14th March 2018
US NAVY SHOULD START WEANING ITS REACTORS OFF BOMB-GRADE URANIUM
On 13th March, Defense One in the US carried an article urging the US Navy to change the fuel type used in its nuclear reactors. This was said to be for 3 reasons – the growing shortage of the fuel-type with no US facility to make more; the risk of theft, terrorism etc if only a tiny amount of that moved around each year is targeted; and continued use of bomb-grade fuel (highly-enriched uranium) by the US Navy enables Iran to argue it should be able to do the same for his naval forces, thus allowing a seemingly legitimate reason for its possession.
CAMBODIA’S FUTURE UNCERTAIN AMID CASINOS, CHINESE INVESTMENT AND CORRUPTION
Radio Australia on 14th March carried an article on Cambodia’s booming economy, which has doubled in the last 2 years, with most of the investment coming from China. It expresses concerns about potential money laundering involved in the investment. It also comments on the proliferation of casinos, where Cambodians are prohibited by their government from gambling, so the casinos are strictly for foreigners, and often staffed by foreign nationals. Corruption in Cambodia is endemic, the report says. Cambodia ranks at number 161 on Transparency International’s 2017 Corruption Perceptions Index — among the 20 most corrupt countries on Earth. The government of Hun Sen is also an authoritarian one – and his attitude (subservience) toward China risks making the country increasingly subservient to Chinese wishes and further isolates it from long-time Western donors. The reports says that the US has now signalled it will be cutting aid funding in response to Hun Sen’s latest political manoeuvrings.
SPANISH POLICE BUST CHINESE TRAFFICKING GROUP SMUGGLING PEOPLE INTO IRELAND
The Africom and others on 14th March reported that Spanish police said that they had arrested 155 mostly Chinese nationals after busting a gang that trafficked Chinese migrants into Britain and Ireland for about $25 000 per person.
According to Spanish police, each victim paid €20,000 for the trip and was supplied with fake passports and other documents.
THE ISRAELI START-UP THAT SEEKS TO STOP TERRORIST DIAMOND SMUGGLING
On 13th March, the Jerusalem Post carried an article about an Israeli company, 6 Degrees, that uses laser-inscribing machinery to invisibly encrypt an ID on diamonds to prevent trafficking. The data is said to be partially encapsulated inside the diamond, and the other part of the identification – a cryptographic key – is encrypted within the blockchain technology. The inscription process also offers a foolproof way of guaranteeing that lent diamonds are the same ones returned, guaranteeing counterfeit protection.
CHINA CUSTOMS EXERCISE AGAINST WASTE IMPORTS
Resource Recycling on 13th March reported that a new enforcement campaign to implement the country’s new import restrictions has been announced. “Blue Sky 2018” will run from March through December 2018 and will focus on preventing the import of recovered materials named in the country’s recyclables ban, which took effect on 1st January, as well as cracking down on falsified import documents. According to the Chinese authorities, a common practice has been for smugglers to circumvent import regulations by illegally using another company’s import licence. The project follows a smuggling enforcement action: “Blue Sky 2017”. Quoting Chinese media, the article says that last year’s Blue Sky actions led to the seizure of 866,800 metric tons of solid waste and hundreds of arrests. Customs authorities have focused strongly on scrap plastics imports. In the first 2 months of the import ban, of more than 50,000 metric tons of imported material investigated, over 80% was scrap plastic.
PHILIPPINES SEIZES HUNDREDS OF SMUGGLED ANIMALS
Free Malaysia Today on 13th March reported that animals seized by authorities included sugar gliders, wallabies, birds of paradise, and Moluccan cockatoos. The Philippines is a regional hub in the illicit animal trade. 4 suspects were arrested in the raid that turned up animals native to Australia, Indonesia, and Papua New Guinea.
FRENCH COURT SENTENCES PIA AIRLINE STEWARDS TO 2 YEARS FOR SMUGGLING DRUGS
Pakistan Today on 13th March reported that a French court has sentenced 2 stewards of Pakistan International Airlines (PIA) to 2 years each in prison in drug smuggling case.
ISLE OF MAN AMENDS ITS NORTH KOREAN EXPORT CONTROL LAW
On 13th March, a news release advised that the European Union (North Korea Sanctions) (Amendment) Order 2018 [SD 2018/0095] had come into operation on 8th March, providing for the application of EU Regulation 2018/285/EU in the Island, and formally bringing Island sanctions law involving North Korea into line with that of the UK.
