3rd December 2018
JAPAN: NEW MEASURES PLANNED AGAINST GOLD SMUGGLING
NHK on 3rd December reported that officials are bracing for an expected rise in the number of cases ahead of a hike in the country’s consumption tax, set to go from 8% to 10%. People who bring gold into Japan are required by law to pay the tax to customs officials when they arrive. The amount is based on the value of the gold they are carrying. The government plans new rules from next year requiring jewellery dealers to check the identification of sellers and keep copies of their driver’s licences, passports and other ID.
G20 NATIONS AGREE TO REGULATE CRYPTO IN LINE WITH FATF RULES
Coingeek and others on 3rd December reported that members of the G20, at the conclusion of their meeting in Buenos Aires, have signed a joint declaration that establishes, among other things, the adoption of regulations for cryptocurrencies, in line with standards set forth by FATF.
TRINIDAD & TOBAGO PASSES LAW TO MEET OECD DEMANDS, BUT OMITS 5 IMPORTANT CLAUSES
Trinidad and Tobago Newsday reported that the country’s parliament passed a weakened Bill that giving the country some breathing room as it tries to meet deadlines for international tax regulation compliance. The government will send the amended Bill to the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, letting it know it was the best that could have been done, and ask if it meets requirements. The Government had removed 5 clauses from the Bill, which focused on demands from the Global Forum on Transparency and Exchange of Information for Tax Purposes, which requires sharing information between its 145 member countries. The Bill, with the clauses, had been a copy of the US Foreign Account Tax Compliance Act (FATCA). November 30th was also the deadline from FATF for the country in respect of a change in law in respect of terrorist financing and, in January, a group of evaluators from other member countries will review Trinidad & Tobago’s progress. The Bill is one of 3 that need to be enacted – the Income Tax (Amendment) Bill, the Mutual Administrative Assistance in Tax Matters Bill, and the Tax Information Exchange Agreements Bill.
4th EU MONEY LAUNDERING DIRECTIVE TRANSPOSED: KEY REQUIREMENTS FOR INVESTMENT FUNDS IN IRELAND
On 29th November, law firm Arthur Cox published an article saying that the 4MLD was finally transposed into Irish law with the enactment on 14th November of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018. From 26th November, amendments incorporate the requirements of 4MLD into the existing legislative framework, and the amendments which are of key relevance to funds (and their administrators) include the introduction of requirements around business risk assessments, customer due diligence and transaction monitoring. The article provides some detail of the changes.
GERMAN PROSECUTORS PRESS CRIMINAL CHARGES AGAINST AN EMPLOYEE FOR SENDING TRADE SECRETS TO CHINA
Winston & Strawn LLP on 29th November published an article saying that German prosecutors recently indicted a former employee of German chemicals manufacturer, Lanxess, for stealing trade secrets and exploiting them in China.
UK: COURT OF APPEAL RULES IN FAVOUR OF MULTINATIONAL PARENT COMPANY (AGAIN)
On 30th November, Penningtons Manches published an article saying that, the Court of Appeal has recently ruled for the second time, in AAA & others v Unilever Plc and Unilever Tea Kenya Limited, that an English multinational parent company cannot be held liable for acts of its foreign-registered subsidiary. It points out that this is the third judgment handed down in the past 12 months on this subject, with 2 of the 3 sets of claimants failing to convince the Court of Appeal either that a duty of care should be imposed on the parent company, or that (consequently) the English courts should have jurisdiction. The article comments that it is clear that in order to establish such a duty, the general principles of the law of tort must be satisfied and it suggests that companies would be wise to impose group-wide policies in a manner such that each subsidiary implements the policies through its own management structure, in order to avoid the parent company effectively taking control of and responsibility for individual subsidiaries, which could inadvertently lead to a duty of care being imposed on the parent company.
THE CFIUS-LIKE EU FDI SCREENING MECHANISM
On 29th November, Sheppard Mullin published an article about the harmonised screening framework of foreign investments into the EU under Regulation 2017/0224 which has been agreed upon by the EU Parliament, the Council and the Commission. The Regulation does not require Member States to implement a foreign investment screening mechanism, but where such a mechanism exists or is to be adopted at the Member State level, the Regulation aims to ensure that it meets certain basic screening requirements
HOW DO AUSTRALIAN FEDERAL PROSECUTORS INVESTIGATE WHITE COLLAR CRIME?
Nyman Gibson Miralis on 28th November published an article saying that the Commonwealth Director of Public Prosecution’s (CDPP) annual report includes details of how its Commercial, Financial and Corruption Practice Group prosecutes serious financial and white-collar crime, with a focus on offences involving corporations, financial markets and services, large-scale tax fraud, and bribery and corruption of Australian and foreign officials. The report provides some insight into how the Practice Group conducts its investigations, and provides some recent high-profile case examples.
