Day: July 16, 2018

16^th July 2018

US SANCTIONS WOULD BAR USE OF LLOYDS OF LONDON IT PLATFORM FOR IRAN TRADE

KYC 360 on 16^th July reported that new US sanctions are likely to prevent the use of a Lloyd’s of London IT platform (partly owned since last year by US company, DXC) for any Iran insurance, adding to difficulties for European insurers providing cover for the country.

https://kyc360.com/news/u-s-sanctions-seen-barring-platform-insurer-lloyds-iran-trade/

TRANSNATIONAL ORGANISED CRIME AND ILLEGAL FISHING HIGHLIGHTED ON THE  INTERNATIONAL DAY AGAINST IUU FISHING

ENACT Africa on 5^th June reported on the first International Day for the Fight against Illegal, Unregulated and Unreported fishing (IUU fishing), saying that IUU fishing is affecting livelihoods and fuelling transnational organised crime at sea and that over 1 billion people worldwide depend directly on fisheries for their livelihoods and protein intake.  It says that, beyond its ecological and developmental implications, however, a much-overlooked consequence of IUU fishing is the increasing transnational criminality it attracts.  Unemployed or impoverished fishermen, in particular, are easily recruited to use their skills and equipment for maritime-based crimes.  Many voluntarily join transnational criminal networks to transport drugs or arms by sea, while others are forcefully sent on fishing expeditions on the high seas and used as slaves on trawlers, particularly across SE Asia.

https://enactafrica.org/research/trend-reports/international-day-against-iuu-fishing?utm_source=BenchmarkEmail&utm_campaign=Newsletter&utm_medium=email

UK GOVERNMENT POLICY ON VISAS FOR NON-EEA WORKERS ON INSHORE FISHING VESSELS

The House of Commons Library produced a briefing paper on 13^th July in anticipation of a Westminster hall debate.  It outlines the position on visas in general transit visas for crew entering the UK to join a vessel and shore leave.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CDP-2018-0184

TIME TO EASE SANCTIONS ON RUSSIA?

On 16^th July, ETH Zurich issued a paper suggesting that Western sanctions imposed against Russia following Crimea’s annexation have been a partial success.  They displayed Western unity and somewhat constrained Russian action in Eastern Ukraine.  However, the sanctions have also alienated the Russian population, strengthened President Putin domestically and failed to bring Russia to the negotiating table.  As a result, the authors argue it’s time for Europe to alter its strategy and allow for an easing of sanctions, if Russia first takes de escalatory steps in Ukraine.

http://www.css.ethz.ch/en/services/digital-library/articles/article.html/805591a6-49b7-464a-8441-8e00b894728b

EU LEVY ON CHINESE TYRES FUELS UK RETREAD MARKET

Commercial Motor on 13^th July reported that the demand for retreaded tyres is soaring after the European Commission introduced a levy on tyres imported from China on 7^th May that equates to €52.85 or €82.17 per tyre.  Bridgestone is said to be scaling up production at its Bulldog retread factory in Lincolnshire by 25% to meet the increased demand.

https://www.commercialmotor.com/news/product/eu-levy-chinese-tyres-fuels-uk-retread-market

 

US SECONDARY SANCTIONS DEVELOPMENT

An article from White & Case on 13^th July on how US export control and sanctions can affect Taiwanese companies includes an interesting diagram that shows the development of so-called US secondary sanctions.  The article explains that secondary sanctions target “sanctionable activities” by non-US persons outside the US, such as trade with North Korea or dealings with designated Iranian parties. Direct civil or criminal monetary penalties for violations of secondary sanctions are not the point, because the violation, by definition, lacks a connection to the US or US persons.   However, other enforcement measures can be just as serious, if not more so, as the US authorities can blacklist the foreign violator, thereby closing or restricting the violator’s access to US commercial and financial markets.  Secondary sanctions thus operate as a powerful deterrent against dealings by non-US persons with US-sanctioned countries or blocked parties.  It says that since 2010 US secondary sanctions have increased both in scope and frequency of enforcement.

