4th April 2018
PAKISTAN CONDUCTS SECOND TEST OF BABUR-3 NUCLEAR-CAPABLE SUBMARINE-LAUNCHED CRUISE MISSILE
On 1st April, The Diplomat reported that Pakistan continued its efforts to obtain a sea-based deterrent asset as it announced the second successful flight test of its Babur-3 cruise missile, which is said to have a 450 km range and was first tested in January 2017. The missile was tested from a submerged platform off Pakistan’s coast in the Arabian Sea and flew to strike a target at an undisclosed location.
RARE EARTHS & URANIUM PERMIT HURDLE READY TO FALL FOR GREENLAND
The West Australian on 4th April reported that in 2016, the Greenland Government signalled that it is open for business and looking to exploit its mineral riches, after the Minister for Industry, Labour, Trade and Foreign Affairs filed documents at the 60th General Conference of the International Atomic Energy Agency (IAEA) which formalised Greenland’s status as a signatory to several international nuclear conventions that are essential for Greenland’s participation in the global civil uranium industry. Greenland Parliament’s also adopted legislation to implement uranium export control procedures in accordance with the IAEA and EURATOM safeguard reporting systems that enabled the sale and export of uranium in the future. Greenland Minerals is now working closely with major Chinese shareholder Shenghe Resources to finalise the complex processing flowsheet to liberate the rare earths, zinc, uranium and fluorspar. Greenland Minerals is hoping to feed the industrial magnet market with its basket of rare earths that includes “neodymium”, “praseodymium”, “dysprosium” and “terbium”.
CAUTION WHEN EXPORTING LUXURY GOODS
Bryan Cave LLP on 29th March published an article saying that suppliers of luxury goods must be cautious when exporting luxury goods, especially when they are leaving the EU. There are special rules applicable to exporting various types of goods, including in relation to ‘luxury goods’. Such rules place restrictions on exports to certain countries and place a higher regulatory standard than for other types of goods. It cites diamond, where rough diamonds exported outside the EU require a Kimberley Certificate. In order to export art, antiques and cultural goods, the exporter may require a licence – open or individual – depending on the age and value of the goods. There is also an outright ban under sanctions on supplying ‘luxury goods’ to North Korea or Syria
https://www.bryancave.com/en/thought-leadership/eu-retail-news-march-2018.html
NEW EXPORT CONTROLS AIMED TO PROTECT AUSTRALIA’S WINE REPUTATION
The Shout and other media reported on 4th April that Wine Australia has welcomed the new regulations which have given the wine export regulator broader powers to help protect the reputation of Australia’s wine exports. Wine cannot be exported from Australia without approval from Wine Australia and its CEO said that the most important change in the new regulations was the capacity to assess whether an exporter was a ‘fit and proper person’. Wine Australia now also has the authority to deny shipments to countries where a product could not lawfully be sold, which aims to prevent preventing the export of a wine from Australia that infringed intellectual property-related laws in the destination country. Exporters will no longer be able to export on behalf of companies or individuals that are not themselves eligible to hold an export licence.
https://www.theshout.com.au/news/new-powers-aimed-to-protect-australias-wine-reputation/
IRELAND MAY FACE EU COURT OVER AML LAW
The Irish Times on 4th April reported that Ireland may be referred to the EU Court of Justice by the EU Commission if it doesn’t comply with its obligations to transpose law designed to strengthen existing rules around money-laundering by May 8th. Ireland has been the subject of EU infringement proceedings due to the Department of Justice’s failure to transpose the 4th ML Directive into Irish law by June 26th 2017.
PROVING YOUR NET WORTH DURING DUE DILIGENCE PROCEEDINGS
Wolters Kluwer on 23rd March published an article on how to prepare a thorough due diligence report verifying your company’s net worth. The firm also offers a free e-book: A Beginner’s Guide to Due Diligence Preparedness.
CORPORATE ANTI-BRIBERY AND CORRUPTION REPORT FOR RUSSIA IN 2017
On 3rd April, Noerr LLP produced its ABC Report 2017 on anti-bribery and corruption enforcement in Russia and the former Soviet republics – Kazakhstan, Azerbaijan, Uzbekistan and Georgia – both international enforcement efforts and those of the national regulator. The report also details legislative developments in 2017 and the legislative outlook for 2018.
