Month: May 2018

FACTORS TO BE CONSIDERED WHEN CHALLENGING FREEZING ORDERS

On 23rd May, TLT LLP published an article saying that the recent case of State Bank of India & Others v Dr Vijay Mallya & Others in the High Court in London considered how various factors are to be assessed when considering whether to continue a freezing order, including the risk of dissipation of assets; delay on the part of the claimant in applying; and material non-disclosure.  It also dealt with issues regarding the registration and enforcement of foreign judgments.  TLT acted for the successful consortium of 13 Indian financial institutions in the case.

https://www.tltsolicitors.com/insights-and-events/insight/factors-to-be-considered-when-challenging-freezing-order/

ARMENIA CENTRAL BANK PRESENTS REPORT ON FIGHTING MONEY LAUNDERING AND FINANCING OF TERRORISM

Armsbank on 30th May reported that the Financial Monitoring Center (FMC) of Armenia’s Central Bank has published a report.  The FMC was established in 2005 as a separate unit in the structure of the Central Bank of Armenia.  It is an administrative-type FIU, which acts as an intermediary between reporting entities and law enforcement authorities.  The FMC said it had received 232,635 reports in 2017 on cash transactions exceeding the legal threshold (5 million drams), up from 206,065 reports in 2016.  It also received 193,460 reports on non-cash transactions exceeding the legal threshold of 20 million drams (50 million drams for real estate transactions), up from 168,329 reports in 2016. The FMC also received 280 reports on suspicious transactions (256 reports in 2016).  £1 equals around 641 drams. Overall, the center received 426,095 reports from financial and non-financial institutions, of which 414,204 from the local commercial banks.

http://www.armbanks.am/en/2018/05/30/114256/

NEW INFORMATION OBLIGATIONS APPLICABLE TO COMPANIES AND TRUSTS WHICH OPERATE IN COSTA RICA

Zurcher, Odio and Raven on 31st May published an article saying that on April 23rd the Executive Branch issued and published The Regulations of the Transparency and Final Beneficiaries Registry.  The Regulations introduce new obligations related to the provision of information and which apply to most companies and other legal structures which operate in Costa Rica. They are part of Costa Rica´s actions to follow the recommendations issued by FATF and OECD, to control money laundering and fulfill the country’s commitments with other nations, in relation to the exchange of tax information.

http://www.mondaq.com/x/706246/Trusts/Introduction+Of+New+Information+Obligations+Applicable+To+Companies+And+Trusts+Which+Operate+In+Costa+Rica

CLEVELAND MAN’S LAWSUIT: “US CUSTOMS TOOK MY $58,000 LIFE SAVINGS”

Trib Live in the US on 31st May reported that a 64-year-old Cleveland man is suing US Customs and Border Protection after agents strip-searched him at an airport in October and took more than $58,000 in cash from him without charging him with any crime, according to a federal lawsuit.  CBP says it suspects that the petitioner in the case, Rustem Kazazi, a retired officer with the Albanian police who relocated with his family to the United States in 2005, was involved in smuggling, drug trafficking or money laundering. Kazazi strongly denies those allegations and says that the agency is violating federal law by keeping his money without filing any formal complaint against him.  

http://triblive.com/local/regional/13710126-74/cleveland-mans-lawsuit-us-customs-took-my-58k-life-savings

CYPRUS: WOMAN SENTENCED TO 8 YEARS FOR MONEY LAUNDERING

The Cyprus Mail on 31st May reported that Irina Koumbari, a 47-year-old woman was sentenced by Nicosia criminal court to 8 years in prison after being found guilty of theft by proxy and money laundering almost €2 million.  She was found guilty of 9 charges, stole €1.97 million between February and November 2012 from a company to which she was offering administrative services. Koumbari’s company, according to the court ruling, was providing the services to another company, Erilin Holdings Ltd – specifically, director, shareholder and account management services.

https://cyprus-mail.com/2018/05/31/woman-sentenced-to-eight-years-for-money-laundering/

CARGO CRIME WAVE HITS BRAZILIAN E-COMMERCE

PYMNTS.com on 31st May reported that Brazil is dealing with a dramatic rise in cargo robberies, with 22,000 thefts reported in 2 states alone last year – in Sao Paulo and Rio de Janeiro which amount to about 60 heists per day, a figure that has almost doubled since 2012.

https://www.pymnts.com/news/ecommerce/2018/cargo-crime-wave-brazil-package-delivery-theft/

