23rd October 2018
ALBANIA STAGES MAJOR OPERATIONS TARGETING CRIME GANGS
Balkan Insight on 22nd October reported that more than 1,500 Albanian police officers were deployed in several major operations against 4 suspected organised crime groups, including international drug smugglers. The General Director of the Albanian Police said 27 people were arrested in 12 towns across the country. The biggest operation, in which 8 people were arrested, was conducted around Shijak in central Albania – where there are scores of luxury villas, often built with inspiration from the drug lord Tony Montana’s house in the film ‘Scarface’ – where several drug smuggling groups have been thought to be active for at least 20 years.
PAKISTAN: ARREST WARRANT FOR MODEL AYYAN ALI IN A CURRENCY SMUGGLING CASE
Samaa reported on 22nd October reported that a customs court in Rawalpindi issued the warrant after the model failed to appear – claiming she was unwell. She was arrested at the old Benazir International Airport in March 2015 and indicted subsequently on charges of trying to smuggle $506,800 to the UAE. She is not in Pakistan, but has said she will return soon.
GREECE: FORMER MINISTER DENIES MONEY LAUNDERING CHARGES
On 22nd October, Ekathimerini reported that former defence minister Yiannos Papantoniou denied charges of money laundering during a marathon deposition before a corruption prosecutor. The charges relate to a €400 million case in 2003 in connection with a Hellenic Navy frigate armaments programme. Prosecuting authorities also found 2.8 million Swiss francs in his bank accounts which they believe he received as kickbacks to approve the upgrade of 6 frigates.
INDIA: CBI, ARRESTS ITS OWN OFFICER IN BRIBERY CASE
India Today on 22nd October reported that the Central Bureau of Investigation (CBI) conducted raids inside its own headquarters and arrested Deputy Superintendent of Police (DSP) Devinder Kumar in connection with a bribery case against CBI’s special director and the No. 2 in the organisation, Rakesh Asthana. Asthana is alleged to have received kickbacks from a meat exporter, to settle a money laundering case against him, and come on the heels of reported infighting within the agency.
BOSNIA JAILS EX-MINISTER FOR ORGANISED CRIME AND MONEY LAUNDERING
OCCRP reported on 22nd October that about a dozen former politicians and businessmen were sentenced to nearly 53 years in prison for organised crime, tax evasion, money laundering and destroying business records, with the group’s leader – Jerko Ivankovic Lijanovic, the former Agriculture, Water Management and Forestry Minister of one of Bosnia’s 2 semi-autonomous regions – 12 years. The court found that the group deprived the budget of some €6 million through tax evasion and illegal use of state incentives for agriculture as well as from selling stolen government stocks.
https://www.occrp.org/en/daily/8775-bosnia-jails-ex-minister-for-organized-crime-laundering
US CUSTOMS AND BORDER PROTECTION CLARIFIES STANCE TOWARD CANADA’S LEGALISED CANNABIS INDUSTRY
On 15th October, Gowling WLG published an article saying that Customs and Border Protection (CBP) issued a statement clarifying its position and hence how US Border Patrol officers will assess those working in and around Canada’s legalised cannabis industry. The statement stipulates that Canadian cannabis industry participants entering the US for reasons unrelated to cannabis should have little cause for concern.
THIRD COUNTRIES ALIGN WITH EU SANCTIONS ON UKRAINE AND LIBYA
A news release on 22nd October reported that he Albania, Norway, Ukraine, have confirmed that they have aligned themselves with the EU sanctions regime resulting from the situation in Ukraine.
Another news release reported that Macedonia, Montenegro, Serbia, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway and Armenia have agreed to align their controls with EU sanctions on Libya.