DANSKE CHARGES RAISE QUESTIONS ON RISK OF SANCTIONS BREACHES
Bloomberg on 2nd December said that as the bank was being investigated for money laundering, a key question remains whether it was used by anyone on US sanctions lists. It has so far said there is no evidence sanctions were breached. But it is also acknowledged that the risk cannot be ruled out.
EXPLOSIVES, POISONOUS GAS AND DRONES SEIZED FROM MILITANTS IN TUNISIA
Defence Web on 30th November reported that Tunisia broke up 4 Islamist militant cells and seized explosives, poisonous gas and drone aircraft. Authorities estimate 3,000 Tunisians joined Islamic State and other jihadist groups in Iraq, Syria and neighbouring Libya, while high unemployment has stoked unrest in southern and central areas.
HORSE RESEARCHER JAILED FOR MULTIPLE FRAUDS
Accountancy Daily on 3rd December reported that a woman from Cheshire who set up a specialist horse research company has been jailed for 4½ years after she defrauded a series of organisations to clear her debts. She dishonestly secured £297,000, telling the leasing company she was buying camera equipment not from the supplier in the US but from another company that she had falsely set up. The Insolvency Service said she did this to make the leasing company believe that this was a valid transaction for the larger amount. Instead of paying the full amount due to the camera supplier, she used the money to clear some of her debts, including mortgage payments. She did pay back more than £128,000 to the leasing company but when she stopped making payments the leasing company applied to have her made bankrupt in 2012.
US PORTS EXPRESS RELUCTANCE TO PAY FOR NEW CUSTOMS FACILITIES
Customs Today on 3rd December reported that the American Association of Port Authorities has criticised US Customs and Border Protection (CBP) policies requesting port authorities to build and incur the costs of staffing facilities at ports.
13 ARRESTED IN NETHERLANDS FOR EXPORTING ECSTASY TO SCANDINAVIA
Customs Today on 3rd December reported that police arrested 12 people in the Netherlands for involvement in the production and export of drugs to Scandinavia, and another suspect was arrested in Belgium. One of the suspects was caught at an ecstasy lab and in that building the police found 26 kg of ecstasy pills, 2 machines that can make 18,700 pills per hour, and raw materials for the drug. During the searches in the Netherlands, a total of almost a million euros in cash was found, and police also confiscated trucks, luxury cars and a money counting machine.
NORWAY REGULATOR FINDS POOR AML CONTROLS AT DNB BANK
KYC 360 on 3rd December reported that Norway’s Financial Supervisory Authority has reportedly found that DNB Bank has insufficient money laundering controls, following an audit of the bank.
INTERNATIONAL ARREST WARRANT ISSUED FOR FORMER BURUNDI PRESIDENT
The BBC reported on 2nd December that the African Union has warned Burundi against moves to jeopardise peace efforts after an international arrest warrant was issued for ex-leader Pierre Buyoya and 16 other officials. They are accused of being behind the 1993 assassination of the country’s first elected Hutu president which triggered a brutal ethnic civil war. Buyoya – who has seized power twice in the last 3 decades with the backing of the army – is described as a respected diplomatic figure on the continent.
WTO LAUNCHES NEW PUBLICATION: “CAN BLOCKCHAIN REVOLUTIONISE INTERNATIONAL TRADE?”
On 3rd December, BIFA reported that the World Trade Organisation has published a new book which contains a basic explanation of the Blockchain technology and goes on to analyse the relevance of its relevance for trade facilitation by reviewing its current and potential application in the various areas covered by WTO rules. It provides an insight into the extent to which the Blockchain technology could affect cross-border trade in goods and services and in intellectual property rights. It also discusses various challenges to the wider and more significant impact of Blockchain on international trade. It argues that the transportation and logistics sector constitutes a fertile ground for Blockchain implementation due to the high number of actors involved and could be deeply transformed.
The publication is available at –
STRONGER EU RULES CRIMINALISING MONEY LAUNDERING ENTER INTO FORCE
On 3rd December, the EU reported that the new Regulation to counter money laundering by criminal law enter into force across the EU. The new rules will ensure that dangerous criminals and terrorists face equally severe penalties for money laundering wherever they are in the EU, with a minimum term of imprisonment of 4 years. Member States now have 24 months to implement the new rules into national law and notify the Commission accordingly.
