15th November 2018
BVI & CAYMAN ISLANDS: SANCTIONS – ADDITIONAL REPORTING OBLIGATIONS
On 13th November, Maples published an article reporting that, w.e.f. from 7th November, the reporting obligation in respect of financial sanctions orders in the two jurisdictions shall extend to ‘relevant businesses and professions’, including auditors, casinos, precious metal and stone dealers, external accountants, independent legal professionals, real estate agents, tax advisers and trust or company service providers. Sanctions Orders are extended by UK Statutory Instrument to these British Overseas Territories, to implement UK, EU or UN sanctions measures.
COUNTER-PROLIFERATION TOOLS AND DIPLOMACY IN US FOREIGN POLICY
A news release from the US State Department on the EIN Newsdesk comprises a speech on an aspect of the work of the State Department that the speaker says is often overlooked. The Bureau of International Security and Nonproliferation, or ISN — is the State Department’s lead for counter-proliferation policy and operations. The speech touches upon the recent history of the organisation, and current challenges.
RENEWED REGULATORY, TRANSPARENCY AND ANIMAL WELFARE FOCUS IN STORE FOR AUSTRALIAN LIVE ANIMALS EXPORT INDUSTRY
On 14th November, the Future Directions website reported that, the fallout from recent scandals and licence revocations, and that the Australian Federal Agriculture Minister initiated the ‘Review of the Regulatory Capability and Culture of the Department of Agriculture and Water Resources in the Regulation of Live Animal Exports’, otherwise known as the Moss Review. The article says that, in beef exports alone, Australia ranks behind only Canada and France. Australian cattle are particularly in demand in Indonesia and Vietnam, while most sheep shipments head to the Middle East. The industry is currently estimated to be worth $2 billion annually; and that it employs over 10,000 individuals and is the backbone of various regional industries. The Moss Review highlighted a number of cultural issues and regulatory shortcomings that had contributed to failings on the part of the regulator, the Department of Agriculture and Water Resources (DAWR). The minister has also announced plans to appoint an Inspector-General for Animal Welfare, a role that could help address the shortcomings and promote the cultural change required within the department and the industry.
OFAC HIGHLIGHTS GAPS IN SINGAPORE’S SANCTIONS REGIME
Regulation Asia on 15th November published an article in the wake of OFAC targeting a Singaporean citizen, a pair of companies and 2 cargo vessels resulted from violations of the trade embargoes enacted by the UN, which Singapore follows. It identifies 3 actions that regulators in countries such as Singapore could follow in order to reduce the chances of further high-profile regulatory incidents – greater bank vigilance and oversight; expanded regulatory scope (none of the companies named in the US actions are financial institutions); and regulatory outreach and education.
AUSTRALIA: $8.5 MILLION CHINESE MONEY LAUNDERING RING SMASHED
On 14th November, the Cairns Post and others reported that police have seized more than $8.5 million in jewellery, luxury cars and properties as they swooped on a Chinese money laundering ring in Melbourne, Sydney and the Gold Coast. It is alleged that 2 Chinese nationals travelled to Australia in 2015 “to establish shell companies to transfer proceeds of crime and purchase residential and development property in Australia”, and that Chinese authorities allege the money was raised in China through the defrauding of investors.
THE UK’S NEW NATIONAL ECONOMIC CRIME CENTRE
On 13th November, Kingsley Napley published an article on the NECC. The NECC is an overarching body whose function is to co-ordinate the UK’s national response to economic crime by tasking and co-ordinating the UK’s different prosecuting bodies, supported by “enhanced analytic capabilities and intelligence”. The NECC is based at the Head Quarters of the NCA and operates with a staff of around 55, recruited mainly from the NCA, the SFO, HMRC, the City of London Police and FCA. Its first annual budget is in the region of £6m.
IRELAND: CHARITIES REGULATOR PUBLISHES NEW GOVERNANCE CODE
On 9th November, Mason Hayes & Curran published an article on the “Charities Governance Code”, published by the Charities Regulator on 7th November, saying that it is an essential document for charity trustees and providing a link to the Code. Every charity must abide by the Code’s principles. The Code is drafted on a “comply or explain” basis, meaning that charities must comply with the Code or else explain why they have not done so. All charities will be expected to implement the Code from 2020 onward.
FORMER KEYDATA BOSS STUCK WITH £76 MILLION FCA FINE
Squire Patton Boggs on 13th November reported that the Upper Tribunal has upheld the FCA decision to fine Stewart Ford, the former CEO of Keydata Investment Services Limited, a huge £76 million (the largest FCA fine on an individual) and ban him from working in the financial services industry – for a lack of integrity, for failing to deal with the regulator in an open way after he made false statements during compelled interviews with the regulator, and the fine results from allegations of active concealment and lack of integrity. Keydata failed to carry out proper due diligence in respect of the viability of the financial model, or the third parties involved, and produced misleading brochures. Ford had extracted exorbitant fees of £73.3 million but concealed this from Lifemark’s compliance officer, the regulator, investors and IFA.
