OTHER THINGS YOU MAY HAVE MISSED – DECEMBER 14

14th December 2018

HIGHER STANDARD SET FOR FINDING VICARIOUS LIABILITY IN FRAUDULENT MISREPRESENTATION

A post from Harneys on 11th December reported that the Court of Appeal had recently reaffirmed the test to be applied in determining whether a principal could be vicariously liable for the deceit of an agent.  The Court found that there needed to be more than just a close connection between the principal and agent; the agent had to have the actual or ostensible authority to make representations on behalf of the principal.

http://harneysoffshorelitigation.com/raise-the-bar-a-higher-standard-set-for-finding-vicarious-liability-in-fraudulent-misrepresentation/

HOW PROTECTIVE IS THE CLOAK OF LITIGATION PRIVILEGE?

Another post from Harneys on 11th December concerns another Court of Appeal case and the decision confirming that “litigation privilege” means no more than obtaining information or advice in relation to that litigation (including settlement of that litigation).  The post explains that litigation privilege applies to communications between a party or their lawyers and third parties while obtaining information in connection with existing or contemplated litigation, subject to restrictions which it also explains – including that any communications at issue must have been made for the sole or dominant purpose of conducting the litigation.  Hence, communications that are about the settlement of litigation but which are not created, sent or received for the dominant purpose of obtaining advice or information about that litigation, will not be covered by litigation privilege and would be disclosable to an opponent.

http://harneysoffshorelitigation.com/just-how-protective-is-the-cloak-of-litigation-privilege/

JERSEY COURT ORDERS BANKS TO OPEN ACCOUNT FOR CONVICTED FRAUDSTER

KYC 360 on 13th December reported that the Royal Court in Jersey has ruled that a trust for a convicted fraudster should be allowed to open a bank account in Jersey, despite being denied banking services in other jurisdictions.  The case is linked to the Bernie Madoff fraud.  As part of the victim compensation programme, M Trust holds an undrawn cheque from the Madoff Victim Fund (overseen by the US SEC) for £211,379.27, with the possibility of more payments to come, but the trustee has been unable to open a bank account for the M Trust to receive the funds.  In 2009 the settlor of the trust pleaded guilty for his role in a scandal involving New York State’s $122 billion pension fund, and received a $12 million fine, and was banned from the securities industry for life.  However, the court held that there was no implication that the funds from the M Trust are not from legitimate sources.

https://kyc360.com/article/financial-crime-court-orders-banks-to-open-account-for-convicted-fraudster/

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ALLEGED KICKBACK SCHEME LEADS TO MURDER-FOR-HIRE, MONEY-LAUNDERING CHARGES AND RUSSIAN MILITARY CONTRACTS

On 13th December, the Wall Street Journal reported that a man living in North Carolina who allegedly laundered part of $150 million in kickbacks related to Russian military contracts was charged in a plot that authorities say involved an extramarital affair, a murder-for-hire plan, immigration fraud and bribing a public official.  Leonid Teyf, 57, originally from Belarus, was charged along with his wife and 3 others.  The article says that authorities seek to seize more than $39 million in assets related to the case, including a mansion in Raleigh, artwork, vehicles, and a Ruger pistol with an obliterated serial number.

https://www.wsj.com/articles/alleged-kickback-scheme-leads-to-murder-for-hire-money-laundering-charges-11544738203?mod=searchresults&page=1&pos=2

BELGIANS WITHDREW €18 BILLION FROM TAX HAVENS IN LAST 4 YEARS

On 14th December, the Brussels Times reported that a report by the Banque Nationale says that, in 2013, the Banque Nationale had calculated that €47 billion had been traced as being in tax havens outside of the EU, but now the daily publication says this total is some €29 billion.  The most significant decrease is in the Cayman Islands (a reduction of €26 billion), in Hong Kong (down by €4.5 billion) and in Jersey (reduced by €2 billion).  On the other hand, an increase was noted in the UAE (up by €6.3 billion).

http://www.brusselstimes.com/belgium/13466/belgians-withdraw-18-billion-from-tax-havens

