MUMBAI A TRANSIT HUB FOR TRAFFICKING OF PROTECTED ANIMALS, SAYS REPORT
On 2nd July, the Hindustan Times carried a report from India’s Wildlife Crime Control Bureau (WCCB) saying that 70% of the cases of seizures of such animals between 2012 and 2018 (till June) in Maharashtra, Goa and Gujarat were reported from the Mumbai metropolitan region. The WCCB lists Hong Kong, Thailand, Singapore and Malaysia as major destinations for Mumbai’s illegal cargo and countries along the Persian Gulf, apart from south-east Asia, as major suppliers. It says that the majority of the trafficking takes place via flights rather than sea or land routes. Indian cities are a favoured hub for the trade because many of these smuggled animal species are protected under CITES but not banned from trade under Indian laws such as the Wildlife Protection Act 1972.
INTERPOL ISSUES RED NOTICE AGAINST NIRAV MODI ON CHARGES OF MONEY LAUNDERING
DNA in India on 2nd July reported that Interpol has issued Red Notice for fugitive baker Nirav Modi on charges of money laundering connected to the PNB Bank scandal. The action comes days after reports of Modi travelling on multiple passports. It is believed that he is hiding in the UK.
MALTA CALLS FOR ECB TO REVOKE PILATUS BANK LICENCE
Politico on 1st July reported that Maltese financial regulators have urged the European Central Bank to revoke the licence of Pilatus Bank, which had been accused of money laundering and other crimes by investigative journalist Daphne Caruana Galizia. The Malta Financial Services Authority (MFSA) announced its recommendation to the ECB in a press release, with no explanation for the timing. The recommendation to revoke the bank’s licence made no mention of Caruana Galizia’s killing and instead cited the legal troubles of the bank’s owner, arrested and indicted in the US on charges of financial crimes, including violating economic sanctions against Iran, money laundering and bank fraud.
UK: HOW TO IMPORT REGULATED HORTICULTURAL, PLANTS, LIVE ANIMALS AND ANIMAL PRODUCTS: USE OF ALVS
On 1st July, HMRC issued updated guidance on the use of the Automatic Licence Verification System (ALVS) by government agencies. It points out that for regulated imports of certain products you must complete advance notification –
- for import consignments that contain horticultural, planting material and plant-related goods, you must provide an advance notification to the Procedure for Electronic Application for Certificates (PEACH);
- for live animals, animal products and high risk food and feed imports, you must provide an advance notification to the Trade Control and Expert System (TRACES), EU’s central IT system for control of third country imports of live animals, animal products and non-animal food products; and
ALVS enables the Rural Payment Agency (RPA), Animal and Plant Health Agency (APHA) and Port Health Authorities (PHA) to pass their decision notifications (as a result of risk assessment or inspection decisions) captured on PEACH or TRACES electronically to HMRC. All RPA/APHA/PHA controlled imports will be routed through ALVS. However, importers and agents cannot see or log onto ALVS.
US SUPREME COURT’S ONLINE TAX DECISION WILL IMPACT CLOUD COMPUTING AND SOFTWARE INDUSTRIES
Greenberg Traurig on 1st July published an article saying that the decision allowing states to tax online sales even if the retailer does not have a physical presence in the state – overruling a precedent from 26 years ago (and based on a case heard 25 years before that) has shaken the retail industry. However, the article argues it will also impact the software and cloud computing industries as well, forcing this sector of the economy to also face the changed online tax landscape. This new change in the tax landscape might impact the software and cloud industries to even a greater extent than online merchandise retailers, it says, because online retailers have long been the target of state tax agencies.
ARREST WARRANT SOUGHT FOR KOREAN AIR CHIEF
KBS World radio on 2nd July reported that prosecutors have sought an arrest warrant for Korean Air and Hanjin Group Chairman Cho Yang-ho who is facing allegations of tax evasion and embezzlement.
PROCEEDS OF CRIME: EU MUTUAL RECOGNITION OF FREEZING AND CONFISCATION ORDERS
The House of Commons EU Scrutiny Committee published a report on consideration on the proposal for an EU Regulation on the mutual recognition of freezing and confiscation orders. The Regulation is intended to improve the cross-border enforcement of court orders authorising the freezing and confiscation of the proceeds of crime and is part of a wider package of measures to disrupt and cut off funding for organised crime and terrorism which often has a transnational dimension. It would ensure that an order to freeze or confiscate the proceeds of crime made by a court in one Member State would be recognised and enforced in another Member State as if it were a domestic order. It would replace 2 EU Framework Decisions (adopted in 2003 and 2006) in which the UK currently participates. The Committee asks for further information.
