15th May 2018
TRUMP ADMINISTRATION MOVES TO SHIFT GUN EXPORT APPROVAL FROM STATE DEPARTMENT TO COMMERCE DEPARTMENT
On 14th May, the Washington Times reported that the Trump Administration took a major formal step towards officially shifting authority from the State to the Commerce Department for the approval of US small arms exports, including semiautomatic rifles and weapons ranging in size up to .50 calibre. Administration officials are touting the policy as breakthrough for US manufacturing and stress that key restrictions on exports to unsavoury international buyers will remain in place.
THE 12 COMPLIANCE STEPS EVERY MULTINATIONAL CORPORATION SHOULD UNDERTAKE IN LIGHT OF RECENT TRUMP ADMINISTRATION ENFORCEMENT ACTIVITY
On 14th May, the National Law Review in the US published an article saying that companies that are subject to US jurisdiction – whether because they are located within the US or otherwise subject to US jurisdiction (such as through the use of US-origin goods or the use of the US financial system) – need to evaluate whether their compliance measures are sufficient to detect and halt potential violations of U.S. international regulations, including the Foreign Corrupt Practices Act (FCPA), US export control regulations, the economic sanctions regulations maintained by OFAC, and the various AML laws. It outlines a 12-step programme to implement the kinds of compliance that US regulators would consider to be industry best practices –
Step 1: Secure Buy-In at the Top
Step 2: Perform a Risk Assessment
Step 3: Survey its Current Controls
Step 4: Identify Available Resources
Step 5: Assess Local Oversight
Step 6: Create a Written Compliance Policy
Step 7: Establish Internal Controls
Step 8: Training, Training, Training
Step 9: Integrate Outsiders acting with or for the company
Step 10: Auditing and Check-ups
Step 11: Monitor Red Flags
Step 12: Communicate with Board & Senior Management
JAILED TOBACCO SMUGGLER TOLD TO PAY £300,000 OR HAVE SENTENCE DOUBLED
The Liverpool Echo on 14th May reported that a tobacco smuggler, John Parker, has been ordered to pay almost £300,000 or see his prison sentence doubled. He was jailed for 4 years over his role in a plot that involved 3 hand-rolling tobacco shipments and the discovery of 54,000 illicit cigarettes. He admitted money laundering and dodging tobacco import duties after his operation was busted in 2016. He admitted he would have sold it for profit, but later claimed to have only been a delivery driver. The Crown Court judge rejected his account. Almost £850,000 tax was due on the tobacco shipments and the cigarettes linked to him by the investigation.
SOUTH KOREAN SHIP INVOLVEMENT IN NORTH KOREA SMUGGLING SUSPECTED
The Japan Times on 14th May reported that Japan has asked South Korea to investigate the possible involvement of a South Korean tanker in maritime smuggling by North Korea. A JMSDF vessel on May 3rd spotted a South Korean tanker and a North Korean tanker side by side in international waters in the East China Sea. It says that Japan reported 4 suspected cases of North Korea’s maritime smuggling between January and February. The latest case, if confirmed, is the first involving a South Korean vessel.
CHINA BUSTS BIGGEST WINE SMUGGLING RING SINCE 2017
Drinks Business on 14th May reported that 17 people have been arrested and wine worth $31.5 million seized in Fujian and Guangdong provinces after officials busted a ring operating in 4 cities. The haul included 13,650 cases of smuggled wines and the evaded tax amounted to more than $7.8 million.
HSBC – TV PROGRAMME CALLS IT THE GO-TO BANK FOR ILLEGAL ACTIVITIES
On 15th May, the New Zealand Herald carried an article about a French-made TV programme that labels HSBC as the go-to bank for “a raft of illegal activities, from money laundering for the mafia, to enabling tax evasion and currency manipulation”.
WORLD BANK – ANOTHER VENUE FOR US SANCTIONS?
