Day: October 30, 2018

30^th October 2018

PHILIPPINES: MILITARY TAKES OVER CUSTOMS

The Manila Standard on 29^th October reported that President Rodrigo Duterte has placed the Bureau of Customs under military control, a move described as both temporary and constitutional.  Duterte acknowledged that innocent government employees would be affected by his directive, but said he had no time to separate the corrupt from the honest, and said that his directive to put the BOC under the control of the military is part of his declaration of the state of lawlessness in the country last year.

http://www.manilastandard.net/news/top-stories/279247/military-takes-over-customs.html

290 UKRAINIAN SAILORS IN JAIL ABROAD FOR ALLEGED SMUGGLING AND TRANSPORTATION OF MIGRANTS

112 UA reported on 29^th October that, according to the Ministry of Foreign Affairs, more than 290 Ukrainians are now kept behind bars in foreign prisons in Greece, Italy, Spain, France, Libya and Nigeria; 160 in Greece and about 20-30 charged with actual involvement in smuggling.  Most of them are suspected of involvement in transporting migrants, as well as smuggling of explosives and cigarettes.

https://112.international/article/ukrainian-sailors-charged-abroad-with-smuggling-and-transportation-of-migrants-33653.html

AMSTERDAM DISTRICT COURT DISMISSES CLAIM AGAINST PWC IN RELATION TO MADOFF PONZI SCHEME

AKD NV in the Netherlands on 30^th October reported that on 26^th September the Amsterdam District Court delivered its judgment in the proceedings between the liquidator of Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited (which are all established in the BVI) against PricewaterhouseCoopers Accountants NV and PricewaterhouseCoopers NV and 4 affiliated accountants.  The proceedings centred on the fraud committed by Bernard Madoff that came to light in 2009, of which the claimants had been victims, and who accused PwC of having failed in its duty to audit their financial statements for the 1998 to 2005 financial years (inclusive).

https://www.internationallawoffice.com/Newsletters/Litigation/Netherlands/AKD-NV/Amsterdam-District-Court-dismisses-Fairfield-Funds-claim-against-PwC-in-relation-to-Madoff-Ponzi-scheme

HMRC MONEY LAUNDERING SUPERVISION: CIVIL MEASURES – UPDATED GUIDANCE

On 29^th October, HMRC published updated information for businesses about HMRC approach to civil measures to money laundering, to raise businesses’ awareness of the steps that HMRC may take when they do not comply with the regulations.

https://www.gov.uk/government/publications/money-laundering-supervision-enforcement-measures

EU PASSPORTS FOR €5,000 IN BULGARIA SCAM

EU Observer on 30^th October reported that Bulgarian police have arrested the head of its State Agency for Bulgarians Abroad and more than 20 others for selling fake documents allowing mostly Macedonians, Moldovans, and Ukrainians to get Bulgarian passports in order to live in the EU, the documents were being sold for €5,000 each, at the rate of some 30 a week.  Local media cited prosecution sources as saying that the head of the agency, Petar Haralampiev, had been arrested

https://euobserver.com/tickers/143248

https://www.euractiv.com/section/justice-home-affairs/news/thousands-obtained-eu-citizenship-for-e5000-in-bulgarian-scam/

THE ROLE OF INVESTIGATIVE JOURNALISM IN ARMENIA’S VELVET REVOLUTION

The Global Investigative Journalism Network on 30^th October carried an article saying that a “Velvet Revolution” quietly swept through Armenia in April 2018. The national movement — bolstered by years of investigative reporting around corruption and murky business dealings by government officials and MPs — brought thousands to the streets in peaceful protest, forcing Serzh Sargsyan, Armenia’s president for 10 years, to resign.

https://gijn.org/2018/10/30/the-role-of-investigative-journalism-in-armenias-velvet-revolution

PAKISTAN’S “BIGGEST EVER” SALES TAX FRAUD: IMPLICATES MAERSK AND THE SINDH REVENUE BOARD

Customs Today on 30^th October reported that Pakistan’s claimed biggest-ever fraud of sales tax is said to involve shipping line Maersk, which is claimed to have evaded billions of rupees sales tax on services provided to its local clients.  It was said that Maersk shipping line was issuing ‘benaami’ bills without sales tax numbers, without publishing its own name on the bills and giving its sales tax numbers.  It also said that sources claimed that the Sindh Revenue Board had detected this fraud but that someone very senior called them and asked them not to proceed against Maersk Line.