ENRC APPEAL TO DETERMINE LEGAL PRIVILEGE (LPP) SCOPE
The Law Society Gazette on 2nd July reports that the extent of legal professional privilege (LPP) comes into the spotlight as a hotly awaited appeal involving the SFO attempts to obtain documents from a multinational mining company opens in the Court of Appeal. A High Court ruling last year favoured the SFO by ruling that privilege did not apply.
“VERY LIMITED RISK” SEES HIGH COURT DISMISS REQUEST FOR A WORLDWIDE FREEZING ORDER
CMS Law on 29th June reported that the English High Court recently decided that it was not appropriate to grant a worldwide freezing order, confirming that generally only a sufficiently strong link with the jurisdiction will justify a freezing order affecting assets not located in England & Wales. The case involved 6 contracts with the Defendant in relation to the construction of the Savoy Resort and Spa Hotel on Mahé, with the contracts governed by Seychelles law and contained an ICC arbitration clause with Paris as the seat of arbitration.
PAN-EUROPE VAT FRAUD CRIME GANG DISMANTLED
A Europol news release on 2nd July reported on Operation OCTOPUS II, involving over 9 EU Member States with the support of Europol, running between June and December 2017 and targeted criminal networks importing clothing and footwear from China into the EU by misusing the CPC 4200 Customs Procedure Code. Over 1 000 lorries were checked, among which 277 of these requiring some degree of follow up or seizure; 5 criminal networks were identified, and a number of shell companies immediately closed down; and over 500 000 counterfeit goods were seized in France alone. It is said to have revealed that this type of large-scale fraud was the work of highly-knowledgeable and well organised criminal networks who knew the ins and outs of the logistics circuits and control systems to subsequently abuse them. A number of investigations have been opened at the pan-European level on the basis on of the information gathered during the operational phase.
THE WORK OF THE US HUMAN RIGHTS VIOLATORS AND WAR CRIMES CENTER (HRVWCC)
An article on the website of the US Department of Homeland Security details the work of the HRVWCC. ICE established in 2008 a team responsible for leading the long and difficult investigations into human rights violators and other war criminals who enter the US. It co-locates a select group of special agents, attorneys, criminal research specialists and historians. It also brings together resources and expertise from various DHS components and other departmental agencies, to include the FBI’s International Human Rights Unit and the Department of State, to work collaboratively on human rights violators and war crimes investigations. Recently, a former member of the Guatemalan army, whom witnesses say participated in the Dos Erres massacre which claimed more than 200 lives in December 1982, was returned to his country.
INDICATORS OF HUMAN TRAFFICKING
The US Department for Homeland Security has published a list of indicators of human trafficking, saying that recognising key indicators of human trafficking is the first step in identifying victims and can help save a life.
- Does the person appear disconnected from family, friends, community organizations, or houses of worship?
- Has a child stopped attending school?
- Has the person had a sudden or dramatic change in behaviour?
- Is a juvenile engaged in commercial sex acts?
- Is the person disoriented or confused, or showing signs of mental or physical abuse?
- Does the person have bruises in various stages of healing?
- Is the person fearful, timid, or submissive?
- Does the person show signs of having been denied food, water, sleep, or medical care?
- Is the person often in the company of someone to whom he or she defers? Or someone who seems to be in control of the situation, e.g., where they go or who they talk to?
- Does the person appear to be coached on what to say?
- Is the person living in unsuitable conditions?
- Does the person lack personal possessions and appear not to have a stable living situation?
- Does the person have freedom of movement? Can the person freely leave where they live? Are there unreasonable security measures?
NORTH KOREA HAS CONTINUED BALLISTIC MISSILE LAUNCHER PRODUCTION IN 2018
The Diplomat, claiming an exclusive, reported that an US intelligence assessment says that North Korea has continued to produce support equipment and launchers for one of its newer ballistic missiles through the first half of 2018. The website says that, while production of launch vehicles — known as transporter-erector-launchers, or TEL — and support equipment has continued through the first half of 2018, North Korea has likely not produced additional Pukguksong-2 missiles, the assessment notes. North Korea may have produced as many as 10 TEL for the Pukguksong-2. Pukguksong-2 is said to be the first North Korean ballistic missile to feature an indigenously designed and built integrated TEL with continuous tracks that allow it to conduct launches from unpaved roads and other rough terrain.