https://www.whitecase.com/publications/insight/taiwanese-companies-are-not-insulated-us-export-controls-and-economic-sanctions

UK: REPORTING RESTRICTIONS ‘PREVENT SCRUTINY’ OF ECONOMIC CRIMES

The Guardian on 16^th July carried an article reporting that excessive court reporting restrictions, inadequate listing information and difficulties in obtaining documents are preventing scrutiny of economic crimes and bribery cases, according to a report by Corruption Watch UK.  A high proportion of hearings are effectively being heard in private because of tight legal controls, and fraud trials are disproportionately affected by such court orders, the study said.  It claims that the SFO is currently unable to publicise 2 major corporate guilty pleas because of blanket reporting restrictions.

https://www.theguardian.com/law/2018/jul/16/reporting-restrictions-prevent-scrutiny-of-economic-crimes

UK: THE SCALE AND NATURE OF FRAUD: A REVIEW OF THE EVIDENCE

On 16^th July, the Home Office released a set of slides which detail findings from an evidence review undertaken by Home Office Analysis and Insight to bring together what is known about the scale and nature of fraud affecting individuals and businesses in the UK.  The aim of the review was to help establish the current state of the evidence base on fraud and identify new areas for research.  It draws upon literature from academia and industry, and data from official sources including new data from the Crime Survey for England and Wales.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/720772/scale-and-nature-of-fraud-review-of-evidence.pdf

IRISH COMPANY DIRECTOR GETS 10 YEARS FOR ARSON AND ATTEMPTED FRAUD

The Irish Times on 16^th July reported that David Healy, 47, from Cork has been given a 10-year suspended jail sentence for arson and attempted fraud. He set fire to his business after increasing his insurance cover.  He had denied a charge of arson that caused €200,000 worth of damage at Munster Air Compressors – a company of which he was a director, in 2014.

https://www.irishtimes.com/news/crime-and-law/courts/circuit-court/company-director-gets-10-years-for-arson-and-attempted-fraud-1.3567019?src=ilaw

FORMER SPANISH KING’S EX-MISTRESS SAYS HE LAUNDERED MONEY
The Digital Journal in Canada on 16^th July carried a story saying that Corinna zu Sayn-Wittgenstein, the former mistress of Spain’s former king Juan Carlos claimed he was involved in money laundering, sparking calls for an investigation.
http://www.digitaljournal.com/news/world/former-spanish-king-s-ex-mistress-says-he-laundered-money/article/527218#ixzz5LRp3bsNT

MONTENEGRO: EX PRESIDENT MAROVIC HAD MILLIONS ON SECRET SWISS ACCOUNT

OCCRP on 16^th July reported that Swiss authorities have confirmed to Montenegro’s Prosecution Office that the wife of former President Svetozar Marovic had millions in an HSBC account in Switzerland at the time when he denied the family even had an account and offered the money alleged to be on it to anyone who proves it exists.  It tells us that Marovic and his son were jailed during an investigation in 2015 into a corruption case and Marovic was suspected of having led an organised criminal group that stole tens of millions of euro from the municipality of Budva.  Both were released pending trial but the family moved to Belgrade and remain out of the reach of Montenegrin authorities.

https://www.occrp.org/en/daily/8328-montenegro-ex-president-had-millions-on-secret-swiss-account?src=ilaw

BROCHURE: UK SPACEFLIGHT PROGRAMME

On 16^th July, the UK Space Agency, CAA and DfT published this brochure which says it is a guide to the UK spaceflight programme which aims to enable commercial markets for regular, reliable and responsible access to space from UK spaceports; and explains how the UK Space Agency, Department for Transport and Civil Aviation Authority are working together to deliver the UK Spaceflight Programme, which will enable the growth of this market in the UK.

