1st October 2018
POLICE SEIZE HALF TONNE OF COCAINE FROM YACHT ON SOLOMON ISLANDS
Illicit Trade on 30th September reported that a joint operation by police from Australia and the Solomon Islands has resulted in the seizure of 500 kg of cocaine. 2 men from Sydney were arrested on suspicion of plotting to import drugs into Australia after the cocaine was discovered by investigators on the Solomon Islands. It says that the Australia-bound shipment originated from South America, and had been concealed in a professional manner before being shipped.
DANSKE BANK “SHOULD TO SUE MANAGERS OVER €200 BILLION SCANDAL”
The FT on 1st October reported calls by Hermes EOS, a UK adviser behind shareholder actions against Volkswagen, Deutsche Bank and Rio Tinto, said it wanted Danske to emulate German engineering conglomerate Siemens, which sued several senior managers, including former chief executives and chairmen, over a large bribery scandal.
BRITISH COLUMBIA TO LOOK AT PRIVATE LENDERS AS PART OF MONEY LAUNDERING PROBE
The Globe & Mail on Canada on 1st October reported that a new probe into money laundering in British Columbia will look into private lenders’ use of Vancouver-area real estate to hide drug money, a tactic uncovered in a Globe and Mail investigation. It will look at abuse of the builders’ liens system, where a lien is registered against a property for a criminal purpose – to launder money or to enforce a loan-shark transaction. The Globe and Mail revealed that people connected to the deadly fentanyl trade are parking their illicit gains in Vancouver-area real estate market through private lending schemes.
SOMALI OFFICIALS “LINKED TO MONEY LAUNDERING, AND PUBLIC CORRUPTION”
The Suna Times on 1st October claimed that several members of Prime Minister Hassan Ali Kheyre’s cabinet and senior government have been linked to money laundering, graft and corruption, according to sources. Some officials have allegedly been extorting businesses and NGO, receiving illegal kickbacks, and steering inflated contracts to politicians, friends and family members as part of corrupt scheme. Other officials are said to have misused development funds, laundering millions of dollars to private bank accounts in Nairobi, Doha, London and Toronto.
ANGOLA: THE FALL OF THE DOS SANTOS CLAN
The Mail & Guardian in South Africa on 30th September carried a feature originating with Deutsche Welle on the travails of the family of former Angolan President Jose Eduardo dos Santos. His son, Jose Filomeno dos Santos, has been arrested and charges include includes the formation of a criminal organisation, illegal enrichment, money laundering and corruption, according to the Angolan prosecutor. The authorities are also examining whether overseas transfers of $500 million were lawful, as instructed by President dos Santos during his time as Chairman of the Fundo Soberano de Angola (FSDEA), the country’s sovereign wealth fund. The former president’s daughter, Isabel dos Santos, said to be “the richest woman in Africa”, was also head of state oil company, Sonangol, but has been dismissed. She has interests in hundreds of companies in various sectors, including telecommunications, the diamond trade, tourism, real estate — in Angola, Portugal and a number of other countries.
FINLAND: EXPERTS SPECULATE ON TURKU REAL ESTATE FIRM’S POSSIBLE RUSSIAN INTELLIGENCE LINKS
YLE in Finland on 30th September carried an article on the continuing investigations in the wake of arrests and searches of 17 properties owned by Airiston Helmi, a real estate company. Investigators have reported that some €3 million in cash was seized during the raids and an unknown number of people involved with the firm are suspected of aggravated money laundering and tax evasion.
FORUM NON CONVENIENS – BVI COURT REFUSES JURISDICTION IN ALLEGED FRAUD CASE
On 25th September, Carey Olsen published an article which it says provides a very helpful summary of the issues the BVI Court must take into consideration when determining applications concerning forum non conveniens and the service of proceedings out of the jurisdiction. Amongst other matters it emphasises that the mere existence of a BVI incorporated company as a respondent to a claim which “has nothing to do with this jurisdiction” is not, in itself, a determining factor of whether the BVI Court will accept jurisdiction. The case involved a Russian company called Eurochem and its Swiss affiliate, Eurochem Trading GmbH. Eurochem is described Russia’s largest mineral fertiliser trader with a turnover of approximately $7 billion in annual sales and operations worldwide. The company alleged that in 2014 discovered that certain senior members of its sales team had set up a web of companies in the BVI, Panama, Cyprus and Scotland, for the sole purpose of receiving, concealing and laundering the proceeds of over $45 million in secret commission payments from Eurochem’s trading partners. The BVI court has held that Russia is the correct jurisdiction for the case to be heard, as it involved a Russian company and the sales staff involved were also Russian.