http://www.customstoday.com.pk/pakistans-biggest-ever-sales-tax-fraud-nab-fia-asked-to-probe-maersk-srb-connivance/

CANADA BORDER SERVICES AGENCY AND PORT OF MONTREAL MULL BLOCKCHAIN SHIPPING SOLUTIONS

Customs Today on 29^th October reported that 2 of Canada’s government-owned structures, the federal Border Services Agency (CBSA) and the Port of Montreal Authority (MPA) have joined TradeLens, the joint blockchain shipping platform of IBM and Maersk. CBSA and MPA revealed separately on Thursday their plans to analyse how distributed ledger technology (DLT) can improve their services.

http://www.customstoday.com.pk/canada-border-services-agency-port-of-montreal-mull-blockchain-shipping-solutions/

FACT SHEET: FAR-RIGHT FATAL IDEOLOGICAL VIOLENCE AGAINST RELIGIOUS INSTITUTIONS AND INDIVIDUALS IN THE US: 1990-2018

On 29^th October, the National Consortium for the Study of terrorism and Responses to Terrorism (START) published a factsheet following the recent shooting at a Pittsburgh synagogue – showing that between 1990 and 2018 there were over 217 ideologically motivated homicide incidents committed by far-right extremists in the US.

https://www.start.umd.edu/news/fact-sheet-far-right-fatal-ideological-violence-against-religious-institutions-and-individuals

NEW DATA, UPDATED ANALYSIS OF PROFILES OF INDIVIDUAL RADICALISATION IN THE US

On 29^th October, START also published an updated database with new data to now include more than 2,100 Islamist, far-left, far-right and single-issue extremists who have radicalised to violent and non-violent extremism in the US from 1948 through 2017.

https://www.start.umd.edu/news/new-data-updated-analysis-profiles-individual-radicalization-united-states

NAMING AND SHAMING AND TAX COMPLIANCE

On 30^th October, VOX, the CEPR Policy Portal published an article saying that many tax authorities use public shaming as a penalty for tax non-compliance.  Yet, there is a lack empirical evidence on how the introduction of naming and shaming affects behaviour.  This article uses a new policy in Slovenia to argue that shaming is an effective tool for tax enforcement, reducing tax debt by about 8.5%.

https://voxeu.org/article/shaming-and-tax-compliance

HMRC TO BE MADE PREFERRED CREDITOR IN TAX AVOIDANCE CRACKDOWN

City AM on 29^th October reported that HMRC will be made a preferred creditor in insolvencies, the Chancellor has announced.  This would reverse a change made several years ago (note: the Isle of Man did not follow suit, despite the Customs and Excise Agreement between the UK and the Isle of Man).

http://www.cityam.com/267570/hmrc-made-preferred-creditor-tax-avoidance-crackdowntax

PIRATES BOARD SHIP OFF NIGERIA

Defence Web on 30^th October reported that pirates boarded a container ship – the MV Pomerania Sky, bound for the Nigerian port of Onne – off the coast of Nigeria, seizing 11 crew of who are 8 from Poland, according the vessel’s management firm and Polish state media.  Midocean (IOM) Ltd said in a statement that the ship had proceeded to a safe location, with 9 other crew remaining aboard and unharmed.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=53569:pirates-board-ship-off-nigeria&catid=108:maritime-security&Itemid=233

EU PROPOSAL FOR QUALIFIED MAJORITY VOTING ON SANCTIONS POLICY

On 30^th October, the European Sanctions Blog posted a message saying the the EU Commission had proposed the introduction of Qualified Majority Voting (QMV) instead of unanimity in sanctions policy, on the grounds that requiring unanimity “slows down progress and in some cases prevents the EU from adjusting to changing realities”.  The UK oppose the proposal, which will be discussed at a meeting of the EU Council in May.

https://europeansanctions.com/2018/10/30/eu-commission-proposes-qualified-majority-voting-for-sanctions/

