29th March 2018
TRUSTEE AML RESPONSIBILITIES IN THE UK
On 27th March, Ashfords published a briefing which details requirements under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. It explains that trustees of UK trusts are required to maintain accurate records of settlor(s), trustees, individual beneficiaries and potential beneficiaries of a trust.
https://www.ashfords.co.uk/article/trustee-responsibilities
7 REASONS TO REGISTER AN AIRCRAFT IN THE CAYMAN ISLANDS
On 27th March, Maples published an article setting out reasons to register an aircraft in the Cayman Islands – political stability; the legal system; the Civil Aviation Authority of the Cayman Islands; the registration procedure and continuing requirements; ease of operation into US airspace; protection of third party interests; Cayman Maritime & Aviation City (which provides, amongst other services, for companies seeking to obtain a Cayman Islands air operator’s certificate (AOC) with an efficient solution for setting up a principal place of business in the Cayman Islands).
AML AND FRAUD IN SWITZERLAND
In a briefing on 27th March, Niederer Kraft & Frey published a briefing providing a structured guide on the relevant law and enforcement framework.
https://www.lexology.com/navigator/#!results/676
POLAND: JUDICIAL REFORMS VIOLATE ANTI-CORRUPTION STANDARDS
The Council of Europe on 27th March said amendments passed late last year to Poland’s judiciary, including laws on the National Council of the Judiciary (LNCJ), to the Supreme Court (LSC) and to the Law on Ordinary Courts, do not comply with Council of Europe anti-corruption standards, concludes a report from the Group of States against Corruption (GRECO).
DETENTION ORDER ISSUED IN US ON TOYS MADE IN MAINLAND CHINA OVER FORCED LABOUR CONCERNS
HK TDC on 29th March reported that US Customs and Border Protection has posted to its website information indicating that on 5th March it issued a withhold release order against imported toys produced by Huizhou Mink Industrial Co. Ltd. in mainland China due to concerns that they are being produced with forced labour. US law prohibits the importation of goods mined, produced, or manufactured, wholly or in part, in any foreign country by forced labour, including convict labour, forced child labour and indentured labour. Such goods are subject to exclusion and/or seizure and may lead to criminal investigation of the importer.
PAPUA-NEW GUINEA AUDITOR-GENERAL ARRESTED AND CHARGED WITH FRAUD
Radio New Zealand on 29th March reported that Philip Nauga has been charged with abuse of office, conspiracy to defraud and misappropriating over $76,900. It is alleged that he did not follow proper procedures in awarding two audit contracts, worth tens of thousands of dollars, to a law firm which never carried out the audits.
JERSEY FUNDS SECTOR BOOSTED BY ALTERNATIVE INVESTMENT SURGE
Tax News on 28th March reported that Jersey saw the value of locally administered funds rise to a record high of almost £300 billion at the end of 2017, driven primarily by a rise in private equity business.
https://www.lowtax.net/news/Jersey-Funds-Sector-Boosted-By-Alternative-Investment-Surge-76642.html
JUDGE BACKS FTC ASSET FREEZE IN CRYPTO FRAUD CASE
Coindesk on 28th March reported that the US Federal Trade Commission (FTC) is seeking to permanently freeze the assets of 4 men accused of running cryptocurrency referral scams. It also asked a federal court in Florida to order the defendants to stop working together or creating new business entities. The motion followed a temporary restraining order that provisionally froze the assets of My7Network and the Bitcoin Funding Team, as well as Thomas Dluca, Louis Gatto, Eric Pinkston and Scott Chandler.
https://www.coindesk.com/us-magistrate-recommends-freezing-assets-in-florida-crypto-investment-case/
NEW POWERS TO CRACK DOWN ON WASTE CRIME IN UK
The Environment Agency now has new powers to stop illegal waste sites posing a risk to the environment.
https://www.gov.uk/government/news/new-powers-to-crack-down-on-waste-crime
ALIGNING THE TAX TREATMENT OF ISLAMIC FINANCE AND CONVENTIONAL FINANCE
On 28th March, the Chartered Institute of Taxation published a submission sent to HMRC on aligning the tax treatment of Islamic finance and conventional finance.
