OTHER THINGS YOU MAY HAVE MISSED – AUGUST 7

7th August 2018

NSO GROUP: “A GO-TO COMPANY FOR HUMAN RIGHTS ABUSERS”

On 6th August, Amnesty International published an article about the Israeli company NSO Group, which is based in Israel and manufactures surveillance tools and sells them exclusively to governments. In a statement to Amnesty International, NSO said that its technology “allows government agencies to identify and disrupt terrorist and criminal plots”.  But over the past few years, Amnesty says, digital rights groups including Citizen Lab and Access Now have traced a number of malicious state-backed attacks on human rights activists back to NSO’s tools.  Amnesty cites cases in Mexico and UAE and argues that existing export controls and reliance of contract law are not adequate to control the sale of such software.

https://www.amnesty.org/en/latest/news/2018/08/is-nso-group-a-goto-company-for-human-rights-abusers/

SOUTH KOREAN FINANCIAL AUTHORITIES GRAPPLE WITH ALLEGED NORTH KOREAN COAL SMUGGLING

Business Korea on 7th August carried an article saying that the US government is expected to impose sanctions on not only Korea South-East Power Company, which is alleged to have imported North Korean coal, but also domestic banks which opened a letter of credit to facilitate the transactions.  It says that South Korean financial authorities are even having difficulties finding out which banks are involved in the case and 2 banks that are suspected of having opened a letter of credit also strongly deny the allegations.

http://www.businesskorea.co.kr/news/articleView.html?idxno=24151

JORDAN: INTERNATIONAL ARREST WARRANT ISSUED IN TOBACCO MANUFACTURING AND SMUGGLING CASE

The Jordan Times on 6th August reported that a public prosecutor has issued an International Red Notice against the main suspect in the case of illegal tobacco manufacturing and smuggling which has rocked Jordan and implicated high-ranking officials.  It is said to be for Awni Mutee, a businessman who reportedly fled the country to Lebanon a day ahead of a crackdown on illegal facilities linked to the case.

http://www.jordantimes.com/news/local/intl-arrest-warrant-issued-tobacco-case

CASE COMMENT: SFO V SALEHAPPEAL AGAINST A PROPERTY FREEZING ORDER

On 9th July, an article from 6 King’s Bench Walk chambers in London was concerned with a High Court appeal against a property freezing order obtained by the SFO in connection with suspected bribery and corruption involving a former ambassador of Chad and shares held by his wife.  It says that the case illustrates the willingness and ability of the SFO to obtain civil recovery orders against property under Part 5 of the Proceeds of Crime Act 2002, where the only connection to the UK is that the money was held in a UK bank account.  The shares involved were in a Canadian mining company, and the Court decided that the extremely low price for the shares was prima facie not for any obvious commercial reason, and that the act in Canada would have been an offence in the UK also.

http://blog.6kbw.com/posts/case-comment-sfo-v-saleh-2018-ewhc-1012

FRENCH PORTS CUT OUT OF EU TRADE ROUTE AFTER BREXIT

This exclusive report from Politico, updated on 7th August, says that the EU Commission has adopted plans to reroute Ireland’s freight to ports in Belgium and the Netherlands as a contingency plan for the post-Brexit period, and angered the French ports by doing so.  The Commission has adopted a proposal to revise the routing of one of its strategic transport corridors to connect Dublin and Cork with the Belgian ports of Zeebrugge and Antwerp and the Port of Rotterdam in the Netherlands, to channel trade directly from Ireland to mainland Europe after Brexit – to prevent Irish traffic being caught up in problems in the UK.

https://www.politico.eu/article/brexit-french-ireland-ports-cut-out-of-eu-trade-route-after-brexit/

AGREEMENT BETWEEN THE EU AND NORWAY ON ADMINISTRATIVE CO-OPERATION, COMBATING FRAUD AND RECOVERY OF CLAIMS IN VAT

On 7th August, the EU published information saying that the Agreement comes into force on 1st September.  For the Agreement, see –

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2018:195:TOC

EU LEGISLATION SEEKING TO MITIGATE EFFECT OF REIMPOSED US SANCTIONS

On 7th August, the EU published 2 new Regulations on the amendment of existing EU “blocking” legislation, and a decision granting an EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union, as regards Iran.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2018:199I:TOC

https://europeansanctions.com/2018/08/06/updated-eu-blocking-statute-in-force-tomorrow/

