Month: March 2019

31^st March 2019

INDIAN GOLD RACKET KINGPIN RAN US CALL CENTRE
The Times of India on 31^st March reported that the kingpin of the 110 kg gold smuggling racket unearthed by Indian authorities, Nisar Allyar, 43, ran a call centre in the US.  He also owned 5 companies in Kerala and UAE, including one in Kerala that is said to have produced aluminium products.  seven people for smuggling in gold declared as brass, with the sheen of the gold removed by chemicals.
https://timesofindia.indiatimes.com/city/mumbai/gold-racket-kingpin-ran-us-call-centre/articleshow/68651984.cms

TRINIDAD & TOBAGO: $90 MILLION IN SUSPICIOUS TRANSACTIONS BY RELIGIOUS GROUPS

Trinidad & Tobago Newsday on 30^th March reported that the Attorney General has said that, since 2012, $90 million worth of suspicious transactions by religious organisations has been flagged.  He was speaking as taking the Non-Profit Organisations Bill through the parliament.  He said members of the Islamic community had expressed concerns to him that there might be a prejudice against Islamic organisations sending zakaat (charity) abroad, but the Bill would provide protection for charitable purposes.

https://newsday.co.tt/2019/03/30/ag-90m-in-suspicious-transactions-by-religious-groups/

INDIA: HOLIDAY INN HOTEL ATTACHED IN MONEY LAUNDERING CASE

The Times of India on 31^st March reported that a Holiday Inn hotel has been attached (restrained) as part of a money laundering case against corporate lobbyist, Deepak Talwar and his son, Aditya.

https://timesofindia.indiatimes.com/india/holiday-inn-linked-to-laundering-attached/articleshow/68650999.cms

HMRC’S NEW DIGITAL VAT SYSTEM STARTS ON 1 APRIL – AND 1 MILLION BUSINESSES STILL HAVEN’T SIGNED UP

On 31^st March, Which reported that only 4% of UK businesses have registered for Making Tax Digital, the government’s new initiative to digitalise the tax return process, leaving more than 1 million yet to sign up as the deadline to do so approaches.

https://www.which.co.uk/news/2019/03/hmrcs-new-digital-vat-system-starts-tomorrow-and-1m-businesses-still-havent-signed-up/

THE CORRUPTION CASE AGAINST ECUADOR PRESIDENT LENIN MORENO

On 31^st March, Telesur reported that the President is facing a corruption probe involving an offshore company and Chinese company Sinohydro which built the Coca Codo Sinclair hydroelectric dam, which allegedly deposited $18 million in the offshore company.  The offshore company is said to be linked to Ecuadorean businessman Conto Patiño Martinez who transferred money to more than 10 ghost companies in Panama including INA Investments Corp, whose real owner is  Edwin Moreno Garces, brother of President Lenin Moreno, according to the leaked documents.

https://www.telesurenglish.net/news/INA-Papers-The-Corruption-Case-Against-Ecuadors-President-Lenin-Moreno-20190331-0007.html

A SNAPSHOT OF NORTH KOREA’S SUPPLY CHAIN COAL ACTIVITY

On 9^th March, the Tearline programme published the first of a 2-part report saying that, despite increasing restrictions on the DPRK’s coal exports, the country’s larger coal mines have remained active from 2015 to 2019 and improvements have been made to its coal supply-chain infrastructure.  The report takes a high-level look at 2 areas of North Korea’s coal industry: its mining in the South Pyongan Region, and its rail coal transfer stations located along the Taedong River, which flows through the region.  It also examines a few of the key coal ports and the rail transfer yards along the Chinese and Russian borders.  Part 2 was published on 30^th March.  The report concludes that whilst continued monitoring of North Korea’s coal industry, especially its supply chain infrastructure, can help identify possible violations of the UN sanctions on the country’s coal export activity, Kim Jong Un’s directions in his 2019 New Year’s Address to redirect coal for domestic consumption may also drive continued mining and infrastructure development.

https://pathfinder.geointservices.io/public_page/north-korea-coal-activity/

https://pathfinder.geointservices.io/public_page/a-snapshot-of-north-koreas-supply-chain-coal-activity-part-ii/

MALDIVES COURT FREES $6.5 MILLION IN EX-LEADER’S ACCOUNTS

The Daily Mail on 31^st March reported that a court had ordered the authorities to lift a freeze on former strongman president Abdulla Yameen’s bank accounts holding about $6.5 million but said a money laundering case against him would proceed.  The High Court overturned the Criminal Court’s earlier decision to freeze the 8 accounts over allegations that Yameen had received illicit payments just before he lost his re-election bid in September.

https://www.dailymail.co.uk/wires/afp/article-6870005/Maldivian-court-frees-6-5-mn-ex-leaders-accounts.html

The Malta Independent on 31^st March reported that the Council of Europe’s anti-corruption body, GRECO, has drawn up what sources described to this newspaper as a “damning” evaluation report on Malta, but the body is precluded from releasing its findings on the state of corruption in Malta until the Maltese government gives its consent.  A GRECO spokesperson said that it is an “exception” that a country refuses consent to publish – such as in the case of Belarus, not a Council of Europe member state, and which has not yet authorised the publication of any GRECO reports.  Malta’s last evaluation was in 2014.  That report had deemed the Maltese government’s level of compliance with its recommendations on political funding as “globally unsatisfactory”. It also called for action on real or potential conflicts of interest, the introduction of proper laws governing rules on gifts to MPs, the misuse of public resources, the misuse of confidential information, revolving doors and third-party contacts.

http://www.independent.com.mt/articles/2019-03-31/local-news/Council-of-Europe-body-awaiting-government-s-permission-to-publish-damning-report-6736205922

The Sunday Times on 31^st March carried a report saying that criminals have stolen billions of pounds of British taxpayers’ money from VAT and benefit fraud and used tens of millions to fund terrorism, according to police and intelligence files.  The gang, which has links to the 7/7 London bombings in which 52 people died, is alleged to have sent 1% of its gains, or £80 million, to al-Qaeda in Pakistan and Afghanistan, where it funded madrasahs, training camps and other terrorist activities, according to the leaked files.