GAMBLING ACT 2005 (OPERATING LICENCE CONDITIONS) (AMENDMENT) REGULATIONS 2018
These Regulations, SI 2018/453, add a new licence condition to UK-licensed gambling operators that provides that nothing may be done in reliance on such a licence in relation to a bet on the outcome of a EuroMillions lottery or on a EuroMillions draw. They take effect from 6th April.
http://www.legislation.gov.uk/uksi/2018/453/contents/made
DETAILS REVEALED OF ALLEGATIONS AGAINST UKRAINE’S TOP ANTI-GRAFT PROSECUTOR
Unian on 4th April reported that anti-corruption agency, NABU, believes that the Head of the Specialised Anti-corruption Prosecutor’s Office (SAPO), Nazar Kholodnytsky, improperly performed his duties and committed actions discrediting the office and casting doubt on its objectivity, impartiality, and independence, including allegedly impeding investigation in criminal cases.
CHINESE CITIZEN PLEADS GUILTY TO MAIL FRAUD AND SMUGGLING RELATED TO DIETARY SUPPLEMENT SCHEME
A US DoJ news release on 3rd April reported that Gao Mei Fang (aka Amy Gao), of Shanghai, has pleaded guilty in Dallas to mail fraud and smuggling charges in connection with a scheme to sell mislabelled dietary supplements. Gao was the supply chain manager for Genabolix USA Inc. and Shanghai Yongyi Biotechnology Co. Ltd., Chinese firms that sell raw ingredients for use in dietary supplements. Gao and 2 co-defendants agreed with a confidential government informant to either mislabel the synthetic ingredients or otherwise help to hide the true nature of a proposed dietary supplement from retailers, and admitted that she knew major US dietary supplement retailers would refuse to carry supplements known to contain certain stimulants, such as DMAA. Gao was arrested in September 2017 along with a co-defendant, Zhang Xiao Dong, while attending a dietary supplement trade show in Las Vegas. A third defendant named in the case, Hu Chang Chun, is not believed to be in the US.
IMPORTING PLANTS, FRUIT, VEGETABLES OR PLANT MATERIAL TO THE UK
On 3rd April, DEFRA reissued updated guidance on how to import plants, fruit, vegetables and plant materials to the UK from outside the EU. It includes information on the phytosanitary certificate required for each consignment of controlled plants, fruit, vegetables or plant material that you import, from the plant health authority in the country where your supplier is. The certificate is a statement from the plant health authority of the country of origin.
UK COURTS GRANTS WORLDWIDE FREEZING ORDER AGAINST “PERSONS UNKNOWN” IN CONNECTION WITH ALLEGED FRAUD
On 3rd April, CMS Law published a briefing about a case where a company applied for a worldwide freezing order against “persons unknown”. The application related to an alleged fraud which had been committed by unknown persons infiltrating the email account of one of the company’s senior management. Those persons then impersonated the senior manager to send payment instructions to other staff. As a result, a number of very large payments were sent out from the company’s bank account, at Bank of China in London, to various other banks around the world. The key issue for the Court was whether it could permit a claim to be made (and a freezing injunction granted) against “persons unknown” in a fraud context.
NEARLY 75% OF OFAC PENALTIES HAVE ONE COMMON LINK: NO WORTHWHILE SELF-DISCLOSURE
On 2nd April, US law firm Holland & Hart reported that over the past 5 years, OFAC has assessed 90 civil monetary penalties worth $2,087,207,524 for apparent violations of economic and trade sanctions by US and non-US companies operating in a wide range of industries. The biggest factor in determining OFAC’s enforcement response to sanctions violations may involve a company’s willingness to submit a truthful, timely, and complete disclosure of its violations. OFAC demonstrated a seeming reluctance to assess monetary penalties against companies that submit what the agency deems to be voluntary self-disclosures.
http://www.tradesanctions.com/nearly-75-percent-ofac-penalties-one-commonality/
COLOMBIA ARRESTS AIR TRAFFIC CONTROLLERS WITH SINALOA CARTEL LINKS
Insight Crime on 3rd April reported that 2 veteran air traffic controllers linked to Mexico’s Sinaloa Cartel have been arrested, highlighting the key role played by corrupt aviation authorities in the international drug trade and the growing activities of Mexico’s organised crime groups in the world’s top cocaine-producing country. Working with the DEA, Colombian authorities dismantled a network of 11 people, including corrupt officials accused of overseeing cocaine exports for the Sinaloa Cartel that departed from the Alfonso Bonilla Aragón Airport in the southwest Colombian city of Cali using private jets. Some members of the network reportedly had military connections and were responsible for evading air interdiction operations, recruiting pilots and acquiring planes. The network allegedly extended to other cities.
