23rd November 2018
BVI COURT OF APPEAL ALLOWS APPEAL TO PRIVY COUNCIL OVER WHETHER IT HAD JURISDICTION IN INTERNATIONAL FRAUD CASE
On 19th November, Harneys reported that the BVI Court of Appeal has granted leave to appeal the Court’s own decision in which it applied the principles relating to forum non conveniens (i.e. courts may refuse to take jurisdiction over matters where there is a more appropriate forum available to the parties) in the context of a jurisdictional challenge brought by various of the 18 defendants to the proceedings. Eurochem contended that the Court of Appeal was wrong to find that the BVI court did not have jurisdiction over a claim arising out of an international fraud where large bribes were paid to various companies incorporated in the BVI. It is said that the appeal will generate a defining authority on the way in which forum non conveniens principles are to be applied in the BVI and other Eastern Caribbean courts going forward.
THE FIFTH EU AML DIRECTIVE
Irish law firm William Fry on 21st November published a helpful reminder of the provisions of the Directive, which has to be implemented by EU Member States by 10th January 2020.
SOMERSET MAN JAILED FOR TRAFFICKING FIGHTER JET PARTS TO IRAN
The Guardian and others on 22nd November reported on a businessman from Somerset has been jailed for trafficking fighter jet parts to Iran. Alexander George, 77, was sentenced to 2½ years for shipping military hardware, including Russian MiG and US F-4 Phantom parts sent through a network of companies and countries. He is thought to have made £5 million from the trade. Paul Attwater, 65, and his wife, Iris, 66, of Telford were handed suspended 6-month prison sentences last month for sourcing aircraft parts from the US and shipping them to George’s companies, which then sent them to Iran. He told HMRC he was dealing in wheelbarrows, goggles and gloves for the construction industry, and shipped the items to the Netherlands, in the name of a company registered in the BVI before they were sent to Malaysia and then Iran.
JERSEY TAKE ON WHY PUBLIC REGISTER ARGUMENTS ARE FLAWED
On 23rd November, an article from Jersey Finance listed 10 reasons why it says arguments for a public register of beneficial ownership are flawed.
EU TAX DELEGATION VISITING ISLE OF MAN
Manx Radio reported on 22nd November that the Isle of Man has a delegation from the European Parliament visiting for 2 days to look at how it is geared to fight financial crime. The TAX3 committee is looking at how various jurisdictions tackle tax evasion and avoidance, as well as examining regulatory regimes.
HMRC INTERNATIONAL TRADE NEWSLETTER
On 23rd November, BIFA re-published the latest edition of this newsletter from HMRC and containing tips and updates
US ASKS ALLIES TO SHUN HUAWEI EQUIPMENT OVER ESPIONAGE FEARS
EurActiv on 23rd November reported that the US government is trying to persuade wireless and internet providers in allied countries to avoid telecommunications equipment from China’s Huawei Technologies. US officials have reached out to their government counterparts and telecom executives in friendly countries where Huawei equipment is already in wide use about what they see as cybersecurity risks. Australia has banned the company from supplying equipment for a 5G mobile network.
RYA AND INDUSTRY REPRESENTATIVES MEET HMRC TO DISCUSS RED DIESEL SITUATION
The RYA reported on 22nd November that a meeting had involved the Royal Yachting Association, British Marine, the Cruising Association, the Inland Waterways Association, who met with HMRC officials following the ruling by the European Union Court of Justice against the UK’s use of red diesel by private pleasure craft, to discuss the implications of the Court’s decision and evaluate the UK’s response. The UK is required to provide a response to the Commission by 22nd December, setting out how it intends to bring the UK into line with the EU Directive on fiscal marking of gas oils and kerosene, as well as a timeframe for achieving this.
2 ALCOHOL SMUGGLING BROTHERS JAILED AFTER HMRC STING
Commercial Motor on 22nd November reported that 2 London-based brothers, Tayfun and Taylan Donger, who evaded £3.6 million in tax by distributing alcohol smuggled into the UK, have been jailed for more than 12 years. They were caught unloading beer brought into the UK from Belgium at a warehouse in Epping.
IRISH BOOKMAKERS RECEIVE TEMPORARY REPRIEVE FROM TAX INCREASE
Calvin Ayre on 23rd November reported that Ireland’s bookmakers have won a reprieve, if only temporarily, from the government’s plan to double their betting taxes. The doubling of betting tax to 2% due to come in on January 1st will be delayed by plans to conduct a review of the tax impact on the betting sector that won’t be completed until next year.