CANADA, US & EU MOVE FORWARD WITH ACTION AGAINST CBI PROBLEM
Kenneth Rijock in his blog on 28th March reported that the final steps to implement effective measures are underway in the US, Canada, and EU to combat the threats posed by criminal elements who have obtained citizenship by investment (CBI) passports from 5 East Caribbean countries. Arrivals from St Kits & Nevis, Antigua & Barbuda, Dominica, St Lucia and Grenada would be subject to scrutiny as high-risk individuals, whether they be CBI passport holders, or native-born.
http://rijock.blogspot.com/2018/03/canada-us-eu-move-forward-with-action.html
TRANSSHIPMENT USED TO EVADE DUTIES ON IMPORTS INTO US FROM CHINA
On 29th March, Sandler Travis & Rosenberg reported that US Customs and Border Protection has found substantial evidence that 8 companies evaded the anti-dumping duty order on steel wire garment hangers from China by transshipping them through Malaysia.
https://www.strtrade.com/news-publications-transshipment-evasion-EAPA-CBP-hangers-China-032918.html
UNDERCOVER BILLIONAIRES FOUNDER ARRESTED FOR PONZI FRAUD
Baker McKenzie on 28th March reported that Louis Tshakoane Junior hasppeared in court in South Africa after being arrested on fraud charges in Johannesburg. He is accused of running a pyramid scheme through his company Undercover Billionaires International that robbed investors of more than R20 million. He lured investors to his company promising large returns on investment.
SLOVAK JUDGE ACCUSED OF ACCEPTING BRIBE FROM CRIME GROUP
Baker McKenzie on 28th March reported that Monika Jankovska has been accused of accepting a $124,000 bribe from the organised crime group Sykora to detain the owners of a restaurant while they intimidated an owner’s wife into transferring the deed to the restaurant. Sykora member Michal Vida is said to have confirmed the bribe took place.
http://www.riskandcompliancehub.com/slovak-judge-accused-of-accepting-bribe-from-crime-group/
NIGERIA TO MANUFACTURE POLISH ASSAULT RIFLES
Janes.com on 28th arch reported that Polish Armaments Group (PGZ) holding company and Defence Industries Corporation of Nigeria (DICON) have signed a letter of intent on covering the production of Beryl M762 assault rifles in Nigeria, the rifle’s manufacturer Fabryka Broni announced.
http://www.janes.com/article/78899/nigeria-to-manufacture-polish-assault-rifles
CHINA’S PURSUIT OF OVERSEAS SECURITY
Think tank, the RAND Corporation in the US has produced a report that says that China’s ascent as the world’s second-largest economy has brought the country tremendous prosperity, but integration into the global economy has also exposed growing numbers of its citizens and their assets to potential harm. This report examines China’s pursuit of security for its overseas interests.
https://www.rand.org/pubs/research_reports/RR2271.html
AEO COMPENDIUM
The WCO AEO Compendium is regularly updated to track the developments of existing AEO programmes, AEO programmes in the process of being launched, and customs compliance programmes. Authorised Economic Operator (AEO) has become a flagship programme for WCO Members as it offers an opportunity for Customs to share its security responsibilities with the private sector, while at the same time rewarding them with a number of additional facilitation benefits. Partnership programmes with trade allow Customs to achieve more with less effort and aim at ensuring sustainable and long-term compliance through incentives, such as reduced levels of control, periodic reporting, deferred payment, and reputational benefits.
http://www.wcoomd.org/Topics/Facilitation/Instrument%20and%20Tools/Tools/AEO%20Compendium
THE UK MILITARY IN THE ARABIAN PENINSULA
On 28th March, the Oxford Research Group published a report described as a primer that explains what presence, relations and obligations the UK military has in the Arabian Peninsula, including the 6 monarchies of the Gulf Co-operation Council (GCC) and Yemen, as well as the international waters of the Persian Gulf, Arabian Sea, Gulf of Aden and Red Sea. Key points include the fact that the Gulf region has the largest concentration of British military forces outside of the UK, including about 20% of the operational Royal Navy and over 300 personnel embedded with local militaries. Exports to the region are critical to UK military aerospace business models and likely to constitute over half of all British arms exports in coming years. Saudi Arabia, Oman and Qatar are the key markets. There is obvious tension between what the National Security Capability Review calls the fundamental values of Global Britain – respect for human dignity, human rights, freedom, democracy and equality – and the UK’s growing military presence in the Gulf States and involvement in the Yemen war.
