16th August 2018
UK COURTS RAISE THE BAR TO US EXTRADITION
An article from WilmerHale published on 14th August discusses the decision of the High Court on 31st July to block the extradition to the US of Stuart Scott, who is alleged to have committed an insider trading fraud. It says that the cases (and the earlier case of Love) run counter to a long-held belief by many that UK-US extradition cases will tend to be decided in favour of the US. However, it cautions that the US has indicated its intention to appeal this decision. The outcome of that appeal will provide a clearer indication of whether there is a genuine shift towards greater protection given by the courts to UK citizens from extradition to the US.
AUSTRALIA: CHINESE FAMILY LINKED TO CIGARETTE SMUGGLING AND MONEY LAUNDERING
On 16th February, SBS News reported that a Chinese family of 6 in Melbourne has allegedly laundered at least $11 million in organised crime money, and smuggled in millions of cigarettes. 4 men and 2 women were charged with smuggling tobacco and dealing with the proceeds of crime after federal police seized 2.5 million illegally imported cigarettes in Melbourne. The cigarettes allegedly arrived in Melbourne and Sydney in 4 shipping consignments hidden in tiles.
FORMER KYRGYZ LAWMAKER DETAINED IN KAZAKHSTAN FOR SMUGGLING GETS HIS ARREST EXTENDED
AKI Press on 16th August reported that the detention of Damirbek Asylbek uulu has been extended to October. Kazakh and Kyrgyz media reports said that in February, Kazakh law enforcement authorities detained 29 people during an anti-smuggling operation including the member of the Kyrgyz parliament. The smuggling was said to involve goods from China taken into Kazakhstan and Russia via Kyrgyzstan. Asylbek uulu, 37, has been an MP with the Kyrgyzstan party since 2015. He is said to be an active supporter of President Sooronbai Jeenbekov’s run for the presidency in the October 2017 election, is the deputy president of the Asian Associated Wrestling Committee at the Olympic Council of Asia.
TRINIDAD & TOBAGO: 18 CHARGED WITH MONEY LAUNDERING IN LAST 7 YEARS
On 16th August, the Trinidad & Tobago Observer reported that, according to a weekly police briefing, over the past 7 years, the Financial Investigations Branch (FIB) of the Police Service has charged 18 people in relation to laundering almost $20 million. The unit also successfully saw $418,387,40, US$138,620 and EC$28,000 linked to money laundering forfeited to the state during the period.
HOW THE 1MDB SCANDAL BROUGHT DOWN A CENTURY-OLD SWISS BANK
Channel News Asia on 14th August provided a useful and interesting article on the background to the 1MDB scandal in Malaysia, and in particular how it brought down the 143 year old Swiss bank, BSI – the 6th largest in Switzerland, it was said to have expanded overseas during the 2000s into the high-growth markets of Asia, Eastern Europe, the Middle East and Latin America and opened a subsidiary in Singapore in 2005.
BERMUDA: AGENCY ASSESSES $564M OF SUSPICIOUS ACTIVITY IN 12 MONTHS
The Royal Gazette in Bermuda reported on 15th August on the annual report of the Island’s FIU, saying that the Financial Intelligence Agency received 494 SAR between April 2016 and the end of March last year, up 12% on the previous reporting period, and of the 10,363 separate transactions contained in those reports, with a collective value of $564,249,836, some 40 were in excess of a million dollars. Bermuda faces a mutual evaluation by the CFATF in the near future.
IS THE NETHERLANDS A TAX HAVEN FOR THE SUPER RICH?
Business Report on 16th August carried an opinion piece following the Steinhoff affair in South Africa.
PANAMA PAPERS: UPDATE ON FINDINGS FROM AROUND THE WORLD
On 16th August, ICIJ published an article providing an update on the fallout from the Panama Papers from –
- Latvia – re a trust owned by the daughter of an influential Latvian politician;
- Algeria – offshore activities of the son of the state oil chief;
- Colombia – a Panama helped pay for the election campaign of Colombian president Manuel Santos;
- Botswana – the deputy head of the country’s foreign investment agency directed a company helping wealthy Africans move money offshore; and
- Luxembourg – re an offshore company owned by a high-profile lawyer who has sat in Luxembourg’s parliament since 2013.