https://www.thetimes.co.uk/article/taxman-kept-quiet-while-8bn-fraud-helped-fund-bin-laden-wqkcsrdpz

30^th March 2019

UKRAINE’S SECURITY SERVICE SEIZES AMMUNITION EXCEPT ROCKETS IN ODESA

On 30^th March, 112 UA reported that military equipment said to belong to JSC Rosoboronexport, the sole state intermediary agency for Russia’s exports/imports of defence-related and dual-use products, technologies and services.  The equipment included grenade launchers RPG-7, RPG-18, RPG-22, anti-tank shells, anti-personnel mines, and TNT blocks, stored only with the number of containers and estimated weight.  This is said to have followed the seizure of 36 Russian surface-to-air missiles for man-portable “Pechora” air defence systems.

https://112.international/ukraine-top-news/ukraines-security-service-seizes-ammunition-except-rockets-in-odesa-38316.html

MYANMAR SEIZES LARGEST CRYSTAL METH EXPORT HAUL THIS YEAR

Outlook India on 30^th March reported that Myanmar authorities seized more than 1,700 kg of crystal meth worth nearly $29 million, the biggest haul of 2019 in a country widely believed to be the world’s largest methamphetamine producer – with a largely unchecked supply of precursor chemicals flooding in from China.   It is smuggled out of Myanmar via sophisticated networks to lucrative developed markets as far away as Japan, South Korea, and Australia.  Myanmar Navy stopped a boat with 7 people aboard off the coast.

https://www.outlookindia.com/newsscroll/myanmar-seizes-largest-crystal-meth-haul-this-year/1505953

US BILL WOULD IMPROVE BENEFICIAL OWNERSHIP POSITION

An article from Ballard Spahr on 29^th March detailed the contents of a Bill introduced into the US House of Representatives that would extend the AML/CFT provisions of the Bank Secrecy Act and seeks to ensure that persons who form legal entities in the US disclose the beneficial owners of those entities.  Although such a law would have broad application, the Act does not include “formation agents”, i.e. those who assist in the creation of legal entities such as corporations and LLC — in the definition of financial institutions subject to the BSA.  The Bill focuses on bolstering beneficial ownership disclosure – the subject of regular criticism of the US system.

https://www.jdsupra.com/legalnews/corporate-transparency-act-of-2019-58642/

UK BOOKMAKERS PREPARE FOR STORE CLOSURES AS FOBT STAKE IS CUT

The Guardian on 30^th March reported that bookmakers are preparing to shut shops and push customers towards online gambling, as they brace for a reduction in the FOBT stakes (from a maximum £100 to £2) from 2^nd April.  Ladbrokes has already chosen 71 out of 1,000 shops that are likely to close.  The Association of British Bookmakers predicted that up to 4,500 shops could shut – more than half of all the shops in the UK – though estimates from the big bookmakers so far indicate a toll closer to 2,300.

https://www.theguardian.com/uk-news/2019/mar/30/bookmakers-prepare-for-store-closures-as-fobt-stake-cut

IRELAND: MEN ADMIT INDUCING PEOPLE TO INVEST €5 MILLION IN FORESTRY SCAM

Bray People on 30^th March carried an article saying that 2 men ran a ‘Ponzi scheme’ in which they induced dozens to invest over €5 million in a forestry investment scam.  They were involved in Arden Forestry Management (Arden FM) between January 2014 and mid-2016 during which 143 foreign investors were induced to deposit approximately €5.5 million into the company’s accounts.  It is said that investments would have required around 858 acres of land to be serviced but the company only owned 30.2 acres of land.

https://www.independent.ie/regionals/braypeople/news/men-admit-inducing-people-to-invest-5m-in-forestry-scam-37953541.html

JUDGMENTS OBTAINED BY DEPLOYING FRAUDULENT EVIDENCE WILL NOT BE ALLOWED TO STAND

On 27^th March, Shoosmiths published an article discusses the mantra that “fraud unravels all” and that judgments obtained by deploying fraudulent evidence will not be allowed to stand, in the light of a recent UK Supreme Court decision.  One side argued that the claim involved was an abuse of process as the matter had already been decided and any fraud could have been discovered at the time of the original proceedings.  If so, either cause of action estoppel or issue estoppel (aka res judicata), had to be heard as a preliminary issue and the Court considered both cause of action estoppel and issue estoppel.  The Court of Appeal had held that there was an abuse of process, and the Supreme Court agreed with this – but said that fraud had not been in issue between the parties in the original proceedings, and it was also a matter of public policy that fraud should override the general principles.

https://www.shoosmiths.co.uk/client-resources/legal-updates/unravelling-judgments-fraud-and-the-courts.aspx

PAKISTAN: WORLD BANK SUSPENDS $200 MILLION WATER DEVELOPMENT PROJECT LOAN

Pakistan Today on 30^th March reported that the World Bank has suspended a $200 million loan due to allegations of corruption in Balochistan Integrated Water Resource Management and Development Project.  The project beneficiaries were supposed to be small-holding farmers and medium-holding farmers engaged in irrigated agriculture, and approximately 42,800 farm households were supposed to benefit from the project’s interventions.  However, after the award of contracts allegations were made about false information being provided and complaints to National Accountability Bureau (NAB) about the alleged corruption in awarding civil works.

https://www.pakistantoday.com.pk/2019/03/30/world-bank-suspends-200m-worth-balochistan-water-development-project/

BBC CATCHES ROGUE TRADERS SELLING BLACK-MARKET RECEIPTS

On 30^th March, the BBC reported an investigation which has discovered rogue traders are selling tens of thousands of pounds’ worth of receipts and invoices in a black-market trade to cheat UK taxes.

https://www.bbc.co.uk/news/av/uk-47756250/bbc-catches-rogue-traders-selling-black-market-receipts