PROBE REVEALS ORGANISED CRIME, FORGERY DRIVING AUSTRALIA’S ILLEGAL WILDLIFE TRADE
Sydney Morning Herald on 2nd July reported that submissions to a parliamentary inquiry into the elephant ivory and rhino horn trade have revealed the disturbing extent of illegal wildlife trafficking in Australia. The sophisticated market allegedly involves forged documents, false declarations and antique dealers who instruct buyers to hide illicit objects in their luggage or declare it as plastic. Other objects are blatantly traded on Gumtree and other websites. The parliamentary inquiry is probing Australia’s compliance with international obligations to restrict the lucrative trade, which is fed by demand for traditional Asian medicines, hunting trophies and trinkets.
THE HEROIN COAST: A POLITICAL ECONOMY ALONG THE EASTERN AFRICAN SEABOARD
ENACT Africa on 2nd July published a report which examines the characteristics of the heroin trade off the East African coast and highlights the criminal governance systems that facilitate drug trafficking along these routes. It says that in recent years, the volume of heroin shipped from Afghanistan along a network of maritime routes in East and southern Africa appears to have increased considerably. Most of this heroin is destined for Western markets, but there is a spin-off trade for local consumption. An integrated regional criminal market has developed, both shaping and shaped by political developments in the region.
CHINA MAY SLOW PACE OF TOURISM CO-OPERATION WITH NORTH KOREA AFTER US PROTEST
Yonhap News in South Korea reported on 2nd July that China appears to be slowing the pace of its tourism sector co-operation with North Korea, apparently in the face of complaints from the US. It reports that flag carrier Air Koryo was to launch a charter flight service between Pyongyang and Chengdu on June 28th but cancelled the plan on the same day, the sources said, adding that any rescheduling plan has yet to be announced. The sudden flight cancellation has embarrassed Chinese tour agencies, which had sold group tour packages to Chinese tourists wanting to visit the North Korean capital, they noted.
GUERNSEY: PROVIDENCE INVESTORS IN BATTLE FOR MONEY
This is Guernsey on 2nd July reported that a court battle that could be decisive in how much money investors in the collapsed Providence scheme eventually recoup is being played out in Miami. While the $150 million fraud was centred on a Miami-based operation, companies were set up around the world, including in Guernsey, to help execute what court papers have described as a Ponzi scheme, luring investors with promises of high returns. The Trustee for Providence Financial Investments and Providence Fixed Income Fund LLC, Maria Yip, has filed a motion in the US Bankruptcy Court in the South District of Florida to essentially combine all the entities involved, including those based in Guernsey, into one estate. Inter-company loans involving the Guernsey operation have been cited in one of the arguments in favour of consolidation.
HMRC HAS FORMED AN ALLIANCE WITH TAX ENFORCEMENT BODIES IN 4 COUNTRIES TO SHARE INTELLIGENCE AND EXPERTISE
On 2nd July, HMRC issued a news release confirming that it had joined forces with Canada, the Netherlands, the US and Australia to launch the Joint Chiefs of Global Tax Enforcement (J5) – a new alliance dedicated to tackling international tax crime and money laundering. The group is intended to build on existing international co-operation by sharing intelligence and expertise and will work together on joint operations to crack down on those who make a living out of enabling tax crime. At the first meeting, the J5 brought together leading experts in tax and other financial crimes from each of the 5 member countries. Together they developed tactical plans and identified opportunities to pursue cyber criminals and enablers of international tax crime.
UK EXPORT PROHIBITIONS AND RESTRICTIONS
On 2nd July, HMRC issued updated details of the main prohibitions and restrictions on certain exports from the UK, guidance that includes the licensing requirements for dual-use goods, cultural goods and controlled drugs.