On 11th May, Information Management Solutions Ltd of Antigua published an article saying that a piece of legislation, the World Bank Accountability Act, put forward by Republican Congressman Andy Barr is sweeping through the legislative process of the US almost unnoticed. It quickly achieved Congressional support and is due to be placed before the Senate shortly. It provides that until the Secretary of the US Treasury has certified that the Bank has undertaken reforms to fight corruption, strengthen management accountability and combat violent extremism up to 30% of future US appropriations for the World Bank’s International Development Association could be withheld. The Act is set to provoke reforms that will help better fight poverty, uphold human rights and democracy, prevent the flow of funds to corrupt governments and those who support terrorism, and improve oversight and accountability.
JERSEY DONATES £250,000 TO HELP FIGHT INTERNATIONAL FINANCIAL CRIME
The Bailiwick Express on 15th May reported that Jersey has contributed £250,000 drawn from the Criminal Offences Confiscation Fund to the International Centre for Asset Recovery (ICAR) to help fight international financial crime and recover stolen assets. ICAR is part of the Basel Institute on Governance and supports global efforts to prevent international financial crime. It operates in a number of countries, including developing ones, where it builds capacity to fight financial crime and trains investigators as well as anti-corruption officers.
HOW A CRIMINAL NETWORK MADE A FORTUNE THROUGH THE FRAUDULENT USE OF COUNTERFEIT FUEL AND CREDIT CARDS
On 15th May, Europol published a news release reported that on 6th May, 24 suspects were arrested in Spain by the Spanish National Police and the Guardia Civil in an international operation involving Spain and France and supported by Europol. The organised crime group was specialised in using counterfeiting fuel and credit/debit cards to avoid paying toll fees and in selling these cards to truck drivers and hauling companies. Over the course of the 3 months of action of Operation ANDREA, fuel card companies and one card scheme reported approximately 30 000 fraudulent transactions linked to counterfeit cards used to cross toll barriers in Spain and France. The criminal group operated mainly in the Spanish region of Catalonia, although the cards were also used on French highways. As a result of the cooperation between Europol, the Fuel Industry Card Fraud Intelligence Bureau (FICFIB), the Spanish authorities and the French Gendarmerie, 24 people were arrested and 11 fraud cards factories were dismantled.
THREAT REPORT 2018: AL-QAIDA PATIENTLY REBUILDING
Cipher Report, as part of its Threat Report 2018, published an excerpt saying that Al-Qaida has rebounded in recent years, rebranding its message and building local branches across the Middle East and Africa. While the Islamic State (ISIS) grabbed the spotlight of international terrorism, al-Qaida has meticulously rooted itself in several conflicts across Africa, the Middle East and South Asia, where it has seized upon local grievances to appeal to disenfranchised communities and build its brand as a champion of victimised Sunnis. Consequently, al-Qaida’s strategy, combined with its long-term vision, renders the movement the most dangerous and entrenched terrorist network devoted to carrying out spectacular attacks against the West, and the US in particular. It provides a potted history of the organisation, saying Al-Qaida, meaning “the base,” was established in 1988 in the Pakistani city of Peshawar close to the Afghan border under the guidance of Osama bin-Laden, prominent Palestinian cleric Abdullah Azzam, current leader Ayman al-Zawahiri and several hardline mujahedeen rebels who had fought against the Soviet Union during its invasion of Afghanistan in the 1980s. It explains that –
- Al-Qaida’s North African offshoot, al-Qaida in the Islamic Maghreb (AQIM), was created in January 2007.
- Al-Shabab, meaning “the youth,” was formed in December 2006 and was designated by the US State Department as a Foreign Terrorist Organization in March 2008. The group officially pledged allegiance to al-Qaida in February 2012 and remains al-Qaida’s affiliate in East Africa.
- Al-Qaida’s Syrian offshoot, formerly known as Jabhat al-Nusra or the al-Nusra Front, emerged in January 2012 against the backdrop of the Syrian civil war.
- The network’s Yemeni branch, al-Qaida in the Arabian Peninsula (AQAP), was officially formed in January 2009.
- Al-Qaida in the India Subcontinent (AQIS) was born in September 2014 as an al-Qaida affiliate spanning Afghanistan, Pakistan, India and Bangladesh.
