OTHER THINGS YOU MAY HAVE MISSED – JANUARY 17

17th January 2019

OFAC EXTENSION OF TEMPORARY LICENCES FOR EN+, GAZ GROUP, RUSAL AND JSC EUROSIBENERGO

On 16th January, OFAC announced 3 new General Licenses authorising continued operations maintaining or winding down existing contracts with these concerns (on which the US Government has proposed ending sanctions measures after Oleg Deripaska reportedly reduced or ended his ownership or control).

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190116.aspx

NEW ZEALAND: 12 FOREIGNERS INVESTIGATED BY IMMIGRATION NZ OVER WMD FEARS

Newshub in New Zealand reported on 17th January that 12 foreigners who have applied to study or work in the country are under investigation by Immigration New Zealand, and 7 students have now been denied visas over concerns their study could contribute to a WMD programme.

https://www.newshub.co.nz/home/new-zealand/2019/01/12-foreigners-investigated-by-immigration-nz-over-weapons-of-mass-destruction-fears.html

NEPALIS IN TAX HAVENS, SWISS BANKS, MONEY LAUNDERING

On 17th January, the Nepali Times published an article containing excerpts from an investigation carried out by The International Consortium of Investigative journalists and Centre for Investigative Journalism Nepal and revealing the names of some of the top Nepal business people.  It notes that records reveal that Nepalis started to deposit money in Swiss banks the year after the Maoist insurgency began in Nepal in 1996.  The country with the biggest Foreign Direct Investment (FDI) in Nepal is not China, India or the United States as one may presume, but the BVI.

https://www.nepalitimes.com/latest/nepalis-in-tax-havens-swiss-banks-money-laundering/

http://kathmandupost.ekantipur.com/news/2019-01-17/washing-up.html

REVIEW OF EXPORT CONTROL ISSUES IS PART OF NECESSARY DUE DILIGENCE

An article from Tucker Arensberg on 16th January says that, in the context o mergers and acquisitions, one area that is frequently overlooked in a company’s due diligence checks of its planned purchase is export control exposure.   The results can be devastating for both the seller and the buyer if export control compliance is not taken into account.  It says that export control liability should be factored into the due diligence process, and suggests some questions that should be asked.

https://www.jdsupra.com/legalnews/review-of-export-control-issues-is-64268/

CHARCOAL SMUGGLING FINANCES SOMALI TERRORIST GROUPS

An article from the Maritime Executive on 16th January reminds one that terrorists are profiting from the illegal charcoal trade, saying that they are making over $7 million a year by smuggling charcoal illegally out of Somalia, according to estimates by the Royal Navy.  Terrorist organisations like Al-Shabaab in Somalia, where there has been a UN ban on exporting charcoal since 2012, tax and smuggle an estimated 3.5 million bags of charcoal a year, which is often marketed as legitimate to buyers in Gulf nations.  The estimated wholesale value of smuggled Somalia charcoal is said to be in the range of $150 million a year.  It is also said that if charcoal smuggling continues unabated, it is possible that there will be no trees left in Somalia by the year 2060.  1½ million acacia trees are felled every year.

https://www.maritime-executive.com/article/charcoal-smuggling-finances-somali-terrorist-groups

IMF: MALTA — AML/CFT ELEMENTS OF CONCLUDING STATEMENT OF THE 2019 ARTICLE IV MISSION

On 16th January, the EIN Newsdesk carried a news release from the IMF on the conclusion of the latest review of the financial systems of Malta by the IMF.  Amongst other things, it says that there is a need to safeguard financial integrity by continuing the reforms and swiftly remedying identified deficiencies in the implementation of the AML/CFT framework; guarantee the long-term independence of the supervisor and increase supervisory capacity; and enhance monitoring of the non-bank financial sector and close remaining data gaps.  It also says that a failure to effectively implement the AML/CFT framework could affect the business and financial environment and potentially imperil financial stability, as could a sharp correction in housing prices.  The envisaged expansion of blockchain-related activities create significant ML/TF risks, it says.  However, measures taken to implement the recently-enacted 50-point action plan (based on the latest National Risk Assessment) are steps in the right direction, and the mission supports its full implementation without delay, and authorities should guarantee that virtual asset service providers implement AML/CFT requirements in an effective manner and are monitored in line with the FATF standards.

https://www.einnews.com/pr_news/473775620/malta-concluding-statement-of-the-2019-article-iv-mission

BRITISH MAN HAS JAILED FOR SENDING FUNDS TO BROTHER WHO TRAVELLED TO SYRIA

On 17th January, KYC 360 reported that Sheffield-based Abdurahman Kaabar, 24, admitted sending money to his brother but denied knowing or suspecting it might be used to fund terrorism.  Instead, he claimed he had provided the funds to enable his brother to obtain medical advice only.  he was sentenced to a total of 8 years and given notification orders of 15 years – these require offenders to notify the authorities of any major changes such as new name or address after they are released from prison.

https://www.riskscreen.com/kyc360/news/terror-financing-uk-man-claims-syria-cash-was-for-brothers-medical-advice/

BELGIUM FINES 92-YEAR-OLD FRAUDSTER

KYC 360 on 17th January reported the case of “Betty W”, 92, who defrauded the Belgian tax authorities of millions of euros over many decades was given a 16-month suspended sentence and a €600,000 fine.

https://www.riskscreen.com/kyc360/news/old-money-belgium-fines-92-year-old-fraudster/

