OTHER THINGS YOU MAY HAVE MISSED – JULY 7

IRISH CENTRAL BANK IMPOSES FIRST CYBER-FRAUD SANCTION

McCann Fitzgerald on 5th July published an article saying that the Central Bank of Ireland has for the first time imposed a sanction on a firm following a loss of client funds through cyber-fraud directly caused by significant regulatory breaches and failures by the firm.  This followed a case where, acting on the instructions of a fraudster impersonating a client, the firm facilitated a series of transactions resulting in the loss of €650,000 of the client’s funds.  The Central Bank imposed a fine of €443,000 for the regulatory breaches causing the loss of client funds – but it would have been €825,000 had it not been for the financial position of the firm.

https://www.mccannfitzgerald.com/knowledge/financial-services-regulation/central-bank-imposes-first-cyber-fraud-sanction

MONEYVAL PLENARY

The Council of Europe on 6th July reported on the outcome of the 56th Plenary of its AML/CFT body, MONEYVAL.  Amongst other issues, MONEYVAL completed the country assessments of Albania and Latvia and adopted follow-up reports of Armenia, Bulgaria, Croatia, Liechtenstein, Montenegro, Poland, Romania, the Slovak Republic, FYR Macedonia and the Isle of Man.

https://www.coe.int/en/web/moneyval/-/outcome-of-moneyval-s-56th-plenary-meeting

EU PARLIAMENT VOTES TO SUSPEND THE EU-US PRIVACY SHIELD: WHAT IS THE CONSEQUENCE?

On 5th July, Greenberg Traurig published an article on the non-binding vote by MEP, to suspend the EU-US Privacy Shield (Privacy Shield) if the US does not meet specific requirements by 1st September, which, it says, may not be supported by other parts of the EU framework  The EU-US Privacy Shield Framework was finalised in July 2016.  The vote sets the stage for the upcoming annual review of how and whether the US is implementing the Privacy Shield as promised.  The article says that over 3,000 companies having self-certified their compliance with the Privacy Shield Principles and more joining every day as part of their compliance with the EU GDPR, the Privacy Shield is an important tool for numerous US companies doing business with the EEA.  The article says it is an important tool for entities established in the EEA because it facilitates their exchange of data with their US counterparts and reduces the amount of paperwork when transferring data to the US.

https://www.gtlaw.com/en/insights/2018/7/eu-parliament-votes-to-suspend-the-eu-us-privacy-shield-what-does-it-mean

BRIEFING PAPER: TAXATION (CROSS-BORDER TRADE) BILL – THE “CUSTOMS BILL”

On 6th July, the House of Commons Library published an updated version of a briefing paper in anticipation of a Commons debate on 16th July.  The purpose of the Bill is to allow the Government to create a functioning customs, VAT and excise regime for the UK after Brexit.  The Bill also contains trade defence measures to protect UK industry from unfair competition from abroad and provisions on trade preferences which allow imports from developing countries to benefit from reduced customs duties.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8126

US: 2 CONVICTED IN $30 MILLION INSIDER TRADING SCHEME WITH LINKS TO UKRAINE

Rferl on 6th July reported that Vitaly Korchevsky, a former Morgan Stanley vice president, and his co-defendant, Vladislav Khalupsky, were each found guilty on securities fraud and conspiracy counts and face a maximum of 20 years in prison.  The $30 million insider trading case has been called one of the largest on record and involved sensitive business information stolen by computer hackers based in Ukraine.  Authorities said more than 150,000 corporate press releases were hacked before their scheduled release from February 2010 to August 2015, hacking into the computer networks of 3 business newswires that distribute corporate press releases.

https://www.rferl.org/a/two-convicted-korchevsky-khalupsky-30-million-dollar-insider-trading-scheme-ukraine-computer-hackers/29348233.html?src=ilaw

THE END OF BRAZIL’S PLAYBOY BILLIONAIRE

The BBC on 6th July carried a feature on the downfall of former billionaire, Eike Batista, described as a “maverick mining tycoon”.  In 2017, Operation Car Wash – a wide investigation that revealed corruption in all major Brazilian political parties – revealed that Eike Batista used his connections with officials in Rio de Janeiro state to obtain public contracts.  A judge has sentenced him to 30 years in jail for allegedly paying $16.5 million to former Rio de Janeiro governor Sergio Cabral.

