8th October 2018
US STATE DEPARTMENT CLARIFIES EXPORT CONTROLS ON SATELLITE THRUSTERS
Space News on 5th October reported on a revision of an US export control rule to clarify that spacecraft and their thrusters should not be classified as rocket engines and the confusion among satellite and space hardware manufacturers about reforms meant to relax some export control laws in 2014 and 2017. Previous rules under US International Traffic in Arms Regulations (ITAR) classified satellites and their thrusters as rocket engines, resulting in strict, weapons-level control of their sale to non-US buyers. It says that, though the reforms made in recent years have made it easier to export non-military space hardware, many aerospace companies want to see further easing of the rules.
https://spacenews.com/us-state-department-clarifies-satellite-thruster-regulations/
ANGOLA: 4 KILLED AS POLICE ROUND UP FOREIGN DIAMOND SMUGGLERS
INDEX on 7th October reported that 4 people were reportedly killed and 7 injured in north-eastern Angola during a police operation targeting foreign nationals suspected of diamond smuggling in the Lunda Norte province bordering the Democratic Republic of Congo. Around 800 people were arrested during the operation, including Congolese, Lebanese, Malians and Nigerians, foreigners are drawn by the prospect of working in illegal diamond mining in the diamond-rich north of the country.
http://www.idexonline.com/FullArticle?id=44272
GHANA: 4 LEBANESE IN DOLLAR SMUGGLING ATTEMPT ARRESTED AFTER POLICE TIP-OFF
Ghana Web on 7th October reported that a group of Lebanese Businessmen based in Accra have been arrested based on a tip-off by a police informant as they smuggled thousands of dollars in cash to Lebanon in order to avoid the payment of tax to Ghana – by arranging the dollars inside lorry tyres with the rim in place.
DJ DAVID MORALES ARRESTED AT JAPAN AIRPORT ON SUSPICION OF SMUGGLING MDMA
The Independent on 7th October reported that the famous US DJ has been arrested in Japan on suspicion of drug smuggling after customs officials claimed they discovered ecstasy in his suitcase on arrival from Hong Kong.
9% OF LIBYAN SMUGGLED FUEL “SOLD IN ITALIAN GAS STATIONS”
The Libya Observer on 7th October reported claims by Petroleum Economist magazine that 9% of the smuggled Libyan petrol is being sold at Italian gas stations, this being according to a source from Libya’s National Oil Corporation, smuggling it to Italy via Malta using a fleet of 70 boats.
TRACK ANYTHING: FOLLOW SHIPS, SMUGGLERS AND SUPPLY CHAINS
The Sri Lanka Guardian on 7th October reported a talk given at the Uncovering Asia conference in Seoul providing tips on how investigative journalists can find stories in shipping data, and resources by tracking ships, smugglers and supply chains. It suggests this can be done by –
- Obtaining trade data and investigating the anomalies
- Searching for the bill of lading
- Tracking containers and ships through their international BIC and IMO Codes
- Using seafarers’ use of social media
- Track the goods to the end of the supply chain and verify the end-use
- Identify where contraband surfaces legally
https://www.slguardian.org/track-anything-follow-ships-smugglers-and-supply-chains/
GUYANESE CASH JET PILOT FOUND GUILTY OF COCAINE TRAFFICKING, MONEY LAUNDERING
Starbroek News on 6th October reported that Khamraj Lall used his private jet to transport cocaine from Guyana to the US. It says that Lall hobnobbed with politicians from the former administration and had even transported then President Donald Ramotar, but is now to be sentenced in January and that his possessions, including 2 aircraft will be forfeited. The case began in 2014 when searches of his private aircraft during a refuelling stop in San Juan, Puerto Rico, when $620,000 was found. Lall was travelling to Guyana at the time. It is said that he used his private jet that he owned through his businesses, including Exec Jet Club, to important quantities of cocaine from Guyana to the US, helped launder the proceeds from the sale of the drugs in the US, and that he and others also smuggled cash back to Guyana and purchased substantial assets, including jet aircraft and residential properties.
