Greetings from warm Lisbon!
1st May 2018
SPENT CONVICTIONS AND THE RIGHT TO BE FORGOTTEN: NT1 & NT2 V GOOGLE LLC
McDowell Purcell on 24th April published an article that says that a recent decision of the High Court in England and Wales has addressed the interplay between spent convictions and the right to be forgotten in a data protection context. It explains the decisions in the case – the appeal in respect of NT2 was allowed, however, the appeal in respect of NT1 was not. In explaining the decision and, in particular, the distinction as between the claimants, the judge stated that NT1 had continued to mislead the public and had failed to show remorse. By contrast, in respect of NT2, it was noted that “the crime and punishment information has become out of date, irrelevant and of no sufficient legitimate interest to users of Google search to justify its continued availability”.
BVI LIMITED PARTNERSHIP ACT 2017 – KEY POINTS
On 17th April, Carey Olsen produced a briefing on this Act that came into force in February. It creates a modern regime for new limited partnerships and replaces Part VI of the former Partnership Act 1996 for new limited partnerships and for those existing limited partnerships that elect to re-register under the Act.
https://www.careyolsen.com/briefings/bvi-limited-partnership-act-2017-–-key-points
US CHARGES 2 WITH ESPIONAGE IN CHINESE TRADE SECRETS THEFT
On 30th April, World Intellectual Property Review reported that 2 men have been charged with conspiracy to commit economic espionage for the benefit of a Chinese company, 1 year after being indicted for conspiracy to commit theft of trade secrets. Shan Shi, a citizen of Houston, and Chinese national Gang Liu were charged on April 26th. They had been acting for the benefit of CBM-Future New Material Science and Technology (CBMF), a Chinese company based in Taizhou. It is said that Shi and Lui conspired with others to commit economic espionage and steal trade secrets from a US engineering firm that produces syntactic foam. The foam is a strong and lightweight material with commercial and military uses.
CAYMAN ISLANDS GOVERNMENT IS WORKING ON A FRAMEWORK OF GOVERNANCE FOR CRYPTOCURRENCIES AND DIGITAL COIN PROJECTS
The Cayman News Service on 30th April reported that the Cayman Islands Government is working on a framework of governance for cryptocurrencies and digital coin projects taking place in the jurisdiction while it considers how to implement a legislative framework for the sector.
https://caymannewsservice.com/2018/04/cryptocurrencies-cayman-framework/
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY – CBA BANK HAD “INADEQUATE OVERSIGHT” OF NON-FINANCIAL RISKS, INCLUDING REPUTATIONAL RISKS AND SENSE OF COMPLACENCY WHEN ADDRESSING NON-FINANCIAL RISKS
The Brisbane Times on 1st May reported on the report published following a review commissioned by the Australian Prudential Regulation Authority into the Commonwealth Bank of Australia (CBA) culture which found the board of the bank had “inadequate oversight” of non-financial risks, including reputational risks. The review also found a sense of complacency within the bank when addressing non-financial risks. The review was sparked after CBA was sued by Austrac for more than 50,000 failings under AML/CFT laws. The report found serious failings with the board’s oversight of these issues.
HONG KONG’S FIGHT AGAINST DIRTY MONEY – OFFICIALS VOW TO ‘ADDRESS GAPS’
The South China Morning Post on 1st May reported that a just-released government risk assessment describes rise in money laundering reports as ‘significant’. Produced by the Financial Services and Treasury Bureau, the release of the 132-page report came as local authorities prepared for a major audit of the city’s AML capabilities by a team from FATF in October.
AUSTRALIA APPOINTS TOP POLICEMAN TO LEAD FIGHT AGAINST OFFSHORE CRIME
Xinhua on 1st May reported that the Australian government has named its first Transnational Organised Crime Coordinator to tackle the growing problem of offshore organised crimes, especially cybercrimes, child exploitation, human trafficking, illicit drugs and firearms, and money laundering. He will work within the Department of Home Affairs to lead a national effort against “transnational serious and organised crime”. Australia’s Minister for Home Affairs said a crime co-ordinator was needed because up to 70% of organised crimes occurred offshore.
http://www.xinhuanet.com/english/2018-05/01/c_137148791.htm
COUNTERFEIT STEROID TRAFFICKING, MONEY LAUNDERING CASE IN US
US Immigration and Customs Enforcement (ICE) on 27th April reported the case of a woman from Massachusetts who imported raw steroid materials from China/Hong Kong into the US and manufactured injectable anabolic steroids which were advertised and sold over social media sites, fitness blogs, and email as “Onyx Pharmaceuticals”. The steroids were marketed and sold with counterfeit labelling, holograms and branding and distributed all over the US. Search warrants yielded 9 kg of raw powder steroids, over 35,000 units of finished steroid units, laboratory production equipment, 14,000 fraudulent branding labels and boxes and more than $500,000 dollars in cash. The investigation was assisted by team members from the US Postal Inspection Service, and the FDA.
SURVEY REVEALS UK CONSTRUCTION FIRMS VULNERABLE TO MONEY LAUNDERING AND BRIBERY
Public & Building Control Today on 30th April reported that 97% of middle market UK construction firms consider themselves at risk of falling foul of AML and anti-bribery legislation according to the latest YouGov survey, commissioned by leading audit, tax and consulting firm RSM. he survey of more than 300 UK middle market business leaders also revealed that 47% of firms have suffered, unwittingly or otherwise, in incidents that are outside of the law.
