OTHER THINGS YOU MAY HAVE MISSED – APRIL 30

30th April 2018

FRANCE TAKES NEXT STEP IN ANTI-CORRUPTION ENFORCEMENT: FIRST “FRENCH DPA” AND WHAT COMPANIES SHOULD KNOW

Jones Day published a short article on 26th April on “convention judiciaire d’intérêt public” (“CJIP”), the French version of a deferred prosecution agreement (“DPA”).   It reports that 3 “French DPA” have been entered into thus far, and the increased flexibility that French prosecutors have to settle cases by means of a CJIP has significant implications with respect to the efforts of French authorities to investigate and prosecute allegations of international corruption.

www.jonesday.com/France-Takes-Next-Step-in-Anticorruption-Enforcement-First-French-DPAs-and-What-Companies-Should-Know-04-26-2018/?RSS=true

MODERN SLAVERY: HOW CAN FACILITATED MEETINGS REDUCE THE RISK OF LITIGATION WITHIN SUPPLY CHAINS?

On 27th April, law firm Penningtons Manches published an article which, with complex supply chains, discusses how facilitated meetings between companies and their suppliers, based on the principles of mediation, can reduce those risks, help businesses fulfill their responsibility to respect human rights and avoid the cost and risks of litigation and/or crisis management to protect their brand.  It warns that audit alone will not remove the risk of modern slavery, and that there should be a move in emphasis from remedy to addressing the root cause, and thus preventing (or mitigating) the risk.

https://www.penningtons.co.uk/news-publications/latest-news/2018/modern-slavery-how-can-facilitated-meetings-reduce-the-risk-of-litigation-within-supply-chains/

FEATURES OF CANADA’S NEW DEFERRED PROSECUTION AGREEMENTS (DPA) SCHEME

On 25th April, Fasken in Canada reported that the Canadian Government has announced that it will be moving forward, slowly, with a Deferred Prosecution Agreement (DPA) system with an announcement from the government of a paper on “Remediation Agreements and orders to Address Corporate Crime”.  In Canada, DPA will be known as the Remediation Agreement Regime (RAR).  The article provides some of the details of the regime.

http://whitecollarpost.com/features-canadas-new-dpa-scheme/#page=1

US ‘A LOT MORE FRAGILE THAN WE REALISE’ ON BIOTHREATS, EXPERTS WARN

Homeland Security Today on 27th April reported that the US is critically underprepared to confront transnational biological threats ranging from DIY bioterror agents to natural pathogens that outpace current pharmaceuticals and overwhelm medical facilities, the Blue Ribbon Study Panel on Biodefense heard at an event at the Hudson Institute.  As genetic engineering continues to evolve, it was warned, the threat will “exponentially” increase with “significant potential for malevolent use”.

https://www.hstoday.us/subject-matter-areas/pandemic-biohazard/country-a-lot-more-ragile-than-we-realize/

RELIGIOSITY AND THE ISLAMIC STATE FOREIGN FIGHTERS

On 27th April, the Oxford Research Group published an article that starts by saying that many studies on the motivations of Islamic State foreign fighters emphasise the role of low socio-economic prospects. But interviews with fighters suggest greater attention should be given to the role of religiosity.  The article examines what fighters themselves have said about motivation.

https://sustainablesecurity.org/2018/04/27/in-their-own-words-religiosity-and-the-islamic-state-foreign-fighters/

CRIME AND INSECURITY IN TRINIDAD AND TOBAGO

Another article from the Oxford Research Group by Dr Sanjay Badri-Maharaj is an independent defence analyst and attorney-at-law based in Trinidad and Tobago, on 10th April, includes comments on the perceived corruption of the police service in Trinidad & Tobago.  It says that the fact that the TTPS is corrupt is widely known within the country.  Whether through solicitation of bribes or through the use of undue influence to secure favours or obtain unfair advantages, the TTPS is perceived as thoroughly corrupt as an institution.  Indeed, it says, part of the reason for Trinidad’s failure to tackle violent crime has been attributed to corruption in the TTPS, allowing illegal firearms and narcotics to become easily available and even running so-called “drug blocks”.  As recently as January 2018, a former Prime Minister and Minister of National Security bemoaned the lack of progress in fighting corruption in the TTPS.