https://www.gov.uk/government/publications/brochure-uk-spaceflight-programme

FRAUDSTER MADE MORE THAN £750,000 SELLING KODI BOXES PROVIDING ILLEGAL ACCESS TO PREMIER LEAGUE FOOTBALL AND MOVIES: JAILED FOR MORE THAN 3 YEARS

The Mail Online on 15^th July reported that John Haggerty, also known as Gilfillan, was the prime mover in a husband and wife scam lasting 2 years.  Haggerty had multiple passports in different names and set up an offshore ‘dummy company’ in Nevis to hide the true purpose of his business and, in collusion with his wife, supplied the Immigration Service with false documents to sponsor an Egyptian national who maintained the illegal streaming service for the company.  He ran the scam through a business called Evolution Trading.  He has been jailed for 5 years and 3 months for conspiracy to defraud, and his wife, Mary Gilfillan, was given a suspended prison sentence for her lesser role.

http://www.dailymail.co.uk/news/article-5959925/Blyth-pirate-jailed-selling-set-boxes-illegally-stream-Premier-League-football-films.html

THE 2017 LIFTING OF US SANCTIONS ON SUDAN: RATIONALE AND REALITY

In October 2017, the US lifted 3 of the most significant components of its sanctions regime against Sudan as part of a shift in bilateral relations.  A report from HSBA describes the specific sanctions changes, their stated rationales, and their documented and likely future effects on Sudan’s internal conflicts, particularly in Darfur.  HSBA is the Human Security Baseline Assessment for Sudan and South Sudan, a multi- year project administered by the Small Arms Survey.  It was developed in cooperation with the Canadian government, the UN Mission in Sudan, the UN Development Programme, and a wide array of international and Sudanese partners.  The report finds that although the sanctions themselves had a broad impact on Sudan’s economy, they did not consistently hinder key regime functions, including government institutions’ ability to transact in US dollars, obtain US-origin goods and services, and acquire military and dual-use materiel.  It also says that the easing of sanctions effectively reflects international acceptance of Sudan’s longstanding strategy of seeking militarised counter-insurgency solutions.   It comments on the government’s neglect of formal peace processes in favour of moving directly to ‘post-conflict’ civilian disarmament—which is being implemented by a militia, in violation of the UN arms embargo, and being used as a counter-insurgency instrument—and placing pressure on internally displaced persons to return home. The easing of sanctions is likely to legitimate these tactics.

http://www.smallarmssurveysudan.org/fileadmin/docs/reports/HSBA-Report-Sudan-Sanctions.pdf

BLOCKCHAIN IN INTERNATIONAL TRADE

A briefing paper from the EU Parliament Research Service on 16^th July says that whilst initially used for digital currencies, most research into blockchain technology has been carried out for the finance industry.  In recent years, however, research and development on supply chains and trade-related business processes have also gained ground.  Start-ups and large companies have already exploited a wide range of blockchain-based applications in these areas, but the opportunities generated by this technology in international trade have yet to be fully exploited.  It examines blockchain opportunities in trade-related areas, and examples of blockchain-empowered applications in trade, as well as challenges presented by blockchain technology – including data protection issues, cross-border data movements, the legal validity and enforcement of contracts, and there is a need for a harmonised regulatory approach.

http://www.europarl.europa.eu/RegData/etudes/ATAG/2018/625130/EPRS_ATA(2018)625130_EN.pdf

US REGULATOR CFTC ISSUES NEW CUSTOMER ADVISORY ON DIGITAL TOKENS – USE CAUTION AND RESEARCH BEFORE BUYING

Mondo Visione carried a new advisory from the Commodity Futures Trading Commission (CFTC) in the US which warns customers to use caution and do extensive research before purchasing virtual coins or tokens, including those that are self-described as “utility coins,” or “consumption coins”.  This is the 4^th advisory about virtual currencies the CFTC has issued to give customers a greater understanding of virtual currencies.   The other 3 advisories are –

