OTHER THINGS YOU MAY HAVE MISSED – DECEMBER 12

12 December 2018

GUIDANCE ON CONTRACTUAL SANCTIONS CLAUSES IN COMMERCIAL MARITIME AGREEMENTS

Wikborg Rein on 12 December published an article saying that the High Court recently considered the wording “exposure to sanctions” and ruled that the underwriters of a marine insurance policy could not rely on that wording to avoid a claim on the basis of a “risk of exposure” to the US-Iran sanctions.  There would need to be an actual prohibition on paying the claim in question.  As with any clause that exempts a party from what would otherwise be its contractual obligations, sanctions exclusion clauses must be clearly worded and provide for the consequences of a breach.  This judgment deals with a number of key points for drafting effective sanctions exclusion clauses in commercial maritime agreements.

https://wr.no/en/news/news/guidance-on-drafting-and-interpreting-contractual-sanctions-clauses/

COMPENSATION ORDER MADE BEFORE CONFISCATION PROCEEDINGS WERE COMMENCED AND CONTRARY TO RULE THAT IF CONFISCATION PROCEEDINGS ARE POSTPONED, THE COURT MUST NOT MAKE CERTAIN SORTS OF FINANCIAL ORDERS

On 12 December, law chambers 6KBW published a report on an appeal where the issue was whether a compensation order, made before confiscation proceedings were commenced and contrary to section 15(2) of the Proceeds of Crime Act 2002, was rendered a nullity.  The Court held that it was not.

https://blog.6kbw.com/posts/weekly-digest-12-december-2018

STRENGTHENING NATIONAL AND INTERNATIONAL PLUTONIUM MANAGEMENT APPROACHES

A paper from the Middlebury Institute on 7 December is concerned with issues relating to separated, or unirradiated, plutonium in civilian nuclear programmes, i.e. plutonium that has been chemically separated from spent nuclear reactor fuel by reprocessing but has not been reintroduced into a nuclear reactor after separation and subjected to further irradiation.  Efforts to limit the spread of reprocessing in the civilian sector emerged in the 70s. Saying that current safeguards are insufficient, and even if diversion of plutonium is detected immediately the plutonium could be weaponised too quickly for effective preventive measures, the paper recommends steps to address the risks posed by existing reprocessing programmes and stocks as well as ways to discourage potential new programmes.

https://www.nonproliferation.org/op-42-the-other-fissile-material-strengthening-national-and-international-plutonium-management-approaches/

WAIVE PRIVILEGE TO SHOW CO-OPERATION – THE LATEST GUIDANCE FROM THE SFO

On 10 December, MacFarlanes published an blog post saying that various senior members of the SFO have been giving guidance on how companies can go about agreeing deferred prosecution agreements (DPA) and co-operating properly with the SFO when subject to investigations.  This included reminding companies that they will receive credit for waiving privilege over factual accounts and sharing them with the SFO voluntarily.

https://blog.macfarlanes.com/post/102f72c/waive-privilege-to-show-co-operation-the-latest-guidance-from-the-sfo

US SANCTIONS ON VENEZUELA

On 11 December, Bracewell LLP published an article on the sanctions that have been imposed by the US on Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state‑owned national oil company which accounts for about 98% of Venezuela’s export revenues.  The sanctions on PDVSA are less stringent than those on the Iranian or Russian energy sectors, it says, but still merit consideration.

https://bracewell.com/insights/international-sanctions-and-energy-sector-–-part-3-venezuela

WHY SINGAPORE’S PROPOSED IVORY BAN MAY NOT SOLVE PROBLEM OF ILLEGAL TRADE

An article on Today Online on 12 December discussed the proposed ban, the author arguing that a ban on ivory has been tried by other governments before, with limited success. Reporting by the BBC is said to show that, despite an international ban on ivory trade, elephant poaching has persisted.  He says a ban reduces the supply on the market without necessarily changing the underlying demand for it, therefore raising perceptions of scarcity and driving up prices. When prices are high, poachers, especially in poor countries, remain highly incentivised to poach and this further fuels black market sales.

https://www.todayonline.com/commentary/why-banning-ivory-may-not-solve-problem-illegal-trade

ONLINE MARKETPLACES TO BE LIABLE FOR MISSING VAT IN EU

Accountancy Daily on 12 December reported that the European Commission has announced new measures, due to come into force in January 2021, which will allow for a smooth transition to an updated VAT structure for dealing with online selling and will make online marketplaces liable for VAT not recovered by tax authorities.

