12th July 2018
UK LAW COMMISSION LAUNCHES A PUBLIC CONSULTATION ON SEARCH WARRANTS
On 11th July, Mishcon de Rey published an article about the consultation recently launched by the Law Commission into possible changes to search warrants in the UK. The article lists the concerns highlighted by the Commission. The consultation runs to 5th September.
STOLEN US MILITARY DRONE DOCUMENTS FOUND FOR SALE ON DARK WEB
The Wall Street Journal on 11th July reported that an unidentified hacker is said to have tried to sell purported US military documents containing information about combat drones last month after they were allegedly stolen from an US Air Force officer’s computer. The hacker sought buyers for maintenance documents about the MQ-9 Reaper. This was amid heightened concern about how US military secrets may be insufficiently protected from hackers. The hacker likely didn’t know the value of the documents he had obtained because he was attempting to sell them for as little as $150. The hacker also advertised the sale of another tranche of military documents that included a tank operation manual and training material on how to mitigate improvised explosive devices (IED).
FRENCH NATIONAL IN AUSTRALIA ARRESTED OVER EUROPEAN DRUG SYNDICATE
On 11th July, The Australian reported that a French national, 26, is accused of using tourists to distribute illegal drugs, smuggled into Australia in wine bottles and chip packets. About 40 packages of MDMA and cocaine linked to the syndicate, worth up to $3.3 million, have been intercepted over the past 6 months, hidden in wine bottles, potato chip packets and chilli paste after arriving either in luggage or being sent via post. 3 French nationals and 1 Belgian have now been charged for their role in the syndicate since March.
SWISS ATTORNEY-GENERAL ON 1MDB – A ‘PONZI SCHEME’
On 11th July, Channel News Asia reported that the Attorney General’s Office in Switzerland began probing suspicious fund flows originating from 1MDB in August 2015 after several transactions linked to a Middle Eastern wealth fund were flagged by Swiss authorities. “There were no scruples, money just flew out of the country,” Switzerland’s Attorney-General Michael Lauber told Channel NewsAsia. Swiss authorities have co-ordinated action with Singapore counterparts and closed down 2 banks – BSI and Falcon – and are now investigating 6 people for possible criminal indictment. About $403 million was frozen by Swiss authorities in relation to 1MDB – mainly bankable assets retrieved from the 2 closed banks
AUSTRALIAN TAXPAYERS DODGING $8 BILLION TAX PER YEAR
The Mail Online on 12th July reported that the Australian Tax Office had announced that it was A$8.7 billion short due to tax dodging and accidental underpaying by self-employed people in 2014-15. This was far bigger than the $2.5 billion shortage from large companies and is said to dispel the myth that corporate tax dodging is the most pressing tax issue. More than 70% of audited returns contained errors, the figures show. The estimated net tax gap for individuals not in business in 2014–15 is approximately 6.4%, that for corporate tax payers is 5.8%. Common mistakes include claiming deductions where there is no connection to income, claims for private expenses, or not having records to show that an expense was incurred. Other areas of concern include high rates of incorrect claims for rental property expenses and non-reporting of cash wages.
CULPRIT IN CHINA’S BIGGEST BANK CORRUPTION CASE REPATRIATED FROM US TO CHINA
OCCRP on 12th July reported that the man responsible for embezzling $485 million from his employer and perpetuating the biggest bank corruption scandal in China’s history was repatriated from the US. Xu Chaofan, is the former president of the Kaiping branch of the Bank of China. He fled to the US in 2001. Chaofan was arrested in 2003 and was found guilty of racketeering, money laundering, international transportation of stolen property as well as passport and visa fraud. He had funnelled money stolen from the bank into shell corporations in Hong Kong as well as multiple personal bank and investment accounts before it was laundered through Canada and the US. In China, authorities have recovered more than $300 million of what he stole.
UK: NORTHERN AEROSPACE SALE COLLAPSES AFTER NATIONAL SECURITY CONCERNS
On 11th July, Janes.com reported that the planned sale of UK aerospace component manufacturer Northern Aerospace to Gardner Aerospace Holdings has collapsed. Concerns had been raised by the UK government over the potential national security implications of the sale to Gardner, which had been acquired by a Chinese company in 2017.
4 WAYS 3D PRINTING MAY THREATEN SECURITY
On 8th May, the RAND Corporation in the US published an article saying that a RAND paper explores how 3D printers will affect personal, national, and international security. The paper is part of RAND’s Security 2040 initiative, which looks over the horizon to anticipate future threats. The same technology that might one day custom-print heart valves can just as easily produce gun parts. The same machines that allow astronauts on the international space station to print their own tools might also help a state like North Korea print military or industrial equipment to get around international sanctions. The article presents 4 areas to watch as 3D printing makes the leap from high tech to home tech.