FINDING THE MISSING MILLIONS – HANDBOOK ON ANALYSIS OF MINING COMPANIES’ DISCLOSURES
On 28th September, the Global investigative Journalism Network recommended as its “Document of the Day” a handbook produced by NGO Global Witness which offers 10 tests to help journalists spot potential losses (or “red flags”). The handbook contains suggestions on where to find reports of extractive sector payments to governments and tips to analyse and evaluate the payment data to identify potential losses. It also guides one comparing payment and receipts, comparing payment trends over time, verifying value-based royalty payments and more.
https://gijn.org/2018/09/28/document-of-the-day-finding-the-missing-millions/
EU: FALSIFIED MEDICINES DIRECTIVE: IMPLICATIONS FOR PARALLEL IMPORTERS AND OF BREXIT
AA Thornton & Co on 4th October published an article about EU Directive 2011/62/EU (the Falsified Medicines Directive or FMD), which came into force in 2013, with the aim of preventing falsified medicines from entering the legitimate supply chain in the EU. In 2016, a Regulation to have effect from 9th February 2019, set out detailed rules for new safety features to appear on the packaging of prescription-only and some non-prescription medicines to enable them to be verified and authenticated – and obligations are putting additional pressure on all in the pharmaceutical supply chain in the EU, not least parallel traders – and Brexit adds further uncertainty to the law and practice around parallel importing.
UK: 2 IMPORTANT HIGH-PROFILE CASES INVOLVING FRAUDSTERS (IMPOSTERS) SELLING RESIDENTIAL PROPERTY
On 28th September, Clyde & Co published a briefing on cases ending in success for the buyers, both of whom will receive substantial compensation for their losses; whereas the defendant lawyers concerned (or their insurers) were left to pick up the tab although also innocent victims of fraud. It lays out the background to, and details of, the cases. The article says that the main points of the cases are –
- if a sale is not genuine the solicitors acting for both vendor and purchaser are likely to be in breach of trust;
- even if a solicitor acts honestly and reasonably it may not be exonerated from liability;
- depending on the circumstances, a vendor’s solicitors may also be warranting to the purchaser (and any lender) that their clients are the true owners of the property, even if in reality they are not because they are fraudulent imposters; and
- there is no change to the law on liability in negligence to a third party.
https://www.clydeco.com/blog/projects-construction/article/who-pays-for-property-fraud
SHAM TRUSTS AND THE EXPLOITATION OF CHARITIES
An article from Birketts on 4th October which looks at “sham trusts, citing the definition that “a sham is merely a pretence; a transaction which is one thing but dressed up to pretend to be something else”. It provided examples of sham trusts involving unwitting charities – so called “Red Cross Trusts”; and asks what charities can to avoid being caught up in sham trusts.
https://www.birketts.co.uk/insights/legal-updates/sham-trusts-and-the-exploitation-of-charities
INTERNATIONAL COMPARATIVE LEGAL GUIDE TO COPYRIGHT 2019: AN UPDATE ON COPYRIGHT LAW IN THE UK
On 5th October, Bird & Bird published the 5th edition of the International Comparative Legal Guide to Copyright 2019 is a practical cross-border insight into patent law.
https://www.twobirds.com/~/media/pdfs/iclg-copyright-uk-2019.pdf?la=en
It also published an article: Brexit and Copyright: More Questions than Answers?
https://www.twobirds.com/~/media/pdfs/iclg-copyright-2019–brexit.pdf?la=en
NETHERLANDS TO HOST EU TALKS ON HUMAN RIGHTS SANCTIONS
EU Observer on 5th October reported that the Netherlands has invited EU diplomats to discuss the creation of a new sanctions regime against human rights abusers worldwide on 20th November. Its idea is to target individuals, via EU visa bans and asset freezes, to discourage them and others from violations, potentially saving lives. The sanctions would also be meant to snap into place quickly, without first waiting for a major event, such as a war or a massacre, to take place, and without clunky debate by EU ministers.
https://euobserver.com/foreign/143040
DUTCH REFUSE POLISH ARREST WARRANT OVER JUDICIAL FEARS
EU Observer on 5th October reported that a Dutch court is refusing to send a suspect to Poland following a warrant for his arrest given Warsaw’s shaky judicial system. The court said the Polish national, suspected of dealing drugs, is not guaranteed a fair trial in Poland.