UK DRUGS POLICY
On 22nd October, the House of Commons Library published a briefing paper on the country’s drugs policy in preparation for a debate.
http://researchbriefings.files.parliament.uk/documents/CDP-2018-0227/CDP-2018-0227.pdf
NIGERIA: HOW OIL MARKETERS JUMPED BAIL IN $200 MILLION CASE
The Nation on 23rd October reported that a court heard how a defendant in an alleged $200 million oil fraud, Yusuf Yahaya Kwande, jumped administrative bail granted to him by the Economic and Financial Crimes Commission (EFCC). 2 individuals and 5 companies – Trafigura Beheer BV, Trafigura PTE Limited, Mettle Energy and Gas Limited, Renbrandt Ltd and Jil Engineering and Oil Services Limited – are facing charges.
EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (EITI) ANNUAL REPORT 2018
The EITI is a standard by which information on the oil, gas and mining industries is published. It is not a prescription for governance of the extractive sector, rather a tool that informs the way the sector is governed. Natural resources, such as oil, gas and minerals should benefit all citizens. Implementation of the EITI ensures transparency and better management of the steps along this value chain, and is overseen by a multi-stakeholder group in each country. It seeks to strengthen government and company systems, inform public debate and enhance trust. In each implementing country, it is supported by a coalition of government, company and civil society organisations working together. 50 countries (of the 51 member states) have published beneficial ownership roadmaps detailing how they intend to ensure beneficial ownership transparency by January 2020.
https://eiti.org/sites/default/files/documents/2018_eiti_progress_report_en.pdf
The UK published the updated edition of its EITI report on 22nd October –
DOES AN INACTIVE MEMBER OF A MEMBER-MANAGED LLC OWE FIDUCIARY DUTIES?
On 22nd October, Farrell Fritz PC published an article about a New York case where the question posed was, when things go awry between the 2 members of an LLC, and the active member accuses the inactive member of engaging in misconduct violating fiduciary duties owed to the LLC and to the active member, can the inactive member disclaim those fiduciary duties on the ground he owes no such duty as a de facto non-managing member? This was raised and rejected in a ruling by the court.
https://www.jdsupra.com/legalnews/does-an-inactive-member-of-a-member-92907/
CHANGES PROPOSED TO HONG KONG SHIPPING LAWS
On 22nd October, Berwin Cave Leighton Paisner published an article concerning a recent speech by the Hong Kong Chief Executive in which he outlined proposals to enhance the development of Hong Kong’s maritime industry and related supporting services –
- implementation of tax concessions to foster Hong Kong’s ship leasing business to enhancing Hong Kong’s position as a ship leasing centre;
- provision of tax relief to promote marine insurance and the underwriting of speciality risks;
- streamlining regulations to facilitate the operation of protection and indemnity club for shipowners in Hong Kong; and
- further expansion of Hong Kong’s double tax agreement network to attract more international marine and maritime service providers to set up offices in Hong Kong.
http://www.blplaw.com/expert-legal-insights/articles/tides-of-change-in-hong-kongs-maritime-industry
NORTH KOREA: IN 2017, KIM SPENT MILLIONS ON LUXURY GOODS FROM CHINA
Customs Today on 22nd October reported that North Korea imported at least $640 million worth of luxury goods from China last year, despite UN sanctions, a South Korean lawmaker has said. The goods included lavish items from China and other places like a seaplane for not only his own family, and also expensive musical instruments, high-quality TV, sedans, liquor, watches and fur as gifts for the elites who prop up his regime. Singapore has charged a citizen, a North Korean and 3 companies with supplying prohibited luxury items to North Korea. The charges involved hundreds of thousands of dollars’ worth of perfumes, wines and watches, court documents seen by Reuters show.
http://www.customstoday.com.pk/in-2017-kim-spent-millions-on-luxury-goods-from-chinalawmaker/
TRACKING EXPORTS OF ELECTRONIC WASTE UNDER CONSIDERATION IN US
Sandler Travis Rosenberg on 23rd October reported that the US Bureau of Industry and Security is inviting comments on the feasibility and cost of implementing a mechanism for tracking and controlling exports of electronic waste.
https://www.strtrade.com/news-publications-export-electronic-waste-tracking-prohibition-102318.html
RAW MATERIALS USE TO DOUBLE BY 2060 WITH SEVERE ENVIRONMENTAL CONSEQUENCES
OECD on 22nd October reported that the world’s consumption of raw materials is set to nearly double by 2060 as the global economy expands and living standards rise, placing twice the pressure on the environment that we are seeing today, according to a new OECD report.
