OTHER THINGS YOU MAY HAVE MISSED – JULY 4

4th July 2018

SINGAPORE UNDER SCRUTINY FOR ALLEGED INVOLVEMENT IN ILLEGAL SAND IMPORT FOR LAND RECLAMATION

The Online Citizen on 4th July reported that an article in the New Straits Times has indicated that as of Nov 2017, sand extracted illegally from the coastlines of Pahang and Kelantan in Malaysia were still being exported to Singapore by one of two companies that were issued approved permits.  This was done alongside the export of such sand to India, where “sand mafias” have proliferated.  Singapore, in order to meet a high demand for land expansion and reclamation, has also been accused of engaging in other forms of sand theft.  One such example is “paying smugglers to steal entire beaches under the cover of the night” in neighbouring countries such as Malaysia and Indonesia.  The article also reminds one of past allegations of sand “theft” by Singapore.

https://www.theonlinecitizen.com/2018/07/03/singapore-under-scrutiny-for-alleged-involvement-in-illegal-sand-import-for-land-reclamation/

BREXIT LEXICON

On 2nd July, Paul Weiss published a useful A to Z guide to the terminology of Brexit, from acquis (the body of common rights and obligations that are binding on all EU member states based on EU treaties, EU legislation, ECJ case law, declarations and resolutions adopted by the EU) to Verhofstadt, Guy (the lead Brexit representative for the European Parliament).

https://www.paulweiss.com/media/3977903/brexitlexicon_2july2018.pdf

DANSKE BANK’S ESTONIAN MONEY LAUNDERING SCANDAL GROWS

EU Observer on 3rd July reported that it is reported that far more money was sent through Danske Bank’s Estonian branch than previously known.  The total amount can now be calculated at €7 billion, twice as much as previously estimated, making the case now one of the biggest known in Europe.

https://euobserver.com/tickers/142271

ROMANIA: NEW CRIMINAL CODE “BREACHES UN CONVENTION AGAINST CORRUPTION”

Romania Insider on 4th July reported that part of a new law that redefines abuse of office in the new criminal code breaches the dispositions of the UN Convention against Corruption, according to Romania’s General Prosecutor’s office, saying that the new definition narrows the scope of the crime too much.  The news site says that the new definition incriminates only the public servants who break the law while in office to get material benefits for themselves of for close relatives.  However, this is said to be rarely the case, as most public officials use intermediaries and do not receive any direct benefits from abusing their powers.

https://www.romania-insider.com/criminal-code-un-convention-corruption/?src=ilaw

JERSEY FINANCE SURVEY SHOWS ASIAN INVESTORS WANT TAX TRANSPARENCY

The bailiwick Express on 3rd July reported about a new survey by Jersey Finance in Hong Kong: “The future for International Financial Centres – Views from Asia’s Wealth Management Market”.  It has found that tax transparency and regulatory compliance – instead of secrecy – are the top priorities for Asian High Net Worth Individuals (HNWI) using International Finance Centres.

https://www.bailiwickexpress.com/jsy/business/asian-investors-want-tax-transparency-and-regulatory-compliance/?t=i#.Wzx8G_ZFx9A

CONCERN AT HMRC’S EAGERNESS TO RESORT TO LEGAL ACTION

The UK Chartered Institute of Taxation issued a news release expressing its concern at HMRC’s apparent eagerness to litigate rather than make concessions to reasonable viewpoints when advised that there is less than 50% chance of successful legal action.  It says that the Alternative Dispute Resolution (ADR) should be promoted more widely as a means of curbing this unwelcome trend.  The Institute has made a submission to the Treasury Sub-Committee.

https://www.tax.org.uk/media-centre/press-releases/press-release-concern-hmrc’s-eagerness-resort-legal-action

TRUMP MAY BE SEEKING WAYS TO SKIRT WTO AND INCREASE TARIFFS

Sandler Travis Rosenberg on 4th July reported that President Trump is reportedly considering a draft Bill that would give him authority to ignore WTO rules and increase US import tariffs. However, any such Bill would have major ramifications and is not likely to be approved by Congress.  According to press reports, the president believes the WTO has been detrimental to US interests.

https://www.strtrade.com/news-publications-WTO-tariffs-Trump-reciprocal-070518.html

ITALY HAS ADOPTED A BLANKET BAN ON THE ADVERTISING OF GAMING WITH CASH PRIZES

Intergame on 4th July reported that Italy had adopted a measure and quoted the Prime Minister saying that Italy is the first country in Europe to ban gaming advertising.  The ban will come into force immediately once the decree is finalised, which will probably be January 1st 2019.  Heavy fines are included for non-compliance, with a minimum of €50,000, the fines being donated to the fund against pathological gambling.  The ban, part of what the government calls the “Dignity Decree”, covers all forms of advertising through newspapers and magazines, TV and radio, the internet and the advertising of sponsorships with sports clubs.

