25th September 2018
STRATEGIES TO AVOID UK DEEMED DOMICILED STATUS THROUGH USE OF TAX RESIDENCY IN GUERNSEY OR THE ISLE OF MAN
On 24th September, the Alliott Group published an article saying that, despite the introduction of major changes in April 2017 to how non-UK domiciliaries (“non-doms”) are taxed, the UK non-dom regime remains an appealing choice for those looking to relocate from their country of origin or current location given that UK non-domiciles are still able to enjoy significant tax advantages for up to 15 years. The article by John Nelson of Isle of Man and Guernsey-based firm, Dixcart, suggests inventive strategies for resetting the clock for UK non-doms whereby alternative tax residency jurisdictions provide continued tax benefits while maximising days spent in the UK.
AIR INDIA AIRPORT STAFF ARRESTED AT DELHI AIRPORT FOR SMUGGLING GOLD
NDTV on 24th September reported that 2 people, including an employee of Air India SATS, have been arrested by customs officials for allegedly trying to smuggle gold into the country. Air India SATS is a joint venture between Air India and Singapore-based SATS Limited and offers ground handling services such as passenger and baggage handling, aircraft interior cleaning and cargo handling services. A passenger was intercepted by the officials on his arrival from Bangkok, and Both the passenger and an AIR India SATS staff have been arrested and the gold was seized.
BELIZE: FURTHER STEPS ARE NEEDED TO STRENGTHEN THE EFFECTIVENESS OF THE AML/CFT FRAMEWORK
EIN News on 24th September reported on the Concluding Statement following the IMF Article IV Mission to Belize. Amongst the results and comments in the statement it is said that further steps are needed to strengthen the effectiveness of the AML/CFT framework and support the recovery of correspondent banking relationships, regulatory powers of the International Financial Services Commission (IFSC) should be strengthened, along with its capacity to properly licence, supervise, and, when necessary, enforce sanctions against licensed registered agents and financial services providers, and requiring a physical presence of IFSC licensed institutions is essential. Authorities should ensure that up-to-date beneficial owner information is made available and easily accessible without impediments, and the Central Bank should further develop its capacity to conduct AML/CFT risk-based supervision of banks and impose strict and prompt sanctions when necessary. It also says that conducting a study on the overall benefits as well as the costs and risks of the offshore centre is warranted.
BANK FOR INTERNATIONAL SETTLEMENTS: CRYPTO-PRICES FLUCTUATE WITH REGULATIONS
BC Focus on 25th September reported that the Bank for International Settlements (BIS) has recently released a study around the movement of several cryptocurrencies’ prices and co-related it with regulatory actions by respective central banks. The study says that the most significant driver for external market deviation was reported surrounding bans and restrictions on cryptocurrencies and ICO. It also comments on the efforts to distance cryptocurrencies from “normal” banking on AML/CFT concerns. The study is said to show that cryptocurrencies react to, and are within the reach of. national regulation.
The study itself is available at –
LUXEMBOURG: NEW LAW ON COURT ENFORCEMENT OF EUROPEAN ACCOUNT PRESERVATION ORDERS (EAPO)
On 25th September, Luther SA published an article saying that, in Luxembourg, the EAPO Conversion Law became law on 4th August. It says that Luxembourg’s existing legislation proved to be poorly adapted to the execution of EAPO, which created legal uncertainty for practitioners. This situation was deemed to be unacceptable in view of the considerable number of bank accounts opened in Luxembourg by international entities, and hence the amendment of the law.
LAW COMMISSION CONSIDERS ELECTRONIC SIGNATURES OF DOCUMENTS
On 4th September, a posting from London law firm Anthony Gold says that the consultation would be of interest to landlords and letting agents in relation to the signing of terms of business and tenancy agreements. It says that the use of electronic signatures is increasingly common, especially in parts of the sector that see high turnover of tenants in a short timeframe, such as student lettings. However, there has been a degree of concern as to whether the use of electronic signatures is valid in law.
The consultation, to 23rd November, is available at –
DANISH SCANDAL REVEALS UK’S FAUSTIAN PACT WITH RUSSIA
Deutsche Welle on 25th September published an article on the UK angle to the Danske Bank scandal. It says that while Denmark, which regularly features in surveys as one of the world’s least corrupt countries, may be in a state of shock, few eye lids batted when it turned out that much of the cash was destined for London. UK corporate entities were the second-biggest proportion, behind Russian, of Danske’s Estonian non-resident customers, according to a Danske report. It said that the owners of suspicious accounts obscured their identity behind Limited Liability Partnerships (LLP).
THAILAND: 11 SANCTIONED FOR EARTH INSIDER TRADING
On 25th September, the Bangkok Post reported that the Thai Securities and Exchange Commission (SEC) had imposed a civil sanction on 11 individuals involved with insider trading of securities of SET-listed Energy Earth Plc.
