4th January 2019
GHOSN PAID 2 MORE ACQUAINTANCES $48 MILLION WITH NISSAN MONEY
The Nikkei Asian Review on 4th January reported that Carlos Ghosn is said to have paid nearly $50 million to businesses run by 2 Middle Eastern acquaintances from the cash reserve at the centre of breach of trust allegations against the former Nissan chairman. Nissan dealers in Oman and Lebanon received $32 million and $16 million, respectively, through Dubai-based Nissan Middle East, sources sai, and around the same time that Ghosn paid a total of $14.7 million to a business run by Saudi associate Khaled al-Juffali, allegedly as compensation for help covering personal losses in the wake of the 2008 financial crisis.
PANAMA CLOSES NARCOTRAFFICKING ROUTES
Diálogo on 3rd January reported that Operation Shield (Operación Escudo) was a joint initiative of Panamanian security branches that began on October 1st. In 3 months, the Panamanian Public Force seized nearly 25 tons of drugs and arrested more than 120 people in several operations throughout the country. According to the Public Force, most of the drug seized belonged to Clan del Golfo, a Colombian organized armed group. The Operation Shield, which will extend to the end of September 2019, seeks to create a permanent and sustained siege against narcotrafficking, using all air and naval means with intelligence support from Colombian, Costa Rican, and US security forces. Although Shield is a nationwide initiative, the operations focus mainly on border areas with Colombia and Costa Rica, as well as coastal areas along the Pacific and the Caribbean.
RUSSIAN INDICTED IN FLORIDA FOR EXPORT CONTROL OFFENCES ARRESTED IN SAIPAN
The Marianas Variety in Micronesia reported on 4th January that a Russian national, Dmitrii Makarenko, 72, indicted in Florida in 2017 for alleged involvement in a conspiracy to illegally ship military items in 2013 has been arrested on Saipan. He faces charges of conspiracy to export defence articles without a licence, and money laundering. In June, Makarenko’s co-defendant, Vladimir Nevidomy, was sentenced to 26 months in prison.
UK IVORY BAN HAS BECOME LAW – HOW WILL IT WORK IN PRACTICE?
On 3rd January, an article in Apollo Magazine pointed out that there was also a de facto import ban on ivory in the US that means that US museums and private collectors are unable to increase their holdings with works of art made of or containing ivory, if such objects are not already in the country, and then not without considerable impediments. It also points out that there are different rules on the trade in antique ivory in place across Europe, and in China. The author of the article says that, in the UK, the salient issues revolve primarily around implementation, and how this will impact on the market for historic works of art.
IRELAND: CABINET GIVES GREEN LIGHT TO AML BILL TO IMPLEMENT 5TH AML DIRECTIVE
The Irish Times reported on 3rd January that the Cabinet has approved the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2019, including tougher provisions to tackle the use of cryptocurrencies in funding terrorism. The main purpose of is to give effect to the 5th EU money laundering Directive and strengthen existing legislation. If the Bill passes, banks and other financial institutions will be required to carry out stricter due diligence before taking on new clients; credit and financial institutions will be prevented from creating anonymous safe deposit boxes; restrictions will be imposed on the use of virtual currencies for terrorist financing and limits on the use of pre-paid cards; and improved safeguards for financial transactions to and from “high-risk third countries”. It also gives new powers to the Garda and CAB to access bank records when investigating money laundering.
INDIA: GOVT RESTRICTS PRINTING OF 2,000 RUPEE NOTES TO RESTRAIN MONEY LAUNDERING
Newstrack Live reported on 4th January that the Indian Government has stopped the printing of Rs 2,000 (approximately £22) currency notes in order to hold back money laundering and tax evasion.
BRITISH COLUMBIA CASINOS: $20 BILLS IN DUFFEL BAGS AND ‘OBVIOUS’ MONEY LAUNDERING, WARNINGS IGNORED
CTV News in Vancouver published an article on 3rd January saying that money laundering in British Columbia casinos with huge amounts of $20 bills in duffel bags and paper bags was “obvious” and a problem the BC Lottery Corporation needed to deal with to be a good corporate citizen, public servants warned almost a decade ago in correspondence obtained by CTV news. The agency’s response at the time: dismiss the concerns, according to records newly uncovered through a Freedom of Information request. It says that the person who wrote BCLC’s reply is now the director of its AML unit.
