14th January 2019
EXPORT PROCEDURES IN ASEAN COUNTRIES
On 10th January, Dezan Shira and Associates in their ASEAN Briefing provided brief details of the export procedures in the member states of ASEAN – Burma/Myanmar, Brunei, Cambodia, Thailand, Malaysia, Indonesia, Laos, Philippines, Singapore and Vietnam.
This is an excerpt from the firm’s e-book, available after registration at –
AUSTRALIA: EXPERTS SAY NOT TO REVERSE ONUS OF PROOF FOR BLACK ECONOMY CRIMES
ABC News on 13th January reported that tax experts and business lobbies have hit out against a Treasury proposal to reverse the onus of proof — that is to say that someone is guilty until they prove themselves innocent — as part of a bid to stamp out illegal cash economy activity. A consultation paper has proposed that the government should reverse the onus of proof for serious black economy offences relating to terrorism, drugs and child sex offences. It also proposed additional enforcement and data gathering powers to the tax commissioner – which has also been criticised. The consultation paper also suggested imposing greater penalties on repeat offenders and the imposition of visa forfeiture and travel bans for those with outstanding tax debts. The Australian The Federal Government’s Black Economy Taskforce had estimated that the illegal cash economy could be costing the economy about 3% of GDP, or roughly $50 billion a year.
GHANA: MENZGOLD SCANDAL
Ghana Web on 13th January carried an article about the fallout from the collapse of the investment scheme where some 60,000 people are thought to have lost money. Menzgold is reported to have a client base of about 60,000, all of them promised between 7% to 10% returns. The operation was closed by order in September 2018, and its founder, Nana Appiah Mensah, is said to have absconded, although the company’s PRO has said he has travelled abroad to look for money to pay customers. Meanwhile, the news site says, a warrant has been issued for his arrest whiles the police has said Interpol with a presence in 194 countries will assist in apprehending the man wanted for defrauding by false pretenses’ and money laundering.
GUERNSEY INSOLVENCY UPDATE: UNDERSTANDING AND MANAGING A DIRECTOR’S DUTIES IN TIMES OF FINANCIAL DISTRESS
On 11th January, Carey Olsen published an article saying that the importance of understanding and managing a director’s duties in times of financial distress cannot be overstated. It explains that directors owe both fiduciary and non-fiduciary duties to the company, and what being “solvent” actually means. It covers such things as wrongful or fraudulent trading, and says that company officers should perpetually monitor the financial state of the company, but it is especially vital that they understand the nature of their duties, and how to discharge those duties, when the company appears to be in the zone of insolvency.
COLOMBIA: MISSING FARC LEADER ACCUSES GOVERNMENT OF BETRAYING PEACE DEAL
The BBC on 13th January reported that former commander of Colombia’s FARC rebel group, Iván Márquez, has released a video 6 months after going into hiding, in which he accuses the government of betraying the terms of the historic peace agreement signed in 2016. Recently, the UN chief, António Guterres, urged President Duque to do more to protect former rebels, saying that many of them had been killed by illegal armed groups and drug gangs. One of FARC’s most senior leaders was arrested for extradition to the US on drug trafficking charges and, soon after that, Márquez resigned from his seat in the Colombian Senate and went into hiding.
SFO ANNOUNCES SENTENCES IN FH BERTLING BRIBERY INVESTIGATION
On 11th January, the Wall Street Journal reported sentencing in the case involving bribes for contracts in Angola and the North Sea. The logistics company involved is now in liquidation, and was the UK subsidiary of the German Bertling Group. The company and 6 former directors pleaded guilty in relation to the Angola case, and in the case involving the North Sea 3 pleaded guilty, 1 was convicted and 2 acquitted. Custodial sentences of between 6 and 15 months were suspended for 2 years. Fines were also imposed. Some observers have commented on the apparent leniency involved, particularly the fact that the custodial sentences were suspended.
HUAWEI FIRES EXECUTIVE CHARGED IN POLAND WITH ESPIONAGE
The Wall Street Journal on 12th January reported that the Chinese telecoms company had fired a sales director recently arrested in Poland on espionage charges, saying he brought the Chinese telecom company “into disrepute”.