HEIGHTENED SENSITIVITY IN JAPAN OVER VIRTUAL CURRENCIES
On 1st October, Nagashima Ohno & Tsunematsu published an article which seeks to provide a brief summary of the approach taken to date by Japanese regulators with respect to virtual currencies before discussing recent developments and the regulatory outlook for them in Japan. It says that having been receptive to virtual currencies, the regulator has identified material compliance failures by such a large proportion of exchange operators is a cause for concern, with insufficient measures have been established to identify, prevent or protect customers from AML/CFT risks. The article says that, with the 2019 FATF peer review approaching, it is reasonable to expect the regulator to continue to closely monitor all exchange operators to ensure that appropriate AMT/CFT procedures are established, are that they are consistent with global standards.
SALISBURY A GOOD REMINDER OF THE IMPORTANCE OF EU-UK EXTRADITION PROCESSES
A blog from the LSE says that the European Arrest Warrant and the UK’s extradition relations with the EU will be greatly affected by Brexit. The Salisbury poisoning is an especially poignant reminder of the importance of establishing future relations in this regard. In case they would ever set foot on EU territory, the UK Government issued a European Arrest Warrant.
MALTA: VENEZUELA-PROBE FIRM CLEARED MILLIONS FOR CLIENTS TO BYPASS BANKS, SAYS FIAU
Malta Today on 1st October reported that a Maltese wealth management firm suspected of being used in a high-profile money laundering scheme, has been fined €370,000 by the FIAU over its scant due diligence on its PEP. Portmann Capital Management is contesting the fine. A police investigation has now taken control of the company’s computer servers. It is said that the MFSA and FIAU suspect that the company’s core business was carrying out unlicensed payments services for its select clients, of significantly high values not related to investment operations but as a substitute for banking or payment accounts.
IMPRISONED EX-PRESIDENT WINS PRIMARY ELECTION TO PANAMA NATIONAL ASSEMBLY
Kenneth Rijock in his blog on 30th September reported that Panama’s former president, Ricardo Martinelli, now a resident of El Renacer Prison, has just won a primary in the upcoming election for Deputy in the National Assembly, winning 44% of the vote.
THE LUXEMBOURG SPF: A PRIVATE WEALTH MANAGEMENT COMPANY OF CHOICE
Ogier on 28th September published an article about the SPF – société de gestion de patrimoine familial. This includes simplified taxation, and simplified incorporation – with low procedural and initial share capital requirements.
AT A GLANCE GUIDE TO JERSEY’S CHARITY LAW
On 28th September, Ogier produced a brief guide to charity law in Jersey. The Charities (Jersey) Law 2014 (the “Law”) enacted on 1st May allowed entities to finally register as charities under the Law. It says that, whilst registration is voluntary, it is necessary to ensure entitlement to certain Jersey tax reliefs and to the use of the word “charity”. It is further anticipated that from 1st January the remaining provisions of the Law will come into force which amends Jersey taxation legislation in relation to charities.
UK: POLICE SUPER-DATABASE PROMPTS LIBERTY WARNING ON PRIVACY
The Guardian on 1st October reported that a new super-database being built for the police represents a “grave” risk to privacy, a leading human rights group has said. The law enforcement data service (LEDS) will use 2 existing stores of information: the PNC, containing criminal convictions; and the police national database, which holds details such as intelligence. On to these will be added other databases, so the new one will be much more powerful.
DRC: THE KING OF COBALT
On 28th September, GPF Geopolitical Futures published an article saying that the Democratic Republic of Congo has as much cobalt reserves as the rest of the world combined and producing an informative infographic.
2 DUTCH OIL SERVICES EXECUTIVES JAILED FOR BRIBERY IN US
On 28th September, the Wall Street Journal reported that 2 former executives of Dutch oil-services firm SBM Offshore NV have been sent to prison for violating US foreign bribery law. Anthony Mace, the company’s CEO 2008-11, received 3 years and was ordered to pay a $150,000 fine. Robert Zubiate, a former SBM Offshore sales executive, received 30 months in prison and has to pay a $50,000 fine.
FATF PUBLISHED PALAU MUTUAL EVALUATION REPORT
On 1st October, FATF published the mutual evaluation report for Palau (an archipelago of over 500 islands, part of the Micronesia region in the western Pacific), produced by the Asia-Pacific Group on Money Laundering and carried a summary of key findings, ratings and priority actions on its website.
