21st January 2019
SMUGGLING HITS NORTH KOREA BORDER FOLLOWING KIM-XI SUMMIT
The Korea Times on 21st January reported that smuggling on the North Korea-China has increased following leader Kim Jong-un’s fourth visit to China in January. Copper and zinc concentrate are being smuggled en masse into China, a source said, and Kangsong Trading Company, Yonun Company and Mirim Company are said to be among the North Korean trading companies sending concentrated minerals to China. Another source said military units, such as the Rearguard General Bureau and the 8th General Bureau have been exporting minerals to China, while importing diesel and petroleum. The imports include flour, soybean oil, sugar and other manufactured foodstuffs as well as car and motorcycle parts.
EU AUTHORITIES’ INFORMATION EXCHANGE AGREEMENT WITH STATE REGULATORS TO BOLSTER AML OVERSIGHT
The ACFCS Blog on 18th January reported that the European Central Bank (ECB) and the European Supervisory Authorities (ESA), the government bodies engaged in examining and enforcing financial crime compliance rules, have approved a multilateral agreement on the practical steps for exchanging information between the various Member State authorities responsible for supervising financial institution AML rules. The new agreement will also review the AML enforcement actions and penalties imposed by regulators on banks to gauge the oversight rigor of regulators themselves, and will be a two-way street. The preferred language of the information sharing is English and in urgent cases, requests can be made over the phone or in person, but most be immediately followed up by digital or paper requests as a matter of record. The network would include an AML office that would act as a central hub and be responsible for leading financial crime investigations and a compliance network made up of Joint Supervisory Teams reviewing banks considered to be at a higher risk for money laundering, either through business models, economic throughput or tied to riskier regions.
LUXEMBOURG REGISTER OF BENEFICIAL OWNERS HAS ARRIVED
On 17th January, Dechert published an article about a new law that required all entities that are registered with the Luxembourg trade and companies register (Registre de Commerce et des Sociétés, or RCS) – including investment funds – to disclose, and regularly update, information as to their beneficial owners – to ensure compliance with the EU 4th AML Directive. The register may be accessed not only by certain national authorities (including the public prosecutor, FIU, tax authorities and the CSSF) but also by the public. It explains that while the relevant Luxembourg national authorities will have full access to all the information filed regarding beneficial owners, the address and national identification number of the beneficial owners will not be available to the public. Furthermore, access to information regarding the beneficial owner(s) of an entity can be restricted, to national authorities, credit institutions, financial institutions, bailiffs and notaries, upon request from the entity or the beneficial owner(s) in certain circumstances.
A GUIDE TO ONLINE AND REMOTE GAMING IN MALTA
On 12th November, Camilleri Preziosi provided a guide to the online and remote gambling framework in Malta – licensing, the taxation structure, as well as aspects such as loot boxes.
LUXEMBOURG: VAT AND TRANSFER PRICING
Baker McKenzie published an article on 11th January saying that transfer pricing provisions must be observed when preparing the Luxembourg VAT returns, as new anti-avoidance provisions take effect, and bring the country into line with the position in neighbouring Belgium and Germany. The change is an attempt to avoid situations where a taxpayer artificially mitigates the amount of VAT as final cost or increases its input VAT recovery right, and the “arm’s length” principle should thus be taken into account when preparing VAT returns.
WARNING OVER VAT GUIDANCE ON CLAIMS HANDLING
Accountancy Daily reported on 21st January that HMRC has issued guidance on delegated authority claims handling by lawyers, which may create additional VAT costs for law firms and lead to disputes with their insurance clients, RSM has warned. It says that many law firms are contracted by insurers to undertake claims handling work when third parties have made claims against policy holders by way of defendant delegated authority. HMRC has been conducting a long review of the VAT liability of these contracts, which has created a great deal of uncertainty in the sector.
FIRST EU CITIZENS USING ePRESCRIPTIONS IN ANOTHER EU COUNTRY
On 21st January, the EU announced that the first EU patients can now use digital prescriptions issued by their home doctor when visiting a pharmacy in another EU country: Finnish patients are now able to go to a pharmacy in Estonia and retrieve medicine prescribed electronically by their doctor in Finland.
UK COUNTER-TERRORISM AND BORDER SECURITY BILL 2017-19
On 21st January, the House of Commons Library issued a briefing paper as the Bill is scheduled to have its Lords amendments considered by the Commons on 22nd January. Included in its provisions, in the light of the Skripal poisoning, would be to bring in powers to stop, question, search and detain people at ports and borders to determine whether they appear to be (or have been) engaged in hostile activity.
AVANT-GARDE ANTI-MARITIME PIRACY FLOATING ARMOURY CASE FIXED FOR TRIAL ON FEBRUARY 28TH
The Daily News in Sri Lanka reported on 21st January that the case against Avant-Garde Maritime Services (Pvt) Ltd Chairman Nissanka Senadhipathi has been fixed for trial on February 28th. He and another face a case for allegedly offering a bribe linked to the Avant-Garde floating armoury.