TOP-SECRET FILE LINKS SOUTH AFRICA GOVERNMENT OFFICIALS TO ABALONE POACHING
On 4th April, Times Live reported that a tug-of-war over 3 tons of poached perlemoen has exposed claims of crippling corruption in the fight against organised crime. A “top-secret” police crime intelligence document seen by Times Select recounts how an undercover operation aimed at the kingpins of an international abalone poaching network was allegedly derailed by the government official in charge of thwarting poaching and smuggling.
STATE OF EMERGENCY ENDS, BUT THE MALDIVES IS STILL IN CRISIS
The International Institute for Strategic Studies on 3rd April reported that turmoil in the Maldives has seen opposition figures arrested, detained and imprisoned. The country’s 45-day state of emergency officially ended on 22nd March, but the political unrest that triggered it continues. The state of emergency – first declared on 5th February – was enforced by President Abdulla Yameen Abdul Gayoom 4 days after a Supreme Court ruling that reinstated 12 opposition members of parliament and overturned verdicts against 9 opposition figures, including former President Mohamed Nasheed, who was the country’s first democratically-elected president from 2008 until his resignation in 2012.
US GOVERNMENT TO INCLUDE DIGITAL CURRENCY ADDRESSES ON LIST OF SANCTIONED PARTIES
On 4th April, Baker McKenzie published a briefing reminding one that the US Government is considering adding digital currency addresses affiliated with individuals and entities identified to the List of Specially Designated Nationals and Blocked Persons (the SDN List). This would put US persons on notice that doing business with those digital addresses may be prohibited, increasing compliance considerations for businesses delving into the world of virtual currency.
TRANSPARENCY KEY TO TACKLING CORRUPTION, SAY OECD CHIEFS
Public Finance International on 4th April reported that improving transparency to regain lost trust in governments around the world is key to tackling corruption, OECD division heads have told PF International. The director of OECD’s governance division Marcos Bonturi and head of integrity Janos Bertok said the international community should encourage countries to move towards being more transparent, following the organisation’s Global Anti-Corruption and Integrity Forum. It says that a high-risk area for corruption is public procurement and, on average, in OECD countries, 29.5% of corruption goes through public procurement.
US CONTRACTOR PROSECUTED FOR $200 MILLION “STRAW MAN” FRAUD
Global Construction Review on 4th April reported a Milwaukee construction firm Sonag, and 2 of its directors have been indicted on charges of cheating the US federal government out of more than $200 million over 12 years by exploiting a programme set up to help companies owned by minorities and disabled veterans. The conspiracy involved operating construction companies with “straw owners”, who qualified as a disadvantaged or former military personnel injured while on service, but who did not actually control their businesses. The named individuals in the indictment are Brian Ganos, 57, president of Sonag, and accountant Mark Spindler, 56. In a separate but related case, Nicholas Rivecca, 68, president of Sonag Ready Mix, pleaded guilty. As part of the indictments, prosecutors have seized 3 houses, a Corvette Stingray convertible and more than £2.2 million from 2 bank accounts.
http://www.globalconstructionreview.com/news/us-contractor-prosecuted-200m-straw-man-fraud/?src=ilaw
INCREASE IN REPORTS OF CORRUPTION RECEIVED BY CORRUPTION WATCH IN SOUTH AFRICA
Sowetan Live in South Africa on 4th April reported that the Corruption Watch body said that it received 5,334 reports of corruption in 2017‚ an increase from the 4‚391 reports it received in 2016. The report painted a picture of a more emboldened and vocal public‚ as evidenced by the 25% increase in the number of reports of corruption in 2017. 30% of the reports alleged that corruption was taking place at provincial government level‚ which includes departments that focus on schools and housing‚ and 29% of reports alleged that corruption was taking place at national government level‚ which includes the police service. 22% of reports were taking place at local government level‚ 9% in the private sector and 10% of corruption could not be classified. The report said that most corruption took place at the interface between the public and the private sectors.
SON OF MOLDOVAN EX-PRESIDENT CONVICTED OF MONEY LAUNDERING, SENTENCED TO PRISON
Rferl on 4th April reported that a son of former Moldovan President, Petru Lucinschi, Chiril Lucinschi, has been sentenced to 5½ years in prison and also fined him $1,600 on corruption charges that he says are trumped up. He was detained in May 2017.