JAPAN INTRODUCES PLEA BARGAINING IN ORGANISED CRIME, BRIBERY CASES

The Mainichi in its 1st June edition reported that Japan has introduced a plea bargaining system for organised crime and bribery cases, hoping to spur co-operation in the investigation and prosecution of crimes.  Prosecutors can now agree not to indict or to pursue lesser charges or lighter penalties if suspects or defendants provide evidence or depositions against alleged accomplices, according to the revised criminal procedure law.  Under the Japanese system defendants will not be rewarded with reduced sentences for pleading guilty, unlike plea bargaining in the US and other countries.

http://mainichi.jp/english/articles/20180601/p2g/00m/0dm/005000c?src=ilaw

MONEY LAUNDERING CASE AGAINST AIR ASIA OFFICIALS   

The Business Standard in India reported that after the CBI, the Enforcement Directorate (ED) has now registered a case of money laundering against AirAsia officials and others for allegedly trying to manipulate the government policies through corrupt means to get international licence for its Indian venture AirAsia India, officials said.

https://www.business-standard.com/article/companies/after-cbi-ed-files-money-laundering-case-against-airasia-officials-118060100031_1.html?src=ilaw

MELBOURNE MAN ARRESTED OVER 10 TONNE ILLICIT TOBACCO HAUL

Australian Border Force on 25th May reported in a news release that it has arrested a Melbourne man over the alleged importation of around 10 tonnes of illicit tobacco into Australia, which represents an estimated $10 million in duty evaded.

http://newsroom.border.gov.au/channels/NEWS/releases/melbourne-man-arrested-over-10-tonne-illicit-tobacco-haul

VIETNAMESE AUTHORITIES HAVE BOOSTED INSPECTIONS OF SCRAP IMPORTS AND PLAN TO HALT SHIPMENTS TO KEY PORTS

Resource Recycling on 30th May reported that the changes are a result of a glut of scrap paper and plastic imports and numerous instances of customs violations.  Because of China’s restrictions, Vietnam has become a larger destination for exports of US recyclables. Now, Vietnamese officials are restricting imports, similar to the actions taken by the Chinese government over the past year.

https://resource-recycling.com/recycling/2018/05/30/why-vietnam-is-shutting-out-some-materials/

 

NEW ZEALAND RECYCLING CRISIS AFTER CHINA BAN: SITUATION “NOT SUSTAINABLE”

The New Zealand Herald on 31st May reported that New Zealand previously shipped millions of kilograms of waste to Chinese processing plants each year, but its just-introduced ban on 24 types of foreign waste has forced recyclers to look for buyers elsewhere, mainly SE Asia.  Although exports to Indonesia, Thailand and Malaysia have surged, stockpiles of some plastic have begun to appear around the country as certain types of products became harder to sell.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12062016

ILLICIT DRUG TRADE WORTH €2.7 BILLION A YEAR IN FRANCE

RFI on 30th May reported that the trade in illegal drugs contributes an estimated 0.1% of France’s GDP, earning €2.7 billion, according to the national statistical institute, Insee.  The figures are based on the findings of a government agency poll and could be an underestimate.

http://en.rfi.fr/20180530-illicit-drug-trade-worth-27bn-euros-year-france

THAI AUTHORITIES LAUNCH COORDINATED CRACKDOWN ON GARLIC SMUGGLERS AFTER DOMESTIC PRICES FALL

Illicit Trade on 31st May reported that military police in Thailand have been called in to crack down on organised garlic smugglers after local prices for the popular cooks’ ingredient plummeted.  Customs officials, the country’s Commerce Ministry and the Thai military have teamed up to tackle a huge rise in the trafficking of garlic into Thailand from neighbouring countries, which has caused domestic price levels to slump significantly.

https://www.illicit-trade.com/2018/05/thai-authorities-launch-coordinated-crackdown-on-garlic-smugglers-after-domestic-prices-fall/?utm_source=dlvr.it&utm_medium=twitter

SOUTH AFRICA CLAMPS DOWN ON ILLICIT TRADE OF MARINE RESOURCES

Ricochet News on 30th May reported that the Department of Agriculture, Forestry and Fisheries (DAFF) has reiterated its call to all communities to work together to curb poaching and the illegal trade of Marine Living Resources (MLR).  This follows the arrest of more than 40 suspected poachers of marine living resources. The suspects were arrested recently by fisheries control officers from the department. 5 boats that had been used in alleged poaching activities were confiscated, as efforts intensified in curbing illegal harvesting of MLR.

https://www.rnews.co.za/article/daff-clamps-down-on-illicit-trade-of-marine-resources

 