https://sustainablesecurity.org/2018/04/10/hope-belied-crime-and-insecurity-in-trinidad-and-tobago/

HOW RUSSIAN RETALIATION COULD HIT BACK OVER US SANCTIONS

The Cipher Brief on 29th April published an article outlining how Russia might retaliate.  It says that manipulating or disrupting international financial markets would be a risky move, but Putin’s Russia has shown remarkable risk tolerance though, and could feel further emboldened by its ability until now to weather Western reaction, or the lack of it.  The author of the article suggests that there are at least 3 potential areas of vulnerability in US and other Western financial systems that Russian actors could exploit – Putin-linked actors could steal proprietary information from financial or other firms in an attempt to move securities markets; the Russians could exploit financial markets’ vulnerability to “flash crashes”; and in the most serious scenario could see Russian actors undermining the integrity of the IT systems where corporate, stock exchange, government, and personal financial records now reside.

https://www.thecipherbrief.com/article/international/preparing-markets-russian-financial-retaliation/

A FAREWELL TO ARMS CONTROL?

An article from the Carnegie Center on 17th April looks back at a half-century of arms control efforts and argues that this traditional failsafe is no longer effective.  The article says that the history of US-Russian arms control closely follows the trajectory of the political relationship between the Soviet Union and the US.  Improvements in the political relationship were invariably accompanied by accomplishments in arms control.  When the relationship between Moscow and Washington deteriorated, progress in arms control stalled and existing agreements came under increasing pressure from critics.

https://carnegieendowment.org/2018/04/17/farewell-to-arms-.-.-.-control-pub-76088

NETANYAHU ACCUSES IRAN OF CHEATING ON NUCLEAR DEAL

The Guardian and other media on 30th April reported that in a televised prime-time speech, the country’s prime minister said Israel had tens of thousands of documents from what he called Iran’s “Atomic Archives” which he said had been shared with the US.  He accused Iran of hiding a nuclear armaments programme that continued to operate despite the JCPOA 2015 agreement, presenting what he said was “new and conclusive proof”.

https://www.theguardian.com/world/2018/apr/30/netanyahu-accuses-iran-cheating-nuclear-deal

ISLE OF MAN UPDATES SANCTIONS LISTS

On 30th April, the Isle of Man issued news releases advising the renewal of the designation under terrorism sanctions of Mohammed Fawaz KHALED and to raise awareness of changes to EU sanctions measures in relation to Burma/Myanmar.

https://www.gov.im/news/

EVALUATING THE EFFECTS OF PROTECTIONISM ON THE FILM INDUSTRY: A CASE STUDY ANALYSIS OF SOUTH KOREA

The European Centre for International Political Economy (ECIPE) has published an article which assesses whether Korean film policies have been instrumental for the success of the Korean film industry.  The major finding of this analysis is that protectionist policies in the film industry have played an insignificant role despite an import restriction and subsidies, and it recommends that policymakers in other countries review their own policies that advocate protectionism as a way to make their film industry more competitive and attractive.

http://ecipe.org/publications/evaluating-the-effects-of-protectionism-on-the-film-industry-a-case-study-analysis-of-korea/

DIGITAL TRADE RESTRICTIVENESS INDEX (DTRI) REPORT – MEASURES HOW COUNTRIES IN THE WORLD RESTRICT DIGITAL TRADE.