IRELAND: CORPORATE BENEFICIAL OWNERSHIP – CENTRAL REGISTER REQUIREMENTS IMMINENT

On 29^th March, McCann Fitzgerald reported that many Irish corporate entities are, since 15^th November 2016, required to maintain registers containing their respective beneficial ownership information under the EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016.  This requirement has now been restated and supplemented in the recent EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019, which replace the 2016 Regulations from 22^nd March.  It details what the new Regulations do, and sets out the deadlines for submitting information – 22^nd November for existing entities (i.e. those in existence before 22^nd June), and within 5 months of being incorporated for new entities.

https://www.mccannfitzgerald.com/knowledge/company-secretarial-and-compliance/corporate-beneficial-ownership-central-register-requirements-imminent

INDIA: ENFORCEMENT OF FOREIGN JUDGMENTS 2019

On 28^th March, Clyde & Co made available a chapter from International Comparative Legal Guide to Enforcement of Foreign Judgments 2019, which offers a practical cross-border insight into the enforcement of foreign judgments in India.

https://iclg.com/practice-areas/enforcement-of-foreign-judgments-laws-and-regulations/india

GIBRALTAR: THE SPAIN-GIBRALTAR TAX TREATY

On 23^rd March, the Gibraltar Chronicle published an article saying that the tax treaty covering Gibraltar and Spain is at the centre of a fierce political row over its implications for the Gibraltar community.  The government insists it is a good deal that normalises tax relations with Spain and includes recognition, for the first time, of the Gibraltarian and Gibraltar’s authorities.  The article says that most of the provisions in the tax treaty are already in place through EU Directives, or could be implemented by Spain unilaterally – in other words, most of the core provisions in the tax treaty, particularly when it comes to individuals, apply already.  For example, the treaty sets out provisions too for the exchange of information on individuals and companies, something which has alarmed many people in the community with interests in Spain – but the reality is that, for the most part, such data already flows across the border in both directions under EU rules on tax information exchange.  The treaty has been agreed signed and, once ratified by the UK – on Gibraltar’s behalf – and Spain, it will come into force.

http://chronicle.gi/2019/03/analysis-interpreting-tax-treaty-complex-business-even-experts/

REPORT ON ALLEGED “ENABLERS” OF RUSSIAN INFLUENCE IN EUROPE

On 27^th March, the CSIS Europe Program and the Center for the Study of Democracy published a report – The Kremlin Playbook 2: The Enablers – which sets out to explore whether jurisdictions and companies could be enabling forces that amplify Russian malign economic influence in some countries in Europe.  The study analysed the following case study countries: Austria, Czech Republic, Italy, Montenegro, the Netherlands, and Romania.  The report claims to show that some countries facilitate of enable Russian malign economic influence, and by doing so these enablers actively participate in the weakening and discrediting of their own democratic structures.  It says that the US and its European allies must take decisive action to limit Russia’s malign behaviour in their financial systems.

https://www.csis.org/analysis/kremlin-playbook-2-enablers-0

 

Now available, is the full text of the new UN SCR 2462 (2019) that reaffirms what previous Resolutions said in requiring all States to prevent and suppress the financing of terrorist acts and to refrain from providing support to those involved in them.  It demands that Member States ensure that their counter-terrorism measures are in compliance with their obligations under international law, including international humanitarian law, international human rights law and international refugee law.  The Resolution also calls upon Member States to conduct financial investigations into terrorism-related cases and to more effectively investigate and prosecute cases of terrorist financing, applying criminal sanctions as appropriate.

https://undocs.org/en/S/RES/2462(2019)

On 29^th March, the UN advised that 6 entries on its Al-Qaida/ISIL sanctions list had been amended.

https://www.un.org/press/en/2019/sc13758.doc.htm

On 30^th March, an article on Ekklesia reported that the structures and functioning of UK government, Parliament and politics have been called into question following the 2016 referendum result, says a new report by the Institute for Government.

http://www.ekklesia.co.uk/node/27994

The report itself is available at –

https://www.instituteforgovernment.org.uk/publications/brexit-effect

29^th March 2019

NATIONAL SPACE COUNCIL RECOMMENDATIONS ON EXPORT CONTROLS IN US

On 26^th March, Space Policy Online reported that a meeting of the National Space Council had made a number of recommendations to President Trump.  These included on space-related export control regulations and the licensing process, including action that was part of the wider Export Control Reform process underway in the US.  Short-term action included reporting on the public consultation on export controls implemented in United States Munitions List (USML) Categories IV (launch vehicles) and XV (spacecraft) and/or implemented on the Commerce Control List (CCL); creating a work plan to identify additional technologies where changes in controls would require legislation or would raise significant policy concerns; report on space-related activity and attempted acquisition by foreign adversaries and competitors working to mitigate both licit and illicit attempts to exploit US technology; and report on the status of efforts within the Wassenaar Arrangement (WA) related to the proposal by the US and UK to move certain air launch platforms and suborbital vehicles to the WA dual-use list.

It says that a dual-use control on air launch platforms was adopted at the December 2018 Wassenaar Plenary, and the Department of Commerce is preparing regulations to implement this control, with a new proposal for a dual-use control on suborbital vehicles submitted to the WA for consideration in 2019.

https://spacepolicyonline.com/news/space-council-adopts-recommendations-at-its-march-26-2019-meeting/

TURKEY: 2 REMANDED FOR SMUGGLING RADIOACTIVE ELEMENT

On 28^th March, AA.com in Turkey reported that police arrested the 2 Syrian nationals in the act when they attempted to sell some 14 grams (0.50 oz) of radioactive element, considered to be californium, for $5 million, and which was sent to Turkey’s Atomic Energy Authority for examination.  Californium is said to be considered to be highly hazardous and is used in nuclear reactors as well as oil wells.

https://www.aa.com.tr/en/turkey/turkey-2-remanded-for-smuggling-radioactive-element/1432786

EL SALVADOR: NEW ARREST WARRANT FOR EX-PRESIDENT FUNES

On 29^th March, KYC 360 reported that prosecutors in El Salvador have issued another arrest warrant for former President Mauricio Funes, this time for alleged tax evasion.

