OTHER THINGS YOU MAY HAVE MISSED – JULY 14

14th July 2018

REFORM OF FOREIGN INVESTMENT IN THE US – FRANCE AND OTHER ALLIED COUNTRIES MIGHT BE EXEMPT

The National Law Review on 13th July reported on a US Bill a bill expanding and increasing the powers of the Committee on Foreign Investment in the United States (CFIUS).  The Bill is called the Foreign Investment Risk Review Modernization Act (FIRRMA).  It says that there is overwhelming bipartisan momentum behind FIRRMA and the Bill is likely to be on the President’s desk for signature as soon as the House and Senate reconcile their versions.  One feature of the Bill not emphasised as much is that it authorises CFIUS to exempt from its review transactions in which all foreign persons involved are from a country identified by the Committee as having processes which effectively safeguard national security interests the country shares with the US; is a NATO member country or is a major non-NATO ally; or as adhering to non-proliferation control regimes.  FIRRMA will significantly expand CFIUS’s authority to review inbound foreign investments, particularly in technology, even where those investments do not result in control of the US company by a foreign entity.  The article points out that FIRRMA would also require the update and enhance US controls on exporting leading-edge technologies, as current US export controls lag behind emerging technology.

https://www.natlawreview.com/article/reform-foreign-investment-us-france-and-other-allied-countries-might-be-exempt

IRS SPENT $380 MILLION BUT TOOK ‘LIMITED OR NO ACTION’ TO ENFORCE FATCA

CNS News on 10th July reported that the IRS spent nearly $380 million to be in line with foreign tax-compliance rules according to a new report by the Treasury Inspector General for Tax Administration (TIGTA), which oversees the IRS.  The article says that the Inspector General’s office made 6 recommendations to the IRS to improve the situation and to help ensure the IRS is following FATCA.  According to TIGTA, the IRS agreed with 4 of the 6 recommendations.  An IRS Commissioner is quoted as disputing the report’s findings, saying that the narrow focus of the report should not be used to draw conclusions about the entirety of the IRS’s enforcement efforts in this area.

https://www.cnsnews.com/news/article/brady-kenyon/irs-spent-380-million-took-limited-or-no-action-enforce-tax-compliance-act

JERSEY PUBLISHES ICO GUIDANCE NOTE

Law firm Carey Olsen on 13th July published an article saying that the Jersey Financial Services Commission has published its final guidance note in relation to Initial Coin Offerings (ICO).  It says that the guidance note formalises the road map for approval previously developed by the JFSC in consultation with Carey Olsen who have advised on all Jersey ICO to date.  It is said to adopt a pragmatic approach, focusing on consumer protection and AML.  The chief features of the guidance is provided in the article.

https://www.careyolsen.com/briefings/jersey-publishes-ico-guidance-note

The guidance note itself is available at –

https://www.jerseyfsc.org/media/1999/gn-ico-july-2018.pdf

NEW YORK’S AUTHORITIES DIRECT UBL BANK OF PAKISTAN TO STRENGTHEN AML POLICIES

On 13th July, Business Recorder reported that the Federal Reserve Bank of New York has directed Pakistan’s United Bank Limited (UBL) and its New York branch to strengthen its AML policies.

https://www.brecorder.com/2018/07/13/428435/new-yorks-reserve-bank-directs-ubl-to-strengthen-anti-money-laundering-policies/

JAPANESE PROSECUTORS REACH FIRST-EVER PLEA BARGAIN AGREEMENT IN FOREIGN BRIBERY CASE

The Japan Times on 14th July reported that Tokyo prosecutors and a power plant manufacturer have reached the first plea bargain in Japan since the option was introduced in June.  Mitsubishi Hitachi Power Systems Ltd entered the plea bargain over the alleged bribery by one of its employees of a Thai public servant in relation to a local power plant project.  The article mentions that there have been only 4 cases in Japan in which companies or individuals have been prosecuted on bribery charges involving foreign public officials since 1998 when the country prohibited giving bribes to and receiving them from such officials.

https://www.japantimes.co.jp/news/2018/07/14/national/crime-legal/case-concerning-bribery-thai-public-servant-japanese-prosecutors-reach-first-ever-plea-bargain-agreement/?src=ilaw#.W0mXf_ZFx9A

AUSTRALIA: NEW SALES TAX ON INTERNATIONAL RETAILERS

On 14th July, Customs Today reported that the tax applies to international retailers if they have a GST turnover of A$75,000 or more in a 12-month period and on all products sold valued at $1,000 or less, It is designed to provide “fairer trading for all retailers” and to ensure that low-value goods purchased by consumers in Australia will have the same tax treatment, no matter where they are purchased from.  Retailers using the system will only need to report total taxable sales and GST and pay once each quarter.  However, on 10th July the Sydney Morning Herald reported that UK giant Marks & Spencer, US electronics warehouse B&H and fashion retailer J Crew are among those who have failed to add GST to their invoices, saving their Australian customers 10% in tax while not disclosing their own tax obligations.  Up until July 1st, GST was only paid on international purchases worth more than $1,000, but that has now been extended to all online products following years of lobbying from local bricks and mortar retailers struggling against the tide of online sales.

http://www.customstoday.com.pk/australia-imposes-new-sales-tax-on-international-retailers/

EUROPEAN PRODUCTION AND PRESERVATION ORDERS AND THE APPOINTMENT OF LEGAL REPRESENTATIVES FOR GATHERING ELECTRONIC EVIDENCE

A briefing from the EU Parliament Research Service published on 13th July providing an initial analysis of an Impact assessment accompanying a Commission proposal for an EU Regulation on European Production and Preservation Orders for Electronic Evidence in Criminal Matters and a proposal for an EU Directive laying down harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings.  The 2 legislative proposals are part of an initiative seeking to address obstacles in cross-border access to electronic evidence (electronically stored data) in criminal investigations.