CAUTIOUS WELCOMES FOR UK GOVERNMENT RESPONSE TO THE LIMITED PARTNERSHIP LAW REFORM CONSULTATION
An article from Charles Russell Speechlys comments on the Government response that summarises the comments received during the consultation launched in April 2018 and which ended in July, and sets out the Government’s proposed responses and potential legislative changes. It says the response recognises the need to limit the risk of misuse of UKLP whilst also maintaining the appeal of UKLP as an investment vehicle for legitimate domestic and overseas businesses.
US REPORTING CHECKLIST FOR FOREIGN TRUSTS
On 3rd January, Kozusko Harris Duncan published an article which says that trusts classified as foreign for US tax purposes, whether established under the law of a US state or of an offshore jurisdiction, must review whether they have any US tax or information reporting filings to make in 2019 with regard to income earned and distributions made in 2018. This article provides trust officers and family advisers with a summary checklist.
UK: ADDITIONAL CUSTOMS DUTIES ON PRODUCTS FROM THE USA
On 4th January, HMRC published a Customs Information paper on an EU Regulation which, from 22nd June 2018, additional customs duties were liable on goods listed in Annex 1 and 2 of the Regulation originating from the USA.
GIBRALTAR ORDERED BY EU TO RECOVER €100 MILLION IN ILLEGAL TAX-BREAKS
On 2nd January, International Investment published an article saying that the European Commission has found that Gibraltar gave around €100 million worth of illegal tax advantages to multinational companies and has ordered it to recoup those tax-breaks. Gibraltar’s corporate tax exemption regime for interest and royalties between 2011 and 2013 was deemed illegal under EU state aid rules after a 5-year probe
US: INTERNATIONAL CO-OPERATION IN FOREIGN-BRIBERY ENFORCEMENT CONTINUED IN 2018
The Wall Street Journal on 4th January reported that international co-operation continues to be a central theme in anti-foreign bribery cases, as 2018 enforcement figures indicate. US authorities resolved 17 corporate cases of Foreign Corrupt Practices Act violations in 2018, matching the average amount struck over the past 10 years- with about $2.9 billion in penalties connected to those cases, but in several instances collecting only a portion of that amount, as the companies involved struck simultaneous settlements with multiple countries.
ROMANIA: NEW RETROACTIVE TAX FOR GAMBLING OPERATORS
On 4th January, Calvin Ayre reported a new 2% tax on gambling turnover. An emergency ordinance took effect on 1st January and imposed stiff tax hikes on a number of industries, including a ‘greed tax’ on bank assets and a 3% tax on telecom operators’ turnover. The new taxes on gambling turnover, which the government referred to as a ‘gambling participation fee’, involve a 5% turnover tax for online operators, and 3% for land-based operators. These were to be imposed in addition to the existing 16% tax all operators pay on their gross gambling revenue. However, it says that the government then released a revised ordinance that softened the blow by reducing the gambling turnover tax to 2% – but will reportedly apply the tax retroactively to Romanian-licensed gambling operators’ 2018 performance, and operators will have until February 25th to make this lump-sum payment.
NON-DISCLOSURE AGREEMENTS (NDA) IN EMPLOYMENT CONTRACTS – DO EMPLOYERS REALLY NEED THEM?
On 3rd January, Appleby published the second part of an article looking at the increasing use of non-disclosure agreements (NDA) in the employment context. The second part considers introducing or improving upon standard confidentiality clauses in an employment contract as an alternative.
MONTENEGRO LAUNCHES SCHEME OFFERING CITIZENSHIP FOR INVESTMENT
KYC 360 on 4th January reported that Montenegro has launched a programme offering citizenship to up to 2,000 foreigners in return for investment over the next 3 years to help speed up its economic development.
BELGIAN COURT CALLS PRISON SENTENCES IN CHEMICALS TO SYRIA CASE
The Knack on 4th January reported that prosecutors in Antwerp recommended 3 Belgian companies involved in the shipping of 168 tonnes of isopropanol and 219 tonnes of acetone to Syria be fined and that managing directors of 2 companies be sentenced to jail.
ALLEGED DRUG TRAFFICKING WITHIN THE VENEZUELAN REGIME
In May, Insight Crime published an article saying that InSight Crime had been building files on senior Venezuelan officials, current or past, that have been involved in the trafficking of cocaine. It says it had 123 files. However, for legal reasons it could not publish the entire list. Instead it gave details of those it felt it had very strong evidence against. It says that, instead of side-lining those accused of drug trafficking, President Maduro has promoted them to the highest offices, perhaps calculating that they have the most to lose if his regime falls and will therefore fight the hardest to preserve it.