TAX POLICY AND THE IMPACT ON FOREIGN INVESTMENT IN IRELAND
On 22nd October, law firm Mathesons published an article which points out that Ireland’s tax policy was not always designed to attract FDI. In fact, it says that, one only has to look at the rules in play in the 1950s to see that restrictions were imposed on foreign ownership of firms and heavy tariffs were applied to protect Ireland’s manufacturers. In the 1980s, Ireland’s tax regime sought to attract certain manufacturing operations (throughout the country) and internationally-traded financial services to certain designated zones (i.e. the IFSC in Dublin and the Shannon Free Zone in the mid-West). Over the past half-century, Ireland has gradually relied less on its trading ties with the UK. In the light of Brexit, it will be important to forge new trading relationships in Asia and the Middle East, as well as continuing to build on the strong investment flows between Ireland and the US and the rest of the EU. it says that changes proposed by the OECD and the EU will mean that aggressive tax structuring will no longer be tolerated and maintaining a transparent and low statutory rate of tax will be more important than ever, particularly with the US statutory rate now as low as 21%.
ANTWERP AND ABU DHABI SIGN BLOCKCHAIN TRADING DEAL
FIATA on 22nd October reported that Maqta Gateway, an Abu Dhabi Ports subsidiary, has unveiled that it began implementing the first international blockchain pilot testing project in partnership with the Port of Antwerp in Belgium. The project is expected to support companies in conducting trade transactions between the UAE and Belgium, providing full cargo visibility and streamlining trade flows and supply chains.
MEXICO TAKES DOWN MAFIA THAT SOLD LOW-QUALITY FOOD TO VENEZUELA
Insight Crime on 22nd October reported that an international network that sold and shipped low-quality food to Venezuela – one of a string of corruption investigations and accusations surrounding the largest food assistance programme of the Maduro government. A criminal structure made up of Venezuelan and Mexican businesspeople sold food at marked-up prices for its system of Comités Locales de Abastecimiento y Producción (CLAP) that the Venezuelan government use to distribute subsidised food to its citizens.
https://www.insightcrime.org/news/brief/mexico-takes-down-mafia-sold-low-quality-food-venezuela/
RESEARCH EXPEDITION BEGINS TO INVESTIGATE DEEP-SEA MINERAL DEPOSITS
techUK on 18th October reported that the Royal Research Ship (RRS) Discovery is sailing to the Rio Grande Rise in the South Atlantic, 1400 km east of Brazil, to investigate cobalt-rich mineral deposits of interest to potential deep-sea mining. It will use robotic vehicles, moored scientific instruments, and novel sampling methods to study the environment in which deep-sea mineral deposits are formed. This expedition is part of the Marine e-tech project, which is an international collaboration between the NOC, British Geological Survey (BGS), University of Edinburgh and University of Sao Paulo, and is jointly funded by the governments of the UK and the State of Sao Paulo, Brazil.
WHY DOES HEZBOLLAH WANT LEBANON’S HEALTH MINISTRY?
The Washington Institute on 19th October published a paper saying that Iran’s economic problems have reportedly decreased the flow of financial patronage to the group, forcing it to seek another slush fund at home. In the discussions on forming a new government in Lebanon, Hezbollah seems intent on directly controlling a key service portfolio itself: the Ministry of Public Health. After the Defense, Education, and Interior Ministries, the Health Ministry commands Lebanon’s fourth-largest budget at $338 million per year, and while most of the money in the top 3 ministries is allotted to salaries, the majority of Health Ministry funds are given directly to the public. The paper says that Hezbollah reportedly wants access to this cash flow because it is worried about losing some of its funding from Iran.
