24th December 2018
ITALIAN SUBSIDIARY OF GERMAN COMPANY STILL EXPORTS TO SAUDI ARABIA DESPITE GERMAN ARMS BAN
On 24th December, Politico reported that Italian political divisions mean a Sardinia-based arms manufacturer – RWM Italia, 100% owned by Rheinmetall – is still selling bombs to Saudi Arabia, even though its German parent company is banned from doing so. Even though it is wholly owned by Rheinmetall, RWM Italia is not subject to the German ban because it is an Italian-registered company and Italy has no such embargo. The deal includes the supply of various air-dropped bombs including general-purpose Mk 80 and Mk. 84 and laser-guided Mk 82.
GOLD SMUGGLING IN GUYANA
Stabroek News on 24th December reported that an estimated 30% of Guyana’s raw gold is being smuggled out of the country.
PAKISTAN: HAWALA/HUNDI CRACKDOWN
The Business Recorder on 24th December carried a short article saying that the Federal Investigation Agency (FIA) had made further arrests of those suspected to be involved in hawala/hundi businesses. Market sources say police reports have also been filed against the clients of those hawala/hundi operators, who in the case of most recent arrests happen to be traders and commercial importers based in Karachi and Lahore. It says that cracking down on hawala/hundi is paramount, especially in light of Pakistan’s FATF saga where the choking of terrorists financing and money laundering is top priority. It says that some bankers estimate that about $10 billion of workers’ remittances are channelled through hawala/hundi operators because workers lack awareness of formal channels and because hawala/hundi channel offers better currency conversion rates.
FRENCH STATE LOOKING TO INTENSIFY ITS CONTROL ON FOREIGN INVESTMENT
On 21st December, Freshfields Bruckhaus Deringer LLP published an article saying that, as with most G20 countries, France is currently intensifying its control on foreign investment. Under French law, investments made by non-EU investors and, to a lesser-extent, EU investors may be subject to a prior authorisation of the French Minister of Economy.
FCA: FINAL GUIDANCE ON INSIDER DEALING AND MARKET MANIPULATION
In its Corporate Crime Update, Herbert Smith Freehills reported that the FCA has finalised guidance on financial crime systems and controls, including insider dealing and market manipulation; and has set out a number of examples of good and bad market practice around the requirement to counter the risk of financial crime, as it relates to insider dealing and market manipulation.
HMRC GUIDANCE ON PUBLISHING DETAILS OF MONEY LAUNDERING CIVIL PENALTIES
Also in its Corporate Crime Update, Herbert Smith Freehills reported that HMRC had produced guidance on its duty to publish details of penalties, censuring statements and persons prohibited from management, naming the business or an individual after it issues a notice relating to these measures. Information will be published on the Gov.uk website for a minimum of 5 years. Those issued with a pre-penalty letter or a letter advising HMRC are minded to publish a censure statement or prohibit a person from management, will have 30 days to make representations against publication.
NEW US LAW ALLOWING FOR SANCTIONS ON NICARAGUA
On 20th December, Crowell Moring published an article about the recent Nicaraguan Investment Conditionality Act signed by President Trump. The Act aims to block any loan that could be issued by international financial institutions that could benefit the current Government of Nicaragua and will only allow international loans once the State Department determines that Nicaragua is taking the appropriates steps towards democracy, corruption-free elections and institutions, strengthening the rule of law, respecting the freedom of the press and individuals and entities with opposing views, and combating corruption. It says that the new sanctions are already affecting Nicaragua, even if indirectly. The article contains details of the Act. The Act defines “Government of Nicaragua” as any political subdivision, agency, or instrumentality thereof, including the Central Bank of Nicaragua, and any person owned or controlled by, or acting for or on behalf of, the Government of Nicaragua.
HUNDREDS PROTEST AFTER HONG KONG PROSECUTORS DROP CORRUPTION CASE AGAINST EX-LEADER CY LEUNG
The Hong Kong Free Press on 24th December reported that protesters marched to oppose the Department of Justice’s decision not to prosecute Hong Kong’s former chief executive, Leung Chun-ying, for corruption and misconduct in public office.
INSIDE THE CORRUPTION ALLEGATIONS PLAGUING MALTA
On 23rd December, the CBS “60 Minutes” programme did a feature saying that smallest nation in the EU is earning an unsavoury reputation, with a series of scandals involving allegations of bribery, cronyism and money laundering.
THE EUROPEAN ECONOMIC AREA (EEA)
On 21st December, the House of Commons Library published a briefing paper which outlines the institutional structure of the EEA, its pros and cons and the debate over withdrawal from the EEA. The Government’s view is that while the UK has given no explicit notice it believes that sending the Article 50 letter also amounted to implicit notice of leaving the EEA.
MALTA CBI PASSPORT-HOLDER LIST
On 23rd December, Kenneth Rijock in his blog reported that Malta’s Government Gazette has published what it represented to be all the Citizenship By Investment (CBI), as well as naturalised, citizens, for the period 1st January to 31st December 2017. The (long) weblink can be obtained from Kenneth by emailing him.
LATVIA: BLUEORANGE BANK FINED OVER €1 MILLION FOR AML FAILURES
On 24th December, KYC 360 reported that the Financial and Capital Market Commission (FCMC) has imposed a penalty of around €1 246 798 in a settlement relating to AML/CFT failings – reportedly re issues pertaining to identifying suspicious transactions, amongst other issues.
BRAZIL PRESIDENT-ELECT’S SON CAUGHT UP IN GROWING PAYMENTS PROBE
KYC 360 on 24th December reported that Brazilian state prosecutors have ordered the son of President-elect Jair Bolsonaro, Senator-elect Flavio Bolsonaro, to explain suspicious funds in the bank account of his former driver, widening their probe after the ex-staff member failed to show up to answer queries.