REACH: NEW CRITERIA HELPS COMPANIES BETTER ASSESS SAFETY AND IMPACT OF NANOMATERIALS
On 3rd December, the EU reported that the European Commission has adopted the revision of several Annexes of REACH – the EU Regulation for the registration, evaluation, authorisation and restriction of chemicals. It clarifies the registration requirements with regard to nanomaterials. Nanomaterials are chemical substances in a particular form (“nanoform”) with special features at the “nanoscale” between 1 nm and 100 nm. The new registration requirements for nanomaterials will apply as of 1st January 2020.
UK: CRIMINAL INVESTIGATIONS INTO COMPUTER HACKING UP 14% IN ONE YEAR
Information Age on 3rd December reported that a new research paper: “Hack Attack: Police Under Pressure”, has revealed that 14 police forces have launched a total of 2,547 investigations into reports of computer and social media hacking over the last 2 financial years. Cleveland Police reported the most incidents of hacking, with a total of 356 reports recorded. This was followed by Nottinghamshire Police which reported 246 cases of hacking.
SFO HAILS CONCLUSION OF FIRST DPA
The Law Society Gazette on 3rd December reported that the UK’s first deferred prosecution agreement (DPA), with Standard Bank and agreed in 2016, has successfully concluded. The bank had been ordered to pay nearly $26 million in fines and disgorgement of profits, and pay $6 million in compensation to the government of Tanzania. The bank also agreed to commission an external report on its anti-bribery and corruption controls, and to recommend improvements to strengthen its controls, with regular reports to the SFO.
IRELAND AND MALTA TO CLOSE ‘SINGLE MALT’ TAX LOOPHOLE
Low Tax on 3rd December reported that the tax authorities of Ireland and Malta have signed a Competent Authority Agreement in a bid to prevent the use of the so-called “Single Malt” tax planning structure – involving a company incorporated in Ireland but managed and controlled in Malta deemed to be resident in Malta. Such an Irish-incorporated company will be deemed resident in Ireland and the relevant payments to it will come within the charge to Irish corporation tax.
PANAMANIAN ATTORNEY EXTRADITED TO PANAMA FROM DOMINICAN REPUBLIC ON MONEY LAUNDERING CHARGES
On 3rd December, Kenneth Rijock in his blog reported that José Augusto Stoute Arias had been arrested under an Interpol warrant. He is described as being from a prominent Panamanian family.
SANCTIONS REVIEW PROCEDURE (EU EXIT) REGULATIONS 2018
These regulations, SI 2018/1269, come into force on 7th January and are concerned with where a request is made for a review, variation or revocation of a designation or ship specification that has been made under the Sanctions and Anti-Money Laundering Act 2018, and makes provision for the procedure applicable to such requests.
NEW GEO-BLOCKING RULES TAKE EFFECT IN THE EU
Out-Law on 3rd December reported that new rules which prevent online sellers from restricting cross-border sales based on the nationality, residence or place of establishment of their customers have come into force across the EU – although each country is responsible for applying its own enforcement mechanisms.
AUSTRALIA PASSES LEGISLATION TARGETING MODERN SLAVERY
Out-Law on 3rd December published an article saying that legislation requiring large businesses operating in Australia to report on modern slavery risks in their supply chains has been passed by both houses of the federal government. Similar to the UK’s Act, once commenced the Modern Slavery Bill 2018 will apply across Australia.
NETHERLANDS TIGHTENS ARMS EXPORT RULES FOR SAUDI ARABIA, EGYPT AND UAE OVER YEMEN WAR
On 29th November, NRC in the Netherlands reported that the country was tightening export controls on supplies to the 3 countries because of concerns over use of weaponry in the war in Yemen.
BELGIUM: 102 RECORDED THEFTS OF FIREARMS AND/OR EXPLOSIVES FROM POLICE STOCKPILES IN BELGIUM 2013-2017
HLN on 3rd December reported that in 96 cases the theft was from a police station, the other 6 cases involved a police vehicle.
ROBBERS TARGET SHIPS AT VENEZUELAN PORTS
Hellenic Shipping News on 3rd December reported that robbers are targeting vessels anchored in ports in Venezuela, and attacks on ships in ports in the South American country have been growing as the nation struggles with a deteriorating economy and civil unrest. Vessels at anchor have been particularly targeted by robbers at Puerto José and Puerto La Cruz, and fears also exist for the safety of crew when ashore.
DETECTING AN INCREASE IN URANIUM MINING AND MILLING IN INDIA AND PAKISTAN
On 3rd December, the James Martin Center for Nonproliferation Studies published an Occasional Paper about remote sensing techniques that can allow open-source analysts to monitor and track front-end uranium-production activity in India and Pakistan. It says that analysis shows that both of these states are expanding existing uranium mines and mills and funding exploratory research into new sites for uranium exploitation. This indicates a continued reliance, by both India and Pakistan, on domestic uranium production, and leads to greater understanding of these states’ nuclear capabilities. This paper is part of an ongoing project to track uranium production in Asian states that possess nuclear weapons.