PROSECUTING A COMPANY IN ITS ABSENCE

On 16th January, 6 KBW College Hill published a post which starts by reiterating the basic position in law: the court must not proceed unless it is satisfied that the defendant has waived the right to attend, and that the trial will be fair despite the absence, and then mentions the relevant leading case of R v Jones from 2005.  Then it poses the following connected questions – How do these provisions apply, if at all, to the prosecution of a corporate defendant in its absence; and if a company does not co-operate with any prosecution, what shape might any trial take?  Its conclusion? “The courts are unlikely to allow unscrupulous companies to kibosh any trial by simply not turning up”.

https://blog.6kbw.com/posts/runaway-companies-prosecuting-a-company-in-its-absence

TACKLING ILLICIT FINANCE: LAWYERS UNDER THE SPOTLIGHT IN UK

On 15th January, Kingsley Napley published an article in the light of the recent NCA report on SAR submitted during 2018.  That report focussed, amongst other things, on the relatively small proportion of SARs made by lawyers.  The article asks if this a fair criticism and, if so, what is the reason for it?  It says that the purported (it says) role of professionals as “facilitators” of money laundering is a current theme (as emphasised in a FATF publication last year) – as mentioned in the NCA Strategic Assessment for 2018.  It argues that the rise in the volume of SAR submitted by the financial sector, and defensive reporting by businesses in that sector, render the decline by 300 in the number of SAR made by the legal sector is, statistically speaking, almost meaningless, and reflects the reality – that the number of occasions on which lawyers are required to report suspicions is fairly stable.

On 14th January, another law firm, MacFarlanes, in its blog also published an posting on the same topic, asking “where are the suspicious activity reports”?  It says that lawyers and accountants are being singled out for criticism by both FATF and the NCA for not submitting enough reports.  Another comment is that with SAR from lawyers in 2018 represented just 0.57% of the total submitted and those by accountants only 1.11%, the authorities consider this is far too few considering the client base and transactions those professions are often involved with.

https://blog.macfarlanes.com/post/102fd2z/lawyers-and-accountants-where-are-the-suspicious-activity-reports

SHANNON AIRPORT WELCOMES OPPORTUNITY TO EXTEND US PRE-CLEARANCE FACILITIES

Blue Sky on 17th January carried an article saying that Shannon Airport in Ireland has welcomed the proposed changes to Ireland/United States Preclearance agreement which it says will allow it to enhance its US Preclearance service at Shannon for its airline customers and their passengers, in particular, its business jet customers.  The Airport’s Director of Operations is quoted as saying that in August 2009, Shannon became the first airport in Europe to have full US Preclearance and operated a US Pre-inspection facility since 1986.  Shannon Airport was the first airport in the world to offer full US pre-clearance for private aircraft and is still the only airport in either Europe or the Middle East with this unique service.

https://blueskynews.aero/issue-494/Shannon-Airport-welcomes-opportunity-to-extend-US-Preclearance-facilities.html

EU ENVOYS AGREE SANCTIONS ON RUSSIANS ACCUSED OF SKRIPALS’ POISONING

EurActiv on 17th January reported that EU ambassadors have agreed to impose sanctions (travel bans and asset freezes) on 9 individuals and 1 entity accused of chemical weapons attacks, including 2 Russian men (Alexander Petrov and Ruslan Boshirov, said to be GRU agents) blamed for poisoning a former Russian double agent in Britain.

https://www.euractiv.com/section/global-europe/news/eu-envoys-agree-sanctions-on-russians-accused-of-skripals-poisoning/

EU IMPOSES SAFEGUARD MEASURES WITH IMPORT DUTIES ON RICE FROM CAMBODIA AND MYANMAR

On 16th January, the EU issued a news release saying that an investigation had confirmed a significant increase of imports of Indica rice from Cambodia and Myanmar into the EU that has caused economic damage to European producers.  The European Commission has therefore decided to re-introduce import duties that will be steadily reduced over a period of 3 years.

http://europa.eu/rapid/press-release_IP-19-427_en.htm

EU A STEP CLOSER TO ADOPTING NEW RULES THAT WILL BOOST THE EXPORT OF GENERIC MEDICINES AND BIOSIMILAR PRODUCTS TO THIRD COUNTRIES

On 16th January, a news release announced agreement on a draft Regulation which would introduce an exception for manufacturing for export purposes (a manufacturing waiver) to the protection granted to an original medicine by a supplementary protection certificate (SPC).  This would allow EU-based makers of generics and biosimilars to manufacture a generic or biosimilar version of an SPC-protected medicine during the term of the SPC if done exclusively for the purpose of exporting to a non-EU market where protection has expired or never existed.  Once the European Parliament agrees on a negotiating mandate, the Romanian presidency will start negotiations with the Parliament with the aim of adopting the Regulation.

https://www.consilium.europa.eu/en/press/press-releases/2019/01/16/eu-to-help-boost-exports-of-generic-pharmaceuticals/

FORMER IVORIAN LEADER LAURENT GBAGBO ACQUITTED OF WAR CRIMES

Defence Web on 16th January reported that the International Criminal Court acquitted former Ivorian leader Laurent Gbagbo of war crimes ordering his immediate release (after 7 years in custody) to the joy of dancing supporters and frustration of victims of atrocities.  A judge in The Hague said that the prosecution had failed to prove accusations against Gbagbo and co-defendant Charles Blé Goudé, a former political youth leader.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=54240:gbagbo-acquitted-of-war-crimes&catid=56:diplomacy-a-peace&Itemid=111

SALE OF ARMED UAV GROWING TO THE MIDDLE EAST

Defence Web on 16th January reported that countries in the Middle East are increasingly buying armed unmanned aerial vehicles, especially from countries like China and Turkey which are stepping in to fill a gap created by the US strict UAV export controls.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=54238:sale-of-armed-uavs-growing-to-the-middle-east&catid=125:unmanned-aerial-vehicles&Itemid=306

