A briefing from Allen & Overy on 23rd January deals with the question of how, or if, you can use documents obtained in discovery for one litigation in another case, in the same country or overseas. It says that 2 recent cases have considered applications by litigants wanting to use documents disclosed in English proceedings (or information derived from them) to seek foreign legal advice in related on-going or contemplated foreign proceedings. It warns of the problems.
On 30th January, the House of Commons Library published a briefing paper which provides an introduction to the issue of tax avoidance, looking in detail at the development of follower notices and accelerated payments, before discussing the current UK Government’s approach, including the introduction of the 2019 Loan Charge.
On 30th January, HM Treasury issued a Notice confirming the removal of Mohamed Marwan Ben Ali Ben Mohamed MABROUK from its Consolidated List.
Illicit Trade on 29th January explains that, given the choice, the vast majority of new parents in China will opt to give their babies infant formula milk made outside of their country. 8 out of the top 10 baby formula brands sold in China are made by foreign companies. New parents remain sceptical as to the safety of locally-made alternatives in the wake of a baby powder scandal over a decade ago in which contaminated formula caused the deaths of six infants and poisoned as many as 300,000.
29th January 2019
CHINESE CHIP GIANT FUJIAN JINHUA TO CEASE OPERATIONS AFTER US BAN
Silicon on 28th January reported that Fujian Jinhua, China’s massive state-backed chip start-up, is set to shutter production in the next few weeks due to a block on parts from the US. Jinhua was founded in February 2016 with a $5.6 billion investment from the Chinese government and Fujian province.
THE SEARCH FOR IRAQ’S LOOTED ARTEFACTS GETS SERIOUS
VoA on 28th January carried an article saying that before Islamic State militants were dislodged from Iraq in 2017, they stole thousands of ancient artefacts. Most are still missing, and an international team of archaeologists is turning detective to recover as many as possible. A a workshop at Baghdad’s National Museum has been convened to co-ordinate international retrieval efforts. It brought together Iraqi and foreign police, customs officials and archaeological experts, and was the second in 2 years organized by the European Union Advisory Mission in Iraq.
ZIMBABWE: BEEKEEPERS SMUGGLING HONEY TO EXPORT MARKETS
Newsday on 28th January reported that Zimbabwe is losing a lot of potential revenue through illegal exportation of honey to neighbouring countries, as most beekeepers continue to shun formal honey export procedures due to exorbitant levies charged by government, an industry official has said. Zambia, Botswana and South Africa as some of the destinations for the honey.
ISLE OF MAN TO FIND OUT IF IT’S ON EU TAX BLACKLIST BY 12 MARCH
Manx Radio on 28th March reported that the Isle of Man could find out as soon as 12th March if it is included on the EU 2019 tax blacklist, an EU official has said. The Island, Jersey and Guernsey have made changes to tax laws over the “economic substance” of companies with links to the islands. EU finance ministers will make the final decision on the list following talks which could be as soon as 12th March.
THE DIAMOND INDUSTRY IN UAE
One World Middle East has published an article saying that UAE has emerged as one of the world largest diamond trading hub. Traders from all over the world to set base in Dubai including most of the large diamond companies in India.
FCA CONSULTS ON CRYPTOASSETS REGULATION
On 28th January, Gowling WLG published an article saying that the FCA has published its Consultation Paper which sets out guidance on how cryptoassets can be subject to FCA regulation. In the article, the firm’s experts summarise the FCA’s expectations and highlight the key considerations for firms. The Guidance seeks to clarify where different categories of cryptoasset tokens fall in relation to the FCA’s regulatory perimeter – and whether a security token, utility token and exchange token.
FIRED COMPLIANCE OFFICER SUES MONEYGRAM
Corporate Counsel on 28th January reported that he claims he was fired after 6 months on the job after he repeatedly brought up compliance failures that allegedly violated the company’s 2012 deferred prosecution agreement with the DoJ and a 2009 order by the Federal Trade Commission. He was a former compliance officer at MoneyGram International Inc. in Dallas.
UK IVORY BILL TO COME INTO FORCE IN 2019
On 29th December, DEFRA issued updated information on this Bill, which will ban the commercial use of ivory in the UK. It includes information on the 5 categories of items exempted from the ban, and details what actions those wishing to sell exempt items will need to take to be compliant with the ban.