https://www.riskscreen.com/kyc360/news/el-salvador-new-arrest-warrant-for-ex-president-funes/

UK-REACH AND THE NEW APPEAL SYSTEM AFTER BREXIT

On 27^th March, Burges Salmon LLP published an article saying that, to make sure the systems still function, detailed and complex (and huge!) UK statutory instruments are being rushed through the UK parliament to provide new mechanisms to address those roles, responsibilities, rights and obligations currently held by the EU institutions.  The article highlights the rules that are broadly the same.  Other changes made are far more significant, and some of these are simply a consequence of the UK government selecting to use an existing tribunal rather than creating a bespoke one.

https://www.burges-salmon.com/news-and-insight/legal-updates/uk-reach-and-the-new-appeal-system-after-brexit/

FRANCE: ANTI-COUNTERFEITING FIGHT IN A STRENGTHENED AND MORE FOCUSED CUSTOMS STRATEGY

An article from Regimbeau on 6^th March about a new strategy of the Directorate General of Customs and Excise (DGCE) in the fight against counterfeiting.  It says that it reflects a desire to fight counterfeiting quicker and more efficiently, but also to ensure greater consumer protection.  Its proposals include those that customs services will limit actions in cases of fraud with “low” stakes, e.g. articles offered for sale in flea markets, fairs, and markets as well as articles brought back by travellers and intended for personal use; and instead to focus on the collection of information regarding express or postal freight – to find a faster way of dealing with low-stakes issues and thus gain time for fighting against trafficking of prohibited goods, specifically those which are dangerous for consumer health and/or safety, or involving organised crime.

https://www.regimbeau.eu/REGIMBEAU/GST/COM/PUBLICATIONS/2019-02-12-LUTTE%20ANTI-CONTREFACON%20%20Une%20stratégie%20douanière%20renforcée%20et%20davantage%20ciblée%20EN%20-%20SAH%20(002).pdf

GUERNSEY ROYAL COURT ISSUES REGULATORY DECISION ON PROHIBITION ORDERS, FINES AND PUBLIC STATEMENTS

Ogier on 28^th March reported that, as a result, Guernsey FSC can no longer issue fixed-term prohibition orders – but, as in the UK, it can prohibit individuals indefinitely but then invite them to reapply for prohibitions to be lifted after a certain number of years.  Public statements must be more focused on explaining exactly what happened and why it happened, and should not provide any extraneous material or arguments put forward in defence.  Even if investors’ money is not at risk and AML rules have not been breached, an individual can still be prohibited from working as (among others) a director.

https://www.ogier.com/publications/guernsey-royal-court-regulatory-decision-on-prohibition-orders-fines-and-public-statements

ASSET RECOVERY IN JERSEY

On 21^st March, Baker & Partners published a structured guide to civil and criminal asset recovery frameworks in Jersey.

https://www.lexology.com/gtdt/tool/workareas/report/asset-recovery/chapter/jersey

PORTS & TERMINALS IN THE UNITED KINGDOM

On 27^th March, HFW published a structured guide to ports and terminals in the UK.

https://www.lexology.com/gtdt/tool/workareas/report/ports-and-terminals/chapter/united-kingdom

GUERNSEY’S RECOGNITION OF ELECTRONIC AGENTS AND SMART CONTRACTS

On 19^th March, Carey Olsen published an article about a draft law in Guernsey intended to provide certainty about the legal effect, validity and enforcement of a contract involving an electronic agent – defined as “a computer program or electronic or other automated means used independently to initiate an action or to respond in whole or in part to information or actions in electronic form or communicated by electronic means, without review or action by a natural person.”

https://www.careyolsen.com/briefings/guernseys-recognition-electronic-agents-and-smart-contracts

THE CONFUSING ANTI-CORRUPTION FIGHT OF EL SALVADOR’S ATTORNEY GENERAL

Insight Crime on 28^th March reported that Raúl Melara has called for evidence and witness statements to be unsealed in all corruption cases, and for such information to be made available to the public.  However, unsealing these records could expose witnesses who testified against his deputy for alleged corruption – after witnesses implicated his Deputy Attorney General Allan Hernández in a bribery scheme that’s already landed one former top prosecutor in jail.  The article says it is still unclear what Melara’s motives are for unsealing the information on all of the country’s corruption cases, primarily because he hasn’t thoroughly explained them.

https://www.insightcrime.org/news/analysis/corruption-fight-el-salvador-attorney-general/

ILLICIT OUTFLOW OF CAPITAL FROM SOUTH AFRICA ELIMINATED BY STATUTORY DUTIES PLACED ON DIRECTORS

Dentons on 28^th March published an article which begins by giving a simple illustration of the concepts of semi-privatisation and privatisation; it then discusses common law duties and fiduciary duties of directors under the Companies Act 2008; and finally discusses the far-reaching ramifications for directors of a leading case with regard to deterring them from engaging in illicit outflow of capital activities.  A recent report stated that Africa loses around $60 billion annually due to illicit financial outflows, and the report also established that most illicit financial outflows are facilitated through trade mispricing.  As well as trade mispricing, illicit outflow comprises bulk cash movements and smuggling, among others, all of which are designed to move money out of Africa with the object of avoiding taxes.  It concludes that, regardless of whether directors act in a semi-privatised or privatised entity they will face civil or even criminal liability if found guilty of participating in illicit outflow of capital activities.  It also says that African countries that suffer most of the illicit financial outflows should consider adopting similar company law rules to the ones applicable in South Africa.

https://www.dentons.com/en/insights/newsletters/2019/march/28/south-africa-newsletter/south-africa-newsletter-march-2019/illicit-outflow-of-capital-from-south-africa-eliminated-by-statutory-dutiesplaced-on-directors

ALGERIA: WHAT’S NEXT FOR A CHANGING COUNTRY?

