22nd May 2018
US CHAMBER OF COMMERCE, OTHERS BACK CHANGES ON FOREIGN INVESTMENT IN TECH
Euronews on 21st May reported that the US Chamber of Commerce, along with business groups which lobby for oil, tech, and other industries, said that they supported changes to draft legislation to tighten oversight of foreign investment, especially Chinese investment. Due to concern about Chinese attempts to invest in sensitive US technologies, the Senate and House of Representatives are considering measures to expand the clout of the inter-agency Committee on Foreign Investment in the United States (CFIUS) which reviews investments to ensure they do not harm national security. The Bills were designed to address Defense Department concerns but further draft changes address business concerns. For example, they remove a measure that would require CFIUS to review joint ventures that could lead to technology transfer, delaying proposed transactions. CFIUS has killed a long list of deals, including attempts to purchase semiconductor companies such as Qualcomm Inc and the proposed acquisition of US semiconductor testing company Xcerra Corp by a China state-backed investment fund.
ZIMBABWE’S CROCODILE INDUSTRY RISES AGAINST THE TIDE
Al Jazeera on 21st May reported that Zimbabwe reptile farmers are dealing with increasing regional competition and challenges getting their products to market and are calling for government reforms to allow them to keep their lead against regional competitors. According to a 2017 UN Environment Programme (UNEP) report, over 2 million crocodile skins are traded annually around the world and after the US, Zimbabwe ranks as the world’s second-largest exporter of the reptile products. 90% of the crocodile business is in exports.
CHINA LAUNCHES FRESH CAMPAIGN AGAINST GARBAGE SMUGGLING
The Strait Times on 22nd May reported that China has launched a fresh crackdown against rubbish smuggling from overseas in the latest move to curtail the inflow of foreign garbage and strengthen its “war on pollution”. China’s customs administration announced the effort but provided no details other than to say the campaign would be huge. China told the WTO last year that it would stop accepting imports of 24 types of foreign waste by the end of the year and that it would phase out shipments of other waste products, including those readily available from domestic sources, by the end of 2019. The move has thrown the global recycling industry into turmoil and left domestic recyclers to cope with raw material shortages. Customs said in early April that it had seized 110,000 tonnes of smuggled solid waste this year and arrested 52 people. Earlier this year, the customs announced China’s “National Sword 2018” campaign to clamp down on 5 major areas of smuggling. The movement prioritizes the crackdown on foreign garbage smuggling as “Project No.1,” with greater significance than drugs and ivory smuggling.
LIBYA TO INVESTIGATE COMPANIES SUSPECTED OF SMUGGLING HARD CURRENCY THROUGH LETTERS OF CREDIT
The Libya Herald on 21st May reported that the Governor of the Central Bank of Libya (CBL) has instructed the CBL’s Anti Money Laundering Crimes Unit to open an urgent investigation into a number of Libyan companies accused by the Audit Bureau of smuggling hard currency through documentary letters of credit.
GREEK POLICE BUST TOBACCO SMUGGLING GANG
Ekathimerini on 21st May reported that the financial crime unit of the Greek Police said on Monday that it had broken a criminal gang that earned profits of more than €100 million from the manufacture and distribution of illegal tobacco products.
UN CONSIDERS SANCTIONS ON LIBYA MIGRANT SMUGGLERS
i24 News on 21st May carried an AFP piece saying that the UN Security Council is considering imposing the first-ever sanctions on migrant smugglers in Libya, targeting 6 leaders of trafficking rings, but that Russia has requested more information. The proposed sanctions list includes 2 Eritrean nationals described as top operators in transnational smuggling networks and 4 Libyans including the head of a regional coast guard unit. The list was presented on 1st May, and the Russian delay was requested on 8th May. On the list is Ermias Ghermay of Eritrea, described as a leader of a network responsible for “trafficking and smuggling tens of thousands of migrants” from the Horn of Africa to the coast of Libya and onwards to Europe and the US, according to the sanctions request obtained by AFP. The other 5 are Fitiwi Abdelrazak of Eritrea, Libyan militia leader Ahmad Oumar al-Dabbashi, Libyan Musab Abu-Qarin, described as a “central actor” in migrant smuggling in the coastal area of Sabratha, Libyan Mohammed Kachlaf, head of the Shuhada al Nasr brigade in Zawiya, western Libya and Abd al Rahman al-Milad, who heads the Libyan coast guard in Zawiya.