“YATES MEMO”: DOJ ANNOUNCES REVISIONS TO POLICY ON CORPORATE CO-OPERATION
On 3rd December, Wilmer Hale reported that in a speech on November 29th, Deputy Attorney General Rod Rosenstein announced a softening of the US DoJ policy on giving credit for co-operation in corporate prosecutions. Since the “Yates Memorandum” of 2015 the DoJ had followed an “all or nothing” policy that barred corporate defendants from receiving co-operation credit if they failed to provide information on all employees who were involved in criminal conduct. The new arrangement allows prosecutors to give credit even where companies provide information only on those employees who were “substantially involved in or responsible for the misconduct at issue” and “provide . . . all relevant facts relating to that misconduct”. It says that, according to Rosenstein, the aim of the DoJ is to have a policy that works in the real world of limited investigative resources. The law firm suggests that the policy shift may also hasten the resolution of protracted criminal investigations.
FinCEN AND FEDERAL BANKING AGENCIES ISSUE JOINT STATEMENT ENCOURAGING INNOVATIVE INDUSTRY APPROACHES TO AML COMPLIANCE
On 3rd December, a news release advised that a joint statement had been issued to encourage banks and credit unions to take innovative approaches to combating money laundering, terrorist financing, and other illicit financial threats. It recognises that private sector innovation, including new ways of using existing tools or adopting new technologies, can help banks identify and report money laundering, terrorist financing, and other illicit financial activity by enhancing the effectiveness and efficiency of compliance programmes. Therefore, the joint statement encourages banks to consider, evaluate, and, where appropriate, responsibly implement innovative approaches in this area, and also makes clear that regulators are committed to continued engagement with the private sector on this issue.
The joint statement itself is at –
MODERNISING SHIP REPORTING SYSTEMS – EU COUNCIL AGREES ITS STANCE ON A MARITIME SINGLE WINDOW
On 3rd December, a news release from the EU advised that the EU Council had reached a general approach on a proposal to bring together all reporting formalities associated with a port call, under a system called a European maritime single window. Every time a ship stops at a port, it needs to fulfil a number of reporting obligations. This will address the issue of numerous, non-harmonised reporting obligations by linking the existing national maritime single windows together in a co-ordinated and harmonised way. The reform will improve interoperability between various systems, making it much easier to share and reuse data. The text constitutes the Council’s position for negotiations with the European Parliament – both institutions must agree on the final text.
FORBIDDEN STORIES CONTINUES THE WORK OF MURDERED MALTESE JOURNALIST
The International Press Institute on 3rd December reported how the Daphne Project, which brings together journalists from around the world to continue Daphne Caruana Galizia’s work, and was the first initiative of Forbidden Stories, a global network of journalists ready to take over the work of colleagues who have been threatened, imprisoned or killed. A new phase has expanded the work of the group from the Daphne Project, and highlights killings of Ecuador, Mexico journalists
URUGUAY DENIES ASYLUM TO FORMER PRESIDENT OF PERU
Telesur on 3rd December reported that Uruguay did not accept Alan Garcia’s argument that he is being politically persecuted and urged the former Peruvian president to leave its embassy in Lima. Garcia is accused of committing “illicit agreements” during the bidding process of Line 1 of Lima’s Metro favouring the Brazilian construction firm Oderbrecht during his last presidential term (2006-2011).
IRISH REVENUE SEIZE OVER 8 MILLION CIGARETTES WORTH ALMOST €4 MILLION IN DUBLIN PORT
A news release from the Revenue Commissioners on 3rd December reported that, as part of routine operations, Revenue officers seized over 8 million smuggled cigarettes that had arrived into Dublin Port. The cigarettes were discovered with the assistance of Revenue’s mobile x-ray scanner when officers conducted an examination of freight, which arrived into Dublin from Rotterdam.
ISLAMIC STATE KHORASAN’S NETWORK AND ORGANISATIONAL CAPACITY IN AFGHANISTAN AND PAKISTAN
On 3rd December, the Counter Terrorism Center published a report about this terrorist group, saying that, in the years following its official formation in January 2015, the Islamic State Khorasan (ISK) has conducted some of the most devastating attacks in the Afghanistan-Pakistan region. But the report asks – what exactly is ISK? What are the broader contours of ISK’s lethality, targets, and tactics in Afghanistan and Pakistan? More broadly, what explains ISK’s demonstrated ability to survive and thrive in the Afghanistan/Pakistan region, and what do its operational trends and alliances collectively tell us about its future trajectory?