The European Centre for International Political Economy (ECIPE) has produced the latest DTRI report, which uses a wide spectrum of digital trade policies covering more than 100 policy measures across 64 countries worldwide and is based on the Digital Trade Estimates (DTE), a database that ECIPE has developed and that is freely available for anyone to use.

http://ecipe.org/dte/dte-report/

ORGAN AND TISSUE DONATION: A GUIDE TO BETTER UNDERSTAND THE PRINCIPLE OF PROHIBITION OF FINANCIAL GAIN

On 30th April, the Council of Europe produced this guide designed to facilitate the implementation of the principle that the human body and its parts must not, as such, give rise to financial gain.  The principle of prohibition of financial gain, as set out in the Oviedo Convention and its additional Protocol concerning the transplantation of organs and tissues of human origin, guarantees respect for human dignity.  The guide underlines that the prohibition of financial gain does not prevent living donors from being compensated for loss of earnings and the reimbursement of medical expenses, or from being compensated for unjustified damage resulting from the removal of organs, tissue or cells.

https://www.coe.int/en/web/portal/-/organ-and-tissue-donation-guide-explains-principle-prohibiting-financial-gain

PANASONIC UNIT SETTLES US CRIMINAL, CIVIL CHARGES OF BRIBERY

Reuters on 30th April reported that Panasonic Avionics Corp, a subsidiary that designs in-flight entertainment systems, has reached a deal with the US government to settle criminal and civil charges that the company falsified its financial books and records in order to conceal payments to sales agents in China and other parts of Asia.  The company will pay a total of $280 million to resolve both the criminal and civil charges.  Of that, about $143 million in disgorgement and interest will be paid to settle parallel civil charges with SEC, which investigates civil violations of the anti-bribery law.

https://in.reuters.com/article/usa-panasonic-corruption/panasonic-unit-settles-u-s-criminal-civil-charges-of-bribery-idINKBN1I11RE?src=ilaw

PROFESSIONALS TO FOOT ENTIRE BILL FOR AML QUANGO IN UK

The Law Society Gazette on 30th April reported that lawyers will have to pay a large part of the costs of setting up a new quango to oversee their regulators’ efforts to combat money-laundering.  Bills to cover the £2.25 million initial cost of the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) will go out in January 2019, the FCA has said.

https://www.lawgazette.co.uk/practice/professionals-to-foot-entire-bill-for-aml-quango/5065905.article

CFTC CHARGES OWNER OF BULLIONDIRECT WITH $16 MILLION PRECIOUS METALS FRAUD

Finance Magnates reported that customers of Texas-based commodity brokers were lulled into the false belief that precious metals ‎had been ‎purchased and were stored in the firm’s vault.  Charles H. McAllister and his company BullionDirect, Inc (BDI) ‎accused of taking money from customers who thought they were getting gold, ‎silver, palladium, and platinum in return.

https://www.financemagnates.com/forex/regulation/cftc-charges-owner-bulliondirect-16m-precious-metals-fraud/

 VAT REGISTRATION THRESHOLD CALL FOR EVIDENCE – CIOT AND ATT MEMBERS’ SURVEY

On 30th April, the Chartered Institute of Taxation reminded one that a report last year by the Office of Tax Simplification (OTS) set out concerns that the current level of the VAT threshold and its cliff edge nature distort taxpayer behaviour.  In particular, small businesses may choose to keep their turnover below the VAT threshold, either by legitimately limiting their expansion or illegally under-recording their takings.  A call for evidence was published by the Government on 13th March to explore whether the design of the VAT threshold could better incentivise growth.  The CIOT and Association of Taxation Technicians have now put out a short survey of members.

https://www.tax.org.uk/policy-technical/technical-news/vat-registration-threshold-call-evidence-–-ciot-and-att-members

NCA TO CONDUCT A PRE-INVESTIGATIVE REVIEW OF ALLEGATIONS OF FRAUD BY HBOS IMPAIRED ASSETS DIVISION, LONDON AND SOUTH EAST REGION

On 30th April, an NCA news release advised that in response to a request from Thames Valley Police, the NCA has confirmed it will lead a pre-investigative evidential review into allegations of fraud concerning the then HBOS Impaired Assets Division, London and South East Region.  The review will consider allegations that fell outside the scope of Operation Hornet, a Thames Valley Police investigation into allegations of fraud by former employees of this division of HBOS, which resulted in a number of convictions in 2017.  A number of companies have reported allegations of significant fraud involving a former employee of HBOS and their associates. These include allegations of asset stripping, through the use of corrupt consultants as well as allegations of fraud and money laundering. The sums of money involved could be significant, running to many millions.