https://euobserver.com/justice/143034
INDIA: DOCUMENTS SEIZED FROM CITY FLAT KEY TO DETAILING ROLE OF 300 SHELL FIRMS
The Mumbai Mirror on 8th October detailed the apparent results during a recent search of a north Mumbai flat to establish and the alleged use of around 300 shell firms for diverting unpaid bank loan funds in its money laundering probe against the Gujarat-based Sterling Biotech Group. It says that Nitin Sandesara, who controls the Sterling Biotech Group, is a key accused in the case and is suspected to be hiding in Nigeria with a few family members, according to sources.
https://mumbaimirror.indiatimes.com/articleshow/66112627.cms
US: FEDERAL AUTHORITIES SEIZE PROPERTIES BELONGING TO OLEG DERIPASKA
The New York Post on 8th October reported that the US has frozen Deripaska’s US-based assets, including massive mansions in Manhattan and Washington, DC, but it says officials are also negotiating with him to give up some of his European-based operations to keep them running free of sanctions. It also says that Deripaska has arranged to have the children and ex-wife of his business partner, Roman Abramovich, live at the New York address. Abramovich’s ex-wife, said to be a good friend of President Trump’s wife, is said to be dating Greek shipping heir Stavros Niarchos, while Abramovich is reportedly dating Deripaska’s estranged wife, Polina Deripaska.
https://nypost.com/2018/10/08/feds-freeze-russian-oligarchs-assets-upper-east-side-mansion/
QUIZ: IS NAFTA BACK FROM THE DEAD?
On 5th October, the Atlantic Council published an online quiz saying that NAFTA is back with a new alias: the USMCA. It asks if you can spot the difference? It invites you to put your knowledge to the test with 7 questions designed for only the truest trade geeks.
http://www.atlanticcouncil.org/blogs/new-atlanticist/quiz-is-nafta-back-from-the-dead
see also –
https://www.cmtradelaw.com/2018/10/goodbye-nafta-hello-usmcain-2020/
IRELAND: REVENUE DISCOVER 2 SEPARATE OIL LAUNDERING PLANTS IN COUNTY LOUTH
On 8th October, the Revenue Commissioners reported that Revenue Officers searched a commercial premises and discovered and dismantled 2 separate oil
laundering operations. Approximately 5,000 litres of illicit fuel, a lorry, an adapted refrigerated trailer, a van containing barrels of diesel sludge, bleaching agent and various tanks and pumping equipment were seized.
TURKEY’S WALKING DEAD: ZOMBIE COMPANIES LURK AROUND EVERY CORNER
Website War on the Rocks on 8th October published an article warning of the risks from bad debts from Turkish companies, where the justice system already makes it difficult for creditors to obtain payment through legal action, and the former use of a loophole that allowed debtors to delay repayment for up to 7 years, now has a law that allows companies to exclude foreign currency calculations from default calculations. This, the article warns, is likely to produce a “zombie economy,” filled with firms that have not technically defaulted on unaffordable interest payments, but also do not have enough cash to continue operations. It also warns about another worrying trend in the Turkish economy, the reclassification of non-performing loans on banks’ balance sheets, evidenced by central bank pressure in the case of Turk Telecom. Then, in August, Turkish lenders proposed a new measure, which sought to expedite the restructuring process following a default, and take mounting non-performing loans off banks’ books. – and this has become law. The government is also said to be now considering setting up a “bad bank,” where Turkish lenders can offload their non-performing loans.
https://warontherocks.com/2018/10/turkeys-walking-dead-zombie-companies-lurk-around-every-corner/
SILK AIR FIGHTS BACK AGAINST CLAIMS OF SECRET FLIGHTS CARRYING WEAPONS
Loadstar on 8th October reported that the Azeri airline has hit back at claims which it says are politically motivated perpetrated by those in direct collaboration with Armenian connections. It says the so-called “secret” flights were operated in full compliance with all established procedures and were ordered by the US DoD, while all consignors and consignees were designated by the mentioned authority. The allegations in 2017 were that the airline was used to transport hundreds of tons of weapons from Bulgaria to ISIS terrorists in Syria and other Middle Eastern countries between 2014 and 2017; allegations that were revived in September, when it was said that it had received $419.5 million of loans from the US Export-Import Bank (EXIM) to buy 3 747-8 cargo planes from Boeing to continue these operations. Silk Way also points to what it describes as a “character assault” on its president – and reportedly 100% owner – Zaur Akhundov.