BITCOINS SEIZED FOR FIRST TIME IN ISRAELI FRAUD AND MONEY LAUNDERING CASE
Ethereum World News reported that Hilmi Git has been indicted by the cybercrime department of the State Attorney’s office for carrying out over 20,000 fraudulent credit card transactions and laundering money through the Bitcoin network. This is the first time in Israeli law that Bitcoin has been seized, and the state will file to confiscate the 1,000+ Bitcoin if Git is convicted. The indictment alleges that Git made fraudulent transactions worth $280,000 and laundered over $8 million. The article says that Git’s indictment is a landmark case in the state of Israel which has set a precedent for Bitcoin seizure and may do the same for the confiscation of Bitcoin involved in a criminal operation.
IRISH MINISTER MADE TAX BLACKLIST PLEA TO BRAZIL
The Times on 22nd May reported that Ireland has tried unsuccessfully to lobby for removal from Brazil’s list of nations classed as tax havens. Brazil’s federal revenue service added Ireland in 2016 to its register of tax havens, which includes jurisdictions such as Panama, Monaco and the Isle of Man. This meant companies based in Ireland had to pay a 25% tax rate on deals with businesses from Brazil instead of the 15% that previously applied. The Irish government has been campaigning to be removed from the list and has consistently refuted any suggestion that the country is a tax haven.
RAISING THE GLOBAL BAR FOR SECURITY CLEARANCE OF CROSS-BORDER MERGERS AND ACQUISITIONS
On 18th May, White & Case published a briefing saying that a clampdown by governments across the world on potential security threats has increased the scrutiny of participants seeking clearance for cross-border mergers and acquisitions. The article provides an update on developments in Australia, Canada, France, the EU, Japan, Russia, Italy, Germany, China, the UK and US.
UK HOUSE OF LORDS APPOINTS NEW SELECT COMMITTEE TO REVIEW BRIBERY ACT
On 21st May, Addleshaw Goddard reported that the House of Lords had established a new ad hoc Select Committee that will review certain elements of the Bribery Act 2010. It is to consider whether the Act has had the intended effect of stricter prosecution of corrupt conduct, a higher conviction rate and a reduction in such conduct and if SME are sufficiently aware of the Act and how it applies to them. It may also consider the effect of deferred prosecution agreements (DPA) and their application beyond the scope of Bribery Act offences. The Committee is to report on its findings by the end of March 2019.
CONFIDENTIALITY CLUBS – A DEPARTURE FROM OPEN JUSTICE?
Mishcon de Reya on 21st May reported on concerns arising from civil courts in the UK having to undertake a balancing exercise, weighing up unfettered access to a party’s documents with risks that arise from such access. Those risks may relate to damage to commercial rights (such as trade secrets) or risks to the life, limb or property of third parties. This issue came before the High Court in The Libyan Investment Authority v Société Générale SA and others. In this case, due to the “perilous and lawless situation in war-torn Libya”, the Court imposed a “confidentiality club” on the LIA, putting strict limits on who could be given the names of certain individuals involved on the basis that not doing so would expose them to an immediate risk of loss of life or limb. This also required the use of “secure communications systems” where the individuals were anonymised, with “confidential information and material” which could only be seen by named “relevant persons”, including solicitors, counsel, forensic accountants and IT and data management teams, who had given an undertaking to the Court to preserve the confidentiality in it. Confidentiality clubs are not all the same but at their heart they work by limiting who can see the evidence received from another party, where and how they can see it and whether they can copy or share it with others. Strict confidentiality clubs can even prevent the parties themselves from gaining access to other party’s disclosed documents, limiting access to solicitors and counsel (and perhaps experts); although this level of lockdown almost never continues all the way to trial.
