OTHER THINGS YOU MAY HAVE MISSED – MARCH 13

13th March 2018

CHANGES TO HONG KONG LAW COULD MAKE LIFE HARDER FOR NORTH KOREAN COMPANIES

NK News on 13th March reports that new legislation w.e.f. 1st March may put pressure on DPRK front companies in the notoriously opaque city.  It says that the Companies (Amendment) Bill 2017, along with an amendment to Hong Kong’s existing AML/CFT law were passed to ensure, among other reasons, that Hong Kong was fulfilling its obligations to FATF.  Research conducted by the UN Panel of Experts on North Korea and highlighted in recent investigative media reports has revealed Hong Kong to be one of the leading jurisdictions for DPRK front companies.

https://www.nknews.org/2018/03/how-changes-to-hong-kong-law-could-make-life-harder-for-north-korean-companies/

TOKYO CUSTOMS SEIZES BIGGEST STIMULANTS HAUL IN MAIL FROM US

The Asahi Shimbun on 12th March reported that Tokyo Customs has intercepted Japan’s single biggest haul of illegal stimulant drugs sent by international mail, weighing 64 kg with a street value of $38.5 million.  They were hidden in packages disguised as powdered seasoning in 4 boxes posted from the US, and  also found was an additional 12.7 kg of stimulants in a separate express delivery addressed to the same person.

http://www.asahi.com/ajw/articles/AJ201803120045.html

UN INVESTIGATORS IDENTIFY 43 WAR CRIMES SUSPECTS IN SOUTH SUDAN

On 6th March, Kingsley Napley published a briefing on a report by investigators from the UN Commission for Human Rights which has named individuals whom they allege committed war crimes and crimes against humanity during the violence which started in the country in 2013.

https://www.kingsleynapley.co.uk/insights/blogs/criminal-law-blog/international-criminal-law-a-month-in-review-february-2018#page=1

The UNHCR news release and link to the report is at –

http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=22691&LangID=E

REGISTRATION OF BENEFICIAL OWNERSHIP IN FRENCH COMPANIES

On 7th March, Bryan Cave LLP published a briefing on the position following the transposition of the 4th Money Laundering Directive into French law.

https://www.bryancave.com/en/thought-leadership/registration-of-beneficial-ownership-in-french-companies.html

BELGIUM “IGNORED KOSOVO FOOD FRAUD TIP-OFF” FOR 18 MONTHS

EU Observer on 13th March reported that food safety authorities from Kosovo were said to have informed their Belgian counterparts of possible food fraud in September 2016, but the Belgians only began investigating in February 2017.  It is reported that a Belgian company reportedly exported 12-year-old meat to Kosovo with falsified labels

https://euobserver.com/tickers/141298

EU AMENDS ITS CENTRAL AFRICAN REPUBLIC SANCTIONS

On 14th March, EU Regulation 2018/387/EU amends Regulation 224/2014/EU to bring the sanctions regime into line with that of the UN in respect of exemptions to the arms embargo and the criteria for designation of persons and entities for the asset freeze.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.069.01.0009.01.ENG&toc=OJ:L:2018:069:TOC

See also Council Decision 2018/391/CFSP.

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2018.069.01.0046.01.ENG&toc=OJ:L:2018:069:TOC

CANADA’S EDC SEEKS TO HAVE JET GROUNDED OVER DEFAULT BY GUPTA FAMILY

Defence Web on 12th March reported that Canada’s export credit agency has sought in a Johannesburg court to have a Bombardier luxury jet grounded, saying South Africa’s Gupta family had defaulted on repayments of the loan they used to acquire the plane.  EDC wants the plane, a Global 6000, grounded until a legal dispute in the UK involving the EDC’s efforts to recover the aircraft is settled.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51000:canadas-edc-seeks-to-have-jet-grounded-over-default-by-south-africas-gupta-family&catid=114:civil-aviation&Itemid=247