ESTONIA: E-RESIDENTS, ADDRESS SERVICES BEHIND MOST LETTERBOX COMPANIES

ERR in Estonia on 14th December said that the Estonian media recently reported that there are several thousand companies registered to just a handful of addresses.  While letterbox companies have long been a common phenomenon in tax havens around the world, they are a relatively recent novelty in Estonia.  For example, some 5,000 businesses are registered at just 3 Tallinn addresses.

https://news.err.ee/884885/e-residents-address-services-behind-most-letterbox-companies

MALDIVES COURT FREEZES EX-PRESIDENT YAMEEN’S BANK ACCOUNTS

Al Jazeera on 14th December reported that police have summoned the ex-leader for questioning as court freezes accounts over allegations of ‘illicit financial transactions’Yameen suffered a decisive defeat in a presidential election in September.  He is expected to be questioned over allegations that he received $1.5 million in cash as campaign funds days before the contentious vote.

https://www.aljazeera.com/news/2018/12/maldives-court-freezes-president-yameen-bank-accounts-181214091920719.html

HIGHLAND CASTLE OWNER ARRESTED IN MOSCOW OVER AN ALLEGED MULTIMILLION-POUND FRAUD

The Press & Journal on 14th December reported that Sergey Fedotov, 41, a Russian tycoon who bought former Glasgow Rangers owner Craig Whyte’s Highland castle for £1 million has been arrested over an alleged fraud for the second time. He has already served a prison sentence for a £3.6 million property fraud which he committed while head of the Russian Authors’ Society (RAO), and he has now been accused of embezzling £9 million worth of funds from the organisation, which collects royalty payments on behalf of writers.

https://www.pressandjournal.co.uk/fp/news/highlands/1632630/highland-castle-owner-arrested-over-an-alleged-multi-million-pound-fraud/

HM TREASURY ISSUES FORMAL NOTICE REVOKING ERITREA SANCTIONS

14th December, HM Treasury issued a Notice about the publication on 11th December of Council Regulation 2018/1932/EU, repealing the financial sanctions, including asset freezes, which had been imposed under the Eritrea regime.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/763853/Notice_Eritrea_2018_1932.pdf

GUANGZHOU CUSTOMS CRACK DOWN ON SMUGGLING

Customs Today on 14th December reported that Customs officers in Guangzhou, capital of Guangdong province, earlier this year seized more than 170,000 live aquatic products and 620,000 cans of milk powder.  The seizures came as part of a crackdown on 2 major cross-border, e-commerce smuggling cases.  A total of 17 suspects were detained in the 2 cases.

http://www.customstoday.com.pk/guangzhou-customs-crack-down-on-smuggling/

THE WAYWARD MILLIONS OF LITHUANIA’S RUNAWAY BANKER

OCCRP on 14th December carried an article saying that Lithuania’s Vladimir Romanov absconded to Russia more than 4 years ago, leaving investigators grasping to recoup millions they believe he stole from Ukio Bankas, and they are still chasing the money today.  Investigators say evidence contained in the Paradise Papers leak of offshore financial data points to how it was done.

https://www.occrp.org/en/28-ccwatch/cc-watch-indepth/9036-the-wayward-millions-of-lithuania-s-runaway-banker

GUATEMALA: NO REDUCTIONS EXPECTED IN BUSINESS-TARGETED EXTORTION IN 2019 FOR CARGO AND TRANSPORT COMPANIES

Janes.com on 14th December reported that anti-gang interventions in Guatemala unlikely to reduce business-targeted extortions in 2019, particularly with cargo and transport companies.  So-called “imitators” who pose as gang members to extort over $439,000 in 2018, and 3 police officers from the National Division against the Criminal Development of Gangs (DIPANDA) also were arrested for allegedly extorting taxi drivers in Guatemala City.

https://www.janes.com/article/85227/anti-gang-interventions-in-guatemala-unlikely-to-reduce-business-targeted-extortions-in-2019-particularly-with-cargo-and-transport-companies