EX-FUGEES MEMBER FIGHTING A $38 MILLION FORFEITURE ORDER LINKED TO FUGITIVE MALAYSIAN FINANCIER JHO LOW
Prakazrel ‘Pras’ Michel, a founding member of the hit 1990s group, is fighting the US government over a $38 million civil forfeiture complaint. He is accused of aiding a scheme to try and get the DoJ to drop an investigation into embezzlement from a Malaysian investment fund, 1MDB, according to the complaint.
UK: CRIME (OVERSEAS PRODUCTION ORDERS) BILL
On 29th January, the House of Commons Library published a briefing on this Bill which would create a framework to enable law enforcement agencies and prosecutors in the UK to apply to a court in the UK for an ‘overseas production order’ requiring a person (in practice, generally a communications service provider) in a foreign jurisdiction to produce or grant access to electronic data for the purposes of investigating and prosecuting serious crime. Orders would only be available where there was a designated international agreement in place between the UK and the country or territory where the CSP was based. No such agreements are currently in force, but the UK has been in the process of negotiating a data sharing agreement with the USA since 2015.
WESTERN GOVERNMENTS – NAMING AND SHAMING STATES SUSPECTED OF INFILTRATING THEIR CRITICAL NATIONAL INFRASTRUCTURE
A Commentary from RUSI on 29th January said that Western governments are shedding their inhibitions about naming and shaming states suspected of infiltrating their critical national infrastructure; and saying that this is a good step, but should be just the beginning. It discusses “hardware attacks”, such as where using computer chips illegally attached to Chinese-made servers and shipped all over the world.
US INDICTMENT AGAINST HUAWEI
The complete text of the US indictment against Huawei is available online.
THE KIDNAP, RANSOM AND MURDER OF FOUNDER OF THE 5DIMES SPORTSBOOK IN COSTA RICA
On 29th January, Calvin Ayre provided an update on the case where, in September, the founder of the 5Dimes sportsbook, William Sean Creighton, was kidnapped and held for ransom. Although the ransom was eventually paid in cryptocurrency, his whereabouts were still unknown until his lifeless body was found a month later. It says that 12 people have been arrested in Costa Rica and Spain, with all reportedly being Costa Rican citizens.
4 JAILED FOR UP TO 7 YEARS FOR 2005 SCHIPHOL DIAMOND HEIST
Customs Today reported on 29th January that 4 men, arrested in Spain and Amsterdam in 2017 in connection with a massive diamond heist at Schiphol airport in 2005, have been jailed for up to 7 years. Armed robbers dressed as KLM staff hijacked an armoured car in a secure area of Schiphol airport and stole uncut diamonds said to be worth more than $72 million. The diamonds were about to be loaded onto a plane and flown to Belgium.
LIQUID COCAINE SMUGGLING FROM BELGIUM INTO LEBANON FOILED
On 25th January, Customs Today reported that a suspicious vehicle imported from Belgium was tracked in the Aley neighbourhood and confiscated. A metal box professionally concealed inside the vehicle was found and it was found to contain a heavy liquid weighing 75 kg, comprising the equivalent to 65 kg pure cocaine.
SECURING EVIDENCE ACROSS EU BORDERS – REPORT ON EUROPEAN INVESTIGATION ORDER
On 29th January, Eurojust advised the publication of a new report on the use of the EIO. It said that the European Investigation Order (EIO) is proving its value as a practical tool for speeding up cross border criminal investigations in Europe. Judicial practitioners, however, stress the need for guidance and support, since the EIO requires a sound knowledge of national criminal law systems, quick access to the right contacts and a pragmatic and flexible approach. The EU Directive on the European Investigation Order is a stand-alone legal instrument for evidence gathering that applies to all EU Member States, with the exception of Denmark and Ireland.
CYBERCRIME: XDEDIC ILLEGAL ONLINE MARKETPLACE DISMANTLED IN UKRAINE
On 29th January, Eurojust issued a news release about 2 criminal investigations into the xDedic Marketplace, on which access to tens of thousands of compromised servers of unknowing victims (companies and private individuals) was offered for sale. The hacking was accomplished via the Remote Desktop Protocol (RDP). Buyers and sellers traded such RDP servers on this platform for amounts ranging from $6 to more than $10,000 each. One investigation was initiated in Belgium and the other in the US.
HEZBOLLAH’S BACKING OF MADURO MAY SHINE LIGHT ON LINKS WITH VENEZUELA
Insight Crime on 29th January published an article speculating on links between Hezbollah and the Maduro government. However, it does say that reports that Hezbollah is mining gold in Venezuela to finance its own operations have so far remained unconfirmed – but the article asks what is Hezbollah doing in Venezuela?
