OTHER THINGS YOU MAY HAVE MISSED – JANUARY 9

9th January 2019

NIGERIA LOST $2.8 BILLION TO OIL-RELATED CRIMES IN 2018

Pulse in Nigeria on 8th January said that a UN report says that Nigeria lost an estimated $2.8 billion in revenues in 2018, mainly due to oil-related crimes.  It also is quoted as saying that maritime crime and piracy off the coast of West Africa continued to pose a threat to peace, security and development in the region, and that between January 1st and November 23rd, there were 82 reported incidents of maritime crime and piracy in the Gulf of Guinea.

https://www.pulse.ng/news/local/nigeria-lost-dollar28bn-to-oil-related-crimes-in-2018-un-report/914b3k0

WHY BECOMING A NATIONAL TREASURE CAN LOWER AN ARTWORK’S VALUE

On 2nd January, Artsy,net carried an article that said that laws increasingly categorise works by the artist as cultural property subject to export restrictions and limitations on sale. Originally designed to protect antiquities and Old Masters, it says that these rules and regulations are starting to ensnare art made in the 20th Century.  Because they restrain trade, these laws lower the value of art that must remain in the local country.   It then gives examples from Italy and Germany – commenting how the imminent imposition of such restrictions had left to a rush to get artwork out before they were imposed.

https://www.artsy.net/article/artsy-editorial-national-treasure-lower-artworks-value

EGYPT REPATRIATES SMUGGLED ANCIENT ARTEFACT FROM UK

News AM on 8th January reported that Egypt’s Antiquities Ministry says it has repatriated an illegally smuggled artefact from the UK.  The relief with cartouche of King Amenhotep I from the 18th dynasty had been on display at a London auction house.  The article says that Egypt has drastically stepped up efforts in recent years to stop the trafficking of its antiquities, and has warned foreign museums that it will not help them mount exhibits on ancient Egyptian sites unless they return smuggled artefacts.

https://news.am/eng/news/489628.html

POKERSTARS ONLINE POKER PLAYERS DON’T HAVE TO PAY TAX ON WINNINGS IN NETHERLANDS

Dutch News on 8th January reported an appeal court ruling in the Netherlands in a case where the tax office had gone to court demanding that players pay 29% tax on winnings earned via the Pokerstars.eu website, arguing that as the company is based on the Isle of Man, and this is not an EU country, the players are liable for tax.  It had been counter-argued that the company is based in Malta, and the court has agreed with this.  Gamblers are not liable for income tax on winnings earned within the EU.

https://www.dutchnews.nl/news/2019/01/online-poker-players-dont-have-to-pay-tax-on-winnings-appeal-court-rules/

GERMANY: BAFIN PROVIDES GUIDANCE ON THE GERMAN MONEY LAUNDERING ACT

On 7th January, CMS Germany published an article saying that in December the German Federal Financial Supervisory Authority (BaFin) has published its Guidance on the construction and application of the German Money Laundering Act (GwG).  It is updated to take account of the 4th EU AML Directive.

http://www.cms-lawnow.com/regzone/articles/2019/january/germany-bafin-provides-guidance-on-the-german-money-laundering-act?cc_lang=en

FRANCE: LIFTING OF CURRENCY RESTRICTIONS AND THE IMPACT ON THE AVIATION INDUSTRY

On 19th December, an article from Odi-se Avocats said that since the 1930s, French regulation has made it clear that parties to domestic contracts must make payments using French currency.  While there was an exception to this rule for international payments, the criteria for making international payments were unclear.  However, amendments made mean that an agreement for the sale and purchase of an aircraft between a French seller and buyer which provides that the purchase price must be paid in US dollars is now clearly permitted under the law.

https://www.internationallawoffice.com/Newsletters/Aviation/France/Odi-se-Avocats/Lifting-of-currency-restrictions-impact-on-aviation-industry

DUTCH LEGISLATOR PROPOSES LICENCE REQUIREMENT FOR CRYPTO CURRENCY EXCHANGES AND CRYPTO WALLET PROVIDERS UNDER ANTI-MONEY LAUNDERING LEGISLATION