NEW YORK TRADER PLEADS GUILTY TO PAYING THOUSANDS IN BRIBES FOR LUCRATIVE IPO TIPS
The Japan Times on 25th September reported that Adam Rentzer, a New York stock trader, pleaded guilty to paying thousands of dollars in cash bribes to a broker at an investment banking firm in exchange for preferential access to lucrative IPO. Rentzer admitted that between mid-2013 and January 2017, he and an unidentified co-conspirator paid cash kickbacks. He faces 5 years in prison and a fine of $250,000.
OWNER OF FORMER AFGHANISTAN MINING COMPANY CONVICTED OF DEFRAUDING US GOVERNMENT
The Washington times on 25th September carried an article about the owner of a now-defunct marble mining company in Afghanistan found guilty on charges of defrauding the US Government and defaulting on a nearly $16 million loan. Adam Doost owned Equity Capital Mining LLC.
ROMANIA’S VAT COLLECTION RATE WEAKEST AMONG EU
BNE Intellinews reported that share of uncollected VAT (the “VAT gap”) was the highest among the EU in Romania, reaching 35.9% in 2016 up from 34.5% versus a median average of 10% for the whole EU. The lowest VAT gaps were in Luxembourg (0.85%) and Sweden (1.08%) and, in the region, in Croatia (1.15%).
IRELAND AND BELGIUM ARE THE NEW FRONTIERS IN THE FIGHT AGAINST ILLEGAL MIGRATION, NCA WARNS
Customs Today on 25th September reported the comments of Tom Dowdall, deputy director of the NCA. People smugglers are increasingly opting for the two countries because security elsewhere has become effective.
GERMANY ARRESTS ALBANIAN OVER RECORD COCAINE SMUGGLING
Customs Today on 25th September reported that Arber Cekaj, owner of the Abi Garden firm which owned the cargo, and an Albanian businessman suspected of being involved in smuggling a record 613 kg of Colombian cocaine in a cargo of bananas was arrested in Germany. The drugs were discovered in February in a container that arrived from Colombia, via Italy, to the northern port of Durres. It was the biggest such seizure in the Balkans country, which is used as a crossroads for smuggling to Europe.
DARKNET EURO COUNTERFEITER ARRESTED IN POLAND
A Europol news release on 25th September reported that the Polish Central Bureau of Investigation in Gdansk has dismantled an illegal print shop producing counterfeit €50 banknotes. The printer sold the counterfeit banknotes on illegal darknet marketplaces and sent them all over the EU and beyond. The suspect had been active as a vendor on different darknet platforms for many years and had built up a strong reputation. He is suspected of being responsible for producing over 10 000 counterfeit €50 banknotes.
ALLIANCE FOR TORTURE-FREE TRADE
This international alliance, an initiative of Argentina, the EU and Mongolia, bringing together countries from around the world with the aim to end the trade in goods used to carry out the death penalty and torture. It held its first ministerial meeting in New York on 24th September. Domestic export bans on torture and execution equipment in many countries (including the EU) have made this trade more difficult in recent years, and Argentina, the EU and Mongolia recognised the need to take further steps to end it. Its website has more information, and photos of some scary equipment (such as the electric shock grabber and spiked baton).
COURT DELIVERS WARNING BLOW TO PARTIES SEEKING TO RELY ON FORCE MAJEURE CLAUSES
Out-Law on 24th September reported that the English High Court has ruled that a charter company was in breach of contract when it failed to provide cargoes to a ship owner – but that the contract’s ‘force majeure’ clause means it escapes paying damages. However, it is stressed that to be excused by the force majeure clause the party must show that it would have been able to perform its obligations by the usual method if the force majeure event had not happened. In the specific case considered, the defendant had also failed to ship 2 cargoes before the event, as its owners had not wanted it to ship the iron ore pellets involved in weak economic conditions. Therefore, the court found that it would not have shipped the cargo even if the event had not intervened.
NEW ZEALAND: UNPRECEDENTED DRIVE TO COMBAT SERIOUS AND ORGANISED CRIME
Scoop on 25th September reported that on how a further 500 police will prevent and combat organised criminal networks and serious offending to reduce crime and harm in communities. They are part of the 1800 additional officers to be recruited by Police, following a $298.8 million increase for Police in Budget 2018. The Police Commissioner is quoted as saying that gangs are getting more sophisticated, growing their links with international syndicates, and continuing to be financed through the supply of methamphetamine and other drugs. The new officers will include in those for cybercrime, financial forensic investigations and asset recovery.
