7 December 2018
SOMALIA REMAINS THE HIGHEST BRIBERY RISK IN TRACE INDEX
On 7 December, the Wall Street Journal reported that business compliance group Trace International’s latest edition of its anti-bribery index, finding for the second consecutive year that Somalia poses the highest risk. The 2018 index found that New Zealand, Sweden, Norway, Denmark and Finland are among the least risky countries, while Somalia, Libya, Venezuela, Chad and Turkmenistan are among the most.
ASIAN EXPORT NATIONS SOFT ON CORPORATE BRIBES OF FOREIGN OFFICIALS
Nikkei Asian Review on 7 December reported that Asia’s largest export countries show scant interest in holding their companies accountable for bribing foreign civil servants, according to a recent report from Transparency International, a Berlin-based NGO: “Exporting Corruption — Progress Report 2018”. The paper showed that 5 countries and 1 territory practice “little or no” enforcement against companies suspected of paying off officials.
NEED HELP LAUNDERING MONEY? WHAT ABOUT BUYING YOUR OWN BANK?
On 7 December, an article on Medium saying that to further their bribery and laundering schemes, 3 Venezuelans had bought the Banco Peravia in the Dominican Republic for the purpose of laundering money and paying bribes to Venezuelan officials. A number of Peravia’s executives have been under investigation since 2015 for allegedly defrauding the bank. Meinl Bank Antigua was also said to have been purchased by the Brazilian construction company Odebrecht and reportedly used to move dirty money and pay bribes to officials in at least 12 different countries.
UK: PUBLISHED DETAILS OF DELIBERATE TAX DEFAULTERS
On 7 December, HMRC published the latest list of the details of deliberate tax defaulters, these are people who have received penalties either for deliberate errors in their tax returns or deliberately failing to comply with their tax obligations.
EU COMMISSION STEPS UP FIGHT AGAINST ILLICIT TOBACCO TRADE
On 7 December, the European Commission announced that it had adopted an Action Plan to enable the European Union to continue fighting illegal tobacco trade, a phenomenon that deprives it and its Member States of roughly €10 billion of public revenue every year. The Action Plan outlines concrete steps to address both the supply of and the demand for illegal tobacco products. The new Action Plan builds on the EU’s 2013 Strategy on fighting the illicit tobacco trade. With the recent entry into force of the WHO Framework Convention on Tobacco Control (FCTC) Protocol and the roll-out of the new EU traceability system, required under the Protocol, the Action Plan proposes further initiatives to ensure the effective fight against illicit tobacco products. They include actions to fully exploit the potential of the FCTC Protocol as a global instrument, to engage key source and trade countries, thus limiting the supply arriving at EU’s borders, and to raise awareness among consumers.
MYSTERY FUNDER IN BILLION-POUND OLIGARCH FISHING BATTLE
The Law Society Gazette on 7 December reported on a row in which 2 Russian oligarchs are wrestling for a stake in one of the world’s largest fishing businesses took another twist this week as lawyers for one of the men sought assurances over a mystery funder. Russian businessman Alexander Tugushev is against Vitaly Orlov in the High Court for a stake in the $1.5 billion Norebo Group. Orlov is challenging the jurisdiction of the English courts and resisting the continuation of a freezing order.
HOW DOES IRS DEFINE TAX EVASION ETC?
An article from Foodman CPAs and Advisors on 7 December starts by saying that the IRS Tax Crimes Handbook states that there are 2 kinds of tax evasion: the wilful attempt to evade or defeat the assessment of a tax, and the wilful attempt to evade or defeat the payment of a tax. The article looks at how the important terms are defined by the IRS, including what is an “attempt”.
KASSIM TAJIDEEN, BEIRUT MONEY LAUNDERER WORKING IN AFRICA AND LEBANON, AND WHO WAS FUNDING HEZBOLLAH, PLEADS GUILTY IN US
On 7 December, Kenneth Rijock in his blog reported this case and said that Tajideen and his co-conspirators allegedly moved over $1 billion through the US financial system, and he apparently has a long history of providing financial support to Hezbollah. he was named a Specially Designated Global Terrorist by OFAC in 2009. Rijock also provided illustrations of the networks used.