The report is at –
THE IMPACT OF BREXIT ON THE UK’S EXTRADITION ARRANGEMENTS
On 12th July, law firm Corker Bining published a briefing that looks at the options for the UK’s post-Brexit extradition arrangements with the EU – what will replace the European Arrest Warrant (EAW), and where will any new arrangements leave the UK? It says that time is running out for a solution to be found to prevent the UK becoming a pariah; a safe haven for criminal organisations to flourish. The SFO in its 2017 Annual Report stated that one of its biggest strategic risks was the potential loss of access to EU measures and tools as a result of Brexit, a loss it predicts could lead to an adverse effect on investigations and prosecutions. It says that the possible scenarios are an EAW-style agreement with the remaining 27 EU states, or a return to the 1957 European Convention on Extradition. The article then looks at each of the options. It tells us that the 1957 Convention governs extradition relations between EU Member States and Council of Europe Countries (as well as Israel, South Africa and South Korea) and was the basis upon which extradition arrangements between EU states was underpinned prior to the introduction of the EAW in 2003.
HMRC SEEKING ‘UNPRECEDENTED’ INFORMATION REQUEST POWERS
Out-Law on 12th July published an article saying, that according to a tax expert at Pinsent Masons (the law firm behind Out-Law), HMRC is seeking “unprecedented” powers to obtain information about taxpayers without independent oversight from the tax tribunal. These powers would allow HMRC to submit information requests to financial institutions, accountants, lawyers, estate agents and other third parties that hold information about taxpayers without first seeking approval from the tax tribunal. A consultation is underway, closing on 2nd October.
REVENUE SEIZE 7.9 MILLION SMUGGLED CIGARETTES IN DUBLIN
The Irish Revenue Commissioners issued a news release on 12th July saying that, as part of an intelligence-led operation, Revenue officers seized 7.9 million smuggled cigarettes that arrived into Dublin Port aboard a vessel from Rotterdam. The cigarettes were identified in a shipping container said to contain ‘welding equipment’ and ‘workshop machinery’ and were so-called ‘cheap whites’ branded “Business Royals” and “Gold Classic”. These cigarettes may be legally produced but are then smuggled and traded illegally, are a growing problem in Europe.
JAILED HEROIN WHOLESALER ORDERED TO PAY BACK £740,000
On 12th July, a news release from the NCA reported that a Wolverhampton man, Daljinder Bassi, 36, who was jailed for 13 years in February and who acted as a wholesaler to drug dealers in the West Midlands has been ordered to pay back £742,270 in a confiscation hearing. Officers searching his home in October 2017 seized £737,000 in cash, 22 kg of heroin, cocaine and mixing agents. If he does not pay the sum of money within 3 months, he will be sentenced to a further 5 years and 5 months in prison.
MOLDOVA TO LAUNCH CBI PASSPORT SCHEME
Kenneth Rijock in his blog on 12th July reported that Moldova is creating the Moldovan Citizenship by Investment Programme (MCBI). Moldovan nationals having visa-free access to Europe through a treaty with the EU, might make a Moldovan passport attractive for citizens from high-risk or sanctioned jurisdictions, he says. OCCRP says that the goal of the Moldovan government is to attract €1.3 billion over the next 5 years, but saying that the programme would be provided only to applicants who meet the best international standards, with a 4-stage verification of their economic and financial reputation, including checks by Interpol, the Moldovan Intelligence and Security Service, Interior Ministry (MAI), National Anticorruption Centre (CNA) and international diligence companies going through their case history and validating information contained in application form. It is due to be launched in the next 3 months.
THE REVERSE CHARGE: SHAKING UP VAT ON CONSTRUCTION SERVICES IN 2019
On 12th July, Bryan Cave Leighton Paisner provided a brief on the introduction of reverse-charge for VAT on construction services in the UK from 1st October 2019. In many cases, it says, this will require the recipient of a supply of construction services, rather than the supplier, liable for the VAT on the supply.
NIGERIA: LAW SIGNED TO CREATE INDEPENDENT FIU
Baker McKenzie on 12th July reported that President Buhari has signed the Nigerian Financial Intelligence Unit Bill 2018 into law, creating a body to monitor illegal money transfers and money laundering. The FIU was previously within the Economic and Financial Crime Commission (EFCC) but will henceforth be an autonomous unit, although administratively located within the Central Bank.