CYPRUS AIMS TO EXPORT GAS VIA EGYPT AND FURTHER ESTABLISH EGYPT AS THE ENERGY HUB OF THE EASTERN MEDITERRANEAN
The Washington Institute on 21st September published an article says that the new pipeline agreement will further establish Egypt as the energy hub of the Eastern Mediterranean. The project involves an undersea pipeline connecting the offshore Aphrodite natural gas field with an Egyptian liquefaction plant. It is already the main gas player in the Eastern Mediterranean by virtue of its large reserves and production capacity. Its ace in the hole is two coastal LNG plants. The main political challenge to the new plan could come from Turkey, which argues that revenue from Cypriot gas sales should benefit all of the island’s citizens, including those in the so-called Turkish Republic of Northern Cyprus, set up after Turkey’s 1974 military intervention – in February, Turkish warships prevented an Italian-contracted drilling ship from operating in south-eastern waters that form part of the island’s exclusive economic zone.
LEGALISE AND REGULATE DRUGS, SAYS NEW REPORT BY GLOBAL LEADERS
Ekklesia on 25th September reported that the Global Commission on Drug Policy has released its new report, Regulation: The Responsible Control of Drugs in Mexico City. The Global Commission comprises 9 former presidents, 3 former prime ministers, and other global leaders. It is also the last piece of work by the former UN Secretary-General Kofi Annan, who died on 18th August. It details how governments can take control of illegal drug markets through responsible regulation to severely weaken criminal organisations which profit from illegal drugs, and promote global health, security and development; and provides a practical roadmap.
The report is available at –
UK TO BE EXAMINED ON UN CONVENTION AGAINST TORTURE
Ekklesia reported on 25th September that in April 2019 the UK will be reviewed by the UN Committee against Torture as part of its 6th periodic review. A number of organisations are also compiling a joint civil society alternative report to the UN Committee, to provide an alternative, fact-based view of the measures taken by the UK to implement its obligations under UNCAT.
On 24th September, VOX, the CEPR portal, published an article saying that the OECD estimates that more than $100 billion is lost each year to tax avoidance by MNE. One way that firms do this is by using their size and mobility to bargain for tax breaks. This article uses French data to identify the nature of such bargaining. It finds that the scale of the projected tax payment accounts for 41% of the tax break, and a credible threat to relocate accounts for the rest.
UK AGREES PRINCIPLES FOR TACKLING MODERN SLAVERY IN SUPPLY CHAINS
On 25th September, the Home Office issued a news release saying that the UK has developed, alongside the US, Canada, New Zealand and Australia, principles for nations to adopt to tackle modern slavery in global supply chains. It is said that the UK and its partners can use their $600 billion of purchasing power as a lever to prevent forced labour in both the public and private sector. In the UK alone it is estimated that modern slavery costs up to £4.3 billion a year. The UK is encouraging other countries to adopt the 4 key principles –
- Governments should take steps to prevent and address human trafficking in government procurement practices
- Governments should encourage the private sector to prevent and address human trafficking in its supply chains
- Governments should advance responsible recruitment policies and practices
- Governments should strive for harmonisation
CHELSEA FC OWNER ROMAN ABRAMOVICH LABELLED ‘A THREAT TO PUBLIC SECURITY’ IN SWITZERLAND
International Adviser on 25th September reported that Roman Abramovich, has lost his court bid to block the publication of a police report into his Swiss residency application, which said he posed a “threat to public security and a reputational risk” because of a “suspicion of money laundering and presumed contacts with criminal organisations”. Abramovich, a Russian national, who has subsequently successfully applied for Israeli citizenship, wanted the application kept private.
FINLAND HOLDS RUSSIAN, ESTONIAN IN MONEY LAUNDERING PROBE
In a follow-up to reports of searches and arrests in Finland reportedly involving a Russian national with a Malta passport, on 25th September Reuters reported that a court has remanded in custody a Russian and an Estonian detained on suspicion of aggravated money laundering following a police raid described by officials as exceptionally large. About 400 police and other officials had searched 17 locations and found more than €500,000 in cash on the suspects’ premises.
DUTCH BANKS TOO LAX ON MONEY LAUNDERING, SAYS CENTRAL BANK
Reuters on 25th September reported that several Dutch banks insufficiently monitor clients and their transactions, enabling them to use accounts for money laundering and other criminal activities, the Dutch central bank (DNB) said.
JERSEY TO LAUNCH LLC
Lowtax.net on 17th September reported that Jersey has approved a law that would enable the creation of limited liability companies, in a bid to attract business from the US. The new LLC law follows new limited liability partnerships (LLP) legislation that came into force in Jersey in August.
DUTCH PILOT WHO SMUGGLED COCAINE INTO THE UK ORDERED TO PAY MORE THAN £400,000
A news release from the NCA on 25th September reported that John Buwalda, 54, smuggled millions of pounds-worth of cocaine into the UK in a light aircraft and has been ordered to pay more than £400,000 at a confiscation hearing. He was jailed for 23 years in December 2016.
