14th November 2018
IRAN, PANAMA, AND RUSSIA POSE HIGHEST FINANCIAL CRIME RISK, ACCORDING TO UK FINANCIAL SERVICES INDUSTRY
Finance Feeds on 13th November reported that Iran, Panama and Russia are the jurisdictions assessed by UK-based financial services firms to have highest financial crime risk, according to the first FCA annual financial crime survey of over 2,000 UK firms, across the financial sector.
BRITISH DRUGS BARON ‘ONCE ONE OF EUROPE’S MOST INVESTIGATED CRIMINALS’ IS JAILED IN SPAIN
The Daily Mirror on 13th November reported that Brian Charrington, 61, of Warrington was jailed for 15 years for drug trafficking and money laundering in Spain and also ordered to pay a fine of more than €30 million. He was a former associate of notorious gangster Curtis Warren. His son Ray, one of 9 defendants in a trial over a large drugs seizure near Benidorm in July 2013, was also handed a 3½-year jail sentence after being convicted of money laundering.
AIRLINE STAFF DETAINED IN INDIA OVER GOLD SMUGGLING
New Indian Express reported on 13th November that officials at Air India SATS and Sri Lankan Airlines were amongst those detained in Delhi over alleged smuggling of gold from Dubai.
SWIFT SAYS SUSPENDING SOME IRANIAN BANKS’ ACCESS TO MESSAGING SYSTEM
ACFCS reported on 13th November that bank messaging service SWIFT said that it was suspending some unspecified Iranian banks’ access to its messaging system in the interest of the stability and integrity of the global financial system – but made no mention of US sanctions.
SPAIN ARRESTS 4, SEIZES MORE THAN 115 PROPERTIES WORTH MORE THAN €60 MILLION IN VENEZUELAN MONEY LAUNDERING PROBE
ACFCS on 13th November reported that Spanish police have arrested a former Venezuelan official and an exiled opposition leader’s relative and seized more than 100 properties in a money-laundering investigation into a ring that allegedly bought real estate in Spain with illicit funds from Venezuela.
CANADA CONSIDERS “VAST” CHANGES TO AML REGIME
On 13th November, Blake Cassels & Graydon LLP published an article about a recent report which makes 32 recommendations on proposed modifications and additions to the Canadian AML regime, and it highlights the key changes proposed by the Report and discusses their potential implications, if implemented. The recommendations include a pan-Canadian beneficial ownership registry, and that controls on the real estate sector be expanded to apply to mortgage insurers, land registry systems and title insurance companies. Another recommendation is that structuring transactions in a manner designated to avoid record-keeping or reporting requirements under the AML legislation should be a criminal offence (for both customers and regulated entities).
IS IT HARDER TO PIERCE THE CORPORATE VEIL OF A US LIMITED LIABILITY COMPANY (LLC)?
On 12th November Fisher Broyles LLP considered this question in the light of a recent bankruptcy case – Steve Baldwin, et al. v. Atlantis Water Solutions, LLC, et al. (In re Atlantis Water Solutions, LLC). In this case it was discussed the different analysis required to pierce the veil of a LLC, where it is argued that the vehicle is a sham or means to evade/avoid controls or scrutiny. The Court ultimately found that a creditor could not pierce the veil of a Montana LLC, using traditional piercing corporate veil factors that apply to corporations. It notes that those traditional factors do not necessarily apply in cases where the insolvent entity is not a corporation and state law expressly permits the non-corporate entity to operate in a less formal manner.
RECEIVERS…THE GATEWAY TO UNLOCKING DISABLED BEARER SHARES
On 16th October, Harneys, in its Offshore Litigation Blog, about BVI Court of Appeal decisions concerned with ‘disabled’ bearer, where shareholders were found to have a constitutional right not to be deprived of their property without compensation.
JERSEY, GUERNSEY, ISLE OF MAN – KEY ASPECTS OF “ECONOMIC SUBSTANCE” LEGISLATION
On 5th November, the 3 Crown Dependencies issued guidance which sets out key aspects of the proposed legislation and will be followed by more comprehensive guidance notes. The proposed legislation is relevant to all companies resident for tax purposes in the Crown Dependencies and will be effective for accounting periods commencing on or after 1st January.