NUCLEAR CHIEF SAYS IRAN EXPLORING NEW URANIUM ENRICHMENT
KYC 360 on 13th January reported that the head of Iran’s nuclear programme has said that Iran has begun “preliminary activities for designing” a modern process for 20% uranium enrichment for its 50-year-old research reactor in Tehran, signalling new danger for the nuclear deal. It says that restarting enrichment at that level would mean Iran had withdrawn the 2015 nuclear deal.
US WARNS GERMAN COMPANIES OF POSSIBLE SANCTIONS OVER RUSSIAN PIPELINE
KYC 360 on 14th January reported warnings to German companies involved in the Russian-led Nord Stream 2 gas pipeline that they could face sanctions if they stick with the project. The pipeline would carry gas straight to Germany under the Baltic Sea.
ORGANISED CRIME IN AFRICA: TRANSNATIONAL CRIME CONVERGING ACROSS AFRICA
On 14th December, ENACT Africa published a series of analytical reviews published by INTERPOL under the ENACT project which highlight the linkages between different types of transnational organised crime across Africa. Amongst the conclusions were that –
- transnational organised crime and violent extremism are increasingly interconnected;
- traffickers are progressively diversifying and interconnecting their activities – drug trafficking, people smuggling, arms trafficking, wildlife crime, illegal logging, as well as fake medicines, and trafficking in cultural artefacts increasingly involves criminal organisations;
- drug trafficking is a growing and cross-cutting threat across Africa – with an estimated 18 tonnes of cocaine originating from South America and destined for Europe transiting through West Africa every year;
- migrants moving illegally across the continent are vulnerable to human trafficking and high levels of violence; and
- Africa’s rapid technological development, including its e-commerce industry and mobile technologies, has come with a proliferation of cybercrime and illicit online activities.
US GOVERNMENT SHUTDOWN STARTS TO AFFECT AIR CARGO
Loadstar on 14th January said that the US government shutdown, entering its 24th day and the longest closure to date, has started to impact aviation. It is not just passengers being inconvenienced. There are also delays to aircraft registry documents and other certification paperwork, with the backlog likely to cause delays for some time. Some 800,000 federal workers have failed to receive at least 1 pay cheque, if not 2 and the shutdown has already cost the US economy some $3.6 billion.
ISRAEL: LAW FOR THE REDUCTION OF CASH USE INTRODUCED
Fischer Behar Chen Well Orion & Co published an article on 11th January about the Law for the Reduction of Cash Use (5778/2018), which came into force on 1st January. It provides details of the law which imposes certain restrictions on the use of cash and cheques that do not name the payee. It aims to reduce cash transactions in an effort to fight financial crime and money laundering and foster the use of more modern and efficient payment methods. It distinguishes between transactions to which a business selling products or providing services in the ordinary course of its business is party and transactions between private parties.
CAMBODIAN PRIME MINISTER BLACKMAILS EU, THREATENS TO EXTERMINATE THE OPPOSITION
EurActiv on 14th January reported that the Cambodian Prime Minister has threatened to retaliate against the opposition if the EU withdraws duty-free trading access over human rights concerns.
BULGARIAN REVENUE AGENCY ANNOUNCES INSPECTION OF CRYPTOCURRENCY-SELLING COMPANIES
Coin telegraph on 14th January reported that the National Revenue Agency (NRA) has announced the launch of inspections of cryptocurrency-selling companies to provide assurance compliance with tax and social security laws, as the NRA is reportedly worried about the use of crypto-assets for revenue concealment and tax evasion. It says income from the sale of virtual currencies is declared in annual tax returns, treated as profit from the sale of a financial asset, and taxed at 10%, and companies profiting from the sale of crypto-assets are subject to taxation.
UKRAINE: COURT OBLIGES NABU TO INVESTIGATE POSSIBLE CORRUPTION OFFENCE BY PROSECUTOR GENERAL
Interfax Ukraine on 14th January reported that a District Court has obliged the National Anti-Corruption Bureau of Ukraine (NABU) to launch a criminal investigation into a possible corruption offence by Prosecutor General Yuriy Lutsenko after it received a statement by law enforcement bodies.
BERMUDA SEEKS GREATER SAY IN INTERNATIONAL TAX POLICY TALKS
Tax News on 14th January reported that the Bermuda Government has set out its plans to more actively engage in discussions on tax policy internationally, including newly-establishing offices in Brussels and Washington.
