3rd July 2018
WHAT CORPORATE LAWYERS AND BUSINESSES SHOULD KNOW ABOUT US CUSTOMS COMPLIANCE
An article from Torres Law on 2nd July provides a useful summary of the customs compliance issues from a US perspective, in the light of increased enforcement of US import laws and regulations, and because, it says, there remains a knowledge gap among some importing companies and non-trade attorneys related to a few of the basics of import regulations. The article touches upon classification and valuation of the goods, what taking “reasonable care” means, what ACE reports are under the Automated Customs Environment, priority issues and areas of risk.
ATR SEEKS NEW EXPORT LICENSE FOR IRAN AIRLINER DELIVERIES
AIN Online on 2nd July reported that Franco-Italian airliner manufacturer ATR has applied for a new export licence from OFAC to allow it to deliver the final 12 ATR 72 of an order for 20 of the 70-seat turboprops placed in 2016 by Iran Air. It says that OFAC recently revoked ATR’s previous licence following new sanctions imposed in May by the Trump administration that bar further delivery of commercial airplanes to Iran. The new sanctions also prevent Airbus, ATR, and Boeing from selling parts and providing support for the aircraft already delivered. The proportion of US content that triggers sanctions compliance requirements generally amounts to 25% of the final product, but this falls to 10% when applied to what the US deems “terrorist-supporting countries” (e.g. Iran, North Korea, Sudan and Syria).
$2-3 MILLION SMUGGLED DAILY FROM AFGHANISTAN TO IRAN
The Financial Tribune in Iran reported on 3rd July that Iran’s rial has lost 40% of its value since President Trump’s decision on May 8th to pull the US out of the JCPOA. In the face of the threat of renewed US sanctions, Iran increasingly needs dollars and neighbouring Afghanistan, with a loosely regulated, dollarized economy and a border with few controls, is an obvious source. Iranian rules allow travellers to bring in up to €10,000 ($11,697). The official rate of exchange is 42,450 rials to the dollar, but the unofficial rate is some 77,000 to the dollar. The article quotes an estimate that as much as $2-3 million cross the porous borders of the western provinces of Herat, Farah and Nimruz into Iran every day.
TRIAL DELAYED FOR FRENCHMAN ACCUSED OF GAZA GUN-RUNNING
The Times in South Africa reported on 2nd July that Romain Franck, 24, a French employee at the French consulate in Jerusalem, accused of smuggling dozens of guns from Gaza to the West Bank in an official car, has appeared in an Israeli court, but had his trial delayed. He is accused along with several Palestinian suspects of belonging to a gun-running network.
LORRY DRIVER CHARGED WITH TRYING TO TAKE OVER £100,000 THROUGH PORT OF DOVER
Kent Online on 2nd July reported that Rimvydas Galinas has been charged with taking more than £100,000 in sterling through a Kent port. He was arrested after police stopped and searched an HGV in Dover on its way out of the UK.
http://www.kentonline.co.uk/dover/news/man-charged-with-laundering-more-than-100k-185586/
UK’S MOST WANTED FRAUD SUSPECT MARK ACKLOM ARRESTED IN SWITZERLAND
Manx Radio on 3rd July reported a Sky News story saying that Britain’s most wanted fraud suspect Mark Acklom, 45, has been arrested in a dramatic raid on his hideout, two years after he went on the run in Europe. He was held by police at an apartment he was sharing with his wife and their 2 young children in Switzerland. He is wanted in the UK for fraud after posing as a wealthy banker and MI6 agent and promising to marry a woman to get access to her £850,000 life savings. The hunt for Acklom has focused on the Zurich area from where it is believed he has been setting up various companies in a bid to attract investors. One business claimed to be manufacturing computer chips for black-box data recorders for cars. The company’s website suggested it had customers from the luxury car industry.
https://www.manxradio.com/news/uk-news/uks-most-wanted-fraud-suspect-mark-acklom-in-swiss-arrest/
http://www.nationalcrimeagency.gov.uk/news/1404-fugitive-conman-mark-acklom-arrested-in-switzerland
ENFORCING THE 4TH AML DIRECTIVE IN ROMANIA
On 2nd July, Schoenherr published an article about the implementation of the 4th EU Money laundering Directive in Romania. As with several other EU states, it has exceeded the 26th June 2017 deadline for transposition into national law by a year. The article says that on 31st May the Romanian government approved draft legislation transposing the Directive and introducing, among other things, important changes for private companies with regard to their reporting duties and transparency of ownership – uncertainty lingers as to when such provisions will be enforced. Non-listed private companies will have to convert all existing bearer shares into registered shares and keep a record of beneficial owners and disclose them to the reporting entities or government authorities. The Bill will also introduce stricter reporting duties and penalties for non-compliance. On bearer shares, the Directive provides that EU states must take appropriate measures only to prevent the misuse of bearer shares and bearer share warrants. The article says that Romania is banning bearer shares from the market – within 18 months from the domestic legislation’s entry into force, all companies that have issued bearer shares must convert them into registered shares. Another key element of the new draft law is the introduction of a central register of all beneficial owners of private companies, other than those already listed on a regulated stock market. The article provides further detail of the implementation.