IMF SPEECH – WINDS OF CHANGE: THE CASE FOR NEW DIGITAL CURRENCY
The IMF has published the text of a speech given by the MD of the IMF at the Singapore Fintech Festival in which Christine Lagarde evaluates the role for central banks in the new financial landscape — especially in providing digital currency, and considers some downsides, and how they can be minimised. UK Finance interpreted it as the IMF urging government to offer cryptocurrencies to prevent them from becoming a haven for fraudsters and money-launderers, in a proposal made by the head of the International Monetary Fund, Christine Lagarde, at a conference in Singapore
IMF – CENTRAL BANK DIGITAL CURRENCIES
An IMF Working Paper on 13th November considers central bank digital currencies (CBDC) and why central banks might issue them, as well as risks and side effects.
EU 6th AML DIRECTIVE (6AMLD) PUBLISHED AND TRANSPOSITION DATE SET
KYC 360 reported on 14th November that all EU countries are expected to bring into force the laws and administrative provisions necessary to comply with this directive by 3rd December 2020.
UK FASHION RETAILERS COMMIT TO TACKLING MODERN SLAVERY
Ekklesia on 14th November reported that John Lewis, M&S, New Look, NEXT, River Island and Shop Direct are putting their signatures to a joint agreement aimed at combating labour exploitation in UK textiles manufacturing. The intent is to send a strong signal that the textiles sector is resolved to playing its part in discouraging labour abuse and taking action when it does occur. The Apparel and General Merchandise Public and Private Protocol commits signatories to work together to eradicate slavery and exploitation in textile supply chains. Enforcement bodies have also signed the document, which is supported by industry bodies British Retail Consortium, UK Fashion and Textile Association, and auditing system Fast Forward.
USES OF A HACKED PC
USES OF HACKED EMAIL
INDIA: PREVENTION OF CORRUPTION (AMENDMENT) ACT 2018
Law firm Osborne Clarke published a guide from BTG Legal which says that the Indian Parliament has recently passed the Prevention of Corruption (Amendment) Act 2018, which introduces a number of amendments to the existing anti-bribery and corruption law in India – the Prevention of Corruption Act 1988. The one-page guide identifies the highlights of the new legislation.
BOKO HARAM EVOLVES BUT REMAINS A SUBSTANTIAL THREAT IN NIGERIA
The Cipher Brief website on 14th November published a review of the status of this group which has evolved from a group focused on economic and social development in Nigeria into a transnational terrorist organisation. It reminds one that, in 2015, Boko Haram pledged allegiance to the Islamic State. Shortly after, there was a major split with Abu Musab al-Barnawi, the appointed leader of the so-called Islamic State-West Africa (ISWAP), while Abubakar Shekau continues to lead the other faction of Boko Haram.
PODCAST: 100 DAYS TO DEFEAT SILOS AND ALLOW INFORMATION EXCHANGE
On 6th November, a podcast from BAE Systems saw Holly Armitage and Chris Blood, data strategists at BAE Systems, talk about the practical steps banks need to take to share intelligence between their Fraud, Cyber and Compliance teams. They have seen and tackled this across both the public and private sector, and talk about how banks can take concrete first steps within 100 days – and how some of the toughest challenges they will overcome will be human and cultural.
EU: BETTER SECURITY FOR ID CARDS
On 14th November, a news release from the EU advised of a decision to improve the security of identity cards, to reduce the risk of identity fraud. EU ambassadors have agreed the Council’s position on a proposal for a Regulation which will strengthen the security of identity cards of EU citizens and of residence documents issued to EU citizens and their non-EU family members – with minimum standards both for the information contained in them and for security features common to all Member States that issue them. It is expected that the new rules will enter into force 2 years after adoption of the Regulation, meaning that by this date all new documents issued must fulfil the new criteria.
FCA BANS ADVISER BROTHERS CONVICTED OF £17 MILLION FRAUD
Professional Adviser on 14th November reported that the FCA has banned 2 Norwich-based advisers, Alan and Russell Taylor, for using their advice firm to run a £17.5 million fraud that conned more than 200 elderly and vulnerable clients. They have now been banned by the regulator from performing any function in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm.