USE AND FUTURE OF THE EUROPEAN ARREST WARRANT
EU Observer on 2nd July carried an opinion piece from the Fair Trials NGO about the new report from Fair Trials and its partners about the European Arrest Warrant that began as a fast-track extradition system meant to accommodate cross border cooperation in the fight against terror. It quickly became the EU’s flagship crimefighting tool, based on the principle of mutual recognition, which means that decisions in one EU Member State will be carried out in all others. The NGO claims that cases documented indicate that, far from being used to apprehend fugitives to be tried for participation in complex cross-border crimes such as terrorism, the European Arrest Warrant is too often being used to pursue people for minor offences or for investigatory purposes. It also says that people are surrendered even when there are reasonable grounds to believe that they will not be given a fair trial or will be placed in prolonged pre-trial detention or in prison conditions that fail to meet even the most basic standards of decency. Release of the report coincides with the release of the EU Advocate General Opinion in the “Celmer case” – the opinion being intended to inform the ECJ in relation to a question of interpretation on the European Arrest Warrant from Ireland, where the courts blocked extradition of a suspect to Poland on the grounds of attacks on judicial independence in Poland. The Opinion suggests that the Irish court should postpone the surrender and seek information on such a risk from the Polish authorities. However, Fair Trials says that it hopes that the EU Court will distance itself from the Opinion [which it is not bound to follow] and take the opportunity to develop a brand-new test for national courts to apply where the court believes that there are risks to the right to a fair trial as established in EU law, such as threats to the independence of the judiciary, in the receiving country. Fair trials maintains that reinforcing fundamental rights safeguards is the only way forward to maintain mutual trust between member state and ensure the functioning of the European Arrest Warrant system in future.
The report itself can be accessed at –
UK IVORY BILL
On 2nd July, DEFRA issued updated material connected to the Ivory Bill, which was introduced into Parliament in May. The Bill will introduce a ban on commercial activities concerning ivory (it will ban buying and selling ivory); set out 5 categories of items exempted from the ban; detail what actions those wishing to sell exempt items will need to take to be compliant with the ban; introduce new offences that could be applied to breaches of the ban; and include necessary power for enforcement, such as powers of entry, search and seizure. The materials made available include an impact assessment and factsheets.
BREXIT: THE TRADE BILL
On 2nd July, the House of Commons Library issued an updated version of the briefing paper for what is one of a series of “Brexit Bills” intended to adjust UK legislation for Brexit (another being the Customs Bill). This Bill is intended to allow the UK to continue its existing trade policy as far as possible immediately after Brexit and is not intended to deal with future trade agreements with the EU or other countries. The briefing has been updated following the Bill’s Committee stage in the Commons.
BLACK SCORPION SMUGGLING IN AFGHANISTAN IS BIG BUSINESS
Customs Today on 2nd July reported that the trade of scorpion hunting in Afghanistan, though unregistered, has been around for years but has become a lucrative business in the past few months. Scorpions are in high demand for medical research, scorpion smoking and other uses. Its venom is used to develop compounds for anti-cancer medicines while it is a popular street-food snack in many countries, including China.
UNODC AND COLOMBIA LAUNCH REPORT ON ALLUVIAL GOLD EXPLOITATION IN THE COUNTRY AND ORGANISED CRIME LINKS
On 2nd July, the UN Office for Drugs and Crime reported that it and the Colombian Ministry of Mines and Energy recently launched a study on alluvial gold exploitation in Colombia and the relationship of this activity with organised crime. The report offers a research framework to clarify the linkage between alluvial gold exploitation and other illicit activities. A quote from the launch is that the exploitation of alluvial gold has effects on the environment, security, development and law enforcement. Alluvial gold is found beneath the surface at the bottom of a creek, river or stream and alluvial gold mining is the process of extracting gold from these.
1MDB: MALAYSIA FREEZES 408 BANK ACCOUNTS AND SUMMONS EX-PRIME MINISTER’S STEPSON
On 2nd July, KYC 360 reported on the ongoing 1MDB scandal in Malaysia. It says that Malaysia has frozen more than 400 bank accounts as part of a probe into a multi-billion-dollar scandal at state fund 1MDB, as the stepson of former prime minister Najib Razak was summoned for questioning.
HEZBOLLAH’S ROCKET ARSENAL
The Missile Threat website has provided a guide to the missiles and rockets available to Hezbollah. Hezbollah’s arsenal is comprised mostly of small, man-portable and unguided surface-to-surface artillery rockets. Although these devices lack precision guidance, their sheer numbers make them effective weapons of terror.
SOUTH AFRICA: CLOSE TO 8,000 SEARCHES CONDUCTED FOR MARITIME LAW COMPLIANCE
Defence Web on 2nd July reported that the oceans economy component of Operation Phakisa intends using its enhanced and co-ordinated compliance and enforcement programme to up visibility in South Africa’s coastal zones in an effort to make “positive impacts” on illegal activities. According to the Department of Environmental Affairs, 7,842 searches were conducted and just on 1,000 establishments visited to check compliance between April 2017 and March 2018. Operation Phakisa is said to highlight the government’s commitment to enhancing the oceans or blue economy, enforcing maritime and marine legislation and stopping pillaging of marine resources by poachers and illegal foreign fishing vessels. 3 inshore patrol vessels (IPV) are on order to boost the fleet’s patrol capabilities. Indications are the tender will take 6 years to complete and there has, to date, been no indication of when the first of the IPVs is expected to be taken into service. Over the next 3 years, the South African Navy plans to conduct maritime border patrols and combat piracy in the Mozambique Channel.
