24th May 2018
FLOOD OF SANCTIONS WORLDWIDE INCREASES UNCERTAINTY FOR SMALL BUSINESSES
Deutsche Welle on 23rd May reported that every day new sanctions are announced, imposed or lifted. SME can easily lose track of the situation, but some start-ups are turning the knowledge gap into a business opportunity. But how do small and medium-sized business maintain an overview of the daily announcements of the changes to or lifting of existing sanctions, and of sanctions newly agreed and ratified? Shrewd start-up companies are now offering software solutions that are updated daily and can be directly linked to a company’s own software giving as an example, small software manufacturer easycompliance.
BRAZILIANS ARRESTED ON SUSPICION OF SMUGGLING AFRICAN REFUGEES
The Citizen in South Africa reported on 23rd May that, according to AP, 2 Brazilians have been arrested for their alleged involvement in human trafficking after a group of African migrants set sail last month on a 3,000 km journey across the Atlantic to Brazil, but quickly ran into trouble and were adrift for weeks before fishermen towed them ashore. Each of the 25 migrants – who are from Senegal, Sierra Leone, Guinea, and Nigeria – paid on average €1,000 to make the journey.
BANNED GOODS FOUND IN CONTAINERS AT MAJOR VIETNAM PORTS
Viet Nam News on 24th may reported that Evidence of smuggling has been uncovered at 2 major ports in Ho Chi Minh City (formerly Saigon), with prohibited goods found in several containers left unclaimed during the past month. It cites as one example, a container of 95 air conditioners, 279 used bicycles missing several parts and 3 motorbikes was discovered by customs officials. Some 200 other containers filled with goods banned from import have been left unclaimed at the Cát Lái Port for more than 90 days. Alarmed by the situation, officials from the Customs Department have applied measures to prevent non-standard scrap from being imported [It may be that the import of such “trash” into Vietnam is not unrelated to the ban and crackdown on the import of waste into neighbouring China]
DOG BREEDER JAILED FOR 20 MONTHS AFTER SMUGGLING KNUCKLEDUSTERS AND BATONS THROUGH CARDIFF AIRPORT IN 3 SEPARATE SUITCASES
On 24th May, The Sun reported that Pedigree dog breeder Djaiz of Barry, South Wales, claimed the weapons (8 knuckledusters and 6 batons) were toys and for decoration brought back from a family holiday in Cyprus. However, admitted importing prohibited weapons and was jailed for 20 months.
BAHAMAS BENEFICIAL OWNERSHIP REGISTER “IS NOT SET IN STONE”
Tribune 242 in the Bahamas also reported on 23rd May that legislation to create a central Beneficial Ownership Registry is “not set in stone”, the Attorney General has revealed, with the Government seeking “urgent” consultation on the issue. Addressing a Bahamas Financial Services Board (BFSB)-sponsored seminar, he said the Register of Beneficial Ownership Bill 2018’s recent tabling in the House of Assembly allows the nation to be proactive and get ahead of the international regulatory initiatives it faces. He added that its tabling also signalled “the urgency for the administration to have a meaningful consultation on this issue” with members of the Bahamian financial services industry.
FOREIGN FIGHTERS HAVE HAD €200,000 FROM BELGIUM
The Brussels Times on 23rd May reported that in recent years, a total of nearly €200,000 has been paid to Syria and Iraq, according to De Tijd newspaper. The amounts sent have mainly been transferred by services such as Western Union. It bases its findings on the figures from the Anti-Money Laundering Cell. The €200,000 is thought to have been paid by around 100 donors. The majority of the time these were loved ones or friends of Belgian fighters.
OECD: COMPILATION OF PHASE ONE PEER REVIEWS FOR 95 JURISDICTIONS ON COUNTRY-BY-COUNTRY (CBC) REPORTING
On 22nd May, Accountancy Daily reported that this first annual peer review report reflects the outcome of the review which focused on the domestic legal and administrative framework and contains the review of 95 jurisdictions which provided legislation or information pertaining to the implementation of CbC Reporting whereby, to foster tax transparency, requires the largest multinational enterprise groups (MNE Groups) to provide the global allocation of their income, taxes and other indicators of the location of economic activity. This information on MNE Groups’ operations across the world will boost tax authorities’ risk-assessment capabilities.