LAUNCH OF TRADE BODY FOR BLOCKCHAIN SECTOR IN GIBRALTAR

A news release from the Gibraltar Government on 30^th October reported the launch of the Gibraltar Association for New Technologies (GANT), a trade association that will aim to drive forward Gibraltar’s innovative approach to Distributed Ledger Technology (DLT).  It will establish formal lines of communication between policy makers and the private sector in Gibraltar’s fast-developing blockchain industry as well as facilitating the exchange of knowledge and ideas, with a view to enhancing public trust in this sector.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2018/Press%20Releases/663-2018.pdf

REPORT: MOZAMBIQUE VIOLENCE FUNDED BY ILLICIT TRADE

OCCRP on 30^th October carried a report saying that the recent surge of violence in Mozambique at the hand of extremist militants has been funded by the country’s illicit economy, according to a new report by the Global Initiative Against Transnational Organized Crime.  It says that the report emphasises that the government’s enduring involvement in the illicit trades of drug trafficking, human smuggling and wildlife poaching thwarts its efforts to combat Al-Shabaab, and the illicit economy has nourished corruption, kept borders and coastlines porous, and crippled state legitimacy.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8819-report-mozambique-violence-funded-by-illicit-trade

‘BLOOD GOLD’ IS FINANCING REBEL ARMIES, DRUG GANGS AND CHILD LABOUR

Bloomberg on 26^th October reported that the group that oversees the world’s largest bullion market is seeking new ways to securely track each step from the mine to the jewellery store.  The goal, it says, it to stop the metal’s use as a convenient financing tool for guerrillas in South America, armed African rebels and drug traffickers.  In May, Elemetal LLC, previously one of the biggest US refiners, was sentenced on charges linked to illegally mined gold from Peru.  It was fined, put on supervised probation for 5 years, and restricted from buying precious metals from outside the US.   A London Bullion Market Association meeting in Boston has now probed the use of blockchain and other digital ledgers as a solution.  The London Bullion Market’s “Responsible Gold Guidance Sourcing Program” is mandatory for all of its accredited refiners.

https://www.bloomberg.com/news/articles/2018-10-25/-blood-gold-drives-an-industry-mine-to-market-transparency-push

VIDEO: THE BIGGEST CORRUPTION SCANDAL IN LATIN AMERICA’S HISTORY

On 30^th October, Vox at CEPR released a 9½ minute video seeking to quickly explain Operation Car Wash and the Petrobas bribery and corruption scandal emanating from Brazil.

https://www.vox.com/videos/2018/10/30/18040200/brazil-car-wash-corruption-scandal-latin-america

UAE: NEW LAW ON MONEY LAUNDERING AND TERRORIST FINANCING

On 30^th October, Gulf News reported that the UAE has stepped up the fight against money laundering and financing terrorism by announcing a new law intended to make it difficult for illegal transfers of cash or valuables out of the country to hide the source or to back activities by terrorist organisations.  The law will “require the declaration of anyone entering or leaving the country carrying cash, monetary or financial bearer instruments, precious metals or stones of value”.  The new law is also recommending the formation of an independent FIU within the Central Bank.  New rules under the law for financial institutions and specific non-financial businesses and professions will require them to “identify, evaluate, document and update crime risks in their area of business, undertake due diligence and determine their scope based on multiple risk aspects while taking into account the results of the national risk assessment”.

https://gulfnews.com/news/uae/government/new-law-against-money-laundering-terror-funding-1.2295731

IRELAND: MAN TO BE EXTRADITED TO UK OVER £5 MILLION TAX FRAUD

The Journal on 30^th October reported that the High Court has ordered the extradition of a Roscommon construction company director, Thomas Joseph O’Connor, 50, wanted in the UK in connection with a £5 million tax fraud.  He was convicted at Blackfriars Crown Court in January 2007 and sentenced to 4½ years in prison for defrauding the revenue.  After being convicted following a 6-week trial, O’Connor, who was on bail, did not attend court for the sentencing hearing and now faces further charges in of absconding.

https://www.thejournal.ie/roscommon-man-uk-extradition-4313019-Oct2018

UK MINISTER REVEALS KNOWLEDGE OF FOOTBALL MONEY LAUNDERING INVESTIGATION

Sky News on 30^th October reported that a professional football club or clubs are being investigated over allegations of money laundering, a minister has said.  Security minister Ben Wallace told the Treasury Select Committee that the sports industry “is as susceptible as anything else” to being used to hide the source of dirty money.