EU REPORT: CRIME RISKS FROM MALTA AND CYPRUS PASSPORT-FOR-SALE SCHEMES
On 21st January, Reuters reported that the European Commission will warn in a new report that schemes in EU states to sell citizenship or residence to wealthy individuals could help foreign organised crime groups infiltrate the bloc and increase the risk of money laundering, corruption and tax evasion. It says that Malta, Cyprus and Bulgaria are the only Member States which run schemes selling citizenship, while 20 states, including those 3, sell residence permits.
UK INSOLVENCY SERVICE WOUND UP 24 COMPANIES FOR PENSION FRAUD SINCE 2015
On 21st January, Pensions Age reported that the Insolvency Service has applied to wind-up 24 companies, connected to 3,750 pension-scam victims, for “pension misuse” since 2015, according to its latest figures, as a campaign is launched urging people to be aware of scammers targeting their pension savings, as it was revealed an average £91,000 was lost per victim in 2017.
ARMENIAN INSURANCE FIRM “SUSPECTED IN MAJOR FRAUD”
Armenpress reported on 21st January that Nairi Insurance, an Armenian insurance firm, is suspected in major tax evasion, according to the State Revenue Committee.
THE PORTUGUESE COUNCIL OF MINISTERS HAVE APPROVED A LAW TO ALLOW ARMED GUARDS TO SAIL ON PORTUGUESE FLAGGED VESSELS
Dixcart briefing IN570 reported that piracy now constitutes a major threat to the shipping industry and it is recognised that the use of armed guards on board vessels is crucial to the decrease the number of piracy incidents. Portugal will be joining the increasing number of ‘Flag States’ that allow the use of armed guards on board.
ECONOMIC CRIME REFORM ‘GRINDS TO HALT’
The Law Society Gazette on 21st January reported that proposed reforms for tackling economic crime, which could expand the ‘failure to prevent’ model in the Bribery Act 2010, have ‘ground to a halt’, a report by an international law firm claims. WilmerHale said there ‘has been little mention of this issue since’ and that reforms had ‘ground to a halt’.
EX-SWISS BANKER CONVICTED FOR SELLING SECRET TAX DATA TO GERMANY
On 21st January, Reuters reported that a former UBS banker accused of selling information about wealthy German tax evaders to German authorities was convicted of economic espionage by a Swiss court.
UK: SPORTS STAR BROTHERS SCAMMED DONORS WITH CHILDREN’S CHARITY
On 21st January, NCA issued a news release saying that a former professional footballer and professional rugby player are among 3 brothers who were given prison sentences in 2017 for defrauding donors to their children’s charity, it can now be reported. Efe Sodje, 35, of, Bright Sodje, 51, , and Stephen Sodje, 43, siphoned off more than £60,000 given to the Sodje Sports Foundation (SSF), a NCA investigation found. A judge has now lifted reporting restrictions preventing publication of the result of that trial, following the completion of a number of linked legal proceedings.
SIMPLIFY IMMIGRATION RULES, PROPOSES LAW COMMISSION IN UK
The Law Commission on 21st January said that it proposes to simplify how the Immigration Rules are drafted and presented, so they are easier to follow and more user-friendly. The Rules have grown from 40 pages in 1973 to around 1,100 pages today, becoming increasingly complex. They have been criticised by senior judges as labyrinthine. The Law Commission is seeking views on its proposals for simplifying Immigration Rules. The consultation began on 21st January.
SUNDERLAND ‘MULES’ SMUGGLED ALMOST 800,000 ILLEGAL CIGARETTES INTO UK FROM KUWAIT
The Sunderland Echo on 21st January carried the story of how 4 men and a woman were caught with suitcases full of non-UK duty paid cigarettes at Newcastle and Heathrow airports.
PIRATES CONTROL OCEAN BETWEEN VENEZUELA, TRINIDAD AND TOBAGO
Insight Crime on 21st January carried an article saying that increased pirate attacks in the waters between Trinidad and Tobago and Venezuela show that criminal gangs in the Venezuelan state of Sucre are trying to dominate the drug trafficking route from the country’s coast to the Caribbean; and Trinidadian fishermen have suffered constant attacks by Venezuelan criminal groups. Sucre has been a base for drug trafficking for over 10 years. The objective of these modern-day pirates is to control the smuggling routes from eastern Venezuela.
DENMARK TO SUSPEND ARMS EXPORTS TO UAE
On 17th January, CPH Post Online reported that the Danish Foreign Ministry has revealed that Denmark will no longer export arms to the UAE, and the ministry has asked the state police to withdraw export permits that have already been approved. The move comes as a result of the UAE’s involvement in the conflict in Yemen. Over the past 5 years, Danish companies have exported 210 million kroner of arms and military equipment to the UAE.
AUSTRALIAN POLICE CHARGE MEMBERS OF FAMILY-RUN GANG WHO SMUGGLED STOLEN BABY MILK TO CHINA
Illicit Trade on 21st January reported that police in Australia have smashed a family-run criminal syndicate that prosecutors allege stole infant formula milk worth and estimated £718.000 from shops before smuggling it out of the country to China. Infant formula from countries such as Australia is considered much safer than locally-produced alternatives, as parents in countries across Asia are willing to pay a premium for baby formula from western countries due to fears that lax local food safety laws mean that local producers are not forced to make sure that the products they make are safe and heathy.