“SERIOUS IRREGULARITIES” IN ANDORRA CASINO TENDER LEAD TO LEGAL DISPUTE
On 16th August, Calvin Ayre reported that a recent decision to award its sole casino license to a small local company has led spurned bidders to mount a legal challenge of the tender. The venue is due to open in September 2020. 5 losers have now submitted formal requests to the government last month for a legal review of the tender, seeking a complete do-over based on the “serious irregularities” that had arisen. The government has 3 months in which to respond.
NEW FIFA CODE OF ETHICS
Occrp ON 16TH August reported that, in its newly-released 2018 code of ethics, FIFA has removed the word “corruption” from the text, put a time limit on prosecuting bribery, and introduced a new charge of “defamation” – with a US$10,000 fine and a 2-year ban on anyone found to have made “public statements of a defamatory nature” toward FIFA and FIFA officials. It also imposes a 10-year time limit from the date of the bribery for a charge of bribery to be sustained. FIFA claims the that the word “corruption” had been taken out to ensure “language clarity” in the English, Spanish and German versions.
UK: SENTENCING COUNCIL PUBLISHES GROSS NEGLIGENCE MANSLAUGHTER DEFINITIVE SENTENCING GUIDELINE
On 15th August, Walker Morris published a briefing saying that the penalties imposed on individuals for fatal accidents in the workplace are set to increase after the Sentencing Council for England and Wales published new guideline. It explains that the guideline sets out a step-by-step decision-making process for the court to use to ensure a consistent approach to sentencing in gross negligence manslaughter cases across England and Wales.
ARTICLE ON THE LOGISTICS INDUSTRY IN INDIA
The FIATA Review magazine for September includes a feature which says that the outlook for the Indian economy in general and its logistics sector in particular is positive. the Government is pushing investment in infrastructure and has established a new Logistics Division in the Department of Commerce, in order to ensure the integrated development of the sector to 2022.
MALDIVES-INDIA RELATIONS GOING DOWNHILL?
On 16th August, Eurasia Review published an analysis saying that the Maldives’ relations with India is going downhill and could soon be beyond repair if Yameen continues to be in power in the Maldives. By getting closer to China, Saudi Arabia and even Pakistan, he is seen to be sending a message to India that the Maldives can survive and even thrive without India.
FSB SEEKING FEEDBACK FROM STAKEHOLDERS AS PART OF THEMATIC PEER REVIEW ON IMPLEMENTATION OF THE LEGAL ENTITY IDENTIFIER (LEI)
An article on Mondo Visione on 16th August reported that the Financial Stability Board (FSB) is seeking feedback from stakeholders on progress made by FSB members – both national authorities and international bodies – in response to the G20 Leaders’ 2012 call for “global adoption of the LEI to support authorities and market participants in identifying and managing financial risks”. LEI is a 20-character, alpha-numeric code whose aim is to uniquely identify legally distinct counterparties to financial transactions and to provide high quality reference data on them (such as the name, address, and basic ownership information). The G20 Leaders supported the creation of a global LEI at the Cannes Summit in 2011, and endorsed the global LEI system’s high-level principles and recommendations. The FSB is chaired by Bank of England Governor, Mark Carney, and has been established to co-ordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability.
AFTER IS, IRAQ’S MAJOR CHALLENGE IS CORRUPTION
On 2nd August, the Washington Institute carried an article saying that the issue of fighting corruption in Iraq is important because the problem is serious and growing. The current administration, which has repeatedly stressed that Iraq must fight corruption after its defeat of the Islamic State (IS), is urgently seeking better strategies to confront the issue. It says that some commentators explain that the situation in Iraq has normalised corruption in Iraqi institutions, entrenching it into the political system. This notion implies that corruption is the price that must be paid in order to ensure the continuity of Iraq’s political system, which is based on the principle of ethnic sharing or fairness.