https://www.lexology.com/library/detail.aspx?g=39e4e0f0-caf2-4a10-b033-a9f51024fc85
THAILAND: THE RICH WORLD’S NEW DUMPSITE FOR E-WASTE
An article in EurActiv on 3rd July reports that Thailand has become one of the largest dumpsites for electronic waste from developed countries since China’s January ban on the import of plastic waste. It reports on a visit by the Guardian to a site recently closed down by national authorities for infringing legislation on the importation of waste. Old Dell and HP printers, out of use Daewoo TV and mountains of keyboards, routers and other photocopying machines – all coming from foreign countries and particularly Europe and the US – could be found on site. Over the first 5 months of the year, e-waste imports in the country have increased by 37,000 tonnes compared to last year. Though such practices are increasing across Asia, the continent does not hold the record for most e-waste produced, which is probably Africa.
https://www.euractiv.com/section/circular-economy/news/thailand-new-dumpsite-for-western-e-waste/
US: THE NEW FINANCIAL EXTRATERRITORIALITY
On 3rd July, a research paper from the University of Oxford Faculty of Law reminds one that, since 2008, the US DoJ has brought numerous criminal actions against major foreign banks for tax evasion, benchmark manipulation, money laundering, sanctions violations, and corrupt payments that took place primarily outside the US and all of which were resolved before trial by non-prosecution agreements (NPA), deferred prosecution agreements (DPA), or plea agreements, resulting in unprecedented fines and other financial penalties: nearly $32 billion from 2008 to 2016, solely from non-US global systemically-important banks. The Paper examines the law and policy of what is termed the ‘new financial extraterritoriality’.
https://www.law.ox.ac.uk/business-law-blog/blog/2018/07/new-financial-extraterritoriality?src=ilaw
NEW ZEALAND: FRAUDSTER BEHIND $8.3 MILLION PONZI SCHEME JAILED FOR 8 YEARS
On 3rd July, NBR reported that the SFO had brought charges against Lance Ryan and Jimmie McNicholl after they used a forex website BlackfortFX (Arena Capital t/a) to defraud about 900 people, mostly from the Christchurch area, of $8.3 million.
JAMAICA: GOVERNMENT SEEKS $203 MILLION FORFEITURE FROM BUSINESSWOMAN OVER COUNTERFEIT GOODS
The Jamaica Observer on 2nd July reported that the Assets Recovery Agency is seeking the forfeiture of over $203 million from Chinese-Jamaica businesswoman Lan Yan as her alleged benefit from the retailing of counterfeit goods. This followed the seizure of $2,100,000 cash, which the police seized from the businesswoman in 2015, and is to be forfeited to the Government. The cash had been found in 4 different locations of an upstairs bedroom in her house hidden in black plastic bags. Lan was arrested and charged for multiple counts of unlawful use of trademark and pleaded guilty to the offences on April 6th 2016.
MALTA’S GAMBLING SECTOR CONTRIBUTED OVER €1.1 BILLION TO THE LOCAL ECONOMY IN 2017,
On 2nd July, Calvin Ayre reported that Malta’s gambling regulator’s annual reported has revealed the contribution made to the country’s economy by the gambling sector – some €100 million higher than 2016. There were 287 gaming operators at the end of 2017, 28 more than in 2016. The total number of remote gambling licences issued rose by 112 to 625, while full-time gaming jobs rose by 480 to 6,673, of which 5,327 worked in the remote gambling sector.
https://calvinayre.com/2018/07/02/business/malta-gaming-sector-annual-report-2017/
GAO: CONFLICT MINERAL DISCLOSURES IN US SHOW IMPROVEMENTS IN DETERMINING ORIGIN
Sandler Travis Rosenberg on 3rd July reported that slightly more companies investigating the origin of their conflict minerals were successful in 2017 compared to 2016, according to a recent report from the US Government Accountability Office. The article reminds one that US law requires companies that file reports with the SEC, whether foreign or domestic, must file by May 31st each year a disclosure of their use of tantalum, tin, gold, or tungsten originating in the DRC or an adjoining country if those minerals are necessary to the functionality or production of a product they manufacture or contract to manufacture. The minerals at issue are used to make a wide range of goods such as cell phones, computers and video game systems, medical equipment, high-speed tools, machine parts, glass, and lamps.