THE RISE OF THE PRIVATE MILITARY AND SECURITY INDUSTRY
A further report from the Oxford Research Group on 28th March that seeks to show that, amid a new global security environment shared by state and non-state actors, the market for force has developed into a strategic partner for the state in both the Western and non-Western world. Globally, the private military and security industry has filled voids that the state and its armed forces can no longer fill. As a consequence, Western and non-Western states alike have developed a dependency on commercial providers of security and military services.
ISLE OF MAN ADVISES AMENDMENT TO DETAILS OF 3 PERSONS ON SUDAN SANCTIONS LIST
On 29th March, the Isle of Man published a news release advising that the details of 3 entries on the Sudan sanctions list, as made by EU Regulation 2018/518/EU.
https://www.gov.im/news/2018/mar/29/financial-sanctions-sudan/
CROWN DEPENDENCIES: THE UK AND JERSEY, GUERNSEY AND ISLE OF MAN
On 29th March, the UK Ministry of Justice republished information dating from 2013 laying out the constitutional relationship between the UK and its Crown Dependencies.
https://www.gov.uk/government/publications/crown-dependencies-jersey-guernsey-and-the-isle-of-man
SOUTH AFRICA’S MIRE OF GUPTA-LINKED CORRUPTION
Al Jazeera on 28th March carried an article asking how did major multinational companies get drawn into this web of corruption? It says that, since arriving in South Africa in the early 1990s, 3 poor brothers, Atul, Ajay and Rajesh, have made themselves astoundingly rich. In 2016, Atul Gupta was listed as being South Africa’s seventh-richest person, with a net worth of over $760 million. Their empire encompasses ownership of mines, media and many other companies.
COMPLIANCE SPENDING SHIFTING TO NEW TECHNOLOGIES AS THREAT LANDSCAPE EXPANDS
The Paypers on 29th March reported that a new report from Accenture has shown that compliance spending is shifting to new technologies as threat landscape expands. Faced with growing threats such as cyber fraud, cryptocurrency, quantum computing and open banking, financial institutions expect to increase their compliance investments over the next 2 years as they seek new approaches to strengthening compliance functionalities. Based on a survey of 150 compliance executives at financial services institutions, Accenture’s 5th annual compliance risk report found that 89% of respondents said they expect to increase their compliance investments over the next 2 years. The study revealed that the top spending priority for compliance officers over the next 12 months is technology transformation, cited by 24% of respondents. Investments will be led with the implementation of new surveillance tools, with half (49%) of respondents planning to deploy these technologies this year.
The report is at –
https://www.accenture.com/us-en/insight-2018-compliance-risk-study-financial-services
REPORT: MOST AID CHARITIES’ BANK ACCOUNTS IMPACTED BY COUNTER-TERRORISM REGULATIONS
On 29th March, Civil Society reported that the majority of international charities surveyed have experienced difficulty accessing their bank accounts due to AML/CFT regulations, a report from the Charity Finance Group (CFG) which surveyed 34 NGO last year found. Four-fifths of had experienced some kind of problem accessing mainstream banking channels, while a seventh had had their accounts closed, and four-fifths of respondents also said that banks had become substantially more risk averse towards them. Some NGO operate in high-risk environments such as Syria or Palestine and because of this, all NGO are generally treated as “medium-risk”, which means their accounts are more likely to be de-risked by banks. However, last year the UK National Risk Assessment said the level of risk for NGO should be downgraded to “low” due to the existing safeguards in the sector.