HAND CAR WASHES NEED LICENSING TO PREVENT ‘MODERN SLAVERY’, SAYS COMMONS COMMITTEE
On 15th November, the Parliament website reported that hand Car Washes should require licences to operate to prevent exploitation of workers and water pollution, MPs on the Environmental Audit Committee are demanding.
MINING COMPANIES WELCOME LIFTING OF UN SANCTIONS ON ERITREA
Defence Web on 15th November reported that Danakali and other miners said a UN decision to lift sanctions on Eritrea – after a rapprochement with Ethiopia and thawing of relations with Djibouti – should enhance international trade opportunities and give an economic boost, although widespread wariness about investing in mining was likely to linger. The UN Resolution removes a requirement for countries to ensure people or companies working in Eritrea’s mining sector prevented funds from being diverted and used to undermine peace and security in the region.
POLICE BELIEVE DIAMONDS SMUGGLED INTO ISRAEL IN CONDOMS
The Times of Israel on 15th November, in an article about the investigations into Russian-Israeli billionaire Lev Leviev’s diamond enterprise, says that police believe people smuggled hundreds of millions of shekels’ worth of gems into Israel inside condoms inserted into couriers’ bodies. 6 suspects are being held on suspicion of smuggling: 2 had run a diamond facility owned by Lev Leviev and the remaining 4 suspects held senior positions in his company. Diamonds — worth some $81.4 million — were then allegedly sold illegally in Israel, without paying taxes. They were also smuggled into other countries, according to the investigation.
ETHIOPIA’S EX DEPUTY INTELLIGENCE CHIEF ARRESTED IN CORRUPTION, RIGHTS CRACKDOWN
IOL in south Africa reported on 15th November that more than 60 officials, some from the intelligence services and some from the military-run industrial conglomerate METEC, have been arrested. Analysts and diplomats are describing the arrests as a “full frontal assault on the establishment”. The attorney general has said that investigations uncovered corruption at METEC (Metal and Engineering Corporation), which makes military equipment and is involved in sectors from agriculture to construction.
EU: REVISING THE VISA INFORMATION SYSTEM
On 15th November, the European Parliament Research Service published a briefing paper on plans to upgrade the Visa Information System (VIS) to allow for more thorough background checks on visa applicants, while also closing security information gaps and ensuring full interoperability with other EU-wide databases.
WCO DEDICATES 2019 TO TRANSFORMING FRONTIERS INTO SMART BORDERS FOR SEAMLESS TRADE, TRAVEL AND TRANSPORT
On 15th November, a news release from the WCO said that the Secretary General of the World Customs Organization announced on 8th November that 2019 will be devoted to the swift and smooth cross-border movement of goods, people and means of transport, with the slogan “SMART borders for seamless Trade, Travel and Transport”. The news release lays down the guiding principles are at the centre of Customs compliance, enforcement and facilitation efforts: Secure, Measurable, Automated, Risk Management-based and Technology-driven. The campaign will be launched on International Customs Day, which is celebrated annually by the global Customs community on 26th January.
CALL FOR INTERNATIONAL ACTION ON THE USE OF INCENDIARY WEAPONS
Ekklesia on 15th November reported that countries at an upcoming UN disarmament conference, faced with evidence of 30 new incendiary weapons attacks in Syria, should agree to strengthen the international law that governs their use, Human Rights Watch says in a new report. The 13-page report, Myths and Realities about Incendiary Weapons, counters common misconceptions that have slowed international progress in this area.
The report is available at –
PODCAST: CUSTOMS, BORDERS AND DIGITAL PROTECTIONISM – THE IMPERFECT STORM
This podcast from Gowling WLG on 15th November explores the crucial customs and border issues that are likely to be caused by protectionist laws and barriers (including data protection laws) that govern the movement of data, as well as tech related goods and services. Gowling WLG’s Ursula Johnston and Sean Giles talk to national journalist Andrew Cave, a writer for the Daily Telegraph and Forbes magazine.
Gowling WLG also offers a report “Protectionism 2.0”, in which it explores the digital forces driving the new protectionist agenda. It is concerned with the flow of data between governments, businesses and consumers, as well as the raw materials needed to power the technological revolution, and Gowling WLG revealed in a previous report that the world’s top 60 economies have adopted more than 7,000 protectionist trade measures since 2008.
REPORT: MONITORING DRUG USE IN RECREATIONAL SETTINGS ACROSS EUROPE
On 15th November, the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) published this report which examines how drug-use data are currently collected in recreational settings, and identifies the benefits and challenges of monitoring in these milieux. It is said that the report shows how specific drugs, drug-using populations and recreational settings dominate investigations, while others tend to be ignored. Research largely focuses on night-time-economy (NTE) locations, such as clubs and bars, leaving a significant knowledge gap around drug use in other recreational settings (e.g. private parties, illegal raves). The point is made that drug use takes place in both private and public recreational settings.
EX-MACEDONIA PM GRUEVSKI SEEKING REFUGEE STATUS IN HUNGARY
Reuters reported on 15th November that Nikola Gruevski resigned in 2016 after 10 years in power, fled his Balkan homeland 6 months after being sentenced to 2 years in prison on corruption-related charges.