UK REPORT: THE ECONOMIC AND SOCIAL COSTS OF CRIME

On 6th August, the Home Office published the 2nd edition of a report that uses existing crime and cost data to update previous analysis by the Home Office to estimate the economic and social costs of different offences.  It says that such estimates are important in helping to develop an understanding of the wider costs and benefits associated with changes in the number of crimes.  The report estimates the total costs of crime in England and Wales in 2015/16 to be approximately £50 billion for crimes against individuals and £9 billion for crimes against businesses.

https://www.gov.uk/government/publications/the-economic-and-social-costs-of-crime

CHINA PROBES HEAD OF SHANGHAI AIRPORTS OPERATOR FOR CORRUPTION

Bloomberg on 7th August reported that the Chinese Communist Party is probing Wu Jianrong, 56, the chairman of the Shanghai Airport Authority for alleged corruption as President Xi Jinping continues his more than 5-year-old crackdown on graft.

https://www.bloomberg.com/news/articles/2018-08-07/china-probes-head-of-shanghai-airports-operator-for-corruption?src=ilaw

£700,000 SEIZED FROM GANGSTERS ON OFFER TO NORTHERN IRELAND CRIME PREVENTION PROJECTS

The Belfast telegraph on 7th August reported that £700,000 recovered from the proceeds of crime, including cars and property, is being made available to groups across Northern Ireland and public sector bodies, voluntary and community sector organisations to bid for a share of the fund are being invited to bid for a share.  The 2018/2019 Assets Recovery Community Scheme (ARCS) will mean that a total of £5million of criminal assets will have been distributed to the community since the scheme began in 2012.

https://www.belfasttelegraph.co.uk/news/northern-ireland/700k-seized-from-gangsters-on-offer-to-northern-ireland-crime-prevention-projects-37190912.html?src=ilaw

FORMER BERNARD MADOFF CUSTOMERS ARE FIGHTING TO PROVE HIS SCANDAL WASN’T A PONZI SCHEME

The Toronto Star on 6th August reported that scores of Bernard Madoff’s former customers are pushing for access to a massive database of trading records and other documents seized from the con man’s now-defunct securities firm to advance a theory about the epic fraud.  If it wasn’t a Ponzi scheme, they needn’t surrender more than $100 million in what the trustee of Madoff’s firm calls false trading profits.

https://www.thestar.com/business/2018/08/03/former-bernard-madoff-customers-are-fighting-to-prove-his-scandal-wasnt-a-ponzi-scheme.html?src=ilaw

ARRESTED ABROAD: ADVICE FOR BRITISH NATIONALS

On 6th August, the FCO issued updated guidance on what to do, or can be done, if you are arrested in another country.

https://www.gov.uk/government/publications/arrest-or-detention/arrested-abroad-advice-for-british-nationals

UK: GUIDANCE FOR EXPERT WITNESSES

On 6th August, the Forensic Science Regulator published issue 6 of guidance and obligations placed on expert witnesses in the criminal justice system in England and Wales.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/732120/FSR_Legal_Obligations_-_Issue_6.pdf

UK HIGH COURT HOSTS NEW MEGA-MONEY RUSSIAN DISPUTE

The Law Society Gazette on 7th August reported on a case involving a stake in a Russian fishing company valued at more than a billion pounds which has opened in the High Court – though the relevance of England and Wales as a jurisdiction has again been called into question.  Alexander Tugushev is fighting billionaire Vitaly Orlov for a stake in the $1.5 billion valued Norebo Group, which is one of the largest international fishing companies in the world.  Orlov took control of Norebo in 2016 but Tugushev claims his one-third stake in the company is not being recognised.

https://www.lawgazette.co.uk/law/high-court-hosts-new-mega-money-russian-dispute-/5067195.article

CJEU RULES BRAND OWNERS CAN PREVENT DE-BRANDED PARALLEL IMPORTS

Gowling WLG on 6th August published an article saying that the CJEU has held that the proprietor of a mark may take action against parallel importers of their products who remove all signs identical to their mark and replace them with other signs, without the consent of the trade mark owner and with a view to importing and trading the products for the first time in the EEA.  The case involved Mitsubishi-built forklift trucks and, after acquiring them from a company in the Mitsubishi group, and in a customs warehousing regime, removed all the Mitsubishi marks from the trucks and affix their own signs and replaced the identification plates and serial numbers and modify the trucks so that they were compliant with EU standards.  These modified forklift trucks would then be imported into the EEA and marketed within and outside the EEA.

https://gowlingwlg.com/en/insights-resources/articles/2018/owners-can-prevent-de-branded-parallel-imports