44 AFRICAN COUNTRIES SIGN AGREEMENT TO ESTABLISH AFRICAN CONTINENTAL FREE TRADE AREA
Jones Day on 21st May reported that in March 44 African states signed the draft Agreement Establishing the African Continental Free Trade Area (CFTA) and other related protocols. 44 of the 55 Member States of the African Union signed the agreement and when 22 states have ratified, the Agreement enters into force. The percentage of intra-African trade is only 16%, compared to 70% in the EU – said to be largely due to the former’s reliance on extractive industries. The article considers the potential implications for foreign companies, and advantages EU companies might have over others. Africa’s 2 largest economies — Nigeria and South Africa — did not sign the Agreement in Kigali, though both are expected to join in due course. The article concludes with 3 key takeaways –
- The CFTA is a bold step forward. It potentially heralds transformative economic relations between African countries, as well as significant economic growth and industrialization in Africa.
- If fully implemented, the CFTA can also make Africa a much better economic partner for non-African companies. But implementation is likely to prove challenging.
- Thus far, the U.S. response has been muted. At present, European and Chinese companies are probably better positioned to take advantage of the changes likely to be brought by the CFTA.
SHIPPER’S LETTER OF INSTRUCTION (SLI)
The usually interesting Shipping Solutions blog carried a post on 21st May about SLI saying that by completing an SLI and sending it to the freight forwarder, you are establishing a best practice for your business. You have a written record of who received the shipping documents, who to contact for questions, who to contact for proof of export, and who issued the export control documentation that supports the decision to send your products to your foreign customer. It provides several reasons for completing an SLI. It also says that the National Customs Brokers and Forwarders Association of America (NCBFAA) in the US has developed a template for the SLI. It also says one should not continue to use the old Shipper’s Export Declaration (SED) as it does not contain all the necessary data required under the US Freight Trade Regulations.
The National Customs Brokers and Forwarders Association of America (NCBFAA) was established in 1897 and represents many of the leading freight forwarders, customs brokers, ocean transportation intermediaries (OTI), NVOCCs and air cargo agents, serving more than 250,000 importers and exporters in the US. The website contains much useful information on such programmes as the Broker Known Importer Program (BKIP) which establishes a process for licensed, permitted US customs brokers to identify importers in connection with their import related activities.
HOW NORTH KOREAN HACKERS BECAME THE WORLD’S GREATEST BANK ROBBERS
On 16th May, Global Post Investigations published an article saying that the Reconnaissance General Bureau, North Korea’s equivalent to the CIA, has trained up the world’s greatest bank-robbing crews. In just the past few years, RGB hackers have struck more than 100 banks and cryptocurrency exchanges around the world, pilfering more than $650 million. It says that they struck an account managed by the Federal Reserve Bank of New York, an institution renowned for its security.
The feature includes a BBC World Service podcast excerpt.
EU TO SPLIT TRADE AND INVESTMENT AGREEMENTS
On 22nd May, the EU Observer reported that EU trade ministers have given the go-ahead to the Commission’s plans to split investment and free trade agreements in the future, following a ruling by the ECJ in March saying that investment and dispute settlement arrangements cannot be established without Member States’ consent. This opens the door for future investment deals to be ratified by the 38 national and regional parliaments.
REVISED PACE CODES C, H, E AND F
On 22nd May, the Home Office published a news release advising that following the consultation period, revised Police and Criminal Evidence Act 1984 Codes were laid before Parliament on 21st May, and will come into force 21 days from that date. The Codes affected are Code C (revised code of practice for the detention, treatment and questioning of persons by police officers); Code H (the detention, treatment and questioning by police officers of persons in police detention…under Terrorism Act 2000 or Counter Terrorism Act 2008); Code E (revised code of practice on audio recording interviews with suspects); and Code F (revised code of practice on visual recording with sound of interviews with suspects).
