10th October 2018
£14 MILLION COCAINE HAUL SMUGGLED IN LORRY FROM HOLLAND TO LIVERPOOL
The Liverpool Echo on 9th October carried a report about a case where photographs show “massive” 84 kg shipment which saw father and son jailed. 4 men were jailed for nearly 37 years in total after police discovered the 84 kg load when they raided an industrial unit in Speke in February.
2 BUSINESSMEN SMUGGLED €2.9 MILLION IN COUNTERFEIT BANKNOTES INTO DUBAI FROM ITALY
Gulf News on 10th October reported that in July a customs inspector at Dubai International Airport stopped a 51-year-old Pakistani businessman and discovered unusually thick paper bundles in his bag during scanning and when the inspector opened the bag he discovered huge quantities of €500 banknotes. The banknotes turned out to be fake and when the businessman was asked about the source of those fake Euros, he alleged that he had taken them from his 36-year-old countryman.
PROFESSIONS MOST LIKELY TO LAUNDER MONEY IN GREECE
Ekathimerini on 9th October reported that estate agents, accountants, notaries, the banking sector and money transfer providers are categorised as high-risk for money laundering in Greece, according to a Finance Ministry report on assessing the national risks of money laundering and terrorist financing. The list of high-risk professions also includes traders of expensive goods. It says that investigations in the last 5 years have shown an increase in fraud, corruption and bribery at organisations and corporations. The illegal economy in Greece is estimated at about 20% of the national income – i.e. more than €36 billion p.a.
HMRC FACTSHEET: PUBLISHING DETAILS OF DELIBERATE DEFAULTERS
On 10th October, HMRC issued an updated version of factsheet CC/FS 13 which contains information about when HMRC may publish the details of people who deliberately get their tax affairs wrong.
LOW-THC CANNABIS PRODUCTS BEING SOLD IN THE EU – KEY LEGAL ISSUES
On 9th October, a news release from the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) said that since 2017 herbal cannabis and cannabis oils have been offered for open sale in health food shops or specialist shops in several EU countries, including France, Italy, Luxembourg and Austria. Sales have taken place based on the claim that these products have little or no intoxicating effect and therefore are not controlled under drug laws. The news release examines the situation in respect of both international drug laws – noting that a WHO expert committee on drug dependence recently recommended that pure CBD (the other active cannabinoid in cannabis) should not be listed under the drug conventions. In the EU, farmers can grow cannabis for other uses, e.g. hemp, as long as THC content does not exceed 0.2 %, and there are several Directives and Regulations that might address the sale of low-THC products. The news release then consider Member States’ responses, noting that countries differ in their response towards low-THC products and have developed different responses towards products containing CBD.
A page on the EMCDDA website contains much more information on cannabis and cannabis policy.
ISRAEL: 2 GOVERNMENT OFFICIALS ARRESTED IN CORRUPTION PROBE
The Jerusalem Post on 10th October reported that 2 senior officials from the Israel Land Authority were among 7 suspects arrested as part of an ongoing investigation into corruption in the public sector. The officials are suspected of receiving bribes in exchange for illegally providing information in order to advance the interests of others.
SON OF THAILAND’S FORMER PM THAKSIN FACES MONEY LAUNDERING INDICTMENT
Reuters on 10th October reported that Panthongtae Shinawatra, 38, (aka “Oak”), son of fugitive former Thai prime minister, Thaksin Shinawatra, faces an indictment for money laundering, in a move his supporters called politically motivated.
SOUTH AFRICAN MINISTER STEPS DOWN AMID CORRUPTION ALLEGATIONS
Telesur on 9th October reported that Tito Mboweni will be replacing Nhlanhla Nene as finance minister after a public announcement revealed the former’s illicit association with the Gupta family, accused of large-scale corruption in the region.
KAZAKHSTAN: SHELL LOST INTEREST IN ACQUISITION OF KMG SHARES DUE TO CORRUPTION RISKS
KazhTag reported 10th October a story from Dutch newspaper De Telegraaf saying that Royal Dutch Shell has lost interest in acquisition of stake in state-owned KazMunayGas (KMG), which is preparing to enter the stock market in 2019, due to corruption risks.
TAX AVOIDANCE: RECENT DEVELOPMENTS
On 9th October, the House of Commons Library briefing a briefing paper which provides an introduction to the issue of tax avoidance, looking in detail at the development of follower notices and accelerated payments, before discussing the current UK Government’s approach.
A TREATY ON THE PROHIBITION OF NUCLEAR WEAPONS
On 9th October, the House of Commons Library produced a briefing paper which says that the Treaty was adopted in the UN on 7th July 2017. However, none of the nuclear weapon states participated in those discussions and have declared their intention not to sign and ratify the new treaty. The lack of engagement by the nuclear weapon states raises the question of what this treaty can then realistically achieve? The Treaty will come into force 90 days after 50 countries have ratified it. To date, the treaty has 69 signatories, including 19 States Parties, 3 of which signed and ratified the treaty on the first day. Along with the other nuclear powers, the British Government did not participate in the UN talks and has indicated its refusal to sign and ratify the new treaty.