MALI’S DRUG PROBLEMS ARE ITS SILENT ENEMY
Defence Web on 15th May reported that as well as repeated attacks by extremist groups and inter-communal violence continue to fuel insecurity in Mali, the country is confronting another enemy – drugs. Earlier this year, the Mali anti-drug body, OCS, seized nearly 3 tons of cannabis hidden in a truck of goods reportedly coming from Ghana via Cote d’Ivoire. Mali is a country of drug transit, destination, production and consumption. However, the problem is not unique to Mali; nor is it new for the country. In the past decade, West Africa has become a drug-trafficking hotspot – both in the global trade and on the continent. In 2013, the UN Office on Drugs and Crime estimated that at least 18 tons of cocaine transit each year through West Africa. It points out that security services are under-resourced and the borders porous, and Mali will probably remain a key crossing point and a hub for cocaine trafficking in West Africa.
SWISS SEEK QUICK TALKS WITH MALAYSIA ON 1MDB INVESTIGATION
Reuters on 15th May reported that Swiss federal prosecutors are seeking quick talks with Malaysian counterparts on how to press forward with an investigation of suspected corruption surrounding scandal-hit sovereign wealth fund 1MDB, the Swiss attorney general’s office said.
ARAB STATES TO IMPOSE POLITICAL AND ECONOMIC SANCTIONS ON SUPPORTERS OF US EMBASSY MOVE
The Middle East Monitor on 15th May reported that the Organisation of Islamic Cooperation (OIC) has said that it will impose economic and political sanctions on countries, officials, parliaments, companies or individuals who support the US Embassy move from Tel Aviv to Jerusalem.
For details of the membership of the OIC, see –
BREXIT: CUSTOMS AND REGULATORY ARRANGEMENTS IN THE FUTURE PARTNERSHIP AGREEMENT
On 15th May, the House of Commons Library published a paper which considers the proposals that have been put forth by the UK in order to satisfy the simultaneous objectives to leave the EU Customs Union but continue to have a co-operative ‘customs arrangement’ following Brexit; and to leave the Single Market but maintain trade that is ‘as frictionless as possible’ following Brexit. These proposals have to navigate the EU’s red lines, primarily the ones that preclude sectoral agreements (or ‘cherry-picking’), and that guarantee an invisible land border between Northern Ireland and Ireland.
2 ISLANDS, 2 COURTS, 2 LAWS – AND 2 DIFFERENT APPROACHES TO HASTINGS-BASS
On 14th May, a briefing published in The Lawyer about the rule in Hastings Bass which gives the court discretion to set aside an exercise of power if a trustee failed to take into account relevant considerations when exercising the power, or took into account considerations which should properly have been disregarded. In England, the rule in Hastings Bass was revised by the cases of Futter v HMRC and Pitt v HMRC which effectively limited the protection afforded to beneficiaries to cases of ‘aberrant’ conduct. Some offshore jurisdictions (including Jersey) appeared to consider that the limitation of the rule was wrong in principle and should be reversed. The briefing looks at the difference in treatment in jersey and Guernsey.
UK SANCTIONS GUIDANCE MEANS IMPORTERS AND EXPORTERS MUST BE SANCTIONS-AWARE
Out-Law on 15th May said in an article that the UK Office of Financial Sanctions Implementation (OFSI) has issued new guidance for import and export businesses on complying with financial sanctions, and this includes direction on how to identify individuals and companies subject to sanctions, and how UK companies should deal with those entities. Regulatory expert Tom Stocker of Pinsent Masons, the law firm behind Out-Law.com, said the guidance emphasised the risk of sanctions breaches to those engaged in importing and exporting products and services. “The guide is significant because it shows that OFSI do not see sanctions compliance purely as a matter for banks and payment processors,” Stocker said.
CANADA PASSES TOBACCO PLAIN PACKAGING LAW
TJI on 15th may reported that the federal government has passed the Tobacco and Vaping Products Act which will introduce standardised packaging for tobacco products and regulate new tobacco products, such as vapour products, marketing and advertising news organisation Strategy reported.