FCA HAS SECURED CONFISCATION ORDERS IN ITS LONGEST-RUNNING AND MOST COMPLEX INSIDER TRADING CASE

On 6th August, Allen & Overy published a briefing saying that the FCA has secured confiscation orders totalling £1.69 million as part of Operation Tabernula triggered by an STR concerning the trades of 2 individuals in a listed company.  5 Operation Tabernula defendants were accused by the FCA of a single count of insider trading occurring between November 2006 and March 2010.  The trial began in January 2016 and 2 defendants were found guilty.  To date, the FCA has secured 5 convictions in respect of Operation Tabernula and 1 additional individual is still due to stand trial.

http://www.allenovery.com/publications/en-gb/Pages/A-closer-look-United-Kingdom—FCA-secures-confiscation-orders-in-Operation-Tabernula.aspx

ROBBERS IN MALAYSIA STEAL 50 KG OF DRUGS FROM CUSTOMS

Euronews on 6th August reported that police in Malaysia have arrested 2 customs officers and 3 other suspects after a gang of thieves stole about 50 kg of narcotics, ketamine and heroin, from a customs storage facility.  The thieves targeted a container that had been recently impounded.

http://www.euronews.com/2018/08/06/robbers-in-malaysia-swipe-50-kg-of-drugs-from-customs

SEC UPDATES LIST OF UNREGISTERED FIRMS USING INACCURATE INFORMATION TO SOLICIT INVESTORS

On 6th August, a news release on Mondo Visione said that the SEC has announced that it has updated its list of unregistered firms that use misleading information to primarily solicit non-US investors, adding 16 soliciting entities, 4 impersonators of genuine firms, and 9 bogus regulators.

http://www.mondovisione.com/media-and-resources/news/sec-updates-list-of-firms-using-inaccurate-information-to-solicit-investors/

RUSSIA’S RUSAL SAYS SANCTIONS FORCING SHUTDOWN OF PLANT CATERING TO US CUSTOMERS

Rferl on 7th August reported that Russian aluminium giant Rusal says US sanctions are forcing it to shut down one of its smaller plants, the Nadvoitsky aluminum smelter, that catered to US customers and find new jobs for hundreds of the plant’s workers because the plant stands to lose U.S. customers under the sanctions as well as a steady supply of raw materials.

https://www.rferl.org/a/russia-rusal-aluminum-giant-says-sanctions-forcing-shudown-plant-st-petersburg-catering-us-customers-smelter-deripaska/29416471.html

IRISH CUSTOMS SEIZES €90,000 IN DUBLIN AIRPORT

On 7th August, the Irish Revenue Commissioners reported that officers seized €90,000 in cash when they stopped and searched a UK national in her 30s travelling to Amsterdam, following routine profiling.  The cash was found hidden in a suitcase with the assistance of Revenue detector dog Josie.

https://www.revenue.ie/en/corporate/press-office/press-releases/2018/pr-070818-90000-dublin-airport.aspx

CRIMINAL GANG TO USE SMALL BOATS AND A JET SKI TO SMUGGLE MIGRANTS ACROSS THE CHANNEL INTO THE UK

A news release from the NCA on 7th August reported that 6 men who were part of a crime group attempting to use small boats and a jet ski to smuggle migrants across the Channel into the UK have been found guilty, following a 9-week trial.  The lengthy investigation, led by the NCA, focused on 2 separate criminal networks working together, one Albanian and one from Kent.

http://www.nationalcrimeagency.gov.uk/news/1437-crime-network-planned-to-use-boats-and-jet-ski-to-smuggle-migrants-to-uk-2

LITHUANIA’S EX-PRESIDENT’S WIDOW ENTANGLED IN TAX EVASION

OCCRP on 7th August reported that Lithuanian authorities have raised tax evasion charges against the son of the ex-president’s widow, Kristina Brazauskiene, the widow of Lithuania’s former president Algirdas Brazauskas, because the company her son from her first marriage, Ernestas Butrimas, runs and co-owns with his mother allegedly failed to pay some €40,000 in profit tax on a real estate trade in Florida.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8429-lithuania-s-ex-president-s-widow-entangled-in-tax-evasion

SPAIN: 3 RUSSIANS ARRESTED FOR PLOTTING MURDER OF RIVAL GANG LEADER

OCCRP on 7th August reported that Spanish police arrested 3 high-profile members of the Russian mob in the resort town of Marabella, catching them as they allegedly plotted to consolidate their hold in the region by murdering a rival mafioso.  It is claimed that the men were part of Vory v Zakone, or “Thieves in Law”, a brotherhood of elite professional criminals from across the post-Soviet space.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8427-spain-3-snagged-for-plotting-murder-of-rival-gang-leader