JERSEY: NEW LAWS DESIGNED TO PROTECT JERSEY’S INTERNATIONAL INTERESTS AND ENSURE IT IS ABLE TO RESPOND EFFECTIVELY TO THE POTENTIAL IMPACTS OF BREXIT
A news release from Jersey on 7 December reported on the successful enactment of the Taxation (Companies – Economic Substance) Law – which provides the means to fulfil the commitments made by the Government to the EU Code of Conduct Group in November 2017; the Sanctions and Asset-Freezing Law preserves Jersey’s power to impose EU sanctions and also allows Jersey to impose UK sanctions; and the EU Legislation (Customs Union, Import and Export Control) regulations that create the powers necessary to implement the landmark Jersey/UK Customs Arrangement, agreed in November, which establishes a customs union between Jersey and the UK.
EU-WIDE ACTION AGAINST BUYERS OF COUNTERFEIT MONEY ON THE DARKNET
Europol on 7 December reported on how law enforcement agencies performed actions against suspects who bought counterfeit euro banknotes on illegal platforms on the Darknet. These actions, coordinated by Europol, started on 19 November and the majority of interventions took place from 3 to 6 December. Almost 300 house searches were conducted in 13 different countries and 235 suspects were detained. Law enforcement also seized around 1,500 counterfeit euro banknotes.
IRELAND LEGISLATES FOR NEW CORPORATE CRIME AGENCY
Out-Law on 7 December published an article saying that a new agency with powers to investigate and prosecute cases of corporate crime is to be set up in Ireland, with the existing Office of the Director of Corporate Enforcement (the ODCE) will be replaced by a new Corporate Enforcement Authority (CEA).
ECONOMIC SUBSTANCE REQUIREMENTS IN THE CAYMAN ISLANDS
On 7 December, Appleby published an article saying that the Cayman Islands government has published draft legislation that will require certain Cayman Islands entities carrying on specified activities to have ‘adequate substance’ in the Cayman Islands. Any relevant entity that may be impacted by this legislation will wish to monitor these developments closely. The government of the Cayman Islands has been working closely with the EU Code Group to ensure that its concerns are adequately addressed.
AUTHORITIES IN COLOMBIA HAVE DISMANTLED SEVERAL INTERNATIONAL MONEY LAUNDERING ORGANISATIONS THAT EMPLOYED DRUG MULES FOR DIRTY MONEY FOR MEXICAN CARTELS
On 7 December, Insight Crime published an article saying that the operations provided further details on the relationship between criminal organisations in both countries. Authorities arrested 27 suspected members of 4 transnational money launder organisations for transporting money from Mexico into Colombia.
US GRAIN EXPORTER UNDER INVESTIGATION FOR ALLEGED BRIBERY OF MEXICO CUSTOMS OFFICIALS
On 7 December, Buckley Sandler reported that US-based agriculture company, CHS Inc., disclosed that it is co-operating with an investigation being conducted by the SEC and DoJ involving payments made to Mexican customs officials. The payments were made in connection with grain shipments crossing the Mexican border by train. CHS Inc is owned primarily by farmer and rancher co-operatives and has extensive operations in the energy sector in addition to agriculture.
BOGUS ISLE OF MAN FSA EMAILS
On 7 December, the FSA said that it had recently become aware that businesses in the Isle of Man have received emails purporting to be from the Financial Services Authority. These bogus emails have the heading styled, “December Sanctions Update – Payroll Providers” with the sender being listed as Isle of Man Financial Services Authority firstname.lastname@example.org
UK: FCA PROPOSING PERMANENT MEASURES FOR CFD AND BINARY OPTIONS
On 7 December, the FCA said that it is proposing rules to address harm to retail consumers from the sale of certain complex derivative products with the publication of 2 consultation papers. New rules would ban the sale, marketing and distribution of binary options to retail consumers; and restrict the sale, marketing and distribution of contracts for difference (CFD) and similar products to retail customers.
SEC HALTS ALLEGED INSIDER TRADING RING SPANNING 3 COUNTRIES
On 7 December, the SEC said that it has filed insider trading charges against an IT contractor and 2 others he illegally tipped with confidential client information that he stole while working in the Singapore branch of an investment bank. It also obtained a freeze of assets in 3 US brokerage accounts and a US bank account connected to the alleged trading.