https://www.bbc.co.uk/news/business-44742012?src=ilaw

‘GODFATHER OF PAYDAY LENDING’ SENTENCED TO 14 YEARS IN US

Reuters on 6th July reported that Charles Hallinan, 77, has been sentenced for conspiring to collect on hundreds of millions of dollars in illegal high-interest loans issued to thousands of people and found guilty on charges including racketeering conspiracy, mail fraud and wire fraud.  The charges were filed in 2016 in a crackdown by prosecutors during the Obama Administration crackdown on abusive practices by payday lenders.  From 1997 to 2013 he operated and financed numerous payday lending companies with names like Easy Cash and Apex 1 Processing that issued and collected debt from loans whose annual interest rates could exceed 780%.

https://www.reuters.com/article/us-usa-paydaylending-crime/godfather-of-payday-lending-sentenced-to-14-years-in-u-s-prison-idUSKBN1JW2XH

US COURT IMPOSES MAXIMUM FINE ON CHINESE WIND GROUP FOR THEFT OF TRADE SECRETS

On 6th July, the US DoJ issued a news release saying that a manufacturer and exporter of wind turbines based in China was sentenced for stealing trade secrets from AMSC, a US-based company formerly known as American Superconductor Inc.  AMSC’s losses from the theft exceeded $550 million and imposed the maximum statutory fine in the amount of $1.5 million on Sinovel Wind Group LLC.  Sinovel was convicted of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud on 24th January.

https://www.justice.gov/opa/pr/court-imposes-maximum-fine-sinovel-wind-group-theft-trade-secrets?src=ilaw

CIS COUNTRIES TO PROVIDE EACH OTHER LEGAL ASSISTANCE IN CORRUPTION INVESTIGATIONS
Belarus News on 7th July reported that the CIS countries (Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Uzbekistan) will provide each other legal assistance in the investigation of corruption cases
http://eng.belta.by/society/view/cis-countries-to-provide-each-other-legal-assistance-in-corruption-investigations-113175-2018/?src=ilaw

1MDB PROBE: MACC NOW FOCUS ON OBTAINING EVIDENCE FROM OVERSEAS

On 7th July, Bernama.com reported that the investigation into the 1MDB case involving local evidence has been completed and the focus is now on obtaining evidence from overseas, the Malaysian Anti-Corruption Commission (MACC) chief commissioner has said.

http://www.bernama.com/en/general/news.php?src=ilaw&id=1478318

FINANCE BILL 2019: LEVELLING THE PLAYING FIELD FOR OVERSEAS INVESTMENT IN UK REAL ESTATE

On 6th July, Bryan Cave Leighton Paisner published a briefing about provisions in the recently released draft Finance Bill which includes rules relating to the taxation of disposals of UK property by overseas investors and disposals of their property-rich entities.  The briefing says that, broadly speaking, the UK does not currently tax non-UK investors on their disposal of UK commercial investment property or disposals of interests in entities which own UK property but that this beneficial treatment will be lost for many from April 2019.  Hence, overseas investors to pay capital gains tax on disposals of UK property and property rich entities.  The briefing explains the rules that will apply, and also refers to the UK Government response to the public consultation on the matter.  Another change the briefing highlights is that, as expected, overseas corporate landlords will be subject to corporation tax on their UK property income from 6th April 2020, including where they invest via a tax transparent collective investment vehicle.

http://www.blplaw.com/expert-legal-insights/articles/finance-bill-2019-levelling-the-playing-field-for-overseas-investment-in-uk-real-estate

MALAYSIA CUSTOMS DEPARTMENT SEIZED 8 TONNES OF FIRECRACKERS

Customs Today on 6th July reported that a customs department in Malaysia has seized 8 tonnes of contraband firecrackers and fireworks worth $48,000, the contraband being seized from a variety of sources, including stores, premises and Ramadan bazaars.

http://www.customstoday.com.pk/malaysia-customs-department-seized-8-tonnes-of-firecrackers-worth-nearly-rm200000/

SCALE OF CYBER CRIME BEHIND NEW LONDON CYBER COURT PLANS, SAY LAWYERS

Out-Law on 6th July carried an article saying that plans to open a new court in London to specialise in resolving cases concerning cyber crime, fraud, and economic crime have been welcomed by legal experts, who believe the move reflects the scale of cyber-related crime businesses are dealing with.  It reports that the MoJ and HM Courts & Tribunals Service announced that a new 18-courtroom premises on the site of Fleetbank House in London with the court due to be completed in 2025.

