7th January 2018
JAPAN TO FIGHT SOUTH KOREA’S ASSET SEIZURE OVER WARTIME LABOUR
The Nikkei Asian Review on 6th January reported that the Japanese Prime Minister has instructed his government to take measures rooted in international law to counter efforts in South Korea to seize assets of Nippon Steel and Sumitomo Metal in South Korea on behalf of South Korean labourers forced to work for the company during WW2, arguing that the issue “was fully and finally settled” through a 1965 treaty signed when Japan normalised diplomatic ties with South Korea.
TUNISIAN AUTHORITIES SEIZE OVER 6 KG OF GOLD SMUGGLED FROM LIBYA
The Libya Observer on 6th January reported that Tunisian authorities have seized Friday more than 6 kg of gold jewellery from 2 Tunisians coming from Libya.
ARGENTINA BANS IMPORTS OF BLANK-FIRING GUNS
HKTDC on 4th January reported that Argentina had banned with immediate effect the production, importation and sale of blank firearms (defined in the article) – though excluded from this prohibition are blank firearms used by a duly authorised entity for special effects purposes, and items that fire projectiles through the use of air or compressed gas powered by an electrical device, commonly known as airsoft markers or paintball markers, are not covered by the ban.
AUDITS REVEAL DEUTSCHE BANK’S LINKS TO TAX TRADE SCANDAL
On7th January, KYC 360 reported that there are “lots of indications” that some managers discussed “the reputational risks” of Deutsche Bank’s involvement in a share-trading scheme that is the subject of Germany’s biggest post-war fraud investigation – the so-called “cum-tax” scandal – according to a conclusion in one of 5 internal audits.
ARGENTINA: COCAINE DEALERS INVESTED DIRTY CASH IN REAL ESTATE, 47 PROPERTIES SEIZED
KYC 360 on 7th January reported that following a joint operation between police in Spain, Italy, Argentina and Europol, up to 47 properties and numerous vehicles were seized in a police crackdown on a drug dealers’ network which involved investing drug money in the property market. The network trafficked cocaine via containers from places such as Argentina and Columbia to Europe, and also cultivated and sold marijuana in Spain. Over 2 tonnes of cocaine was seized by the Spanish National Police and Argentine National Gendarmerie when it was being transported from Bolivia to Argentina, destined to Europe.
NICARAGUAN IMPORTING AND EXPORTING COMPANY APPROVED
An article from Arias on 4th January reported that the National Assembly of Nicaragua had adopted a Law for the Creation of the Nicaraguan Importing and Exporting Company (ENIMEX), which will operate as a commercial public entity with its own personal capital and under the regulation of the Ministry of Finance and Public Credit (MHCP). It will carry out transactions for goods, assets, products and general services, being also able to operate as a buyer and seller agent for the State of Nicaragua and in the national market as an “important tool for the sustainable economic development of the country”. ENIMEX will have to operate under the same terms and guidelines as any other private entity, and will not have the planned tax exemption that was originally proposed.
PANAMA TIGHTENS AML CONTROLS FOR BANKS AND FIDUCIARY SERVICES
An article from Arias on 3rd January advised that on 27th November, the superintendencia de bancos had modified the rules for banks and fiduciary services to comply with FATF requirements. Banks and trust companies must develop a client profile, both for individuals and for legal persons (i.e. companies etc) and the new rules set out the minimum mandatory information. In addition, if the customer act as an intermediary for a beneficiary, the bank or trust company must perform due diligence on the ultimate beneficiary. They must also carry out a risk assessment of the client and its business, and the use of the product or service involved.
LETTING AGENT HANDED £175,000 BILL BY COURT AFTER ‘BAIT AND SWITCH’ SCAM PROSECUTION
Property Eye on 7th January reported that London agent Sterling De Vere was taken to court after Tower Hamlets Council intervened after complaints about a ‘bait and switch’ scam – in which prospective tenants are typically shown a good quality property at a reasonable price, but are then told it is not available after they have agreed to rent it, and end up with something far inferior.
GUNSHIPS FOR SALE AS PART OF MASS JORDANIAN SELL-OFF
AIN Online on 5th January reported that the Royal Jordanian Air Force (RJAF) has put its 2 AC-235 gunship aircraft up for sale, along with its Sikorsky UH-60L helicopter fleet. They add to a series of declarations in the summer in which a number of other types were made available for purchase as part of a major RJAF fleet rationalisation and cost-reduction effort.
GABON COUP: WHO IS PRESIDENT ALI BONGO?
On 7th January, Deutsche Welle carried a background article on the President of Ali Bongo as an attempted military coup takes place in Gabon. Since succeeding his father in 2009, his time as president has been marred by accusations of electoral fraud, human rights abuses and nepotism.