PRINCESS YACHTS FRAUDSTER MUST SELL HIS HOMES OR FACE YEARS IN JAIL

The Plymouth Herald on 12th March reported that a conman, former Plymouth Argyle footballer Darren Tallon, 44, who plundered cash from luxury boat-builders Princess Yachts looks set to pay back more than half a million pounds.  He must sell several properties in the city and in Canada to raise the cash – or he could face a 5-year jail sentence.  4 other building bosses have already been ordered by a judge to pay back just over £300,000 from their ill-gotten gains.

https://www.plymouthherald.co.uk/news/plymouth-news/princess-yachts-fraudster-must-sell-1330645

ANTIGUA & BARBUDA DIPLOMATIC PASSPORTS

On 12th March, Kenneth Rijock in his blog published what is said to be a list of diplomatic passports, including those sold for cash to non-nationals.  He invites one to examine the list for “surprising entries”.

http://rijock.blogspot.com/

SERVER LINKED TO PDVSA BRIBERY CASE MUST STAY IN US

Law 360 on 12th March reported that a federal judge has blocked the shipment to Swiss authorities of a computer server belonging to one of the dozens of defendants named by Venezuela’s state-owned oil company PDVSA in its suit alleging a long-running scheme by international oil companies to steal its information and bribe its employees.

https://www.law360.com/articles/1021060

CHANGES TO PROTECTION OF COMPANY OFFICER DETAILS AT COMPANIES HOUSE

Shoosmiths on 9th March reported that the UK government has announced changes to legislation designed to reduce the risk of fraud, violence or intimidation faced by company directors as a result of having their residential addresses on the public record.  It reminds one that, for a number of years, directors have been able to keep their residential address details private by making use of a separate service address, often the company’s registered office and it is only the service address which will be entered on the public record.  However, this general level of protection does not extend to historical records at Companies House.  Under the proposed legislation, directors (and other officers) will be able to apply to have their residential addresses removed from the public record at Companies House without having to prove any risk of violence or intimidation.  Similar changes are to be made in respect of limited liability partnerships (LLP).  It is expected that the changes will take effect by the end of the Summer 2018.

https://www.thelawyer.com/knowledge-bank/white-paper/directors-get-better-protection-fraud/

UN DRAFT REPORT CLAIMS SINGAPORE FIRMS ILLEGALLY SENT LUXURY GOODS TO NORTH KOREA

On 12th March, the BBC carried an article about a leaked UN report that highlights 2 Singapore-based firms, among others in Asia.  It alleges that the 2 firms supplied a range of luxury goods to North Korea, including wines and spirits, until as recently as July 2017.  The companies are named as OCN and T Specialist.  They are sister companies and share the same director, and both the companies have denied any wrongdoing.  The article does point out that it was only in November 2017 that Singapore introduced a total ban on trade with North Korea, and before that, some trade was allowed.

http://www.bbc.co.uk/news/business-43367760

PODCAST: VIRTUOUS CIRCLES OF ANTI-CORRUPTION

In the latest TRACE podcast, Michael Johnston talks about the research for his book “Transitions to Good Governance: Creating Virtuous Circles of Anticorruption”.  He provides some cause for optimism as he describes lessons we can learn from modest success stories like Botswana and Georgia.

https://www.traceinternational.org/bribe_swindle_or_steal

MARITIME HIJACKS INCREASE IN GULF OF GUINEA

This Control Risks podcast asks why are maritime hijacks increasing in the Gulf of Guinea and how can maritime operators mitigate the threat?  This after the most violent period in the region.  Now considered the highest-risk area for maritime attacks, chiefly from Nigerian pirate groups.

https://www.controlrisks.com/our-thinking/insights/podcasts/maritime-hijacks-increase-in-gulf-of-guinea

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WHAT ARE NOVICHOK NERVE AGENTS? WHAT WE DO (AND DON’T) KNOW ABOUT THEM

The always interesting Compound Interest website offers a graphic that takes a look at what is known about Novichok agents and what is still unclear.  Novichok agents are organophosphate nerve agents of the type that likely used in the attack on Sergei Skripal and his daughter, Yulia, in the UK.