https://news.sky.com/story/security-minister-reveals-knowledge-of-football-money-laundering-investigation-11540039

RECENT MINISTERIAL DECISION MAY NEGATIVELY IMPACT YACHTS CHARTERING IN GREEK WATERS

Superyacht News on 30^th October reported that regulations similar to the French Commercial Exemption model have been recently introduced in Greece by a ministerial decision issued by the country’s Ministries of Finance and Shipping.  It says that the decision threatens to take away many tax incentives for charter yachts operating in Greek waters and could further dissuade yachts from chartering in Greece.  Last year, the Greek government passed a law that all commercial yachts wanting to start and end a charter in Greek waters must be in possession of a Greek charter licence (the article describes this as an “arduous” process).  The latest blow to the local industry is the introduction of regulations stating that charter yachts with Greek charter licences must spend at least 50% of their time chartering in open seas (defined under legislation to be 6 nautical miles off the country’s coastline) in order to benefit from VAT exemptions applicable to commercial yachts.

http://www.superyachtnews.com/business/update-on-chartering-in-greece-

UK: TAXING TOKEN GENERATION (ICO) EVENTS

An article from Eversheds Sutherland in the Tax Journal considers the UK tax treatment of cryptocurrencies, particularly “token generation events” (often called an initial coin offering or ICO) is uncertain, it says.  It considers the current situation and calls for further analysis to be undertaken in relation to taxing cryptocurrencies.

https://www.eversheds-sutherland.com/documents/services/taxation/Taxing-token-generation-events.pdf

i-Gaming Business on 30^th October reported that Gibraltar has reached a tentative agreement with Spain to protect industry jobs and ease concerns over the future of gambling on the Overseas British Territory, amid ongoing uncertainty over Brexit.  Around 14,000 people commute daily between Gibraltar and Spain, with many working in the island’s flourishing gaming industry.  However, with the UK yet to reach a final deal for its departure from the EU, the future of this arrangement remains unclear.

http://www.igamingbusiness.com/news/gibraltar-wins-spanish-support-gambling-future

The Daily Mail reported on 30^th October that Spanish authorities have detained a vice-president of the Spanish soccer federation in an operation investigating alleged embezzlement.  He is under investigation for alleged irregularities during the time he was in charge of the Catalan federation.  Andreu Subies was detained as part of Operation Soule, which last year led to the arrest of then president, Angel Maria Villar, on corruption charges.

https://www.dailymail.co.uk/wires/ap/article-6334851/Vice-president-Spanish-federation-detained.html

An article from Diplomatic Courier on 30^th October is concerned with titanium, which it says is a critical material for aerospace and military industries worldwide, and is vital in other industries such as healthcare and technology.  In particular, titanium sponge is a material used to create parts such as alloys and ingots for aircrafts, spacecrafts, missiles, and other machinery.  Production of the metal is in 6 countries (China, Russia, Japan, Kazakhstan, Ukraine, India), with Russia being a dominant leader in titanium exports.  It says that Ukraine’s major titanium manufacturers are United Mining and Chemical Company (UMCC) and Zaporozhye Titanium and Magnesium Combine (ZTMC).  UMCC exports industrial materials to more than 30 countries, including the EU and the US; and ZTMC is the only producer of of titanium sponge in Europe.  Both of these entities are on the list of government-approved companies to be privatised in 2018.  It notes that a named oligarch has connections to both companies and to Russia, and has been named in the past in connection with alleged bribery in India, is under house arrest in Austria and is facing extradition to the US.  The article says that this situation representative of a bigger issue of billionaire oligarchs pulling the strings and leveraging their power in Ukraine’s markets.  Furthermore, officials at UMCC were allegedly  involved in an embezzlement scheme in 2018.

https://www.diplomaticourier.com/ukrainian-privatization-corruption-threats-titanium-and-u-s-interests/