CHINA CENTRAL BANK WILL LAUNCH CRACKDOWN ON VIRTUAL CURRENCIES AND DEVELOP OWN DIGITAL CURRENCY
KYC 360 on 29th March reported that China’s central bank will launch a crackdown on all types of virtual currencies this year, a vice governor of the central bank said. It will also push forward the research and development of its own digital currency this year.
https://kyc360.com/news/china-central-bank-will-launch-crackdown-virtual-currencies/
LAB-GROWN DIAMONDS THREAT TO BIG MINERS – BUT HOW MIGHT PATENTS PLAY THEIR PART?
On 27th March, Urquhart-Dykes & Lord LLP published a briefing (originally published in December) reflecting on an FT article from October on why lab-grown diamonds pose a threat to big miners such as De Beers in the diamond jewellery sector. It says that sales of laboratory-grown diamonds are currently only about 2% of supply in this multi-billion sector, it is reported that they are expected to reach 10% by 2030 and perhaps more. The article asks if patent disputes will escalate within the lab-grown diamond jewellery sector and what effect that may have on the sector’s growth and development.
THE UK JOINS THE HAGUE SYSTEM FOR INTERNATIONAL INDUSTRIAL DESIGNS – WHAT THIS MEANS AND HOW TO USE IT
On 21st March, Urquhart-Dykes & Lord LLP reported that companies and rights owners in the UK can now use the Hague System to apply for and register industrial designs and explains how this works.
BORDER SEARCHES OF TRAVELLERS’ ELECTRONIC DEVICES REMAIN AN EVOLVING AREA OF US LAW
On 28th March, Foley Hoag published an article providing a further update re border searches and inspections of electronic devices of travellers applying for admission to the US and a recent interesting case: United States v. Vergara. It reminds one that US Customs and Border Protection issued another directive earlier this year that further clarified their authority to search electronic devices.
EUROPEAN POWERS PRESS FOR IRAN SANCTIONS TO BUTTRESS NUCLEAR DEAL
Reuters on 29th March reported that France, the UK and Germany have sought to persuade their EU partners to back new sanctions on Iran to preserve a nuclear deal with Tehran that President Trump has threatened to pull out of in May. The new measures proposed were discussed by the EU’s 28 ambassadors and could include members of Iran’s most powerful security force, the Islamic Revolutionary Guards Corps (IRGC).
CLAIM THAT EXXON WAS COMPLICIT IN OIL SECTOR CORRUPTION IN LIBERIA
NGO Global witness on 29th March, in a news release, claimed that in 2013, under outgoing Secretary of State Rex Tillerson’s leadership as CEO, Exxon paid $120 million for a West African oil block the company knew was tainted by corruption.
https://www.globalwitness.org/en/press-releases/exxon-complicit-oil-sector-corruption-liberia/
FCA SHUNS BRUSSELS RULES ON TACKLING MONEY LAUNDERERS BY OPTING FOR CIVIL PENALTIES
The Financial Times on 28th March reported that the FCA has yet to press criminal charges against a bank for breaches of EU AML rules that took effect 11 years ago, opting instead for civil penalties which can yield bigger financial returns.
https://www.ft.com/content/131f75a0-329b-11e8-ac48-10c6fdc22f03
NICOLAS SARKOZY TO FACE TRIAL FOR CORRUPTION AND INFLUENCE PEDDLING
The Guardian on 29th March reported that Sarkozy has been sent to trial for corruption and influence peddling. He is alleged to have promised the judge a comfortable promotion in return for information about the fraud inquiry. This follows claims he took €50 million from the late Libyan dictator Muammar Gaddafi in illegal donations for his successful 2007 presidential campaign, which he also denied.
ZIMBABWE DELEGATION VISITS RUSSIA’S ULAN-UDE AVIATION FACTORY
Defence Web on 29th May reported that a Zimbabwean delegation has visited the Ulan-Ude Aviation Factory, part of the Russian Helicopters group, to view the VIP modification of Mi 171E helicopters. Zimbabwe has operated Russian-built Mi 17, Mi 24 and Mi 35 helicopters.