Bird & Bird on 7th January published an article saying that the Netherlands has published a draft legislative proposal implementing the 5th EU AML Directive into Dutch law for consultation, with views sought by 15th January.  One aspect of the proposal is expected to impact the crypto currency market in the Netherlands significantly, it says.  The article asks if the Dutch proposal is a balanced and proportional proposition.

https://www.twobirds.com/en/news/articles/2018/denmark/dutch-legislator-proposes-licence-requirement-for-crypto-currency-exchanges

IRELAND AND THE WTO – HOW WILL CROSS BORDER SERVICES PROVIDED TO THE UK BE TREATED IN A NO-BREXIT DEAL SCENARIO?

An article from Irish law firm, A & L Goodbody on 3rd January says that the effect of a no-Brexit deal scenario on trade in services between Ireland (as well as the rest of the EU) and the UK would also be marked and potentially be more restrictive.

https://www.algoodbody.com/insights-publications/ireland-and-the-wto-how-will-cross-border-services-provided-to-the-uk-be-tr

EU ISSUES CORRECTED LIST OF ENTITIES SUBJECT TO SANCTIONS RELATED TO LIBYA

On 9th January, the EU published a corrected list of entities subject to sanctions under EU Regulation 2016/44/EU.

Note that the list includes an Isle of Man company –

16. Baroque Investments Limited c/o ILS Fiduciaries (IOM) Ltd, First Floor, Millennium House, Victoria Road, Douglas, Isle of Man

Other info: Reg no 59058C (IOM)

IOM-incorporated subsidiary of the Libyan Investment Authority.

Closely associated with the former regime of Muammar Qadhafi.

12.4.2011

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.006.01.0010.01.ENG&toc=OJ:L:2019:006:TOC

COUP-OUSTED, SELF-EXILED THAI EX-PM YINGLUCK SHINAWATRA APPOINTED AS CHAIRWOMAN OF CHINESE PORT FACILITY

The Asia Times on 9th January reported that she fled Thailand when facing an official corruption charge in 2016.  It is reported that she has now been appointed chairwoman and legal representative of the Shantou International Container Terminal in China’s southern Guangdong province.  The Shinawatra family is known to maintain private residences in the UK in London and Birmingham.  The article says that Yingluck is not known to have any private professional experience in the transport sector, sparking speculation about what may be behind the appointment – such as China’s position if the coup-toppled, Shinawatra-aligned Peua Thai party is returned to power at polls expected this year.  Neither her brother Thaksin nor Yingluck are permitted under Thai law to have any influence over Peua Thai.  Thaksin is known to have obtained Montenegrin citizenship after his Thai passport was cancelled over his criminal conviction and flight into exile.

http://www.atimes.com/article/thailands-exiled-shinawatras-making-waves-abroad

NEW EU FOREIGN DIRECT INVESTMENT REGULATION

On 8th January, White & Case published an article saying that 3 main EU institutions have agreed on a compromise for a new Regulation that gives the EU a largely procedural and co-ordinating function in connection with foreign direct investment reviews conducted by EU Member States – a response to increased foreign direct investments into European technology and infrastructure assets, in particular, from the People’s Republic of China.  The Regulation will be formally implemented from early 1919, and take full effect in 2020.

https://www.whitecase.com/publications/alert/new-eu-foreign-direct-investment-regulation-initial-steps-towards-harmonized

TRAFFICKING CONVICTIONS FALL 25% DESPITE RISING NUMBER OF VICTIMS IN EUROPE

The Guardian on 8th January reported that a report by the UN found that 742 people in Europe were convicted for trafficking offences in 2016, the latest year for which there is available data, compared with 988 in 2011.  The number of identified victims increased from 4,248 to 4,429 over the same period.  It is said that the fall in convictions could reflect the hardening of border controls across Europe, and a failure to recognise victims of abuse.  The drop may also be due to continued difficulties authorities face when building cases under modern slavery laws, which are still relatively new, it says.

https://www.theguardian.com/global-development/2019/jan/08/trafficking-convictions-fall-25-despite-rising-number-of-victims-in-europe