On 31st May, the Council of Europe announced that its AML/CFT body Moneyval has just published its General Activity Report for 2017.  The Moneyval chairman pointed out that it is evident that the threats of being exposed to money laundering and terrorist financing are increasing. He also stressed that countless cases of money laundering are being reported by the media and brought to the attention of the general public.  “The lack of transparency of legal entities and trusts persist and international co-operation is still not working as effectively as it should be. We also need to improve information-sharing with the private sector and across borders”, he said.  Moreover, the Chairman underlined the need for more specialised training for investigators and prosecutors and to involve prosecutors at the early stages of investigations.

https://www.coe.int/en/web/portal/-/moneyval-s-annual-report-money-laundering-risks-are-increasing

 

On 31st May, OFAC advised that it had amended the Counter-Terrorism Designation entry for the Al-Nusrah Front, adding numerous aliases.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180531.aspx

 

On 31st May, OFAC issued Ukraine-/Russia-related General License 13B, which replaces and supersedes General License 13A.   General License 13B extends the expiration date of the general license authorising certain transactions necessary to divest or transfer debt, equity, or other holdings in certain blocked persons  to 12:01 a.m. August 5th,

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180531_33.aspx

 

On 30th May, the Carnegie Endowment for International Peace published an article which starts by saying that detecting proliferation-relevant illicit financing is even harder than detecting money laundering or terrorism financing.  Governments and financial institutions around the world have been dealing with money laundering and terrorism financing for decades.  They have developed typologies, “red flags,” and standard operating procedures to minimize exposure to money laundering or terrorism financing.  Compared to money laundering and terrorism financing, proliferation financing is a relatively recent and less understood challenge. It then gives examples of how even apparently benign products can have an illicit role –

• semi-conductor material that is indispensable for laptops and transistors can be used in military equipment;
• production of instant coffee, as well as of dry ice-cream for astronauts, relies on freeze-drying technology that can be used in bio-warfare research; and
• components for nuclear power reactors that generate electricity rely on dual-use components and technology that can be used in a nuclear weapons programme.

The article explains why financial institutions struggle with implementing proliferation financing controls.  It also says that looking at proliferation financing challenges as related to export control efforts can significantly improve the overall national capacity of a given country to minimise proliferation financing risks.

https://carnegieendowment.org/2018/05/30/challenges-with-implementing-proliferation-financing-controls-how-export-controls-can-help-pub-76476

 

TREASURY COMMITTEE’S VIRTUAL CURRENCIES INQUIRY PUBLISHES FCA AND BANK OF ENGLAND EVIDENCE

On 25th May, Katten reported that the UK’s House of Commons Treasury Committee has updated its webpage on its inquiry into what it refers to as “digital currencies”.  The webpage now provides links to written evidence the Treasury Committee has received from the UK Financial Conduct Authority (FCA) and the Bank of England in which they outline their work in this area. See –

https://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/inquiries1/parliament-2017/digital-currencies-17-19/publications/

https://www.corporatefinancialweeklydigest.com/2018/05/articles/uk-developments/treasury-committees-virtual-currencies-inquiry-publishes-fca-and-bank-of-england-evidence/#page=1

CAYMAN ISLANDS: THE NEW AML REGULATIONS

An article from Cayman Finance on 29th May claims that the Cayman Islands’ new Anti-Money Laundering Regulations replace the Money Laundering Regulations and while there is a noticeable difference with the name, the Regulations mainly seek to formalise the AML practices of the jurisdiction which have been followed by industry through the Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands.  This, it says, means little change has occurred in how businesses operate as the recommendations were adhered to for several years through the Guidance Notes.

http://www.mondaq.com/caymanislands/x/705426/Money+Laundering/The+New+AntiMoney+Laundering+Regulations

DOJ POLICY ON CO-ORDINATION OF CORPORATE RESOLUTION PENALTIES – NEW DOJ POLICY TO PREVENT “PILING-ON”

On 30th May, Wilmer Hale released a briefing reporting that on May 9th Deputy Attorney General Rod J. Rosenstein announced a new DoJ policy regarding the coordination of corporate resolution penalties.  This policy is intended to reduce duplicative penalties against corporations by encouraging co-ordination between the various law enforcement authorities, both domestic and international.

https://wilmerhalecommunications.com/26/2520/may-2018/new-doj-policy-to-prevent–piling-on-.asp?sid=bb393f11-1ef2-4374-af54-3e02c54406ef

TRACE PODCAST: SANCTIONS UPDATE: TURBULENT TIMES

In the latest TRACE podcast, Amanda DeBusk, sanctions expert with Dechert LLP, provides an update on Iran, China’s ZTE and North Korea.