NEARLY 240 KG OF MARIJUANA FOUND UNDER SHIP IN ROTTERDAM
Customs Today on 23rd November reported that Customs divers found 239 kg of marijuana hidden under a sea-going vessel docked at a terminal after the seaport police received a report that something suspicious was detected during the maintenance of the ship.
ILLEGAL GAMBLING ARRESTS IN THE PHILIPPINES
Intergame on 23rd November reported further arrests, with police in the Philippines having arrested 104 people for illegal online gambling in Pasig City. 93 of the individuals arrested were Chinese nationals.
AUSTRALIA: ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY
On 21st November, Allen & Overy published an article providing the key findings of the Royal Commission interim report of 28th September. It provides no formal recommendations but highlights key issues identified during the Commission’s 11 months of public hearings and evidence gathering.
HMRC SENIOR ACCOUNTING OFFICER PERSONAL PENALTIES CONTINUE
Out-Law on 23rd November published an article saying HMRC is continuing to issue significant numbers of personal penalties to the senior financial executives at big businesses, the latest figures show. Another 125 penalties were issued by HMRC under its senior accounting officer (SAO) regime in the year ending 31st March, up from 115 a year earlier, and just 5 years ago only 46 penalties were issued by HMRC under the regime.
NUISANCE CALLS: NEW UK LAW PROVIDES FOR DIRECTOR LIABILITY
Out-Law on 23rd November reported that UK law will be updated next month to make it possible to hold company directors personally liable for nuisance calls made by their businesses. From 17th December the Information Commissioner’s Office (ICO) will get new powers to fine company directors up to £500,000 for breaches of the Privacy and Electronic Communications Regulations (PECR). PECR sets out the legal parameters for electronic direct marketing in the UK.
GIBRALTAR BLOCKCHAIN EXCHANGE FIRST IN WORLD TO ACQUIRE FULL LICENCE
Banking Tech on 22nd November reported that the Gibraltar Blockchain Exchange (GBX), a token sale platform and digital asset exchange, has been granted a full licence by the Gibraltar FSC. The licence as a provider of distributed ledger technology (DLT) is granted under Gibraltar’s Financial Services Regulations 2018 DLT framework.
UN AMENDS 1 NAME TO ITS SOUTH SUDAN SANCTIONS LIST
On 21st November, the UN announced that the entry relating to JOK RIAK GABRIEL had been amended. He was appointed as Chief of Defence Forces in May, and since January 2013, in his position as the SPLA Sector One commander, he has expanded or extended the conflict in South Sudan through breaches of the Cessation of Hostilities Agreement. The SPLA is a South Sudanese military entity that has engaged in actions that have extended the conflict in South Sudan.
TRANSPORTING GOODS OUT OF THE UK BY ROAD: STEP BY STEP
On 23rd November, HMRC published a step-by-step guide on how to transport goods commercially if you’re driving from the UK to or through Europe.
NETWORK OF 5 ORGANISED CRIME GROUPS DISRUPTED IN ROMANIA
A news release from Eurojust on 23rd November reported the dismantling a network of 5 organised crime groups involved in cybercrime, money laundering and computer fraud in Romania and various other States. Since January 2018, Eurojust (he EU Judicial Co-operation Unit) has supported the national authorities by swiftly executing requests for co-operation, by accelerating the real-time exchange of information, and by providing regular updates on the case. Judicial and law enforcement authorities identified 93 suspects and brought them before the Romanian case prosecutor for further measures. The suspects managed to gain systematic control of the financial flows of 200 bank accounts that were fraudulently opened in Romania, 9 other European States and Mexico. The suspected fraudsters used the compromised bank accounts and computer systems to defraud more than 500 people of a total of €3 million.
TRANSPORTING CONTROLLED DRUGS AND PRECURSORS: UK GUIDANCE ON SECURITY MEASURES
On 23rd November, the Home Office published updated guidance on security measures for transporting controlled drugs and/or drugs precursors in the UK or internationally. It applies to companies undertaking their own transport and to companies providing transport or freight services as a ‘third party’.
