20th March 2018
FRENCH EMBASSY WORKERS ARRESTED FOR SMUGGLING WEAPONS TO PALESTINIANS
The Jerusalem Post carried further information on the arrest of a French Consulate worker. It said that 2 French Embassy workers along with 5 Palestinians have been indicted on charges of smuggling dozens of weapons from the Hamas-run Gaza Strip to the West Bank. Shin Bet (the Israel Security Agency) said that 24-year-old French citizen Romain Franck, who worked as a driver in the French Consulate in east Jerusalem, was part of a cell that smuggled 70 pistols and 2 assault rifles through the Erez crossing on the Israel-Gaza border on 5 different occasions.
INDIA SUMMONS GUPTAS OVER TAX AND ‘MONEY LAUNDERING’
The Citizen in South Africa on 19th March reported that Ajay Gupta has been named a fugitive from justice by South African authorities and has been red-flagged by Interpol. The Gupta brothers are facing scrutiny for the role they played in the alleged looting of South African resources through state capture. The Times of India reports that the brothers have until March 26th to appear before the Indian income tax department, in connection with money laundering and “amassing properties in Uttarakhand, Uttar Pradesh and NCR”. Gupta properties have been raided in Dehradun and Saharanpur.
ISLE OF MAN VAT AFFAIRS STILL UNDER EU SPOTLIGHT
Manx Radio on 19th March reported that the Isle of Man’s VAT affairs haven’t escaped scrutiny by the European Commission according to a spokeswoman, who said that the Manx government is still under investigation by anti-fraud experts EUROFISC for its VAT arrangements on private jets. She says ‘should it become necessary, the Commission will not hesitate to take further action’. This comes as the EU is taking action on Malta, Cyprus, and Greece for failing to raise the ‘correct amount’ of VAT on the provision of yachts.
CALL FOR ACTION AS REPORT REVEALS LINK TO HOW FREE TRADE ZONES FOSTER COUNTERFEIT TRAFFICKING
The World Trademark Review on 15th March reports on new research from the OECD and the EU Intellectual Property Office (EUIPO) that reveals that the growth in free trade zones – where economic activity is driven by reduced customs controls, light regulation and limited oversight – is in turn fostering growth in counterfeit goods trafficking. The study notes that the global value of exports from export processing zones (EPZ) is $3,500 billion, which represent 29% of total exports of economies included in the World FTZ database. Exporting more than $2,400 billion from EPZ, Asian economies lead the way, followed by the Middle East ($552 billion) and South American economies ($284 billion).
The report is at –
ENGLISH COURT OF APPEAL CLARIFIES WHEN A PARENT COMPANY WILL BE LIABLE FOR THE ACTIONS OF ITS SUBSIDIARY
Mayer Brown on 19th February reported on Okpabi and others v Royal Dutch Shell Plc and another. The judgment considered the effect of the implementation of the parent company’s group policies by the subsidiary and whether or not that made it more likely that a parent would be held liable for the actions of its subsidiary. The claimants had sought damages as a result of serious, and ongoing, pollution and environmental damage caused by leaks of oil from pipelines and associated infrastructure in and around the Niger Delta, for which they contended Shell and its Nigerian subsidiary were responsible. Both the High Court and Court of Appeal held that no duty of care was owed by Shell to the claimants.
UK’S FIRST CONTESTED FAILURE TO PREVENT BRIBERY CONVICTION – WHAT DOES NOT CONSTITUTE “ADEQUATE PROCEDURES”
Jenner & Block on 12th March reported on the first contested case of its kind since the UK Bribery Act 2010 came into force in July 2011. In January 2014, Skansen International Ltd appointed a new CEO who initiated its first anti-bribery and corruption (ABC) policy and ordered an internal investigation into payments made in 2013. At trial, Skansen argued that it had had adequate procedures, relying on the fact that it was a small business, operating locally and out of a single, open-plan office, so as not to require a sophisticated ABC policy.
US CUSTOMS EXTENDS IMPORT RESTRICTIONS FOR CERTAIN ARCHAEOLOGICAL MATERIAL FROM BELIZE
On 28th February, Baker McKenzie reported that the US had renewed import restrictions designed to protect archaeological material from Belize.
EU RENEWS SANCTIONS RESTRICTIONS RELATING TO BOSNIA-HERZOGOVINA
EU Council Decision 2018/459/CFSP renews EU restrictions under Council Decision 2011/173/CFSP to 31st March 2019. The sanctions relate to people and entities, and those associated with them, deemed to be undermining the sovereignty or territorial integrity of Bosnia, seriously threatening its security situation, or undermining the Dayton/Paris peace agreement.