SWITZERLAND OPENS CRIMINAL PROBE TIED TO ANGOLA FUND
News 24 in South Africa reported on 22nd May that Swiss authorities have raided multiple sites as part of a money laundering probe tied to Angola’s sovereign wealth fund. The Swiss are reported to have it “opened criminal proceedings in April 2018 in response to reports of money laundering… by persons unknown connected with alleged offences involving assets held by the National Bank of Angola (BNA) and the Fondo Soberano de Angola, the Angolan sovereign wealth fund”.
UKRAINE’S POROSHENKO – WE’VE LISTENED TO FOREIGN PARTNERS ON CORRUPTION LAW
Reuters on 22nd May reported that President Petro Poroshenko said that Ukraine had taken into account most international recommendations in the latest draft law to create an anti-corruption court.
CYPRUS DEVELOPMENT BANK FINED FOR AML SHORTCOMINGS
The Cyprus Business Mail on 22nd May reported that the Central Bank of Cyprus fined the Cyprus Development Bank (CDB) €715,000 for failing to comply with the provisions of legislation for the prevention and suppression of money laundering. The CDB fine is one of the highest ever imposed by the bank supervisor and was announced days after authorities announced the launch of a campaign to improve Cyprus’s reputation tarnished by allegations that its financial system had in the past failed to prevent the laundering of illicit funds.
SFO HAS BROUGHT FRESH BRIBERY CHARGES AGAINST UNAOIL IN RELATION TO A £555MILLION CONTRACT
On 22nd May, Energy Voice reported that the SFO has accused the Monaco-based company of using bribery to help Leighton Contractors Singapore win the half-a-billion-pound contract to build oil pipelines in southern Iraq. Basil Al Jarah, who was the firm’s Iraq partner and lives in Hull, has been charged with 2 offences of conspiracy to give corrupt payments. Meanwhile, Ziad Akle is also facing an offence of conspiracy to give corrupt payments. These adds to charges already in place against the pair relating to the award of contracts to Unaoil’s client SBM Offshore, and 2 other men have also been charged,
COMBATTING IMPORTS OF ILLEGALLY HARVESTED SEAFOOD IS AIM OF US COMMERCE DEPARTMENT INQUIRY
On 22nd May, Sandler Travis Rosenberg reported that the Department of Commerce is seeking information regarding nations whose vessels are engaged in illegal, unreported, or unregulated (IUU) fishing, bycatch of protected living marine resources, and/or fishing activities in waters beyond any national jurisdiction that target or incidentally catch sharks. Information that may prove useful includes trade data supporting evidence that a nation’s vessels are engaged in shark catch on the high seas; reports from off-loading facilities, port-side government officials, enforcement agents, military personnel, port inspectors, transshipment vessel workers, and fish importers; and reports from governments, international organisations, or NGO. The deadline for information being supplied is 31st December.
JERSEY BUSINESS TENDENCY SURVEY
On 22nd May, Jersey released the latest quarterly Jersey Business Tendency Survey (BTS) provides timely, qualitative information about the Island’s economy.
GUERNSEY ECONOMIC OVERVIEW PUBLISHED
On 22nd May, Guernsey published the report, produced by Strategy and Policy, which brings together core government data to provide an overview of current economic conditions.
MOSCOW GOLD: FOR CITY LAWYERS, THE OLIGARCH ERA IS OVER
The Lawyer on 22nd May reported that the changing political environment is making life harder for the London lawyers servicing Russia’s super-rich.
MALAYSIA TO INVESTIGATE MANAGEMENT OF 1MDB DEVELOPMENT COMPANY
On 21st May, Jurist reported that the Malaysian government announced the creation of a special task force to look into whether there were criminal acts committed by the management of 1MDB. The task force is asked to identify and seize assets that were acquired from the illegal siphoning from the state fund.
US CANDLE INDUSTRY – CUSTOMS DUTY ON PETROLEUM WAX CANDLES FROM CHINA UPHELD
A news release from the National Candle Association on 21st May reported that the US Court of International Trade has upheld a customs duty on petroleum wax candles imported from China. This ruling will continue to protect US candle manufacturers and their suppliers from the unfair dumping of inexpensive petroleum wax candle imports from China. The Trade Associates Group Ltd., a US importer of candles, had contested the 108.3% duty that applies to all petroleum wax candles from China, regardless of the candles’ shape, with the limited exception of birthday candles, utility candles, and figurines.