https://www.intergameonline.com/casino/news/italy-adopts-cash-gaming-ban

HONG KONG’S LUXURY TIMBER PROBLEM: MAJOR STOCKPILES, MINOR PROSECUTIONS

Asian news site Coconuts on 4th July reports that 50 cargo containers at secure sites contain a stockpile of more than 1,200 tons of seized tropical hardwood that attests to the city’s role as a major conduit for timber smugglers on route to China.  So far this year, Customs has intercepted 4 major shipments of rosewood and 1 massive load of red sandalwood, a timber so valuable it’s known as “red gold”.  The seizures already represent more than twice the amount captured in 2017.  One major obstacle, say activists, is that trafficking in endangered species does not fall under the territory’s Organized and Serious Crimes Ordinance – hence customs and the AFCD have more limited investigative powers and resources to combat what are often transnational syndicates responsible for the trade.  The article goes on to provide more detail and background to the illicit trade.

https://coconuts.co/hongkong/features/hong-kongs-luxury-timber-problem-major-stockpiles-minor-prosecutions/

HOW ICIJ DEALS WITH MASSIVE DATA LEAKS LIKE THE PANAMA PAPERS AND PARADISE PAPERS

ICIJ on 3rd July reported on how it deals with massive dumps of raw data.

https://www.icij.org/blog/2018/07/how-icij-deals-with-massive-data-leaks-like-the-panama-papers-and-paradise-papers/

ROMANIAN-ORGANISED SOCIAL BENEFIT FRAUD RING DISMANTLED IN GERMANY

On 4th July, Eurojust reported that operations were carried out simultaneously in Romania and Germany in a joint action day, involving arrests (including execution of 4 German European Arrest Warrants), searches (16 in Germany and 11 in Romania), hearings and freezing orders.  The case involved, between 2013 and 2017, a Romanian organised crime group from the Braşov region recruited and trafficked more than 50 Romanian families to Dortmund, with the promise of employment.  The families were then housed by the criminals and bogus employment documents were drawn up for some of the family members, who were compelled to sign documents in German without understanding the contents.  The jobs, which never existed, were officially terminated, and the criminals compelled the families to open bank accounts and apply for social benefits, including child allowances. The gang confiscated the millions of euros deposited by the German authorities, laundered it, and sent it to Romania by car or wire transfer.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2018/2018-07-04.aspx

ITALY’S TOP COURT ORDERS €49 MILLION TO BE SEIZED FROM LEAGUE PARTY FUNDS

The Local in Italy on 4th July reported that the Court of Cassation recommended a “blanket” seizure of funds from the junior party in the ruling coalition in connection with the fraud case against its founder Umberto Bossi, his son Renzo and ex-treasurer Francesco Belsito.  The 3 were convicted in July 2017 of embezzling public funds between 2008-10, and the party ordered to repay nearly €49 million in state financing that it had received during that period.   Since then €1.5 million of the League’s assets have been frozen, but the party succeeded in blocking an order by a lower court to confiscate the rest of the sum.  That appeal was overturned by Italy’s highest court, however, after investigators found scant money in the League’s accounts and began to suspect that some may have been moved abroad to escape seizure.

https://www.thelocal.it/20180704/italy-league-party-funds-seized-embezzlement-umberto-bossi?src=ilaw

CHINA FREES EX-RIO TINTO MINING EXECUTIVE JAILED ON CORRUPTION CHARGES IN 2010

Reuters reported on 4th July that Stern Hu, an Australian citizen and the former head of Rio Tinto’s China iron ore business, has been released from a Shanghai prison after serving 8 years of a 10-year sentence following a 2010 conviction for corruption and stealing commercial secrets.  Hu was one of 4 defendants arrested by China and subsequently fired by Rio Tinto. The company conducted an internal audit but did not find any wrongdoing by the company itself.  The 4 were convicted of accepting bribes in return for helping private Chinese mills secure access to relatively low-cost and stable term iron ore from Rio Tinto and of stealing commercial secrets that helped the company in iron ore negotiations with Chinese mills.

https://www.reuters.com/article/china-australia-stern-hu/update-2-china-frees-ex-rio-tinto-executive-jailed-on-corruption-charges-in-2010-idUSL4N1U02Z2?src=ilaw

