OTHER THINGS YOU MAY HAVE MISSED – JUNE 16

16th June 2018

LIST OF CHINESE PRODUCTS TO BE SUBJECT TO US SECTION 301 TARIFFS AND CHINA RESPONDS BY IMPLEMENTING RETALIATORY TARIFFS IN KIND

On 15th June, an International Trade, Investment and Market Access Alert from law firm Wilmer Hale detailed how both the Office of the US Trade Representative (USTR) and the Chinese Ministry of Finance announced that products imported under certain tariff lines from China and from the US, respectively, would be subject to an additional duty of 25%.  The Alert noted that the additional tariffs are only one part of the actions that the President has directed and that the Administration has already filed a request for consultations with China at the WTO with respect to certain Chinese technology licensing requirements.  It also plans to impose investment restrictions and export controls on Chinese companies in an effort to limit China’s acquisition of “industrially significant” technology (these investment restrictions will be announced by June 30th).

https://wilmerhalecommunications.com/26/2570/june-2018/ustr-releases-list-of-chinese-products-to-be-subject-to-section-301-tariffs–and-china-responds-by-implementing-retaliatory-tariffs-in-kind.asp?sid=0a8b1c86-3f90-4bcc-8166-5d47efcc1e4e

BEIRUT AIRPORT “A SMUGGLING POINT FOR HEZBOLLAH”

The Washington Times on 15th June published an article claiming that reports indicate that Hezbollah smuggles forces, weapons and drugs via Beirut Rafic Hariri International Airport, and that Hezbollah allowed the Iranian Revolutionary Guard Corps (IRGC) to use the airport as a base for transporting weapons and fighters to other locations and countries.

https://www.washingtontimes.com/news/2018/jun/15/pro-iranian-hezbollah-uses-beirut-airport-smugglin/

ASSET MANAGEMENT FIRM FINED BY IRISH CENTRAL BANK AFTER CLIENT LOST €650,000 IN CYBER-FRAUD

RTE on 15th June reported that Appian Asset Management has been fined a total of €443,000 and reprimanded it for significant breaches of regulations which resulted in the loss of a client’s funds due to cyber-fraud.  This is said to be the first time the Central Bank has fined a company for the loss of client funds from cyber-fraud as a direct result of a firm’s “significant regulatory breaches and failures”.  Breaches, including in the AML regime, have been admitted.  In the wake of the incident the firm is said to have introduced new client asset and AML/CFT policies and procedures and introduced new controls in respect of the management of client assets.  It had been found to have inadequate policies and procedures to monitor transactions, detect and report money laundering and provide its staff with appropriate training.

https://www.rte.ie/news/business/2018/0615/970719-appian-asset-management-fine/

VIJAY MALLYA ORDERED TO PAY £200,000 ORDER COSTS TO INDIAN BANKS BY UK HIGH COURT

The Indian Express on 15th June reported that Indian liquor baron Vijay Mallya has been directed to pay a minimum of £200,000 towards the costs incurred by 13 Indian banks –towards registration of the worldwide freezing order and of the Debt Recovery Tribunal (DRT) of Karnataka’s judgment in the UK.  As well as the debt recovery case launched by the banks, Mallya is also fighting an extradition to India on fraud and money laundering charges.  The final hearing in the extradition case is likely to take place on July 31st.

https://indianexpress.com/article/india/vijay-mallya-ordered-to-pay-200000-pounds-to-indian-banks-by-uk-high-court/

MONEY LAUNDERING THROUGH THE BLACK MARKET PESO EXCHANGE (BMPE)

On 12th June, Lane Powell PC published an article about BMPE, a trade-based money laundering technique commonly used by narcotics traffickers based in Colombia and Mexico.  It points out that the central feature is the use of a money trader to ensure that the revenue from drug sales in the US doesn’t actually cross any borders.  Instead, those dollars are used to purchase any number of legitimate commodities from unsuspecting businesses on behalf of legitimate South American businesspersons whose legitimate imports are used to obtain pesos for the drug cartels.

https://www.targetletterlaw.com/2018/06/12/money-laundering-through-the-black-market-peso-exchange/#page=1