EXCHANGE CONTROL RULES GIVES SOUTH AFRICA ADVANTAGE IN COMBATING TRANSFER PRICING ABUSE

Business Day on 17th January carried an article which claimed that an advantage South Africa has over many other countries in combating transfer pricing abuses is its exchange control regulations.  For example, if a South African entity wished to transfer its intellectual property to a subsidiary located in a tax haven, it would require consent for such transfer.  Companies that do not comply with the transfer pricing rules would have an adjustment made to their taxable income, resulting in income tax being imposed at a rate of 28%, plus dividends tax at a rate of 20% may be levied on such a transfer pricing adjustment.  Furthermore, penalties of up to 200% may also be levied as well as interest on the unpaid tax.  The normal 3-year time period for raising an additional assessment does not apply where there has been fraud, misdeclaration or misrepresentation.

https://www.businesslive.co.za/bd/opinion/2019-01-17-exchange-control-rules-give-sa-an-advantage-in-combating-transfer-pricing-abuse

OVER 9,000 IRISH MOTOR INSURANCE POLICIES WERE ISSUED THROUGH ‘GHOST BROKERS’

On 17th January, the Irish Times reported that unlicensed middle men have diverted €23 million away from insurance companies.  It explains that “ghost brokers” are unlicensed and unregulated middle men acting as agents for motorists when dealing with insurance companies, and frequently use social media outlets such as Facebook to advertise their services.  They promise motorists large discounts on their premiums, and it is said that some 98% of their target customers are foreign-born nationals living in Ireland.  An anti-fraud conference also heard many examples of insurance frauds based on staged crashes and exaggerated claims, and about “fraud tourism” – foreign nationals coming to Ireland specifically to fake crashes and then sue insurance companies.

https://www.irishtimes.com/news/crime-and-law/over-9-000-irish-motor-insurance-policies-were-issued-through-ghost-brokers-1.3760559

MAN TO STAND TRIAL FOR SMUGGLING €26 MILLION PICASSO PAINTING OUT OF SPAIN

Customs Today on 17th January reported that the picture was seized by the French authorities from Jaime Botin’s yacht in Corsica in 2017 although Botin insisted that he was taking it to Geneva, intending to store it at the Freeport warehouse complex.  Botin, brother of Emilio Botin – founder of the Santander bank and uncle to the current president Ana Patricia Botin – is accused of taking the picture outside Spain in order to sell it, despite knowing that it was classed as not-exportable.

http://www.customstoday.com.pk/jaime-botin-to-stand-trial-for-smuggling-e26-million-picasso-painting-out-of-spain/

IRELAND UPDATES TRADE MARK LAWS

On 17th January, Out-Law published an article saying that changes made to trade mark laws in Ireland give businesses greater scope to protect innovative brands, but put greater onus on those businesses to proactively preserve their trade mark rights.

https://www.out-law.com/en/articles/2019/january/ireland-updates-trade-mark-laws/

WHERE DOES THE MONEY GO FOR BLOCKCHAIN INVESTMENTS?

An article from Coinworks on Medium on 28th October sought to answer the question: where are the venture capitalists investing into in the blockchain space?

https://medium.com/coinmonks/where-did-the-money-go-for-blockchain-investments-dba74c028b15

A FORGOTTEN CONFLICT: NAGALAND IN INDIA

On 17th January, a Commentary from War on the Rocks focussed on attempts since 2015 between the government of India and the largest Naga rebel organization, the National Socialist Council of Nagaland — or Isak-Muviah — (NSCN-IM), to reach an agreement on the framework for a peace accord.  The Nagaland dispute is called one of the world’s longest-running unresolved disputes.  Since 1952, Naga rebels in northeastern India have engaged in a violent insurgency against the government of India, fighting for a separate “Nagalim” or “Great Nagaland” for all Naga people.  Nearly 4 years after an announcement on an agreement the road to a lasting peace remains challenging, the Commentary says.  It relates the background to the situation and attempts made to resolve it.  The conflict dates back to 1881, when British colonists annexed the Naga hills to control strategic trade routes in India’s north-east and into Burma (current-day Assam, Manipur, and Myanmar).  The article says that Nagaland and her neighbours are no longer a backwater of the British Empire, but a strategic region linking South and South-east Asia.

https://warontherocks.com/2019/01/nagalands-time-a-states-led-effort-to-resolve-the-naga-conflict/

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HUAWEI TARGETED IN US CRIMINAL PROBE FOR ALLEGED THEFT OF TRADE SECRETS

Adding to the Chinese telecoms company’s problems, on 16th January the Wall Street Journal reported that federal prosecutors are pursuing a criminal investigation of China’s Huawei Technologies for allegedly stealing trade secrets from US business partners, including technology used by T-Mobile US Inc to test smartphones.

https://www.wsj.com/articles/u-s-adds-criminal-courts-to-its-strategies-to-fight-chinese-theft-of-trade-secrets-11547727362?mod=searchresults&page=1&pos=3

VAT: EUROPEAN LAW ON VAT RATES

On 17th January, the House of Commons Library Service published a briefing which says that all Member States have limited discretion in setting VAT rates under EU VAT law.  This briefing discusses the development of EU law in this area, and the implications this has for the UK setting its own VAT rates.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN02683

INVESTIGATIVE REPORTER WHO EXPOSED CORRUPTION IN SOCCER SHOT DEAD IN GHANA

Buzz Feed on 17th January reported that an investigative journalist, a member of the Tiger Eye investigative reporting team, who helped expose corruption in soccer in Africa has been shot dead in Ghana.  Ahmed Hussein-Suale was shot twice in the chest and once in the neck by unidentified assailants on motorbikes.