UK NOTIFIES AMENDMENT OF SYRIA SANCTIONS

On 4th July, HM Treasury published a Notice advising of changes to the Syria sanctions lists following the amendment of EU Regulation 2018/774/EU by a Corrigenda in the EU Official Journal.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/722436/Notice_Syria_2018_774.pdf

WOMAN WHO TRIED TO LAUNDER NEARLY £90,000 FOR FRAUD GANG LEADER HUSBAND WALKS FREE FROM COURT

The Liverpool Echo on 4th July reported that Danielle Wren was cleared because there was no evidence she knew funds going into her account were the proceeds of crime.  She is the wife of Timothy Wren, whose gang cold-called people and conned them into buying supposedly lucrative plots, but in reality, the land did not have any development potential and even included protected green belt, which could never have been built on.  He and 4 others crooks enjoyed a life of luxury, while victims, including vulnerable pensioners, vicars and teachers, lost their life savings, but he was jailed for 8 years in 2016.

https://www.liverpoolecho.co.uk/news/liverpool-news/mum-who-tried-launder-90k-14867119

HOW THE GOVERNMENT MONITORS IMPORTS INTO THE UK

On 4th July, the Department for International Trade published updated information on import controls and import licensing.  It says that an import licence is not needed to import the majority of industrial goods into the UK or EU.  However, some industrial goods need import licences, issued by the Import Licensing Branch (ILB), as a result of controls imposed at national, EU or UN level. ILB publicises these restrictions by issuing Notices to Importers.  Import controls can be set at EU or national (UK) levels, and there are also international sanctions measures.  It explains that there are 3 types of import control – here are 3 types of control:

  • bans – where no import is allowed
  • quotas – where the volume of goods is restricted
  • surveillance – where the import of goods is monitored with licences

https://www.gov.uk/guidance/import-controls

GAMBLING ADVERTISING: REGULATION IN GREAT BRITAIN

On 4th July, the House of Commons Library published a briefing paper that says that, in October 2017, DCMS published a range of proposals to strengthen protections around gambling.  These included a package of measures relating to advertising. A responsible advertising campaign is expected to go live in 2018. GambleAware, an independent charity tasked to fund research, education and treatment services to help to reduce gambling-related harms in Great Britain, has commissioned new research on the effects of marketing and advertising on young people and vulnerable groups.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7428

UK: HOW GDP STATISTICS ARE CHANGING FROM JULY 2018

On 2nd July, the House of Commons Library published a briefing paper providing a summary of changes the Office for National Statistics (ONS) is making to the GDP publication schedule from July 2018, including a new monthly GDP estimate.  A new publication release schedule introduced in July 2018 will see estimates of monthly GDP and GDP growth published for the first time.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8358

INDIA’S “MOST WANTED” ONLINE GAMBLING OPERATOR ARRESTED

Calvin Ayre on 4th July reported that India’s leading illegal online gambling operator had been arrested.  Police in Mumbai had arrested 9 individuals, including Ramesh Chaurasia and his son Anchal.  They are directors of Game King India Pvt Ltd, which operates the gamekingindia.com and planetgonline.com gambling domains.

https://calvinayre.com/2018/07/04/business/indias-online-gambling-most-wanted-run-to-ground-again/

AUSTRALIA SPENT €33 MILLION DEFENDING ITS CIGARETTE PLAIN PACKAGING LAWS

TJI on 4th July reported that freedom of information documents have revealed the Australian government spent almost €33.4 million defending its plain packaging laws in a case brought by Philip Morris Asia at the Permanent Court of Arbitration in The Hague.

http://www.tobaccojournal.com/Cost_of_plain_packs_challenge_revealed.54874.0.html

MORE SEMINARS PLANNED AS UK BRACES FOR NEW CUSTOMS SYSTEM

Air Cargo News on 4th July reported that a series of new seminars are being planned to prepare the UK’s supply chains for a new Customs system.   The Customs Declaration Service (CDS) will replace the current system, CHIEF, which has been in place since 1994.  The first phase of CDS is set to be implemented in August, followed by the second phase in November and it will be fully functioning by January 2019.  Hundreds of delegates have already attended seminars, but extra seminars are now being planned for the UK-wide roadshow in Heathrow, Southampton and Felixstowe in the near future.

http://www.aircargonews.net/news/policy/customs/single-view/news/more-seminars-planned-as-uk-braces-for-new-customs-system.html