KENYAN BANKS PUT ON HIGH ALERT OVER MONEY LAUNDERING
The Standard on 4th April reported that, in a circular sent out this month, the Central Bank of Kenya (CBK) has asked banks to intensify their surveillance against money laundering activities by their clients. It said to watch for suspicious activities on accounts of politicians and senior government officials, NGO and cash-intensive businesses such as supermarkets, liquor stores and car dealership, as well as those operated by professional service providers, foreigners, casinos, real estate dealers and dealers in precious metals. It ordered the lenders to appoint a MLRO, and to draw up a profile of account holders and map the risk they pose as channels of money laundering and terrorism financing. Forex bureaus and money transmitters will also be subject to controls.
UK IMPLEMENTATION OF THE INTERNATIONAL LABOUR ORGANISATION’S WORK IN FISHING CONVENTION
On 4th April, the Maritime and Coastguard Agency reported the outcome of the consultation on implementation of the Convention which ran to 12th January. The Convention covers issues such as the status of share fishermen and fishermen’s work agreements. It entitles all fishermen to written terms and conditions of employment (a fisherman’s work agreement) decent accommodation and food, medical care, regulated working time, repatriation, social protection and health and safety on board. It also provides minimum standards relating to medical fitness. The standards will apply to all fishermen working on commercial fishing vessels of any size. They apply equally to employed fishermen and non-employed (share) fishermen. The proposals on how the Convention will be implemented will follow in due course.
OECD: FREE TRADE ZONES BOOSTING DRINKS BLACK MARKET
Just Drinks on 4th April reported that the rising number of Free Trade Zones is encouraging sales of counterfeit drinks, an official from the OECD. A policy analyst with the OECD, said the drinks category has become a target for illicit traders in FTZ. The OECD released its ‘Trade in Counterfeit Goods and Trade Zones’ report late last month. The report said that the problem is particularly acute where governments have light-touch policing policies or, worse, have farmed out controls to private zone freight operators, who may have “little interest in or capacity to conduct law enforcement operations”. The OECD concerns were of Middle East free trade zones but also stressed the role of free trade zones in countries bordering the EU as facilitating the counterfeit drinks trade, involving counterfeit vodka, cognac and champagne produced in China and Russia. The article notes that Moldova and Belarus border the EU and have such FTZ.
https://www.just-drinks.com/news/free-trade-zones-boosting-drinks-black-market-oecd_id125570.aspx
CHINA ISSUES NEW RULES TIGHTENING OVERSEAS TRANSFERS OF IP RIGHTS
On 4th April, Hogan Lovells published an article saying that on 29th March, the Chinese State Council released the External Transfer of Intellectual Property Rights Measures (for trial implementation) (the IPR Overseas Transfer Measures) providing for further governmental scrutiny of overseas transfers of IPR from China, with a focus on the impact of such transfers on national security and/or the impact on the development capabilities for certain key industries in China. The article says that the message is clear that there will be a stepping up in the enforcement of Chinese technology export regulations, potentially affecting multinationals that engage in R&D activities in China or who are parties to IPR licensing transactions that may result in improvements being made by their Chinese licensees which they wish to have exported to the overseas contracting party.
https://www.jdsupra.com/legalnews/china-issues-new-rules-tightening-up-on-72696/
NCA ANNUAL PLAN 2018/19 PUBLISHED
On 4th April, the UK National Crime Agency published its latest annual plan. Amongst its stated aims are to continue to build critical capability through the creation of the National Assessment Centre, the National Data Exploitation Capability, and the National Economic Crime Centre, and to implement the recommendations of its international review, ensuring that its activity to tackle serious and organised crime upstream is driven by agreed national priorities. On money laundering the Plan says that there is a realistic possibility that the scale of money laundering impacting on the UK annually is in the hundreds of billions of pounds; that criminal exploitation of accounting and legal professionals, particularly those involved with trust and company service provision, continues to pose a significant threat; and that criminals continue to use well-established methods to move or disguise illicitly earned cash proceeds.
http://www.nationalcrimeagency.gov.uk/news/1321-annual-plan-2018-19-published
ESTONIA APPLIES TRAVEL RESTRICTIONS ON MAGNITSKY LIST INDIVIDUALS
On 29th March, Estonia announced that a proposal to impose restrictive measures under the International Sanctions Act against individuals involved in grave human rights violations, including the death of Sergei Magnitsky had been approved. As a result, 49 individuals on the so-called Magnitsky List will be denied entry to Estonia. It notes that national measures, including entry bans, against human rights violators have already been implemented in the US, Canada, the UK, Latvia and Lithuania.