http://www.compoundchem.com/2018/03/12/novichok/

EUROPE SURPASSES US IN NUMBER OF ONGOING BRIBERY INVESTIGATIONS

Corporate Counsel on 13th March says in a feature on the March 2018 TRACE International Global Enforcement Report that there is a slow but steady trend of increased enforcement of bribery violations by governments outside the US, and also saying that China surpassed every other country as far as where the most bribery violations occurred over the past 4 decades.

https://www.law.com/corpcounsel/2018/03/13/europe-surpasses-us-in-number-of-ongoing-bribery-investigations-report-says/?kw=Europe%20Surpasses%20US%20in%20Number%20of%20Ongoing%20Bribery%20Investigations%2C%20Report%20Says&et=editorial&bu=Corporate%20Counsel&cn=20180313&src=EMC-Email&pt=InsideScoop&slreturn=20180213081257

The report is at –

http://traceinternational.org/ger

HOW BLOCKCHAIN CAN PLAY A ROLE COMBATING FAKE MEDICINES

Loadstar on 13th March carries an article saying that lives could be saved each year by using blockchain technology to prevent the spread of counterfeit drugs and fake medication in the supply chain.  It says that, according to Interpol, around 1 million people die each year globally because of counterfeit drugs – some 30% of pharmaceutical products sold in emerging markets are thought to be fakes.  With Accenture, DHL has been working on a blockchain-based track-and-trace serialisation project, which assigns a “unique” identity to each sealable unit to verify a shipment’s legitimacy.

https://theloadstar.co.uk/blockchain-can-play-life-saving-role-war-fake-medication/?utm_source=The+Loadstar+daily+email&utm_campaign=c6e5a319bc-EMAIL_CAMPAIGN_2018_03_13&utm_medium=email&utm_term=0_c4570e43d4-c6e5a319bc-153488301

PANAMA OPENS THE DOOR TO THE LEGALIZATION OF MEDICINAL CANNABIS WITH A PROPOSED LAW

On 13th March, Greenberg Traurig reported on a draft law in Panama to legalise consumption of liquid marijuana for medicinal purposes. In Panama, cannabis use was declared illegal in 1928.  However, the article points out that, unlike the laws of Colombia and other Latin American countries, the Panamanian law does not differentiate between non-psychoactive and psychoactive cannabisThe article suggests that the law can, and should, be amended.

https://www.gtlaw.com/en/insights/2018/3/panama-opens-the-door-to-the-legalization-of-medicinal-cannabis-with-a-proposed-law

VIOLENT PROTESTS IN GUINEA DISRUPT SOME BAUXITE SHIPMENTS

Defence Web on 13th March reported that opposition supporters in the Republic of Guinea staged protests and erected barricades in 2 mining towns, disrupting some shipments of the aluminium ore bauxite.  This follows an election and opposition parties calling for the publication of results from recent local elections, which allies of President Alpha Conde say they have won.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51024:violent-protests-in-guinea-disrupt-some-bauxite-shipments&catid=3:Civil%20Security&Itemid=113

G20 FINANCE MINISTERS SAY STANDARD-SETTERS SHOULD STRENGTHEN MONITORING OF CRYPTOCURRENCIES

Forex Live on 13th March reported that a draft communique from G20 finance ministers will say (if issued as drafted) that international standard-setters should examine if a co-ordinated, multilateral response to cryptocurrencies is required.

http://www.forexlive.com/cryptocurrency/!/g20-to-say-standard-setting-bodies-should-strengthen-monitoring-20180313?src=ilaw

LIBYA MUFTI SLAMS UAE, SAUDI ARABIA AS SPONSORS OF WAR IN LIBYA

The Libya Observer on 13th March reported that, in a new article, Libya’s Mufti, Al-Sadiq Al-Gharyani has said that the “dirty money” of the UAE and Saudi Arabia is being paid to recruit African mercenaries to occupy Libya’s south and that money could lead to the division of the country if it was not blocked.