https://www.out-law.com/en/articles/2018/july/cyber-crime-london-cyber-court-plans/

A SHORT GUIDE TO NEW PROTECTION FOR TRADE SECRETS AND PRACTICAL TIPS FOR UK BUSINESSES

On 8th June, Osborne Clarke published a short guide to the effect of the EU Trade Secrets Directive (Directive 2016/244/EU) which is implemented in the UK w.e.f.  9th June.  The aim of the Directive is to harmonise the protection of trade secrets in all Member States.  The article looks at how the Directive affects the protection of trade secrets in the UK.  Such confidential law was previously protected according to rules evolved through case law, but the Directive introduces a new harmonised definition of a trade secret, i.e. that it is –

  • a secret;
  • has commercial value because it is a secret; and
  • has been subject to reasonable steps (under the circumstances) to keep it secret by the person lawfully in control of the information.

The article also provides some practical tips on protecting trade secrets.

http://www.osborneclarke.com/insights/top-secret-new-protection-for-trade-secrets-in-the-uk/

REVISITING AUM SHINRIKYO: INSIGHTS INTO AN EXTENSIVE NON-STATE BIOLOGICAL WEAPONS PROGRAMME

As the terrorists themselves have just been executed in Japan, the blog at CNS suggests that perhaps it is time to revisit this NTI article from 2011 on the background to the attack on the Tokyo underground in the 1990s.  The article reminds one that Aum Shinrikyo began as a peaceful group before gradually morphing into an apocalyptic millenarian cult.  The group grew rapidly; by 1989, it comprised about 4,000 members, and by 1995, when the cult carried out the sarin gas attacks on the Tokyo subway, it had about 10,000 members in Japan – and even had foreign offices in the US, Germany, and Russia.  The cult’s pursuit of chemical and biological weapons was substantially grounded in science.  Chemical weapons were pursued in parallel with and ultimately as a substitute for failed biological weapons efforts.  The cult reportedly manufactured small quantities of phosgene, hydrogen cyanide, soman, GF and VX nerve agents, and attempted to employ some of these in targeted assassinations.  The article itself focuses on its biological weapons efforts, which had received relatively little attention.  It looks at the problems encountered by the cult (and hence why presumably it opted for using a chemical nerve agent in its Tokyo attack), including production and dispersal.

http://www.nti.org/analysis/articles/revisiting-aum-shinrikyo-new-insights-most-extensive-non-state-biological-weapons-program-date-1/

FRENCH SHIPPING COMPANY DROPS IRAN DUE TO US SANCTIONS THREAT

Rferl on 7th July reported that French shipping group CMA CGM says it has decided to pull out of Iran following the US decision to renew sanctions on companies operating in the country.  The company had a co-operation agreement with the Islamic Republic of Iran Shipping Lines (IRISL) allowing it to lease spaces for vessels, operate joint shipping lines, and co-operate on the use of port terminals.

https://www.rferl.org/a/french-shipping-company-drops-iran-due-to-u-s-sanctions-threat/29348789.html

FRENCH SHIPPING COMPANY DROPS IRAN DUE TO US SANCTIONS THREAT

Rferl on 7th July reported that French shipping group CMA CGM says it has decided to pull out of Iran following the US decision to renew sanctions on companies operating in the country.  The company had a co-operation agreement with the Islamic Republic of Iran Shipping Lines (IRISL) allowing it to lease spaces for vessels, operate joint shipping lines, and co-operate on the use of port terminals.

https://www.rferl.org/a/french-shipping-company-drops-iran-due-to-u-s-sanctions-threat/29348789.html

UN: GUIDANCE MANUAL FOR MEMBER STATES ON TERRORIST FINANCING RISK ASSESSMENTS

This is a document containing good practice methodologies intended for Member States, regional entities and supranational territories for use in the development of terrorist financing risk assessments.  It builds upon past guidance from FATF, the World Bank, the IMF and EU.

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https://www.unodc.org/documents/terrorism/Publications/CFT%20Manual/Guidance_Manual_TF_Risk_Assessments.pdf