DUBAI CUSTOMS DISRUPTED 922 SMUGGLING ATTEMPTS IN FIRST 9 MONTHS OF 2018
On 2nd January, Insight Crime published an article saying that, of the 922 smuggling efforts disrupted by Dubai Customs last year, 355 were related to drugs, including one plot to sneak an illicit shipment of cannabis weighing 25.5 kg into the city hidden inside loud speakers in an airline passenger’s luggage. In another incident, inspectors found 6,720 Lyrica tablets, which have been dubbed “the new Valium”, cleverly concealed inside bags of nuts. Officers in Dubai are said to have inspected 30.2 million items of luggage between January and September.
ILLICIT FINANCE IN RUSSIA’S OVERSEAS INFLUENCE OPERATIONS: A CASE STUDY OF FIRST CZECH-RUSSIAN BANK
On 28th December, the Alliance for securing Democracy published an article which claims that the bank was involved in financial support for Iran; use of the bank as a vehicle for money laundering by corrupt elites on a massive scale through the “Russian Laundromat” money laundering scheme identified by OCCRP; support for sanctioned organised crime figures; and Russian state-sanctioned interference in the Western political system in the form of a €9.4 million loan to the National Front in France.
FORMER COLOMBIAN NATIONAL DIRECTOR OF ANTI-CORRUPTION JAILED FOR 4 YEARS IN US
The FCPA Blog on 3rd January reported that Luis Gustavo Moreno Rivera, 37, former Colombian National Director of Anti-Corruption has been sentenced to 4 years in prison after a DEA sting in Miami caught him soliciting a $132,000 bribe to undermine an investigation into a local politician.
UK: PHARMACIES WARNED OF FAKE TABLETS CONTAINING FENTANYL
The Pharmaceutical Journal on 4th January reported that counterfeit tablets that contain the opioid fentanyl have been found in the UK for the first time. Public Health England (PHE) said that it had alerted all directors of public health in the capital about the seizure and was working with the police and local authorities. PHE is quoted as saying that Fentanyl is a strong opioid about 50 times more potent than heroin…there is no safe way to use illicit fentanyl, which has been responsible for thousands of drug-related deaths in North America.
TUNISIAN MAROUANE MABROUK SHOULD REMAIN ON EU SANCTIONS LIST, SAYS TRANSPARENCY INTERNATIONAL
On 4th January, Transparency International said that the EU should not unfreeze the assets of a Tunisian businessman and son-in-law of the former Tunisian president Zine el Abidine Ben Ali. Following a request from the Tunisian Ministry of Foreign Affairs, Mohammed Marouen Mabrouk, will potentially be removed from the EU’s list of 48 people sanctioned for misappropriating Tunisian state assets in 2011, following the Tunisian revolution. However, the NGO said that EU governments should reject the request until such time as the corruption allegations are resolved.
FORMER PORTUGUESE MINISTER CLEARED IN VISA CORRUPTION CASE
The Washington Post on 4th January reported that a court in Lisbon said it was not proven that former Interior Minister Miguel Macedo had favoured Chinese and Angolan investors in administrative procedures granting the so-called “golden visas”. 2 other senior Portuguese officials were found guilty of corruption while 2 Chinese citizens were convicted of influence-peddling. Another Chinese citizen and an Angolan were acquitted.
SOUTH AFRICA: LAW ENFORCEMENT LAYS DOWN A MARKER AGAINST MARITIME POACHING
On 4th January, Defence Web reported the arrest of 20 suspects and confiscation of abalone and rock lobster valued at £9.7 million. A 16 day-long tasking saw the SA Police Service (SAPS), Department of Agriculture, Forestry and Fisheries (DAFF) and Western Cape provincial conservation agency, Cape Nature, make what the national Department of Environmental Affairs called “a notable success”.
UK CORPORATE GOVERNANCE REFORM
On 4th January, the House of Commons Library published a briefing which discusses UK Government work on reforms and other proposals. It explains that “corporate governance” is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies.
FOREIGN GANGSTERS ‘BUYING RESPECTABLE COMPANIES IN SCOTLAND TO HIDE DIRTY MONEY’
The Evening Times in Glasgow on 4th January reported that the head of forensic accountancy at Police Scotland, confirmed the purchase of a mainstream Scottish company by a foreign businessman with known gangland affiliations, and effectively sounded a wake-up call about the threat of organised crime infiltration into Scotland’s legitimate economy. He said he was not talking about shell companies, such as Scottish limited partnerships, which tend to bank overseas, but rather about the purchase by gangsters of real-world business which employ real people and do real business in Scotland.