SWISS FINANCIAL ASSOCIATION PUBLISHES AML STANDARDS FOR DIGITAL ASSETS
Coin Telegraph on 23rd October reported that Capital Markets and Technology Association (CMTA), a non-profit, independent association set up earlier this year, has published new AML standards for digital assets and distributed ledger technologies (DLT). It was a joint initiative from online bank Swissquote, market software provider Temenos, and the country’s largest law firm Lenz & Staehelin.
ACACIA MINING SAYS SENIOR MANAGER OF ITS TANZANIAN BUSINESSES ARRESTED AND CHARGED BY CORRUPTION BUREAU
Proactive Investor on 23rd October carried an article saying that LSE-listed had announced that a senior manager of its Tanzanian businesses has been arrested and charged on Tuesday by the Tanzanian Prevention and Combating of Corruption Bureau (PCCB).
OECD AND WORLD BANK REPORT ON IMPROVING CO-OPERATION IN COMBATING TAX CRIME AND CORRUPTION
Accountancy Daily on 22nd October reported on Improving Co-operation between Tax Authorities and Anti-Corruption Authorities in Combating Tax Crime and Corruption – a study which focuses on the legal, strategic, operational, and cultural aspects of co-operation between tax authorities and anti-corruption authorities.
https://www.accountancydaily.co/cch_uk/cln/news_007155_combtaxcrimcorr
The report is at –
It calls for whole-of-government approach to combating tax evasion and corruption, and –
- making available the broadest range of legal gateways for reporting and information-sharing permitted by law;
- implementing streamlined and efficient operational procedures to ensure that reporting and information sharing is effective in practice;
- utilising enhanced co-operation mechanisms such as joint operations and taskforces; and
- promoting a culture of co-operation at all levels of an organisation, starting with political leaders and agency heads.
CORRUPTION FUELLING ILLICIT FLOW OF MONEY FROM AFRICA
All Africa on 23rd October reported on the 6th Pan African Conference on illicit financial flows and taxation held in Kenya. It was said that corruption was mentioned as the lead driver in enabling illicit cash leaving Africa. It is said that it is estimated that corruption accounts for about 5% of global illicit financial flows and the proportion of the $100 billion lost through IFF (illicit financial flows) from Africa is much higher.
https://allafrica.com/stories/201810230521.html
HAITI: TOP OFFICIALS FIRED AFTER ANTI-CORRUPTION PROTESTS
OCCRP on 23rd October reported that the Haitian President has removed 2 top government officials in a purge of people linked to a corruption scandal that sparked violent mass protests. The cabinet chief and the secretary general of the presidency were fired from their posts along with 15 government advisers; this follow a report compiled in August by the Haitian Senate that called for charge against 2 former prime ministers and several other government officials for alleged embezzlement of $3.8 billion, abuse of power and forgery in connection with a Venezuelan oil loan programme.
https://www.occrp.org/en/daily/8788-haiti-top-officials-fired-after-anti-corruption-protests
FAKE ACCOUNTS AND MONEY-LAUNDERING “MASTERMIND” ARRESTED BY INTERPOL
The News in Pakistan on 23rd October reported that the chief finance officer of the Omni Group, Aslam Masood have been arrested by Interpol in Saudi Arabia.
CLAIM THAT OVER $770 MILLION LAUNDERED VIA FAKE BANK ACCOUNTS IN PAKISTAN
Bernama on 23rd October reported that the Supreme Court of Pakistan has been informed that transactions of more than 100 billion rupees (about S770 million) have been carried out through 107 fake bank accounts.
http://www.bernama.com/en/world/news.php
DENMARK: PENSAM PENSION FUND TO STEP UP SCRUTINY OF PARTNERS AND INVESTMENTS AS TAX SCANDAL UNFOLDS
IPE.com on 23rd October reported that tThe head of one of Denmark’s biggest pension funds has spoken out to condemn a wide-scale tax fraud uncovered by a media investigation. The withholding tax scam – dubbed ‘Cum-Ex’ – is said to have cost European governments €55 billion and the scandal has cost Denmark’s public purse at least €1.6 billion. The fraud involved shares being traded between banks, investors and hedge funds to create the illusion of multiple owners, each entitled to a refund on withholding tax charged on stock dividends.