COURT OF APPEAL REJECTS “CYNICAL” ATTEMPT BY 2 MEN TO BLAME THEIR BARRISTER FOR CONFISCATION ORDERS

Legal Futures on 7th August reported that the Court of Appeal has rejected what it described as a “cynical” attempt by 2 men convicted of money laundering to blame their barrister for confiscation orders.  It is said that were initially “content” with the confiscation orders, but ceased to be so when they were unable to mortgage commercial properties.  The Court rejected “the unseemly attempt by the applicants to create grounds of appeal by making false allegations against their former counsel”.

https://www.legalfutures.co.uk/latest-news/appeal-judges-reject-criminals-cynical-attempt-to-blame-barrister

SOUTH AFRICA BECOMES PART OF AFRICAN HEROIN TRAFFICKING TRAIL          

On 3rd August, ENACT Africa published an article asking have South Africa’s ports and authorities been absorbed into the heroin economy?  The volume of heroin being trafficked through Southern and East Africa’s coastal countries has risen dramatically in recent years, part of a major transit path for heroin being shipped from Afghanistan to Europe, and a few other markets.  Conflict and improved policing along the main land-based drug-trafficking route to Europe via the Balkans, as well as skyrocketing poppy production, have caused the alternative route to become more important.  It has also caused increased problems in Africa from users.  The article says that research by the ENACT organised crime project suggests that since 2015, the heroin market in South Africa has grown substantially.  In part this phenomenon has been obscured by language – Chatsworth thought it had a ‘sugars’ problem, Cape Town an ‘unga’ problem and Johannesburg a ‘nyaope’ problem, without realising that the base ingredient in all these drugs is heroin.

https://enactafrica.org/enact-observer/heroin-hits-south-africa-along-the-highway-to-impunity?utm_source=BenchmarkEmail&utm_campaign=Newsletter&utm_medium=email

IS THE AFRICAN UNION ON TRACK TO SILENCE THE GUNS?

An article from ENACT Africa on 26th July says that stemming demand for arms and ammunition is key if Africa is serious about “Vision 2020”.  In May, it says that the African Union Peace and Security Council (AU PSC) underlined the need for AU member states to increase their efforts in the fight against organised crime – including illicit financial flows; wildlife crime; the exploitation of natural resources – notably by armed groups; and the illicit proliferation of weapons.  That meeting reflected on issues that stand in the way of achieving the AU’s goal of silencing the guns as required by Vision 2020.

https://enactafrica.org/enact-observer/is-the-au-on-track-to-silence-the-guns?utm_source=BenchmarkEmail&utm_campaign=Newsletter&utm_medium=email

DJIBOUTI REJECT “BIASED” LONDON COURT DECISION OVER CONTAINER TERMINAL

On 7th August, Loadstar reported that Djibouti has attacked a London court ruling in favour of DP World over its government’s seizure of the Doraleh Container Terminal (DCT) of which a new law earlier this year allowed the government to take control.  DP World had built the terminal after winning a concession in 2006.  The London Court of International Arbitration (LCIA) has ruled the seizure illegal, and said the concession agreement remained valid.  The Djibouti government has said it does not accept the decision.  The government said the dispute should be resolved with a compensatory settlement, which, it added, was in line with the principles of international law.  The terminal is Djibouti’s largest single employer.  The government holds a 67% stake and DP World 33%.  But Djibouti has also received significant investment from China Merchants, which has bought a 23% stake in the wider port of Djibouti.

https://theloadstar.co.uk/djibouti-rejects-biased-court-ruling-doraleh-box-terminal-seizure/

STATE COURTS IN US REJECT THE PONZI SCHEME PRESUMPTIONS IN FRAUDULENT TRANSFER ACTIONS

On 7th August, Fox Rothschild published a lengthy article that concludes by recommending that those “innocent” institutions caught up in Ponzi schemes, such as those of Bernie Madoff, would be better trying their luck before state than federal courts.  It says that Ponzi schemes have spawned thousands of “fraudulent transfer” cases.  It says that Anglo-American fraudulent transfer law has a long history dating back 4 centuries to the Statute of 13 Elizabeth, enacted in 1571, and to the first reported fraudulent transfer case, Twyne’s Case, decided in 1601.  The article goes on to say that, in an effort to obtain funds for the victims of the Ponzi schemes, bankruptcy trustees and receivers have commenced fraudulent transfer cases to recover payments made by the Ponzi fraudster.  It says that many of the defendants had no knowledge of the Ponzi scheme and had innocently loaned money or provided goods and services, and therefore they had done nothing wrong.   Nevertheless, most of the defendants lost—at least in federal courts.  It says that 2 cases – Finn and The Golf Channel indicate that the transferee-defendant will be more likely to escape the constrictions of the Ponzi scheme presumptions in state court than in federal court.