• Beware virtual currency pump and dump schemes
• Beware of “IRS approved” virtual currency IRAs
• Customer Advisory: understanding the risks of virtual currency trading

http://www.mondovisione.com/media-and-resources/news/cftc-issues-customer-advisory-on-digital-tokens-new-guidance-alerts-customers/

The latest advisory is available at –

https://www.cftc.gov/sites/default/files/2018-07/customeradvisory_tokens0718.pdf

OCCRP on 16^th July carried an article claiming that a Russian billionaire living in Greece has given hundreds of thousands of euros to Macedonian opponents of the country’s proposed name change.  The recipients include football hooligans who have rioted in the capital.  Evidence appears to show that at least €300,000 was given to opponents of the renaming by Ivan Savvidi, a Russian billionaire living in Greece who was formerly a member of the Russian parliament.  Georgian-born Savvidi, also known as Savvidis, made his fortune in the privatisation of what would become Russia’s largest tobacco company and is one of Russia’s wealthiest businessman, with an estimated wealth of $2 billion.  After moving to Greece in the mid-2000s, he purchased the PAOK football club and various media outlets, and his business empire now dominates the country’s second city of Thessaloniki.  Russia has also been implicated in protests in Greece over Macedonia’s name change, and Greece has expelled 2 Russian diplomats for paying opponents of the name deal and encouraging rallies against it.  It also banned 2 other Russian diplomats from entering the country.  Moscow has denied the claims.

https://www.occrp.org/en/28-ccwatch/cc-watch-indepth/8329-russian-businessman-behind-unrest-in-macedonia

On 16^th July, the Home Office published UK Visas and Immigration guidance for staff on the CTA, including its legal basis, instructions and requirements for people travelling to and within the CTA and in-country encounters.  It explains that the CTA is an administrative arrangement between the UK, Ireland and the Crown Dependencies (Isle of Man, Guernsey and Jersey) which is implemented in UK domestic law in statute.  The Crown Dependencies are not part of the UK but are self-governing dependencies of the Crown.  This means they have their own directly elected legislative assemblies, administrative, financial and legal systems and their own courts of law.  The CTA was developed to facilitate the principle of free movement for British and Irish citizens between the UK, Ireland and the islands.  It ensured that British and Irish citizens continued to benefit from a mutual enjoyment of rights.  There are no routine passport controls on routes from within the CTA to the UK. The UK approach, based on the UK legal framework, is for border checks to be undertaken at the first point of entry to the CTA.

https://www.gov.uk/government/publications/common-travel-area

Defence Web on 16^th July reported that President Joseph Kabila of the Democratic Republic of Congo has appointed a new army chief, General John Numbi, who is under international sanctions for violent repression of dissent, raising fears of a crackdown.  The new inspector general of the Congolese Armed Forces is under sanctions by the US, EU and Switzerland for alleged killings of scores of civilians by forces controlled by him over several years.  At the same time, a General Gabriel Amisi, also under sanctions for abuses and selling weapons to rebel groups responsible for massacring civilians, was promoted to army deputy chief of staff.  The changes come as elections are due for 23^rd December.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=52396:new-drc-army-chief-under-sanctions&catid=54:Governance&Itemid=118

On 16^th July, a news release from the EU Council said that the Foreign Affairs Council adopted a framework for targeted restrictive measures against persons and entities responsible for undermining the rule of law or obstructing an inclusive political solution in the Maldives as well as persons and entities responsible for serious human rights violations.  This decision makes it possible, if the situation does not improve, to impose a travel ban and an asset freeze on relevant individuals and entities.  In other words, the EU is ready to impose sanctions if things in the Maldives do not improve.  In February, the EU had expressed concern about developments in the Maldives and had called for a lifting of the state of emergency, which had been imposed after the Supreme Court had overturned criminal convictions against 9 of the President Abdulla Yameen’s opponents (including a former president).  The President ordered the arrest of 2 judges of the court and an aide on terrorism charges.  The state of emergency was lifted in March but tension remains. Following the crackdown on dissent by the government.