The Washington Institute has published an article posing this question as, over the previous month, Algeria has witnessed the largest protests in its modern history as millions contested the announced fifth term of current president Abdelaziz Bouteflika.  It says that a better understanding of the current situation in Algeria requires a careful analysis of the events that have taken place, both within the government and on the street.  These two factors can provide hints at what lies in store for Algeria’s future and determine the path these protests may take.  It says that, if properly managed, the country’s major changes may provide a basis of stability in the North African region; poorly handled, they may fuel another conflict.

https://www.washingtoninstitute.org/fikraforum/view/algeria-whats-next-for-a-changing-country

MEET UKRAINE’S PRESIDENTIAL CANDIDATES

Rferl has published an infographic introducing those involved in the crowded Ukraine presidential contest.

https://www.rferl.org/a/meet-ukraines-presidential-candidates-2019/29756553.html

EUROPEAN BANKING FEDERATION BANKS SUPPORT FIGHT AGAINST FINANCIAL FRAUD & CRIME

A news release from the EBF on 27^th March reiterates its full support to the fight against tax fraud and financial crime.  The EBF recognises the significant investments made by the banking sector to comply with the relevant international standards in the area of tax reporting and AML.  However, the EBF agrees that the efficiency and the administrability of the current EU framework could be improved and should be better aligned on international standards.  The recent money laundering cases are a sad demonstration of this situation, it says.

https://www.ebf.eu/tax-compliance/banks-support-fight-against-financial-fraud-crime/

SERIOUS CRIME PREVENTION ORDER (SCPO) IMPOSED ON VAT FRAUDSTER

On 27^th March, Police Professional reported that a man who committed a VAT fraud and then used the money to pay a confiscation order imposed for a previous offence of forgery has become the first person in Scotland to be given an SCPO.  John Farrell was jailed for nearly 3 years after using fake passports and driving licences to set up bogus companies and bank accounts to fraudulently claim VAT repayments in excess of £180,000.

https://www.policeprofessional.com/news/serious-crime-prevention-order-imposed-on-vat-fraudster/

WORLD BANK BARS VIETNAMESE WATER COMPANY

A post on the FCPA Blog on 27^th March reported that the World Bank had debarred a state-owned Vietnamese water and sewerage treatment company for 1 year for “fraudulent practices” involving a project in Vietnam.  Vietnam Water and Environment Investment Corporation – JSC (VIWASEEN) is ineligible to participate in World Bank-financed projects during the 12-month debarment.

http://www.fcpablog.com/blog/2019/3/27/world-bank-debars-vietnam-water-and-sewerage-company.html

ADVICE FOR DOING BUSINESS IN LUCRATIVE UKRAINE

The UK Institute of Export has published a guide saying that, in 2017, the UK was the 4^th largest investor in Ukraine, after Cyprus, Netherlands and Russia.  It says that, despite the current difficult political and economic climate, Ukraine continues to offer opportunities in a broad range of sectors.  Many of these involve co-operation with Ukrainian companies and authorities, and require Western financial investment.

https://www.export.org.uk/page/ukraine_guide

NEW GUIDE GIVES ADVICE FOR DOING BUSINESS IN QATAR

The Institute of Export has also produced a guide which says that Qatar offers a wealth of demand for British goods and services.

https://www.export.org.uk/news/444035/New-guide-gives-advice-for-doing-business-in-Qatar.htm

WILL KENYA’S POLICE REFORMS STRENGTHEN RESPONSES TO CRIME?

An article from ENACT Africa on 26^th March posed this question and saying that police reforms should improve coordination between central command and local units.  However, it says, the reforms have been clouded by legal challenges and doubts over whether they would enable the police to fight organised crime effectively.  The author recommended, among others, the establishment of an independent, specialised serious crimes unit and strengthening police co-operation in the region.  A 2016 survey identified the police service among state institutions that are most prone to corruption during the research period between 2012 and 2016.  The article also mentions a lack of state presence, especially along porous borders with neighbouring conflict countries through which crimes like the trafficking of illicit arms, drugs, wildlife products and minerals take place.  The recent terror attack in the heart of Nairobi revealed the need to enhance intelligence gathering to foil attacks by home-grown terrorists, and corruption has also been cited as a challenge in the policing of the long porous border with neighbouring Somalia.  It says that a UN report in 2018 detailed an operation foiled by Kenyan anti-terror forces, in which operatives of militant Islamist group al-Shabaab bribed their way back and forth across the Kenya-Somalia border.

https://enactafrica.org/research/trend-reports/will-kenyas-police-reforms-strengthen-responses-to-crime

ROMANIA INDICTS FORMER ANTI-CORRUPTION CHIEF KÖVESI

Politico on 29^th March reported that Laura Codruta Kövesi, a candidate to be the first-ever EU public prosecutor, has been indicted on corruption charges, meaning she cannot travel abroad.  Romania has actively lobbied against Kövesi, who was the country’s high-profile anti-corruption chief until she was fired last year.

https://www.politico.eu/article/laura-codruta-kovesi-rromania-indicts-former-anti-corruption-chief-reports

CAN MINING BE CORRUPTION-FREE?

On 25^th March, Transparency International published an article posing this question.  It points out that a quarter of all corruption cases in the oil, gas and mining sectors arise at the very start of those extractive projects – prompting the organisation to take a closer look at the very start of the mining value-chain: the awarding of mining licences, permits and contracts.  If we can improve the system and ensure mining projects are developed on clean, accountable and transparent foundations, it says, then the rest of the mining project is more likely to be corruption-free.

https://voices.transparency.org/can-mining-be-corruption-free-ddee6ed42708

RUSSIA’S TOP BANKS PLOT TEMPORARY SANCTIONS WORKAROUND

Reuters on 14^th March reported that leading Russian banks are working on plans to help each other retain at least short-term access to the global financial system in the event that they are hit by fresh US sanctions.  Sberbank, VTB, Gazprombank and others are said to be examining how they can provide each other with access to US dollars or other major foreign currencies by using so-called correspondent accounts.

https://www.reuters.com/article/us-russia-banks-accounts/russias-top-banks-plot-temporary-sanctions-workaround-sources-idUSKCN1QV22K