https://www.strtrade.com/news-publications-conflict-minerals-disclosure-due-diligence-070318.html
DHS USES UNDERCOVER CRYPTOCURRENCY SCHEME TO BUST DARK WEB
Government CIO Media on 2nd July reported that investigators from Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) posed as cryptocurrency money launderers on the dark web to find people selling illegal narcotics, and according to the DoJ, it worked — opening more than 90 active cases. Various law enforcement agencies arrested more than 35 alleged Dark Web vendors including those selling cocaine, marijuana and LSD. Agencies also seized Xanax and opioid fentanyl and charged defendants with weapon possession offences. Posing as a money launderer for Bitcoin was said to be key.
PENALTIES FOR CORPORATE OFFENDERS IN AUSTRALIA SET FOR SIGNIFICANT INCREASE
Clifford Chance on 3rd July reported that Australia is preparing for a big increase in the maximum penalties for corporate crime. The proposed increases bring Australia into line with the sanctions available in other jurisdictions, particularly the UK and US.
https://www.cliffordchance.com/briefings/2018/07/penalties_for_corporateoffendersinaustrali.html
FORMER MALAYSIAN PRIME MINISTER NAJIB RAZAK ARRESTED IN 1MDB GRAFT PROBE
The Globe & Mail on 3rd July reported that Malaysian anti-corruption agents have arrested former Prime Minister Najib Razak following a probe into how money went missing from a state fund he founded almost a decade ago. It reports that 1MDB was founded by Najib in 2009 and is now being investigated in at least 6 countries for alleged money laundering and graft. The article says that the initial focus of the Malaysian Anti-Corruption Commission (MACC) investigation focused on how $10.6 million went from SRC International to Najib’s account. SRC was created in 2011 by Najib’s government to pursue overseas investments in energy resources and was a unit of 1MDB until it was moved to the finance ministry in 2012.
SPAIN REDUCES GAMBLING TAX IN LATEST BUDGET
Gambling Insider on 3rd July reported that Spain has included several gambling tax reductions in its 2018 budget, including a 5% cut to online gambling operator’s taxes. The budget will see gross gaming revenue tax for online operators cut from 25% to 20%. The new tax reductions will cover most online gambling offerings including sports betting, bingo, poker, betting exchanges, online casino games, and fixed odds betting; there are also changes to the taxation of pari-mutuel betting. The budget did not include any change to the 10% tax rate for online operators located in Ceuta and Melilla.
https://www.gamblinginsider.com/news/5505/spain-reduces-gambling-tax-in-latest-budget
SLOVAKIA TAX OFFICERS RAID 100 FACILITIES IN ONLINE GAMBLING BUST
Calvin Ayre on 3rd July reported that raids were was carried out on June 28th /29th and considered to be the biggest action since the newest gambling law took effect earlier this year. Authorities reportedly confiscated 5 of the so-called quiz machines and sealed 75 gambling units during the simultaneous raids in the country. The website says that there are at least 800 quiz machines across Slovakia and most of these machines reportedly have servers located outside the country.
RUSSIAN ALUMINIUM COMPANY RUSAL ELECTS A NEW BOARD OF DIRECTORS IN AN EFFORT TO HAVE US SANCTIONS LIFTED
The European Sanctions Blog on 3rd July reported that RUSAL is attempting to circumvent US sanctions imposed in April, Oleg Deripaska having already resigned.
https://europeansanctions.com/
FRENCH ARMS EXPORTS HALVED IN 2017, MIDDLE EAST CLIENTS STILL BIGGEST
On 3rd July, France 24 reported that French weaponry exports fell sharply last year in the absence of major deals to sell new Rafale fighter jets, with Middle Eastern clients again making up the bulk of the orders, the defence ministry said. The ministry said the value of exports dropped to €6.9 billion from €14 billion the previous year and the record €17 billion booked in 2015.
ITALIAN INTERIOR MINISTER BACKED BY POLITICIAN ‘WITH LINKS TO MAFIA’
The Guardian on 3rd July reported that Matteo Salvini’s electoral victory in Calabria during the Italian general election this year was supported by a former politician who law enforcement authorities have claimed has close ties to the ‘Ndrangheta, the criminal organisation that controls most of the cocaine trade. The head of the League party, who has emerged as a de facto prime minister, won his senate seat in the region with the backing of a former mayor of Reggio Calabria, Giuseppe Scopelliti, with whom Salvini had a political alliance and who was arrested weeks after the March poll for forging documents while he was mayor.