http://www.consilium.europa.eu/en/press/press-releases/2018/07/16/maldives-eu-adopts-a-framework-for-targeted-sanctions/pdf

On 16^th July, EU Regulation 2018/999/EU added Rabah TAHARI (a.k.a. Abu Musab), an Algerian national, to its sanctions list with effect from 16^th July.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.LI.2018.178.01.0001.01.ENG&toc=OJ:L:2018:178I:TOC

On 16th July, HM Treasury also published a Notice advised that the name had been added to the UK Consolidated List.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/725876/Notice_ISIL_2018_999_EU.pdf

A news release from the Gibraltar Government on13th July reported that Gibraltar welcomes the decision of the Spanish Cabinet to ban Rigid Hull Inflatable Boats (RHIB).   These types of boats (commonly referred to as RHIBs) are of the type frequently used by drug smugglers.  RHIBs were banned in Gibraltar in 1995 and have been prohibited imports since then.  Spanish authorities have also pledged to increase co-operation with their Gibraltarian and Moroccan counterparts to track criminals evading working between the 3 territories.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2018/Press%20Releases/420-2018.pdf

http://www.gibraltarolivepress.com/2018/03/27/spain-to-ban-the-rhib-in-attempt-to-hinder-drug-smugglers/

Commercial Motor on 16^th July reported that the warning follows a case in which a Dover business had its leased Mercedes-Benz truck seized by Border Force officials at the Port of Dover in December last year and has yet to have it returned.  While the lease company involved waived its fees after 6 months, and is currently helping the company in its attempts to have the truck returned, a road transport lawyer has warned that not all leasing firms are so understanding, and that more finance agreements contain provisions allowing the lessee to require the return of financed vehicles or require lessors to pay up all money owed immediately – and this can sometimes be applied to all of the vehicles it hires, even if only one has been seized.

https://www.commercialmotor.com/news/compliance/hauliers-whose-trucks-are-seized-border-force-face-even-greater-costs-if-they-are

On 16^th July, Mining Weekly carried a report alleging that a “last ditch effort” by a trio of Kazakh oligarchs – Alexander Machkevitch, Alijan Ibragimov, and Patokh Chodiev – to derail the UK’s biggest bribery investigation into Eurasian Natural Resources (ENRC, now renamed ERG), suspected of paying bribes to secure mines in Kazakhstan and in Africa.  They are reported as claiming that their own lawyer conspired with British police to incriminate them so he could fleece them for millions of pounds.  This could frustrate attempts to bring criminal charges against them and drag out proceedings for months.   They allege that a lawyer hired to investigate a whistleblower leaked details to the media to get the SFO to begin an investigation.

http://www.miningweekly.com/article/how-mining-tycoons-are-trying-to-foil-a-big-uk-bribery-probe-2018-07-16/rep_id:3650

On 13^th July, McCann Fitzgerald published an article saying that the new Act, as well as updating the existing bribery offences, provides for several new corruption offences.  Perhaps most significantly it also provides that, in certain circumstances, bodies corporate will be held liable for corruption offences committed by their staff, agents or subsidiaries, where they failed to take reasonable steps to avoid the commission of the relevant offence.  The Criminal Justice (Corruption Offences) Act 2018 was signed into law on 5^th June and is intended to modernise and consolidate the law on bribery and corruption.  New offences include active and passive trading in influence; corruption in office involving the use of confidential information; facilitating the commission of a corruption offence; and intimidation.  The article provides a summary of these new offences, as well as a background to the new Act.  Its main conclusion is that, from a corporate perspective, the most significant development is the introduction of the new “failure to supervise” type of offence, reminiscent of the offence of failing to prevent bribery set out in section 7 of the UK Bribery Act 2010.

https://www.mccannfitzgerald.com/knowledge/corporate-advisory-and-governance/bribery-out-with-the-old-in-with-the-new