https://www.libyaobserver.ly/news/libya-mufti-slams-uae-saudi-arabia-sponsors-war-libya?src=ilaw

SFO SEEKING FUNDING INCREASE

International Adviser on 13th March reported that the UK SFO is in talks with HM Treasury to increase the funding of the SFO.

https://international-adviser.com/serious-fraud-office-seeking-funding-increase/?src=ilaw

ASIA-PACIFIC GROUP TO VISIT PAKISTAN TO ADVISE ON ACTION PLAN

In its 14th March edition, the Express Tribune in Pakistan reported that the Asian Pacific Group (APG) on Money Laundering will visit Pakistan next month to help the country develop an action plan to exit from the FATF grey list.  The delegation will visit in the second week of April and brief senior government ministers and officials on how to prepare and prioritise the action plan.

https://tribune.com.pk/story/1659014/1-anti-money-laundering-asian-pacific-group-visit-pakistan-april/?src=ilaw

CZECH SUPREME COURT JUDGE CHARGED WITH CORRUPTION

Radio Praha on 13th March reported that criminal charges have been filed against a judge at Prague’s Supreme Court. Ivan Elischer is accused of bribe taking, abuse of office and preferential treatment.  He has been a Supreme Court judge since 2013 and is said to specialise in drugs cases.

http://www.radio.cz/en/section/news/supreme-court-judge-charged-with-corruption?src=ilaw

UK VAT GAP ESTIMATES

On 13th March, HMRC released the latest statistics relating to VAT gap estimates.

https://www.gov.uk/government/statistics/vat-gap-estimates

HMRC: VAT REGISTRATION THRESHOLD CONSULTATION

On 13th March, HMRC launched a consultation on whether the design of the VAT threshold could better incentivise growth.  The consultation runs to 5th June.

https://www.gov.uk/government/consultations/vat-registration-threshold-call-for-evidence

EU PROPOSES TO EXTEND VAT REVERSE CHARGE MECHANISMS

Tax News on 13th March reported that the European Commission has proposed that the current reverse-charge mechanisms should be extended beyond December 31st 2018, to tackle VAT fraud, until the new “definitive VAT regime” is introduced.  This follows a report to the Commission on the overall assessment of the effects of the mechanism, which was delivered on 8th March.  The report includes feedback on the efficacy of the mechanism and a review of the compliance costs on businesses.  It found that member states generally consider the reverse charge mechanism a very effective and efficient tool in fighting VAT fraud.

https://www.tax-news.com/news/EU_Proposes_To_Extend_VAT_Reverse_Charge_Mechanisms____76534.html

HULL SHOPKEEPER JAILED FOR £670,000 TOBACCO FRAUD

Talking retail on 13th March reported that a Hull shopkeeper has been jailed for 5 years after being caught with more than 1 million illicit cigarettes hidden in self-storage containers.

https://www.talkingretail.com/news/industry-news/shopkeeper-jailed-670k-tobacco-fraud-13-03-2018/

UK INSOLVENCY SERVICE ENFORCEMENT OUTCOMES: 2017/18

On 13th March, the Insolvency Service released statistics on new outcomes resulting from the enforcement activities of the Insolvency Service.  They include: disqualifications of company directors; companies wound up in the public interest; bankruptcy restrictions.

https://www.gov.uk/government/statistics/insolvency-service-enforcement-outcomes-201718

CONSULTATION: THE ROLE OF ONLINE PLATFORMS IN ENSURING TAX COMPLIANCE BY THEIR USERS

On 13th March, HMRC issued a consultation document which starts by saying that platforms enabling the sale and rent of goods and services online are growing intermediaries in the UK economy. This is part of a worldwide trend that has the potential to bring great benefits to businesses, individuals, and the wider economy.  The consultation is intended to explore how government can build on work already undertaken with online marketplaces.  HMRC says it wants to understand how platforms interact with their users currently, what they know about them, and understand more about attitudes to tax among people earning money through platforms.  The consultation runs to 8th June.

https://www.gov.uk/government/consultations/online-platforms-role-in-ensuring-tax-compliance-by-their-users