STRONGER EU RULES ON NEW ILLEGAL DRUGS
On 23rd November, the EU announced that reinforced rules on new psychoactive substances (NPS) started applying across the EU from that date. The new rules are intended to allow the EU to respond much faster to the challenges posed by NPS. The new rules introduce shorter deadlines from the moment a dangerous drug is identified to the moment it is banned. The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) will continue to play a leading role in early warning and monitoring of NPS, and will initiate a scientific investigation into any new substance causing concern at EU level. NPS can cause extremely serious health and social harms, including acute intoxications and deaths. In 2017, 51 NPS were reported for the first time — a rate of around 1 per week, prompting the EU to ban a number of them.
UKRAINE’S PRIVATBANK TO APPEAL IN UK COURT CASE AGAINST FORMER OWNERS
Reuters reported on 23rd November that PrivatBank said it would appeal a London court’s conclusion that the court does not have jurisdiction over a case pitting PrivatBank against its former owners over alleged fraud.
ANGOLA PRESIDENT FIGHTS ‘WASP NEST’ OF CORRUPTION IN COUNTRY
News 24 on 23rd November reported that Angolan President Joao Lourenco compared the fight against corruption in his country to “touching a wasps nest”, a day after his predecessor Jose Eduardo dos Santos refuted allegations he emptied the state’s finances. The Angolan government has said it intends to voluntarily or forcibly return illegitimate funds to the country. Despite its oil wealth, Angola remains among the poorest countries in the world.
PORTUGAL PROMISES TO HELP ANGOLA RECOVER ‘UNEXPLAINED ASSETS’
Reuters on 23rd November reported that Portugal has promised to help the government of Angola repatriate funds obtained through corruption and deposited in Portugal. Many rich Angolans live or own property in Portugal, its former colonial master.
MOTOR FINANCE AND THE GROWTH OF IDENTITY FRAUD IN THE UK
Motor Trader on 23rd November published an blog post saying that, according to the 2018 Cifas Fraudscape Report, application fraud in motor finance increased by 47% between 2015 and 2017. It also says that the concern for car dealers is, unfortunately, this has vast potential to rise further as more consumers finance vehicles online and opt for PCP.
IRELAND: TWO-THIRDS OF INSURANCE CLAIMS WITHDRAWN WHEN FOLLOWED UP BY GARDAÍ
The Irish Examiner on 23rd November reported that two-thirds of people who were informed by Gardaí that their insurance claim was being investigated for being potentially fraudulent ended up withdrawing it.
BAHAMAS TO ENACT TAX LEGISLATION TO ADOPT INTERNATIONAL STANDARDS
Low Tax on 23rd November reported that EU and OECD officials have been presented with draft copies of the Commercial Entities (Substance Requirements) Bill, the Removal of Preferential Exemptions Bill, the Register of Beneficial Ownership Bill, and the Non-Profit Organizations Bill, which will be enacted by the end of November. These would reinforce the territory’s efforts to safeguard the financial sector and ensure the removal of the Bahamas from all tax “watch lists” in the shortest time frame possible.”
ONLY TAX-COMPLIANT FIRMS TO BE ALLOWED AUSTRALIAN GOVERNMENT CONTRACTS
Tax News on 23rd November reported that Australia is to require businesses seeking to tender for significant federal government procurement contracts (i.e. over AUS$4 million) to demonstrate their record of tax compliance from 1st July next year. They will need to provide a statement from the Australian Taxation Office (ATO) to show that they have a satisfactory tax record.
COUNTRIES STILL SELLING ARMS TO SAUDI ARABIA
On 23rd November, CNN published an article identifying those countries selling arms to Saudi Arabia, giving that several countries have announced arms embargoes. It notes that Finland also banned new arms sales to the UAE, which is part of the Saudi-led coalition in the conflict.
US POSTAL SERVICE FIXED A SECURITY WEAKNESS THAT ALLOWED ACCESS TO 60 MILLION OTHER USERS AND THEIR ACCOUNTS
Krebbs on Security on 21st November reported that the US Postal Service just fixed a security weakness that allowed anyone who has an account at usps.com to view account details for some 60 million other users, and in some cases to modify account details on their behalf. The problem was connected to a USPS initiative called “Informed Visibility,” which according to the USPS is designed to let businesses, advertisers and other bulk mail senders “make better business decisions by providing them with access to near real-time tracking data” about mail campaigns and packages.