https://bankruptcylitigation.foxrothschild.com/2018/08/articles/fraudulent-transfers/for-the-defense-state-courts-reject-the-ponzi-scheme-presumptions-in-fraudulent-transfer-actions/

POLICE SEARCH SHINIL GROUP FOR SUSPECTED FINANCIAL FRAUD OVER SUNKEN RUSSIAN WARSHIP

The Korea Times on 7th August reported that South Korean police searched the office of Shinil Group as part of an investigation into an allegation the company committed investment fraud by inventing a fictitious story that it discovered the wreck of a sunken Russian warship laden with treasure off Ulleung Island, east of the peninsula.  In July the group announced it had found the Russian warship Dimitrii Donskoi, which went missing in 1905 during the Russo-Japanese War, showing what was said to be submarine footage.  Following the press conference, Shinil Group issued its cryptocurrency Shinil Gold Coin (SGC), with police suspecting it used the story to attract investment.

http://www.koreatimes.co.kr/www/nation/2018/08/356_253504.html?src=ilaw

ISLE OF MAN UPDATE ON SUBSTANCE REQUIREMENTS FOR COMPANIES

On 7th August, the Isle of Man published a news release providing an update on the progress towards the proposed introduction of legislation which will require companies tax resident in the Isle of Man, undertaking specific activities, to demonstrate that they have sufficient substance in the Isle of Man.  This follows the commitment given in November 2017 to address the EU Code of Conduct Group’s concerns.  It says the Island has worked closely with the other Crown Dependencies and put forward proposals to the Group which will enable it to meet its commitment by 31st December. These proposals will require companies that are tax resident in the Isle of Man and engaged in key activities identified by the EU to demonstrate they meet minimum substance requirements as part of their annual tax return.

https://www.gov.im/news/2018/aug/07/update-on-work-to-meet-code-of-conduct-group-commitment/

GUIDELINES FOR OBTAINING EXEMPTIONS TO DELIVER HUMANITARIAN ASSISTANCE TO THE DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA

On 6th August, a news release from the UN advised that the UN Sanctions Committee has published its 7th implementation assistance notice, entitled “Guidelines for Obtaining Exemptions to Deliver Humanitarian Assistance to the Democratic People’s Republic of Korea”.   The implementation assistance notice provides additional guidance on the humanitarian exemption mechanism and is available on the Committee’s website in all official languages of the UN.

https://www.un.org/press/en/2018/sc13445.doc.htm

These Guidelines, and previous notices, and a factsheet on measures imposed by various UN sanctions on DPRK, can be found at –

https://www.un.org/sc/suborg/en/sanctions/1718/implementation-notices

PROPERTY HIJACK FRAUD: NEW DUTY FOR CONVEYANCERS?

On 3rd August, TLT Solicitors published a briefing saying that the Law Commission has recommended introducing a new statutory duty on solicitors in property transactions and if the proposals are implemented, solicitors will owe a duty to HM Land Registry in respect of identity checks.  It says that the problem involves property title fraud, which occurs when a property is transferred to another party without the true owner’s knowledge.  Typically, this is a result of an imposter pretending to own the property and deceiving the other parties involved in the transaction.

https://www.tltsolicitors.com/insights-and-events/insight/property-hijack-fraud-new-duty-for-conveyancers/

TALC: THE AFGHANISTAN TERROR TRAIL

The Geographical Magazine on 7th August carries an article saying that an investigation reveals how the illegal export of talc, used in numerous household products, is providing significant funds to insurgents in Afghanistan.  It points out that talc (also known as hydrated magnesium silicate) is used in a diverse range of household products, from plastics and baby powder to cosmetics and paints.  One region of the world where the mineral can be found in large quantities, along with chromite and marble, is the Nangarhar province in eastern Afghanistan, along the border with Pakistan.  The Taliban alone makes an estimated $300 million annually thanks to the talc trade, despite the introduction in 2015 of a ban on exporting these unprocessed minerals.  The US imported more than 128,000 tons of talc from Pakistan in 2016, making it the country’s primary destination for talc exports, while more than 110,000 tons went to the EU and smaller quantities to South Korea, Saudi Arabia and Japan.

http://geographical.co.uk/people/development/item/2824-talc-terror-trail?src=ilaw