US, EU AND CANADA “TO SHUT THE DOOR” ON CARIBBEAN CBI PASSPORTS

Kenneth Rijock in his blog on 13th March claimed that multiple governmental sources, in the US, Canada, and the countries of the EU, have reported openly that they are actively considering drastic measures, to cope with the influx of people of dubious provenance, arriving with Citizenship by Investment (CBI) passports, issued by the 5 East Caribbean republics who are engaged in this practice.

http://rijock.blogspot.com/

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INFO FROM BOOK “WEAPONS OF MASS CASUALTIES AND TERRORISM RESPONSE HANDBOOK”

IRAN RELOCATES RADAR AND EXPANDS UAV AIRFIELD ON QESHM ON STRAITS OF HORMUZ

On 13th March, Bellingcat reported that Iran continues to upgrade the UAV airfield on the island which sits near the important maritime choke-point.  The posting concludes that improvements to the airfield show Iran increasing the surveillance capability of the Strait of Hormuz.

https://www.bellingcat.com/news/mena/2018/03/13/iran-relocates-radar-expands-uav-airfield-qeshm/

ADDRESSING THE DARK SIDE OF THE CRYPTO WORLD

On 13th March, the MD of the IMF, Christine Lagarde, published a statement on the “perils” of cryptocurrencies, including potentially as a major new vehicle for money laundering and the financing of terrorism.  However, she says that money laundering and terrorist financing is only one dimension of the threat, financial stability is another.  The rapid growth of crypto-assets, the extreme volatility in their traded prices, and their ill-defined connections to the traditional financial world could easily create new vulnerabilities.    She says that there is a need to begin by focusing on policies that ensure financial integrity and protect consumers in the crypto world just as the IMF has for the traditional financial sector.  Regulatory technology and supervisory technology can help shut criminals out of the crypto world.  She says there is a need for international co-ordination and co-operation, and notes that the G20 has agreed to put crypto-assets on the agenda of its November 2018 summit in Argentina.

https://blogs.imf.org/2018/03/13/addressing-the-dark-side-of-the-crypto-world/

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ISRAEL PASSES LAW TO LIMIT CASH DEALS TO FIGHT ECONOMIC CRIMES

On 13th March, Baker McKenzie reported that Israel’s parliament has passed a law that limits the amount of cash in the economy in an effort to fight against dirty money, economic crime and money laundering.  The World Bank in 2010 said Israel’s so-called shadow economy was equal to 22% of economic output.  The new law imposes a limit of approximately $3,197 on cash transactions made with businesses, which could be further reduced by the finance minister in 2020.  Cash deals between private individuals, such as buying a used car, will also be limited to around $14,500, a level that also may be lowered considerably.

http://www.riskandcompliancehub.com/israel-passes-law-to-limit-cash-deals-to-fight-economic-crimes/

 

EU REPLACES 3 NAMES ON ITS TAX BLACKLIST

On 13th March, the EU confirmed changes to its list of non-cooperative jurisdictions in taxation matters.  The changes made are said to be because of commitments made by listed jurisdictions, and an assessment of jurisdictions for which no listing decision had yet been taken.  The listing mechanism is also said to have been made more transparent.  The European Council has removed Bahrain, the Marshall Islands and Saint Lucia from the list – as they have made commitments at a high political level to remedy EU concerns and, in the light of an expert assessment of those commitments, the Council has agreed to their removal from the list.

The Council added the Bahamas, Saint Kitts and Nevis and the US Virgin Islands because they have failed to make commitments at a high political level in response to all of the EU’s concerns.

