19th July 2018
SFO TO EXPECT INTERVIEW NOTES OF INTERNAL INVESTIGATIONS
On 17th July, Mishcon de Reya published an article saying that the SFO has intimated it will now routinely expect companies to hand over written notes from any interviews carried out as part of an internal investigation. These first account interviews are often obtained in order to advise on whether there is evidence of a breach of the law and may be conducted prior to any decision to report to the SFO. It says that this approach presents a challenge for any company which comes to suspect that its employees may be involved in serious criminal activity, such as bribery, fraud or financial sanctions offences, but that the future position is heavily dependent upon the outcome of the ENRC appeal and that this is a complex area of law which is in a period of flux.
AUSTRALIAN WINE COMPANY LINKED TO COPYCAT WINE SOLD IN CHINA
The Weekly Times in Australia on 19th July reported that a wine company has been caught attempting to sell wine branded similar to iconic Australian wine brand, Penfolds. Wine Australia indefinitely suspended Dalefold Wines’ exporting licence after the company was found exporting 3 wines that allegedly ripped off Penfolds’ iconic branding. The wines had not been approved for export, lacking the necessary licence, product registration and an export permit. Dalefold Wines is owned and managed by Chinese-born Shuyen Liu, 53.
CHINESE CUSTOMS OFFICIALS SEIZE MILLIONS OF DOLLARS WORTH OF SMUGGLED ANIMAL PARTS
The Epoch Times on 18th July reported that, in northern China, customs officials seized wild animal parts worth millions of dollars, in one of the largest smuggling cases in years at the Hulin Control Point — a land cargo port that borders Russia in Hulin City, Heilongjiang Province. Officials found 1,276 pieces of antelope horns, 156 pieces of mammoth tusks, 406 pieces of walrus tusks, 2 pieces of elephant tusk, 70 bear teeth, 226 whale teeth, about 319 kg of sea cucumber, 44 pieces of bear bile, and 4 deer penises. The market value for all the seized animal parts was estimated at about $15.8 million.
RELATIVE OF MEXICAN STATE GOVERNOR ARRESTED ON BULK CASH SMUGGLING CHARGE IN US
The Monitor in Texas on 18th July reported that the cousin of the Tamaulipas governor’s wife was arrested early Monday morning in San Antonio on a bulk-cash smuggling charge after allegedly attempting to smuggle nearly $900,000 to Mexico on a private plane from San Antonio International Airport. Under US federal law, travellers carrying more than $10,000 in currency in or out of the US must report it.
NORTH KOREA’S COAL SMUGGLED INTO SOUTH KOREA VIA RUSSIAN PORT
The Korea Joongang Daily on 19th July reported that South Korean authorities have opened an investigation into a UN panel’s finding that North Korea transhipped over 9,000 tons of coal, disguised as Russian exports, to South Korean ports in October. The report said that North Korean coal shipped to the Russian port of Kholmsk was reloaded on 2 vessels – the Panama-flagged Sky Angel and the Sierra Leone-registered Rich Glory – that arrived after the UN Security Council’s comprehensive coal ban was implemented in August 2017. The article also said that VOA had reported that the vessels were actually run by Chinese companies, and Joongang Daily says it confirmed that Sky Angel was operated by Dalian Sky Ocean International Shipping Agency, and Rich Glory was operated by Sanhe Marine, both from China.
GERMANY OVERHAULS “CHAOTIC” AML UNIT
Handelsblatt on 18th July reported that, after a year of backlogs and delays in handling urgent money laundering tip-offs, Germany’s new FIU is getting hundreds more staff, new powers and a new boss. Under-staffing and poor equipment had led to a massive backlog of cases.
€2.2 MILLION IN CASH FOUND IN AMSTERDAM EVENT CENTRE
The NL Times on 18th July reported that police found the cash in a search of the Dido Centre and that members of the family that runs the centre had been arrested on money laundering and weapons possession charges.
AZERBAIJAN: TORTURE, IMPUNITY AND CORRUPTION HIGHLIGHTED IN NEW ANTI-TORTURE COMMITTEE PUBLICATIONS
On 18th July, the Council of Europe’s Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (CPT) has released all of its reports on visits to Azerbaijan 2004-2017. The overall impression of the situation in Azerbaijan is that torture and other forms of physical ill-treatment by the police, other law enforcement agencies and the army, corruption in the whole law enforcement system and impunity remain systemic, widespread and endemic. The findings of the 2017 ad hoc visit suggest the existence of a generalised culture of violence among the staff of various law enforcement agencies.
THIRD COUNTRIES ALIGN WITH EU RESTRICTIVE MEASURES –
IN RESPONSE TO THE ILLEGAL ANNEXATION OF CRIMEA AND SEVASTOPOL
A news release from the EU Council on 18th July reported that Montenegro, Albania, Norway, Ukraine and Georgia have aligned themselves with EU sanctions on Ukraine until 23rd June 2019.