https://theloadstar.co.uk/silk-way-fights-back-claims-secret-illegal-flights-carrying-weapons/
CAMBODIA DEFIANT DESPITE EU TRADE THREAT OVER HUMAN RIGHTS TO CAMBODIA AND MYANMAR/BURMA
EurActiv on 8th October reported that Cambodia’s Prime Minister has taken a defiant stance following a EU announcement that Cambodia would lose its special access to the EU, and said it was considering similar trade sanctions for Myanmar, adding that it was ready to punish human rights abuses in both countries., launching a 6-month review of Cambodia’s duty-free access to the EU, meaning garments, sugar and other exports could face tariffs within 12 months.
UK FUTURE TRADE WITH THE EU: “MUTUAL RECOGNITION” AND WHAT IT MEANS
On 8th October, the House of Commons Library published a briefing which examines the different ways in which the term ‘mutual recognition’ is used in the context of the UK’s future relationship with the EU. It says that the term ‘mutual recognition’ has featured prominently in the debate over the UK’s future relationship with the EU. This paper examines the different ways in which this term is used. It considers how mutual recognition has been used in practice, within the EU, between the EU and non-EU countries and between non-EU countries. It notes that Outside the EU, mutual recognition is generally much more limited in scope than arrangements within the EU, and where there is so-called ‘mutual’ recognition of standards themselves, the alignment is in fact based on EU rules.
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8384
EUROPEAN COMMISSION TO FLAG INFORMATION ABOUT SUSPECTED FRAUD WITH EU FUNDS IN BULGARIA TO OLAF
BTA, the Bulgarian news agency, reported on 8th October that a spokesman for the European Commission has said that it has no tolerance towards corruption and misuse of EU funding and that it accepts very seriously every tip-off about suspected fraud with financing from the EU structural funds. The spokesman also said that the Commission follows the media publications related to Bulgaria and that it will notify the European Anti-Fraud Office (OLAF) and that information about the suspicions has been demanded from the relevant authorities.
http://www.bta.bg/en/c/DF/id/1883930
€500,000 HIDDEN CASH SEIZED FROM WOMAN AT BANGKOK AIRPORT
On 8th October, The Nation in Thailand reported that the Anti-Money Laundering Office (AMLO) has temporarily confiscated €574,000 that a Thai woman tried to bring into the country without permission, reportedly hidden in the passenger’s luggage. The 90-day detention of the cash was deemed necessary in order to prevent the woman from moving the money on.
http://www.nationmultimedia.com/detail/national/30356048
DIRECTOR OF FINANCING COMPANY BANNED FOR 10 YEARS OVER £4.3 MILLION FALSE INVOICE SCAM
On 8th October, Financial Reporter reported that a director of First Capital factors has received a 10-year ban after heading a false invoice scheme to secure £4 million of illegitimate funds. David Marsden, had instructed a number of his clients to produce false invoices before submitting them to secure illegitimate funds.
MALTA’S ‘BLOCKCHAIN ISLAND’ PLANS OVERSHADOWED BY EU INVESTIGATION
Finance Magnates on 8th October carried an analysis triggered by the fact that Malta’s new laws to facilitate blockchain business are due to come into force on 1st November. It says that what should be a positive development for the cryptocurrency industry is somewhat marred by ongoing investigations into widespread corruption and possible clashes with EU law. Already it is said that at one business is involved in a project to base a “decentralised” bank in Malta.
MALTA FSA ISSUES GUIDELINES ON POLITICALLY EXPOSED PERSONS (PEP)
Malta Today on 8th October reported that the Financial Services Authority said the ‘guidance notes’ are ‘another step’ in its efforts to enhance AML supervision. This comes in the wake of recent controversy over the Pilatus Bank and the use/abuse of the country’s visa programme.
ZIMBABWE: STATE ELECTRICITY OFFICIALS ARRESTED FOR ALLEGED $35 MILLION GRAFT
On 8th October, OCCRP reported that police have arrested 3 top employees of Zimbabwe Electricity Supply Authority (ZESA), the state-owned electricity company, in connection with over $35 million alleged illicit dealings with an Indian company. It is said that in 2012 they allegedly awarded PME Power Solutions India Ltd a 2-year contract without specified deadlines by which the company was to deliver the agreed equipment and without any performance guarantee. The 3 officials are ZESA’s chief executive, Joshua Chifamba, 59, the managing director of a ZESA subsidiary, Julian Chinembiri, 53, and the subsidiary’s finance director, Thokozani Dhliwayo, 51.