EU DIRECTIVE FOR VAT GENERALISED REVERSE CHARGE MECHANISM
On 7th January, Tax News reported that EU legislation providing for the introduction of the “generalised reverse charge mechanism,” to enable Member States to better counter VAT fraud, has been published in the Official Gazette and will become effective from January 16th. It will allow Member States that are most severely affected by VAT fraud to temporarily apply a generalised reversal of VAT liability.
UGANDA: HOW ILLICIT TRADE IS AFFECTING GOLD SECTOR
All Africa on 7th January reported that the gold sector is in the clutches of cartels which have been handed free rein by government to set the rules of the game. This, it says, is because government has not streamlined the processes of registration and supervision in the sector, and companies are relying on a complex system to hide funds in safe havens and secrecy jurisdictions. One of the companies said to be facing investigation is Africa Gold Refinery (AGR) owned by wealthy Belgian businessman Alain Goetz – who is said to be close to the political establishment in Uganda.
SOUTH KOREA TO CRACK DOWN ON OFFSHORE TAX EVASION
On 7th January, the Korea Times reported that the government will step up its efforts to crack down on overseas tax evaders in 2019 by delivering heavier fines to firms or individuals failing to submit their overseas entities’ financial statements and other related documents, as part of the 2019 tax revision’s enforcement ordinances from the Ministry of Economy and Finance that take effect in February. Holders of, or those who have de facto control over an overseas financial account of $446,000 or more in countries with which Korea has no tax treaties, will no longer be able to avoid regular tax filings. It will also apply if part of the funds is held by their immediate family members, or executives or employees at a firm of which they are owner.
THE WESTERN BALKANS
On 7th January, the House of Lords Library published a briefing pack which contains a selection of material relevant to the forthcoming debate on developments in the Western Balkans and the threat posed by instability and insecurity in that region.
GERMAN COURT ORDERS TELECOM COMPANY TO RESUME SERVICES TO IRANIAN BANK
On 7th January, European Sanctions Blog reported that in November the Hamburg District Court had ordered Deutsche Telekom to reinstate internet and telephone services to Bank Melli Iran, rejecting Deutsche Telekom’s reasons given for terminating services without notice. Deutsche Telekom suspended services from 16th November. Bank Sepah and European Iranian Trade Bank are also said to have obtained similar injunctions.
EDIBLE CANNABIS IN CANADA FROM OCTOBER
On 3rd January, Gowling WLG published a briefing saying that Edible cannabis and other new forms of cannabis will be legal in Canada on October 17th, but it says that the burning question that has been on everyone’s mind is how these new forms of cannabis will be regulated. It says that some preliminary answers to this question have now been answered.
UK: CHANGE IN REGULATION OF CLAIMS MANAGEMENT COMPANIES
On 7th January, Out-Law published an article saying that the FCA will become responsible for the regulation of claims management companies in Great Britain from April in a move broadly welcomed within the insurance sector. Legislation implementing the reforms provides some details on how the new regime will work.
UNODC LAUNCHES LATEST GLOBAL REPORT ON TRAFFICKING IN PERSONS
On 7th January, the UN Office on Drugs and Crime published this report which says that the number of human trafficking victims is on the rise, while armed groups and terrorists are trafficking women and children to generate funds and recruit. It examines trafficking trends and patterns, and puts the spotlight on human trafficking in armed conflict. It is said that practically every nation is affected by this crime, whether as a country of origin, transit or destination of victims. Children now account for 30% of all detected victims, with far more girls detected than boys. Sexual exploitation continues to be the main purpose for trafficking, accounting for some 59%.
A separate booklet is the Global Report on Trafficking in Persons − in the context of armed conflict. It categories trafficking as being for sexual exploitation, sexual slavery, forced marriage, children for armed groups, and for forced labour.
TRANS WOMEN: THE UNSEEN VICTIMS OF HUMAN TRAFFICKING
On 7th January, Insight Crime published an article which document the vulnerabilities that surround the lives of trans adolescents and adults when they leave their homes in South America, whether to simply express their sexual identity or whether they are driven out by violence from their families, and how this uprooting makes them easy targets for human trafficking or the child sex trade.
NO DEAL BREXIT – THE UK TEMPORARY PERMISSIONS REGIME (TPR)
On 7th January, Eversheds Sutherland published an article containing flowcharts to help navigate the UK temporary permissions regime – if the Withdrawal Agreement and transition period do not come into effect. The TPR will enable EEA firms and funds which passport into the UK to continue operating in the UK if the existing passporting regime falls away abruptly when the UK leaves the EU. TPR will allow inbound passporting EEA firms to continue operating in the UK within the scope of their current permissions for a limited period after Exit Day (29th March), while seeking full UK authorisation. It will also allow EEA funds already reorganised in the UK under a passport to continue temporarily marketing in the UK.
