OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 19

19th November 2018

BRITISH COLUMBIA: PORTAL LAUNCHED FOR REPORTING DIRTY MONEY IN HORSE RACING, REAL ESTATE, LUXURY CARS

Voice Online in Canada reported on 18th November that people in the province have been invited to provide input to a fact-finding review of potential money laundering in horse racing, real estate and luxury car sales by reporting information through an anonymous tip portal.  Following a report earlier this year into money laundering through British Columbia casinos, 2 further probes are underway concerned with the real estate sector – one is investigating instances of illicit activity on behalf of the Ministry of Attorney General, and the other is looking for legislative, regulatory and other actions that can be taken to prevent money laundering.  The portal is open until 31st January.

https://www.voiceonline.com/tip-portal-launched-for-reporting-dirty-money-in-horse-racing-real-estate-luxury-cars/

INVESTMENT SCREENING AND IMPLICATIONS FOR EU-CHINA INVESTMENT RELATIONS

ECIPE, the European Centre for International Political Economy has published a paper saying that, in the context of the proposal to establish an EU investment screening framework and the ongoing negotiations of the EU-China investment agreement, ECIPE in co-operation with the Mechanical Engineering Industry Association (VDMA) organised a discussion with stakeholders on the threats and opportunities of Chinese investments in European technology and European investments in China in September 2018.  The paper is based on stakeholder opinions expressed during this discussion, as well as subsequent stakeholder consultations conducted by the authors.  It says that how stringent the investments screening will be applied in the EU will be the central issue in the future.

http://ecipe.org/publications/investment-openness-in-europe/

NIGERIAN OIL CORPORATION PROBE

Defence Web on 15th November reported that a probe by the Nigerian Senate into whether state oil firm Nigerian National Petroleum Corporation (NNPC), from NLNG, a venture owned by the state oil firm and foreign energy companies, improperly withdrew money expanded with the amount under investigation doubling to over $2.2 billion, a committee said.  The withdrawals are said to have taken place between 2016 and 2018.  NLNG, which produces liquefied natural gas (LNG) for export, is a joint venture company owned by NNPC and foreign energy firms Royal Dutch Shell Plc, Total SA and ENI.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=53752:nigerian-oil-corporation-probe&catid=7:Industry&Itemid=116

AUSTRALIA: EX-TECH BOSS JAILED FOR FRAUD AFTER ‘LIVING HIGH LIFE’ IN THAILAND

The Brisbane Times on 19th November reported that John Falconer, 70, the former director of technology company TZ Ltd who fled to Thailand while he was being investigated has been sentenced to at least 3 years for fraud, after he told a court he was not “living the high life” or having “one big party” despite spending money on cocaine and lavish meals.  He was extradited from Thailand in September 2017 after he helped to transfer $6.2 million in cash and shares from TZ between 2006 and 2008, then gave false information to the regulator.  Falconer personally benefited by $1.416 million, while the rest of the money went to other beneficiaries, including to pay the large gambling debts of his co-offender, Andrew Sigalla.

https://www.brisbanetimes.com.au/national/nsw/one-big-party-ex-tech-boss-jailed-for-fraud-after-living-high-life-in-thailand-20181109-p50f2w.html

LIBERIA IS FIRST FLAG STATE TO JOIN MARITIME ANTI-CORRUPTION NETWORK

The Maritime Executive on 18th November reported that Liberia has become the first ship registry to be admitted to the Maritime Anti-Corruption Network (MACN) as an associate member.  Established in 2011, MACN is said to include over 100 members globally and works to raise awareness of the challenges faced; implement the MACN Anti-Corruption Principles and co-developing and sharing best practices.

