25th June 2018
UKWA AND HMRC CLARIFY IMPACT OF FHDDS ON LOGISTICS BUSINESSES
Multimodal news on 25th June reported that, contrary to rumour and speculation, fulfilment houses will not have to check every single package they receive from overseas clients to comply with the rules laid down by the new Fulfilment House Due Diligence Scheme (FHDDS). They will, however, need to demonstrate that reasonable due diligence has been exercised to validate an incoming load’s contents and verify the quantities of goods it contains against information declared for customs clearance. This clarification followed a recent FHDDS briefing meeting co-hosted by the UK Warehousing Association (UKWA) and HMRC held at HM Treasury. It also reminds one that FHDDS has been introduced as a way of tackling non-EU online traders that do not pay the correct VAT and duty on goods held in UK warehouses that are sold to UK consumers via websites and that any relevant business must apply online to register for the Fulfilment House Due Diligence Scheme by 30th June and that the new FHDDS standards apply from April 2019.
SEIZED MALAYSIAN-MADE BOMBS MEANT TO ‘STAGE ATTACKS’ IN SOUTHERN THAILAND
The Sun Daily in Malaysia reported on 24th June that the Thai Army has confirmed a statement by police that 41 home-made bombs seized in the Takbai district several days ago were produced in neighbouring Malaysia and smuggled into the country via a “natural border route”. The home-made bombs were said to be intended for use in “staging attacks” by militants after the fasting month of Ramadan. According to an NGO, Deep South Watch, which monitors the situation in southern Thailand, about 7,000 people lost their lives since 2004 as a result of the armed conflict in 4 southernmost provinces near the Thai-Malaysian border.
TRADE IN STOLEN UK PASSPORTS: HOW GANGS SELL THEM FOR £2,500
The Mail Online on 24th June carried an article about British passports stolen by criminal gangs in Western Europe which are flown to Istanbul or Athens for sale by people smugglers, and that fake EU identity cards that can be used to enter the UK are also being made to order within 3 days in the Balkans. The Mail said that it bought a UK passport for £2,500 from Abu Ahmad, a people-smuggling kingpin in Turkey. It had been stolen from a Milton Keynes man working in Brussels and was one of 5 passports that Ahmad, who is known as ‘The Doctor’, offered to the Mail. Ahmad is on bail pending an appeal against an 8-year sentence people smuggling. The article also says that Interpol has a stolen and lost travel documents database: SLTD, but that Interpol is not automatically notified of all passport thefts occurring worldwide, and the SLTD database is not connected to national lists of stolen or lost passports, nor do all countries systematically search the database to determine whether an individual is using a fraudulent passport.
GUNS AND KNIVES SMUGGLED ONTO CRUISE SHIPS TO DEMONSTRATE GAPS IN SECURITY
The Sun in the UK on 24th June carried an article saying that investigators posing as terrorists carried weapons and fake ID to go unchallenged into restricted areas of Southampton docks, exposing “shocking” security flaws at Southampton docks which 1.7 million passengers sail from every year. It says that 16 knives, 8 imitation IED and 4 imitation pistols were smuggled into terminals.
INDIA: 20.5 TONNES OF RED SANDERS SEIZED AT MUNDRA PORT
The Free Press Journal reported on 25th June that the timber was seized at Mundra port from 2 containers which the smugglers were trying to send to the UAE and Vietnam. The article explains that red sanders, or Pterocarpus santalinus, is a non-fragrant variety of sandalwood which is used to make oriental musical instruments. It is protected under the international CITES convention. China, Japan, Singapore, Malaysia and UAE are said to be the primary destinations or transit points, with the consignments usually smuggled through ports in Chennai and Mumbai.
GADAFFI AIDE ALI DABAIBA AND ASSETS IN CANADA AND SCOTLAND
On 25th June, the Globe and Mail in Canada reported on claims that Canadian assets belonged to a former Libyan government official accused of looting vast sums of money during Colonel Muammar Gadaffi’s regime. On 8th April, The Times had reported that Ali Dabaiba had amassed at least 14 flats in Edinburgh and Glasgow, said to be worth around £3 million, through a firm in the BVI and while earning only £12,000 in Libya.
CANADA: GOVERNMENT SEEKS FORFEITURE OF CASINO CHIPS SEIZED FROM SUSPECTED MONEY LAUNDERER
The Vancouver Sun on 24th June reported that in British Columbia the director of civil forfeiture has filed suit against an alleged international money launderer to get casino chips seized from him forfeited. $75,000 worth of chips were taken from Dan Bai Shun Jin last month. The RCMP arrested Jin at a casino on May 25th — a day after the Canada Border Services Agency detained a woman arriving at Vancouver International Airport with US$20,000 allegedly intended for Jin.
The province’s government will release a 250-page report on money laundering in its casinos on 27th June, and this is expected to contain 45 recommendations on how to deal with the problem of criminals misusing the gambling operation to clean their illicit cash.
