OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 28

28 February 2019

ACCOUNTANT IN £280,000 PENSION FUND FRAUD

Accountancy Daily on 28 February reported that an accountant, Roger Bessent, who treated a pension scheme, Focusplay Retirement Benefit Scheme, for which he was a trustee and administrator like a ‘personal piggy bank’ has been found guilty of fraud for transferring more than £280,000 of funds to support his own businesses and investments

https://www.accountancydaily.co/accountant-ps280k-pension-fund-fraud

MONTENEGRO ISSUES ARREST WARRANT FOR EX-RULING PARTY ALLY  

KYC 360 on 28 February reported that Montenegro has issued an international arrest warrant for a fugitive banker who is a former close ally-turned-foe of long-serving President Milo Djukanovic.  Dusko Knezevic, is said to be in London, according to local media, after fleeing Montenegro to avoid detention on suspicion of money laundering and fraud.

https://www.riskscreen.com/kyc360/news/montenegro-issues-arrest-warrant-for-ex-ruling-party-ally/

BIOMETRICS KEY TO WHITE HOUSE STRATEGY ON COMBATING TERRORIST TRAVEL

On 25 February, Homeland Security Today reported on the US National Strategy to Combat Terrorist Travel.  The whole-of-government approach aims to equip state, local and tribal partners with “terrorism-identity and travel data, as well as the tools and technology necessary to identify terrorists at the earliest opportunity,” the strategy said.

https://www.hstoday.us/subject-matter-areas/counterterrorism/biometrics-key-to-white-house-strategy-on-combating-terrorist-travel/

COUNTERFEIT SEIZURES IN BRAZIL

On 19 February, an article from Mayer Brown reported that the Federal Revenue Office of Brazil confiscated approximately US$800 million in illegal products in 2018.  This total represents an increase of approximately US$180 million in confiscated products since 2017, and is said to demonstrate that Brazilian Customs and Border Protection is making strides in combating counterfeiting.  It says that it is recommended recommended for companies to seek IP protection by investing in training sessions with Customs, staff and distributors as well as creating tools to distinguish genuine from counterfeit goods and providing such information to Customs.

https://www.mayerbrown.com/couterfeiting-data-in-brazil-and-parallel-importation-02-26-2019/

FORMER SIG SAUER EXECUTIVES MAKE COURT DEAL IN US OVER COLOMBIA GUN EXPORTS

ABC News on 27 February reported that 3 former executives at German gun-maker Sig Sauer likely won’t go to prison after reaching a deal over allegations they illegally exported arms to Colombia.  The trial centred on the shipment of tens of thousands of semi-automatic pistols from Sig Sauer’s factory in Germany to its sister company in New Hampshire between 2009 and 2011. Prosecutors said most of the SP 2022 pistols were subsequently forwarded to Colombia, in breach of an export licence Sig Sauer had received from German authorities.

https://abcnews.go.com/International/wireStory/sig-sauer-executives-reach-court-deal-colombia-gun-61388961

JAPAN: REPORTS OF DIRTY MONEY BANK TRANSFERS HIT RECORD IN 2018

The Asahi Shimbun on 28 February reported that Suspicious financial transactions suspected of money laundering hit a record in 2018, according to the National Police Agency.  It said that banks and other financial institutions reported 417,465 such money transfers last year. Reports filed by cryptocurrency exchange service operators accounted for 7,096 cases, a more than 10-fold increase over the previous year.

http://www.asahi.com/ajw/articles/AJ201902280054.html

THE CASH CONTROLS (AMENDMENT) (EU EXIT) REGULATIONS 2019

On 28 February, HMRC issued a news release about this SI which amends retained EU law to ensure that it works to collect information from individuals who are carrying cash in excess of £10,000 into or out of the UK in the event that the UK leaves the EU without an agreement.

https://www.gov.uk/eu-withdrawal-act-2018-statutory-instruments/si-the-cash-controls-amendment-eu-exit-regulations-2019

THE ECONOMIC WAR ON SYRIA: WHY EUROPE RISKS LOSING

An article from ETH Zurich on 27 February says that the US and the EU have imposed new punitive economic measures on Syria.  These measures aim to ensure that Western actors do not help strengthen the reconstituted order in Syria under President Bashar al-Assad.  Further, they seek to pressure the Syrian government into behavioural change in return for sanctions relief and reconstruction aid. However, Samaha contends that the sanctions are only likely to strengthen al-Assad’s regime rather than serve Western interests, while also having a detrimental impact on the most vulnerable in Syria.

