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.
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.
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.
The UNHCR news release and link to the report is at –
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.
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
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.
See also Council Decision 2018/391/CFSP.
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.
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.
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”.
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.
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.
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.
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.
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.
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.
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.
The report is at –
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.
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 cannabis. The article suggests that the law can, and should, be amended.
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.
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.
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.
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.
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.
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.
UK VAT GAP ESTIMATES
On 13th March, HMRC released the latest statistics relating to 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.
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.
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.
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.
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.
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.
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.
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.