11th September 2018
DJIBOUTI GOVERNMENT NATIONALISES PORT COMPANY
Maritime Executive on 10th September reported that Djibouti has nationalised the company that owns a majority stake in the Port de Djibouti SA (PDSA), the latest move in its clash with DP World, which had won a decision in courts in London which granted an injunction restraining PDSA from treating its joint venture shareholders’ agreement with DP World as terminated. PDSA was told not to interfere with the management of DCT until further orders of the court or the resolution of the dispute by a London-seated arbitration tribunal. This came after the Djibouti government seized control of the container terminal from DP World.
https://www.maritime-executive.com/article/djibouti-government-nationalizes-port-company#gs.RPlmoCE
STOLEN TOMBSTONE FOUND AT SOTHEBY’S IS RETURNED TO GREECE
The Times on 11th September reported that an ancient Greek tombstone which dates from 340 BC, illegally smuggled out of the country and on sale at Sotheby’s in London has been returned to Athens after it was handed over to the police. This is described as the latest success for Athens in its campaign to pursue auction houses for looted treasures.
oBIKE IS UNDER INVESTIGATION FOR ALLEGEDLY SMUGGLING $7.3 MILLION OUT OF SINGAPORE
e27.com reported on 11th September that liquidators confirmed that bicycle riding-sharing start-up oBike Singapore is reported to have transferred S$10 million (US$ 7.3 million) to its Hong Kong office before calling a halt to its Singapore operation. The company is said to owe its Singapore users S$8.9 million (US$ 6.5 million) in total.
https://e27.co/obike-is-under-investigation-for-allegedly-smuggling-us7-3m-funds-20180911/
INDONESIA CHARGES POLE SUSPECTED IN PAPUA ARMS SMUGGLING PLOT
The News in Pakistan on 11th September reported Jakub Fabian Skrzypski has been named as a suspect in a conspiracy to smuggle arms to separatists in Papua, and was detained in August and charged along with 3 Papuans. Papua, has battled a long-running separatist movement since it was incorporated into Indonesia after a UN-backed referendum in 1969.
MAS FINALISES NEW CORPORATE STRUCTURE FOR FUNDS IN SINGAPORE
Regulation Asia on 11th September reported that the Monetary Authority of Singapore has finalised the features of the VCC (Variable Capital Company) – formerly known as the S-VACC – a new corporate structure for investment funds. The variable capital structure of a VCC allows shares to be issued and redeemed without approval from shareholders, while also allowing dividends to be paid using its capital.
https://www.regulationasia.com/mas-finalises-new-corporate-structure-for-funds/
An explanatory brief from MAS is available at –
LIVERPOOL CRIME FAMILY LIVED THE HIGH LIFE OFF THE BACK OF MULTI-MILLION POUND DISABILITY CAR SCHEME
The Liverpool Echo on 10th September carried an article about a Kirkby-based crime family enjoyed a lavish lifestyle – including luxury homes – thanks to a multimillion pound scam involving mortgage fraud and money laundering. 5 members of the same family were sentenced following a long-running police investigation and 23-week trial at Manchester Crown Court. Disabled people were also systematically exploited into buying more than 120 high-value luxury vehicles, including Bentley Continentals, Porches, Range Rovers and high-powered Audis.
https://www.liverpoolecho.co.uk/news/liverpool-news/crime-family-lived-high-life-15134515
IRELAND: DISCLOSURE OF COMPANY DETAILS – ARE YOU IN BREACH OF LEGISLATION?
On 27th August, Irish law firm LK Shields published an article containing advice on what company details need to be included in communications with third parties through email, letter, and visits to their websites. It warns that many of these companies are unknowingly in breach of the provisions of the Companies Act 2014 and that care should therefore be taken to ensure that such breaches do not occur.
NON-UK COMPANY WITH NON-UK DATA: SFO INFORMATION POWERS CAN STILL APPLY
Freshfields Bruckhaus Derringer on 7th September published an article saying that despite not holding any data in the UK or not being incorporated in the UK, and noot even doing any business in the UK, you may still be within immediate reach of the SFO information powers and, the High Court has found that this should not ‘raise an eyebrow’. It says that the Court has recently held that the SFO power to compel the production of data extends to data of a UK company held abroad and data of a non-UK company held abroad, provided there is a ‘sufficient connection’ between that company and the UK.