THE ANATOMY OF CONSTRUCTION CORRUPTION IN NEW YORK
The Real Deal on 1st April published an interesting article that still has relevance, claiming that bribery and overbilling schemes have become commonplace in the world of real estate’s middlemen in New York City’s $45.3 billion construction industry.
‘PHENOMENAL BREACH OF TRUST’: CORK CREDIT UNION WORKER STOLE €400,000 FROM ACCOUNTS
The Irish Examiner on 15th November reported that a 55-year-old credit union board member, Moira Coughlan, was remanded in custody for the theft of €407,000 as the judge described both the fraud and the breach of trust as reaching a phenomenal level.
SWAZILAND: PRIVATE SECTOR CORRUPT, BUT PUBLIC SECTOR WORSE
OCCRP on 15th November reported that the Kingdom of eSwatini, formerly known as Swaziland, lost $2.09 million due to fraud and corruption in various sectors of the government, the national police deputy commissioner said at an event celebrating International Fraud Awareness week. A report exposes widespread fraud and financial irregularities across numerous government ministries, including the offices of the Prime Minister, National Commissioner of Police and the Ministries of Education, Defence and Home Affairs.
FORMER CFO JAILED FOR FAILING TO PAY $1 MILLION FRAUD FINE
Law 360 on 15th November reported that the former CFO of Dewey & LeBoeuf LLP, Joel Sanders, has been jailed in the US. He was convicted last year on felony charges related to a scheme to defraud the defunct firm’s lenders and investors.
JERSEY: ASSETS CONFISCATED FROM ID THEFT FRAUDSTER AT US REQUEST
The Jersey Government issued a news release on 15th November about Michael David Reid, currently in prison in the US. He had been extradited from Colombia in 2007, and in 2005-2007, he and his co-conspirators engaged in an elaborate scheme to steal money from account holders at various financial institutions. The fraud was perpetrated by stealing the identities and assets of more than 250 people living in Venezuela and other countries outside the US, with accounts set up in the US to launder the illicit funds. In 2017, assets in Jersey were frozen on the back of a US forfeiture order. Having had his appeals rejected, the order now be enforced in the Island and the assets paid into the Criminal Offences Confiscation Fund.
ROSMAH MANSOUR, WIFE OF OUSTED MALAYSIAN PRIME MINISTER NAJIB RAZAK CHARGED WITH CORRUPTION
Jurist on 15th November reported that she was charged, along with 3 others, on 2 counts of corruption in Kuala Lampur. In charges related to 1MDB scandal involve he being accused of stealing 12,000 pieces of jewellery, 423 wristwatches and 567 handbags, among other items, along with $112 million in cash; the total value of these items exceeds $225 million.
SOUTH KOREAN CONSTRUCTION COMPANY EMPLOYEES INDICTED ON US BRIBERY CHARGE
Baker McKenzie reported on 15th November that 2 employees of a South Korean construction company, SK Engineering & Construction Co. Ltd, have been indicted on US federal fraud charges in connection with construction contracts for projects at a US Army base in South Korea.
IN ‘EL CHAPO’ CASE, DEFENCE PUTS SPOTLIGHT ON ALLEGED MEXICO CORRUPTION
Insight Crime on 15th November reported that defence lawyers for former Sinaloa Cartel kingpin “El Chapo” have alleged that 2 of Mexico’s presidents accepted millions of dollars in bribes — unverified accusations that are hotly denied, but which put Mexico’s government in an uncomfortable position and are likely to become a recurring theme during the trial.
TRANSPOSITION, IMPLEMENTATION AND ENFORCEMENT OF UNION LAW
On 15th November, the EU Parliament Research Service published a handy briefing paper which provides a simplified and brief explanation of the terminology linked with the transposition, implementation and enforcement of EU law. It also describes the main roles of the EU institutions and Member States during the legislative procedures leading to adoption of European legislation and possible infringement procedures. Less useful in the UK in the light of Brexit perhaps…
The UK, Australia, New Zealand, Canada and the USA together make up the Five Eyes Law Enforcement Group, a global coalition of agencies working together to tackle transnational crime.
INTERACTIVE GUIDE TO HOW FIREARMS GET ONTO THE STREETS OF THE UK
From smuggling to importation via the Dark Web, and even theft from legitimate owners. Follow the journey of a firearm into the UK.
UK POLICE NEED A ‘ZERO TOLERANCE’ CULTURE FOR DISCLOSURE FAILINGS
Police Professional on 15th November reported that HM Attorney General has called for an immediate end to disclosure being seen as “an administrative add-on rather than fundamental pillar of the justice system”. This is in the light of a report issued reviewing and making many recommendations to improve the disclosure of evidence process in criminal trials.
SINGAPORE TO BECOME “IP HUB” FOR RUSSIAN BUSINESSES
World Intellectual Property Review on 15th November reported that Singapore is soon to become an “IP hub” for innovative Russian enterprises, after the Intellectual Property Office of Singapore’s (IPOS) international arm made an agreement with Russia’s Internet Initiatives Development Fund (IIDF). IPOS will give the Russian enterprises access to IP management consultancy services, bespoke patent search and analytics, and customised training programmes and workshops.