Also, on 12th March, an earlier news release had advised that the Export Control (North Korea Sanctions) Order 2018 had been part of Island law. This provides for the enforcement of updated trade sanctions against North Korea, and for offences, penalties and licences (where possible).
CHINA INVESTS FURTHER $1 BILLION IN COLOMBO PORT CITY DEVELOPMENT IN SRI LANKA
On 12th March, HK TDC reported that a further $1 billion in Chinese funding has been secured for the Colombo Port City development, the largest Belt and Road Initiative project currently underway in Sri Lanka. Once completed, Colombo Port City will function as an extension to the Sri Lankan capital’s central business district and as a semi-autonomous entity, operating under a different financial and investment regime to the rest of the country.
PROPOSED CHANGES TO CANADA’S AML/CFT REGIME
On 2nd March, Fasken in Canada produced a briefing on a consultation paper published in February. This paper contains proposals described as diverse and far reaching. Some would extend the reach of Canada’s AML/CFT regime, whilst others would reduce the burden of the regime on reporting entities. The briefing details the proposals and notes that comments are required by 30th April. Amongst the proposals on which comments are sought is whether there should be a limit on the amount of cash an individual can carry in Canada without a legitimate purpose, whether Canada should establish a business registry for persons who deal in high volumes of cash, and whether there should be a limit on the amount of cash a business could accept and/or report on.
DIRECTORS’ DUTIES IN GUERNSEY
On 6th March, law firm Ogier produced a brief synopsis of the common law duties owed by directors of companies incorporated in the Island of Guernsey.
SINGAPORE LAUNCHES AN AMBITIOUS BLUEPRINT TO DRIVE SINGAPORE PORT AS THE FUTURE GLOBAL MARITIME HUB
Reed Smith on 13th March published a briefing about Singapore’s new “Sea Transport Industry Transformation Map” launched in January. It appears that Singapore’s government is determined to ensure the country remains a leading maritime trading hub, and that the strategic blueprint aims to create over 5,000 new jobs in the maritime sector and grow its “value-add” by US$3.50bn by 2025, by developing technological innovation, workforce talent, and connectivity between maritime industry actors.
EU BAN ON THE IMPORT AND PLACING ON THE MARKET OF SEAL PRODUCTS
On 13th March, HMRC released updated guidance on the ban on importing seal, walrus and sea lion products into the EU, and what’s exempt from the ban.
INVESTIGATORY POWERS (INTERCEPTION BY BUSINESSES ETC. FOR MONITORING AND RECORD-KEEPING PURPOSES) REGULATIONS 2018
These UK Regulations (SI 2018/356) provide the legal basis under which a body, such as a company or public authority, may intercept communications for monitoring or record keeping purposes that are transmitted by a telecommunications system they control.
INVESTIGATORY POWERS (CODES OF PRACTICE) REGULATIONS 2018
These UK Regulations (SI 2018/355) bring into force 5 codes of practice regarding functions carried out under the Investigatory Powers Act 2016.
TAX AVOIDANCE AND EVASION: DISCLOSURE BY INTERMEDIARIES
The 17th Report from the House of Commons EU Scrutiny Committee is concerned with the proposal for a EU Council Directive as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements, as part of the EU response to the information on tax avoidance and evasion contained in the “Panama Papers”. The new amendment to an existing Directive would add a new category of information for automatic exchange, by requiring intermediaries, like tax advisors and consultants, to report potentially aggressive cross-border tax planning arrangements for an EU-based client to their national tax authority. Where the intermediary is based outside the EU and thus outside of the reach of the Directive, the disclosure obligation would shift to the taxpayer itself.
MONGOLIA ANTI-CORRUPTION AGENCY TARGETS RIO TINTO UNIT OVER OYU TOLGOI
Mining Weekly on 14th March reported that Rio Tinto is facing more scrutiny into its business dealings, this time from the Mongolian Anti-Corruption Authority (ACA), which has requested financial information from its subsidiary Turquoise Hill Resources regarding the Oyu Tolgoi project, thought to be connected to allegations stemming from negotiating of the agreement in 2009. There was said to be no indication that Turquoise Hill Resources was itself the subject of the investigation.