ONLINE NETWORK SEEKS TO BOOST INTERNATIONAL COLLABORATION AGAINST WILDLIFE TRAFFICKING IN CENTRAL AFRICA
Mongaby on 21st May reported that 5 countries that are home to some of the most iconic and threatened animal species in the world have joined forces in a high-tech collaboration to improve wildlife law enforcement. Cameroon, Gabon, the Republic of Congo, the Democratic Republic of Congo and the Central African Republic have formed the Africa Trade in Wildlife Information eXchange (Africa-TWIX). It is modelled on EU-TWIX, which consists of a mailing list and a database, both secured, to centralize and classify information relating to wildlife infractions and seizures. The mailing list, currently sent to nearly 115 officials (out of 131 designated people) involved in wildlife and forestry law enforcement from the 5 countries, aims to enable Central Africa’s national enforcement authorities to communicate and collaborate on wildlife crime investigations.
VIRTUAL KIDNAPPING IN THE UNITED STATES
Control Risks on 22nd May produced a podcast about “virtual kidnapping” – a crime which is traditionally associated with Latin America, but which is also very common in the US. This is where an extortionist claiming falsely (by phone) that someone has been kidnapped and demanding a ransom for their release. Despite how common it is there and how much local coverage incidents get, most people still don’t know about virtual kidnapping, and so it continues to thrive. Raising awareness of the crime is the only real impediment to it spreading. The interviewee says it continues to thrive because of lack of knowledge of it.
SOLICITOR STRUCK OFF FOR MISCONDUCT THAT LANDED HIS FIRM RECORD FINE
Legal Futures on 22nd May reported that Jonathan Denton, the former partner whose conduct in a dubious investment scheme led to the record £500,000 fine for US law firm Locke Lord last year has been struck off by the Solicitors Disciplinary Tribunal (SDT).
US DOJ ANNOUNCES POLICY TO DISCOURAGE LAW ENFORCEMENT AGENCIES AND REGULATORS FROM “PILING ON” DUPLICATIVE AND PARALLEL PENALTIES
On 21st May, Clifford Chance reported that on May 9th, Deputy Attorney General Rod Rosenstein announced that the US DoJ would implement a new policy discouraging regulators and law enforcement agencies engaged in parallel investigations from “piling on” multiple penalties for the same misconduct.
FUEL SMUGGLING COSTS GHANA $200 MILLION A YEAR
Modern Ghana on 20th May reported that Ghana lost $200 million in both 2016 and 2017 as a result of the smuggling of fuel into the country, the National Petroleum Authority has revealed – with a claim that up to 300,000 metric tonnes of fuel used in the country are not recorded and no taxes paid on them. The illegal activity which is done through depots mainly in Tema and Takoradi is one of the major challenges affecting the petroleum sector.
EU TO REACTIVATE 1996 BLOCKING REGULATION AGAINST US SANCTIONS ON IRAN
On 22nd May, Wilmer Hale provided a comprehensive briefing following the launch, on 18th May, by the EU Commission of a formal process to reactivate a 1996 trade defence law in response to the US withdrawal from JCPOA with Iran. Once reactivated, this law (the EU Blocking Regulation) would seek to prevent European companies from complying with any sanctions the US may reintroduce against Iran.
NEW TRADE BODY FORMED IN US TO HELP SHIPPERS USE BLOCKCHAIN TECHNOLOGY IN SUPPLY CHAINS
On 22nd May, Loadstar reported that Blockchain in Transport Alliance (BiTA), the North American association of transport and logistics companies looking to develop industry standards for the use of blockchain technology in logistics has launched a sister organisation for supply chain professionals. Although BiTA has a substantial number of 3PL members, it is currently dominated by the vast US road freight industry. BiTA announced the launch of the Blockchain in Supply Chain Alliance (BiSCA) which would be based around 4 key pillars of activity: procurement, planning, transport and warehousing. Denver University and the US Air Force had joined, and shipping giant Panalpina has announced it has joined BiTA, saying it sees many advantages of blockchain technology for freight forwarding and logistics operations.