https://www.buzzfeednews.com/article/matthewchampion/ahmed-hussein-suale-ghana-journalist-shot-dead

ESTONIA SCRAPS KEY PART OF NEW AML LEGISLATION

On 17th January, Reuters reported that Estonia scrapped a key part of planned legislation drafted in the wake of a scandal involving Denmark’s Danske Bank because it was not specific enough.  It was intended to force people suspected of benefiting from suspicious financial transactions to prove that their wealth came from legitimate sources.

https://www.reuters.com/article/us-danske-estonia-law/estonia-scraps-key-part-of-new-anti-money-laundering-legislation

PERU “FAILING TO COMBAT ILLEGAL LOGGING IN AMAZON”

OCCRP on 17th January said that a new report from Global Witness claimed that the Peruvian government is eroding its ability to protect the Amazon from illegal logging by succumbing to corporate pressure, and that the government has conceded to the timber industry’s demands to weaken the powers of its forest watchdog, the Organismo de Supervision de los Recursos Forestales y de Fauna Silvestre (OSINFOR).  The report claims that up to $112 million of illegal timber is now laundered through fraudulent permits and inadequate oversight.

https://www.occrp.org/en/daily/9132-peru-failing-to-combat-illegal-logging-in-amazon-claims-report

SFO LAUNCHES PROBE INTO NORTH WEST CONSTRUCTION SITE DEVELOPMENTS

Construction Enquirer on 17th January reported that the SFO has opened an investigation into a suspected fraud concerning 3 property developments in Manchester and Liverpool, including New Chinatown in Liverpool.

http://www.constructionenquirer.com/2019/01/17/serious-fraud-office-launches-probe-into-north-west-sites

https://www.bbc.co.uk/news/uk-england-merseyside-46905572

IRELAND: FEARS ALLAYED FOR AUGHINISH ALUMINA IN LIMERICK AS US SANCTIONS VOTE FAILS

The Limerick Leader on 16th January reported on the sense of relief after the US Senate failed to block an agreement to suspend or remove sanctions imposed on the Rusal aluminium company because of links to Oleg Deripaska.  A Irish subsidiary is a major employer in Limerick.

https://www.limerickleader.ie/news/home/358274/fears-allayed-for-aughinish-alumina-in-limerick-as-us-sanctions-vote-fails.html

ISRAEL BAR ASSOCIATION CHIEF RESIGNS AMID SEX CORRUPTION SCANDAL

The Times of Israel on 17th January reported that Efi Nave is suspected of advancing judicial appointments for sexual favours.

https://www.timesofisrael.com/israel-bar-association-chief-resigns-amid-sex-corruption-scandal

HOW SBOBET GETS CREATIVE TO AVOID THE POLISH GAMBLING BLACKLIST

On 17th January, Calvin Ayre reported that at least one international operator is getting creative in its attempts to evade Poland’s digital censors.

https://calvinayre.com/2019/01/17/business/sbobet-poland-online-gambling-blacklist/

COURT OF APPEAL: DEBT UNDER ENGLISH LAW CANNOT BE DISCHARGED BY A FOREIGN RESTRUCTURING PROCEEDING

On 17th January, Out-Law published an article about a recent case involving Russian bank, Sberbank, saying that the Court of Appeal has said that English courts will not indefinitely delay a case, preventing English creditors from pursuing claims in insolvency proceedings abroad, especially when the foreign proceedings had ended.  It said that an English debt can only be discharged by an English law process.

https://www.out-law.com/en/articles/2019/january/court-of-appeal-says-no-to-indefinite-delay-to-insolvency-case/

BULGARIAN AND LIBYAN PRIME MINISTERS INTERVENE TO END OIL TANKER ROW

The Hellenic Shipping News on 17th January reported that the prime ministers of Bulgaria and Libya have said they are working for a “positive outcome” to a dispute over the alleged illegal seizure and sale in Bulgaria of a Libyan oil tanker – the 61,000-ton “Badr” was detained in Bulgaria’s Black Sea port of Burgas in November 2017.  The vessel is owned by the state-run Libyan General National Maritime Transport Company, and was held by the Bulgarian company Bulgargeomin, which claimed it as collateral for a $9.2 million state company debt dating back to 1989.  The regional court in Burgas refused to honour Bulgargeomin’s claims or to allow the sale of the “Badr” vessel.  However, the vessel remained moored in the port of Burgas for over a year.  The tanker then left with a new crew, a new name and a Panamanian flag.  In retaliation, Libya’s maritime authorities ordered the seizure of all Bulgarian ships entering its ports, and this threat prompted Bulgarian prosecutors to open an investigation.

https://www.hellenicshippingnews.com/bulgarian-libyan-pms-intervene-to-end-oil-tanker-row/

USE OF FINANCIAL DATA FOR PREVENTING AND COMBATING SERIOUS CRIME IN THE EU

On 17th January, the EU Parliament Research Service published a briefing paper about a proposed EU Directive laying down rules facilitating the use of financial and other information for the prevention, detection, investigation or prosecution of certain criminal offences and repealing Council Decision 2000/642/JHA.   It is intended to facilitate law enforcement authorities’ access to and use of financial information held in other jurisdictions within the EU for investigations related to terrorism and other serious crime.  The Directive also aims to strengthen domestic and cross-border exchange of information between EU Member States’ competent authorities, including law enforcement authorities and FIU, as well as with Europol.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2019/633144/EPRS_BRI(2019)633144_EN.pdf

FORMER ARMENIAN MINISTER WANTED FOR CORRUPTION

Azatutyun on 17th January reported that a Yerevan court has been asked to issue an arrest warrant for Armenia’s former Environment Minister Aram Harutiunian after he was formally accused of receiving $14 million in bribes.  The allegations are that an Armenian businesswoman, Silva Hambardzumian, paid the money in 2008 in return for obtaining a dozen mining licences.