SANCTIONS AND ANTI-MONEY LAUNDERING BILL PASSED BY UK PARLIAMENT
Accountancy Daily reported on 22nd May that the Sanctions and Anti-Money Laundering Bill has been agreed by the House of Commons and the House of Lords and was scheduled for Royal Assent on 23rd May. The Bill makes provision enabling sanctions to be imposed where appropriate for the purposes of compliance with UN obligations, other international obligations, for the prevention of terrorism, for national security, international peace and security or for furthering foreign policy objectives – in the light of Brexit.
SANCTIONS AND ANTI-MONEY LAUNDERING ACT RECEIVES ROYAL ASSENT
On 24th May, the FCO reported that the UK’s Sanctions and Anti-Money Laundering Act has received Royal Assent. It is described as the first of the Bills which prepares for life after the UK exit from the EU to complete its passage through Parliament.
CLAIMS UNDER “WAR RISKS” INSURANCE WHEN SHIP DETAINED FOR UNSUCCESSFUL ATTEMPT TO SMUGGLE DRUGS
Reed Smith on 23rd May reported on the UK Supreme Court of Navigators Insurance Company Limited v Atlasnavios-Navegacao LDA. In this case it was held that where a vessel was used by unknown third parties in an unsuccessful attempt to export cocaine from Venezuela (by strapping a parcel of drugs to the vessel underwater), leading to a detention of the vessel by Venezuelan authorities for more than 6 months, the owners were not entitled to recover the vessel’s insured value from the vessel’s war risk insurers. The decision involved interpretation of whether the intention had been to cause loss or damage of the ship, or of other property as a result of which the vessel is lost or damaged. The article points out that this was precise opposite of the intention of the drug smugglers: they, of course, had no wish to have the vessel detained.
FROM DJIBOUTI TO JEDDAH, THE WESTERN INDIAN OCEAN NEEDS SECURITY – MOVING FROM ANTI-PIRACY TO ALL-CRIMES
On 24th May, Defence Web reported a meeting this month in Jeddah where signatories to the Djibouti Code of Conduct (DCoC) and its 2017 Jeddah Amendments (DCoC+) explored how they could build on years of successful counter-piracy co-operation to create a regional maritime security architecture to tackle all crimes. The meeting also discussed the question common to all maritime codes, conventions and strategies – how to move from declarations of intent to effective action. The original DCoC of 2009 was intended to deal with piracy and armed robbery at sea, and its amendment to cover other important transnational maritime crimes including the trafficking of arms and narcotics, the illegal wildlife trade, illegal oil bunkering and theft, human trafficking and smuggling and the illegal dumping of toxic waste. States debated whether they should widen the code’s counter-piracy provisions to include non-traditional threats. The DCoC+ can provide the framework for linking all information-sharing centres and, if problems can be overcome, the 2018 Jeddah meeting could prove effective beyond piracy and the Indian Ocean to apply to West Africa too, and thus Africa as a whole.
FORMER TREASURER OF SPAIN’S RULING PARTY GETS 33 YEARS IN JAIL IN GRAFT CASE
Reuters on 24th May reported that Luis Barcenas, former treasurer of the People’s Party, has received a 33-year prison sentence and fined €44 million for money laundering, personal enrichment and a number of tax crimes – his part in a corruption case in which dozens of high-ranking party members have been jailed. The case relates to the use of a slush fund in the 1990s and early 2000s to illegally finance campaigns and has plagued Prime Minister Mariano Rajoy, who has denied any wrongdoing ever since he came to power in 2011.
COURT FINDS SPAIN’S RULING PARTY BENEFITED FROM BRIBERY SCHEME
SHOULD CONVICTED ETHNIC SERB JOIN TOP KOSOVAR COURT?
Rferl on 24th May reported that the office of Kosovo’s President says thorough “verification” is needed before he can make a decision on whether to allow Radomir Laban, an ethnic Serb convicted of corruption in neighbouring Serbia, to join Kosovo’s Constitutional Court. He was nominated by the Serbian List party that represents Kosovar Serbs, estimated at 5% of the population. The Serbian List has ties to Belgrade but at times has shown its independence. Laban, who has a law degree, was sentenced in 2011 in Serbia to 6 years in prison for corruption when he was working for the Serbian customs service. After his trial, Laban was provisionally released after serving 3 years pending the start of his sentence, but he instead fled to Kosovo.