RENOUNCING US CITIZENSHIP IS NOT EASY
An article dated 13th August on Medium which says that becoming an American citizen is a prohibitive, bureaucratic nightmare, but so is trying to give it up. If you want out of your US citizenship, the author says, it’s a complicated, emotional, and expensive ordeal that can take years. She is an Australia who has lived in New York since she was 4 years old. She mentions the complication caused by FATCA, and says that the number of expatriations has skyrocketed since FATCA went into effect in 2014, with 5,132 people expatriated in 2017 — compared with around 500 to 600 a year a decade ago.
ROYAL BANK OF SCOTLAND: $4.9 BILLION MISCONDUCT AND DUMB EMAILS
Corporate Counsel from Law.com on 15th August reported that, according to the DoJ, RBS didn’t just commit fraud — its employees also chatted about it via email and text. The DoJ had announced a $4.9 billion settlement with RBS — the largest US penalty imposed by the agency for financial crisis-related misconduct at a single entity. The record penalty is said to have been imposed due to the size of the fraud and the egregiousness of the misconduct. The statement of facts from the DoJ contains details quoting contemporaneous calls and emails of RBS executives, showing how the bank “routinely made misrepresentations to investors about significant risks” and then discussed the misconduct among themselves, the DOJ said.
UN SECURITY COUNCIL CONCERNED BY SITUATION IN CENTRAL AFRICA
Defence Web on 16th August reported that the UN Security Council expressed “grave concern” over the security situation and human rights abuses in central Africa. A statement highlights concerns over the security situation and human rights abuses. Terrorist attacks by Boko Haram, ISIL (Da’esh), the Lord’s Resistance Army and other armed groups, are ongoing. There is continued maritime insecurity in the Gulf of Guinea and a pervasive threat of transnational organised crime, including that of mercenary activities. It notes ongoing violence by armed groups against civilians and UN peacekeepers, human rights violations against children and sexual violence. Incitement to ethnic and other religious hatred is on the rise, as well as manipulated hostility towards the UN Stabilisation Mission in the Central African Republic (MINUSCA) and other international organisation.
INDIA’S COSMOS BANK HIT BY $13.4 MILLION CYBER ATM FRAUD
Retail Banker International on 16th August reported that Cosmos Co-operative Bank (Cosmos Bank) has lost $13.4 million to cyber attacks that breached the bank’s server that authorised the ATM transactions and were conducted over 2 days. Hackers created a proxy server to authorise fake transactions with cloned ATM cards. The transfer of funds was carried out through ATMs located across 28 countries.
RUSSIA: FORMER HIGH-RANKING INVESTIGATOR GETS 5½ YEARS IN PRISON FOR CORRUPTION
News agency RAPSI reported on 16th August that General Denis Nikandrov, a former high-ranking investigator of Russia’s Investigative Committee to 5½ years in prison. Although the trial was held in secret, investigators believe that he and colleagues extorted about $170,000 from a head of a large joint-stock company who was allegedly a mafia boss.
ASIA PACIFIC GROUP TALKS TOUGH, ASKS PAKISTAN TO ENACT APPROPRIATE LAWS TO CURB TERROR FINANCING
WION on 16th August reported that the Asia Pacific Group (APG) on Money Laundering, which is currently in Pakistan undertaking a review, will submit a report to FATF which placed Pakistan on its ‘grey list’ in June. It urged the country to make terror financing and money laundering extraditable offences. The team comprises officials from the US, Turkey, China and the UK. Officials from the US Treasury and Scotland Yard are part of the delegation. After discussions, the AGP will prepare a second draft of technical compliance report before October, which can be improved upon during the mutual evaluation on-site visit, which is scheduled for October.