See MACN at –

http://www.maritime-acn.org/

https://maritime-executive.com/corporate/liberia-is-first-flag-state-to-join-maritime-anti-corruption-network

EU AMENDS IRAQ SANCTIONS TO REMOVE RAFIDAIN COMPANY FOR BUILDING DAMS (AKA STATE ORGANIZATION FOR DAMS)

EU Regulation 2018/1781/EU has amended the EU Iraq sanctions list in line with the decision of the UN on 13th November, to remove the RAFIDAIN COMPANY FOR BUILDING DAMS (alias STATE ORGANIZATION FOR DAMS) from the list with effect from 20th November.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.292.01.0002.01.ENG&toc=OJ:L:2018:292:TOC

TYCOON LESZEK CZARNECKI TO BE QUESTIONED IN POLISH FINANCIAL PROBE

Radio Poland on 19th November reported that the Polish billionaire expected to be questioned by prosecutors after he reportedly accused the head of the country’s financial watchdog of attempted corruption.  The business tycoon and owner of banks, including Getin Noble Bank, was expected to give testimony to prosecutors in the southern city of Katowice, public broadcaster TVP Info reported.  He has alleged that the former head of the Polish regulator KNF in March offered him favourable treatment in return for millions in financial gain.

http://www.thenews.pl/1/9/Artykul/392700,Tycoon-to-be-questioned-in-Polish-financial-probe

SHARP DROPS IN OPIUM POPPY CULTIVATION AND PRICE OF DRY OPIUM IN AFGHANISTAN

The UN Office on Drugs and Crime reported on 19th November that the total area under opium poppy cultivation in Afghanistan remains at very high levels despite a decrease by 20% compared to 2017.  The potential production of opium decreased by 29% in 2018 compared to last year, while farm-gate prices hit an all-time low, according to the 2018 Afghanistan Opium Survey – mainly attributed to the severe drought that has hit Afghanistan.

https://www.unodc.org/unodc/en/frontpage/2018/November/sharp-drops-in-opium-poppy-cultivation–price-of-dry-opium-in-afghanistan–latest-unodc-survey-reveals.html?ref=fs1

SPANISH POLICE SEIZE 650 KG OF COCAINE AND ARREST 11 IN INTERNATIONAL DRUG BUST

The Latin American Herald Tribune on 19th November reported that, with the help of the US DEA and Colombia’s Technical Investigation Team (CTI), Spanish national police managed to track down and monitor a safe house used by the alleged criminal network in the north-western province of Galicia.

http://www.laht.com/article.asp?ArticleId=2469753&CategoryId=12395

WHAT MIGHT A TRUMP WITHDRAWAL FROM THE WTO MEAN FOR US TARIFFS?

A November 2018 Policy Brief from the Peterson Institute for International Economics posed this question.  It says that a decision to withdraw the US from the WTO — if deemed legal under US law — could deal a disastrous blow to US foreign trade and would likely cripple an organisation that has helped foster peaceful commercial relations for over 7 decades.

https://piie.com/publications/policy-briefs/what-might-trump-withdrawal-world-trade-organization-mean-us-tariffs

US CUSTOMS AND BORDER PROTECTION FORCED LABOUR WEBINAR

Available online (using Adobe Connect software) is a webinar from US CBP on 22nd August in which the CBP Office of Trade with speakers from the Department of Labor, Department of State (DOS) and a non-profit organisation, Verite, gave updates on their role and responsibilities.  This included an overview of the Department of Labor’s Comply Chain: Business Tools for Labor Compliance in Global Supply Chains.  It also included a presentation by Verite on the Responsible Sourcing Tool.  It covers all work or service which is exacted from any person under the menace of any penalty for its non-performance and for which the worker does not offer himself voluntarily.  Merchandise not entitled to entry into the US therefore includes that made using:  slave labour; prison/convict labour; forced child labour; indentured labour under penal sanctions.

https://www.cbp.gov/trade/stakeholder-engagement/webinars

VIETNAM ARRESTS EX-DEPUTY HEAD OF HO CHI MINH CITY IN GRAFT CRACKDOWN

Reuters on 19th November reported that Vietnamese police had arrested Nguyen Huu Tin, 61, a former deputy chairman of Ho Chi Minh City, the country’s business hub, as the country steps up a crackdown on corruption.