FCA PROPOSES DIRECTORY OF FINANCIAL SERVICES WORKERS

Mondo Visione on 4th July carried an item from the UK FCA about its proposals for a new Directory to help consumers and firms check the status and history of individuals working in financial services.  The Directory will include all those who hold Senior Manager positions requiring FCA approval and those whose roles require firms to certify that they are fit and proper.  This includes those in consumer-facing roles, such as mortgage and investment advisers.  The Directory has been designed to provide user friendly, practical and easy to understand information.  For example, consumers will be able to search by location to find local advisers.

http://www.mondovisione.com/media-and-resources/news/uks-financial-conduct-authority-proposes-new-directory-of-financial-services-wo/

EASE OF DOING BUSINESS COMPARED FOR 25 EUROPEAN CITIES

EU Business on 4th July reported that a new report from the World Bank Tuesday assesses the support and obstacles entrepreneurs find in setting up and expanding businesses in 25 cities in Croatia, the Czech Republic, Portugal and Slovakia.  The report analyses business regulations affecting domestic SME in 5 “Doing Business” areas: Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, and Enforcing Contracts.  It is part of a series of subnational reports being produced by the World Bank Group at the request of and funded by the European Commission.  A first edition, covering 22 cities in Bulgaria, Hungary and Romania, was released in 2017.

https://www.eubusiness.com/news-eu/doing-business.37jk

ANTI-MONEY LAUNDERING AND COUNTERING THE FINANCING OF TERRORISM (UNREGULATED DOMESTIC TRUSTEES) CODE 2018

This Code is on the Order paper for the July sitting of Tynwald, the parliament of the Isle of Man.  It is made under powers in the Proceeds of Crime Act 2008 and Terrorism and Other Crime (Financial Restrictions) Act 2014 and contains provisions to prevent money laundering and the financing of terrorism by unregulated domestic trustees.   Failure to comply with the requirements of this Code would be an offence.   An unregulated domestic trustee is defined in the Code as being means a trustee of an express trust that is governed by or otherwise subject to the law of the Island and who is resident on the Island;  is not (and is not required to be) the holder of a licence issued under the Financial Services Act 2008 which permits the holder to carry on the regulated activity  of providing trust services; and who is not already required to comply with the Anti-Money Laundering and Countering the Financing of Terrorism Code 2015.  Like much else in recent changes to Island legislation and processes, this Code follows the national risk assessment and MONEYVAL evaluation and their follow-up.

http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2018-SD-0191.pdf

ISLE OF MAN: “FIT AND PROPER” AMENDMENT OF FSA RULE BOOK

The Order Paper for the July sitting of the parliament of the Isle of Man, Tynwald, includes an order making necessary amendments to the Financial Services Rule Book 2016 which result from changes to, and harmonisation of, the Financial Services Authority’s process for the assessment of fitness and propriety.

Financial Services (Amendment) Rule Book 2018 (SD 2018/0151)

http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2018-SD-0151-MEMO.pdf

ISLE OF MAN AML/CFT HANDBOOK UPDATE

On 4th July the Financial Services Authority in the Isle of Man advised that some amendments had been made to the Anti-Money Laundering and Countering the Financing of Terrorism Handbook.  The changes are said to reflect recommendations of the MONEYVAL evaluation of the Island, and revised FATF guidance.

https://www.iomfsa.im/fsa-news/2018/jul/amlcft-handbook-update/

BLOW AGAINST ILLEGAL TRAFFICKING OF CULTURAL GOODS

Europol on 4th July reported that 250 police officers have searched simultaneously 40 houses in the Italian regions of Sicily, Calabria, Piedmont, Apulia as well as in Ehningen in Germany, London and Barcelona.  On the basis of European arrest warrants, 23 suspects were detained, and over 25,000 archaeological items were seized as part of this investigation, worth a total of €40 million.  In the district of Caltanisetta, in the centre of Sicily, which is rich in archaeological sites from the Greek and Roman epochs, local members of the organised crime group illegally excavated artefacts which were then brought out of Italy, equipped with false provenances and sold via German auction houses.  Key facilitators were also acting from Barcelona and London, co-ordinating the supply chain and providing technical support.

https://www.europol.europa.eu/newsroom/news/hard-blow-against-illegal-trafficking-of-cultural-goods

CORRECTION OF EU SYRIA SANCTIONS LISTS

EU AMENDMENT OF SYRIA SANCTIONS

On 4th July, the EU advised in its Official Journal that the entry for Bassam Sabbagh contained in EU Regulation 2018/774/EU and Council Decision 2018/778/CFSP of 28th May had been deleted.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.167.01.0036.02.ENG&toc=OJ:L:2018:167:TOC

UK NOTIFIES AMENDMENT OF SYRIA SANCTIONS

On 4th July, HM Treasury published a Notice advising of changes to the Syria sanctions lists following the amendment of EU Regulation 2018/774/EU by a Corrigenda in the EU Official Journal.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/722436/Notice_Syria_2018_774.pdf