SALES OF ‘LEGAL HIGHS’ MOVE TO STREETS FOLLOWING HEAD SHOP CLOSURES, REVIEW OF LAW REVEALS
The Pharmaceutical Journal on 21st November covered the report on the UK government review of the Psychoactive Substances Act.
FINANCIAL SCANDAL LOOSENS GRIP OF POLAND’S RULING NATIONALISTS
Euronews on 23rd November reported that Poland’s ruling nationalists were likely to survive a no-confidence vote in parliament, but have seen their grip on power loosened by allegations of extortion at the financial regulator. Jacek Jastrzebski, as been appointed as head Poland’s KNF financial regulator. He replaces Marek Chrzanowski, appointed by the nationalist government party, who resigned after the billionaire owner of a bank accused him of demanding payments of millions of dollars to a lawyer for “support”.
CARGOX LAUNCHES CARGOX SMART B/L™ BLOCKCHAIN PRODUCT FOR THE INTERNATIONAL TRANSPORTATION INDUSTRY
On 23rd November, Forwarder Law published an article on the above launch, saying that it marks the first practical commercial application of blockchain technology in the industry. CargoX says that the technology will replace transfer of paper documents in a transparent and secure environment. Records of ownership (for example), the article says, will be contained on the distributed ledger, transparent to all users, and not alterable without the agreement of the preceding blocks in the chain including the owner of the BL (bill of lading) who will have a unique product key. It will accommodate a variety of transport documents, including Switch Bills of Lading.
INDIA: WHAT CRACKDOWN? BANK FRAUDS UP 20% IN 2 YEARS
Livemint on 23rd November reported that banking frauds have continued to rise over the past 2 years despite a recent crackdown, according to Deloitte Touche Tohmatsu India LLP. Instances of fraud have increased 20% in the past 2 years, Deloitte said in its annual banking fraud survey.
MONGOLIA CORRUPTION: THE STRAW THAT BREAKS THE CAMEL’S BACK?
On 22nd November, a report from the Economist Intelligence Unit says that a corruption scandal involving a large number of officials from the ruling and main opposition parties has been unfolding since October. Further revelations of graft are likely in the coming months. The government’s response is likely to be slow and underwhelming. This will aggravate public discontent and raise the risk of large-scale protests. In any case, current levels of political stability and efficacy of policymaking have been seriously compromised. The latest major scandal to break is related to a financing initiative for private businesses, the SME Fund, which offers low-interest loans to small and medium-sized private companies. It has been funded publicly since 2000 and a total of $26.5 million was allocated to the fund in the 2018 budget.
IRISH MEP SLAMS APPLEBY FOR REFUSAL TO MEET TAX3 GROUP ON VISIT TO ISLE OF MAN
On its website, Sinn Fein on 23rd November said that Sinn Féin MEP Matt Carthy criticised the refusal of law firm Appleby to meet with MEPs during the visit by the European Parliament’s TAX3 special committee on financial crimes, tax evasion and tax avoidance to the Isle of Man that took place over 2 days.
UK: MAMMOTH FRAUD TRIAL ENDS IN JAIL FOR FRAUDSTERS IN £13 MILLION IMMIGRATION SCAM
Huffington Post on 23rd November reported that 5 men who ran a multimillion-pound tax and immigration scam have been sentenced to more than 31 years in jail after they claimed £13 million in tax repayments and facilitated around 900 bogus visa applications in an elaborate scheme that spanned 6 years. The fraud was discovered in 2011 and involved the use of 79 bogus companies to create fake documents that were then used by Bangladeshi nationals in fraudulent visa applications.
POST-BREXIT DATA FLOWS WITH THE CROWN DEPENDENCIES
On 23rd November, Appleby published an article outlining how data protection transfers are intended to be treated in the aftermath of the UK leaving the EU on 29th March.
AIR STEWARD JAILED AFTER BEING CAUGHT TRYING TO SMUGGLE £150,000 CRIMINAL CASH OUT OF THE UK
The NCA reported on 23rd November that 37-year-old Muhamad Aziz, from Selangor in Malaysia, was due to fly on a Malaysian Airlines flight from London to Kuala Lumpur when he was stopped. After scanning his bags, security staff at Heathrow Terminal 4 called in Border Force officers, who found £100,000 cash in a roller bag and another £50,000 in his black suit carrier.