A European Production Order would allow a judicial authority in one Member State to request electronic evidence directly from a service provider offering services in the EU and established or represented in another Member State, regardless of the location of the data.

A European Preservation Order would oblige a service provider to preserve specific data, which the authority could request later.  Service providers offering services in the EU would be required to appoint a legal representative for the purposes of gathering electronic evidence.

The initiative is to address a problem that some crimes cannot be effectively investigated and prosecuted in the EU because of challenges in cross-border access to electronic evidence.  The paper notes that judicial co-operation between public authorities is often too slow, and administrative procedures and different legal standards may present obstacles to judicial co-operation.  However, the paper does conclude that the Impact Assessment provides a comprehensive description of the problem, supported by an extensive stakeholder consultation, reports and literature.  The options are clearly linked to the objectives and the problem definition.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2018/621844/EPRS_BRI(2018)621844_EN.pdf

NCA: 2 CYBER CRIMINALS JAILED FOR ATTEMPTS TO HACK NATIONAL LOTTERY

On 13th July, the NCA announced in a news release that 2 cyber criminals have been sentenced for committing offences against the National Lottery.  Daniel Thompson, 27, and Idris Kayode Akinwunmi, 21, were jailed for 8 months and 4 months respectively at Birmingham Crown Court in relation to the 2016 attack.  The men used an online application to bombard the victim’s web domain with thousands of attempts to log in to customer accounts.

http://www.nationalcrimeagency.gov.uk/news/1415-cyber-criminals-jailed-for-national-lottery-intrusion

MAN JAILED FOR £2.1 MILLION INTERNATIONAL FILM INDUSTRY FRAUD SPANNING 8 COUNTRIES

Get West London on 14th July reported that London man Michael Banfield, 36, attempted to steal expensive equipment from 9 different companies across 8 countries over 6 months in 2014.  He is said to have used a complex network of shell companies as well as fraudulently adopting a legitimate company’s details to get filming equipment but never return it.  He operated the scam in the UK, South Africa, Canada and the USA as well as others and at least 15 items were advertised online for sale by Banfield and his associates under the company name World Wide Broadcast Solutions Ltd (WWBS).

https://www.getwestlondon.co.uk/news/west-london-news/brent-man-jailed-21million-complex-14907502

ARGENTINA FREEZES ASSETS OF TRANSNATIONAL CRIMINAL ORGANISATIONS LINKED TO HEZBOLLAH

On 14th July, the Director of FinCEN in the US congratulated the Argentine FIU (UIF-AR) for taking decisive action to freeze assets belonging to a transnational criminal organization linked to Hezbollah and its global terror network.  The organisation is Clan Barakat, is a criminal organization led by Assad Ahmad Barakat, who is tied to Hezbollah leadership, and has long been known to operate in the tri-border area between Argentina, Paraguay, and Brazil.  He is also designated by OFAC.  The FinCEN Director says that it is infamous for its suspected involvement in smuggling, counterfeiting, extortion, drug trafficking, arms trafficking, money laundering, and terrorist financing.

https://www.fincen.gov/news/news-releases/statement-fincen-director-kenneth-blanco-support-recent-anti-terrorism-financing

https://www.infobae.com/america/mundo/2018/07/14/la-hidra-dorada-como-opera-en-la-triple-frontera-el-clan-barakat-que-financia-a-hezbollah/ {Spanish]

https://www.infobae.com/politica/2018/07/12/el-gobierno-congelo-por-primera-vez-bienes-de-una-organizacion-vinculada-a-hezbollah-en-la-triple-frontera/

UN IMPOSES SANCTIONS ON 2 INDIVIDUALS IN SOUTH SUDAN AND EXTENDS SANCTIONS REGIME TO MAY 2019

On 13th July, a UN news release advised that the Security Council, condemning what it called the continued and flagrant violations of the Agreement on the Resolution of the Conflict in South Sudan and related ceasefires, had adopted UN SCR 2428 which renews sanctions on South Sudan to 31st May 2019.  It also imposed a travel ban and assets freeze on 2 high-ranking individuals – Lieutenant-General Malek Ruben Riak and General Paul Malong Awan.  The sanctions involve an embargo on the supply of arms and related material, and the supply of training, technical and financial assistance related to military activities or materials.  In addition, it lays out several exemptions to the country’s arms embargo — including for material and activities related to humanitarian activities — and lists details related to the inspection of shipments and cargo bound for South Sudan.  The sanctions also impose travel bans and asset freezes on designated individuals.

https://www.un.org/press/en/2018/sc13421.doc.htm

CIVIL FORFEITURE ORDERS IN JERSEY

A briefing from law firm Ogier on 12th July outlined the introduction of a civil forfeiture process following MONEYVAL’s inspection of Jersey’s AML regime in 2015 and its subsequent report issued in May 2016.  The new Draft Law replaces and extends the current Proceeds of Crime (Cash Seizure) (Jersey) Law 2008 and applies to both cash and property held in bank accounts.  It also introduces the concept of a “civil forfeiture investigation” and the grant of investigative powers to the Attorney General or an authorised officer acting with the Attorney General’s consent.  The briefing says that the Draft Law provides a broad and powerful tool to financial crime investigators and prosecutors in Jersey.

https://www.ogier.com/publications/reform-of-civil-forfeiture-orders-in-jersey