EU TO INTRODUCE AML LEGISLATION FOR ART INDUSTRY

The Art Law & More blog on 29^th March reported that new EU AML legislation will specifically include the art industry for the first time, under the 5^th AML Directive.  The post looks at how the Directive will affect the art industry.

https://artlawandmore.com/2019/03/29/eu-to-introduce-anti-money-laundering-legislation-for-the-art-industry/

GERMANY EXTENDS ARMS EMBARGO TO SAUDI ARABIA

On 29^th March, EurActiv reported that Germany had extended its arms embargo for a further 6 months on 28^th March and will now run to (at least) 30^th September.  Germany will also take necessary steps to make sure that no weapons manufactured in collaborative projects with other European countries can be delivered to Saudi Arabia until the end of the year, so that it cannot be used in the Yemen war – but exempt from the ban are components produced by Germany in joint European projects such as the Eurofighter.

https://www.euractiv.com/section/defence-and-security/news/germany-extends-arms-embargo-to-saudi-arabia/

US: 2 CORPORATE EXECUTIVES INDICTED IN FIRST-EVER CRIMINAL PROSECUTION FOR FAILURE TO REPORT UNDER CONSUMER PRODUCT SAFETY ACT OVER CHINESE RESIDENTIAL DEHUMIDIFIERS

On 29^th March, a DoJ news release reported that a federal grand jury returned an indictment yesterday against 2 corporate executives for their roles in a scheme involving defective and dangerous consumer products.  They are charged with a multiple-object conspiracy to commit wire fraud, to fail to furnish information under the Consumer Product Safety Act (CPSA), and to defraud the US Consumer Product Safety Commission (CPSC).  The company imported, distributed, and sold to retailers for consumer purchase dehumidifiers that were made in China.  The CPSA requires manufacturers, importers, and distributors of consumer products to report “immediately” to the CPSC information that reasonably supports the conclusion that a product contains a defect that could create a substantial product hazard or creates an unreasonable risk of serious injury or death.

https://www.justice.gov/opa/pr/two-corporate-executives-indicted-first-ever-criminal-prosecution-failure-report-under

CHRONOLOGY OF NIRAV MODI’S CASE
On 29^th March, the Economic Times provided a timeline of the case involving Modi, wanted in India for alleged fraud and money laundering charges connected to the PNB Bank scandal.

https://economictimes.indiatimes.com/news/politics-and-nation/chronology-of-nirav-modis-case/articleshow/68636493.cms

BILLIONAIRE JEWELLER NIRAV MODI DENIED BAIL IN LONDON OVER PNB FRAUD CASE

Reuters reported on 29^th March that fugitive billionaire jeweller Nirav Modi was denied bail by a London court, following his arrest on charges over his alleged involvement in a $2 billion fraud at India’s state-run Punjab National Bank, and as he faces extradition to India.

https://in.reuters.com/article/punjab-natl-bank-fraud-fugitive/billionaire-jeweller-nirav-modi-denied-bail-in-london-over-pnb-fraud-case-idINKCN1RA1S9

GERMAN FRESENIUS MEDICAL CARE COMPANY TO PAY $231 MILLION IN US TO RESOLVE CRIMINAL AND CIVIL FOREIGN BRIBERY CHARGES

Reuters on 29^th March that Germany-based dialysis clinic operator Fresenius Medical Care AG will pay about $231 million to resolve criminal and civil allegations that the company paid bribes to public health and government officials in a variety of countries (Angola and Saudi Arabia from 2007 through 2016) in order to win or retain business.

https://www.reuters.com/article/fresenius-care-justice-corruption/fresenius-medical-care-to-pay-231-mln-to-resolve-criminal-civil-foreign-bribery-charges-idUSL1N21G0YX

IRAN CUTS SYRIA MILITIA FUNDS AS US ECONOMIC SANCTIONS TIGHTEN

The Middle East Monitor on 29^th March reported that Iran has cut funding to militia groups in Syria as its economy continues to suffer from the renewed US sanctions.  Armed groups backed by Iran have reported to be missing pay cheques and even financial aid to Iran’s closest Arab ally, the Lebanese Hezbollah group, has dried up in recent months.  The Hezbollah leader has acknowledged the difficulties faced by Iran’s circumstances, but has called on the movement’s fundraising arm “to provide the opportunity for jihad with money”.  It is also feared that the renewed sanctions could push Iran to build stronger economic ties with neighbouring countries in compensation for the loss.  Iran is also keen to invest in the reconstruction of Syria; in January the countries signed a deal wo ease bank transfers to make finance available faster.

https://www.middleeastmonitor.com/20190329-iran-cuts-syria-militia-funds-as-us-economic-sanctions-tighten

WIFE OF SOUTH AFRICA’S AMBASSADOR TO GERMANY AND FORMER ANC CHIEF WHIP PAYS BAIL AS CONVICTED OF FRAUD

IOL on 29^th March reported that Portia Sizani was convicted in the Port Elizabeth Commercial Crimes Court of fraud by processing several fraudulent applications for teaching posts.  Arrested in 2012, Sizani appeared stone-faced after she was found guilty of 15 counts of fraud and 9 counts of money laundering – but earlier acquitted on 6 counts of money laundering and 1 count of fraud.  Sizani was described as the “mastermind” behind the crime and used vulnerable people “dangling a golden carrot” with the promise of giving them jobs at the education department.

https://www.iol.co.za/news/south-africa/eastern-cape/portia-sizani-pays-her-r5000-bail-after-fraud-conviction-20214993