http://www.css.ethz.ch/en/services/digital-library/articles/article.html/80004e2b-db27-4dc2-a401-a96381ed611f

FAKE FRENCH ‘MINISTER’ DEFRAUDS TURKISH TYCOON

Daily Sabah in its 1 March edition reported that the con man asked the tycoon asked him to help France to secure the release of hostages captured by a terrorist group, the fake – complete with a prosthetic face mask resembling the original minister sitting in his “office” – persuaded Kıraç to give the French government €4.1 million.  

https://www.dailysabah.com/investigations/2019/03/01/fake-french-minister-defrauds-turkish-tycoon

4 CORRUPTION SCANDALS SWIRLING AROUND BENJAMIN NETANYAHU, EXPLAINED

PBS on 28 February reported that scandals have engulfed Netanyahu’s family and his inner circle, with at least 3 former close confidants turning state’s evidence and testifying as a witness against him.  Attorney General Avichai Mandelblit says he has sufficient evidence to press charges against Netanyahu in 3 separate cases. The article looks at the current cases facing the longtime Israeli leader.

https://www.pbs.org/newshour/world/4-corruption-scandals-swirling-around-benjamin-netanyahu-explained

https://www.timesofisrael.com/netanyahus-illicit-dealings-benefited-tycoon-by-500-million-ag-alleges/

UK: DAY OF ACTION CO-ORDINATED BY THE NEWLY FORMED NATIONAL ECONOMIC CRIME CENTRE (NECC) WILL SEEK TO FREEZE 95 BANK ACCOUNTS CONTAINING AN ESTIMATED £3.6 MILLION

A news release from the NCA on 28 February said that the money in the accounts is suspected to be either the proceeds of crime or intended to be used for criminal purposes.  The accounts are held mainly by overseas students studying in the UK who may be unaware that operating a bank account in this manner is potentially illegal. The accounts were identified by a bank as part of their AML processes and officers from the NECC assess that the students are likely to have been targeted by organised crime groups, specifically to launder the proceeds of crime.

http://www.nationalcrimeagency.gov.uk/news/news-listings/1573-multi-agency-day-of-action-to-freeze-95-bank-accounts-suspected-of-laundering-millions

NETHERLANDS: “TERRIFYING” ONLINE GAMBLING PENALTIES PLANNED

Calvin Ayre on 28 February reported that online gambling operators serving Dutch customers without Dutch permission will face “terrifying” new financial penalties as gaming regulators prep for the country’s new liberalised online market.  The KSA regulatory body announced that it was increasing the ‘starting’ financial penalty for unauthorised online gambling from its current €150,000 to €200,000 from 1 March.

https://calvinayre.com/2019/02/28/business/netherlands-terrifying-online-gambling-penalties/

GIBRALTAR: COMMAND PAPER ON IVORY TRADE

On 27 February, Gibraltar published a news release about  a Command Paper on a draft Bill to make provision for the prohibition of dealing in ivory.  The Bill provides for a prohibition on “dealing” in ivory, and defines this as buying, selling or hiring ivory, or offering to do so, keeping ivory for sale or hire, or exporting or importing ivory from Gibraltar for sale or hire, or for personal possession.  The ivory ban will not affect ownership of items made of or containing ivory, including inheriting or gifting.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2019/Press%20Releases/136-2019.pdf

UPDATE: UAE EMBARGO IN RELATION TO QATAR

On 28 February, Ince Gordon Dadds published an update intended to clarify the position regarding the UAE embargo in relation to Qatar; and, in particular, the confusion seems to center around the question of whether the UAE now permits shipment of Qatari cargo to the UAE and vice versa.

https://www.incegdlaw.com/en/knowledge-bank/update-uae-embargo-in-relation-to-qatar?event=reloadPublications&currentPagePiD=58ef56d8c6fe1b0e9cddff00&assetType=PUBLICATION&orderBy=datedesc&take=8&skip=0&ajaxbranchid=58ef614fc6fe1b266450fe10

WORKING GROUP LISTS ETHICAL PRINCIPLES FOR FACIAL RECOGNITION POLICY

On 27 February, Police Professional reported that a report for the Home Office had identified 9 key areas were identified by the Facial Recognition Working Group of the Biometrics and Forensics Ethics Group (BFEG) – formerly the National DNA Database Ethics Group) – to inform policy and trials of the technology.  The working group is monitoring developments and advising Home Office ministers on the ethics of the technology’s deployment.

https://www.policeprofessional.com/news/working-group-lists-ethical-principles-for-facial-recognition-policy/