IN VIEW OF THE SITUATION IN VENEZUELA
Another news release said that Macedonia, Montenegro, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway, Moldova and Georgia have agreed to align themselves with the EU sanctions on Venezuela.
Yet another news release said that Macedonia, Montenegro, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway, and Moldova have agreed to align themselves with the EU sanctions on Burma/Myanmar.
Finally, a news release also advised that Macedonia, Montenegro, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway and Moldova have agreed to align themselves with the EU sanctions on Iran.
OIL SECTOR UNDER FIRE IN LIBYAN CORRUPTION CRACKDOWN
Oil Sector on 18th July reported that Libya’s central bank, national oil company, politicians, businessmen, and traders in the country could end up being probed in a wide-ranging corruption investigation to tackle the underlying problem of Libya’s oil wealth— the accusations and counter-accusations of corruption and channelling of oil revenues to Islamist groups. LNA eastern Libyan strongman General Haftar and his allies claim that Libya’s oil money is being mismanaged, stolen, or channelled to extremist groups. The accusations are mostly directed to the Central Bank of Libya. Central bank governor, Saddek Elkaber, for his part, has accused Libyan governments of using the central bank as a ‘scapegoat’ for their own mismanagement and misdeeds. The latest agreement that lifted the oil port blockade may lead to a wide-ranging corruption probe, but any new deal on oil wealth distribution must tackle the structural corruption problems in Libya, analysts say.
US OPPOSES VIKTOR BOUT’S FORMER PARTNER’S APPLICATION FOR EARLY END FROM SUPERVISED RELEASE
Kenneth Rijock in his blog on 18th July reported that Viktor Bout’s former partner, Richard Chichakli, has filed a Pro Se motion for early termination of his 2-year Supervised Release (parole) obligation, which was a part of his sentence. Chichakli paid all the costs assessed against him, including the $70,000 restitution, and he has lived and worked without incident since his release in 2017. Hence, he has served more than half of his Supervised Release, and normally, when the defendant has stayed out of trouble, the courts often terminate it early.
CHINA’S INVESTMENT IN WEST AFRICA CHALLENGES FRANCE FOR BUSINESS IN ITS FORMER COLONIES
Customs Today on 18th July reported that the area’s fast-growing economies have seen a spectacular rise in loans from China, with its companies competing with firms from France for big infrastructure projects.
RUSSIA’S ENDURING LOVE FOR FAKE LUXURY
On 18th July, Gowling WLG published an article that says that over $43 billion-worth of counterfeit goods are sold in Russia each year – and this figure is escalating. It also says that It is estimated that approximately 40% of all handbags, apparel and accessories sold in Russia are counterfeits and in 2017 the Federal Customs Service made headlines with the seizure of counterfeit branded Swiss watches estimated to be worth over $200 million. While some products are locally produced, most are imported from Asia, Bulgaria, Turkey, Poland and other Eastern European countries. It then says that the target audience for original and fake luxury products differs significantly, and most consumers of fake fashion products know that their items are counterfeit.
RUSSIA INCREASES DUTIES ON US GOODS
Grata International has produced an article saying that, in response to US tariff increases, in July 2018, increased import customs duties rates were introduced for certain goods originating in the US and imported into the Russian Federation. The customs duties of 25% to 40% of the customs value of specific goods and take effect from 6th August.
UK LEASEHOLD LAW SET FOR RADICAL REFORM
The Law Commission on 19th July said that radical new proposals to provide a fairer deal for leasehold homeowners have been announced by the Law Commission. It is outlining a range of measures to help existing leasehold homeowners buy the freehold of their houses. It says that, in September 2018, it will publish a consultation paper on this enfranchisement. This will propose a new, single regime for leasehold enfranchisement designed to benefit leaseholders of houses and flats. The proposal will then be subject to full public consultation. The Law Commission also intends to publish consultation papers on commonhold and Right to Manage before the end of the year.
THE US GOVERNMENT HAS TROUBLE KEEPING TRACK OF RADIOACTIVE MATERIAL
The Verge website on 17th July published an article that says that the Center for Public Integrity says that the US: the government isn’t keeping a close enough watch on radiological material that could be made into a bomb or radiological exposure device. For example, it seems that in 2009 the Department of Energy’s own inspector general found that 45 lb of highly enriched uranium had gone missing. Whilst it is said that it is more likely that they were taken to be sold for financial gain rather than to be used in a radiological weapon, the fact that the radiological materials could be stolen is a bad sign.