INTERPOL SEIZES 500 TONNES OF ILLICIT DRUGS IN WORLDWIDE RAIDS
Reuters on 23rd October reported that co-ordinated police raids in 116 countries have netted 500 tonnes of illicit pharmaceuticals available online, including fake cancer medications, counterfeit pain pills and illegal medical syringes. The operation also saw 3,671 web links closed down, including websites, social media pages, and online marketplaces.
https://www.interpol.int/News-and-media/News/2018/N2018-123
JERSEY: DRAFT TAXATION LAW ON COMPANY ‘SUBSTANCE’ MEASURES
On 23rd October, a news release from Jersey about a draft Taxation Companies Economic Substance Law scheduled for debate by the States Assembly on 4th December. The Law has been designed to address concerns of the EU Code of Conduct Group on Business Taxation about the need for relevant businesses to demonstrate adequate economic substance in the Island. The legislation takes account of the responses to a public consultation and has been developed in close consultation with industry representatives and with the governments of the Crown Dependencies, which will be tabling similar proposals.
https://www.gov.je/News/2018/Pages/DraftTaxationLawLodged.aspx
EURO COUNTERFEITING RINGS IN FRANCE AND ITALY CIRCULATING FAKE BANKNOTES ACROSS EUROPE
A news release from Europol on 23rd October says that French and Italian police have arrested 23 individuals and dismantled 2 criminal networks suspected of producing and distributing counterfeit banknotes in France and Italy. The networks produced various denominations: €20 and €50 counterfeit banknotes and distributed €45 000 in €100 counterfeit banknotes since 2016, causing €4.5 million worth of damage to the economy.
and
One of the biggest AND MOST modern counterfeiting print shops in Europe dismantled
Also on 23rd October, Europol reported on the Bulgarian operation where authorities with the collaboration of the US Secret Service seized €11 million and $1.7 million in counterfeit €50, €100 and €500 banknotes, as well as $100 and $50 counterfeit US banknotes.
ABOUT 6,200 UK BUSINESSES WARNED OVER MODERN SLAVERY REPORTING DUTIES
Out-Law on 23rd October reported that approximately 6,200 UK businesses have been issued with a letter advising them of their transparency obligations under modern slavery laws and warned that they risk being listed as non-compliant in the new year. The Modern Slavery Registry has sent the letter to businesses that it believes are subject to the Act and for which it does not yet have statements. It aims to provide a central registry of statements published under the Modern Slavery Act and currently holds around 7,000 published statements. Current and historic statements of companies are listed, in order that progress in the area can be tracked. According to the Home Office, only around 60% of UK companies subject to the Modern Slavery Act have so far published the required statement under the Act. Those that do not lodge a statement will be “named and shamed”.
https://www.out-law.com/en/articles/2018/october/businesses-warned-modern-slavery-reporting-duties/
REVISED HONG KONG GUIDELINES ON AML/CFT TO TAKE EFFECT FROM NOVEMBER
Baker McKenzie on 23rd October reported that the Hong Kong Monetary Authority has published revised AML/CFT Guidelines for authorised institutions and SVF (stored value facilities), both set to take effect from 1st November.
IRELAND: REPORT CALLS FOR DEDICATED NEW WHITE COLLAR CRIME AGENCY
Baker McKenzie on 23rd October reported that the Report on Regulatory Powers and Corporate Offences from the Law Reform Commission is calling for the establishment of a new Corporate Crime Agency to be set up, modelled on the Criminal Assets Bureau and targeting white collar crime.
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