NATIVE AMERICAN TRIBES TO FORFEIT $3 MILLION IN PROFITS MADE FROM PAYDAY LENDING SCHEME

Buckley Sandler LLP on 29th June published an article saying that the US DoJ had filed 2 forfeiture complaints, which cover agreements with 2 Native American tribes to forfeit a combined $3 million in profits made from their involvement in an allegedly fraudulent payday lending scheme.  Payday loans are small loans subject to regulation at the state level in the US.  Many states also have criminal usury laws to protect consumers.  18 states and the District of Columbia prohibit extremely high cost payday lending, 3 states permit lower-cost payday lending and 32 states allow higher-cost loans.  Some states impose other limits, e.g. Washington limits borrowers to 8 payday loans per year.

For more information on US payday lending, see –

https://paydayloaninfo.org/state-information

Both the tribes involved are said to have also acknowledged as part of the settlements that they were used as a way to sidestep state usury laws — tribes answer only to the federal government, which doesn’t have a usury statute for payday loans.  They are said to have been linked to Scott Tucker, 56, who is currently serving a 16-year jail sentence

https://www.kansascity.com/news/local/crime/article213852304.html#storylink=cpy

https://buckleysandler.com/blog/2018-06-29/native-american-tribes-forfeit-3-million-profits-made-payday-lending-scheme#page=1

INSIDE THE EXTRAVAGANT LIFE OF THE WORLD’S BIGGEST PROFESSIONAL GAMBLER KNOWN AS THE ‘THE JOKER’

The Daily Mail in Australia on 3rd July carried an article about Australian billionaire punter Zeljko Ranogajec (aka John Wilson), described as a master mathematician, and a man who bets $3 billion a year on horse racing as the world’s biggest professional gambler.  Such is the value of his business gaming companies – including Australia’s Tabcorp – guarantee him rebates from the betting pool, sometimes up to as much as 20%.  In 2008 he revealed his stake in the highly successful syndicate called ‘20.613’ percent.  When the Australian Tax Office started looking into the syndicate, he moved his business address to the Isle of Man.

http://www.dailymail.co.uk/news/article-5885445/Inside-private-life-Zeljko-Ranogajec-worlds-biggest-gambler.html

CITY UNIVERSITY OF LONDON PARTNERS WITH KINDRED AND BETBUDDY TO EXPLORE USE OF ARTIFICIAL INTELLIGENCE IN AML INITIATIVES

On 3rd July, City University of London reported that a collaboration between City, University of London’s Research Centre for Machine Learning, the online gambling operator Kindred, and BetBuddy, Playtech’s responsible gambling data analytics company, has produced a White Paper: “Raising Standards in Compliance: Application of artificial intelligence to online data to identify anomalous behaviours”.  It represents the first findings from a 3-year project which will explore how artificial intelligence can be used in AML initiatives.  This initial research focused on analysing areas requiring improvement for artificial intelligence (AI) to be deployed.  The next phase of research will use real-world online gambling data to detect signs of money laundering.  As well as providing a summary of the main discussions taken from the expert and stakeholder interviews – which included experts from national crime agencies, regulators, trade associations, suppliers, and operators – the paper identifies a number of challenges to the online gambling industry and makes key technical recommendations, some of which should be tackled at industry level, and others which will form the basis of later phases of technical research.  The recommendations included –

  • development of a single format or technical protocol for submitting Suspicious Transaction Reports (STRs), Suspicious Activity Reports (SARs), and Defence Against Money Laundering (DAML) across jurisdictions that enable operators to submit cases using a consistent system while also providing feedback on submission quality;
  • continuation of efforts to develop a single central database for customers flagged for suspicious gambling activity, to enable enhanced monitoring of flagged customers across industry;
  • developing more sophisticated and cost-efficient methods to improve ongoing monitoring, with techniques that analyse player’s behaviour below the minimum threshold levels required by regulators, whilst not relying on increased staff numbers to broaden monitoring scope;
  • using data to develop more sophisticated behavioural checks and customer affordability segments to support ongoing enhanced source of wealth and source of funds checks for higher spenders, and not just at specific points required by regulators; and
  • investing in the modernisation and simplification of KYC and source of funds processes, and not viewing these as an administrative or ‘check box’ compliance process.

The report is available at –

https://www.city.ac.uk/__data/assets/pdf_file/0014/421106/City-collaborative-Whitepaper-Anti-Money-Laundering-and-Artificial-Intelligence-02July2018.pdf