http://www.nationalcrimeagency.gov.uk/news/1337-nca-to-conduct-a-pre-investigative-review-of-allegations-of-fraud-by-hbos-impaired-assets-division-london-and-south-east-region

UK: 14 YEARS FOR MEN INVOLVED IN DISTRIBUTING 10 KG OF COCAINE

On 30th April, a news release from NCA advised of prison sentences following the events of November 2017, when officers from the joint NCA and Metropolitan Police’s Organised Crime Partnerships (OCP) arrested Mark Lammin (44) after they stopped him carrying 10 kg of cocaine in a large holdall in Castle Road, Surrey.  A short time later, officers stopped a black Range Rover, which was parked in the vicinity of the drugs handover and arrested Gurdip Samra (44).

http://www.nationalcrimeagency.gov.uk/news/1339-14-years-for-men-involved-in-distributing-10-kilos-of-cocaine

EU COMMISSION TO BAN 2 NEW PSYCHOACTIVE SUBSTANCES

On 30th April, the EU announced that the Commission has proposed to ban 2 new psychoactive substances (NPS) – cycloproplyfentanyl and methoxyacetylfentanyl – across the EU.  It says that these strong synthetic opioids can cause severe harm to health, sometimes resulting in death, and pose a growing threat to European citizens.

http://europa.eu/rapid/press-release_MEX-18-3623_en.htm

SPANISH POLICE ARREST GANG WHO TRAFFICKED DRUGS USING YACHT

The Gibraltar Chronicle on 29th April reported that a gang that trafficked cocaine from South America and cannabis resin from Morocco has been arrested by Spanish law enforcement officers, who seized 2.7 tonnes of drugs, 2 assault rifles and a sailing boat in Alcaidesa marina as part of the operation.  7 members of the gang were arrested, including 3 with prior convictions for drug trafficking and 1 who was on the run from a 19-year prison sentence in France.

http://chronicle.gi/2018/04/spanish-police-arrest-gang-who-trafficked-drugs-with-yacht/

TRADE-BASED MONEY LAUNDERING AND BANGLADESH

On 30th April, the Daily Star in Bangladesh carried an article saying that, amid Bangladesh’s rapidly expanding foreign trade, trade-based money laundering has become a major concern for the banking industry, a recent survey by the Bangladesh Institute of Bank Management has found.  This includes over- and under-invoicing of goods and services and mis-declaration of goods.  The survey also said that money laundering is being facilitated by collusion between importers, exporters and bank officials who are at times getting involved in these illegal transactions.

https://www.thedailystar.net/opinion/the-overton-window/the-hidden-dangers-money-laundering-1569517

GERMANY A GROWING ARMS SUPPLIER TO EGYPT

Defence Web on 30th April reported Cairo is looking for new sources of advanced weapons.  Germany is emerging as one of the new suppliers of military systems to Egypt, along with Russia and France.  The German press has quoted members of the opposition and a Swedish monitoring body that have pointed to the growing role of Germany equipping Egypt with modern systems.  According to these reports, 35 requests for the export of German made defence systems to Egypt were approved in 2017 by the German government, and total defence exports to Egypt last year amounted to €708 million.  In the past 5 years, German defence exports to Egypt have jumped by 205%, compared with the total exports in the previous 5 years.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51537:germany-a-growing-arms-supplier-to-egypt&catid=7:Industry&Itemid=116

US: EXECUTIVES OF IRANIAN AUTO PARTS MANUFACTURER ARRESTED AND INDICTED FOR VIOLATING IRANIAN SANCTIONS

The DoJ in a news release on 27th April reported that Sadr Emad-Vaez, Pouran Aazad, and Hassan Ali Moshir-Fatemi have been indicted.  The indictment alleges the defendants engaged in transactions involving the illegal export of goods and services to Iran and financial transactions designed to evade the Iranian Transactions Sanctions Regulations (ITSR).  According to the indictment, the defendants, all naturalised US citizens who lived variously in Tehran and California, participated in the operation of the Ghare Sabz Company, aka GHS Technology, a large manufacturing corporation in Tehran.