ISRAELI ARMS EXPORTS TO AFRICA GROWING
Defence Web on 19th March reported that Israeli arms sales to African countries are growing steadily, with defence exports increasing 70% between 2015 and 2016 to reach $275 million. It says that 2017 numbers are not yet available, but Israeli ministry of defence sources say that last year the numbers were even higher.
AFRICAN CENTRE TO FIGHT ILLEGAL FISHING TO BE SET UP
On 19th March, Defence Web reported that South Africa will play a significant role in the establishment of the SADC regional Monitoring Control and Surveillance Coordination Centre (MCSCC) which will soon be established in Mozambique. The SADC MCSCC is expected to enhance and co-ordinate compliance and enforcement efforts in the SADC region in order to combat illegal fishing.
MALDIVES TO LIFT STATE OF EMERGENCY, AND CHARGE EX-PRESIDENT, CHIEF JUSTICE ETC WITH BRIBERY
On 20th March, Reuters reported that the Maldives government will bring bribery charges against former leader Maumoon Abdul Gayoom and Chief Justice Abdulla Saeed and Supreme Court Judge Ali Hameed, and Supreme Court administrator Hassan Sayeed. The state of emergency was imposed in February (and later extended for another 30 days with parliament approval) in order to annul a Supreme Court ruling that quashed convictions against 9 opposition leaders and ordered the government to free those held in prison. The chief justice, another Supreme Court judge, and a Supreme Court administrator were arrested on allegations of attempting to overthrow the government.
NIGERIA: SWISS ACCOUNTS BLOCKED OVER SUSPECTED NIGERIAN OIL BRIBERY CASE
Vanguard in Nigeria on 20th March reported that the Office of the Attorney General of Switzerland (OAG) has blocked various bank accounts in Switzerland over an alleged oil bribery scheme linked to Nigeria at the request of the Milan public prosecutor and reportedly linked to the Shell and Eni bribery trials in Milan.
CANARA BANK IN INDIA: NEW FRAUD CASE
On 20th March, Reuters reported that shares in India’s Canara Bank tumbled more than 5% after the country’s federal police filed charges against a former chairman of the state-run bank and others over allegations that the officials helped a company defraud the bank of about $10.5 million taken in loans over 4 years ago.
UK EXPORT STRATEGY: TERMS OF REFERENCE
On 20th March, the terms of reference for the Department for International Trade’s development of a new export strategy were published. The Export Strategy will explore 5 important areas:
- segmenting the differing needs of UK businesses
- assessing different sector and market needs
- the Department for International Trade’s products and services
- working with other providers of export support, including the private sector
- DIT income generation strategy
CANADA’S 2018 BUDGET HERALDS INTRODUCTION OF DEFERRED PROSECUTION AGREEMENTS FOR CORPORATE WRONGDOING
Dentons on 19th March reported that the Canadian government has announced its intention to introduce legislation to establish Deferred Prosecution Agreements (DPA) as “an additional tool to hold corporate offenders to account”, following the results of the Government’s fall 2017 public consultation process, which revealed strong public support for the introduction of DPA in Canada. The article goes on to explain how they might work.
THE DESPOT’S GUIDE TO WEALTH MANAGEMENT
In the latest TRACE podcast, Professor Jason Sharman at King’s College, Cambridge, discusses his book about how kleptocrats operate and advocates for a controversial “bounty hunter” model for asset recovery.
OFAC LICENCES FOR ACCESS TO INTERNET FOR IRANIAN CITIZENS
A news release from OFAC on 20th March was intended to highlight existing guidance to underscore the US Government’s ongoing commitment to ensure that the Iranian people can exercise their universal right to freedom of expression and can freely access information via the Internet. OFAC’s guidance, authorisations, and licensing policies support the Administration’s continued commitment to promote the free flow of information to citizens of Iran. OFAC has 2 Iran-related general licences that authorise the provision of certain hardware, software, and services incident to the exchange of personal communications over the Internet, such as instant messaging, chat and email, and social networking software and services, as well as certain apps for mobile operating systems, anti-censorship tools, anti-tracking software, mobile phones, and other devices. OFAC has provided extensive guidance on its website on these general licences, and OFAC will consider applications to provide products and services outside the scope of these authorisations on a case-by-case basis based on US foreign policy and national security interests.
POLITICALLY EXPOSED PERSONS (PEP) AND THE LEGAL RESTRICTIONS THEY FACE
In an article published on 15th March, law firm Rahman Ravelli considers the Novartis scandal in Greece and the business restrictions on those holding high office. It points out that 2 former Greek prime ministers and an EU Commissioner are among 10 officials being investigated over allegations that Swiss medical giant Novartis bribed officials and doctors, from 2006 to 2015, to fix drug prices and boost its sales to public hospitals. The article goes on to consider the effect of the UK money laundering regulations on such PEP. The 2007 Regulations require that enhanced customer due diligence measures are taken to manage and mitigate the risks posed by PEP, their families and known close associates. It says that those in political positions must take careful and organised steps to ensure they can account for the sources of any wealth they are known to possess. Whether they like it or not, their past or current position can be viewed as a vulnerability to corruption; which means they are liable for greater scrutiny than the more “normal” members of the population.