Bailiwick Express on 30^th October reported that the new legislation sets up financial sanctions to be imposed against anyone who might be concerned in the building or supply, financially or physically, of chemical weapons.  The legislation links to EU Council Regulation 2018/1542, which was in response to concern about the proliferation of the weapon type.  The new local legislation means if any name is added to the EU’s sanctions list, it will automatically take effect to any business that person has on the island as well.

https://gsy.bailiwickexpress.com/gsy/news/guernseys-own-chemical-weapon-legislation-introduced

Reed Smith on 30^th October issued an article reminding one of the latest, final batch of changes resulting from the US withdrawing from the JCPOA.  The first set of sanctions were re-imposed on 6^th August and the second set will become effective on 5^th November.  The article says that, w.e.f. 5^th November the US will re-impose the following secondary sanctions –

• Sanctions on Iran’s port operators and shipping and shipbuilding sectors, including IRISL;
• Sanctions on petroleum-related transactions, including the purchase of petroleum, petroleum products or petrochemicals from Iran;
• Sanctions on foreign financial institutions who engage with the Central Bank of Iran and other designated Iranian financial institutions;
• Sanctions on the provision of specialised financial messaging services to the Central Bank of Iran and Iranian financial institutions;
• Sanctions on the provision of underwriting services, insurance or reinsurance to SDN or for sanctioned activities;
• Sanctions on Iran’s energy sector.

It will also re-list in the SDN List of sanctioned persons and entities many of the persons and entities removed from the SDN List after the JCPOA took effect.

https://www.shiplawlog.com/2018/10/30/iran-sanctions-update/

On 29^th October, CMS Law in Belgium reported that the Central Point of Contact (CPC), which is held by the National Bank of Belgium, and which is a register of bank accounts and financial contracts will, in future, also will, from 1^st August 2019, also contain information about life insurance contracts with Belgian companies or foreign insurance companies that operate in Belgium.  The CPC includes information about bank accounts held in Belgium by both resident and non-resident natural and legal persons, and about bank accounts held abroad by Belgian resident natural persons, and tax authorities are empowered to consult the CPC especially if there are indications of tax fraud.

http://www.cms-lawnow.com/ealerts/2018/10/life-insurance-contracts-to-be-listed-at-central-point-of-contact?cc_lang=en

Ogier on 29^th October published an article saying that the powers of the Jersey Financial Services Commission to impose civil financial penalties for significant and material contraventions of the Codes of Practice were extended on 26^th October to apply to “principal persons” of registered persons.  The widened civil penalty regime now applies to any “principal person” of any entity (in addition to the entity itself) which is registered or has been issued a certificate or permit under the following laws and is therefore required to comply with the corresponding Codes of Practice relevant to their activities (a “registered person”).  The article details the changes and the penalties involved, and provides a link to an earlier briefing on the civil penalty regime.

https://www.ogier.com/publications/jersey-civil-penalties-regime-principal-persons

Sandler Travis Rosenberg on 30^th October reported that the US Bureau of Industry and Security has added 1 entity in China – Fujian Jinhua Integrated Circuit Company Ltd – to the Entity List, which lists entities restricted from receiving US exports of goods controlled under the Export Administration Regulations “because Jinhua poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States”.

The state-backed chipmaker is reported by Nikkei Asia Review as being sued by Micron Technology of the US for allegedly stealing designs.

https://www.commerce.gov/news/press-releases/2018/10/addition-fujian-jinhua-integrated-circuit-company-ltd-jinhua-entity-list

https://www.worldipreview.com/news/us-bans-exports-to-chinese-firm-amid-ip-litigation-16901

The Liverpool Echo reported on 29^th October that a man was arrested as he attempted to carry a bag stuffed with £10,000 in cash into Liverpool, the 42-year-old had just arrived on a ferry from the Isle of Man when police sniffer dogs brought him to the attention of officers.  The suitcase he was carrying was searched, leading to the discovery of the money.  It is not commonly known (despite posters at the airport and seaport) that one has to declare large sums of cash (€10,000 or more) carried or sent to or from the Isle of Man – including to and from the UK – and that the rules on declaring cash taken in and out of the EU also apply to cash moved between the UK and the Isle of Man (and the Channel Islands).

https://www.liverpoolecho.co.uk/news/local-news/ferry-passenger-tried-walk-liverpool-15345221