CITY POLICE SQUAD FOILS £25 MILLION OF FRAUDULENT ONLINE SCAMS IN JUST 6 MONTHS
The Evening Standard on 16th August reported that the Dedicated Card and Payment Crime Unit (DCPCU) tackles crooked bank staff, online card fraud and scams, to bolster the security of the banking industry. 26 fraudsters were convicted between January and June this year thanks to DCPCU efforts, and 7 organised crime groups were targeted. The unit stopped frauds totalling £25 million in the first 6 months of this year, bringing the total to £540 million since its inception in 2002.
ALARMING RISE OF COUNTERFEIT BEER, WINE AND SPIRITS
FoodBev Media reported on 16th August that, according to the WHO Global Status Report on Alcohol and Health, unrecorded alcohol has come to represent approximately 25% of all alcohol consumption worldwide. The EU Intellectual Property Office reports that in the EU, €2.8 billion is lost in sales every year due to fraudulent wines and spirits. In February Mexican police seized 20,000 gallons of black-market tequila, with over 200 gallons containing dangerous levels of methanol, destined for resorts catering to North American tourists. The article suggests that digital end-to-end traceability using the blockchain could be an answer.
BRIBERY AND CORRUPTION OFFENCES IN CANADA
As parts of its 6-part series on corporate and financial crimes, the Blakes Business Crimes, Investigations & Compliance group outlines basic principles of criminal and quasi-criminal law that may arise in the running of a business in Canada. This one covers bribery and corruption offences.
The 6 parts of the series cover – Criminal Law 101; Criminal Fraud; Bribery & Corruption Offences; Money Laundering; Securities-Related Offences; and Competition.
WHAT IS BEHIND GROWING VIOLENCE IN COSTA RICA?
Insight Crime on 16th August reported that the government is still struggling to stall worsening violence that is being driven by local criminal groups battling for control of domestic drug markets. Costa Rica had long been known for its low crime rate and relatively stable economy. Authorities and experts have explained the rise in violence by pointing to issues such as increasing criminal fragmentation, a greater presence of firearms and the country’s new role in the region’s drug map. Costa Rica has been a long time transhipment/transit country with local Costa Rican criminal outfits contracted to guard drug shipments and move product across the country, and being paid by being supplied with drugs for local sale; but local consumption has risen in recent years. There is also greater evidence of availability of firearms, with reports of arms trafficking rings allegedly connected to Mexico, Colombia and Panama.
BREXIT, ENGLISH LAW AND THE ENGLISH COURTS: WHERE ARE WE NOW?
On 16th August, Clifford Chance produce a briefing which says that the status of English law used in transactions is not one of them; it will remain the same after Brexit as it was before because the EU, for all its law-making, has had minimal impact on transactional law. Similarly, the procedure, judges and practitioners in the English courts will not change as a result of Brexit. The main way in which Brexit that might affect the English courts is the ease of enforceability of an English judgment in the EU, or vice versa, but that will only matter if enforcement in the EU is important and no satisfactory mitigation is available. The briefing looks at the key issues involved, summarising the situation of the firm sees it.
MIAMI ATTORNEY AND BELGIAN FIRM FEUD OVER $13.5 MILLION INVESTMENT
Daily Business review on 15th August reported an unusual case where Miami international tax attorney Suzanne DeWitt says she is being sued as revenge by her former fiancée, while Belgian firm Agorive says DeWitt took 17 properties from the company, the attorney blaming her vengeful ex-fiancé and the Belgian firm claiming she committed fraud. Agorive NV sued attorney Suzanne DeWitt, claiming the company and its predecessor, agrochemical business Percival SA, had hired her to help with their $13.5 million investment in real estate here. Instead, she has kept the properties and their rental income and lives in one of the Gables homes, according to the lawsuit.
STOLEN BUDDHA STATUE RETURNS TO INDIA FROM UK ON INDEPENDENCE DAY
The Art Law & More blog reports on 16th August that missing for nearly 60 years, a 12th-century statue of Buddha was returned to India by the UK in a ceremony on Independence Day. Before first arriving in London to be sold by an antiques dealer, the Buddha is said to have changed hands several times. The current owner and dealer were alerted to the illicit status of the object when it was identified it at a trade fair in March 2018.