7th April 2018
WANT TO UNDERSTAND BLOCKCHAIN?
In this Chatham House video webcast, Dr Garrick Hileman explains the basic concept of a blockchain, outlining some of the technology’s current uses as well as suggesting a number of potential future applications that could revolutionize the global economy.
https://www.chathamhouse.org/file/chatham-house-primer-blockchain
NON-US COMPANIES BEWARE: US EXPORT LAWS MAY APPLY TO YOU
Torres Law on 6th April published an article that cautions that non-U.S. companies involved in the re-exporting of US goods or technology should familiarise themselves with the applicable US export laws, regardless of where they are located. This is because the US export and economic sanctions laws have wide ranging extraterritorial reach. While companies with little or no connection to the US may think they are not subject to US jurisdiction, recent enforcement cases are a stark reminder that this is not the case. US laws apply to US-origin products wherever located, and this includes foreign products containing US-origin components or incorporating US-origin technology controlled by the US export laws. The article briefly explains the relevant US laws and cites the recent ZTE case as an example of effects on foreign companies. It then explains steps needed to comply with US law, including saying that exporters and re-exporters should prepare for any end-use checks conducted by the US government.
NORWAY SALMON’S ‘BIG 3 DENY ANY CHINA SMUGGLING LINKS AS PRICES RISE
Undercurrent News on 6th April reported that Norway’s 3 largest salmon farmers (Marine Harvest, Cermaq Group and Leroy Seafood Group) said they are not selling salmon to China via Vietnam, after a crackdown on smuggling by Chinese authorities caused prices to increase, with a smuggling operation closed down that was said to have smuggled around $100 million worth of salmon. The article says that last year, in total, Norway exported 23,085 tonnes of whole, fresh Atlantic salmon to Vietnam. China levies a 10% tariff on fresh salmon imports plus VAT of 11% on net value. The article says that UK direct fresh Atlantic salmon exports to China were worth $87.8 million in 2017, but UK fresh salmon exports to Vietnam were worth far less at $7.3 million. Video appears to show boxes seized in China bearing the mark of a Scottish salmon farmer.
ALCOHOL HIDDEN IN FURNITURE SEIZED BY REVENUE OFFICERS AT DUBLIN PORT
The Irish Times on 6th April reported that 203 litres of beer, 89 litres of wine and approximately 22 litres of spirits with a combined retail value of approximately €3,000 were seized from a van arriving in Dublin from Holyhead. It was discovered concealed in furniture, when officers stopped and searched a Latvian-registered van.
UK AML/CTF, SANCTIONS AND INSIDER TRADING
Shearman & Sterling on 6th April published an article about the FCA publishing on 27th March a consultation on adding a proposed chapter on insider dealing and market manipulation to its Financial Crime Guide. This Guide is not part of the FCA’s rules but it is a guide to assist firms in implementing the regulator’s rules. The FCA is proposing to add a new chapter on insider dealing and market manipulation to the Financial Crime Guide. The consultation paper also covers other minor amendments proposed by the FCA, including updating the Guide to reflect the introduction of the Money Laundering Regulations 2017 and removing outdated references on Sanctions. Responses are required by 1st October.
https://www.fca.org.uk/publication/guidance-consultation/gc18-01.pdf
JP MORGAN SAYS IT KNEW EX-MINISTER WAS LINKED TO FIRM IN NIGERIA OILFIELD DEAL AND RECEIVED CLEARANCE FROM UK AUTHORITIES
Reuters on 6th April reported that JP Morgan Chase has acknowledged in its legal response to a lawsuit filed by Nigeria that it knew a former Nigerian oil minister convicted of money laundering would benefit when it transferred over $800 million of government funds to a company he controlled. The court case relates to the transactions when Royal Dutch Shell and Eni bought offshore oilfield OPL 245 from Malabu Oil and Gas in 2011. Malabu is controlled by Dan Etete, who was Nigeria’s oil minister at the time of the deal and was convicted of money laundering in France in 2007. JP Morgan said the UK SOCA (now NCA) had approved the transfers to Malabu.
ISLE OF MAN CONFIRMS KIB ON ISIL (DA’ESH)/AL-QAIDA SANCTIONS LISTS
On 6th April, a news release from Isle of Man Customs and Excise confirmed that KHATIBA IMAM AL-BUKHARE (KIB) was subject to sanctions in the Island.
https://www.gov.im/news/2018/apr/06/financial-sanctions-isil-daesh-and-al-qaida/
RUSSIAN TYCOON WHO BROUGHT SCOTTISH CASTLE IS TRYING TO SELL IT ON THE CHEAP AFTER BEING CONVICTED OF FRAUD
The Press & Journal reported on 7th April that Sergey Fedotov, 40, purchased Castle Grant near Grantown-on-Spey for £1 million in 2014 (after it was repossessed from the previous owner when he failed to keep up with mortgage payments). He has now admitted a massive embezzlement while he was head of the Russian Authors’ Society (RAO), which collects royalty payments on behalf of writers. He was arrested in Moscow in 2016 and jailed for 18 months in June 2017, but released on parole after 6 months. Still the registered owner of Castle Grant, he put it up for sale in October for offers over £950,000 after he was ordered to pay back the money he had swindled from the RAO.
https://www.pressandjournal.co.uk/fp/news/highlands/1449404/whytecastle/
THE CLOUD ACT: BROADENING BOTH U.S. AND FOREIGN GOVERNMENTS’ REACH INTO INDIVIDUALS’ DATA
On 6th April, law firm Bryan Cave Leighton Paisner provided a briefing on the Clarifying Lawful Overseas Use of Data, or CLOUD, Act in the US. The Act provides clarity for communications providers on obligations to secure and disclose information to US and foreign law enforcement.
OTTAWA’S SECRET REPORT ON MONEY LAUNDERING POINTS FINGER AT CANADA’S BANKS
On 5th April, CBC reported that an internal report by Financial Transactions and Reports Analysis Centre (Fintrac), Canada’s money laundering watchdog paints a picture of the country’s banks that’s far less flattering than that presented in a sanitised report it issued for Parliament and the public. The confidential annual report — described as “not meant for public release” — was delivered to the Finance Minister, looked at Fintrac’s probes of 9 banks in 2016-2017 and found “significant” problems at 6 of the 9 banks — including problems in providing Fintrac with suspicious transaction reports (STR). The banks’ poor showing is somewhat better than the “significant” non-compliance Fintrac found in the real-estate sector (75%) and the money services sector, such as payday loans (69%). 7 casinos selected for inspection showed 29% showing “significant” non-compliance.
http://www.cbc.ca/news/politics/money-laundering-banks-terror-1.4603064
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