TAX HAVENS BECOMING HOTBEDS FOR ICO PROJECTS
On 24th May, BTC Manager carried an article saying that while major jurisdictions have completely shut out the controversial fundraising method, tax havens have seemingly fully embraced the concept, and are reaping the rewards. It gives the example of Zac Cheah, the founder of blockchain-based payments company PundiX, who found the Isle of Man the ideal place to launch his project. According to a working paper from the University of Luxembourg, lesser-known hubs like the BVI, Gibraltar, and the Cayman Islands now count among the world’s top 10 ICO destinations, owing to their ease-of-ICO administration, laws, and tax benefits. For research purposes, the study sampled over 300 different ICO. Data collated from the 80 largest ICO, regarding funds collected, indicated that a quarter of the companies were concentrated around a few jurisdictions known for beneficial tax breaks, and included Curaçao, Mauritius, and St. Kitts and Nevis.
THE ICO GOLD RUSH: IT’S A SCAM, IT’S A BUBBLE, IT’S A SUPER CHALLENGE FOR REGULATORS
This University of Luxembourg working paper, revised in February, is available at –
RUSAL SAYS CEO, TOP DIRECTORS RESIGN OVER US SANCTIONS
Customs Today on 24th May reported that Russian aluminium giant Rusal has announced that its CEO and half of its board of directors had resigned to ensure the firm avoids US sanctions that targeted its founder Oleg Deripaska. In a statement it said the resignations were part of “the efforts that have been made by the management of the group to protect the interests of the company and its shareholders since the OFAC sanctions were imposed” last month.
US LOBBYING FIRM LAUNDERS AZERBAIJAN’S REPUTATION — AND GETS “LAUNDROMAT” CASH
OCCRP on 23rd May reported that some of the money that passed through the “Azerbaijani Laundromat”, a secret money laundering scheme and slush fund that saw €2.5 billion flow out of the country between 2012 and 2014, ended up in the hands of a purportedly private Azerbaijani organization that hired a Virginia firm, Bob Lawrence & Associates (BL&A), to lobby the US government for more than a decade – via a Baku-based organisation called Renaissance Associates.
PARALLEL IMPORT GUIDANCE CLARIFIED BY EUROPEAN COURT
A briefing from law firm Gowling WLG on 24th May said that the Court of Justice of the European Union (CJEU) has issued a ruling clarifying what you can, and cannot, do if you wish to import goods from one Member State of the EU to another. In summary, the article says, it has ruled that the trademark owner cannot oppose the further commercialisation of a medical device in its original internal and external packaging even where an additional label has been added by a parallel importer in certain circumstances. These are where, by its content, function, size, presentation and placement, the added label does not give rise to a risk to the guarantee of origin of the medical device bearing the trade mark.
CHINA’S NEW ANTI-BRIBERY AGENCY ANNOUNCES PHARMA PROBE
On 24th May, Allen & Overy reported that China’s State Administration for Market Regulation (SAMR) announced on 17th May the launch of a nationwide campaign to crack down on unfair competition and commercial bribery in the pharmaceutical, medical device and educational sectors. The announcement comes after several bribery scandals have rocked the Chinese pharmaceutical industry. The announcement likely signals that China is gearing up its enforcement efforts and looking into those industries that are most prone to corruption risk, particularly the pharmaceutical industry. The article identifies key takeaways for pharma and medical device companies operating in the PRC.
CRYPTOASSETS TASKFORCE TO EVALUATE NEED FOR CRYPTOCURRENCY REGULATION IN UK
Out-Law on 23rd May reported that the Cryptoassets Taskforce was set up in March and includes representatives from HM Treasury, the Bank of England and the FCA. It has met for the first time and it agreed on its objectives. According to a statement issued by the government, the taskforce will explore “the impact of cryptoassets, the potential benefits and challenges of the application of distributed ledger technology in financial services” and also assess “what, if any, regulation is required in response”. As part of its work, the taskforce will consider “existing analysis by the government and regulators” and it will also seek new views of “trade bodies, academics, consumer groups and investor representatives”, the statement said.
US RETURNS ANCIENT TEXTS TO IRAQ
Language Magazine on 23rd May reported that US Immigration and Customs Enforcement (ICE) has returned 3,800 ancient artefacts, including cuneiform tablets, cylinder seals, and clay bullae, to the Republic of Iraq. The artefacts were smuggled into the US in violation of federal law and shipped to Hobby Lobby Stores, Inc, a nationwide arts-and-crafts retailer.