US COMPANY FINED $2 MILLION FOR BRIBING RUSSIAN NUCLEAR OFFICIAL
On 14th March, the New York Post reported that a Maryland company, Transport Logistics International Inc – which offers management services for transporting nuclear cargo – will pay a $2 million criminal penalty for bribing a Russian nuclear official for uranium-shipping contracts. It conspired to pay more than $1.7 million to offshore bank accounts associated with shell companies in Switzerland, Cyprus and Latvia. The beneficiary was a Maryland-based official with TENEX, a subsidiary of Russia’s state-controlled nuclear energy agency Rosatom that supplies uranium products.
INDIA: BAN ON LETTERS OF UNDERTAKING IN TRADE FINANCE: BULK GOLD AND DIAMOND IMPORTERS TO BE AFFECTED
The Economic Times in India reported on 14th March on moves following the Punjab National Bank (PNB) scandal. The Reserve Bank of India has decided to ban letters of undertaking for trade finance, but is likely to largely affect importers of gold and diamonds, as such letters of undertaking account for only 4-5% of the total trade finance, and most done through bank guarantees and letters of credit, which require adequate surety or collateral.
See also –
CURRENT ACCOUNT CLOSED OR REFUSED BASED ON IMMIGRATION STATUS IN UK?
On 13th March, UK Visas & Immigration published guidance on what to do if your application for an account is declined or if your account is closing because you are in the UK illegally.
UK MARITIME AND SHIPPING STATISTICS
On 14th March, the Department for Transport published updated information and statistics on the maritime sector: on the domestic waterborne freight, ports, sea passengers, shipping fleets and seafarers.
EXPERTS IN KUWAIT INVESTIGATING PHARAOH-ERA SMUGGLED ANTIQUE
On 14th March, Customs Today reports on a smuggled coffin lid artefact, brought to Kuwait earlier in the month from Egypt, and which may date back to time of the Pharoahs. It was hidden inside a sofa that came in a shipment of office furniture from Egypt. Officers at the Kuwait Airways cargo terminal discovered the artefact as they were scanning the shipment. According to a source from Egyptian airport, the sofa was shipped from the airport by a certified and registered company.
SINGAPORE POLICE AND REGULATOR TEAM UP TO INVESTIGATE IFA OFFENCES
On 14th March, International Adviser reported that the Monetary Authority of Singapore (MAS) and the white-collar crime unit of the city-state’s police force are teaming up to investigate all capital markets and financial advisory offences, w.e.f. 17th March.
EU ACTION PLAN ON CROWDFUNDING AND ICO
On 13th March, Irish law firm Matheson produced a briefing on an EU Action Plan that sets out a number of proposals to advance these objectives, including in the areas of crowdfunding and initial coin offerings (or ICO).
SWITZERLAND: 2 ARRESTED IN PDVSA VENEZUELA CORRUPTION CASE
On 13th March, OCCRP reported that Swiss police have arrested 2 executives in connection with a lawsuit launched by the Venezuelan state oil company PDVSA against a group of partner companies, claiming they had stolen billions in oil revenues from Venezuelans. PDVSA filed the lawsuit against Miami-based company, Helsinge Inc, for allegedly obtaining inside information, and rigging bids by bribing PDVSA officials, including former Vice President, Ysmel Serrano. The Swiss arrests of 2 unidentified executives were made in regards to a probe on bribing foreign officials and money laundering.
AUSTRIAN LAW ON THE ULTIMATE BENEFICIAL OWNERS REGISTER
On 8th March, law firm Schoenherr produced a briefing on the Austrian Law on the Ultimate Beneficial Owners Register (Wirtschaftliche Eigentümer Registergesetz – WiEReG), with came into force on 15th January.
LARGE COUNTERFEIT JEWELLERY SHIPMENT SEIZED IN PHILADELPHIA
WPVI-TV Action News in Philadelphia carried a report on 13th March about a large shipment of fake jewellery from Hong Kong was seized earlier this month in Philadelphia. If the jewellery had been authentic, it would have had a retail value of about $1.4 million. The parcel contained necklaces, bracelets, earrings, and diamond pendants bearing the names Cartier, Chanel, Bvlgari, and Tous.
SLAVERY AND HUMAN TRAFFICKING IN SUPPLY CHAINS: GUIDANCE FOR UK BUSINESSES
The Home Office issued updated guidance for organisations on how to ensure that slavery and human trafficking is not taking place in their business or supply chains on 14th March.