PODCAST: BUYING FAKES
In the latest TRACE podcast, which explore the world of financial crime: corruption, fraud, money laundering and sanctions. Valerie Salembier, former publisher of Harper’s Bazaar and founder of The Authentics Foundation, discusses the true cost of counterfeit luxury items: child labour, trafficked labour and organised crime.
https://www.traceinternational.org/bribe_swindle_or_steal
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (COMMENCEMENT AND TRANSITIONAL PROVISIONS) REGULATIONS 2018
In the UK, these Regulations bring into force various provisions of the European Union (Withdrawal) Act 2018, which recently received Royal Assent.
http://www.legislation.gov.uk/uksi/2018/808/contents/made
UK CANNABIS REVIEW: PART 1
On 3rd July, the UK Government published a review of recent evidence of the therapeutic and medicinal benefits of cannabis-based products. The first part of a 2-part review of the UK law and policy on cannabis-based medicines (following recent controversy, including a young boy using such medicine to counter epileptic fits). It summarises the results of recent reviews and discusses the quality of evidence. The report advises that cannabis-based medicinal products should be moved out of a Schedule 1 classification. Separately, the Advisory Council on the Misuse of Drugs will provide an assessment, based on the balance of harms and public health needs, of what (if anything) should be rescheduled.
https://www.gov.uk/government/publications/cannabis-scheduling-review-part-1
UK: TOBACCO PRODUCTS AND E-CIGARETTE CROSS-BORDER SALES REGISTRATION
On 3rd July, Public Health England published updated information (and registration application) for businesses that supply tobacco products and e-cigarettes via cross-border distance sales can register with the UK government. Such traders need to register their business if they supply tobacco products and/or e-cigarettes via cross-border distance sales, for example online sales, to consumers in another EEA state. The requirement also applies to businesses established in the EEA or any other country selling to UK consumers. This is necessary to comply with the EU Tobacco Products Directive and the requirement has applied since 2016.
LAS VEGAS REAL ESTATE BROKER ACCUSED OF LAUNDERING DRUG MONEY FOR DRUG CARTELS
OCCRP on 3rd July reported that a Las Vegas real estate broker has been arrested for allegedly helping Mexican and Central American drug cartels to launder criminal profits through Las Vegas real estate and dummy corporations. Luis Eduardo Rodriguez is accused of aiding major international drug traffickers by moving hundreds of thousands of dollars in drug money through his real estate business and acting under the direction of Jesus Rodriguez-Jimenez, the leader of a global money-laundering organisation. Rodriguez also allegedly assisted Rodriguez-Jimenez in recruiting “managers” for various shell corporations used by the organisation to launder money. It is said that the DEA has been investigating Rodriguez-Jimenez’s organisation and its cartel clients since 2013.
VIETNAM JAILS FORMER CENTRAL BANK OFFICIAL AMID GRAFT CRACKDOWN
Baker McKenzie on 3rd July reported that a former deputy governor of the central bank has been jailed for 3 years. In 2012, Dang Thanh Binh, 64, and 4 accomplices were accused of “lack of responsibility”, leading to losses of up to $654 million at the privately-owned Vietnam Construction Bank.
http://www.riskandcompliancehub.com/vietnam-jails-former-central-bank-official-amid-graft-crackdown/
EU BRIEFING: TAX TRANSPARENCY FOR INTERMEDIARIES
On 3rd July, the EU Parliament Research Service published a briefing paper on Council Directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information (AEOI) in the field of taxation in relation to reportable cross-border arrangements. This followed situations highlighted by the ‘Panama papers’ and ‘Paradise papers’, among other leaks, which show how certain intermediaries and other providers of tax advice appear to have facilitated companies and individuals in avoiding taxation, often through complex cross-border schemes involving routing assets to, or through, offshore entities. Intermediaries can have different professions and professional qualifications, including: accounting firms, accountants working for banks, law firms (large and small) and specialist tax lawyers working for banks or multinationals, wealth management professionals and offshore specialist providers. In June 2017, the EU Commission adopted a proposal aimed at ensuring early information on such situations, by setting an obligation to report cross-border arrangements designed by tax intermediaries or taxpayers and by including the information collected in the automatic exchange of information between tax authorities within the EU. The Directive was adopted on 25th May, and it is to be applied from 1st July 2020, it must be implemented in the law of Member States by 31st December 2019. The Directive as adopted also refers to the list of non-cooperative jurisdictions, jurisdictions with inadequate or weak regime of enforcement of the AML legislation as well as non-transparent legal or beneficial ownership.
http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/614634/EPRS_BRI(2017)614634_EN.pdf
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