https://www.reuters.com/article/us-vietnam-security-arrests/vietnam-arrests-ex-deputy-head-of-economic-hub-in-graft-crackdown-idUSKCN1NO1K5?feedType=RSS&feedName=worldNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FworldNews+%28Reuters+World+News%29&src=ilaw

SEC PROVIDES GUIDANCE ON HOW TO FIX THE FAULTY INITIAL COIN OFFERING

An article from Stinson Leonard Street on 19th November concerned with 2 settled enforcement actions related to illegally offered ICO, included reference to the remedial provisions in the agreements and required to fix the faulty offerings – including telling all “investors” that they will get their money back, and making sure that they do.

https://www.jdsupra.com/legalnews/sec-tells-how-to-fix-the-faulty-initial-41937/

JERSEY GRANTED PERMISSION TO NEGOTIATE TRADE DEAL WITH UAE

The Jersey Evening Post on 19th November reported that Jersey has been granted “long-awaited” permission by the UK government to negotiate an international trade deal on its own behalf.  However, local politicians and business said that the process involved needs to be streamlined if the Island is to prosper post-Brexit.  Until now, it says, Jersey has not had the legal power to negotiate a treaty with any foreign government on matters outside of international tax.

https://jerseyeveningpost.com/news/2018/11/19/jersey-granted-permission-to-negotiate-trade-deal-with-uae/

ARE UKRAINE’S ANTI-CORRUPTION REFORMS WORKING?

A report from Chatham House on 19th November says that Ukraine’s vicious circle of corruption begins with the power groups that have created and sustained a system in which citizens believe that it is impossible to live without corruption.  The process of cleaning up institutions must start at the top.  It says that progress is lacking in priority areas such as customs, deregulation, privatisation, de-monopolisation and the reform of public administration.  Defence spending is particularly opaque.  Corruption schemes remain untouched in some parts of the energy sector.  An overhaul of the civil service is also essential.  Reforms of the law enforcement agencies are proceeding slowly, if at all, and it is too early to say whether judicial reform will lead to improvements.  The newly created National Anti-Corruption Bureau has yet to achieve a high-level prosecution because of the influence of vested interests over the judiciary.

https://www.chathamhouse.org/publication/are-ukraines-anti-corruption-reforms-working

ENSURING THERE’S NO SLAVE LABOUR IN YOUR BLACK FRIDAY WAREHOUSE

CILT in the UK on 19th November carried an article and infographic saying that cases of modern human slavery are rising all the time, up 35% in the past year and the warehousing sector is considered a higher risk.  Manufacturers, retailers and their logistics service providers should be extra cautious about who they employ or engage to support them through the busy Black Friday period, to ensure they are not inadvertently exploiting victims of modern slavery.  It includes some best practice advice for companies, issued by Hope for Justice, to protect the workers in the supply chain.

https://ciltuk.org.uk/News/Latest-News/ArtMID/6887/ArticleID/20114/Ensure-theres-no-slave-labour-in-your-Black-Friday-warehouse

SALEVRY

 

 

HM TREASURY ADDS 1 NAME TO LIBYAN SANCTIONS LIST

On 19th November, a Notice notified that, alongside UN, EU and US sanctions actions, the UK has added Badi Salah to its Libyan sanction lists.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/757327/Notice_Libya_19112018.pdf

 

CALL TO ACTION TO END FORCED LABOUR, MODERN SLAVERY AND HUMAN TRAFFICKING LAUNCHED AT UN

On 19th November, the UK Department for International Trade reported that the Call to Action to End Forced Labour, Modern Slavery and Human Trafficking was launched during the 72nd Meeting of the UN General Assembly.

https://www.gov.uk/government/publications/a-call-to-action-to-end-forced-labour-modern-slavery-and-human-trafficking