https://www.azatutyun.am/a/29715914.html

US DISCOURAGES FOREIGN COMPANIES FROM DOING BUSINESS IN CUBA

EurActiv on 17th January reported that the US Secretary of State has warned foreign businesses to steer clear of formerly private properties seized by Cuba — and said he was considering allowing lawsuits over such assets in US courts.  This would mean implementing a 1996 law that has never been given effect.

https://www.euractiv.com/section/global-europe/news/us-discourages-foreign-companies-from-doing-business-in-cuba/

DoJ DOES HIGH “WIRE ACT” – FLIP FLOPS ON LEGALITY OF ONLINE GAMBLING

On 16th January, Sheppard Mullin published an article concerning the recent statement from the US DoJ on what it saw as the legality of online gambling in the US under the Wire Act.  It explains that, in 2011, the DoJ said that the prohibitions of the Wire Act are limited to sports betting, but now it has concluded that the 2011 opinion was wrong, and that only one of 4 parts of the Wire Act apply to sports betting, while the other 3 apply to any online betting.  It goes on to explain that the Wire Act 1961 prohibits persons involved in the gambling business from transmitting several types of wagering-related communications over the wires, and then sets out what the relevant provisions say.  The article says that this is a significant reversal for the sector, but is not necessarily binding on courts.  However, it warns, the DoJ could engage in enforcements based on this interpretation, unless and until there is a successful legal challenge or Congress changes the law.

https://www.lawofthelevel.com/2019/01/articles/gambling/doj-high-wire-act-flip-flops/#page=1

OTHER THINGS YOU MAY HAVE MISSED – JANUARY 16

16th January 2019

NEW POST-BREXIT 50 PENCE COIN

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JAPAN TO RESTART IMPORTING IRANIAN OIL

Nikkei Asian Review reported on 15th January that Japan expects to restart imports of oil from Iran, which have been suspended under US sanctions, as early as this month, under an exemption agreed with the US in November.

https://asia.nikkei.com/Politics/International-Relations/Japan-to-restart-importing-Iranian-oil

AUSTRALIA: FLIGHT ATTENDANT SMUGGLED DRUGS IN ‘HIGHLY ORGANISED’ RING

The BBC on 16th January reported that Australian police say they have busted a “highly organised” drug ring which allegedly used a flight attendant from Malindo Air, a small Malaysian airline, to smuggle drugs into the country.  The Melbourne-based Vietnamese syndicate had been operating for at least 5 years.  8 people, including 1 Malindo Air employee, were arrested in Melbourne.

https://www.bbc.co.uk/news/world-australia-46886799

ROMANIA LOSES €641 MILLION DUE TO CIGARETTE SMUGGLING IN 2018

See News on 15th January reported that the loss of revenue is similar to the one recorded in 2017, as the share of the black market of cigarettes in Romania edged up to 16.3% in 2018.  In 2018, the Romanian authorities prevented over 112 million contraband cigarettes from reaching the country’s market, about 25% less than in the previous year.  It says that tobacco is the second biggest contributor of revenue to Romania’s state budget, after the oil industry.

https://seenews.com/news/romania-loses-3-bln-lei-641-mln-euro-due-to-cigarette-smuggling-in-2018-639544

CANADA: QUEBEC MAN CAUGHT SMUGGLING 2.96 MILLION ILLEGAL CIGARETTES

The Whig News on 15th January reported that a man from Quebec has been charged by Ontario Provincial Police after he was caught smuggling 2.96 million illegal cigarettes in a U-Haul rented truck.

https://www.thewhig.com/news/local-news/opp-briefs-quebec-man-caught-smuggling-2-96-million-illegal-cigarettes-woman-95-defrauded-of-nearly-150000

SMUGGLERS CAUGHT WITH 170 KG OF SHISHA TOBACCO IN SUITCASES AT MANCHESTER AIRPORT
The Yorkshire Evening Post reported on 15th January that 2 men from Leeds had been arrested in November after arriving on a flight from Oman via Dubai.  They have been sentenced to 9 months’ in prison each, suspended for 2 years, and community service.

https://www.yorkshireeveningpost.co.uk/news/crime/leeds-smugglers-caught-with-170kg-of-shisha-tobacco-in-suitcases-at-manchester-airport-1-9538560

IRELAND: REGISTER OF BENEFICIAL OWNERSHIP AT DRAFT STAGE

On 15th January, the Law Society of Ireland reported that the drafting of legislation to establish a central register of beneficial ownership is at an advanced stage and will be concluded soon.  This legislation is expected to assign separate legal responsibility to the Registrar of Companies.

https://www.lawsociety.ie/gazette/Top-Stories/register-of-beneficial-ownership-measures-at-draft-stage/

NIGERIA AND THE GULF OF GUINEA: LEGAL LIMITS OF ARMED GUARDS ON BOARD SHIPS

On 16th January, an article from Akabogu & Associates said that voyages in West African waters, particularly the Gulf of Guinea, are considered dangerous and raises the question of whether shipowners are entitled to put armed guards on board their vessels to protect them from attacks by arms-bearing third parties.  The International Maritime Organisation neither endorses nor condemns the use of armed personnel on board merchant ships, but leaves the decision to the shipowner subject to the law of the flag state.  In Nigerian waters, the possession of a firearm – without a licence from the Nigerian president or the inspector general of police, unless the individual is in the armed forces – is prohibited, and licensed private guard companies may provide guard services, but cannot carry arms during their duties.