DANISH FSA WANTS 8-FOLD INCREASE IN MONEY LAUNDERING FINES
Bloomberg on 10th September reported that a new Bill proposes that perpetrators have to pay fines according to “the gravity and circumference of the offense” as well as their financial wealth, according to a draft published by Danish Financial Supervisory Authority. The government plans to take the proposal to parliament in October.
ING FINANCIAL CHIEF STEPS DOWN OVER MONEY LAUNDERING SCANDAL
Dutch News on 11th September reported that ING’s CFO, Koos Timmermans, has resigned in the wake of the money laundering scandal in which ING paid an out-of-court settlement of €775 million.
MALTA AS ‘BLOCKCHAIN ISLAND’ IS ‘CALCULATED RISK’, PRIME MINISTER SAYS
The Malta Independent on 11th September reported that Prime Minister Joseph Muscat said, “we’re taking a calculated risk”, by cutting “layers of bureaucracy” and offering fast-track approvals for digital players to set up shop on the island.
IMF REPORT ON SELECTED ISSUES IN MARSHALL ISLANDS
On 10th August, the IMF issued a report on correspondent banking and on legislation to enable the issuance of a second legal tender in the form of a “decentralised digital currency based on blockchain technology”, to be called the Sovereign, or SOV.
POLISH MAN JAILED FOR DRUG SMUGGLING IN UK USING SAME TRUCK AS THAT USED BY BROTHER TO SMUGGLE 2 YEARS PREVIOUSLY
On 11th September, the NCA issued a news release saying that Piotr Chmielowiec, 49, a Polish lorry driver has been jailed for 9 years for attempting to import cocaine into the UK in the same truck his brother was caught smuggling in 2 years ago.
ELITE RUSSIANS RECEIVED CONTROVERSIAL HUNGARIAN RESIDENCE PERMITS
OCCRP on 10th September reported that influential Russian citizens including politicians and executives of state-owned companies received residence permits in Hungary through the country’s controversial residency bond programme, according to a joint investigation by 2 OCCRP partners. The list of those involved includes relatives of Sergey Naryshkin, the head of Russia’s foreign intelligence service (SVR); Dmitry Borisovich Pavlov, a Russian businessman with close ties to the Kremlin who is active in charity and the Orthodox Church. Pavlov made headlines last November, when, at his 50th birthday party, an argument over parking turned into a bloody shootout, killing 1 and injuring 5 people; Vladimir Blotskiy, a member of the Russian Duma; Iliaz Muslimov, a former Duma member; Evgenii Evstratov, the former deputy head of Rosatom; Alexey Yankevich, the deputy head of Gazprom Neft; and Andrei Kalmykov, head of a low-cost airline wholly owned by state-controlled Aeroflot.
UK GAMBLING COMMISSION LAUNCHES CONSULTATION ON AGE AND IDENTITY VERIFICATION PROCEDURES
CMS Law on 10th September reported that the UK Gambling Commission had launched on 5th September a public consultation on age and identity verification procedures in online gambling, the latest step in the Commission’s ongoing effort to address the harms caused by underage gambling.
US THREATENS SANCTIONS AGAINST INTERNATIONAL CRIMINAL COURT
Jurist on 10th September reported that the White House has announced that the US will consider imposing sanctions against the ICC, judges and prosecutors if the ICC opens an investigation into the actions of US service members and intelligence professional in Afghanistan. The Chief Prosecutor of the ICC requested an investigation in November 2017 into alleged war crimes committed by the US in the war in Afghanistan, in addition to actions taken by the Afghan National Security Forces, the Taliban and the Haqqani network. The US will also consider seeking to have the ICC’s powers restricted by the UN Security Council and seek to strengthen agreements that would prevent other nations from surrendering US nationals to the ICC. Although the US originally signed the Rome Statute that established the ICC in 2000, the treaty was never ratified by Congress, and the signature was withdrawn in May 2002.
https://www.jurist.org/news/2018/09/us-threatens-sanctions-against-icc/
WHY DOES U.S. HAVE IT OUT FOR INTERNATIONAL CRIMINAL COURT?