US AND 4 ALLIES IN CRACKDOWN ON “PROFESSIONAL ENABLERS” OF INTERNATIONAL TAX FRAUD
Reuters on 14th November reported that the IRS, in an alliance with UK, Australia, Canada and the Netherlands set up earlier this year, is pursuing individuals and firms that facilitate tax evasion, IRS Chief of Criminal Investigations told reporters. The Joint Chiefs of Global Tax Enforcement (J5) alliance was launched in July to boost the fight against global tax evasion and money laundering.
BELGIAN SOCCER CLUB RAIDED OVER FRAUD SUSPICIONS
Reuters on 14th November reported that investigators raided Royal Excel Mouscron and detained 3 people suspected of funnelling illicit funding from offshore companies and illegally obtaining a licence to operate as a professional club. The case is the second recent investigation into suspected fraud and money laundering in Belgian soccer.
GREECE: MONEY LAUNDERING AUTHORITY TO OPEN ACCOUNTS OF FORMER PRIME MINISTER
On 14th November, Tovima reported that the Authority for Combating Money Laundering has ordered the opening of the bank accounts of former Pasok prime minister Costas Simitis and his family, as well as of Simitis’ public order minister, Michalis Chrysohoidis.
FORMER ROMANIAN FOOTBALL LEAGUE PRESIDENT ACQUITTED AFTER 7-YEAR INITIAL SENTENCE
Romania Insider on 14th November reported that Bucharest Court of Appeal has acquitted former Romanian Football League (LPF) president, Dumitru Dragomir, of tax evasion, embezzlement and money laundering charges in a case related to the sale of broadcasting rights for football matches in the top league between 2009 and 2014.
UK FOBT MAXIMUM STAKE CHANGES AND THE REMOTE GAMING DUTY RISE WILL BE BROUGHT FORWARD TO APRIL
iGaming Business reported on 14th November that the online gambling industry is set for a £100 million tax bombshell next year after the UK confirmed that fixed-odds betting terminals (FOBT) maximum stake changes and the Remote Gaming Duty rise will be brought forward to April.
FORMER TRADER BEHIND UK’S BIGGEST BANKING FRAUD DEPORTED TO GHANA
The Irish Examiner on 14th November reported that a former trader behind a £1.4 billion banking fraud has been deported to Ghana despite a campaign to keep him in the UK. Kweku Adoboli was handed a 7-year jail sentence in 2012 after he gambled away the record-breaking sum while working for UBS.
LAW FIRM FRAUD: INVESTIGATING THEFT BY A FELLOW PARTNER
On 14th November, Out-Law published an article providing guidance and saying that time is of the essence for law firms when responding to allegations that fraud has been committed by a partner, particularly where client money is involved.
MOBILE CUSTOMS TEAMS IN BULGARIA SEIZE OVER 51 TONNES OF ILLICIT FUEL WITHIN A WEEK
Novinite on 14th November reported that mobile customs teams have seized over 51 tonnes of illicit fuel within a week, on 3 occasions.
NATO SCIENTISTS DEVELOP NEW IED BOMB-DETECTING DEVICES
Homeland Preparedness News in the US on 14th November reported that NATO recently announced the development of 3 new technologies designed to detect improvised explosive devices (IEDs) as part of its Science for Peace and Security (SPS) Programme.
GIBRALTAR FUNDS AND INVESTMENTS ASSOCIATION HAS PUBLISHED FIRST-EVER CODE OF CONDUCT FOR CRYPTO FUNDS
On 14th November, Gibraltar Chronicle reported that, at an event held in London, the GFIA also published an amendment of Gibraltar’s Experienced Investor Funds Regulations 2018.
EUROPEAN PARLIAMENT SLAMS MOLDOVA AS A ‘STATE CAPTURED BY OLIGARCHIC INTERESTS’
Rferl on 14th November reported that the European Parliament on 14th November overwhelmingly passed a Resolution highly critical of Moldova, saying it has become a “state captured by oligarchic interests” that exert their influence over most part of Moldova’s society. The European Commission earlier this year froze the first tranche of a €100 million macro-financial aid package for Moldova, citing worries over the democratic situation in the country.