AUTHORISED PUSH PAYMENT FRAUD – EXTENDING THE JURISDICTION OF THE FINANCIAL OMBUDSMAN SERVICE

On 14th December, the FCA published Policy Statement PS 18/22 which summarises and provides a response to the consultation on extending the jurisdiction of the FOS to cover cases of APP fraud.  Access will be available to dispute resolution through the Financial Ombudsman Service for complaints against payment service providers (PSP) who receive payments relating to the alleged fraud, under final rules which take effect on 31st January.  It explained that APP fraud is where a fraudster tricks a payer into making an APP to an account controlled by that fraudster.   It differs from other kinds of fraud, such as where a fraudster steals money from an account without the owner of the account knowing, because in APP, the account owner authorises the payment, albeit under false pretences.

https://www.fca.org.uk/publications/policy-statements/ps18-22-authorised-push-payment-fraud-extending-jurisdiction-financial-ombudsman-service

http://www.mondovisione.com/media-and-resources/news/uks-financial-conduct-authority-introduces-new-rules-on-handling-complaints-abo/

TRANSNATIONAL CRIME CONVERGING ACROSS AFRICA – INTERPOL

ENACT Africa on 14th December reported that an INTERPOL report has found crimes are increasingly converging across Africa, underlining how transnational threats cannot be treated in isolation.  The report consists of a continental and 5 regional overviews which highlight the relationships between different types of organised crime across Africa’s regions.  Its findings suggest crime syndicates remain highly connected across borders on the continent and are active in a number of illicit markets.  Amongst its finding are that, operating in the shadow of the global economy, traffickers are progressively diversifying and interconnecting their activities, including drug trafficking, people smuggling, arms trafficking, wildlife crime, illegal logging, as well as fake medicines; and trafficking in cultural artefacts increasingly involves criminal organisations across the continent.  Criminals, terrorists and armed insurgents alike are profiting from crime and, through illicit trafficking routes and networks, are moving people and products, creating fault lines from one region to the next across Africa.

https://enactafrica.org/press/press-releases/transnational-crime-converging-across-africa-undefined-interpol

ALGERIAN COCAINE BUST POINTS TO ALARMING TRENDS

ENACT Africa on 10th December reported that a seizure of 710 kg of cocaine in the port of Oran, Algeria’s second largest city, suggests an increase in narcotics trafficking along North African routes.  The shipment reportedly started its journey in Brazil, then stopped in the Spanish ports of Las Palmas and Valencia before reaching Oran.

https://enactafrica.org/enact-observer/algerian-cocaine-bust-points-to-alarming-trends

UK GOVERNMENT COMMITS TO REVIEW OF E-CIGARETTE REGULATIONS AND SNUS AFTER BREXIT

The Pharmaceutical Journal on 12th December reported that, in response to a parliamentary report on e-cigarettes, the government has agreed to review e-cigarette regulations once EU legislation ceases to apply.  The government also committed to “consider reviewing the position on snus” — a moist powder tobacco product currently banned across the EU – and it will consider whether snus would promote “proportional harm reduction”.

https://www.pharmaceutical-journal.com/news-and-analysis/news/government-commits-to-review-of-e-cigarette-regulations-after-brexit/20205881.article

EU PROPOSES SANCTIONS REGIME FOR HUMAN RIGHTS VIOLATIONS AND CORRUPTION

On 10th December, Transparency International reported that EU foreign ministers have agreed on introducing the EU Global Human Rights Sanction Regime, and over the next few months, the European External Action Service will develop a framework for the proposed regime.  Possible sanctions could include, for example, asset freezes and travel bans on individuals and entities who are known to have committed serious human rights violations.  Similar regimes, usually termed “Magnitsky” sanctions, are in place in the US and Canada and elsewhere.

https://voices.transparency.org/fighting-back-eu-sanctions-for-human-rights-violations-and-corruption-f9455480fe5e

POLITICAL ASYLUM FOR EX-PRESIDENTS

An article from Transparency International on 14th December looks at 2 recent cases of ex-presidents who have applied for political asylum to evade justice, and the countries which handled these requests in very different ways.  Firstly, Last month, former Peruvian president Alan García entered the Uruguayan embassy in Lima and filed a request for political asylum, only hours after being banned from leaving the country while under investigation for allegedly receiving bribes from Odebrecht (as part of the “Car Wash” bribery and corruption scandal).  Uruguay rejected his application, saying that there are no signs of political persecution in his case.  In the second case there was a different result.  Nicola Gruevski, the former Prime Minister of Macedonia, applied for asylum in Hungary after fleeing his home country in what seems to be an attempt to avoid a prison sentence.