NEW TAX EVASION PROBE OPENED INTO EX-CEO OF PROMINENT RUSSIAN CONSTRUCTION FIRM
RAPSI reported on 14th March that a new tax evasion case has been opened in Russia against the ex-CEO of the Mostovik construction firm, Oleg Shishov, who had been earlier sentenced to 4 years in prison for evading about $8.8 million of taxes.
BULGARIAN PARLIAMENT ADOPTS NEW LAW ON AML MEASURES, PROHIBITS THE OPENING OF ANONYMOUS AND FICTITIOUS ACCOUNTS
On 14th March, the Focus News Agency reported that the Bulgarian Parliament has passed conclusively an entirely new Anti-Money Laundering Measures Act.
CITY OF LONDON POLICE WARNS THAT UK CLAIMS-MANAGEMENT COMPANIES COULD FACE BRIBERY PROBES
On 14th March, M Lex Market Insight carried a story saying that the force has ongoing bribery cases targeting the insurance sector and is “exploring” prosecutions in the claims-management industry, according to the head of the force’s insurance-fraud unit. Apparently, it wants to target claims-management companies where employees pay bribes to obtain claims data from insurers, paying bribes from “a few hundred pounds” to as much as “£10,000”.
KAZAKHSTAN’S ‘GOLDEN BOY’ EX-ECONOMY MINISTER SENTENCED TO 10 YEARS
Rferl on 14th March reported that former Kazakh Economy Minister, Quandyq Bishimbaev, has been sentenced to 10 years in prison on charges of bribery and embezzlement. He was one of 22 defendants in the trial, others (including his cousin) receiving prison terms ranging from 2 to 7 years, were fined, or were released with no penalty under an amnesty enacted in 2017. He had been arrested in January 2017, shortly after being replaced, and accused of accepting bribes when he was head of Bayterek, a state-controlled holding company.
UK: INCREASED CHECKS ON PRIVATE FLIGHTS, CUSTOMS AND FREIGHT COMING FROM RUSSIA
In her statement to Parliament following the nerve agent attack on a former Russian spy and his daughter, PM Theresa May included reference to increased checks on private flights, customs and freight coming from Russia – no details were provided initially. It also seems that the sanctions Bill currently going through Parliament will be amended to include a “Magnitsky” clause – allowing the imposition of sanctions for human rights abuses etc – similar to measures adopted in the US, Canada and elsewhere.
THIRD COUNTRIES ALIGN THEMSELVES WITH EU SANCTIONS ON AL-QAIDA, ISIL, DA’ESH
On 14th March, a news release from the EU Council advised that the “Candidate Countries” – the former Yugoslav Republic of Macedonia, Montenegro, Serbia and Albania, plus Bosnia and Herzegovina, as well as the EFTA countries Iceland and Liechtenstein, members of the EEA, Moldova, Armenia and Georgia had all undertaken to align their sanctions regimes with that of the EU.
WHEN COMPANIES NEGOTIATE WITH TERRORISTS
In another TRACE podcast, investigative journalist Dorothee Myriam Kellou tells the story of the French cement company Lafarge and its plant in Syria that was ultimately taken over by ISIS.
UPDATE ON VARIOUS US BRIBERY AND CORRUPTION INVESTIGATIONS
On 14th March, US law firm Buckley Sandler carried reports on several US bribery/corruption cases – data analytics company Teradata and energy company Exterran reported that the DoJ and SEC were not pursuing enforcement action relating to questionable gifts or accounting involving Turkey and the Middle East respectively. Meanwhile, German-owned dialysis provider Fresenius Medical Care revealed that it is facing an investigation following a self-disclosure to the US authorities. In another case, French pharmaceutical company Sanofi SA announced that it had been informed that the DoJ had closed its investigation into the self-disclosure, but that the SEC inquiry continued into certain payments made by company employees to healthcare professionals in the Middle East and Africa.
CALIFORNIA TECH COMPANY, CEO AND FOUNDER CHARGED WITH LONG-TERM INVESTOR FRAUD
On 14th March, the SEC announced that it had charged Silicon Valley-based private company Theranos Inc, its founder and CEO Elizabeth Holmes, and its former President Ramesh “Sunny” Balwani with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance and its key product – a portable blood analyser.