LEBANON’S FIRST STEPS IN THE OIL AND GAS INDUSTRY

King & Spalding has published a chapter it contributed to Pratt’s Energy Law Review which  outlines the main challenges facing the development of the hydrocarbons’ sector in Lebanon.  It also offers a brief overview of the legal framework regulating Lebanese petroleum activities as well as a succinct timeline of the events that paved the way to Lebanon’s first steps in the offshore energy industry. It starts by saying that Lebanon is the latest country to join the race for oil and gas exploration in the Eastern Mediterranean region.  The significant natural gas fields discovered over the past decade in the Levant and Cyprus basins have sparked increased interest in the potential oil and gas resources contained in the Eastern Mediterranean sea. After more than 3 years of delay due to political deadlock, Lebanon has finally re-launched its first licensing round stalled since 2013.

https://www.kslaw.com/attachments/000/006/754/original/Lebanon’s_First_Steps_in_the_Oil_and_Gas_Industry.pdf?1551390265

CUSTOMS (CROWN DEPENDENCIES CUSTOMS UNION) (EU EXIT) REGULATIONS 2019

This SI deals with circumstances in which the UK leaves the EU without a negotiated deal. It would modify various customs rules to take account of the customs union arrangements between the UK and the Crown Dependencies (Isle of Man, Bailiwick of Guernsey and Bailiwick of Jersey), which will take effect once the UK and the Crown Dependencies cease to be part of the customs territory of the EU.

http://www.legislation.gov.uk/uksi/2019/385/contents/made

TERRORISM ACT 2000 (PROSCRIBED ORGANISATIONS) (AMENDMENT) ORDER 2019

This SI formally  adds 3 groups to the list of proscribed organisations in Schedule 2 to the Terrorism Act 2000 – “Hizballah (Party of God), JNIM and Ansaroul Islam (Ansar ul Islam) (Ansaroul Islam Lil Irchad Wal Jihad).  

http://www.legislation.gov.uk/uksi/2019/406/contents/made

FATF: PUBLIC STATEMENT – MITIGATING RISKS FROM VIRTUAL ASSETS

On 28 February, FATF is setting out more detailed implementation requirements for effective regulation and supervision/monitoring of virtual asset services providers, with an Interpretive Note to Recommendation 15.  The text of the new Interpretive Note has been finalised, and will be formally adopted as part of the FATF Standards in June 2019 – the text of the Note is included in the release. FATF invites private sector entities and other experts to provide written comments on one paragraph.

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/regulation-virtual-assets-interpretive-note.html

WARNING ON LOST LIMITED LIABILITY STATUS FOR UK COMPANIES AND LLP IN NO DEAL BREXIT

On 28 February, Accountancy Daily reported that In the event of a no deal Brexit, the limited liability status of UK companies and limited liability partnership (LLP) may not be recognised in some EU jurisdictions, raising substantial business and personal risks, according to analysis of official government advice by RSM, which is urging businesses to ensure they review their structure.

https://www.accountancydaily.co/warning-lost-limited-liability-status-no-deal-brexit

OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 27

26 February 2019

NOTE

Away from home (again) and relying on slow or unreliable wi-fi, so there may be some items missing (to follow later, and hopefully not urgent), and may not be able to highlight separately as many (or any?) important items as I would like…

FORMER SWISS OFFICER SENTENCED FOR FIGHTING AGAINST ISIS

On 25th February, Homeland Security Today reported that a Swiss military court has sentenced a former soldier for fighting against the Islamic State group in Syria.  Johan Cosar used his military training to recruit hundreds of men to defend Christian groups from IS. He was found guilty of undermining Switzerland’s neutrality and security by joining a foreign army – and given a 3-month suspended sentence and fined SF500.

https://www.hstoday.us/subject-matter-areas/counterterrorism/former-swiss-officer-sentenced-for-fighting-against-isis/

https://www.bbc.co.uk/news/world-europe-47319581

EX-SIG SAUER EXECUTIVES ON TRIAL FOR FUNNELLING 38,000 GUNS DESTINED FOR COLOMBIA THROUGH NEW HAMPSHIRE

https://www.unionleader.com/news/business/ex-sig-sauer-execs-on-trial-for-funneling-guns-destined/article_bab9be76-1f0f-586b-82ff-611dbcd95a8f.html

POLICE SEIZE ANCIENT HANDWRITTEN HEBREW MANUSCRIPTS IN ANTI-SMUGGLING OP IN SOUTHERN TURKEY

Daily Sabah on 26 February reported that Turkish security forces confiscated stolen historical artefacts, including a collection of ancient Hebrew manuscripts, in an anti-smuggling operation in Osmaniye province in southern Turkey.  6 suspects, who were later identified as Syrian nationals, have been detained.