CJEU CASE: ITALIAN CIVIL AND CRIMINAL DUAL LIABILITY
On 20th March, a news release from the Court of Justice of the EU was concerned with several joined cases from Italy where persons were liable to both civil penalties and criminal prosecution for the same irregularities. The release said that the ne bis in idem principle may be limited for the purpose of protecting the financial interests of the EU and the financial markets thereof; but such a limitation must not exceed what is strictly necessary to achieve those objectives. The Italian legislation on market manipulation could infringe EU law. Hence, Italy’s laws on financial market manipulation may be too far-reaching and in breach of EU legislation, but an individual’s right not to be prosecuted or punished twice for the same offence can be outweighed by the need to protect the financial interests of the EU.
EXPLAINED: WHAT WE KNOW ABOUT THE GADDAFI-SARKOZY FUNDING SCANDAL
Euronews on 20th March says that former French President Nicolas Sarkozy is being held for questioning by police over alleged illegal funding of his 2007 presidential campaign by the Gaddafi government. He allegedly received funds from the Libyan government to fund his 2007 presidential campaign, according to a 2012 report by French news website Mediapart. The allegations were already made in 2011 by Gaddafi’s son, Saif al-Islam.
UK CONSULTATION: IMPROVING CORPORATE GOVERNANCE IN INSOLVENCY
The UK Department for Business, Energy and Industrial Strategy is undertaking a consultation until 11th June on improvements to corporate governance within companies which are in or are approaching insolvency. The consultation puts forward a number of measures to improve corporate governance in firms that are in or approaching insolvency. It also seeks views on some other aspects of the wider corporate governance framework and whether these are working as they should.
ZAMBIA UNCOVERS $8 BILLION TAX SCAM AT PROMINENT MINING FIRM
Reuters on 20th March reported that Zambia’s tax collection agency has said that it had uncovered an 5-year, $8 billion tax scam at an unspecified “prominent mining company” and had issued an assessment to the company for classifying imported spare parts and other consumables as mining machinery, which attract no custom duty – the import duty on items other than mining machinery ranges from 15% to 25%.
SWEDEN TO REVIEW TRANSACTIONS WITH STATES ON EU’S TAX BLACK LIST
Tax News on 20th March reported that the Swedish Government has directed the tax agency to review transactions with jurisdictions placed on the black list of non-cooperative territories in the area of taxation, to establish whether there are transactions taking place between Sweden and black-listed jurisdictions which are being conducted for the sole purposes of avoiding tax rather than for sound economic reasons.
FAILING’ JERSEY AIRCRAFT REGISTRY TO TRANSFER TO PORTS OF JERSEY
On 20th March, the Jersey Evening Post reported that the Jersey Aircraft Registry is to be transferred to Ports of Jersey with a new business model in an effort to recoup some of the £800,000 invested in setting up the scheme. It reports that, when the registry was launched in 2015, it was hoped it would generate thousands in registration fees and encourage wealthy aircraft owners to do business in Jersey. However, last year the JEP revealed that despite more than £800,000 being spent on establishing the registry, just 2 aircraft were signed up – 1 of which has since left the register. Plans to launch a joint Channel Islands Registry failed after Guernsey instead opted to progress the plan on their own. Since it launched in 2013, more than 150 aircraft have joined Guernsey’s registry, while a similar scheme in the Isle of Man has more than 1,000 registered aircraft.
ALBANIA ARRESTS 39 PEOPLE-SMUGGLERS
OCCRP on 20th March reported that Albanian police say that they arrested 39 suspected members of a smuggling network, including 4 policemen, that helped some 1,000 Albanian citizens illegally emigrate to North America and UK in exchange for $ 9,820 to $30,000 per person.
NEW FIGURES REVEAL LOSS OF £236 MILLION THROUGH AUTHORISED PUSH PAYMENT FRAUDS
Out-Law on 20th March reported that businesses and consumers lost £236 million last year through authorised push payment (APP) frauds, new data has shown. Trade body UK Finance said there had been almost 44,000 reported cases of APP frauds in 2017. It is the first time annual figures on APP fraud have been collected. The largest number of reported cases involved consumers, who accounted for 88% of reported cases and lost an average of £2,784. Businesses lost on average £24,355 per reported APP fraud case. APP frauds take place where a victim is conned into authorising a transfer of money from their bank account into an account which they believe is controlled by a legitimate payee, but is actually controlled by a fraudster.