SAUDI ARABIA MAY BE PRODUCING ROCKET MOTORS
On 25th January, Janes.com reported that satellite imagery suggests Saudi Arabia has built a solid-propellant rocket motor production facility next to its Al-Watah missile base. This highlights the fact that Iran is far from the only country in the Middle East with, or pursuing, ballistic missile programmes. For more information see Arms Control Wonk and its recent podcast.
UK: REPORT ON WORK OF INTERNATIONAL JUSTICE AND ORGANISED CRIME DIVISION
On 29th January, a news release from the CPS reported that the HMCPSI inspectorate has found that the International Justice and Organised Crime Division continuously delivers its work to a high standard despite challenging casework. The report recognises the Division’s specialist casework knowledge, information and tools, and highlights that knowledge management and sharing across the CPS can be improved. The Inspectorate also highlighted that more can be done to improve risk management and performance management.
STANDARD CHARTERED BANK FINED $40 MILLION FOR ATTEMPTING TO RIG TRANSACTIONS IN FOREIGN EXCHANGE MARKETS BETWEEN 2007 AND 2013
An article on Mondo Visione on 29th January reported that the New York Department of Financial Services (DFS) has fined Standard Chartered Bank $40 million for attempting to rig transactions in foreign exchange markets between 2007 and 2013. The consent order marks the last in a series of DFS consent orders that follow a detailed investigation of manipulation in the foreign exchange markets, and the action follows previous fines totalling $3.14 billion that DFS has levied against Barclays Bank PLC, BNP Paribas, Credit Suisse, Deutsche Bank, and Goldman Sachs to resolve unlawful conduct in the foreign exchange trading business. DFS’s investigation of Standard Chartered found that traders used chatrooms, e-mails, phone calls and personal meetings to attempt to rig transactions.
WORLD BANK BARS ODEBRECHT FROM CONTRACTS FOR “FRAUDULENT AND COLLUSIVE PRACTICES” DURING A PROJECT IN COLOMBIA
A post on the FCPA Blog on 29th January sad that the World Bank had debarred Brazil-based engineering and construction company Construtora Norberto Odebrecht SA for 3 years for “fraudulent and collusive practices” during a project in Colombia. Also debarred were Odebrecht construction subsidiaries based in Colombia, Chile, Panama, Peru, Barbados, Angola, the US, Luxembourg, Austria, and the Cayman Islands. This makes them ineligible to participate in World Bank-financed projects. The project in Colombia was the World Bank-financed Río Bogotá Environmental Recuperation and Flood Control Project, and was designed to improve water quality and reduce flood risks along the Bogotá River.
RUSSIAN COUNTER-SANCTIONS: A REVIEW OF 2018 AND OUTLOOK FOR 2019
Noerr has published a report saying that, in 2018, the Russian Federation for the first time took comprehensive countermeasures to respond to the US/EU sanctions. This response was triggered mainly by the adoption of CAATSA in the US in August 2017 and the extension of the US sanctions in April 2018. The countermeasures are a combination of economic sanctions and measures to prevent the implementation of the US/EU sanctions in Russia. Further countermeasures – in particular the introduction of liability for sanctions compliance in Russia – are expected in 2019.
PRIVATE PROSECUTION OF INTERNATIONAL CRIMINAL OFFENCES
Edmonds, Marshall, McMahon, described as a specialist in private prosecutions, has published an article which briefly considers how private prosecutions might be used to prosecute international criminal offences, an issue which it says has been highlighted by relatively recent cases. It says a recent case highlights the potential role that private prosecutions can play in cases involving international crimes, which this article explores.
A comprehensive alert from law firm Wilmer Hale on 29th January details the sanctions, and the various licences, announced by the US Treasury, which described PdVSA as a “vehicle for corruption” and the “primary source of Venezuela’s income and foreign currency”. The designation, it explains, creates new restrictions and compliance challenges for companies that have financial or commercial ties to Venezuela or to PdVSA, including through their portfolio holdings. Because PdVSA is an SDN, all its property and property interests that are in the US or under the possession or control of a US person must be blocked and may not be part of any transactions or dealings with a US nexus. The licences amend existing authorisations and extend limited relief from broad prohibitions – but only in narrow circumstances that involve specific parties, specific periods of duration and specific types of transactions.
On 29th January, a news release advised that a further 8 entities had been removed from the list of those subject to sanctions.