EUROPEAN COMMISSION PROPOSES LEGISLATION BROADENING ACCESS TO CENTRALISED FINANCIAL INFORMATION
On 30th April, Shearman & Sterling published an article about EU proposals for a Directive aimed at increasing security within EU Member States and across the EU by improving access to financial information, including bank account information, to the relevant authorities and bodies in charge for the prevention, investigation and prosecution of serious forms of crimes. It is envisaged that this will enhance their ability to conduct financial investigations and analysis and improve their co-operation. In addition, the proposal contains measures to improve the ability of FIU to carry out their tasks under the 4th Money Laundering Directive. The new 5th Money Laundering Directive already will make it obligatory for Member States to establish centralised bank account registries or data retrieval systems. The proposal follows a public consultation by the Commission which ran from October 2017 to January 2018 and the Commission has published separately a summary of the responses it received to that consultation. The proposal will now be considered by the European Parliament and the Council.
COURT HOLDS THAT ALL RISKS CARGO POLICY DID NOT COVER FRAUDULENT DOCUMENTS FOR A NON-EXISTENT CARGO
On 30th April, Clyde & Co published an article about a recent UK court case – Engelhart CTP v Lloyds Syndicate 1221 – where the claimant bought copper ingots and re-sold them the same day. However, when some of the containers arrived for transhipment, it was discovered that they contained only slag of nominal value. It was assumed for the purposes of this case that no copper was ever shipped and that the claimant had, in good faith, paid for and taken up fraudulent bills of lading and other shipping documents. The claimant sought an indemnity under its All Risks marine cargo insurance policy and some of the insurers denied liability on the basis that the loss did not fall within the scope of the policy cover. It has now been held that the loss was not covered under the policy. Amongst other things, the judge noted that “Since an All Risks marine cargo policy is generally construed as covering only losses flowing from physical loss or damage to goods, there must be clear words indicating a broader intention.” No such clear wording existed in this case.
https://www.clydeco.com/blog/insurance-hub/article/marine-engelhart-ctp-v-lloyds-syndicate-1221
TRANSFER PRICING OVERVIEW FOR CENTRAL AMERICA
On 30th April, the TMF Group published a briefing that said that in Central America, there are 2 countries in particular that are engaging with the new transfer pricing landscape. Costa Rica, which is looking to become a full member of the OECD, and Panama, which is under pressure from the OECD to adopt these changes due to its status as a financial centre. Like other regions around the world, the region is adjusting to the OECD Base Erosion and Profit Shifting (BEPS) initiative, which has resulted in new regulations designed to tackle international tax avoidance. Panama was the first country in Central America to introduce transfer pricing legislation, with the legal framework created through tax reform in 2010. However, Panama is not a member of the OECD, but the OECD’s transfer pricing guidelines are generally used to inform national transfer pricing regulations. If the OECD guidelines interfere, or conflict, with national regulations, then the national regulations will prevail.
SWISS 1MDB CASE WIDENS WITH CRIMINAL PROBE INTO PETROSAUDI OFFICIALS
Bloomberg on 1st May reported that Swiss prosecutors have widened their probe into allegations of corruption at Malaysian development fund 1MDB, opening criminal proceedings to look into 2 officials of Saudi Arabian oil producer PetroSaudi who were allegedly involved in the affair. The investigation into the pair on suspicion of criminal mismanagement, fraud, bribery and aggravated money laundering began in November 2017.
FORMER CFO OF AUTONOMY GUILTY OF ACCOUNTING FRAUD
The Irish Times on 1st May reported that a case which relates to $10.3 billion price Hewlett-Packard paid for the UK software maker in 2011. A jury voted to convict Sushovan Hussain on all 16 counts of wire and securities fraud after 3 days of deliberations in San Francisco federal court. Autonomy was the UK’s second-largest software business when Hewlett-Packard acquired it in 2011.
UK EXPORT LICENCES AMENDED TO EXCLUDE BURMA/MYANMAR
On 1st May, the UK Export Control Joint Unit published a new Notice to Exporters 2018/11 which provides for Burma to been removed as a permitted destination from 5 open general export licences (OGEL).
https://www.gov.uk/government/publications/notice-to-exporters-201811-ogels-amended-to-exclude-burma
CONSULTATION LAUNCHED ON THE REFORM OF LIMITED PARTNERSHIP LAW
On 1st May, Berwin Cave Leighton Paisner published a briefing saying that in the UK BEIS has published a consultation on the reform of limited partnership law, in response to its January 2017 call for evidence. This briefing sets out the main elements of the proposals, along with comments on them. Responses are requested by 23rd July. The full picture will emerge when legislation is produced, which BEIS states is the intention “as soon as Parliamentary time allows”.
ISSUES SURROUNDING A US WITHDRAWAL FROM THE IRAN NUCLEAR AGREEMENT
A briefing from the Washington Institute in April said that President Trump warned in January that absent improvements to the JCPOA Iran nuclear agreement, he might decide by the May 12th deadline not to extend the sanctions waivers, effectively withdrawing the US from the deal. In reality, but reimposing sanctions is not a simple flip of a switch: the process requires numerous steps without which withdrawal would have little meaning. This report by distinguished Iran expert Patrick Clawson outlines the options available to the administration should it choose to terminate its co-operation with JCPOA provisions, and the technical, legal, and administrative considerations related to reimplementation of sanctions.
OLEG DERIPASKA TO REDUCE EN+ GROUP HOLDING IN BID TO AVERT US SANCTIONS
The European Sanctions Blog on 1st May reported that proposals had been aired for Deripaska to reduce his shareholding below 50%, resign from the board and agree to the appointment of others, so that independent directors form a majority.
https://europeansanctions.com/
Meanwhile, Rferl reported that the “US not aiming to ‘put Russian aluminum giant out of business’ With Sanctions
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