BIRMINGHAM COUPLE WHO WASHED AND SOLD USED STAMPS ON EBAY JAILED
Birmingham Live on 4th January reported that a Birmingham couple who defrauded the Royal Mail by “washing” used stamps and selling them on ebay as new have both been jailed. As a result of their scam, which they ran from their home for 5 years, they caused a potential loss to Royal Mail of over £400,000.
FRENCH VAT EXEMPTIONS FOR CHARTERS STARTING IN MARTINIQUE AND GUADALUPE
On 4th January, Superyacht News reported that the French government has passed legislation allowing VAT exemptions for chartered superyachts in the Caribbean – provided the yacht is more than 24m long, is less than 3,000 GT and travels beyond French territorial waters. It says that the system that is now applied to Martinique and Guadalupe is akin to that previously applied in France before the fallout from the Bacino Charter case (2010) forced the French government’s hand in 2013. It explains that the EU VAT Directive does not apply to France’s overseas territories, which are Martinique and Guadalupe, thus allowing the treatment.
CROATIA CATCHES WANTED ITALIAN MAFIA DRUG DEALER
OCCRP on 4th January reported that police arrested in Zagreb a former member of a mafia group who was convicted for drugs trafficking in Italy, Croatian authorities said. They arrested Claudio D’Este, 72, as he was leaving his home with his family. He had counterfeit identity papers. Italy had issued a European arrest warrant for D’Este. D’Este was a member of Venetian mafia group Mala del Brenta, which was led by Felice Maniero, also known as “Angel Face”. The group sold drugs from abroad in the Veneto region throughout the 1980s and 1990s.
FUND MANAGERS MUST ADAPT TO UK LIMITED PARTNERSHIPS REFORMS
On 4th January, Out-Law reported that fund managers will need to alter existing practices to comply with reforms to UK limited partnership laws likely to be introduced in 2019. The article outlines the details of reforms that flow ultimately from allegations that Scottish limited partnerships in particular were being misused.
UK BANKS EXPLORE PROBLEM GAMBLING SPENDING CONTROLS
On 4th January, iGB reported that 3 of the UK’s biggest banking groups are exploring ways to support customers who are problem gamblers, although they have denied that definitive timeframes for the introduction of payment-blocking tools have been finalised.
MODERNISING GUERNSEY’S CORPORATE INSOLVENCY LAW
In an article dated 7th January, Appleby published an article that said the States of Guernsey have published draft legislation (the Draft Legislation) which recommends amendments to the current corporate insolvency legal regime contained within the Companies (Guernsey) Law 2008.
DRUG TRAFFICKERS RECRUITING WOMEN BY THE HUNDREDS TO TRANSPORT DRUGS FROM BOLIVIA TO CHILE
On 4th January, an article from Insight Crime said that drug traffickers are recruiting women by the hundreds to transport drugs from Bolivia to feed Chile’s growing consumer market. It says that they tempt impoverished, debt-ridden women, who are often the sole providers for their families, with offers of up to $1,000 to become “tragonas” (swallowers) or drug mules. And the countries’ poor relations coupled with the high demand for drugs mean this problem will likely only continue to grow.
SAUDI ARABIA TO RECEIVE THUNDER-2 BALLISTIC MISSILE SYSTEM IN 2022
Defence Blog on 3rd January reported that Saudi Arabia’s military is expected to receive new mobile Thunder-2 short-range ballistic missile system in 2022. It is in the middle of receiving first components of the Thunder-2 ballistic missile, which has been jointly developed by King Abdulaziz City for Science and Technology (KACST) and Ukrainian Yuzhnoye Design Office.
POLICE STRUGGLE TO STOP FLOOD OF FIREARMS INTO UK
The Guardian on 27th December carried an article saying that a Senior officer had warned that the supply of guns has increased in the past year and will continue to do so in 2019. The newspaper says that it has learned that the situation is so serious that the NCA has taken the rare step of using its legal powers to direct every single police force to step up the fight against illegal guns; and has used tasking powers to direct greater intelligence about firearms to be gathered by all 43 forces in England and Wales. It says that smugglers have increasingly found new ways and innovative routes to get guns past border defences.