AL-QAEDA TERROR GROUP RETURNS TO TARGET AIRLINERS AND AIRPORTS
The Times on 23rd December reported a speech by the UK Security Minister that Al-Qaeda is resurgent and seeking to carry out new terrorist atrocities against airliners and airports, and was developing technology that could include miniaturised bombs and drones packed with explosives to blow up key targets.
INDONESIA: FIRST-EVER PROSECUTION OF CORPORATION
On 24th December, Ali Budiardjo, Nugroho, Reksodiputro in Jakarta published an article that reported inter alia that in early 2018 the Corruption Eradication Commission (KPK) brought its first-ever prosecution against a corporation for its alleged involvement in a rigged tender for the construction of the Udayana University Hospital in Bali, in a case which dates back to 2009.
MEXICO: COMPANIES’ CRIMINAL AND ADMINISTRATIVE LIABILITY
On 24th December, Becerril, Coca & Becerril SC published an article saying that, historically, only individuals could commit crimes in Mexico. Companies could be held only jointly liable for damages caused by their employees, officials or representatives through a criminal activity. However, following recent amendments to the Criminal Code and the enactment of the new National Code of Criminal Procedures, companies may now be held criminally liable. The article provides details.
TAX TREATIES AND RELATED DOCUMENTS BETWEEN THE UK AND THE ISLE OF MAN
On 24th December, HMRC released updated information including various documents including the 2018 double tax agreement.
THOUSANDS OF COUNTERFEIT ITEMS INTERCEPTED AT EAST MIDLANDS AIRPORT
Leicestershire Live on 24th December carried an article saying that products from fake designer watches to dodgy DVD have been caught at East Midlands Airport in the past few months. Border Force has released photos of “thousands of individual items” intercepted in recent weeks.
OECD FLAGS LACK OF TAX TRANSPARENCY ACROSS ‘SIZEABLE’ NUMBER OF JURISDICTIONS
Accountancy Daily on 24th December reported that efforts to improve tax transparency on information exchange on tax rulings is still failing to meet the standards set by the OECD as part of the Base Erosion & Profit Shifting (BEPS) project Action 5. Over 90 tax jurisdictions have now been assessed. However, the measures are still being ignored by a sizeable number of tax authorities, says OECD, and there are still 60 jurisdiction-specific recommendations outstanding on issues such as improving the timeliness of the exchange of information.
£500,000 IN DIRTY MONEY SEIZED BY NCA IN THE MIDLANDS
A news release from the NCA on 24th December reported that acting on a tip-off from the NCA, officers from West Midlands Police intercepted a van on the M6 near Rugby and found a holdall containing more than £400,000 of cash.
PAKISTAN: EX-PRESIDENT SUMMONED IN MONEY LAUNDERING CASE
AA.com on 24th December reported Pakistan’s Supreme Court has summoned the country’s former President Asif Ali Zardari for alleged involvement in a massive money laundering, according to the court records and local media.
ITALY CONFISCATES $40 MILLION IN ASSETS LINKED TO CORLEONE MAFIA
OCCRP on 24th December reported that Sicilian police seized gas industry companies, real estate, cars and cash in Italy, Spain and Andorra as part of a crackdown on money laundering operations by the infamous Corleonesi mafia clan, Palermo prosecutors said. It says that the industrial network targeted by the seizures dates back to the 1980’s, when a former Sicily government official who died in 2000 created the foundations for Sicily’s gas industry.
UK: IMPLEMENTING ‘SAFETY FEATURES’ UNDER THE FALSIFIED MEDICINES DIRECTIVE
On 24th December, MHRA in a news release provided the official response of the Agency to submissions in a public consultation launched in July on steps proposed to make sure the UK meets its obligations to transpose the provisions of the Falsified Medicines Directive (FMD) requiring ‘safety features’ to appear on the packaging of certain medicinal products. The relevant EU Regulation on ‘safety features’ will apply automatically in all EU Member States, including in the UK, as of 9th February.
CROYDON FRAUDSTER INVOLVED IN £35 MILLION SCAM FINALLY CAUGHT AFTER YEARS ON THE RUN
My London on 24th December reported that James Maynard, 38, originally from Croydon, had fled the UK 5 years ago after authorities uncovered he had a central role in a £35.8 million scam. It said that returned to the UK earlier this year using his own passport, but was not apprehended, even though there was a warrant for his arrest. However, when he tried to leave the UK again in August he was apprehended. He has now been jailed for 7½ years after admitting conspiracy to defraud.
TAXING NON-RESIDENTS ON UK PROPERTY GAINS: THE RULES FOR FUNDS
On 21st December, an article from Travers Smith, first published in Tax Journal, was published online. Whilst explaining the framework, it says that there remain a number of challenges, not least navigating the long and complex legislation applying the new rules to funds and their investors.
THE SICILIAN BANKER WHO LEFT THE CITY TO FIGHT THE MAFIA
On 24th December, the Guardian carried a feature about Gaspare Giacalone, who gave up a 6-figure salary to stand for mayor in his hometown, and saying that he has no regrets, despite the bullets. He had been a respected manager at the European Bank of Reconstruction and Development in the City of London, but he left his job in 2012 to run for mayor of Petrosino, his hometown.
CHINA TO BAN IMPORTS OF WASTE FOREIGN VESSELS FOR SHIP RECYCLING
Hellenic Shipping Report on 24th December reported that China will ban imports of waste foreign vessels to protect the environment. The new measures of banning imports were announced in April and will take effect on 31st December and cover 32 types of solid waste imports, including ships, auto parts, stainless steel scrap, titanium and wood.