HMRC MONEY LAUNDERING GUIDANCE UPDATED
Accountancy Magazine on 14th January reported that a webinar about the money laundering supervision “fit and proper” test and approval processes has been added to HMRC online guidance on the subject.
STIFFER AML RULES FOR SINGAPORE JEWELLERS AHEAD
The Business Times on 14th January reported that some 2,500 jewellers and businesses dealing with precious stones and metals in Singapore are due to meet tighter AML/CFT rules, as called for under international standards. Regulated dealers in precious stones and metals will have to register with the Registrar within the Ministry of Law, and carry out additional checks, with bullion traders and auctioneers also affected. Currently, they already perform customer checks before carrying out any cash transactions more than S$20,000 and file cash transaction reports. They also already file SAR as required. The new law will require additional ID and due diligence checks. Pawnbrokers are exempted, as already regulated under the Pawnbrokers Act. Ffinancial firms that deal with precious stones and metals are also exempted from nearly all requirements so long as they are regulated by MAS, e.g. regulated trading platforms that make loans backed against silver bars, or that sell tokens holding ownership rights to gold coins.
VENEZUELA FILES COMPLAINT CHALLENGING US SANCTIONS AT THE WTO
Husch Blackwell on 14th January published an article saying that Venezuela recently initiated a World Trade Organization complaint against US sanctions – on the same day that the US imposed additional sanctions on Venezuelan nationals and entities allegedly engaging in corrupt currency exchange transactions.
NEW LEGAL CASE IN NEW YORK – VICTIMS OF HIZBOLLAH SUE IRAN’S BANK SADERAT AND ITS UK SUBSIDIARY
In his blog on 14th January, Kenneth Rijock reported on a new civil suit filed in New York in which a number of victims of Hezbollah rocket and missile attacks upon US citizens are suing government-owned Bank Saderat Iran, and its UK subsidiary, Bank Saderat PLC.
INDIA: 24 KG GOLD SEIZED AT CHENNAI AIRPORT, 2 SOUTH KOREANS DETAINED
Customs Today on 14th January reported that Customs officials said Hanbyoul Jung, 26, and Eunyoung Kim, 26, had arrived from Hong Kong via a Cathay Pacific flight.
MAERSK PILOTS PHYSICAL CONTAINER INSPECTIONS AT US PORTS
Lloyds Loading List on 14th January reported that Maersk is funding and has begun random inspections, checking if import and export cargo in four US ports match descriptions and is correctly stuffed, latched and secured, with cost of any corrective action to be borne by shipper or consignee. Where corrections are needed the cost will be charged to the shipper or consignee, depending on the direction of the container. The intention is for the data collected will help develop procedures ensuring the accuracy of cargo descriptions and improved use of the Code of Practice for Packing of Cargo Transport Units.
CONVICTED FRAUDSTER FROM JERSEY CLAIMS HE CANNOT PAY £70 MILLION BILL
The Jersey Evening Press on 14th January carried a report saying that a former Jersey resident who is alleged to owe the UK government around £70 million has claimed that he is too poor to make the payment. Gerald Smith, CEO of a former Jersey-registered company called ORB, was sentenced to 6 years in prison in 2006 after committing a £35 million fraud. He was given a confiscation order to pay a total of £41 million to the UK government but this has since risen, due to interest, to nearly £70 million, and now facing legal action which could see him sent back to prison if he continues to refuse to pay. The SFO has also claimed that he had taken 360 flights in the past 5 years to destinations including Vancouver, Toronto, Buenos Aires and the Maldives, but he says this travel was funded by other sources.
FRAUD CASE SHOWS IMPORTANCE OF INTERNAL INVESTIGATIONS
On 14th January, Out-Law published an article saying that a recent High Court case demonstrates that companies will usually need to carry out their own internal investigations before being able to successfully obtain certain court orders (i.e. Norwich Pharmacal orders seeking information as to the source of allegedly privileged documents that had ended up in the hands of a counterparty) in cases of suspected employee fraud.
51 CONTAINERS OF GARBAGE SHIPPED BACK TO SOUTH KOREA
The Manila Bulletin on 14th January reported that 51 containers of illegal garbage languishing at a container terminal have finally been shipped back to South Korea where the assorted wastes came from several months ago.