SWEDEN TELLS CITIZENS HOW TO PREPARE FOR WAR – FOR FIRST TIME IN 30 YEARS
EU: SMUGGLING OF GLASS EELS VALUED AT €10 MILLION – 17 ARRESTS
On 22nd May, Eurojust published a news release saying that Greek and Spanish law enforcement bodies and judicial authorities, supported by Eurojust and Europol, have dismantled an international criminal network suspected of having smuggled in the current season over 10 tonnes of eels from the EU to China, with a profit estimated at €10 million. A co-ordinated operation carried out in Greece and Spain led to 17 arrests. In addition, approximately 2 tonnes of eels worth €2 million were seized, along with data storage devices, documents, luxury cars and approximately €1 million in cash.
2 IMMIGRATION OFFICIALS AT AUSTRALIAN HIGH COMMISSION IN SOUTH AFRICA SACKED FOR VISA FRAUD
ABC News on 22nd May reported that 2 locally engaged staff at the Australian High Commission in Pretoria have been dismissed for allegedly issued illegal visas to high-risk Nigerian students.
EU SANCTIONS AGAINST RUSSIA : WHAT’S NEXT?
On 22nd May, the European Parliamentary Research Service Blog published an article following the EPRS roundtable discussion on the topic of ‘EU sanctions against Russia: What next’, held in the European Parliament library on 16th May.
GUERNSEY SETS OUT STANCE ON PUBLIC COMPANY OWNERSHIP REGISTERS
On 22nd May, Tax News reported that Guernsey’s Chief Minister has told the island’s parliament that Guernsey will make beneficial ownership information publicly accessible if it becomes an internationally adopted standard.
THAILAND INTRODUCES VIRTUAL CURRENCY TRADING TAX RULES
Tax News on 22nd May reported that in a last-minute change ahead of the implementation of new tax rules for virtual currency trading, Thai lawmakers agreed that virtual currency trading on regulated exchanges should be exempt from VAT. However, gains will be subject to a 15% capital gains tax charge, with the tax to be subject to withholding, and a 7% VAT charge will be assessed where trades take place off an approved exchange.
IRELAND ISSUES TAX GUIDANCE ON PEER-TO-PEER LENDING
Tax News on 22nd May reported that the Irish Revenue has published new guidelines on the withholding tax obligations of companies paying interest on finance raised through peer-to-peer lending or crowdfunding campaigns.
SWEDEN: WARNING TO MEDIA OUTLETS ON TAKING ADVERTS FOR FOREIGN GAMBLING SITES
Calvin Ayre on 22nd May reported that Sweden’s gambling regulator has issued warnings to 39 digital media outlets to stop promoting international gambling sites.
US TREASURY BOOSTS RULES AIMED AT CRACKING DOWN ON MONEY LAUNDERING IN REAL ESTATE
On 22nd May, Baker McKenzie reported that FinCEN has released another set of rules requiring title companies to disclose the identity of all-cash buyers who purchase luxury property under the guise of an LLC – but it has instructed title companies not to disclose details of the new geographic targeting order (GTO), so we do not know where the GTO affect.
TURKISH SHIP ATTACKED OFF YEMEN
Janes.com on 22nd May reported that Iranian-backed Yemeni rebel group Ansar Allah (Houthis) was responsible for an attack on the Turkish-flagged bulk carrier Ince Inebolu. The ship was carrying wheat from the Russian Black Sea port of Novorossiysk to Yemen via Djibouti.
US AGENTS SEIZE FAKE CHINESE GOODS WORTH $16 MILLION IN TEXAS
Illicit Trade on 22nd May reported that officers from US Immigration and Customs Enforcement (ICE) have seized Chinese-made counterfeit luxury items estimated to be worth $16 million in the Texan city of Laredo. They impounded 78,908 suspected fake items, including clothing and electronics products labelled as Adidas, Apple, Hermes, Louis Vuitton, Nike, Samsung and Sony.