COSTA RICA CONTINUES ON US LIST OF IP PIRACY PARADISES
Q Costa Rica reported on 23rd May that a report from the Office of the US Trade Representative (USTR) keeps Costa Rica among those countries that must be monitored for piracy – where the protection and enforcement of intellectual property have deteriorated or have remained at inadequate levels in accordance with international legislation in this area. According to the Report, although Costa Rica has made efforts in this area, they have been insufficient.
PODCAST: ALL ABOUT RICO
In the latest TRACE podcast, Jim Trusty, previously responsible for the RICO review unit at the US DoJ, talks about the US racketeering law and how it has been used against the Mafia, MS13 and, more recently, FIFA.
THAI MONKS ARRESTED IN BID TO ‘CLEAN UP BUDDHISM’ FROM GRAFT
Baker Mckenzie on 24th May reported that several prominent Buddhist monks and worshippers were arrested in Thailand after police raided 4 temples in this year’s biggest operation to crackdown on illicit financial activities. The raids are the military government’s latest bid to reform Buddhism, whose image has been tarnished by money and sex scandals involving monks.
GHANA PRESIDENT ORDERS GRAFT PROBE OF SOCCER BODY CHIEF
Baker McKenzie reported on 24th May that Ghana’s President ordered a probe into the conduct of the head of the country’s soccer association, Kwesi Nyantakyi, due to alleged fraud, according to his office.
INTERPOL WORKING ON VOICE SAMPLE DATABASE
The Bulletin of Atomic Scientists reported on 24th May that Interpol is planning to field a software-and-database platform that will allow law enforcement authorities from 192 countries to match any “lawfully intercepted” voice sample to a “blacklist” database. The “lawfully intercepted” samples “could come from mobile, landline, or voice-over-Internet-protocol recordings, or from snatches of audio captured from recruitment or propaganda videos posted to social media.” Samples could also be culled from “ambient speech”—otherwise known as talking in public.
For more information see –
COURT OF APPEAL REJECTS LEGAL CHALLENGE TO GANG INJUNCTION OBTAINED BY LOCAL COUNCIL
Local Government Lawyer on 24th May reported that the Court of Appeal has rejected a challenge from a 21-year-old man that a gang injunction obtained by Birmingham City Council breached human rights law. Part 4 of the Policing and Crime Act 2009 introduced a new remedy enabling the county court or the High Court to grant an injunction for the purpose of preventing gang-related violence (including the protection of those involved with it from such further violence). In February 2016, Birmingham City Council obtained interim injunctions against members of the Guns and Money Gang, the Johnson Crew and the Burger Bar gang. An appeal to the High Court that the order was incompatible with Article 6 of the European Convention on Human Rights was heard in October 2016 but failed, but a fresh appeal was launched and this has now failed. In its judgment, the Court said that the legislation does not trigger the bringing of a criminal charge for the purposes of Article 6 of the ECHR and neither is the requirement that the court address the issues on the balance of probability a breach of Article 6.
DUBAI INTERNATIONAL FINANCIAL CENTRE CONSULTATION INCLUDES BENEFICIAL OWNERSHIP PROPOSALS
On 24th May, Mondo Visione carried a release saying that the Dubai International Financial Centre (DIFC) has proposed the enactment of legislation to enhance the regulation of the conduct of business in the DIFC, bringing it in line with international best practice and the global trend towards transparency and accountability. This includes new Ultimate Beneficial Ownership Regulations and new Protected Cell Company Regulations and Investment Company Regulations.
US BANS IMPORTATION OF ALL TURKMENISTAN COTTON OR PRODUCTS PRODUCED IN WHOLE OR IN PART WITH TURKMENISTAN COTTON ON FORCED LABOUR GROUNDS
On 23rd May, Crowell Moring reported that on May 18th CBP issued an order banning the importation of all Turkmenistan cotton or products produced in whole or in part with Turkmenistan cotton using the Trade Facilitation and Trade Enforcement Act of 2015. That Act prohibits all products made by forced labour, including child labour, from being imported into the US. It is alleged that the Turkmen government forces public sector employees under threat of punishment, including loss of wages and termination of employment, to pick cotton.
CHINA FINES JAPANESE RETAILER FOR PACKAGING THAT LISTS TAIWAN AS A COUNTRY
On 24th may, Reuters reported that Japanese retailer Muji has been fined £23,445 in Shanghai for using packaging that lists Taiwan as a country, underscoring China’s growing sensitivity to how companies refer to the self-ruled island.