COURT ORDERS FDA TO EXPEDITE GRAPHIC WARNINGS ON CIGARETTE PACKS
TJI on 6th September reported that a federal court has ruled the US Food and Drug Administration (FDA) must issue its rule for graphic warnings on cigarette packs by late September after years of delay.
http://www.tobaccojournal.com/Court_orders_FDA_to_expedite_graphic_warnings.54959.0.html
GERMAN GAMBLING DEBT RULING COULD AFFECT GLOBAL PAYMENTS
Intergame on 10th September reported that a German court’s ruling that a gambler could have his debts written off due to the operator not being licensed in the country could have global repercussions. Landesbank Berlin took legal action after the consumer refused to pay off a credit card debt through Visa accrued while playing on an unnamed online casino site. The gambler argued in the District Court of Munich that the bank had no right to collect due to online casino gambling being illegal in Germany.
http://www.igamingbusiness.com/news/german-debt-ruling-could-affect-global-payments
ALGERIA LAUNCHES MONEY LAUNDERING PROBE ON BACK OF PANAMA PAPERS
ICIJ on 10th September reported that the investigation, which involves the abuse of a government-run milk powder subsidy program and laundering the proceeds from the scheme, was revealed in a decision by Switzerland’s Federal Court. The fraud’s alleged masterminds had bank accounts in Switzerland. The article says the affair involves Algerian entrepreneur, Zoubir Bererhi, the brother of a former government minister and milk powder imported under a government-run subsidy programme.
https://www.icij.org/blog/2018/09/algeria-launches-money-laundering-probe-on-back-of-panama-papers/
SINGAPORE RECOVERS $11.1 MILLION LINKED TO 1MDB MALAYSIA FUND
KYC 360 reported on 11th September that a Singapore court has ordered the return of US$11.1 million linked to the indebted 1MDB Malaysian state investment fund.
https://kyc360.com/news/singapore-recovers-11-1m-linked-to-1mdb-malaysia-fund/
PERVASIVE CORRUPTION COSTS $2.6 TRILLION; DISPROPORTIONATELY AFFECTS ‘POOR AND VULNERABLE’ SAYS UN CHIEF
On 10th September, UN Secretary-General António Guterres linked corruption to many forms of instability and violence, such as the illicit trafficking of weapons, drugs and people and noted that connections between corruption, terrorism and violent extremism have been repeatedly recognized by the Security Council and General Assembly.
https://news.un.org/en/story/2018/09/1018892
https://www.un.org/press/en/2018/sc13493.doc.htm
THE RISE OF THE CYBER-MERCENARIES
The Washington institute has published a fascinating, and worrying, article in September which asks what happens when private Middle Eastern firms have cyberweapons as powerful as those owned by governments? It looks at the “mysterious” Israeli NSO Group – the name is formed from the first initials of the company’s 3 founders. Somehow, this relatively small company had managed to find a vulnerability in iPhones, considered to be among the world’s most secure cellular devices, and had developed a program to exploit it — a hugely expensive and time-consuming process. It says that Israel is a world leader in private cybertechnology, with at least 300 firms covering everything from banking security to critical infrastructure defence. It says that up to 175 people have reportedly been targeted by the NSO Group’s spyware since 2016, including human rights workers and dissidents. Other Israeli firms offer similar products. These are, or may be, made available to repressive governments. In one case examined in the article, the Israeli government had approved the sale by a private company of an advanced cyberweapon to an Arab government (Egypt) with which it has intelligence and security exchanges.
https://www.washingtoninstitute.org/policy-analysis/view/the-rise-of-the-cyber-mercenaries
THE US AND COUNTER-TERRORISM 17 YEARS AFTER 9/11
On 11th September, the Texas National Security review published a set of essays from some of foremost experts on terrorism, insurgency, and strategy in the US.
https://tnsr.org/roundtable/policy-roundtable-17-years-after-september-11/#essay5
The essays included –
- Al-Qaeda and the Taliban: The Alliance that Started the Forever War;
- The Long Aftermath of 9/11: How Terrorism Doesn’t End;
- Understanding the Mixed Record of US Partners on Counter-Terrorism Co-operation Since 9/11; and
- What Progress Has America Made after 17 Years of Global Counter-Terrorism Efforts?
PODCAST: BLOCKCHAIN AS A COMPLIANCE STRATEGY
On 11th September, the FCPA Compliance & Ethics Report released a podcast with a discussion with 2 “thought leaders” from Ernst & Young: Paul Brody – Principal & Global Innovation Leader, Blockchain Technology, and Alexander Perry – Executive Director of Forensic Technology & Discover Services. Tom and Paul discuss with the host the power of blockchains and how they can be effectively implemented in a compliance practice.