JHA OPT-IN AND SCHENGEN OPT-OUT PROTOCOLS FOR UK
On 29th March, a news release from the Home Office provided updated details of the UK’s participation in EU legislation on police and judicial co-operation, civil and criminal justice, asylum and migration.
https://www.gov.uk/government/publications/jha-opt-in-and-schengen-opt-out-protocols–3
BRAZIL PORTS BRIBERY PROBE ENSNARES PRESIDENT’S FRIENDS
Reuters on 29th March reported that police arrested 2 close friends of Brazilian President Michel Temer in an investigation into alleged corruption involving a decree regulating the country’s ports. Temer has denied any wrongdoing in the case in which prosecutors suspect bribes were paid in exchange for the extension of concessions in the port of Santos, Latin America’s busiest.
CHINESE ARRAIGNED FOR ATTEMPTING TO SMUGGLE $300,000 OUT OF NIGERIA
Sahara Reporters on 29th March reported that Li Yanping, a Chinese national, has been arraigned for allegedly concealing $300,000 while attempting to board a flight to Dubai.
NIGERIAN $40 MILLION ARMS SCANDAL: YOU HAVE CASE TO ANSWER, COURT TELLS FORMER PRESIDENT’S COUSIN
The Premium Times in Nigeria reported that the Federal High Court has ordered former President Goodluck Jonathan’s cousin, Robert Azibaola, to defend himself in a fraud allegation of $40 million levelled against him and his company, One Plus Holding Ltd, by the federal government. He faces 2 counts re the possession of and converting $40 million received from the office of the former National Security Adviser (NSA), Sambo Dasuki, to personal use.
A BRIEF GUIDE TO STRATEGY AND SANCTIONS
The Hoover Institution at Stanford University in the US, on 29th March published a series of articles concerned with economic sanctions. It starts with an introduction saying that the modern myth of sanctions efficacy originates in the collapse of the South African apartheid regime, but alas, the South African story was not so simple.
https://www.hoover.org/research/brief-guide-strategy-and-sanctions
SANCTIONS: THE RECORD AND THE REWARDS
This starts with a quote answering the question, why are sanctions so popular? Because “there is nothing else between words and military action to bring pressure upon a government”. The essay takes a sceptical view of the record and effect of sanctions, suggesting that the reason to impose sanctions when they work only for modest purposes, and then only against small or weak opponents, is because we “gotta do something”.
https://www.hoover.org/research/sanctions-record-and-rewards
DO ECONOMIC SANCTIONS WORK?
This essay concludes that economic sanctions compromise between doing whatever it takes to achieve a given objective, and doing nothing, by doing something half-heartedly. Like much of the rest of US national security policy, economic sanctions are self-stroking pretence.
https://www.hoover.org/research/do-economic-sanctions-work
GUERNSEY REPORTS ON FINANCIAL SERVICES PROGRESS
Tax News on 29th March reported that Guernsey Finance, the island’s financial services promotion agency, has reported on the implementation of a plan to drive forward the growth of the territory’s financial services sector. The strategy, unveiled at the agency’s annual update in January this year, was to focus on 5 priorities: green investment, global funds distribution, private wealth and family office, wealth management and brokerage, and technology.
https://www.lowtax.net/news/Guernsey-Continuing-To-Push-Financial-Services-Progress-76650.html
FRAUDSTER ORDERED TO PAY BACK £552,000 TO PRINCESS YACHTS
The Plymouth Herald reported on 29th March that former Plymouth Argyle player, Darren Tallon, 44, must sell several properties in the city and land in Canada to raise the cash. He is nearing release after being locked up almost 2 years ago for fleecing the company of more than £800,000, some jointly with his co-defendants.
https://www.plymouthherald.co.uk/news/plymouth-news/greedy-fraudster-ordered-pay-back-1400633
THE FOREIGN CORRUPT PRACTICES ACT IN CROSS-BORDER MERGERS AND ACQUISITIONS
Dentons on 29th March published an article cautioning US companies about the effect of the bribery and corruption legislation when involved in cross-border mergers and acquisitions. It says that, given the far-reaching application of the FCPA it has made pre-acquisition anti-corruption due diligence a necessity.
https://www.jdsupra.com/legalnews/the-foreign-corrupt-practices-act-in-79215/
FCA PROPOSES NEW GUIDANCE ON FINANCIAL CRIME SYSTEMS AND CONTROLS
Latham & Watkins produced an article on 29th March saying that the UK FCA is proposing to add a new chapter on insider dealing and market manipulation to its Financial Crime Guide and is consulting on the proposal. Responses are required by 28th June, and the FCA proposes that the new guidance will come into effect on 1st October.