PODCAST: SPOTLIGHT ON SWITZERLAND
In the latest TRACE Podcast, Daniel Bühr, with TRACE’s Swiss partner firm LALIVE, discusses recent cases in Switzerland and the country’s uneasy relationship to transparency and financial crime.
HOUSE OF COMMONS INTERNATIONAL TRADE SELECT COMMITTEE BACKS IMPROVEMENTS TO THE PROPOSED TRADE REMEDIES REGIME
On 10th May, Monckton Chambers reported that the Committee had adopted proposals put forward by George Perez QC for proposed legislation setting up a Trade Remedies Authority (TRA), which will, along with the Secretary of State for International Trade, administer after Brexit trade defence measures (anti-dumping duty, countervailing measures, and safeguard measures) permitted under WTO rules. The Chambers reports that, among other matters, the Committee agreed with the QC that: –
- the International Trade Select Committee should have a formal role in appointments as chair and chief executive of the TRA;
- the TRA should not apply an “economic interest” test but that a decision to refuse trade defence measures on grounds of economic interest, as a political decision, should be reserved to the Secretary of State
- the Bill should provide on its face that that there was a right of appeal to the Upper Tribunal against decisions to impose and to refuse trade defence remedies, and that such appeals should be “on the merits” rather than just by way of judicial review.
For more information, see –
THE RETURN OF FOREIGN FIGHTERS TO THE EU
On 15th May, the EU Parliament Research Service published a study which aims at outlining the EU response to the issue of returning foreign fighters and their families. It examines how 6 Member States have responded to this phenomenon so far (Belgium, Denmark, Germany, France, the Netherlands and the UK). These Member States are confronted with significant challenges in dealing with foreign fighters that combine legal, ethical and practical questions regarding their obligations and capabilities as regards the handling of the foreign fighters still abroad and the returnees already on EU soil. Meanwhile, Member States’ existing programmes aiming at tackling radicalisation are difficult to evaluate, leading to uncertainties as regards the efficiency of current practices.
UPS STRENGTHENS CROSS-BORDER CAPABILITIES WITH NEW FLAGSHIP £120 MILLION LONDON HUB
CILT on 15th May reported that the new London Hub is one of UPS’s largest single infrastructure investments outside of the US in the company’s history. Located at the DP World London Gateway Logistics Park, the new building will act as a UK package processing hub and distribution centre for the local area as well as a gateway to UPS’s global logistics network, with capacity to process up to 28,000 packages per hour and room for further expansion. The new London Hub is part of a $2 billion infrastructure and network investment programme by UPS across Europe to add capacity and provide even faster services across the region. Recent investments as part of this programme include the announcement of a €130 million facility in Eindhoven, the Netherlands, the opening of an $80 million facility in Bielefeld, Germany, and the construction of a $100 million hub in Evry, France.
ISLE OF MAN TYNWALD ORDER PAPER FOR MAY
The Order Paper for the May sitting of Tynwald, the parliament of the Isle of Man, includes the following items –
- Proceeds of Crime (Amendment of Schedule 4) Order 2018 – amends the Proceeds of Crime Act 2008 to include race totalisators and the provision of betting facilities as being businesses in the regulated sector and removing the business of supplying controlled machines (i.e. for the purpose of gambling).
- European Union (Central African Republic Sanctions) (Amendment) Order 2018 – applies Council Regulation (EU) 2018/387 of 12th March amending Regulation (EU) 224/2014 concerning restrictive measures in the view of the situation in the Central African Republic following the adoption of UN Security Council UNSCR 2399(2018).
- Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Civil Penalties Order 2018 – sets the time limits where an operator has to pay a civil penalty for contraventions of the provisions of section 22 of the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018, AML/CFT legislation or in relation to false, inaccurate or misleading information provided to the Gambling Supervision Commission.
- Isle of Man National Cyber Security Strategy 2018-2022 http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2018-GD-0029.pdf