CONTAINERS OVERBOARD! HOW TO PROTECT YOUR RIGHTS
Forwarder law on 22nd June published a short article from Australia which starts by saying that, in the past 4 years alone, Australian freight forwarders and consignees have been impacted by container stow collapses on 3 large container ships. The most recent involves the MV “YM Efficiency” carrying 2,252 containers which lost 83 containers and had damage to 30 others while off the New South Wales Coast. One problem is to determine whether or not the container stow collapse was solely caused by a peril of the sea (which would usually provide the carrier with a defence to any claims), or whether there was some other event which caused the collapse. However, the article says that if freight forwarders and cargo owners act quickly, they can potentially obtain information which will assist them in making a decision as to whether or not a vessel owner is liable. The article outlines 5 steps a freight forwarder or a cargo owner can take, and the reasons why they are important.
FINE ON COMPANY DIRECTOR IN IRELAND FOR ANTI-COMPETITIVE CONDUCT INCREASED 6-FOLD BY IRISH APPEALS COURT
On 21st June, law firm Matheson reported that the Irish Court of Appeal has substantially increased a fine imposed on an individual convicted of anti-competitive conduct in May 2017. Mr Smith had originally been fined €7,500 following a guilty plea for bid-rigging in the supply of flooring to multinational companies including Google, Mastercard and Paypal. He had also received a suspended 3-month jail sentence and a 5-year disqualification as a director, with his company, Aston Carpets, fined €10,000. After an appeal by the DPP the fine levied by the High Court on Smith has been increased it to €45,000. He did not alter the fine on the company or the suspended jail sentence. Whilst the fine itself is low by international standards, this case is a reminder of the very serious consequences that competition law breaches can have on company directors individually (both financial and reputational) based in Ireland compared to other jurisdictions where sanctions are often limited to the company itself.
UGANDA HOSTS 6th ANNUAL FORUM ON THE ILLEGAL TIMBER TRADE IN EASTERN AFRICA
On 21st June, TRAFFIC reported that Uganda played host to the 6th Annual East Africa Timber Trade Stakeholders’ Forum jointly hosted by WWF Uganda and Uganda’s Forestry Sector Support Department under the Ministry of Water and Environment. Around 30 senior forestry officials from Uganda, Kenya, Mozambique, Madagascar and Zanzibar, and a representative from the East African Community (EAC) attended. It is said that the Forum built on earlier support by WWF and TRAFFIC to assist member states under the Zanzibar Declaration to develop and implement mechanisms to deter illegality in the timber trade in East Africa. The trade undermines good governance, the rule of law, and undermines local and national economies through depriving local communities, law-abiding traders, and governments of legitimate income.
LESSONS FROM PUGACHEV – ILLUSORY AND SHAM TRUST CONSIDERATIONS
Appleby on 25th June published an article which starts by saying that the “ground-breaking” High Court decision JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev  has potentially introduced the concept of an “illusory trust”, a rather different concept from the commonly-known concept of “sham trust” which concerns the common subjective intentions of the settlor and trustee to mislead third parties by giving a false impression that legal rights and obligations were created in according with the trust deeds. In terms of matters arising from the case, the article says that where families, while having an understanding on the benefits of setting up trusts for succession planning, asset consolidation, asset protection and for other purposes, are generally not willing to give up too much control to the trustees over the assets placed into the trust, there are a number of issues (detailed in the article) which should therefore be considered by both the settlor and the trustee when creating and administering a trust.
THAI CRACKDOWN TARGETS BUDDHIST MONKS AMID ACCUSATIONS OF EMBEZZLEMENT AND FRAUD
Baker McKenzie on 25th June reported that Thailand’s ruling junta has stepped up its offensive to destroy what it sees as a rot that has long been allowed to fester in the upper echelons of Buddhism and corrode the country’s moral core. Police have arrested 6 senior monks (another is seeking asylum in Germany) after raids on several temples in May. Among them were members of the Sangha Supreme Council, the governing body of Thai Buddhists, and Phra Buddha Issara, a right-wing activist monk thought to be close to the prime minister. The monks have been defrocked and charged with offences related to embezzlement, fraud and robbery.
PODCAST: SPOTLIGHT ON THE NETHERLANDS
The regular TRACE podcast explores the world of financial crime – corruption, fraud, money laundering and sanctions. Using interviews with investigative reporters, business people and prosecutors, Alexandra Wragge examines different angles of financial crime and explores what motivates people to break the law, how wrongdoers cover their tracks and what can be done to put a stop to the lawbreaking. In the latest edition Marike Bakker, with TRACE partner firm NautaDutilh in Amsterdam, discusses recent Dutch anti-bribery enforcement efforts.
IS RUSSIA MAKING ANY PROGRESS IN CRIMINALISING BRIBERY AND ENSURING TRANSPARENCY OF PARTY FUNDING?