ROMAN ABRAMOVICH LOSES BATTLE HIS WITH AUTHORITIES OVER A TAX BILL ON HIS FRENCH CHATEAU
Daily Mail on 10th October reported that Roman Abramovich has lost a fight with French tax authorities over his £87 million Riviera getaway, Château de la Croë, having spent years battling authorities over a £1 million tax bill. He bought the villa on Billionaire’s Bay – the Cap d’Antibes – in 2001 and has spent £30 million renovating it.
UK – EXPORTING FOOD, DRINK AND AGRICULTURAL PRODUCTS: SPECIAL RULES
On 9th October, DEFRA issued updated guidance to help producers/exporters to check if they need a certificate to export food, drink and agricultural products.
INTERPOL-LED OPERATION TO DISRUPT THE MOVEMENT OF ILLICIT WEAPONS IN THE MIDDLE EAST AND NORTH AFRICA: 115 ARRESTS AND SEIZURE OF FIREARMS, DRUGS AND CASH
On 9th October, a news release from Interpol reported on Operation Trigger IV which took place across four countries in the region – Iraq, Jordan, Lebanon and Morocco. Checks were carried out at known trafficking hotspots including land, air and sea border points. More than 20,000 checks were conducted against INTERPOL’s global databases during the 9-day operation, including those for wanted persons, stolen and lost travel documents, stolen motor vehicles, facial recognition and suspected or known terrorists, resulting in 5 positive ‘hits’. 57 firearms were recovered and 17 individuals arrested for firearms offences. Authorities also seized cash in several currencies totalling €1.3 million, and nearly 6 kg of pure heroin and 400 synthetic pills were recovered, representing a street value of nearly €200,000.
JAPAN FACING CUSTOMS OFFICER SHORTAGE AS FOREIGN VISITORS SURGE
The Japan Times on 10th October reported that the number of foreign tourists is expected to rise further toward the 2020 Games, the Finance Ministry hopes to boost the number of customs officers by 263 in fiscal 2019, which begins next April, from 9,387 at the start of fiscal 2018. Another factor behind the shortage of customs officers is said to be an increase in gold smuggling stemming from soaring gold prices – cases detected in 2017 rose 66% from the previous year to a record 1,347, with the amount of gold seized jumping more than twofold to 6,236 kg, also a record high.
AUSTRALIAN DRUG BUST NETS HALF A TONNE OF ECSTASY
News.com in Australia on 8th October reported that Australian Federal Police and Australian Border Force offers have seized 496 kg of the drug ecstasy worth $57 million in a joint operation in Sydney. The drugs were hidden inside 4 industrial meat mincing machines and smuggled into Australia from Turkey in a shipping container.
CROSS-BORDER MAIL ORDER TRADING: NEW SWISS VAT RULES FROM 1ST JANUARY
On 8th October, Pestalozzi Attorneys at Law published an article on changes affecting low-value imports into Switzerland by mail. Currently, low-value supplies of goods from abroad to Switzerland are neither subject to Swiss import VAT nor to Swiss domestic VAT if below SF5 in charges – equating to around SF65 at the standard VAT rate of 7.7%.
BELGIAN FOOTBALL CLUBS RAIDED IN POLICE INQUIRY INTO ALLEGED FRAUD
On 10th October, the BBC reported that several of Belgium’s top football clubs have been raided as part of a police investigation into alleged fraud involving the transfer of players. Agents, referees and officials from top clubs including Anderlecht, Club Bruges and Standard Liege are being investigated, Belgian media report. More than 200 police officers took part in raids across several countries. Police also raided properties in France, Luxemburg, Cyprus, Montenegro, Serbia and Macedonia, prosecutors said in a statement.
“MULTI-MILLION DOLLAR FRAUD” IN RUSSIA’S FOREX MARKET
The Moscow Times on 10th October reported that Russian police have uncovered a massive fraud scheme at one of Russia’s foreign exchange markets suspected of embezzling more than 1,000 people. The suspects used an unidentified brand to attract investments under the guise of providing services in the forex market.
CRYPTOCURRENCY THEFT HITS NEARLY $1 BILLION IN FIRST 9 MONTHS: REPORT
Reuters on 10th October reported that a report from U.S.-based cyber security firm CipherTrace claimed that theft of cryptocurrencies through hacking of exchanges and trading platforms soared to $927 million in the first 9 months of the year, up nearly 250% from the level seen in 2017.
SOUTH AFRICA: EXPLOSIVE REPORT INTO VBS MUTUAL BANK REVEALS LARGE-SCALE ‘LOOTING’
News 24 on 10th October reported that a final investigation report into large-scale fraud at VBS Mutual Bank has recommended that more than 50 individuals be criminally charged and held liable in civil proceedings, following the bank’s implosion earlier this year. It says the criminal charges should stem from evidence of fraud, corruption and bribery perpetrated by the bank’s leadership and public officials.