FBI CRITICISED OVER ATTITUDE TO MARITIME SECURITY THREAT

Homeland Security Today reported on 28^th March that an audit by the Office of Inspector General found “significant deficiencies” in the way the FBI worked with other maritime security stakeholders, including its role in the issuance of Transportation Worker Identification Credential (TWIC) cards.  TWIC cards are biometric identity documents issued to port workers who have been subject to a background check by the TSA — and they allow holders into secure and potentially sensitive areas of US ports.  It also said that, while the FBI believes the terror threat to the US maritime system is low, this belief is based on incomplete and maybe even inaccurate information, because many incidents related to the maritime transportation system weren’t properly coded as maritime related in the FBI’s Guardian database.  The audit says that the FBI defers to the US Coast Guard for maritime threat assessment information, and FBI officials said that they view the threat of terrorism in the maritime domain to be low. However, the audit found that these officials’ views may not be informed by all relevant information available to the FBI, such as certain maritime-related incidents with a potential nexus to terrorism, because this information was not categorized as “maritime” in FBI databases.

https://www.hstoday.us/subject-matter-areas/maritime-security/oig-criticizes-fbi-over-maritime-security/

https://oig.justice.gov/press/2019/2019-03-21.pdf

UK MEDICAL CANNABIS INDUSTRY SHOULD BE TOLD TO PROVIDE EVIDENCE IF IT WANTS PRODUCTS PRESCRIBED, MPS TOLD

On 28^th March, the Chief Pharmaceutical Officer told the House of Commons Health and Social Care Select Committee hearing on medical cannabis policy that he saw the primary purpose of rescheduling medical cannabis as supporting development of good evidence, and that evidence for the prescribing of medical cannabis is lacking.

https://www.pharmaceutical-journal.com/news-and-analysis/news/medical-cannabis-industry-should-be-told-to-provide-evidence-if-it-wants-products-prescribed-mps-hear/20206346.article

EURATOM

On 29^th March, the House of Commons Library published a briefing paper on Euratom saying that the UK became a member of the European Atomic Energy Community, also known as Euratom, since 1^st January 1973, but will obviously leave it when (if?) it leaves the EU.  Euratom provides the basis for the regulation of civilian nuclear activity, implements a system of safeguards to monitor the use of civil nuclear materials, controls the supply of fissile materials within EU member states, and funds leading international research.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8036

PUPPY SMUGGLING

On 29^th March, the House of Commons Library published a briefing paper about ongoing animal health and welfare concerns about puppy smuggling into the UK, including by use of the EU Pets Travel Scheme as a cover for importing puppies of desirable breeds, often underage and bred in poor conditions.  The UK Government announced in December 2018 a ban on commercial third-party sales of puppies.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8539

FAMILY LAW DISPUTES INVOLVING EU AFTER BREXIT: GUIDANCE FOR LEGAL PROFESSIONALS

On 29^th March, the MoJ issued guidance for legal professionals in England & Wales on cross-border family law disputes (including divorce and child maintenance) after Brexit if the UK leaves the EU without a deal.

https://www.gov.uk/government/publications/family-law-disputes-involving-eu-after-brexit-guidance-for-legal-professionals

CHANGES TO THE DESIGN OF BRITISH PASSPORTS AS THE UK LEAVES THE EU

On 29^th March, HM Passport Office provided updated guidance explains that there will be changes to the design of British passports as the UK leaves the EU and when the changes will happen.  The intention is that, from late 2019, blue passports will start to be issued but all styles of passport will be equally valid for travel.

https://www.gov.uk/government/publications/passport-design-changes/changes-to-the-design-of-british-passports

MALTA FSA NEW ORGANISATIONAL STRUCTURE TO CREATE ‘MORE SUPERVISORY EFFICACY AND EFFECTIVENESS’

On 29^th March, the Malta Independent reported that the parliament has approved financial services legislative amendments aiming to strengthen the Malta Financial Services Authority’s governance structures, support its focus on financial crime compliance, higher supervisory standards, risk management, and innovation.  In line with its Vision 2021 plan, the MFSA said it has embarked on a restructuring exercise.  The plan includes establishing an Anti-Money Laundering & Financing of Terrorism (AML/CFT) co-ordination Committee.

http://www.independent.com.mt/articles/2019-03-29/local-news/MFSA-s-new-organisational-structure-to-create-more-supervisory-efficacy-and-effectiveness-6736205879

UKRAINIAN MAN EXTRADITED FROM SOUTH KOREA TO US TO FACE CHARGES IN INTERNATIONAL MONEY LAUNDERING AND FRAUD SCHEME

A news release from the DoJ on 29^th March reported that South Korean authorities extradited to the US a Ukrainian man in connection with allegations that he conducted an extensive money laundering and fraud campaign that targeted dozens of victims, including a corporation based in the US – Aleksandr Musienko, aka “Oleksandr Serhiyovych Musiyenko,” “Robert Davis,” and “Ply”.  Musienko had been traveling in South Korea, when, at the US government’s request, South Korean officials arrested him.  Musienko also allegedly operated a network of “money mules” throughout the US, advertising bogus “employment” opportunities to work as “Financial Assistants”.   He promised to pay the money mules a fee of approximately 5% for each overseas wire transfer they completed.

https://www.justice.gov/opa/pr/ukrainian-man-extradited-united-states-face-charges-international-money-laundering-and-fraud

‘EVERY BIG FIRM DOES IT’: SOLICITOR ACCEPTS BAN OVER TAX EVASION SCHEME

The Law Society Gazette on 29^th March reported that a solicitor jailed for 10 years for tax fraud has accepted being struck off – despite continuing to protest his innocence. Rodney Whiston-Dew was convicted in November 2017 of conspiracy to cheat the public revenue and of acting with intent to prejudice or defraud HMRC.  He is quoted as saying, “Whatever actions I took would be taken every day in practice by major English law firms in advising on tax efficient structures. Just as it was my duty, it is the lawyer’s duty to act in the best interests of his/her client, sometimes at the risk of upsetting HMRC, who are programmed to deem any tax avoidance scheme to be aggressive”.

https://www.lawgazette.co.uk/news/every-big-firm-does-it-solicitor-accepts-ban-over-tax-evasion-scheme/5069811.article