https://www.justice.gov/usao-ndca/pr/executives-iranian-auto-parts-manufacturer-arrested-and-indicted-violating-iranian

 

US TREASURY SANCTIONS ISIS-PHILIPPINES FACILITATOR FOR TERROR SUPPORT

On 30th April, OFAC took action targeting Myrna Mabanza (Mabanza), a Philippines-based facilitator who provided support to ISIS-Philippines (ISIS-P), for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, ISIS-P.  On February 28th, the Department of State designated ISIS-P as a Foreign Terrorist Organisation.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180430.aspx

METHODOLOGY: HOW BELLINGCAT TRACKED THE ILLEGAL SHIPMENT OF SARIN PRECURSOR FROM BELGIUM TO SYRIA

Bellingcat on 19th April published an article that documents some of the open source investigative methods employed in an investigation that discovered several key pieces of information.

https://www.bellingcat.com/resources/case-studies/2018/04/19/methodology-tracked-illegal-shipment-sarin-precursor-belgium-syria/

HIGH COURT CRITICISES SFO’S APPROACH TO PRIVILEGE

Allen & Overy on 27th April published an article saying let there be no confusion: first interview notes in internal investigations are rarely privileged.  This, it says, is the message of the High Court in a judgment which is heavily critical of the SFO for failing to take steps to force the disclosure of detailed employee interview notes taken during a company’s internal investigation into corruption.  The SFO had relied instead on ‘oral summaries’ after the company concerned had asserted privilege over the notes themselves.  The claimant in this case is an ex-employee of the company and is the first individual to be charged with criminal conduct where the SFO has entered into a deferred prosecution arrangement (DPA) with a company for related offences.

http://www.allenovery.com/publications/en-gb/Pages/Court-criticises-SFO’s-approach-to-privilege.aspx

UK IMPORTERS UNPREPARED FOR CUSTOMS CHANGES POST-BREXIT

Lloyds Loading List on 30th April reported that more than a third of UK traders rely on the just-in-time delivery of material and components, study finds, but many are not yet preparing for new border procedures.  New research from the British Chambers of Commerce, in partnership with the Port of Dover, based on the responses of over 835 businesses from across the UK that export or import, finds that over a third (36%) of UK traders rely on the just-in-time delivery of material and components, but that many are not preparing for changes to customs procedures after Brexit.  The survey found that delays at UK or EU ports would lead to considerable business disruption, particularly for those operating a just-in-time model.

https://www.lloydsloadinglist.com/freight-directory/news/UK-importers-unprepared-for-customs-changes-post-Brexit/71832.htm#.Wudr20xFzIU

CRACKDOWN ON ABUSE OF UK BUSINESSES FOR FOREIGN MONEY LAUNDERING

A news release from the UK Department of Business, Energy and Industrial Strategy on 30th April reports that reforms will ensure Scottish Limited Partnerships (SLP) continue to be used as a legitimate vehicle for investment and enhance our world-leading business environment.

https://www.gov.uk/government/news/crackdown-on-abuse-of-uk-businesses-for-foreign-money-laundering

 

https://www.gov.uk/government/consultations/limited-partnerships-reform-of-limited-partnership-law

 

BURMA (EUROPEAN UNION FINANCIAL SANCTIONS) REGULATIONS 2018

These UK Regulations (SI 2018/529) make provision relating to the enforcement of Council Regulation (EU) 2018/647 of 26th April in UK law.  New financial sanctions provisions have been added into the Council Regulation with effect from 27th April.  The EU has agreed new autonomous measures to condemn the ongoing widespread and systematic human rights violations committed by the Burma military and security forces, including rape and killings, and calling on Burma to ensure that security, the rule of law, and accountability prevail in Rakhine, Kachin and Shan States. The new EU Regulation provides for targeted restrictive measures against military officers of the Burma Armed Forces who are responsible for the serious human rights violations.

http://www.legislation.gov.uk/uksi/2018/539/contents/made