ICE USING BETA ANALYTICS TOOL TO TRACK HUMAN TRAFFICKERS, TRANSNATIONAL CRIMINALS
Homeland Security Today on 18th July that the US Immigration and Customs Services (ICE) has been utilising a data analytics platform called Igloo to quickly sift through large volumes of data to track the movements of human traffickers and transnational criminal organisations. Igloo currently allows select units of ICE Homeland Security Investigations (HSI) to use machine learning and algorithms to identify patterns and anomalies in vast data sets.
ISIS DEMORALISED BY ESCALATING ATTACKS IN SYRIA, ACCORDING TO US JULY TERROR REPORT
Homeland Security Today on 12th July reported that escalating efforts to target ISIS remnants in Syria through June have left the terrorist group demoralised, and more Iraqi citizens are returning home to reclaimed land among the country’s western border with Syria, according to the July Terror Threat Snapshot for the US House Homeland Security Committee. The Terror Threat Snapshot also notes that Russia reportedly provided documentation allowing men who had become radicalised to leave the country, primarily traveling to Turkey.
SEC CHARGES INVESTMENT ADVISER WITH MISLEADING RETAIL INVESTORS IN $19 MILLION CASE
Mondo Visione on 18th July carried a report saying that the SEC has charged a Connecticut-based investment advisory firm and its CEO (Temenos Advisory Inc and George L Taylor) with putting $19 million of investor money, including elderly investors’ retirement savings and pension plans, in risky investments and secretly pocketing hefty commissions from those investments.
WHAT THE STOLEN IRANIAN NUCLEAR SECRETS DO, AND DON’T, REVEAL
The Washington Institute on 17th July published an article about the content of documents reportedly stolen by Israeli agents and the stolen 50,000 pages, plus 163 computer disks, videos and plans, have been shared with the US and other western intelligence communities, as well as the world’s nuclear watchdog, the International Atomic Energy Agency.
IRAN SAYS IT’S CONTINUING TO INCREASE URANIUM-ENRICHMENT CAPACITY
Rferl on 19th July reported that Iran says it is continuing to acquire uranium and is close to finishing a plant where it can build more centrifuges to enrich uranium. Iran says its nuclear programme is strictly for civilian purposes, while Washington has accused it of attempting to develop nuclear weapons.
SOUTH AFRICA PURSUING BILLIONAIRE CHRISTO WIESE, TULLOW OIL AND FORMER EXECUTIVES AT LAW FIRM ENSafrica FOR THEIR ROLE IN OBSTRUCTING THE COLLECTION $279 MILLION IN TAXES
The Irish Times on 19th July reported that the South African tax agency, SARS, alleged that ENSafrica created a scheme to allow Tullow Oil shift assets out of the country, leaving a shell that was then sold to Wiese. The newspaper reports that the news comes a day after Tullow was found liable for $50.8 million of costs, in addition to a previous award against it of $140 million, to settle a row over the termination of a contract in Ghana. The story comes from a report by investigative journalists at amaBhungane.
BULGARIAN PARLIAMENT SETS UP COMMITTEE TO INVESTIGATE ALLEGED CORRUPTION IN ISSUING OF DRIVING LICENCES
The Sofia Globe on 19th July reported that Bulgaria’s National Assembly has elected a temporary all-party committee to investigate allegations of abuses in obtaining driving licences.
UK SPACE EXPORTS CAMPAIGN LAUNCH
On 19th July, a news release from the Department for International Trade contained a speech made by the Trade Secretary at the Farnborough Air Show.
A UNITED EUROPE IN SPACE?
Meanwhile, also on 19th July, RUSI published an article that begins by saying that the argument over the UK’s post-Brexit role in the Galileo satellite network has led to broader discussions of the UK’s role as a space power. Yet, of equal importance is what this episode tells us about Europe’s long-term space ambitions.
REGULATION OF THIRD PARTY LITIGATION FUNDING IN ENGLAND AND WALES
Out-Law on 19th July published an article saying that third party litigation funding is a growing industry in England and Wales, although the market remains largely unregulated. Third party funding is the funding of legal proceedings by an entity that is not involved in the dispute, typically in return for a share of the damages received or the settlement sum. It says that the amount of assets under management by the 16 main third party funders that operate in the UK is now over £1.5 billion based on figures which are publicly available, although the actual amount is likely to be much higher. Third party funding in England and Wales is self-regulated by the Association of Litigation Funders (ALF).
IRAN BANS IMPORTS OF FOREIGN HANDICRAFTS
The Tehran Times on 19th July reported a quote that supplying foreign handicrafts such as Turkish, Chinese, and Indian ones to the Iranian market has always been one of the main concerns and challenges for the country’s handicraft producers and exporters. The ban on the import of foreign-made handicrafts in a bid to push up sales of domestically-made counterparts. Germany, Armenia, Turkey, Azerbaijan, Russia, the Netherlands, France, Italy, South Africa and the Persian Gulf littoral states are the main importers of Iranian handicrafts.