https://www.traceinternational.org/bribe_swindle_or_steal

WHITE COLLAR FRAUD CASES HIT 20-YEAR LOW IN US

Law.com’s Compliance Hotspot newsletter reported on 30th May that white-collar prosecutions in the US are on track to hit a 20-year low, according to Syracuse University’s Transactional Records Access Clearinghouse (TRAC), a non-profit research centre that analyses government data.  TRAC found in its latest report that about 3,250 cases were brought between October 2017 and April — a 4.4% drop from the same period in fiscal year 2017 and a 33.5% decline from 5 years ago. Separately, it is reported that at the SEC, meanwhile, penalties fell to a 4-year low in the fiscal year that ended in September 2017.

http://trac.syr.edu/tracreports/crim/514/

RISK OF EXTRADITION TAKES SECOND PLACE TO NEED TO GIVE PRACTICAL EFFECT TO A FREEZING ORDER

Gowling WLG, in the May 2018 edition of its Finance Litigation newsletter, reported on a case where the UK Court of Appeal has found that a debtor’s fears of extradition did not obviate the need for him to be cross-examined in person as to his assets under a worldwide freezing injunction.  In the case, the bank involved had made out a strong case against the respondent that he had been involved in a massive international fraud and was concealing evidence about relevant assets. The public interest in the court giving maximum practical effect to the freezing order it had granted was strong.

https://gowlingwlg.com/en/insights-resources/articles/2018/finance-litigation-cases-and-issues-may-2018

LIABILITIES OF LEGAL REPRESENTATIVES AND DIRECTORS OF CHINESE COMPANIES

On 30th May, a briefing from Gowling WLG provided information highlighting the potential legal liabilities associated with individuals, including foreigners, acting as a legal representatives or directors of Chinese registered companies, e.g. a wholly foreign owned enterprise (WFOE) and Sino-foreign joint venture (JV) for civil liabilities, administrative liabilities, criminal liability.

https://gowlingwlg.com/en/insights-resources/articles/2018/liabilities-of-legal-representatives-and-directors

FREIGHT AND BREXIT INQUIRY LAUNCHED BY PARLIAMENTARY COMMITTEE

On 30th May, BIFA reported that the House of Commons Transport Committee has launched an inquiry to examine the potential effects of Brexit on UK freight operations and assess the preparatory steps operators, their customers and the Government need to take.  Road haulage, maritime and aviation sectors may need to take different steps to prepare for the effects and harness the opportunities, of Brexit. But there has been little published analysis of sector-specific freight needs.  The Transport Committee inquiry is offering freight operators and their diverse customers, the opportunity to specify these needs.  Though the terms of reference are wide, the Committee hopes the sector will also be forthcoming about the issues involved.

Submissions are required by 8th June –

https://www.parliament.uk/business/committees/committees-a-z/commons-select/transport-committee/inquiries/parliament-2017/freight-and-brexit-17-19/

https://www.bifa.org/news/articles/2018/may/freight-and-brexit-inquiry-launched?l=y

IRAN SANCTIONS: AEROSPACE FOCUS

On 29th May, HFW produced a briefing detailing how the recently announced reimposed US sanctions might affect the aerospace industries – manufacturers, lessors, financiers, airlines.

http://www.hfw.com/Iran-sanctions-Aerospace-focus-May-2018

GETTING PREPARED FOR THE 2018 YACHTING SEASON

Another briefing from HFW on 30th May said that now is the time for those in yachting to consider both recent changes and possible challenges ahead – mentioning VAT issues in the EU, French social security, the Red Ensign Group (REG) relatively new Yacht Code, cyber piracy and GDPR.

http://www.hfw.com/Getting-prepared-for-the-2018-Yachting-Season

INVESTIGATORY POWERS ACT 2016 (COMMENCEMENT NO. 5 AND TRANSITIONAL AND SAVING PROVISIONS) REGULATIONS 2018

These UK Regulations (SI 2018/652) bring into force provisions in the Investigatory Powers Act 2016 relating to the interception of communications and equipment interference.

http://www.legislation.gov.uk/uksi/2018/652/contents/made

NEW ADVICE ON VAT FOR PROPERTY SEARCHES IN UK

On 30th May, the Law Society Gazette reported that conveyancers should consider charging VAT on fees for electronic property searches pending a definitive court ruling, the Law Society advises on guidance to firms on the First-tier Tax Tribunal ruling in Brabners. This follows a meeting with HMRC to seek clarity on how HMRC intends to approach the VAT treatment of searches.