https://www.dailysabah.com/investigations/2019/02/26/police-seize-ancient-handwritten-hebrew-manuscripts-in-anti-smuggling-op-in-southern-turkey

HOW THE TUNA RACKET OPERATES: A DEEP DIVE INTO THE WORKINGS OF THE ILLICIT TRADE

The Times of Malta on 26 February published an article which says its explains that 2 Maltese criminal investigations into the racket of tuna illegally farmed in Malta are still in the early stages and a third ‘audit’ by the European Commission remains in progress.  A Spanish-led operation has so far revealed that an estimated 2.5 million kilograms of tuna, worth around €12 million, was being smuggled from Malta to Spain annually.

https://www.timesofmalta.com/articles/view/20190226/local/how-the-tuna-racket-operates.702807

RUSSIAN SUPREME COURT CLASSIFIES ILLICIT CRYPTO USE UNDER MONEY LAUNDERING LAWS

Coin Telegraph on 26 February reported that the Court has reportedly included the illicit use of cryptocurrencies in the list of criminal offences related to money laundering.

https://cointelegraph.com/news/russian-supreme-court-classifies-illicit-crypto-use-under-money-laundering-laws

TRUST OR COMPANY SERVICES PROVISION

The Law Society of Scotland has said that an analysis has highlighted a lack of understanding of what constitutes a Trust or Company Service provider (TCSP) amongst Scottish advocates, and so it has provided a straightforward explanation of when you will be considered a TCSP..

https://www.lawscot.org.uk/members/business-support/financial-compliance/anti-money-laundering/trust-or-company-services-provision/

CAN CASH CONTROLS AND ‘CARWATCH’ STOP MONEY LAUNDERING IN THE LUXURY CAR MARKET?

CTV News Vancouver published an article on 26 February about a legal loophole that can turn luxury cars and SUV into literal vehicles for money laundering; and that criminals are taking advantage of a lack of controls on cash purchases of luxury vehicles, and are using them as a way to hide dirty cash

https://bc.ctvnews.ca/can-cash-controls-and-carwatch-stop-money-laundering-in-the-luxury-car-market-1.4314369

INVESTIGATION LOOKING INTO THE SOUTH AFRICAN MARITIME FUND’S MISSING MILLIONS

City Press in South Africa on 26 February reported that a former employee at the South African Maritime Safety Authority has spilled the beans about how the multimillion-rand maritime fund was exposed to fraud, theft and corruption.  The maritime fund is sustained by money collected as a result of penalties, fines and forfeitures to ship owners who violate certain laws and pollute the oceans.

https://city-press.news24.com/News/siu-looking-into-the-maritime-funds-missing-millions-20190226

CHINA ENACTED “BLOCKING STATUTE” FOR INTERNATIONAL CRIMINAL JUDICIAL ASSISTANCE

Ropes Gray on 25 February published a briefing saying that in October 2018, China enacted the International Criminal Judicial Assistance Law, which immediately came into effect.  In essence, the ICJAL serves as a blocking statute that requires approval by PRC governmental authorities before any institution, organisation, or individual within the territory of the PRC can provide evidence materials and assistance to any foreign countries’ criminal proceedings.  As such, the ICJAL could significantly impact cross-border criminal enforcement and prosecutions, which are increasingly commonplace. The briefing outlines the main features of ICJAL and typical scenarios it might affect.

https://www.ropesgray.com/en/newsroom/alerts/2019/02/China-Enacted-Blocking-Statute-for-International-Criminal-Judicial-Assistance

HMRC CONSULTS ON PLANS TO BE PREFERENTIAL CREDITOR IN INSOLVENCIES

Accountancy Daily on 26 February reported that a HMRC public consultation on plans to make it a secondary preferential creditor for certain tax debts paid by employees and customers on the insolvency of a business, which have been branded a ‘cash grab’ by R3, the insolvency and restructuring trade body – the changes would take effect in 2020.  Prior to 2003, HMRC was a preferential creditor for certain taxes, but the Enterprise Act 2002 reduced its status to that of non-preferential creditor for all forms of tax. HMRC argues that as a result losses from insolvency have increased. The consultation closes on 27 May.

https://www.accountancydaily.co/hmrc-consults-plans-be-preferential-creditor-insolvencies

PODCAST: WEDDINGS, FUNERALS AND LITTLE RED ENVELOPES

In the latest episode of Bribe, Swindle and Steal from TRACE International Barbara Tsai, APAC Head-and Deputy Global Head-of Anti-bribery for UBS, talks through 3 compliance challenges associated with her region: weddings, funerals and hong bao envelopes for the Lunar New Year.

https://traceinternational.org/bribe_swindle_or_steal

ARE ART ‘FREEPORTS’ TIP OF EU TAX AVOIDANCE ICEBERG?