CHINESE RESTAURANT OWNER MADE MILLIONS, DECLARED JUST £2,000 INCOME

KYC 360 on 9th January reported that a North London man who falsely claimed his business was a small pottery unit when it was in fact a profitable cash-generating Chinese restaurant has been jailed.  He failed to declare cash payments, fraudulently pocketing £1,018,508 in tax.

https://www.riskscreen.com/kyc360/news/london-fraud-chinese-restaurant-owner-made-millions-declared-just-2000-income/

HOUSE COMMITTEE LEADERS HAVE CALLED ON US TREASURY SECRETARY TO OUTLINE REASONS WHY THE US IS EASING SANCTIONS ON ENTITIES CONNECTED TO OLEG DERIPASKA

On 9th January, Rferl reported that 7 House of representative Democrats wrote to the Secretary on January 8th to inquire about a December announcement that the US would lift sanctions on the aluminium manufacturing giant Rusal and 2 other companies linked to Deripaska.

https://www.rferl.org/a/russia-deripaska-us-democrats-demand-briefing-sanctions/29698996.html

VENEZUELAN TV COMPANY GLOBOVISION CAN GET OFF OFAC SANCTIONS LIST IF IT SHEDS OWNER

On 9th January, the Wall Street Journal reported that Globovisión, and a related Florida company, have been added to the US sanctions list because they are owned by Raúl Gorrín, who the US accuses of profiting from illicit access to the country’s broken currency market.  An OFAC licence issued alongside allows the news network to continue for a year certain operations that the sanctions would have normally prohibited.  OFAC also said in a statement that the path to sanctions relief is through divestment and relinquishment of control by anyone on the sanctions list, directly naming Mr. Gorrín.

EU: ADVICE ON INITIAL COIN OFFERINGS (ICO) AND CRYPTO-ASSETS

On 9th January, the European Securities and Markets Authority published a 49-page booklet of advice, including risks and issues for regulators.

https://www.esma.europa.eu/file/49978/download?token=56LqdNMN

Crypto-assets need common EU-wide approach to ensure investor protection

ESMA has called for the establishment of an EU-wide approach to the regulation of crypto assets and initial coin offerings (ICO), without which it believes investors are “exposed to substantial risks”.

https://www.esma.europa.eu/press-news/esma-news/crypto-assets-need-common-eu-wide-approach-ensure-investor-protection

https://www.investmentweek.co.uk/investment-week/news/3069037/crypto-assets-set-for-eu-wide-regulation

https://eba.europa.eu/-/eba-reports-on-crypto-assets?src=ilaw

YEMENI GROUPS CALL ON WFP TO REVEAL AID ‘CORRUPTION’

On 9th January, the Miami Herald reported that Yemeni non-governmental groups are voicing concern over a threat by the UN food agency (the World Food Program) to suspend some aid shipments to Yemen if the Houthi rebels do not investigate and stop theft and fraud in food distribution.

https://www.miamiherald.com/news/nation-world/article224123275.html#navlink=SecList

UK GAMBLING COMMISSION AML GUIDANCE PLACES HIGH RESPONSIBILITY ON INDUSTRY OFFICERS

SBC News on 9th January reported that the Gambling Commission had published the 4th edition of its guidance on AML/CFT.  It says that it wants its licensed incumbents to have in place the policies, procedures and controls, covering the risks they may face from money laundering and terrorist financing.  Detailing the role of licensed operators in combating money laundering and corruption, the Commission reiterates that operators must uphold the 3 licensing principals set out by the Gambling Act 2005: to prevent gambling from becoming a source of crime or disorder; that no operator can be associated with criminal activities; and ensuring that no operator’s business structures or products can become a mechanism for supporting crime.

https://www.sbcnews.co.uk/europe/2019/01/09/ukgcs-aml-guidance-places-high-responsibility-on-industry-officers/

MOZAMBIQUE CHARGES 18 IN “TUNA BONDS” SCANDAL LINKED TO UBS ARRESTS

OCCRP on 9th January reported that Mozambique had announced the indictment of 18 individuals in connection to the $2 billion “tuna bonds” scandal that plunged the country into its worst financial crisis since independence.  One suspect is former finance minister Manuel Chang who was arrested in South Africa and awaits extradition to the US.

