10 December 2018
AUSTRALIA: 2 MEN CLEARED OVER $2.25 MILLION TOBACCO SMUGGLING PLOT
On 10 December, 9 News reported that the son of “colourful” nightclub owner, John Ibrahim, has been cleared of any involvement in an alleged international tobacco smuggling plot. He had allegedly handed $2.25 million to an undercover police officer in a car. The magistrate agreed that while he was in the car there was no evidence he knew the money was in the 2 bags in the car and no evidence of how they got there.
ANOTHER SPRAWLING MONEY LAUNDERING AND BRIBERY SCHEME INVOLVING VENEZUELA – THE CASE AGAINST THE FORMER NATIONAL TREASURER OF VENEZUELA, ALEJANDRO ANDRADE CEDENO
National Law Review on 9 December provided an article detailing the case against the former national treasurer of Venezuela, Alejandro Andrade Cedeno. Andrade pleaded guilty last year to a single-count information charging him with conspiracy to commit money laundering. Although he retired to Florida after having served as the head of the Venezuelan treasury, Andrade did not begin his career in the world of high finance – instead his climb to power and wealth began as a bodyguard to former President Chavez.
JAPAN BANS HUAWEI AND ITS CHINESE PEERS FROM GOVERNMENT CONTRACTS
Nikkei Asian review on 10 December reported that Japan had followed the US lead with Japan’s central government ministries and Self-Defense Forces adopting guidelines that effectively bar them from buying personal computers, servers and telecommunications equipment from Huawei Technologies and other Chinese companies. The guidelines, which do not single out any company by name, are designed to prevent leaks of sensitive information.
US TO STANDARDISE CONTAINER DETENTION AND DEMURRAGE PRACTICES
Loadstar on 10 December reported that US shipping regulatory body, Federal Maritime Commission (FMC), is to introduce revised rules covering container detention and demurrage practices across the country after a commissioner released the results of an 8-month investigation into how carrier and container terminal apply the charges.
CHINA’S NEW LAW ON JUDICIAL ASSISTANCE IN CRIMINAL MATTERS WILL IMPACT INVESTIGATIONS
On 7 December, an article from Herbert Smith Freehills says that China recently enacted a new law that will impact foreign authorities, corporations and individuals involved in overseas criminal enforcement actions. The Law on International Judicial Assistance in Criminal Matters allows Chinese authorities to block requests for documents, testimony and assets requested in international criminal investigations; and introduces new procedures governing how and when assistance should be provided with approval from a “Chinese competent authority” before a Chinese entity or individual provides assistance to a foreign body or person. The law’s stated goal is simultaneously to curb corruption and stem extra-territorial claims by foreign authorities, some of whom approach Chinese counterparts/contacts direct for evidence.
REPORT: £250 BILLION FRAUD IN UK TAX HAVENS GREATER SUM THAN 20 YEARS OF UK FOREIGN AID BUDGET
The Common Space website reported on 10 December that a Transparency International report has identified over £250 billion in fraudulent funds directed through UK tax havens, more than over 20 years of the UK Government’s foreign aid budget. The report, by Transparency International, examined the UK’s overseas territories, many of which act as tax havens for companies around the world to launder illegally obtained funds through. There are said to be “£250 billion worth of funds diverted by rigged procurement, bribery, embezzlement and the unlawful acquisition of state assets across 79 different countries”. The report identified 1,107 companies registered in British Overseas Territories involved in 237 cases of economic crime, 90% of which were on the BVI.
2 NUNS STOLE $500,000 FOR TRIPS TO LAS VEGAS – BUT THE CHURCH DOESN’T WANT THEM PROSECUTED
In its 11 December edition, the New Zealand Herald reported a vast fraud that was allegedly conducted by Sister Mary Margaret Kreuper and Sister Lana Chang, another nun and longtime school teacher. School officials recently told parents the 2 nuns stole around $500,000 from the school. The school said that the women, reportedly best friends, used the pilfered funds on trips and casino visits. The complex feelings working through the church are compounded by the archdiocese’s refusal to pursue criminal charges against the nuns. There remains a question about whether Kreuper and Chang will face legal consequences. Because the order is willing to repay the lost funds, the archdiocese has decided not to pursue criminal charges against the pair.
EX-HEAD OF EGYPT’S CUSTOMS AUTHORITY FACES GRAFT CHARGES
Reuters reported on 10 December that Gamal Abdelazim, the former head of Egypt’s Customs Authority, has been referred for trial in a criminal court on charges of accepting bribes to facilitate entry of goods without custom duties.
BRITISH MAN CHARGED IN ALLEGED £239 MILLION INVESTMENT FRAUD
The Belfast Telegraph on 10 December reported that Pavandeep Bakhshi, 41, has been charged in the US for allegedly participating in a $300 million scheme to defraud investors in a deal to take a London-listed healthcare company private. The DoJ alleges that Mr Bakhshi, along with Parmjit “Paul” Parmar, Sotirios “Sam” Zaharis, and Ravi Chivukula allegedly used fraudulent methods to inflate the value of the AIM-listed healthcare services company and trick others into believing that it was worth substantially more than it actually was.