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AMERICAN ISIS MEMBER CAUGHT ON SYRIAN BATTLEFIELD
The New York Times on 6th January carried an article reporting that 2 allegedly US citizens fighting for ISIS had been captured by a militia in Syria. The militia said it had also detained other foreign fighters, including citizens of Ireland and Pakistan. Only 4 other Americans are known to have been captured on the battlefield in Iraq and Syria, and if reports are correct the latest 2 they would be only the 15th and 16th American adults to return from joining ISIS in Iraq and Syria.
GREECE: TAX EVASION IN PROPERTY SALES IS ESTIMATED UP TO €70 BILLION
Ekathimerini on 7th January carried an article about the estimated tax evasion involved in the sale of property in Greece, saying that earnings made from such practices are usually hidden away in foreign banks, typically as deposits at offshore institutions.
FORMER KYRGYZ PRIME MINISTER AND MAYOR FACE 20 YEARS ON CORRUPTION CHARGES
The Diplomat on 7th January reported that Sapar Isakov faces the charges in a court in the Kyrgyz capital. The former mayor of Bishkek, Kubanychbek Kulmatov, also faces 20 years on similar charges. They were arrested in 2018 and face charges of corruption relating to a 2013 financial aid package from China, which included the modernisation of the Bishkek Heating and Power Plant.
CONVEYANCER SOLICITOR JAILED FOR ROLE IN MORTGAGE FRAUD GROUP
The Financial Reporter on 7th January reported that solicitor Ross McKay fixed property deals for mortgage fraudsters has been sentenced to 7 years in prison at Manchester Crown Square after being found guilty of money laundering which was discovered during an investigation into the activities of an organised group who had been laundering the proceeds of their criminal enterprise, including drug-dealing, tax evasion and mortgage and property fraud.
SICILY SEIZES OVER €11 MILLION SIPHONED FROM PUBLIC FUNDS
OCCRP on 7th January reported that tax authorities targeted a network of companies that embezzled millions of dollars in public funds destined for investments in Sicily’s cultural heritage, local tourism and infrastructure. Financial assets were seized, as well as a car and 2 buildings worth a total of €11.2 million belonging to one company, 2 consortium and 18 persons allegedly involved in public fund fraud arrested. One of the suspect covertly managed 2 prestigious buildings in the historic centre of Palermo falsely registered to one of the companies in liquidation.
CZECH TOBACCO FRAUDSTER IS JAILED FOR 8 YEARS IN UK
On 7th January, the Essex County Gazette reported that tobacco fraudster, Robert Zduniak, 43, who fled the UK during his trial has been jailed for 8 years after being tracked down to a hideout in Prague. He was part of a £17 million gang which used smuggled raw tobacco in illegal factories across the country to try to evade tax. His co-conspirators, Hubert Jankowski, and Lukasz Pawelec, were each jailed for 4 years in May 2017. Pawelec had also tried to flee but was caught at Doncaster Airport.
FORMER MEXICAN STATE ATTORNEY GENERAL PLEADS GUILTY TO DRUG TRAFFICKING CONSPIRACY
OCCRP reported on 7th January that Edgar Veytia, the former attorney general for the state of Nayarita in Mexico is facing life in prison for using his position as a top law enforcement official to facilitate drug trafficking into the US in exchange for bribes. He was implicated in an international conspiracy to manufacture and import heroin, cocaine, methamphetamine, and marijuana from Mexico into the US.
IRISH LAWMAKERS WORKING TO OVERHAUL GAMBLING REGULATIONS
i-Gaming Business on 7th January reported that long-awaited reforms of Ireland’s gambling laws could be fast-tracked this year, with 2 separate Bills set to be published within weeks. The Gaming and Lotteries (Amendment) Bill aims to provide for the better promotion of regional lotteries, streamline the application process for permits and licenses, and to increase monetary limits on stakes and prizes for gaming machines where licensed in certain local authority areas. An updated Gambling Control Bill is expected to propose the establishment of a new independent regulatory authority, which was originally mooted at the start of last year.
CHINESE POLICE BREAK UP GANG BEHIND BOGUS DYSON HAIR DRYER CONSPIRACY
On 7th January, Insight Crime reported that police in China have arrested 36 suspected members of a counterfeiting gang who are thought to have been involved in the production of fake Dyson hair dryers. A raid on the gang’s production facility last month resulted in the seizure of 400 counterfeit hair dryers along with 1,500 half-finished products, and more than 200,000 spare parts.
“PUBLIC UBO REGISTERS WON’T WORK IN 2019”
A blog post from Martin Kenney, Managing Partner of Martin Kenney & Co, Solicitors, a specialist investigative and asset recovery practice based in the BVI, on the FCPA Blog on 7th January says that the “onslaught” against the Overseas Territories will not be ending anytime soon. NGO will continue to target offshore service providers, insisting on open UBO registers. The campaigners hold a very firm assumption that this is fundamental for transparency, but he says that he will continue to tell them that they are incorrect, and they will continue to tell me why he is wrong.