VIETNAM ONLINE GAMBLING RING THAT HANDLED NEARLY $26 MILLION IN BETS BUSTED
Calvin Ayre on 25th September reported that police in the central region of the country had arrested at least 10 individuals suspected of involvement in an online operation offering sports betting and other forms of illegal gambling to hundreds of local customers. They were said to be using websites, including one identified as affiliated with Philippines-based Bóng88.
CHINA, FRANCE, UK, RUSSIA, GERMANY PLAN TO USE SPV TO CIRCUMVENT US SANCTIONS ON IRAN
On 24th September, a news release from the EU advised that the JCPOA partner countries (excluding, of course, the US) approved the initiative to establish a Special Purpose Vehicle, to facilitate payments related to Iran’s exports (including oil) and imports, which will assist and reassure economic operators pursuing legitimate business with Iran. The participants reaffirmed their strong will to support further work aimed at the operationalisation of such a Special Purpose Vehicle as well as continued engagement with regional and international partners. The intention would be to create a legal entity to facilitate legitimate financial transactions with Iran to allow EU companies to continue trade with Iran, in accordance with EU law, and could be opened to other partners elsewhere in the world.
JUDGE IN UK ENDORSES WORLD-WIDE FREEZING ORDER AGAINST ‘PERSONS UNKNOWN’
Out-Law on 25th September published an article saying that businesses that are defrauded of assets by cyber criminals can obtain court orders to prevent their funds from being dispersed around the world even where the identities of the perpetrators and the actual recipients of the funds are not known, according to a landmark ruling in the UK; this says world-wide freezing orders (WFO) should be available to victims of cyber fraud in cases where they are pursuing claims against ‘persons unknown’. The High Court’s ruling was issued in July, but has only recently been published. The article says that this ruling highlights the “claimant friendly nature” of England and Wales as a jurisdiction for bringing fraud claims.
WARNING FOR SWEDISH STATE-RUN OPERATOR AS UNLICENSED GAMBLING OPERATORS CONTINUE TO THRIVE
iGB on 25th September reported that Sweden’s gambling regulator says new figures show that unlicensed operators continue to make gains over those operating legally. From January 1st, Sweden will introduce a regulated market, with licensed operators taking on the likes of Svenska Spel for the first time.
INDIAN OFFICIALS RULE OUT GOLD IMPORT DUTY HIKE OVER SMUGGLING FEARS
Illicit Trade on 18th September reported that the Indian Government has said it is considering taking action to slow the considerable importation of gold into the country, and considering alternative policy interventions to curb imports, but wants to avoid an increase in importation duties due to fears over smuggling. It is said that raising import duty on gold so close to the festive season would likely result in an increase in smuggling attempts. The smuggling of gold into India has rocketed over recent years after the Government hiked import duties to 10% in 2013 as part of an earlier effort to cut the country’s current account deficit.
COUNTER ISIS FINANCE GROUP LEADERS ISSUE JOINT STATEMENT
The US Treasury on 24th September issued a news release about a meeting of the Counter ISIS Finance Group (CIFG) 52 member states and observers in Warsaw to discuss the ongoing global efforts to counter ISIS financing. CIFG was established in January 2015 as one of 5 working groups within the Global Coalition to Counter ISIS, a broad international group formed to degrade and ultimately defeat ISIS. The group is used by member countries to identify and disrupt ISIS’s ability to generate revenue and access financial systems. It says that, with the military collapse in Syria/Iraq, ISIS is now attempting to hide in the shadows, in Iraq and Syria, with branches, affiliates, and cells around the world. Accordingly, the work of the CIFG remains more important than ever. Even as ISIS desperately seeks new sources of funding, it is adapting its techniques, and the statement says that the Coalition must adapt as well.
VIDEO: HOW THE NEW FACIAL RECOGNITION SCREENING AT DULLES AIRPORT WORKS
On 18th September, Homeland Security Today published an article containing a video showing the system in use at Dulles Airport.
US: DHS NEEDS UNIFIED STRATEGY AND IMPLEMENTATION PLAN FOR CHEMICAL WEAPONS DEFENCE
Homeland Security Today on 23rd September reported that, in the light of the use of chemicals in Syria and in the UK, the Government Accountability Office found and Homeland Security officials acknowledged that DHS has not fully integrated and coordinated its chemical defence programmes and activities. It said that several components — including CBP, US Coast Guard, the Office of Health Affairs, and S&T — have conducted similar activities, such as acquiring chemical detectors or assisting local jurisdictions with preparedness, separately, without DHS-wide direction and co-ordination. DHS recently consolidated some chemical defence programmes and activities into a new Countering Weapons of Mass Destruction (CWMD) Office.