For some additional information on BMPE and example cases, see –

https://www.gov.im/media/1348726/notice-1000-man-trade-based-money-laundering-29-sep-17.pdf

DRUGS BARON JAMES MULVEY’S £68 MILLION FINANCES TRACED THROUGH ISLE OF MAN COMPANIES

Birmingham Live on 16th June reported that jailed drug baron James Mulvey funded his high-rolling lifestyle through offshore transactions that included £11.5 million going through one business alone.  Investigators are continuing to examine the multi-millionaire’s financial trail after he was jailed for smuggling cocaine and cannabis.  The funds were used to bankroll his kingpin’s lifestyle, which included building a lavish villa near Marbella on the Costa Del Sol.  He used haulage firms to transport concealed drugs from mainland Europe into Ireland via the West Midlands.  Investigators first identified companies in the Isle of Man and worked through hundreds of thousands of documents to follow the money.  Mulvey had utilised ‘enablers’ – accountants and solicitors within the UK and overseas – to launder the money through Monaco and into Mauritius to make it appear as if it come from a legitimate source.

https://www.birminghammail.co.uk/news/midlands-news/revealed-68m-drugs-baron-james-14789845

HAJJ FRAUD ROCKETS BY 150% – HOW TO AVOID BEING CAUGHT OUT

Birmingham Live on 16th June published an article saying that up to 25,000 families are potentially at risk from Hajj fraud as they book trips to Mecca later this year.  Action Fraud is raising awareness of Hajj related fraud, in a drive to increase reporting and to protect individuals from falling victim, with a claim that, in 2017, the average reported loss to victims was £5,869.  In the fraud the accommodation booked does not exist, or the whole trip is in fact a scam set up by illegitimate travel operators who have disappeared with thousands of pounds of pilgrims’ money.

https://www.birminghammail.co.uk/news/midlands-news/hajj-fraud-rockets-150-per-14702786

HOME SECRETARY HAS USED AN EXCEPTIONAL POWER TO GRANT A SCHEDULE 1 LICENCE TO ALLOW BILLY CALDWELL TO BE TREATED WITH CANNABIS OIL

The Home Office blog on 16th June reported that, following advice from senior clinicians, the Home Secretary has used an exceptional power to grant a Schedule 1 licence to allow Billy Caldwell to be treated with cannabis oil.  Schedule 1 of the Misuse of Drugs regulations 2001 covers drugs considered to be of no medicinal value, and a Schedule 1 licence is normally used where they are being imported for research etc.  The Guardian reminded one that Billy’s cannabis oil was confiscated at Heathrow Airport because it contains a psychoactive substance called tetrahydrocannabinol (THC) that is illegal in the UK but available elsewhere and had kept his epilepsy at bay.  After it was taken from him Billy suffered 2 seizures that other medicines could not control and he was taken to Chelsea and Westminster hospital by ambulance.

https://www.theguardian.com/society/2018/jun/16/billy-caldwells-mother-hopeful-of-cannabis-medicine-licence

https://homeofficemedia.blog.gov.uk/2018/06/16/home-secretary-issues-schedule-1-licence/

see also Home Office Drug Licensing Factsheet- Cannabis, CBD and other cannabinoids –

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/674713/Factsheet-_Cannabis__CBD_and_Cannabinoids-_January_2018.pdf

FOUNDER OF US TECH UNICORN THERANOS HIT WITH CRIMINAL CHARGES FOR ROLE IN A MULTI-MILLION DOLLAR SCHEME TO DEFRAUD INVESTORS

City AM on 16th June reported that the US DoJ said it had filed criminal charges against Elizabeth Holmes and Ramesh “Sunny” Balwani, her former chief operating officer, for 2 counts of conspiracy to commit wire fraud and 9 counts of wire fraud.  The company had been hailed as a game changer in the blood-testing industry, offering devices that could test for conditions such as cancer through a finger-prick rather that drawing blood through needles.  However, US prosecutors found that the company had enticed investors to use this method while knowing they were not 100% reliable or accurate.

http://www.cityam.com/287663/theranos-founder-hit-criminal-charges-defrauding-investors?src=ilaw

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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