EU Observer on 27 February carried an Opinion piece saying that recently, MEPs raised concerns about the risks presented by Le Freeport, a 22,000 sq metre high-security facility located near Luxembourg airport, where goods can be stored with confidentiality — and without being taxed.  MEPs aren’t the first to point out problems with the Freeport – the article points to reports back in 2014. It highlights another potential problem – ultra-wealthy are increasingly taking advantage of a lack of harmonisation between jurisdictions to store works of art on their yachts – and possibly avoid tax.

https://euobserver.com/opinion/144269

SNC-LAVALIN “PAID FOR GADHAFI SON’S DEBAUCHERY” WHILE HE WAS IN CANADA

On 27 February, the Ottawa Citizen reported claims that engineering company SNC-Lavalin’s cosy relationship with the son of former Libyan dictator Gadhafi, including the company allegedly hiring prostitutes for him during a visit to Canada a decade ago.

https://ottawacitizen.com/news/politics/snc-lavalin-paid-for-gadhafi-sons-debauchery-while-he-was-in-canada-report/wcm/27f4feaf-65d4-4af1-8344-bc7e09fc7f11

BELGIUM AND 6 OTHER MEMBER STATES HAVE TRAITS OF A TAX HAVEN, EUROPEAN PARLIAMENT COMMISSION FINDS

On 27 February, the Brussels Times reported on a report by its Special Commission on Financial Crimes, Tax Evasion and Tax Fraud.  The report will be put before the Parliament in March.

http://www.brusselstimes.com/belgium/14242/belgium-has-traits-of-a-tax-haven-european-parliament-commission-finds

CORK MAN BEHIND £20 MILLION UK TAX SCAM TO SEEK SUPREME COURT APPEAL OVER PENDING EXTRADITION

The Irish Examiner on 27 February reported that a man from Cork, described as the “controlling mind” behind a tax scam in the UK, is to seek a Supreme Court appeal over his pending extradition to the UK for failing to pay a confiscation order amounting to almost £13 million.  Daniel O’Connell, 65, had opposed his extradition on several grounds including delay, and also argued that to imprison him would breach his fundamental rights under the European Convention of Human Rights.

https://www.irishexaminer.com/breakingnews/ireland/–907561.html

CIVIL ASSET FORFEITURE IN THE USA: NOT DEAD YET

On 27 February, an article from Lane Powell PC said that, despite a recent Supreme Court decision, which limited the scope of civil asset forfeiture, the controversial legal process whereby law enforcement officers can seize property they suspect was involved in illegal activities, civil forfeiture is far from finished.  The issue considered by the Supreme Court in the case was whether there are limitations to the amount of assets that a state is allowed to seize. In that case, the accused had sold a small amount of heroin to an undercover cop.  He was charged and convicted, and his crimes carried a monetary fine of up to $10,000. The state then brought a civil action to seize his Range Rover, which he’d used to transport drugs, but which had been purchased with nearly $50,000 in legitimate funds from an inheritance.  However, the article points out, the Supreme Court has repeatedly affirmed that the practice of civil asset forfeiture is constitutional – the new ruling simply means that the amount of the seizure can’t be unreasonably large compared to the underlying crime.

https://www.jdsupra.com/legalnews/civil-asset-forfeiture-not-dead-yet-86020/

PACIFIC DRUG ROUTES FROM SOUTH AMERICA MORE POPULAR THAN ATLANTIC

Insight Crime on 27 February carried an article saying that drug traffickers are turning to the Pacific Ocean to ship their illicit wares to North America.

https://www.insightcrime.org/news/brief/pacific-drug-routes-gaining-popularity-atlantic/

UK: GANGS USE VACUUM CLEANERS TO STEAL CASH FROM PARKING METERS

On 27 February, ITV News reported that organised crime gangs armed with sledgehammers and vacuum cleaners are stealing tens of thousands of pounds from parking meters, a local authority has warned.  Criminals are smashing the meters open or drilling holes in them before inserting vacuum cleaner hoses.

https://www.itv.com/news/london/2019-02-27/gangs-use-vacuum-cleaners-to-steal-cash-from-parking-meters/