https://www.jdsupra.com/legalnews/fca-proposes-new-guidance-on-financial-40504/
SWITZERLAND ALIGNS ITSELF WITH EU SANCTIONS ON VENEZUELA
On 28th March, a news release advised that w.e.f that date, the Federal Council had adopted restrictive measures against Venezuela. As such Switzerland is aligning itself with the sanctions imposed by the EU as a result of human rights violations and the undermining of the rule of law and democratic institutions.
https://www.fdfa.admin.ch/eda/en/home/news/news-fdfa.html/content/eda/en/meta/news/2018/3/28/70265
REPORT: CORRUPTION IN PALESTINE
Coalition for Accountability and Integrity – AMAN in June 2017 produced a 86-page report The executive summary says that, for the past 10 years, AMAN has prepared a periodic report on integrity and combating corruption in Palestine with the goal of highlighting the achievements made and challenges that continue to stand against the protection of integrity and combating corruption in Palestine. The report is based on information and variables monitored from multiple sources, which are then analysed by the report’s preparation team. The latest report says that throughout 2017, negative indicators and the overall climate continued in regards to the Palestine Authority (PA) structure and performance. The report details a wide range of corrupt practices.
https://www.aman-palestine.org/data/itemfiles/902b911598cf1e87515378f025379b30.pdf
LAWSUIT AGAINST SAUDI ARABIA FOR INVOLVEMENT IN 9/11 TERROR ATTACKS MOVES FORWARD
Jurist reported on 29th March that a judge in a US court had denied Saudi Arabia’s motion to dismiss a lawsuit for involvement in the 9/11 terror attacks. Victims and families of victims originally brought suit against Saudi Arabia and the Saudi High Commission for Relief in Bosnia and Herzegovina (SHC). The claim against Saudi Arabia alleged responsibility for its agents who “directly and knowingly assisted the hijackers and plotters who carried out the attacks.” The claim against the SHC was that charity organisations under its control gave “financial and operational support” to al Qaeda, allowing the group to conduct the attack.
20 HACKERS ARRESTED IN €1 MILLION BANKING PHISHING SCAM
A news release from Europol on 29th March advised that a 2-year long cybercrime investigation between the Romanian National Police and the Italian National Police, with the support of Europol and Eurojust, has led to the arrest of 20 suspects in a series of co-ordinated raids on 28th March. The criminals allegedly faked emails from tax authorities to defraud bank customers across Italy and Romania out of €1 million.
DRUGS WORTH £66 MILLION WERE FOUND HIDDEN IN A LORRY – NOW GANGSTERS HAVE BEEN JAILED FOR MORE THAN 100 YEARS
The Manchester Evening News on 29th March reported on drugs smuggler, Julian Solomon, who was one of 8 men involved in a sophisticated continental trafficking network which saw vast amounts of class A drugs delivered from Belgium to the UK via Holland. He has been jailed for 25 years, the downfall of Solomon and his fellow conspirators came after heroin and cocaine worth £66.5m was found hidden in a lorry carrying a tractor at King George Docks in Hull last year.
UK SELECT COMMITTEE TO INVESTIGATE WHETHER HMRC RESOLVES TAX DISPUTES FAIRLY AND PROPORTIONATELY
On 29th March, Out-Law reported that a Treasury Sub-Committee of the House of Commons has asked for submissions by 31st May on a number of specific questions about whether HMRC’s internal strategies, processes and powers enable it to resolve disputes appropriately.
https://www.out-law.com/en/articles/2018/march/mps-investigate-hmrc-resolving-tax-disputes/
CORRUPTION CASES BLOCK KOSOVO’S EU VISA ASPIRATIONS
OCCRP on 29th March reported that the EU demands the country make inroads in its fight against corruption in order to have its citizens freely travel through the Schengen zone.
https://www.occrp.org/en/daily/7845-corruption-cases-block-kosovo-s-visa-aspirations
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