https://www.occrp.org/en/daily/9090-mozambique-charges-18-in-tuna-bonds-scandal

FIRST CONVICTION IN COLOMBIA FOR TRAFFICKING IN PERSONS FOR DOMESTIC SERVITUDE

UNODC on 9th January reported that the first conviction for Trafficking in Persons for domestic servitude was handed down in Colombia in September 2018.  A Colombian woman was found guilty and sentenced to 13 years and 2 months for trafficking in persons for domestic servitude.  The victim was an 18-year-old indigenous woman from the Carapana community and was promised domestic work and a salary of $77.  When she arrived in Bogota she was warned that she would not receive a salary for 2 months because she had to pay for the tickets from her home town to the city.  The decision has been hailed by organisations dedicated to the defence of the rights of indigenous people as an important precedent in the country for the elimination of forms of violence and exploitation based on ethnicity.

https://www.unodc.org/unodc/en/frontpage/2019/January/first-conviction-in-colombia-for-trafficking-in-persons-for-domestic-servitude.html?ref=fs1

2018 WAS A RECORD-BREAKING YEAR FOR MALTA CUSTOMS IN TERMS OF DRUG HAULS

The Malta Independent reported on 9th January that 2018 had seen 15,922.5 kg of cannabis; 184.7 kg of cocaine; 100 kg of cocaine (in a control delivery to Croatia); 2 kg of heroin; and 8 g of ketamine.

http://www.independent.com.mt/articles/2019-01-09/local-news/2018-A-record-breaking-year-for-Malta-Customs-in-terms-of-drug-hauls-6736201786

POLICE OFFICERS CAN DO ANYTHING THAT A CITIZEN CAN

A post in the UK Police Blog is concerned with a case before the Court of Appeal in which the claimant contended that the police could not lawfully ask arrested persons about their immigration status in order to provide this information to the Home Office because a police officer did not have the same power as a member of the public to approach and ask someone questions on any topic for any purpose.  Rather, they argued, a police officer’s powers had to be used to fulfil their duties and obligations as a police officer.  The court’s decision, the post says, would fit with the historic nature of police officers in England and Wales – that they are ordinary citizens with no more powers than other ordinary citizens, save where they are specifically granted by common-law or statute.  To that end, the Court of Appeal has affirmed that police officers may lawfully do anything an ordinary citizen can do, subject to principles of public law.

http://ukpolicelawblog.com/index.php/9-blog/189-police-officers-can-do-anything-that-a-citizen-can

IRISH CRIMINAL ASSETS BUREAU CLAMPS DOWN ON BORDER CRIME GANG

The Belfast Telegraph on 9th January reported that CAB has moved to clamp down on an organised crime gang operating in the border region with Northern Ireland, and CAB and officers from the Garda Emergency Response Unit carried out a series of raids in Co Monaghan targeting the gang.

https://www.belfasttelegraph.co.uk/news/northern-ireland/irish-criminal-assets-bureau-clamps-down-on-border-crime-gang-37695803.html

FISHING VESSELS ARE INCREASINGLY BEING USED AS INSTRUMENTS IN TRANSNATIONAL ORGANISED-CRIME ACTIVITIES.

On 7th January, Global Initiative published an article saying that, as is the case with legal global trade, a significant amount of illicit trade relies on modes of maritime transport.  Vessels – ranging from small wooden dhows to major container ships – participate either willingly or unwittingly in the worldwide transfer of anything from weapons and drugs to humans, wildlife and counterfeit goods.  But of specific concern is the increasing role played by fishing vessels in the global illicit infrastructure – with about 4.6 million fishing vessels worldwide, operated by an estimated 27 million mariners.  It warns that, as fish stocks become depleted, out-of-work fishermen are looking to the shadowy world of transnational organised crime to secure a livelihood.  Other types of smuggling are illustrated by the example that fishermen from Venezuela are using their vessels to smuggle guns to Trinidad, and diapers and baby formula back to Venezuela.  Fishing boats can also be used by terrorists, such as the effort by Shia rebels to arm several fishing vessels with RPG and carry out attacks in the Red Sea shipping channel.  There is also growing awareness of the use of slave labour on fishing vessels, but it is less known that vessels are also used to smuggle people into and out of countries.

