction and intra-group corporate liability.
11th March 2018
DOGS TRAINED TO SNIFF OUT ANCIENT TREASURES LOOTED FROM SYRIA
On 11th March, the Guardian reported that special K-9 units may soon be deployed in the fight against terrorists and criminals looting precious artefacts from war zones. The “K-9 Artifact Finders” has been set up in the US.
ZIMBABWE GOVERNMENT HOPES TO GET BACK $1.3 BILLION ‘UNREALISTIC’
In Zimbabwe, the Standard reports that the Zimbabwe government has no firm legal footing to enforce the return of the over $1 billion of funds removed from the country by individuals and companies, experts have said. In December, a new law set a February 28th deadline for the $1.3 billion of known expatriated funds to be returned. At the deadline passed last month, President Mnangagwa said $250 million in cash and assets had been returned before extending the deadline, but saying after that he would name and shame those that had not returned the funds. However, the question of whether any law was broken in “externalising funds” has been raised, and since 2009, there have been no concrete legislative changes to define externalised funds.
Daniel Salisbury, in his Twitter feed, provides this photo of a machine in a Prague aircraft engine factory made parts for German Messerschmitt Me 262 fighters in 1943, and they still use it today.
US OFFICIAL CONFIRMS NEW RUSSIAN SANCTIONS BEING PREPARED
On 10th March, the Atlantic Council reported that in a speech at the Atlantic Council, US Department of Treasury Undersecretary Sigal Mandelker, the Trump administration’s top sanctions official, confirmed that new Russia sanctions are being prepared, and suggested that they would target members of Russian President Vladimir Putin’s power structure.
TAX HAVEN FIRMS OWN SCOTTISH PROPERTY WORTH AROUND £3 BILLION
On 11th March, the Sunday Post carried an article which includes such revelations that – Scottish property is held in 22 different tax havens around the world, by 776 companies; records reveal some 1,271 purchases – some of them multiple properties – with sums paid ranging from £132 million to just £1; including pubs, shopping centres, private schools, care homes, Highland shooting estates and even ex-council houses; and last year alone, firms based overseas bought more than £200 million worth of Scottish land and buildings.
BRUSSELS CASTS DOUBTS ON SUFFICIENCY OF MALTA’S AML MEASURES
The Malta Independent on 11th March reported that, despite implementing the EU 4th ML Directive, the European Semester Winter Package, which reviews Member States’ progress on economic and social priorities, appears to cast the measures adopted by Malta into doubt, and makes it clear that matters do not end with Malta’s “notification of a complete transposition of the Anti-Money Laundering Directive” in December 2017. It also says that “Further analysis is needed to assess if these measures are sufficient to ensure an effective framework for the fight against money laundering and terrorist financing.”