DUTCH AND BELGIAN POLICE SEIZED 1½ TONNES OF COCAINE AT THE PORT OF ANTWERP

On 28^th March, Customs Today reported that Dutch and Belgian police seized 1,500 kg of cocaine at the port of Antwerp.  The cocaine, hidden in a banana shipment, was intended for a company in Kapelle, where 14 men were arrested at the company.  It also says that Dutch police launched a new approach to dealing with the large-scale import of cocaine in containers with fruit as cover cargo under Project Piggyback, with the police, the tax authorities, customs, various municipalities, the Dutch Chamber of Commerce, the Federal Police in Belgium and the 4 largest Dutch banks are working together to check around 30 fruit companies in the Zeeland-West-Brabant police region.

http://www.customstoday.com.pk/1500-kilos-of-cocaine-seized-in-international-drug-bust-14-arrested/

9 TONNES OF IVORY SEIZED IN VIETNAM: THE WORLD’S LARGEST HAUL

On 29^th March, OCCRP reported that Vietnamese customs has seized over 9 tonnes of ivory found in a container shipment from the Republic of Congo, thought to be the largest ivory seizure in recorded history.   9 tonnes of ivory tusks is equivalent to over 1,000 slaughtered elephants.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9485-nine-tonnes-of-ivory-seized-in-vietnam-world-s-largest-haul

PRIVATE MERGERS AND ACQUISITIONS IN THE ISLE OF MAN: OVERVIEW

On 29^th March, Appleby published an article as a Q&A which gives a high-level overview of key issues including corporate entities and acquisition methods, preliminary agreements, main documents, warranties and indemnities, acquisition financing, signing and closing, tax, employees, pensions, competition and environmental issues.

https://www.applebyglobal.com/insights/insights-2019/private-mergers-and-acquisitions-in-the-isle-of-man.aspx

THE VENEZUELA EXODUS AND ITS EFFECTS ON THE CARIBBEAN

An article on Insight Crime on 29^th March comments that, while Colombia bears the brunt of the Venezuelan exodus in terms of sheer numbers, several islands of the Caribbean, like Trinidad and Tobago, are being battered by a “criminal hurricane” unleashed by the nation’s collapse.  Colombia has anything up to 1½ million Venezuelans now living in country or passing through to other parts of the region, a staggering 3% of the population – but Trinidad and Tobago however, with a population of almost 1.4 million has up to 100,000 Venezuelans, a figure of over 7%.  It comments in particular on the cocaine trade and effects on Trinidad and Tobago.  But, it says, so many other islands offer possibilities to the drug traffickers.

https://www.insightcrime.org/news/analysis/op-ed-venezuela-the-ongoing-hurricane-in-the-caribbean/

UK: FAILURE TO PREVENT FACILITATION OF TAX EVASION – COMPLIANCE LEVELS LOW – NEED TO ACT

On 29^th March, Eversheds Sutherland published an article saying that businesses should act now given new corporate criminal investigations.  It says that, according to a recent HMRC survey, despite the corporate criminal offence being in force for over a year, only 24% of all businesses surveyed have begun implementing prevention procedures; and that HMRC is targeting over 100 prosecutions per year for serious and complex tax crime by 2022.  Businesses that have not yet fully implemented reasonable prevention procedures are exposing themselves to potential criminal prosecution and serious economic and reputational damage.  Furthermore, business counterparties (customers, suppliers, partners, investors, lenders) are increasingly requiring confirmation of reasonable prevention procedures in relation to this offence for their own compliance purposes.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Tax_planning_and_consultancy/facilitation-tax-evasion-290319

SEC ANNOUNCES $37 MILLION WHISTLEBLOWER AWARD, THIRD-LARGEST IN PROGRAMME HISTORY

On 29^th March, law firm Buckley, in its FCPA Scorecard, says that the substance of the underlying case was not described.  This was the third largest whistleblower award given since the SEC’s first award in 2012.  A second whistleblower in the case received $13 million.

https://buckleyfirm.com/blog/2019-03-29/sec-announces-37-million-whistleblower-award-third-largest-program-history-0

SEC AND FCA REAFFIRM CO-OPERATION AND INFORMATION-SHARING POST-BREXIT

On 29^th March, the SEC and the Financial Conduct Authority (FCA) have reaffirmed their commitment to continue close co-operation and information sharing in the event of the UK’s withdrawal from the EU; and signed 2 updated Memoranda of Understanding to ensure the continued ability to cooperate and consult with each other regarding the effective and efficient oversight of regulated entities across national borders.

http://www.mondovisione.com/media-and-resources/news/the-securities-and-exchange-commission-and-the-uk-financial-conduct-authority-si/

IRANIAN FUEL OIL CARGO SITS OFF MALAYSIA AS US URGES SANCTIONS COMPLIANCE

Hellenic Shipping News on 29^th March reported that a tanker of Iranian fuel oil was sitting offshore Malaysia, as a top US sanctions official visiting Singapore urged local governments to comply with oil trading restrictions on Iran.  Reuters reported on March 20^th that some Iranian fuel oil made its way into a storage terminal in Singapore via ship-to-ship transfers using 4 tankers and by using forged documents that masked the cargoes as Iraqi.  One of the ships, the Marshal Z remains anchored in waters about 24 km off the coast of south-eastern Malaysia.

https://www.hellenicshippingnews.com/iranian-fuel-oil-cargo-sits-off-malaysia-as-u-s-urges-sanctions-compliance/

http://rijock.blogspot.com/2019/03/us-tresury-designates-uae-and-turkish.html

In its 30^th March edition, Customs Today reported that customs officials have smashed a charcoal smuggling gang that illegally exported charcoal disguised as garments to Japan and South Korea.  China imposed an export ban on wood charcoal in 2004. Smuggling over 10 tonnes of the cargo is a criminal offence in the country.

http://www.customstoday.com.pk/east-china-customs-crackdown-on-charcoal-smuggling/

On 29^th March, the Home Office released this factsheet on the Scheme which opens fully on 30^th March.  The deadline for applying if the UK leaves the EU with a deal will be 30^th June 2021 and 31^st December 2020 if there is a no-deal exit.

https://homeofficemedia.blog.gov.uk/2019/03/29/media-factsheet-eu-settlement-scheme/