https://www.internationallawoffice.com/Newsletters/Shipping-Transport/Nigeria/Akabogu-Associates/Legal-limits-of-armed-guards-on-board-ships

US IMPORT RESTRICTIONS IMPOSED ON CERTAIN ARCHAEOLOGICAL AND ECCLESIASTICAL ETHNOLOGICAL MATERIAL FROM BULGARIA, AND CERTAIN ARCHAEOLOGICAL MATERIAL FROM CHINA
On 14th January, Baker McKenzie reported an extension of import restrictions on certain archaeological and ecclesiastical ethnological material from Bulgaria.  It also reported an extension of import restrictions on certain archaeological material from China.

http://www.internationaltradecomplianceupdate.com/2019/01/14/extension-of-import-restrictions-imposed-on-certain-archaeological-and-ecclesiastical-ethnological-material-from-bulgaria/#page=1

http://www.internationaltradecomplianceupdate.com/2019/01/14/extension-of-import-restrictions-imposed-on-certain-archaeological-material-from-china/#page=1

CHEMICALS REGULATION: GOVERNMENT REVEALS BLUEPRINT FOR UK REACH POST-BREXIT

On 14th January, Burges Salmon LLP published an article saying that the UK government has published legislation to create a ‘UK REACH’ and a UK chemicals agency, which may include ‘significant costs’ for businesses.  EU Regulation No. 1907/2006 on the Registration, Evaluation, Authorisation and Restriction of Chemicals governs the regulation of chemicals for the protection of human health and the environment.  The article provides a guide to the new arrangements, beginning with a summary of when, if and how the REACH Amendment Regulations might come into force.

https://www.burges-salmon.com/news-and-insight/legal-updates/chemicals-regulation-government-reveals-blueprint-for-uk-reach/

FORMER ROMANIAN FOOTBALL LEAGUE HEAD, MEDIA MANAGER SENTENCED TO JAIL FOR CORRUPTION

Romania Insider on 16th January reported that Dumitru Dragomir, former president of the Romanian Professional Football League (LPF) and Ioan Bendei, a former manager of local telecom group RCS&RDS, were both sentenced to 4 years in jail for bribery (subject to appeal).

https://www.romania-insider.com/dumitru-dragomir-jail-corruption

PHILIPPINES: ‘HIGH-PROFILE’ CHINESE FUGITIVE WANTED FOR CORRUPTION ARRESTED

GMA News Online on 16th January reported that Xie Haojie, 49, was turned over to Chinese police.  He is said to have fled China and hid in the Philippines from March 2018.  He is under investigation in China for allegedly embezzling public funds and taking bribes in his capacity as general manager of a state-owned enterprise.

https://www.gmanetwork.com/news/news/nation/681613/phl-arrests-high-profile-chinese-fugitive-wanted-for-corruption/story

US CUSTOMS SCRUTINISING IMPORTS THAT USE THE “FIRST SALE” VALUATION METHODOLOGY

Sandler Travis Rosenberg on 16th January reported that the use of the first sale rule has increased dramatically over the past several months as companies seek to lessen the impact of the additional tariffs on imports from China.  But US CBP is said to be scrutinising imports that use this valuation methodology more closely as part of a broader increase in enforcement efforts.   The article cautions that importers should therefore review transactions taking advantage of the first sale rule to ensure they are consistent with CBP requirements.  It explains that under the rule, the declared value of a qualifying transaction may be based on the purchase price between the middleman/vendor and the manufacturer rather than the importer and the middleman/vendor.

https://www.strtrade.com/news-publications-first-sale-CBP-301-tariff-011619.html

CORPORATE GOVERNANCE AND DIRECTORS’ DUTIES IN IRELAND

On 16th January, law firm Matheson has made available the Thomson Reuters Practical Law Q&A guide to Corporate Governance and Directors’ Duties in Ireland.  This is said to give an overview of corporate governance trends in Ireland, corporate governance legislation and the authorities that enforce it.  The guide also covers corporate social responsibility and reporting, board composition, and in-depth analysis on directors’ duties and liabilities.

https://www.matheson.com/news-and-insights/article/corporate-governance-and-directors-duties-in-ireland

UK TAX ON OFFSHORE INTANGIBLES: ‘SERIOUS’ COMPLIANCE ISSUES

Out-Law on 16th January published an article saying that the new UK tax charge on multinationals using intangibles held in low tax jurisdictions to generate UK revenue could give rise to “serious” compliance issues for non-UK companies as well as their UK affiliates.

https://www.out-law.com/en/articles/2019/january/uk-tax-on-offshore-intangibles-serious-compliance-issues/

HOUSING OFFICER AT LOCAL AUTHORITY JAILED FOR £300,000 FRAUD DESPITE NO PERSONAL BENEFIT

The Local Government Lawyer on 15th January reported that Stuart Burrell, a former Southend-on-Sea Borough Council housing officer who is also a noted escapologist, has been jailed for a fraud from which the court accepted he did not personally benefit.  He forged invoices and letters from housing suppliers saying he wanted to help “put a roof over people’s heads”.  The court was told how he cut corners to give public funding to 2 Southend housing projects after rule changes meant they may not have been eligible.

http://www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=37827%3A2019-01-15-12-43-43&catid=60&Itemid=28

15 JAILED OVER MULTIBILLION-DOLLAR FRAUD IN CHINA

On 16th January, Xinhua reported that a court in Shanghai has imprisoned 15 people for fraud valued at about $6.4 billion.  The main suspects, Huang Jialiu and Wei Yanping, were sentenced to life in prison and ordered to pay fines, while 13 others received jail terms ranging from 9 to 15 years.  The fraudsters were executive staff with 3 companies including Shanghai Kuailu Investment Group.  The companies used counterfeit documents to pool funds from private investors through the Internet and brick-and-mortar stores between 2014 and 2016.