On 25th June, the Council of Europe’s Group of States against Corruption (GRECO) published a news release about a new assessment of the implementation by Russia of its recommendations on incriminations and transparency of party funding. 12 recommendations (as compared to 11 during the previous assessment) out of 21 have been implemented satisfactorily, GRECO says. The proposed amendments to the bribery-related provisions of the Russian Penal Code do not fully conform to the Council of Europe standards, it says. For example –
- the provision on passive commercial bribery by managers and by domestic and foreign arbitrators only criminalises the “unlawful use”, not receipt, of any undue advantage;
- the provisions on the promising, offering or request to participate in commercial bribery do not include the elements of “requesting” an undue advantage;
- the offence of active public sector bribery lacks the elements of “promising” and “offering”; and
- the offence of passive public sector bribery that of “requesting” an undue advantage.
ALBANIA SEIZES €3.4 MILLION IN CASH IN ALLEGED DRUG PROFITS IN ADRIATIC PORT
On 25th June, Reuters reported that Albanian police seized €3.4 million in cash hidden in 2 cars on a trailer that arrived in the port of Durres from Belgium.
INDIAN GOVERNMENT LIKELY TO GO AFTER KASHMIRI SEPARATISTS FOR ‘TERROR FUNDING’, ‘MONEY LAUNDERING’
On 25th June, WION reported that, with the imposition of Governor’s rule in Jammu and Kashmir, the government is expected to tighten the noose around Kashmiri separatist leaders who were allegedly involved in terror funding and money laundering, officials said. The government had already filed charges against Hafiz Saeed and Syed Salahuddin and 10 Kashmiri separatists in a case of alleged terror funding and secessionist activities in the Valley. Besides Lashkar-e-Taiba chief Saeed and Hizbul Mujahideen head Salahuddin, the other 10 persons accused include Hurriyat leader Syed Shah Geelani’s son-in-law Altaf Ahmed Shah, Geelani’s personal assistant Bashir Ahmad.
VANUATU SIGNS THE MULTILATERAL CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS
On 22nd June, Accountancy Daily reported that Vanuatu has become the 123rd state to sign the Convention, a comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance.
HMRC ALLEGES ARIA PC DEALS BONANZA WAS MTIC VAT FRAUD
The Register on 25th June reported that reseller company Aria PC’s managing director “must have known” that 11 disputed deals his company made a decade ago had a “connection to fraud”, an HMRC barrister has told a tax tribunal. Aria PC (aka Aria Technology Ltd or ATL) is accused by HMRC of playing a key part in a missing trader intra-community (MTIC) fraud, also known as VAT carousel fraud.
POSTAL SECTOR GROWS 2%, IN SPITE OF CHALLENGING CONDITIONS
Postal Technology on 25th June reported that preliminary results from International Post Corporation’s (IPC) Global Postal Industry Report indicate that the delivery industry experienced 2.1% revenue growth in 2017. While mail volumes continued to decline, several posts registered increases in advertising mail volumes and lightweight B2C e-commerce items, helping to offset losses. One-off events such as elections also helped to boost revenues.
UK STRATEGIC EXPORT CONTROLS: LICENSING STATISTICS, 2017
On 25th June, the UK Export Control Joint Unit published export control licensing data for 2017.
HOW MILLIONS LINKED TO KAZAKHSTAN MEGA-FRAUD CASE ENDED UP IN TRUMP PROPERTY
OCCRP on 25th June published an article saying that a new investigation by the Organized Crime and Corruption Reporting Project (OCCRP) and the Dutch TV sheds new light on the suspicions that 3 condominiums in Trump SoHo tower in New York were purchased using funds linked to a massive fraud case in the former Soviet republic of Kazakhstan.
NEW IRISH ANTI-CORRUPTION LAWS: ISSUES FOR BUSINESSES
On 25th June, Out-Law published an article says that the introduction of new anti-corruption laws in Ireland will significantly modernise and consolidate legislation to tackle white collar crime
HOW HEDGE FUNDS USED PRIVATE POLLS TO MAKE MILLIONS OUT OF BREXIT
On 25th June, Bloomberg published this article, described by investigatory journalist Carole Cadwallader as a stunning piece of journalism. How leavers moved the markets on the night of the referendum with & hedge fund pals made millions. The recommendation carries the caution “Warning: long & fury-inducing”.
THE INTERNATIONAL TRADE IN GUNS
On 25th June, investigative video journalism website Carte Blanche, in a special report, it joined forces with international arms trafficking investigator, Kathi Lynn Austin, and followed the guns. This investigation spans 3 continents and reveals the masterminds behind the endless supply of guns that are fuelling the unabated slaughter of South Africa’s rhinos. Part 1 explores how the guns and bullets removed from these crime scenes and held in police vaults could hold the answers to the dealers and manufacturers who are responsible for getting weapons to the poachers on the ground. In Part 2 it traces bullets and ammunition recovered from rhino poaching crime scenes back to their manufacturers in the Czech Republic. But how do the weapons make it into Southern Africa? It follows the trail back to Mozambique. In Part 3 arms trafficking expert Kathi Lynn Austin travels to Portugal to try and stop a consignment of guns from being shipped to Mozambique.