https://globalinitiative.net/whats-happening-below-deck/

PODCAST: 2018 US FOREIGN CORRUPT PRACTICE ACT YEAR IN REVIEW

In the latest TRACE podcast, Kara Brockmeyer, former Chief of the SEC’s FCPA Unit and now with Debevoise & Plimpton, discusses key enforcement actions, the shifting legal landscape and compliance trends from 2018, together with a few predictions for 2019.

https://traceinternational.org/bribe_swindle_or_steal

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FISHING VESSELS ARE INCREASINGLY BEING USED AS INSTRUMENTS IN TRANSNATIONAL ORGANISED CRIME ACTIVITIES.

On 7th January, Global Initiative published an article saying that, as is the case with legal global trade, a significant amount of illicit trade relies on modes of maritime transport.  Vessels – ranging from small wooden dhows to major container ships – participate either willingly or unwittingly in the worldwide transfer of anything from weapons and drugs to humans, wildlife and counterfeit goods.  But of specific concern is the increasing role played by fishing vessels in the global illicit infrastructure – with about 4.6 million fishing vessels worldwide, operated by an estimated 27 million mariners.  It warns that, as fish stocks become depleted, out-of-work fishermen are looking to the shadowy world of transnational organised crime to secure a livelihood.  Other types of smuggling are illustrated by the example that fishermen from Venezuela are using their vessels to smuggle guns to Trinidad, and diapers and baby formula back to Venezuela.  Fishing boats can also be used by terrorists, such as the effort by Shia rebels to arm several fishing vessels with RPG and carry out attacks in the Red Sea shipping channel.  There is also growing awareness of the use of slave labour on fishing vessels, but it is less known that vessels are also used to smuggle people into and out of countries.

https://globalinitiative.net/whats-happening-below-deck/

GIBRALTAR FIU LAUNCHES ONLINE REPORTING SYSTEM FOR SUSPICIOUS ACTIVITY REPORTS (SAR)

On 9th January, a news release from the Gibraltar Government advised that the system called Themis consists of 2 separate parts – an online ‘portal’ for use by Money Laundering Reporting Officers (MLRO) and a system visible only to the FIU.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2019/Press%20Releases/9-2019.pdf

UN REMOVES 3 ENTITIES FROM ITS IRAQ SANCTIONS LIST

On 8th January, the UN advised that the GENERAL ESTABLISHMENT FOR DESIGNS AND RESEARCH, the STATE ENTERPRISE FOR ALUMINIUM SEMI PRODUCTS, and the STATE ENTERPRISE FOR CABLES AND WIRES have all been removed from the Iraq sanctions list on the recommendation of the relevant sanctions committee.

https://www.un.org/press/en/2019/sc13658.doc.htm

THE ECONOMICS OF CRYPTOCURRENCY PUMP AND DUMP SCHEMES

An article on VOX, the website of the European-based Centre for Economic Policy Research, and published on 9th January says that the surge of interest in cryptocurrencies has been accompanied by a proliferation of fraud, largely in the form of “pump and dump” schemes. The article provides the first measure of the scope of such schemes across cryptocurrencies.  Research results suggest that the phenomenon is widespread and often quite profitable, and highlight the need for concerted efforts from industry and regulators to fight cryptocurrency price manipulation

https://voxeu.org/article/economics-cryptocurrency-pump-and-dump-schemes

SAUDI PRIVATE JET INDUSTRY STALLS AFTER CORRUPTION CRACKDOWN

Reuters on 9th January carried an exclusive article saying that a crackdown on corruption in Saudi Arabia has severely dented the kingdom’s private jet industry.  Dozens of planes, owned by individuals and charter companies and worth hundreds of millions of dollars, are said to be stranded at airports.  Some were handed over to the state in settlements reached after the crackdown was launched in late 2017.

https://uk.reuters.com/article/us-saudi-crackdown-planes-exclusive/exclusive-saudi-private-jet-industry-stalls-after-corruption-crackdown-idUKKCN1P30JN