UK COURT ORDERS INDIAN TYCOON MALLYA TO BE EXTRADITED ON FRAUD CHARGES
Reuters on 10 December reported that Indian tycoon Vijay Mallya should be extradited from Britain to India to face fraud charges resulting from the collapse of his defunct Kingfisher Airlines.
IRELAND: COUPLE TO VACATE HOUSE DEEMED BY COURT TO BE PROCEEDS OF CRIME
The Irish Times reported on 10 December that a couple – Kenneth Carpenter and Elaine Byrne – have agreed to vacate a property in west Dublin which the Criminal Assets Bureau claims was acquired with the proceeds of crime.
FORMER MALAYSIA PRIME MINISTER DETAINED FOR CORRUPTION
Telesur reported on 10 December that US officials say former Malaysian Prime Minister, Najib Razak, skimmed $4.5 billion from a public fund, laundering billions in real estate and luxury goods as part of the 1Malaysia Development Berhad (1MDB) scandal. The former prime minister may be faced with an additional 38 charges of corruption, including money laundering and abuse of power when he allegedly committed between 2009, when Razak founded 1MDB, and the end of his tenure in 2018.
UK EXPORT CONTROL TRAINING SCHEDULE TO MARCH 2019
On 10 december, the UK Department for International Trade published the schedule for export control training sessions in January-March 2019. These training events are aimed at exporting and trading companies of all sizes, from the sole trader to the multinational. They cater for a wide range of knowledge levels and exporters can choose the Learning Path that suits them.
REFORM OF UK LIMITED PARTNERSHIP LAW – RESPONSE TO CONSULTATION
On 10 December, the Department for Business, Energy and Industrial Strategy published the official response to the submissions in the consultation on reforms of the law on limited partnerships. The government response sets out a range of proposals, including the tightening of registration requirements for limited partnerships; requiring limited partnerships to demonstrate a firmer connection to the UK; increasing transparency requirements; and enabling the Registrar to strike from the register limited partnerships which are dissolved or which are no longer carrying on business.
NEW MEASURES TO TACKLE INTERNATIONAL MONEY LAUNDERING USING LIMITED PARTNERSHIPS
On 10 December, the Department for Business, Energy and Industrial Strategy published a news release detailing a package of transparency and anti-corruption measures to address the abuse of Scottish Limited Partnerships (SLP) that has been linked to money laundering; measures will bring greater transparency and more stringent checks to those registering a Limited Partnership; and annual filing requirements will ensure Companies House has accurate information on all UK limited partnerships.
AUSTRALIA AND OTHERS’ NEW TAX OBLIGATIONS FOR OFFSHORE SUPPLIES OF LOW-VALUE GOODS
Customs Today on 10 December reported that Australia, as well as many other jurisdictions including New Zealand and Switzerland, are implementing new rules regarding the application of the goods and services tax (GST) or VAT to the supply of low-value goods to consumers. In Australia, the ATO is now taking compliance action with all available enforcement powers. Increased media attention regarding potential non-compliance may also increase ATO scrutiny.
DPA AND ASSOCIATED GUILT: HOW THE RECENT SFO TESCO CASE COLLAPSED
In an article from TLT Solicitors on 7 December, it is said to be now apparent that an admission of guilty by a corporate body does not necessarily result in guilt for individuals.
AUCTION HOUSE HAS FAILED TO ESTABLISH LITIGATION PRIVILEGE OVER CORRESPONDENCE WITH EXPERTS ABOUT WHETHER OR NOT A PAINTING IT SOLD WAS COUNTERFEIT
Out-Law on 7 December reported that an auction house has failed to establish litigation privilege over correspondence with experts about whether or not a painting it sold was counterfeit, in a case brought by the seller of that painting. the correspondence failed the ‘dominant purpose’ test, in that it was not created for the sole or dominant purpose of conducting litigation. The correspondence had instead been created for two purposes: deciding whether the contract for sale should be rescinded on the grounds that the painting was counterfeit, which was a commercial, rather than a litigation, purpose; and preparing for related litigation.
BERMUDA ECONOMIC SUBSTANCE LEGISLATION
On 10 December, Appleby published an article about newly-tabled legislation from Bermuda. Like their counterparts in BVI, Cayman, Guernsey, Jersey and Isle of Man, Bermuda has been working closely with the EU Tax Code of Conduct Group to ensure that those concerns are adequately addressed. As a result of this engagement, a Bill entitled the Economic Substance Act 2018 was tabled on 7 December.
ODEBRECHT PERU AGREES TO PLEA DEAL WITH PERUVIAN AUTHORITIES OVER BRIBERY SCANDAL
Baker McKenzie on 10 December reported that the Peruvian arm of the Brazilian company has signed a deal with Peruvian authorities to pay a multimillion dollar fine that will allow it to continue operating in the country in return for providing evidence about officials it bribed – with £182 million (or more) said to be payable.
NEW NAMING AND SHAMING RISK FOR UK BUSINESSES PUBLISHING THEIR 2018 MODERN SLAVERY STATEMENTS
Eversheds Sutherland on 10 December reported that the UK Government is increasingly concerned that “…too many [businesses] are still failing to meet their basic legal obligations” when it comes to tackling modern slavery in supply chains. Over the last few months it has stepped up its pressure on companies, stating its intention to name and shame non-compliant employers and to strengthen existing legislation. In the article the firm considers recent developments and how business should respond.