Consequently, 9 jurisdictions remain on the EU list: American Samoa, Bahamas, Guam, Namibia, Palau, Samoa, Saint Kitts and Nevis, Trinidad and Tobago and the US Virgin Islands.

http://www.consilium.europa.eu/en/press/press-releases/2018/03/13/taxation-3-jurisdictions-removed-3-added-to-eu-list-of-non-cooperative-jurisdictions/

EU TO REQUIRE ADVISERS/ACCOUNTANTS TO REPORT AGGRESSIVE TAX PLANNING

EU Observer on 13th March reported that EU finance ministers have agreed to introduce measures to increase transparency on activities by tax intermediaries.  By 31st December 2019, “tax advisors, accountants and lawyers that design and/or promote tax planning schemes” will have to report schemes that are considered potentially aggressive, and Member States will have to automatically exchange the information through a centralised database.

https://euobserver.com/tickers/141304

http://europa.eu/rapid/press-release_IP-18-1841_en.htm

http://europa.eu/rapid/press-release_MEMO-17-1677_en.htm

LAUNCH OF TRADE-BASED MONEY LAUNDERING AWARENESS VIDEO

On 13th March, the Wolfsberg Group, with the support of the International Chamber of Commerce (ICC) and the Bankers Association for Finance and Trade (BAFT), launched a short awareness video focussed on Trade-Based Money Laundering (TBML).  This supplements both the 2009 Wolfsberg Trade Finance Principles and the 2017 publication of a more comprehensive paper on the topic, produced in close collaboration with both the ICC and BAFT.  It says that successful mitigation of TBML requires greater collaboration and information sharing between those other key international trade players in the public and private sectors – including shippers, airlines, truckers, port and customs authorities, businesses and law enforcement agencies.  Working together to create a complete picture of illicit TBML flows and typologies would ensure that more could be done to disrupt criminals. 

https://www.wolfsberg-principles.com/articles/launch-trade-based-money-laundering-awareness-video

ITALIAN GAMING OPERATORS GIVE UP MALTESE LICENCES AFTER ANTI-MAFIA PROBE

Calvin Ayre on 13th March reported that Malta’s online gambling regulator has parted company with several of its Italy-based licensees following a probe into their activities.  This follows a probe announced in February of 7 Italian licensees, asking each of them to provide answers to 20 specific questions regarding their operations, including their AML protocols – following the Phoenix International case, the latest in a series of Mafia-connected cases linked to Malta-licensed gambling sites.

https://calvinayre.com/2018/03/13/business/malta-purges-italian-online-gambling-licensees/

https://www.timesofmalta.com/articles/view/20180313/local/italian-gaming-operators-give-up-maltese-licences-after-anti-mafia.673113

NEW EU ANTI-TERROR IMPORT REGULATIONS MAY AFFECT BOOK DEALERS AND COLLECTORS

An article from the International League of Antiquarian Booksellers on 12th March says that, if proposed new EU regulations are approved, European book collectors and dealers may be in for an annoying surprise when they make their first imported purchases in 2019.  The  purpose of the changes is to combat the looting and smuggling of antiquities and prevent the financing of terrorism through the illicit trade in cultural goods.  The article says that while the new regulations apply to a broad range of cultural goods, none will be impacted more adversely than books.

https://ilab.org/articles/new-eu-anti-terror-import-regulations-will-target-bibliophiles

EU AMENDS ITS UKRAINE SANCTIONS

On 14th March, EU Regulation 2018/388/EU takes effect and amends the sanctions regime concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.  Following a review, the list of those persons and entities subject to sanctions measures and contained in an Annex to Regulation 229/2014/EU are updated and replaced.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.069.01.0011.01.ENG&toc=OJ:L:2018:069:TOC

See also Council Decision 2018/392/CFSP

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2018.069.01.0048.01.ENG&toc=OJ:L:2018:069:TOC

EU AMENDS ITS CENTRAL AFRICAN REPUBLIC SANCTIONS

On 14th March, EU Regulation 2018/387/EU amends Regulation 224/2014/EU to bring the sanctions regime into line with that of the UN in respect of exemptions to the arms embargo and the criteria for designation of persons and entities for the asset freeze.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.069.01.0009.01.ENG&toc=OJ:L:2018:069:TOC

See also Council Decision 2018/391/CFSP.

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2018.069.01.0046.01.ENG&toc=OJ:L:2018:069:TOC