IRELAND: REVENUE SEIZES HERBAL CANNABIS WORTH €1.36 MILLION AT DUBLIN PORT
A news release on 7 December announced that Irish customs during routine operations involving the deployment of Revenue’s mobile x-ray scanner and with the assistance of detector dog, Meg, Revenue officers in Dublin Port seized 68 kg of herbal cannabis with an estimated street value of €1.36 million. The drugs were found concealed in a consignment of goods which had arrived into Dublin Port originating in Spain.
GLOBAL WITNESS: MANAGEMENT OF DIAMOND INDUSTRY ‘TEST OF ZIMBABWE’S COMMITMENT TO ECONOMIC REFORM’
On 7 December, NGO Global Witness issued a briefing called “Leaving no stone unturned here”, saying that, 1 year on from the inauguration of President Emmerson Mnangagwa, management of Zimbabwe’s diamond industry is the litmus test of the new government’s commitment to economic reform, and calls on the Zimbabwean government and companies in the diamond industry to implement a raft of transparency measures, which are essential if the diamond industry is to realise its potential for the people of Zimbabwe.
CLEANING UP CLOSER TO HOME – WHY THE CROWN DEPENDENCIES NEED TO GO PUBLIC
On 4th December, NGO Global Witness published an article saying that, as ministers from the Overseas Territories will be sitting down with the FCO to figure out how they are going to follow through on the UK Parliament’s historic vote to require them to create public registers of the real owners of their anonymous companies, “what of the UK’s tax havens closer to home?”.
REPORT: CANNABINOIDS HAVE LIMITED IMPACT ON MS SYMPTOMS
On 3rd December, the Pharmaceutical Journal reported that cannabinoids have limited efficacy in improving the symptoms of multiple sclerosis (MS), authors of a systematic review and meta-analysis have concluded. Researchers used data from 17 randomised controlled trials looking at the effects of oral or oromucosal medicinal cannabinoids involving a total of 3,161 patients with MS. They describe the study as the most complete systematic review and meta-analysis of the effect of cannabinoids on MS.
BOEING CANCELS CONTROVERSIAL SATELLITE ORDER FUNDED BY CHINA
On 7 December, the Daily Caller reported that Boeing had decided to cancel an order for a satellite that uses sensitive technology used by the US military and was reportedly being funded by a state-owned Chinese financial firm – citing non-payment and saying it was a business decision. A Wall Street Journal article had revealed the web of financial transactions that skirted around US export laws, which would ban Boeing from selling satellites to China, and resulted in the Chinese government funnelling nearly $200 million to the project and obtaining a large stake of the company responsible for the satellite.
JAPANESE GOVERNMENT CONSIDERING A BAN ON GOVERNMENT PURCHASES OF EQUIPMENT FROM CHINESE VENDORS HUAWEI TECHNOLOGIES AND ZTE
RCR Wireless News on 7 December reported that it was considering the move with the aim of preventing intelligence leaks and cyberattacks. According to the reports, the Japanese government does not plan to specifically name Huawei and ZTE in the revision, but will put in place measures aimed at strengthening security that apply to these vendors. Australian authorities in August said it would prevent certain vendors from taking part in the roll out of 5G mobile networks across the country, effectively banning Chinese companies Huawei and ZTE from involvement, and UK’s BT Group said it was removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations.
SCOTTISH DIRTY MONEY CONVICTIONS ‘NOTABLY LOWER’
The Herald in Scotland on 7 December reported that Scotland convicts far fewer people under money-laundering laws than the rest of the UK, according to the FATF report on the UK. However, insiders in Scotland are not convinced that the comparison is fair – because Scottish prosecutors have other options for charging launderers and because they face a higher evidential bar, with the requirement for corroboration.
GERMAN REAL ESTATE MARKET A HOTBED OF MONEY LAUNDERING
Deutsche Welle on 7 December reported that about €30 billion of dubiously-sourced money was funnelled into German real estate in 2017. Transparency International is calling for a series of reforms to combat the problem.