BRAZILIAN STATE-OWNED ENERGY COMPANY PETROBRAS TO PAY US AND BRAZIL A $853 MILLION CORRUPTION FINE
Public Finance International on 1st October reported that the company admitted that it had failed to make and keep records and accounts that “accurately and fairly reflected” how and where money was spent, the US DoJ said in a statement. Petrobras falls under American jurisdiction because of it has US investors and makes regular disclosures to the SEC. Payments were facilitated by executives at the “highest levels” including the firm’s board. 80% of the fine will go to Brazil. The bribery scheme took place between 2004 and 2012 and is estimated at $2 billion, of which more than half went to politicians and political parties.
THE AZERBAIJANI LAUNDROMAT 1 YEAR ON: HAS JUSTICE BEEN SERVED?
Transparency international on 28th September reviewed the position 1 year on from a massive leak of bank records from 2012 to 2014 showed that the ruling elite of Azerbaijan ran a $3 billion slush fund and international money laundering scheme. Part of the money was used to help whitewash Azerbaijan’s poor international image. In May 2018, OCCRP revealed that the Azerbaijani Laundromat was also financing lobbying and work on reputation in the US. Transparency International says that there was sufficient evidence for 18 European countries to launch their own investigations into corrupt activities, including bribery and money laundering. However, in 12 countries, there has been no official follow-up by law enforcement, while investigations are pending in 4, with an ongoing criminal procedure in court on charges in bribery only in Italy. 2 of the countries – Azerbaijan and Hungary – refused to open investigations. It also suggests that the revelations have not seemingly affected Azerbaijan’s relations with other European states.
CHANGES TO GUERNSEY’S CORPORATE INSOLVENCY REGIME
Guernsey Press on 1st October reported on changes expected to come into force by the end of March next year. It says that reforms include the requirement for a liquidator in an insolvent voluntary liquidation to give notice of their appointment to creditors, to hold at least one meeting with creditors and to report to creditors on an ongoing basis. Additional powers will be given to liquidators, whether the liquidation is voluntary or compulsory, to demand the production of information from directors at the earliest opportunity. Liquidators will also be able to apply to the Royal Court for an order requiring other individuals with knowledge of the company’s affairs to be examined and be compelled to provide information.
HOMEMADE EXPLOSIVES FILM FROM INTERPOL WINS PRIZE AT CANNES
On 1st October, Interpol published a news release saying that a film developed by INTERPOL to help first responders recognise potential homemade explosives has won a gold prize at the Cannes Corporate Media and TV Awards. The awareness-raising video highlights the importance of educating law enforcement, fire and ambulance services, and public health officials to identify early warning indicators of attacks in preparation, and how best to report such cases. It also says that high-profile explosive attacks using some ingredients found in common household products have affected communities worldwide, and INTERPOL supports the efforts of member countries to deter, detect and disrupt the use of chemicals in terrorist incidents by preventing criminals from diverting, smuggling and using chemical warfare agents, toxic industrial chemicals and explosive precursor chemicals (and EU and UK law includes such provisions).
55% OF FTSE 100 CURRENTLY FAIL TO PUBLICLY MENTION TAX EVASION IN THEIR PUBLIC DOCUMENTS
On 1st October, Out-Law reported that 55% of FTSE100 companies do not mention how they are managing the risks of tax evasion in their published documents, according to research by Pinsent Masons. It reminds one that, under the Criminal Finances Act 2017 which came into force on 30th September 2017, businesses are criminally liable if any of their employees, agents or other third parties facilitate tax evasion whilst providing services on their behalf.
ARREST OF SYNDICATE KINGPIN LIKELY TO REDUCE CASH-IN-TRANSIT HEISTS IN SOUTH AFRICA
Janes.com on 1st October reported that a series of arrests over June and July targeting 23 alleged gang members and their purported leader – Wellington ‘Bibi’ Cenenda. Statistics for the year to March showed a 56.6% rise in cash-in-transit heists from the same period a year earlier, and a 74% increase over the past 3 years. Of 238 heists, 34% took place in Gauteng Province where Cenenda’s gang operated.
4 PUPPIES SEIZED AT DUBLIN PORT
On 1st October, the Irish Revenue Commissioners issued a news release saying that Revenue officers at Dublin Port seized 4 puppies when they stopped and questioned 2 men, in routine operations. The UK nationals, who were travelling to Holyhead, did not have pet passports for the puppies, nor were they microchipped as required under the Animal Health and Welfare Act 2013.
GERMAN FAR-RIGHT TERROR SUSPECTS DETAINED IN OVERNIGHT RAIDS
Deutsche Welle on 1st October reported that Germany’s state prosecutor has ordered the arrest of 6 men charged with forming a far-right terror group known as “Revolution Chemnitz”, and around 100 police officers raided several properties in the German states of Saxony and Bavaria. The men are accused of planning attacks on migrants in eastern Germany.