https://www.accountancydaily.co/online-marketplaces-be-liable-missing-vat

http://europa.eu/rapid/press-release_MEX-18-6789_en.htm

TRACE PODCAST: MEASURING CORRUPTION

In the latest TRACE podcast, Robert Clark, Manager of Legal Research at TRACE, discusses the challenges associated with measuring something as widespread and varied as corruption and refinements to the 2018 TRACE Bribery Risk Matrix after another year of research.

https://www.traceinternational.org/bribe_swindle_or_steal

ARGENTINA, PANAMA, PARAGUAY AND URUGUAY TO SHARE TAX INFORMATION

International Investment on 12 December reported that the countries have agreed to “consider the possibility” of making a wider use of the information provided through exchange of tax information channels for other law enforcement purposes.  The article says that the declaration, signed by participating ministers on November 19 in Uruguay, also sets forth that these 4 countries would also carry out a self-assessment.

https://www.internationalinvestment.net/news/4000172/argentina-panama-paraguay-uruguay-share-tax-information

ISLE OF MAN LINK TO FIRST PANAMA PAPERS PROSECUTION IN US

IOM Today on 12 December reported on Isle of Man links, saying that the indictment alleges that one of those accused, a Panamanian attorney who worked for Mossack Fonseca, opened 2 offshore accounts in the Isle of Man for a client.  These accounts were nominally held by offshore shell companies formed by Mossack Fonseca and which conducted ’no real operations’.

http://www.iomtoday.co.im/article.cfm?id=44457&headline=Manx%20link%20to%20Panama%20Papers%20prosecution&sectionIs=NEWS&searchyear=2018

EU MONEY LAUNDERING AND TERRORIST FINANCING: COUNCIL ACTION PLAN 2018

Eversheds Sutherland on 11 December published an article saying that, on 28 November, the EU Council agreed an action plan, and this article  examines a number of the short-term non-legislative actions that will be carried out over the course of the next year.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Fraud_and_financial_crime/Money_Laundering_and_Terrorist_Financing-The_Council_s_Action_Plan_2018

BRITAIN FREEZES BANK ACCOUNT LINKED TO AZERBAIJANI LAUNDROMAT

Reuters on 12 December reported that British investigators have frozen a bank account linked to a multi-billion dollar Azerbaijani money-laundering scheme that a network of investigative reporters has alleged rinsed dirty money mainly through 4, UK-registered shell companies.  However, the NCA declined to give further details or divulge whether the frozen account was also linked to Danske Bank.

https://www.reuters.com/article/britain-moneylaundering-azerbaijan/britain-freezes-bank-account-linked-to-azerbaijani-laundromat-idUSL8N1YH5E5

JERSEY: CONFISCATED FUNDS AGREEMENT WITH KENYA

A news release from the Jersey Government on 12 December announced that External Relations Minister, Senator Ian Gorst, has signed an asset-sharing agreement to return confiscated assets to Kenya as part of ongoing work to tackle financial crime.  The Jersey Evening Post reported that this could see £3 million confiscated in Jersey returned to the African country.

https://www.gov.je/News/2018/Pages/kenyafunds.aspx

NEW ZEALAND HAS PASSED A LAW THAT REMOVES MANY RESTRICTIONS ON MEDICAL CANNABIS

Jurist reported on 11 December that the new law which will take up to a year for the new regulations and licensing policies required.

https://www.jurist.org/news/2018/12/new-zealand-passes-new-medical-cannabis-law/

UK FINANCIAL REPORTING COUNCIL HAS PUBLISHED THE FINAL VERSION OF NEW CORPORATE GOVERNANCE PRINCIPLES FOR PRIVATE COMPANIES

Out-Law on 12 December reported that the 6 principles are largely unchanged from the June consultation and deal with the same areas: purpose and leadership, board composition, board responsibilities, opportunity and risk, remuneration, and stakeholder relationships and engagement.

https://www.out-law.com/en/articles/2018/december/frc-private-company-corporate-governance-principles/

4 ACCUSED OF SMUGGLING TONNES OF CANNABIS OIL TO EUROPE

The Bangkok Post on 6 December reported that 2 Thais and 2 “foreigners” hid the cannabis in compressed coconut peat, or coir, and exported it to Belgium, with a shipment intercepted in Antwerp.  Police have raided the source warehouse in Thailand.

https://www.bangkokpost.com/news/crime/1588730/four-accused-of-smuggling-tonnes-of-cannabis-oil-to-europe