https://www.transparency.org/news/feature/political_asylum_for_ex_presidents_an_easy_way_to_impunity

HOME OFFICE AND THE FAILURE TO SUSPEND THE ‘GOLDEN VISA’ SCHEME

An article in the Guardian on 11th December says that the UK’s controversial scheme selling UK visas to wealthy foreigners was due to be suspended in anti-corruption drive, but the decision was quickly reversed.

https://www.theguardian.com/uk-news/2018/dec/11/home-office-fails-to-suspend-golden-visa-scheme

HMRC DELAYS MTD EXPANSION FOR BUSINESS DUE TO BREXIT

On 14th December, Accountancy Daily reported that, while HMRC is to continue rolling out Making Tax Digital (MTD) for VAT but has warned that the wider extension of the MTD programme for businesses will be delayed as IT developers are refocused on Brexit customs delivery.  However, HMRC has also confirmed that MTD for VAT will continue as planned, with businesses with a turnover of £85,000 or more being required to keep digital records from 1st April.

https://www.accountancydaily.co/hmrc-delays-mtd-business-due-brexit

SOLDIERS ON BORDER PROTECTION FIND A NEW “PRODUCT” BEING SMUGGLED INTO SOUTH AFRICA – DAGGA SEED

On 14th December, Defence Web reported this story and speculated that it could be legalisation decriminalising personal possession of cannabis in September that has triggered a new market for smugglers who traditionally brought large quantities of the narcotic into South Africa.  Dagga is the South African term for Marijuana or Cannabis.  In one instance it is said that soldiers on border protection duty found and confiscated a 200-litre drum of dagga seed.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=54039:op-corona-soldiers-confiscate-new-product&catid=87:border-security&Itemid=188

UK: ONLINE RIGHT TO WORK CHECKS

On 14th December, the Home Office announced that employers will be able to rely on an online Right to Work Checking Service to demonstrate compliance with illegal working legislation.  It says that the Right to Work Checking Service is secure and free to use.  It was launched in April, but until now employers have still needed to request paper documents alongside using the service.  The changes will mean that employers can use the online service to demonstrate they conducted the necessary right to work checks on migrants and avoid a penalty if they are found to be employing illegal workers.

https://www.gov.uk/government/news/online-right-to-work-checks

WHY DO WE COLLUDE WITH CORRUPTION?

A BBC Radio World Service podcast asks why do we collude with corruption when it is unfair and costs billions of dollars?  Nastaran Tavakoli-Far examines the moral quandaries we face when asked to take part in bribery.  She examines the moral quandaries we face when asked to pay a bribe. She talks to a whistle-blower, a businessman imprisoned for corruption and experts and ordinary people affected by bribery in different parts of the world.  It is said that it is estimated that 1.6 billion people have to pay bribes just to access public services.  When so many countries have signed up to fight corruption, why is it so difficult to stamp out?

https://www.bbc.co.uk/programmes/w3cswrl0

ATO NOW MONITORING SWISS BANK ACCOUNTS OF WEALTHY AUSTRALIANS

Baker McKenzie reported on 14th December that the Australian Tax Office is now accessing Swiss bank accounts for the purpose of ensuring Australians are meeting their tax obligations.

http://www.riskandcompliancehub.com/ato-now-monitoring-swiss-bank-accounts-of-wealthy-australians/

BANKS TOLD TO WATCH FOR SIGNS OF ‘EXTREMIST TRAVELLERS’ RETURNING TO CANADA

Baker McKenzie reported on 14th December that Canada’s financial intelligence agency has warned banks to watch for signs that foreign terrorist fighters may be trying to return home from places like Syria and Iraq.  An example given is reactivation of a dormant bank account linked to an “extremist traveller”, which may indicate that he or she is preparing to come back to Canada.

http://www.riskandcompliancehub.com/banks-told-to-watch-for-signs-of-extremist-travellers-returning-to-canada/

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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