https://www.lawgazette.co.uk/practice/new-advice-on-vat-for-property-searches/5066273.article

PAKISTAN RECOVERS $1.3 MILLION FROM CORRUPTION SUSPECT   

OCCRP on 29th May reported that Pakistan’s anti-graft authorities recovered $1.3 million and a luxurious Toyota Landcruiser from the former head of the Lahore Development Authority, Ahad Cheema, in the eastern city of Lahore.  Cheema was arrested in February under suspicion of misusing his authority and corruption involving a housing project. The case is known as the “Ashiana Housing scam”.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8143-pakistan-recovers-us-1-3-million-from-corruption-suspect

EX-EXEC OF MEXICAN BANK PLEADS GUILTY TO WIRE FRAUD IN US

On 30th May, Baker McKenzie reported that a former partner and part-owner of Mexico’s InvestaBank SA, Carlos Djemal Nehmadhas, 57, pleaded guilty to a US charge that he fraudulently obtained $21 million in tax refunds from the Mexican government.  He was sentenced to 6 years and 3 months in prison in Manhattan.

http://www.riskandcompliancehub.com/ex-exec-of-mexican-bank-pleads-guilty-to-wire-fraud/

The new Venezuela currency notes…

INFORMATION EXCHANGES DRIVING UP SERIOUS TAX EVASION CASES IN UK

Out-Law reported on 30th May that the number of serious tax evasion cases identified by HMRC increased by over one fifth last year, as HMRC has begun to receive more information about taxpayers with offshore bank accounts.

https://www.out-law.com/en/articles/2018/may/information-exchanges-serious-tax-evasion-cases/

EUROPOL ANNOUNCES NEW DARK WEB INVESTIGATIONS TEAM TO TACKLE ILLICIT HIDDEN MARKETPLACES

Illicit Trade on 30th May reported that law enforcement officials from 28 countries gathered at Europol’s headquarters in The Hague to discuss a coordinated approach to tackling illegal activity on the dark web.  Europol announced the establishment of a dedicated dark web investigations team, which it said will work with partners and law enforcement agencies in Europe and across the globe to limit the size and scope of this underground illegal economy.  It will share information and provide operational support and expertise in different crime areas. It will also work towards the development of tools, tactics, and techniques to conduct dark web investigations and identify major threats and targets.

https://www.illicit-trade.com/2018/05/europol-announces-new-dark-web-investigations-team-to-tackle-illicit-hidden-marketplaces/

Out-Law provided a briefing on 30th May saying that as we approach 4th August, when US secondary sanctions begin to be reactivated, businesses with connections to Iran should be carefully considering their next steps.  It says that, in the face of such uncertainty, non-US businesses should start planning their exit from Iran – or, if committed to Iranian businesses notwithstanding the risk of US enforcement, establishing if they will be able to proceed on a legal and practical level.  It says that businesses should begin by asking themselves several questions which the article details.

https://www.out-law.com/en/articles/2018/may/us-iran-sanctions-non-us-businesses/

 

The Jersey Evening Post on 30th May reported that the chief executive of a Jersey finance firm has been banned from the industry after acting with a ‘serious lack of integrity’ and ‘incompetence of the most serious kind’.  The Royal Court rejected David Jonathan Francis’s appeal against the decision of the Jersey FSC to publicly criticise his business activities as chief executive and a major shareholder of Horizon Trustees (Jersey) Limited and to bar him from practice.

https://jerseyeveningpost.com/news/2018/05/30/finance-firm-chief-barred-for-serious-incompetence/

Breaking News on 30th May reported that a psychic turned financier – astrologer and tarot reader, Simon Gold, 53 – is facing trial accused of fraud and money-laundering offences.  Mr Gold is best known for his firm Astrology Ireland and has billed himself as “Ireland’s Leading 7th Generation Psychic Astrologer & Tarot Master”.

https://www.breakingnews.ie/ireland/psychic-turned-financier-to-face-trial-on-fraud-and-money-laundering-charges-846037.html

 

Gowling WLG, in the May 2018 edition of its Finance Litigation newsletter, reported on a case where the UK Court of Appeal has found that a debtor’s fears of extradition did not obviate the need for him to be cross-examined in person as to his assets under a worldwide freezing injunction.  In the case, the bank involved had made out a strong case against the respondent that he had been involved in a massive international fraud and was concealing evidence about relevant assets. The public interest in the court giving maximum practical effect to the freezing order it had granted was strong.

https://gowlingwlg.com/en/insights-resources/articles/2018/finance-litigation-cases-and-issues-may-2018