ACTIVISTS TO HAVE TO DECLARE ASSETS IN UKRAINE
OCCRP on 4th April carried a report from Reuters that Ukrainian lawmakers will uphold a requirement for activists to declare their wealth despite warnings that the law undermines anti-graft efforts. This follows a 2016 requirement for civil servants and lawmakers to declare their assets in an online database. Some members of the ruling coalition believe activists should be subject to the same scrutiny due to the sizable flow of international funds into the civil sector.
MOSCOW COURT OPENS HEARING ON MURDER OF CRIME LORD
OCCRP on 4th April reported that a hearing opened in Moscow into how a former prizefighter killed crime boss Karen “Lipetsky” Petrosyan at a gas station in Moscow over $1.7 million. The case is alleged to involve money put through one of Papoyan’s venues – a company that is said to launder dirty money.
FORMER MONGOLIAN FINANCE MINISTER ARRESTED IN MINING PROBE
Baker McKenzie on 4th April reported that Bayartsogt Sangajav has been arrested as part of an investigation into suspected abuse of power during investment talks for the giant Oyu Tolgoi copper mine in 2009, the anti-corruption agency, Independent Authority Against Corruption, said. The Swiss Office of the Attorney General (OAG) is conducting a criminal investigation into a seized bank account that court documents indicated was used to transfer $10 million to Bayartsogt in September 2008.
http://www.riskandcompliancehub.com/former-mongolian-finance-minister-arrested-in-mining-probe/
FRENCH GANGSTER CLEARED OVER ‘HEIST OF THE CENTURY’
France 24 on 4th April reported that an organised crime boss in southern France was cleared of having a role in the “heist of the century” at a Riviera bank after being accused of writing about the robbery in a book. Jacques Cassandri, a well-known figure in the Marseille underworld, was cleared on a charge of laundering the proceeds of the 1976 theft at a Societe Generale bank branch in Nice where a gang of robbers tunnel through sewers to snatch the equivalent of €29 million from a bank vault, but it remained a mystery until Cassandri appeared to write about it in a 2010 book using the pen name D’Amigo.
http://www.france24.com/en/20180404-french-gangster-cleared-over-heist-century
INDONESIA TO GO HIGH-TECH IN HUNT FOR ASSETS AFTER TAX AMNESTY
KYC 360 on 4th April reported that Indonesia’s tax office plans to spend hundreds of millions of dollars to update its outdated technology to boost low tax compliance and raise revenue collection in Southeast’s largest economy, the country’s tax chief told Reuters. It completed one of the world’s most successful tax amnesties in 2017, but its very success has created headaches as the tax office has to use old technology or even manual labour to deal with a wealth of new data.
https://kyc360.com/news/indonesia-goes-hi-tech-hunt-tax-assets-amnesty-evasion/
AUSTRALIAN DEFENCE DEPARTMENT SCIENTIST HAD SEPARATE ROLE WITH CHINA-LINKED FIRM
The Sydney Morning Herald on 4th April reported that the Defence Department is reviewing business dealings between one of its senior scientists and the Chinese government’s missile development agency amid ongoing concerns about Beijing’s effort to recruit western scientists and officials. It also reports that Australia’s scientific research agency, the CSIRO, spent tens of millions of dollars upgrading its cyber-security and information systems after a data breach linked to an employee who was a Chinese national who disappeared after the apparent breach in November 2013.
WHO ARE THE WINNERS AND LOSERS OF AFRICA’S NEW FREE TRADE AGREEMENT?
The Atlantic Council on 4th April carried an analysis of the recent African Continental Free Trade Area (AfCFTA) would be the largest free trade agreement since the founding of the World Trade Organization over 20 years ago. It involves 44 countries and seeks to create a single continental market for goods and services, with free movement of business persons and investments. The implementation of the AfCFTA is still far from completion, pending a long process of consultations, reviews, and formal ratification by 22 countries but, the article says, its potential is tremendous.
DISARMAMENT COMMISSION DELEGATES VOICE ALARM OVER MOUNTING CHEMICAL WEAPON THREATS
As the UN Disarmament Commission’s annual general debate closes, the UN News service on 4th April reported that, citing allegations that illegal toxins had been used in a recent incident in the UK — and by various parties to Middle East conflicts, delegates voiced alarm over mounting threats posed by chemical weapons and their nuclear and biological counterparts.
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