JERSEY: DIRECTOR WHO USED CLIENT FUNDS FOR FORMULA 1 CAR JAILED
The BBC on 2nd July reported that Richard Arthur, 56, a company director in Jersey used clients’ money to buy a Formula 1 car and pay off debts has been jailed for 7 years after pleading guilty to 10 counts of fraud and fraudulent activity. The court heard Arthur took more than £2 million from his clients at accountancy firm BDO, some of whom were elderly, under false pretences.
PWC OWES $625.3 MILLION TO US AUTHORITIES OVER COLONIAL BANK COLLAPSE
Reuters on 2nd July reported that a federal judge has said PricewaterhouseCoopers LLP must pay the Federal Deposit Insurance Corp $625.3 million in damages for failing to uncover a fraud scheme between its client Colonial Bank and the mortgage lender Taylor, Bean & Whitaker.
FAKE PLAIN PACKS EXPAND REACH OF ILLICIT CIGARETTE TRADE
Better Retailing in the UK reported on 2nd July that the rise of counterfeit plain packs is introducing illicit tobacco into areas previously less affected by the black market according to the Consumer Packaging Manufacturer’s Alliance (CPMA), which represents the views of tobacco packaging manufacturers. The CPMA alleges that counterfeit plain packs are mainly manufactured in eastern Europe, but that some UK sites are currently under investigation.
INTERPOL HIGHLIGHTS EVOLVING FOREIGN TERRORIST FIGHTER THREAT AT UN COUNTER-TERRORISM CONFERENCE
An Interpol news release on 2nd July said that the multi-directional movement of foreign terrorist fighters (FTF) means law enforcement needs to reinforce its partnerships, the INTERPOL Secretary General told the conference. The volume of information on FTF shared via INTERPOL over the past 5 years had increased significantly, with details of some 44,000 individuals currently in the databases.
FORMER ATEA DIRECTORS JAILED IN DANISH BRIBERY CASE
Baker McKenzie on 2nd July reported that 4 ex-employees of a Danish supplier of IT infrastructure, Atea, have been given prison sentences after the reseller found guilty of “systematic” bribery and defamation. In summary, the main case revolves around purchases made by the Municipality Region of Zealand of IT infrastructure services provided by ATEA.
BEHIND THE SECRET US WAR IN AFRICA
Politico on 2nd July carried a feature saying that despite Pentagon assertions, secret programmes allow American troops to direct combat raids in Somalia, Kenya, Niger and other African nations. It says that for at least 5 years, Green Berets, Navy SEALs and other commandos operating under a little-understood authority have planned and controlled certain missions, putting them in charge of their African partner forces.
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018: WHAT IT DOES, WHY AND HOW
A useful guide from Clifford Chance on 2nd July now that the Act has finally passed all its Parliamentary stages, received Royal Assent, and become law. The Act will retain most existing EU law as UK domestic law after Brexit in order to the ensure the continuity and completeness of the UK’s legal system. It will also confer wide powers on the Government to amend that retained EU law in order to remedy or mitigate any deficiencies arising from the UK’s withdrawal from the EU.
EU: STRONGER ADMINISTRATIVE CO-OPERATION IN THE VAT FIELD
A briefing from the EU Parliament Research Service on 2nd July says that the reform of the EU VAT system of administrative co-operation to combat fraud is planned in several consecutive steps and will take some years. In the meantime, the present proposal will change the VAT Administrative Cooperation Regulation (Regulation (EU) No 904/2010). The proposal introduces the concept of the ‘certified taxable person’ in the VAT Information Exchange System (VIES) and addresses 3 types of cross-border fraud: carousel fraud, used car fraud and VAT-free import fraud.
CAMEROON’S ANGLOPHONE CRISIS
For a briefing on the background to the unrest in Cameroon one could do worse than read this briefing from the Atlantic Council on 5th June. [Problems for the Anglophone community can be traced back to the decision taken by it not to join neighbouring Nigeria (from which the British had administered its part of the country after World War 1, whilst France incorporated its part with the economy of France and invested more) on independence, but rather to join into a federated state with the Francophone majority]. The article concentrates on more recent developments – since 1972 the state has been a Francophone unitary state, an apparent reneging on the original deal between the two sides.