UK: HUMAN TRAFFICKING SURGE LINKED TO ALBANIAN GANGS

OCCRP on 19th November reported that sophisticated Albanian gangs are linked to the upsurge of trafficking victims in the UK, most of whom are brought from Albania and passed around Europe as commodities through expansive criminal networks.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8933-uk-human-trafficking-surge-linked-to-albanian-gangs

COURT OF APPEAL CONSIDERS FRAUD VICARIOUS LIABILITY TEST

An article from Out-Law on 19th November reported that the Court of Appeal has overturned a finding of the High Court of fraudulent misrepresentation against a postal equipment supplier, on the grounds that it was not ‘vicariously liable’ for the dishonesty of its agent.  The issue of vicarious liability of the principal on the grounds of ostensible authority for the agent has been referred back to the High Court, saying that the High Court judge in the case had applied the wrong legal test when he found the appellant liable for the conduct of his agent.

https://www.out-law.com/en/articles/2018/november/court-of-appeal-fraud-vicarious-liability-test/

EU ADOPTS NEW STRATEGY AGAINST ILLICIT FIREARMS, SMALL ARMS AND LIGHT WEAPONS AND THEIR AMMUNITION

On 19th November, a news release from the EU reported that the EU Council had adopted a new EU strategy against illicit firearms, small arms and light weapons (SALW) and their ammunition.  It says that the EU Council is committed to preventing and curbing the illicit trade in SALW and their ammunition and is promoting accountability and responsibility with regard to their legal trade.  The new strategy takes into account the evolved security context, including the threat of terrorism inside the EU and developments in SALW design and technology affecting the capacity of governments to address the threat.

Small arms and light weapons (SALW) and their ammunition are military grade weapons; they include –

  • small arms: assault rifles; military grade semi-automatic rifles and carbines; military grade revolvers and self-loading pistols; light machine guns; sub-machine guns, including machine pistols;
  • light weapons: heavy machine guns; cannons, howitzers and mortars of less than 100 mm calibre; grenade launchers; recoilless guns; shoulder-fired rockets and other anti-tank and air defence systems that fire projectiles, including MANPADS (portable anti-aircraft missiles systems), all on condition they are man- or crew portable;
  • SALW parts and accessories (such as night scopes, sound suppressors, etc.) and SALW ammunitions.

 

https://www.consilium.europa.eu/en/press/press-releases/2018/11/19/securing-arms-protecting-citizens-council-adopts-new-eu-strategy-against-illicit-firearms-small-arms-and-light-weapons-and-their-ammunition/

https://www.consilium.europa.eu/media/37025/st13581-en18.pdf

OFAC ANNOUNCES SETTLEMENT AGREEMENT WITH SOCIETE GENERALE

On 19th November, OFAC announced an agreement whereby the French bank agreed to pay $53 million settle potential civil liability for apparent violations of US sanctions.  The settlement resolves OFAC’s investigation into Société Générale SA’s processing of transactions to or through the US or US financial institutions in a manner that removed, omitted, obscured, or otherwise failed to include references to OFAC-sanctioned parties in the information sent to US financial institutions that were involved in the transactions.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181119_33.aspx

https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20181119_socgen_web.pdf

US FEDERAL RESERVE BOARD FINES SOCIÉTÉ GÉNÉRALE SA $81.3 MILLION FOR FIRM’S UNSAFE AND UNSOUND PRACTICES PRIMARILY RELATED TO VIOLATIONS OF US SANCTIONS AGAINST CUBA

https://www.federalreserve.gov/newsevents/pressreleases/enforcement20181119a.htm

The Bank has signed deferred prosecution agreements with the US Attorney’s Office of the Southern District of New York and the New York County District Attorney’s Office, which provide that, following a 3-year probation period, the Bank will not be prosecuted if it abides by the terms of the agreements, to which Société Générale is fully committed.  The deferred prosecution agreement with SDNY will be subject to court approval in the US.