UKRAINE, GEORGIA, MOLDOVA AND AZERBAIJAN CUSTOMS INFORMATION EXCHANGE AGREEMENT
Interfax in Ukraine on 8th October reported that Ukraine, Georgia, Moldova and Azerbaijan have signed a protocol of co-operation in the sphere of fighting against customs law violations linked to the movement of goods by air across the state borders of the GUAM Organization for Democracy and Economic Cooperation member states.
https://en.interfax.com.ua/news/general/536550.html
US GOVERNMENT TO TIGHTEN UP CUSTOMS CHECKS ON E-COMMERCE IMPORTS
Tamebay on 8th October reported that the US is to tighten up the checks made on imports to the US with a specific focus on e-commerce and items ordered via online marketplaces. In particular, it says, this reflects growing tension on trade between the US and China, a significant increase in mail imports over the course of this year and political pressure from the Trump administration. US Customs & Border Protection (CBP) reports that they have increased from 1.4 million daily at the start of the year to an estimated 2.1 million daily shipments in August. CBP has predicted that this volume could rise further to 2.5 million shipments per day during the peak season that is on the horizon. Also a new Bill awaiting signature will require the US Postal Service to send advance electronic notifications related to every incoming international shipments to CBP; it also requires that, by December 31st, data on 70% of all international mail must be transmitted before the goods reach the US border, and by December 31st 2019, that threshold will rise to 100% of imports sent by mail.
https://tamebay.com/2018/10/us-government-tighten-customs-check-ecommerce-imports.html
AUSTRALIA AND NEW ZEALAND: WHAT YOU SHOULD DO WHEN CUSTOMS OFFICERS DEMAND ACCESS TO YOUR SMARTPHONE
The Business Standard in India on 8th October says that both Australian and New Zealand customs officers are legally allowed to search not only your personal baggage but also the contents of your smartphone, tablet or laptop. In the first part of a series exploring how technology is changing tourism, the website outlines what you should do if it happens to you.
NORWAY’S NEW MONEY LAUNDERING LAW FOR DIGITAL CURRENCY EXCHANGES AND CRYPTOCURRENCY STORAGE SERVICES
Baker McKenzie on 8th October reported that Norway’s Financial Supervisory Authority has announced that its new money laundering regulations will go into effect on the 15th October. The new rules will be applied to all domestic cryptocurrency exchanges as well as foreign entities with branches in Norway, will require exchanges to provide data about their management teams, services, and transaction details, and providers will also be required to report all suspicious transactions.
http://www.riskandcompliancehub.com/norways-new-money-laundering-regs-to-go-into-effect-october-15/
NCA STATEMENT ON HERMITAGE MONEY LAUNDERING ALLEGATIONS
On 8th October, the NCA issued a statement on Twitter re allegations made by Bill Browder –
https://twitter.com/NCA_UK/status/1049319741867876352
TRACE PODCAST: SPOTLIGHT ON THE UAE
In the latest TRACE podcast, Charles Laubach of Afridi & Angell’s Dubai office discusses the compliance and enforcement landscape there, as well as some common misconceptions and his advice for companies operating in the UAE.
https://www.traceinternational.org/bribe_swindle_or_steal
FORMER MACEDONIAN MINISTER JAILED OVER LUXURY CAR PURCHASE
Rferl on 8th October reported that Gordana Jankuloska a former interior minister has been sentenced to 6 years in prison after convicted her of involvement in the purchase of a luxury bulletproof vehicle. She was found guilty of abusing her position and authority in the purchase of a €600,000 Mercedes in 2012. Judge Dobrila Kacarska said that Nikola Gruevski, who was prime minister at the time, solicited the purchase of the car from Jankuloska. The defendant then encouraged former Deputy Interior Minister Gjoko Popovski to rig the tendering procedure and commit a “criminal act”.
https://www.rferl.org/a/former-macedonian-minister-jailed-over-luxury-car-purchase/29532085.html
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