CASH-TRANSPORTING HELICOPTER SHOT DOWN IN COLOMBIA
On 14th January, Janes.com reported that a helicopter transporting cash on behalf of Brink’s was set on fire and destroyed after it had been fired upon while flying over the area, forcing it to make an emergency landing. The helicopter’s 3 crew were subsequently kidnapped and about $500,000 of cash stolen.
UK SOLICITOR RECEIVES HEFTY FINE IN CASE WITH LINK TO PANAMA PAPERS
On 14th January, Legal Futures reported that Khalid Mohammed Sharif, a partner at London firm Child & Child, a solicitor who failed to do even an internet search to check whether his clients were PEP, has been fined £45,000 in the first disciplinary matter to involve infamous offshore law firm Mossack Fonseca.
FRANCE AND GERMANY AIM TO UNIFY THEIR CLASHING WEAPONS-EXPORT RULES FOR JOINT PROGRAMMES
Defense News on 12th January reported that the German Cabinet has approved a new, high-level pact with France that calls for a common approach to weapons exports in all joint programmes. The article says that France generally is open to exporting arms to many governments willing to pay for them, whilst German leaders profess to take a more cautious approach when human rights concerns crop up, though the government has a history of making arms deals through the back door anyway.
ITALY TARGETS PUBLIC SECTOR CORRUPTION
A post on the FCPA Blog says that the Italian Parliament approved a package of measures aimed to combat public sector corruption and increase scrutiny and transparency requirements with regards to private and corporate contributions to political parties and foundations. The so-called “bribe destroyer” (spazzacorotti) Bill was approved in the Chamber of Deputies. It is estimated that corruption is equivalent to around 13% of Italian GDP.
6 ARRESTED IN MAJOR LAUNDERING AND EXTORTION CASE LINKED TO ISRAELI SOCCER
The Times of Israel on 14th January reported that 6 people were arrested and 6 more detained for questioning in a major money laundering and extortion case linked to Israeli soccer. The suspects are believed to have defrauded investors in real estate transactions, among other businesses and charges in the case include aggravated fraud, criminal conspiracy, extortion, income tax crimes, and money laundering.
FORMER PRESIDENT CHARGED WITH MONEY LAUNDERING IN EL SALVADOR
ICIJ reported on 14th January that the Panama Papers may have snared another former head of state as El Salvador’s Mauricio Funes was accused by the country’s Attorney General of taking bribes while in office that were routed through offshore companies created by Panamanian law firm Mossack Fonseca.
FBI INVESTIGATING SUSPECTED BRIBERY IN LOS ANGELES REL ESTATE DEVELOPMENTS
On 14th January, NBC in Los Angeles reported that the FBI is seeking evidence on suspected large-scale bribery of local officials by Chinese investment companies.
THE IMPACT OF THE UKRAINE CONFLICT ON CO-OPERATION TO COMBAT ILLICIT TRAFFICKING IN NUCLEAR MATERIALS IN THE BLACK SEA REGION
One of a set of new papers from the Stockholm International Peace Research Institute considers the impact of the conflict on co-operation to combat illicit trafficking in nuclear materials in the region, with a rapidly shifting security environment. It says that since the 1990s, most of the world’s identified cases of illicit trafficking of nuclear materials — fissile materials, in particular — have been located in countries around the Black Sea. The nuclear security situation in the region is further complicated by the existence of areas with unstable governance and protracted conflicts such as in Transnistria, Abkhazia, South Ossetia and areas of Eastern Ukraine since 2014. It assesses whether and how the conflict has changed the risk that illicit trafficking will occur, and the impact on existing regional nuclear security regimes and cooperative projects that are intended to reduce the risk of illicit trafficking.
PROTRACTED ARMED CONFLICTS IN THE POST-SOVIET SPACE AND THEIR IMPACT ON BLACK SEA SECURITY
Another of the SIPRI papers focussed on the Black Sea region provides background and information on ongoing conflicts in the territory of the former Soviet Union –
- Azerbaijan: Nagorno-Karabakh;
- Georgia: Abkhazia and South Ossetia;
- Moldova: Trans-Dniester; and
- Ukraine: Crimea and eastern Ukraine.
It says that they have led to an increase in military activities in the region, and that the overlapping conflict-affected areas have generated a wide zone of instability stretching from Trans-Dniester, through eastern Ukraine and the Caucasus and into Turkey and the Middle East. The conflicts are a significant obstacle to economic development in the breakaway regions themselves and their respective states, it says.