In addition, the Bank has reached a separate agreement with the New York State Department of Financial Services relating to the Bank’s AML compliance programme in the New York Branch. The Bank has agreed to pay an additional penalty of $95 million in connection with this agreement, which amount is likewise entirely covered by the provision for disputes booked in Société Générale’s accounts.

Under the terms of all the agreements, Société Générale has agreed to pay penalties totalling approximately $1.3 billion to the US Authorities

https://globenewswire.com/news-release/2018/11/19/1653963/0/en/Société-Générale-reaches-agreements-with-U-S-authorities-to-resolve-U-S-economic-sanctions-and-AML-Investigations.html

OFAC HAS ADDED 2 NAMES TO ITS NORTH KOREAN AND LIBYAN SANCTIONS

On 19th November, OFAC added –

  • Vladlen AMTCHENTSEV, who is linked to Velmur Management Pte Ltd and a Russian with a South African passport to its North Korea sanctions list; and
  • Salah BADI (aka Omal Salem Salah BADI; Saladin BADI; Salah Edine Omar BADI; Salahdin BADI; Salah-Eddin BADI; and Salahidin BADI), a Libyan national, to its Libyan sanctions list.

In 2017, the US DoJ named Singapore-based Velmur Management Pte Ltd as one of several companies involved in laundering North Korean money, and Amtchentsev is said to have acted or purported to act for or on behalf of, directly or indirectly, the company and has advised on how to evade US sanctions.

Badi is the leader of the Sumud Brigade militia that has sparked violent clashes in the south of Libya’s capital, Tripoli, and has also been listed by the UN.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181119.aspx

https://home.treasury.gov/news/press-releases/sm552

https://home.treasury.gov/news/press-releases/sm551

EUROPEAN PARLIAMENT’S TAX3 SPECIAL COMMITTEE ON FINANCIAL CRIMES, TAX EVASION AND TAX AVOIDANCE FACTFINDING VISIT TO ISLE OF MAN

Sinn Fein, the Republican political party in Ireland, reported on 19th November that its MEP, Matt Carthy, is due to participate in a fact-finding mission to the Isle of Man as part of a visit by the European Parliament’s special committee on financial crimes, tax evasion and tax avoidance (TAX3), which was set up in response to the Paradise Papers revelations last year.  It is investigating claims that the Island multinational corporations and ultra-rich individuals avoided paying millions in VAT on aircrafts imported to the EU.

http://www.sinnfein.ie/contents/51585

REVIEW OF THE PSYCHOACTIVE SUBSTANCES ACT 2016

On 19th November, the Home Office published this review of the operation of the Act which targeted the so-called former “legal highs” and their abuse.  It notes that there have been 3 types of legal challenges to the PSA, concerning the medicinal products exemption for nitrous oxide, the psychoactivity of nitrous oxide and the psychoactivity of synthetic cannabinoids (all of which have been held to be caught by the Act).  Data from police forces suggests that the PSA has led to head shops either closing down or no longer selling new psychoactive substances (NPS), with 332 retailers identified as having ceased the sale of NPS.  The Act has not completely eliminated the supply of NPS, given the large numbers of offences and seizures of suspected NPS recorded.  The emergence of new NPS in the UK has not ceased following the introduction of the Act, based on forensic analysis of drug samples, albeit this is based on a small number of observations.  Evidence indicates that there has been a considerable reduction in NPS use among the general adult population since the PSA, mainly driven by a reduction in use among those aged 16 to 24.  However, the report concludes that while most of the main aims of the Act appear to have been achieved (with the open sale of NPS largely eliminated, a significant fall in NPS use in the general population, and a reduction in health-related harms which is likely to have been achieved through reduced usage), some areas of concern have remained or emerged since the Act, such as the supply of NPS by street dealers, the continued development of new substances, the potential displacement from NPS to other harmful substances, and continued high levels of synthetic cannabinoid use among the homeless and prison populations.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/756896/Review_of_the_Psychoactive_Substances_Act__2016___web_.pdf