UK AID TO CRACK DOWN ON CRIMINAL GANGS DRIVING THE ILLEGAL WILDLIFE TRADE
On 10th October, DFID published a news release saying that the International Development Secretary has announced a new joint initiative with the Foreign & Commonwealth Office, to target wildlife traffickers and criminal gangs, tackling the global scourge of the illegal wildlife trade. The UK aid project will launch investigations, seize assets and train law enforcement in East and Southern African countries and will be the largest known project of its kind to crack down on financial crimes associated with the illegal wildlife trade in the world. Wildlife Financial Taskforce will initially comprise of representatives from 30 global banks and financial organisations such as Standard Chartered, HSBC, RBS and City Group, and agencies and regulatory bodies including TRAFFIC and RUSI.
MALAYSIA: PROBE INTO ILLEGAL WAREHOUSE FULL OF SMUGGLED CHICKEN WINGS 50% COMPLETED
Bernama.com on 10th October reported that the Malaysian Anti-Corruption Commission (MACC) Sarawak has completed about 50% of its probe into an illegal warehouse storing smuggled chicken wings that has been in operation for the past 30 years. In September, a national daily reported that the warehouse had been operating illegally by smuggling frozen chicken wings from neighbouring countries, with dubious slaughtering method and marketed the product in Sarawak and Sabah.
US SOLAR FRAUDSTERS ORDERED TO DISGORGE $50 MILLION
OCCRP on 10th October reported that a US federal court ordered 2 men to disgorge (i. give up) over $50 million after it found them guilty of tax fraud for selling “inoperable” solar equipment to tens of customers who then cashed in on lucrative tax deductions.
NORTH KOREA HACKERS TRIED TO TAKE $1.1 BILLION IN BANK ATTACKS
Bloomberg on 8th October reported that a North Korean hacking group has tried to steal at least $1.1 billion in a series of attacks on global banks over the past 4 years, according to a cybersecurity firm. APT38 has, it says, infiltrated more than 16 organizations in 11 countries including the US, and stolen more than $100 million. The most prominent attack by APT38 was the theft of funds from the central bank of Bangladesh accounts at the US Federal Reserve in 2016.
SPAIN: TRANSPOSITION OF THE 4th ML DIRECTIVE
On 10th October, Clifford Chance published an article on the law of 31st August which, amongst other things, transposes the EU 4th Money Laundering Directive into Spanish law, including ultimate beneficial ownership reporting requirements.
US TREASURY REGULATIONS FOR FIRMA PILOT PROGRAMME
On 10th October, the US Treasury released temporary regulations to protect critical US technology and intellectual property from potentially harmful foreign acquisitions. These regulations put to use tools enacted as part of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which President Trump signed into law in August. FIRRMA authorises the Committee on Foreign Investment in the United States (CFIUS)to conduct pilot programmes to implement provisions in the legislation that did not become effective immediately upon enactment. Full implementation of FIRRMA will occur no later than February 2020. In particular, FIRMA expands the scope of transactions subject to review by CFIUS to include certain noncontrolling investments made by foreign persons in US businesses involved in critical technologies related to specific industries.
TRACE PODCAST: 15 YEARS OF THE UN CONVENTION AGAINST CORRUPTION
In the latest TRACE podcast, Candice Welsch of the United Nations Office on Drugs and Crime (UNODC) describes the work, progress and goals of the UN Convention Against Corruption.
EU COURT OF AUDITORS CRITICISES EU CUSTOMS IT SYSTEMS DELAY
On 10th October, Accountancy daily reported that, as HMRC’s progress in developing the UK’s new Customs Declaration System (CDS) came under fire, a report from the European Court of Auditors (ECA) says implementation of customs IT systems in the EU has suffered from a series of delays, and some key elements will not be available for the 2020 deadline. The European Commission set up the Customs 2020 programme to support modernisation of the Customs Union, with €523 million over 7 years, most of which is devoted to IT capacity building.
The ECA report: “A series of delays in Customs IT systems: what went wrong?”, is available at –
REPORT TO CONGRESS ON IRAN’S FOREIGN AND DEFENCE POLICY
On 10th October, USNI News reported on the October 9th US Congressional Research Service report Iran’s Foreign and Defense Policies, also providing the text of the report. Amongst its finding are that –
- Iran provides material support to allied governments and armed factions such as the Assad regime in Syria, Lebanese Hezbollah, Houthi rebels in Yemen, Iraqi Shiite militias, and Bahraini militant groups. Iranian officials characterize this support as helping the region’s “oppressed” and assert that Saudi Arabia, in particular, is instigating sectarian tensions and trying to exclude Iran from regional affairs;
- has sought to use sanctions relief provided by the July 2015 multilateral nuclear agreement (Joint Comprehensive Plan of Action, JCPOA) to emerge as a regional energy and trade hub and to negotiate future weapons buys.