http://www.china.org.cn/china/2019-01/16/content_74380044.htm

13 CAR THIEVES WITH EXPENSIVE TASTE ARRESTED BY FRENCH GENDARMERIE

A news release from Europol on 16th January reported a swoop on a criminal network behind the trafficking of high-value vehicles, estimated of having generated €4 million in criminal revenue.  There were 13 house searches in Nimes (France), which resulted in the arrest of 13 suspects and the seizure of 26 vehicles, as well as several tens of thousands of euros frozen on bank accounts.  Cars were stolen in Belgium, Germany or the Netherlands, the vehicles were ringed and sold locally in Nimes.  The suspects focused on stealing prestigious brands, like Porsche and Lamborghini.

https://www.europol.europa.eu/newsroom/news/13-car-thieves-expensive-taste-arrested-french-gendarmerie

JERSEY APPROVES US-STYLE LLC

Appleby in an article dated 17th January said that the Limited Liability Companies (LLC) Law is expected to come into force in early 2019 and is designed to allow fund managers and investors to use a LLC structure which they will be familiar with from the US and certain other international finance centres.  It provides an overview and says what the key features are.

https://www.applebyglobal.com/insights/insights-2019/jersey-approves-us-style-llcs.aspx

NORTH KOREA’S LESS-KNOWN MILITARY THREAT: BIOLOGICAL WEAPONS

On 15th January, the New York Times carried an article that starts by saying that pound for pound, the deadliest arms of all time are not nuclear but biological.  However, it says that the Trump administration has given scant attention to North Korea’s pursuit of living weapons — a threat that analysts describe as more immediate than its nuclear arms.  According to an analysis issued by the Middlebury Institute of International Studies at Monterey last month, North Korea is collaborating with foreign researchers to learn biotechnology skills and build machinery.  As a result, the country’s capabilities are increasing rapidly.

https://www.nytimes.com/2019/01/15/science/north-korea-biological-weapons.html

MAERSK TO BEGIN RANDOM CHECKS OF CONTAINERS IN US OVER SAFETY FEARS

On 16th January, Loadstar reported that the shipping line is to begin physically inspecting container contents in North America as part of its efforts to stem the increasing numbers of fires that break out inside boxes during transit, as well as boxes in which cargo moves or is damaged due to not being lashed correctly.  The Maersk initiative comes as global shipping insurer the TT Club has launched its #Fit4Freight campaign in conjunction with the Global Shippers Forum, the World Shipping Council and ICHCA.  It is reported that statistics indicate that as much as 66% of incidents related to cargo damage in the intermodal supply chain can be attributed in part to poor practice in the overall packing process, including not just load distribution and cargo securing, but also poor practice in the workflow from classification and documentation through to declaration and effective data transfer.

https://theloadstar.co.uk/maersk-to-begin-random-container-inspections-over-safety-fears/

PODCAST: COMMON DUE DILIGENCE CHALLENGES

In the latest TRACE podcast, Pia Vining of TRACE discusses the 5 most common due diligence challenges her team sees and the growing sophistication of the international community of third party intermediaries.

https://traceinternational.org/bribe_swindle_or_steal

GEORGIANS ASK ‘WHY OLIGARCH IVANISHVILI’S ATTACKING TBC BANK’

BNE Intellinews on 16th January carried an article saying that Georgia’s chief prosecutor was personally asked last year by the chairman of ruling party Georgian Dream, billionaire oligarch Bidzina Ivanishvili, to investigate London-listed TBC Bank’s operations over the past 15 years.  Various media outlets in Georgia have reported that the request for investigations into TBC seems politically motivated.  Georgian-Russian dual national Ivanishvili, a former prime minister of Georgia is also its richest person.  It says that the matter appears to relate to the $2.5 billion Anaklia deep-water port on the Black Sea coast — seen as Georgia’s most important project.

http://www.intellinews.com/georgians-ask-why-oligarch-ivanishvili-s-attacking-tbc-bank-154783

GOLDMAN BOSS APOLOGISES FOR 1MDB SCANDAL

On 16th January, the BBC reported that Goldman Sachs new boss has apologised to Malaysia for the role an ex-partner played in the corruption scandal but distanced the bank from the scheme, which saw billions embezzled from the state development fund, 1MDB.

https://www.bbc.co.uk/news/business-46896849

IRAN WORKING ON CRYPTOCURRENCY – “CRYPTO-RIAL”

The Tehran Times on 16th January reported that the Central Bank of Iran has been working with domestic knowledge-based companies to develop a digital currency, called crypto-rial, supported by HyperLedger Fabric technology.  development of A rial-based national cryptocurrency is said to have been achieved and when the CBI approves the uses of national cryptocurrency, it will be issued to financial institutions such as banks to test payments and internal and interbank settlements.  However, the article notes that the US sanctions affecting a number of cryptocurrency exchange platforms, including Binance and Bittrex, restricted Iran from receiving services.  FinCEN is also said to have issued a warning in an Advisory to assist US banks and other financial actors such as cryptocurrency exchanges in identifying “potentially illicit transactions related to the Islamic Republic of Iran”.

https://www.tehrantimes.com/news/431950/Getting-around-sanctions-with-crypto-rial

AFRICA: HOW MULTINATIONALS AVOID PAYING THEIR TAXES

On 16th January, All Africa carried an article about 2 recent studies which expose in new detail how multinational corporations avoid paying tax in a developing nation.  They use actual corporate tax returns in a developing country for the first time to analyse how multinationals take profits earned in one country and shift them to a “tax haven”.  Firms operating in South Africa but owned by a parent in a tax haven are shown to avoid taxation “on as much as 80% of their true income”.  One study finds that a small number of the biggest multinationals – pre-eminently in the mining and financial industries – is responsible for the vast bulk of “profit-shifting”. It also gives a breakdown of the most frequently used tax havens.  The OECD has said that “aggressive tax planning” by multinationals is one of the factors contributing to losses of somewhere between 4% and 10% of global corporate income tax revenue.