HMRC POSTS 6% RISE IN FRAUD INVESTIGATION TAX TAKE
Accountancy daily on 11th September carried a report saying that HMRC’s elite fraud team, the fraud investigation service (FIS), collected £5.47billion in extra tax last year, an increase of £300 million (6%) from the previous year, according to analysis by Pinsent Masons which suggests tax authorities are taking advantage of wider powers to launch civil investigations.
https://www.accountancydaily.co/hmrc-posts-6-rise-fraud-investigation-tax-take
ISLE OF MAN CONFIRMS TAJI INDUSTRIAL COMPLEX REMOVED FROM IRAQ SANCTIONS LISTS
https://www.gov.im/news/2018/sep/11/financial-sanctions-iraq/
FINRA MAKES ITS FIRST FRAUD CHARGES AGAINST ICO, TARGETS HEMPCOIN
Finance Magnates on 11th September reported that for the first time, the US Financial Industry Regulatory Authority (FINRA) has issued fraud charges in connection with the practice of initial coin offerings (ICO) and accused Timothy Tilton Ayre, from Massachusetts, of defrauding investors through selling a cryptocurrency, known as “HempCoin”, as part of a alleged plan to lure victims to invest in his ‘worthless’ company, Rocky Mountain Ayre Inc (RMTN).
DORSET POLICE ARREST 7 PEOPLE OVER ‘LOFT INSULATION FRAUD’
The BBC on 11th September reported that 7 people have been arrested and a Bentley car seized as part of a police fraud investigation into loft insulation firms. They searched the offices of NRG and Thermal Home Insulations, trading from premises previously occupied by Airtight Renewables in Bournemouth.
https://www.bbc.co.uk/news/uk-england-dorset-45485285?src=ilaw
TAX DEFAULTERS LIST FOR SECOND QUARTER OF 2018 PUBLISHED BY IRISH REVENUE
Agriland and others on 11th September reported that the Irish Revenue has released the latest tax defaulters list.
https://www.revenue.ie/en/corporate/press-office/list-of-defaulters/index.aspx
US SECURITIES LAW CAN COVER CRYPTOCURRENCIES, JUDGE RULES
Reuters on 11th September reported that US securities law can be used to prosecute fraud cases over cryptocurrency offerings, a New York federal judge ruled in what appeared to be the first court decision to address the issue.
CHINA’S HANGZHOU CUSTOMS SENT BACK 3,200 TONNES OF WASTE PAPER IN PAST MONTH
REB Market intelligence on 10th September reported that a total of 3,200 tonnes of waste paper has been rejected and sent back to its country of origin by Hangzhou Customs in the past month.
https://www.rebnews.com/chinas-hangzhou-customs-sent-back-3200-tonnes-of-waste-paper-in-past-month/
US SENATE POISED TO PASS BILL TO STOP FLOW OF OPIOIDS THROUGH THE MAIL
The New York Times on 10th September reported that the US Senate appears poised to pass a Bill intended to shut a window through which fentanyl and other opioids pour into the US from China through the mail, as lawmakers search for ways to combat an epidemic affecting the country. The Bill requires the US Postal Service to collect electronic information on merchandise arriving in this country, so customs inspectors can screen parcels for fentanyl and other contraband. Commercial carriers like FedEx, UPS and DHL are already required to provide such information.
https://www.nytimes.com/2018/09/10/us/politics/opioids-fentanyl-postal-service-senate.html
ROMANIAN COURT RULES HACKER CAN BE EXTRADITED TO US
Baker McKenzie on 11th September reported that a Romanian court has ruled that a hacker known as Guccifer should be extradited to the US to serve a 4½-year prison sentence.
http://www.riskandcompliancehub.com/romanian-court-rules-hacker-can-be-extradited-to-us/
SEC CHARGES ICO “SUPERSTORE” AND OWNERS AS OPERATING AS UNREGISTERED BROKER-DEALERS
Mondo Visione on 11th September carried a release from the SEC that announced that TokenLot LLC, a self-described “ICO Superstore,” and its owners will settle charges that they acted as unregistered broker-dealers. This is the SEC’s first case charging unregistered broker-dealers for selling digital tokens since a 2017 announcement that those who offer and sell digital securities must comply with the federal securities laws.
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