TAXPAYERS HAVE NO RIGHT TO ATTEND HEARING TO APPROVE HMRC INFORMATION NOTICES

An article from Out-Law on 12 December reported that UK taxpayers and third parties have no right to attend a tax tribunal hearing to consider the issue of notices by HMRC requiring the provision of information relevant to tax enquiries, the first-tier tax tribunal has decided.

https://www.out-law.com/en/articles/2018/december/taxpayers-hmrc-information-notices/

PARAGUAYAN EX-PRESIDENT SUBPOENAED IN MONEY LAUNDERING PROBE

Baker McKenzie on 12 December reported that former President Horacio Cartes was subpoenaed by lawmakers who are investigating money laundering allegations against a Brazilian currency trader.

http://www.riskandcompliancehub.com/paraguayan-ex-president-subpoenaed-in-money-laundering-probe/

MORE VENEZUELA DRUG PLANE SEIZURES SIGNAL TRAFFICKING INCREASE

Insight Crime on 12 December reported that the seizure of 28 alleged drug planes this year may indicate an uptick in narcotics smuggling throughout the country.  Venezuela’s seizure of the 28 aircraft this year represents an astounding 460% increase over a mere 5 taken in 2017.

https://www.insightcrime.org/news/analysis/venezuela-drug-plane-seizures-signal-trafficking-increase/

EU: MUTUAL RECOGNITION OF FREEZING AND CONFISCATION ORDERS

On 12 December, the EU Parliament Research Service published a briefing paper on a proposed Regulation on the mutual recognition of freezing and confiscation orders in criminal matters.  The directly applicable instrument removes the need for national transposition, broadens the scope of the current rules to cover new types of confiscation and includes provisions on victims’ rights to restitution and compensation.   The Regulation will apply from 19 December 2020.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2018/628225/EPRS_BRI(2018)628225_EN.pdf

FORMER BIRMINGHAM CITY FOOTBALL CLUB OWNER ORDERED TO PAY $43 MILLION IN MONEY LAUNDERING CASE

KYC 360 on 12 December reported that a Hong Kong court has reportedly ordered Carson Yeung Ka-sing, the former owner of Birmingham City FC to pay up HK$338 million (US$43.2 million) worth of criminal proceeds.

https://kyc360.com/news/money-laundering-ex-birmingham-city-football-club-owner-ordered-to-pay-43-million/

UK GOVT SLAMMED FOR U-TURN ON SUSPENSION OF ‘GOLDEN’ VISA SCHEME FOR SUPER WEALTHY

The Hindu on 12 December reported that campaigners have condemned the British Home Office’s decision to backtrack on plans to suspend a “golden” visa scheme for wealthy investors, just days after announcing the suspension.  After no formal announcement was made to Parliament, with no mention of the scheme or changes to it in an update from the Home Office, a statement from the Home Office sais that,. “The Tier 1 (Investor) visa is not currently suspended, however we remain committed to reforming the route. A further announcement will be made in due course”.

https://www.thehindubusinessline.com/news/world/uk-govt-slammed-for-u-turn-on-suspension-of-golden-visa-scheme-for-super-wealthy/article25727025.ece

EXPLOSIVE PRECURSORS: EU TIGHTENS CONTROLS

A news release from the EU on 12 December reported that the EU is to make access to explosive precursors by the general public subject to even tighter controls.  Explosives precursors are chemical substances that can be used for legitimate purposes, but can also be misused for the manufacture of illegal homemade explosives.  The proposed regulation provides for 2 distinct categories of explosive precursors: “restricted”, which cannot be made available, introduced, possessed or used by members of the general public above certain concentration levels, and “regulated”, for which suspicious transactions should be reported by economic operators, including online marketplaces.

https://www.consilium.europa.eu/en/press/press-releases/2018/12/12/explosive-precursors-eu-tightens-controls/

DUAL-USE EXPORT CONTROL APPEAL RULES TAKE EFFECT IN IRELAND

An article from Out-Law on 11 December said that a new appeals process for failed dual-use export licence applications in Ireland has been established.  The article points out that the rules on the exporting of dual-use items are set at EU-level under the Dual-Use Regulation, which provides for common EU control rules, a common EU control list and harmonised policies for implementation.  However, Member States have some discretion to set their own national rules on licence procedures and enforcement.

https://www.out-law.com/en/articles/2018/december/dual-use-export-control-appeal-rules-ireland/