https://allafrica.com/stories/201901160689.html

NCA RECOVERS £1.7 MILLION OF ASSETS AS PROCEEDS OF DRUG TRAFFICKING AND MONEY LAUNDERING

A news release from the NCA on 16th January advised that the NCA has used proceeds of crime powers to seize property worth £1.7 million from associates of an organised crime group involved in drug supply in Staffordshire and the West Midlands.  9 men and 4 women connected to the group were sentenced at Stafford Crown Court in December for their involvement in a large-scale conspiracy to supply cocaine.  6 properties were seized using a Civil Recovery Order.

http://www.nationalcrimeagency.gov.uk/news/1550-nca-recover-1-7-million-in-proceeds-of-crime-linked-to-drug-trafficking-money-laundering-gang

APPLYING CONVENTIONAL ARMS CONTROL IN THE CONTEXT OF UNITED NATIONS ARMS EMBARGOES

This 2018 report from the UN Institute for Disarmament Research (UNIDIR) says that the  past decade has witnessed the highest number of UN arms embargoes running concurrently across the globe.  The report provides a brief overview of the evolution of the use of arms embargo measures throughout UN sanctions history.  It also examines some of the challenges related to benchmarking and other processes used to reassess and adjust sanctions regimes and offers a comprehensive overview of sources of information used by Member States to inform these processes.  The report introduces preliminary observations for potential approaches to more systematically integrate the analysis of national weapons and ammunition management (WAM) capacities into assessments of arms embargoes, and a more robust use of arms control obligations to support the objectives of embargoes and sanctions regimes.  It uses 5 cases studies – Libya, CAR, Somalia, Liberia and the Ivory Coast.

http://www.unidir.ch/files/publications/pdfs/applying-conventional-arms-control-in-the-context-of-united-nations-arms-embargoes-en-718.pdf

un

LAW SOCIETY RESPONSE TO FATF REPORT ON UK AML/CFT

On 16th January, the Law Society of England & Wales issued a news release about the mutual evaluation report on the UK published in December.  It lists the key highlights and recommendations.  It also points out that the FATF process for the UK is not over: 2 more reviews are expected within the next 5 years – a technical compliance review in 2021 and an effectiveness review in 2023.  It says that neither review is likely to be strenuous, but focus will be placed on the weaknesses identified last year, primarily UKFIU resourcing and the supervisory regime.

https://www.lawsociety.org.uk/support-services/risk-compliance/anti-money-laundering/uk-performs-well-2018-fatf-assessment/

THE EVOLUTION OF EXTREME-RIGHT TERRORISM AND EFFORTS TO COUNTER IT IN THE UK

In the January 2019 edition of the CTC Sentinel, this article which says that the focal point has been National Action — a small, overtly national socialist group that in December 2016 became the first extreme-right group to be banned in the UK since 1940 and the first ever such group to be proscribed as a ‘terrorist’ organisation.  British authorities were subsequently confronted with a new networked threat posed by clusters of activists who continued to operate clandestinely after the ban, as well as a larger and more nebulous threat from extreme right-wing ‘lone actors’ and have responded with an increasingly co-ordinated and multi-layered approach.  It concludes that the threat posed by extreme-right terrorism has increased not just in the UK but across Western Europe.

https://ctc.usma.edu/evolution-extreme-right-terrorism-efforts-counter-united-kingdom

REVISITING THE IDEOLOGICAL ORIGIN OF THE ISLAMIC STATE

Another article in the January 2019 edition of the CTC Sentinel is concerned with the background to IS, saying that it is not just an offshoot or development of Al-Qaida.  Despite its history as a local Al-Qaida affiliate in Iraq (it did grow out of it – but their common history is said to have ended in 2014), the Islamic State developed from an ideological and cultural trend born in late-1980s Afghanistan that was always in tension with the core idea and identity of Al-Qaida.  In fact, the article argues, the ideological vision of the Islamic State developed in some ways in opposition to Al-Qaida.  Furthermore, the Islamic State’s predecessor group was later only incorporated into Al-Qaida due to the strategic gains both groups hoped to benefit from as a result of a merger.

https://ctc.usma.edu/hardline-stream-global-jihad-revisiting-ideological-origin-islamic-state/

IN THE ERA OF ELECTRONIC WARFARE, BRING BACK PIGEONS

In a Commentary piece on War on the Rocks it is argued that, 60+ years after the disbanding of the US Army pigeon service the military homing pigeon warrants re-examination.  It provides a potted history of the use of pigeons by the US military – widespread use starting in WW1.  It notes that both the French army and the Chinese army maintain small pigeon units, in case of communications disruption…

Incidentally, and not mentioned in the article, during WW2 not only did the British use pigeons for communications (one brought back news of successful landings on D-Day) and rescue (ditched aircrew released homing pigeons) – and there was a national pigeon service for pigeon fanciers to do their bit – but (incredibly) there was a Secret Pigeon Service that provided communications with SOE and Resistance in Occupied Europe and was even involved in “spying” (pigeons were dropped by parachute and if a local found it they could complete a questionnaire about German forces and facilities and pop it in the bird’s message container and send it home.  It is claimed, I think, that such a method helped locate an important radar site that was subsequently targeted)…

https://warontherocks.com/2019/01/in-the-era-of-electronic-warfare-bring-back-pigeons/