UN AMENDS 1 ENTRY ON ITS NORTH KOREA SANCTIONS LIST
On 23rd May, the UN announced that the relevant Sanctions Committee made a minor amendment to the entry relating to WEIHAI WORLD-SHIPPING FREIGHT.
AUTHORISED ECONOMIC OPERATOR (AEO)
On 24th May, HMRC issued updated guidance explaining what an AEO is, and the advantages of being one. It explains that AEO status is an internationally recognised quality mark (with similar programmes in other trading countries) indicating that your role in the international supply chain is secure, and that your customs controls and procedures are efficient and compliant. It is not mandatory, but (especially under the Union Customs Code) it gives quicker access to certain simplified customs procedures and in some cases the right to ‘fast-track’ your shipments through some customs and safety and security procedures. You can apply for AEO status for customs simplification (AEOC), AEO status for security and safety (AEOS) or both.
THIRD COUNTRIES ALIGN THEMSELVES WITH THE BURMA/MYANMAR SANCTIONS OF THE EU
On 24th May, the EU announced that Turkey, Macedonia, Montenegro, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway, Moldova and Armenia have agreed to align their sanctions regimes in line with those of the EU.
LICENCE AND REGISTRATION APPLICATION INFORMATION FOR COMPANIES THAT DEAL IN PRECURSOR CHEMICALS
On 24th May, the Home Office issued updated guidance relating to the legal trade and effective control of chemicals capable of being used in the illicit manufacture of narcotic drugs and psychotropic substances is an important tool in combating drug trafficking. These chemicals, known as ‘precursors’, also have legitimate commercial uses as they are legally used in a wide variety of industrial processes and consumer products, such as medicines, flavourings and fragrances.
LATVIA WARNS ITS CLAMPDOWN IS PUSHING HOT MONEY TO EUROPE
Reuters on 24th May reported that Latvia has warned the EU to bolster fragmented money laundering controls as much of the cash now leaving the Baltic state to escape tighter scrutiny is going to other EU countries. The warning was issued by the country’s prime minister and finance minister in interviews with Reuters.
ISRAELI ATTORNEY GENERAL LIKELY TO INDICT MINISTER HAIN KATZ
On 24th May, the Jerusalem Post reported that the Attorney General has informed Labor and Social Services Minister Haim Katz that he will likely indict him for bribery, fraud, and breach of trust subject to a pre-indictment hearing. The investigation looked into the period of time in which Katz served as the organization’s chairman of the National Workers Union. A police statement in February had said that they had found enough evidence to indict Katz and other senior Israel Aerospace Industries (IAI) officials with offences of bribery, fraud, breach of trust and forceful extortion.
NEW US BILL TO REDUCE SYNTHETIC IDENTITY FRAUD
Info Security on 24th May reported that the US Congress has passed an anti-fraud measure as part of a new Act with one of the sections establishing guidelines to help prevent synthetic identity fraud. Synthetic identity fraud is a tactic where criminals fashion identities made up, in part, from credit-inactive Social Security numbers (SSN). Cybercriminals will then use those identities to secure loans and commit other online crimes. When cybercriminals use parts of an individual’s identity – particularly those of children – years can pass before the victim realises their identity has been compromised.
UPDATE: AUCTION OF ‘INDIAN EMPRESS’ SUSPENDED
Superyacht News on 24th May reported that the auction of the superyacht formerly owned by Indian tycoon Vijay Mallya (currently fighting extradition in London), which was due to be auctioned on 21st May, has seen its planned auction suspended after the court in Malta agreed to suspend the auction and has ordered all interested parties to appear before it on 28th May.
CHINA BUSTS ANOTHER ONLINE GAMBLING RING
Calvin Ayre on 24th May reported that police in China’s southern Guangdong province have broken up yet another major online gambling ring with a series of raids in the cities of Shenzhen, Guangzhou and Jieyang in March. Over 150 suspects, including the 5 alleged ringleaders, were detained in the raids.
NEW SANCTIONS LIST ISSUED BY UKRAINE INCLUDES RIA NOVOSTI NEWS AGENCY
On 24th May, Rferl reported that an updated and expanded list of prominent Russians and entities subjected to Ukrainian sanctions was issued by Ukraine on 24th May. It contains 1,748 individuals and 756 legal entities – up from 1,228 individuals and 468 legal entities just 1 year ago. The RIA Novosti office and the Interselekt company, which carried out all the agency’s economic activities in Kyiv, are banned for 3 years.