THE END OF ARMS CONTROL?
On 26th March, BBC Radio 4 will broadcast a documentary in its “Analysis” series. Existing arms control treaties are under threat – at the same time that new types of weapon emerge, with nothing to regulate them. There is a growing crisis in the arms control regimes inherited from the Cold War era, which threatens to undermine existing agreements. At the same time, new technologies are emerging like drones, cyberwar, biotech and hypersonic weapons, which are not covered by existing rules. BBC Defence and Diplomatic Correspondent Jonathan Marcus asks if a new era of chaos beckon or might the whole idea of arms control and disarmament be revived?
JAPAN CUSTOMS SEIZED RECORD 6.2 TONNES OF SMUGGLED GOLD IN 2017
On 23rd February, the Japan Times reported that customs authorities seized 6,236 kilograms of gold smuggled into Japan in 2017, a new one-year high, government data showed. Smugglers try to evade the 8% consumption tax levied on imports of gold worth over ¥200,000 and resell it at a tax-inclusive price. Gold smuggling has been on the rise since Japan raised the consumption tax from 5% in 2014. The number of gold smuggling cases jumped 66% to 1,347 from 811 in 2016, and 94% of the cases involved air travellers, who collectively tried to smuggle 4,779 kg of gold into Japan. Most of the smuggled gold came from South Korea, Hong Kong and Taiwan. The possession of gold is not illegal, which authorities believe helps lower the psychological barrier for smuggling.
ARREST OF SYRIAN JIHAD VETERANS IN LIBYA REFLECTS AL-QAEDA’S EFFORT TO REDEPLOY FIGHTERS ACROSS NORTH AFRICA
Janes.com on 20th March reported that the General Command of the eastern-based Libyan National Army (LNA) announced airstrikes targeting 2 large groups of jihadist militants in southern Libya, without providing further details. The airstrikes came 2 days after the LNA counter-terrorism department arrested 16 jihadists in the southern area of Kufra oasis, and according to a statement, the 16 arrested militants had Sudanese and Syrian passports and had fought in Syria with Jabhat al-Nusra and other Al-Qaeda-affiliated entities.
BULGARIAN POLICE BUST ORGANISED CRIME GROUP DEALING IN ARCHAEOLOGICAL TREASURES
The Sofia Globe on 20th March reported that Bulgarian police said that they had carried out a special operation in which an organised crime group trafficking arkeological treasures had been bust. In the course of the investigation, the crime group was found to be part of an international channel for the trafficking of archaeological valuables, acquired by treasure hunters on the territory of Bulgaria.
“NUCLEAR MATERIAL” SEIZED IN TURKEY
On 20th March, Newsweek reported that Turkish authorities were said to have detained 4 men they claim are part of a criminal gang in possession of large quantities (3 lb) of a radioactive nuclear element, Californium, they had hoped to sell on the black market for over $70 million. Neither the Turkish security services, nor the Turkish Atomic Energy Authority (TAEK) have stated the origin of the material.
Note that the article also refers at the end to an earlier seizure of “red mercury” in Georgia, this material does not exist and is a hoax element…
For information on Californium, see –
WHAT IS THE FUTURE OF THE JIHADIST MOVEMENT?
On 20th March, the Texas National Security Review published a feature in which it said, with ISIS having lost the bulk of its territory in Iraq and Syria, it asked a group of experts what comes next for the jihadist movement. The contents consisted of –
- Introduction – Change or more of the same? The future of the jihadist movement
- How foreign fighter returnees could shape the jihadist movement
- “We squeezed the balloon” – as ISIL collapses, jihadism remains in a growth phase
- ISIL, al-Qaeda and what goes viral next: why tomorrow’s jihadist movement might not look so different from today’s
NUCLEAR NON-PROLIFERATION: 6 LESSONS NOT YET LEARNED
In an article for the Carnegie Center on 20th March, the author highlights what he says are the 6 lessons to be learned from an analysis of Iran’s non-compliance with its IAEA safeguards agreement, North Korea’s withdrawal from the NPT, as well as the lessons not yet fully learned. The 6 are –
- In a case of noncompliance, the IAEA must refer it to the UN Security Council without undue delay
- In case of noncompliance, the IAEA should temporarily receive expanded verification authority.
- The UN Security Council should adopt a generic resolution preventively dealing with cases of noncompliance.
- In case a nation withdraws from the NPT, the UN Security Council must act promptly and decisively to condemn the action and impose sanctions.
- The Security Council needs to deter withdrawal from the NPT by making the use of the veto right less likely.
- All nuclear fuel-cycle facilities should be subject to irreversible IAEA safeguards.