OFAC ISSUES NEW VENEZUELA SANCTIONS LICENCE AND FAQ
On 19th July, OFAC announced new General License 5 that authorises US persons to engage in all transactions related to, the provision of financing for, and other dealings in the Petroleos de Venezuela SA 2020 8.5% Bond that would otherwise be prohibited. It also released 2 additional FAQ – 1 on the new License and the other on whether E.O. 13835 prohibits a US person with a legal judgment against the Government of Venezuela from attaching and executing against Venezuelan government assets.
TRUMP ADMINISTRATION CONSIDERING IMPORT LIMITS ON URANIUM, INVOKING NATIONAL SECURITY
On 19th July, the Washington Post reported that the Commerce Secretary took a first step to expanding the trade war to uranium, saying he would launch an investigation into whether quotas should be used to restrict imports in the name of national security. However, utilities with nuclear plants fear such actions would raise the cost of electricity and nuclear experts said the military already has stockpiles big enough to last for decades. In 2017, Canada and Australia provided more than half of US uranium consumption, according to the Commerce Department. Russia provided 16%.
VENEZUELA SAYS IT IS REFINING GOLD IN TURKEY FOLLOWING SANCTIONS
Reuters on 18th July reported that Venezuela’s central bank this year began refining gold in Turkey following a wave of international sanctions that have left it unwilling to carry out such operations in Switzerland. It has been buying gold from small miners in the south of the country and refining it to be used as monetary gold to shore up its international reserves. The gold is returned to Venezuela after being refined in Turkey and becomes part of the central bank’s portfolio of assets.
THE GLOBAL SLAVERY INDEX: UK – 136,000 IN MODERN SLAVERY IN 2016
The findings of the 2018 Global Slavery Index for the UK estimated that there were 136,000 people living in modern slavery in the UK on any given day in 2016. This includes forced labour and forced sexual exploitation of adults and children and forced marriages. The report also says that the realities of global trade and business make it inevitable that the UK, like many other countries globally, will also be exposed to the risk of modern slavery through the products it imports. A Table in the report presents the top 5 products (according to value) imported by the UK from countries that are at risk of using modern slavery in the production of these goods – apparel and clothing accessories; laptops, computers and mobile phones; fish; cocoa and rice.
LABOUR EXPLOITATION MORE WIDESPREAD IN DEVELOPED NATIONS THAN THOUGHT
Insight Crime on 19th July reported that more than 40 million people across the globe were victims of modern slavery in 2016, according to the latest biennial Global Slavery Index 2018. 24.9 million were victims of forced labour, while 15.4 million were held in forced marriage. The study found the number of modern slavery victims in developed countries is far higher than had been believed. Data used to compile the figures showed that 1 in every 800 people living in the US is a victim of forced labour, meaning that America is home to more than 400,000 people living as modern slaves. India was home to the largest total number of modern slavery victims, with an estimated 18.4 million people there estimated to have suffered from labour exploitation or forced marriage.
EU INFRACTION PROCEEDINGS ON VAT TREATMENT OF CERTAIN COMMODITY DERIVATIVES TRADING
On 19th July, HM Treasury published a news release responding to the European Commission’s notification of infraction proceedings on the UK’s VAT treatment of certain commodity derivatives trading. The Commission sent a Reasoned Opinion to the UK on 19th July. This is part of the normal infraction process and was anticipated. The UK will respond in due course and the legal position remains as set out in the news release.
IRISH “PREDICTION MARKET” COMPANIES IN US TO PAY $3 MILLION FOR ILLEGALLY TRADING BINARY OPTIONS
On 19th July, Mondo Visione carried a release from the Commodity Futures Trading Commission (CFTC) saying that Intrade The Prediction Market Limited (Intrade) and Trade Exchange Network Limited (TEN) – Irish companies based in Dublin – requiring them to pay, jointly and severally, a $3 million civil monetary penalty for violations of the Commodity Exchange Act and CFTC Regulations. They were also found to have engaged in “brazen defiance” of a 2005 Commission “cease and desist” Order.
GLOBAL UN-BACKED TREATY ON ILLICIT TOBACCO COMES INTO FORCE IN SEPTEMBER
Insight Crime on 19th July reported that The Protocol to Eliminate Illicit Trade in Tobacco Products, a treaty backed by the UN intended to disrupt the global illicit trade in tobacco products will come into force on 25th September. Studies have suggested that ending black market sales of tobacco products could save in excess of 160,000 lives a year from 2030. To date, 45 countries and nations from the EU have ratified the treaty, but the UN has said it expects many others to do so over the course of the coming months. The treaty aims to secure the supply chain of tobacco products and will require the establishment of a global tracking and tracing regime within 5 years. Other provisions to ensure control of the supply chain cover licensing, due diligence, record keeping, and security and preventive measures, as well as measures in relation to online and telecommunication-based sales, duty-free sales, free zones and international transit.