1 March 2019
ACCOUNTANT JAILED FOR £400,000 VAT SCAM
The Accountancy daily on 1 March reported that Rakesh Sidhpara, an accountant who tried to avoid going to jail by forging a medical report from a Cypriot hospital has been jailed for a £400,000 VAT scam. He claimed more that 100 fraudulent repayments through hijacked and fake businesses.
https://www.accountancydaily.co/accountant-jailed-ps400k-vat-scam
EXXONMOBIL MAKES BIGGEST NATURAL GAS DISCOVERY IN 2 YEARS OFF THE COAST OF CYPRUS
CNBC on 28 February reported that ExxonMobil announced that it has made the world’s third biggest natural gas discovery in 2 years off the coast of Cyprus in the Eastern Mediterranean. The article says that the gas finding now has energy analysts wondering how thorny it will be working with Cyprus – and the reaction of Turkey.
https://euobserver.com/tickers/144301
AFTER SAUDI KING LETTER EU STATES MOVE TO BLOCK DIRTY-MONEY LIST
KYC 360 on 28 February reported that the adoption of a EU money laundering blacklist, which includes Saudi Arabia as well as Puerto Rico and 3 other US territories, could be blocked by EU governments.
AFRICA’S YOUNG FOOTBALLERS CAUGHT IN A WEB OF CRIME AND ABUSE
ENACT Observer on 26 February reported that young African soccer players are exposed to organised criminality and exploitation, particularly at the hands of unscrupulous agents.
https://enactafrica.org/enact-observer/africas-young-footballers-caught-in-a-web-of-crime-and-abuse
STIFFER PENALTIES NEEDED TO CURB COUNTERFEITS IN EAST AFRICA
An article in ENACT Observer on 28 February said that manufacturers in East Africa have called for stiffer penalties against the flourishing trade in counterfeit goods following an influx of these items across regional markets. While some counterfeit products are manufactured locally, large volumes are imported from countries including China, India, UAE, Indonesia, Taiwan and Thailand.
https://enactafrica.org/enact-observer/stiffer-penalties-needed-to-curb-counterfeits-in-east-africa
WILL A NEW TREATY BOOST AFRICA’S FIGHT AGAINST MARITIME CRIME?
On 14 February, ENACT Africa published an article saying that, in September 2018, the UN launched formal discussions for a treaty on the conservation of marine biodiversity on the high seas. The article says that nowhere could benefit more than Africa. The Treaty would cover not just the “high seas”, but also to ‘the seabed and ocean floor and subsoil thereof, beyond the limits of national jurisdiction’. It says that until now all States, whether coastal or landlocked, [have] freedom of navigation, overflight, freedom to lay submarine cables and pipelines, to construct artificial islands and other installations permitted under international law, freedom of fishing, and freedom of scientific research”. This has been a grey area in international law, it says, notably leaving the high seas open to criminals.
https://enactafrica.org/enact-observer/will-a-new-treaty-boost-africas-fight-against-maritime-crime
EXPLAINED: THE CASE THAT COULD BRING DOWN CANADA’S JUSTIN TRUDEAU
On 1 March, the Guardian provided an explanation of the SNC-Lavalin case, in which the company is accused of paying C$48 million worth of bribes in Libya to Muammar Gaddafi’s family, in order to secure lucrative contracts.
VIRTUAL CURRENCIES: FRAUD AND MONEY-LAUNDERING ISSUES IN THE UK
On 24 January, Ramparts European Law Firm published an article in Q&A form, including: how are transactions using virtual currencies as the medium of exchange taxed in your jurisdiction?
https://www.lexology.com/library/detail.aspx?g=20736649-246a-4526-8ad0-3b4f309fc88d
UKRAINE’S SPECIAL PARLIAMENTARY COMMISSION TO STUDY MILITARY-PROCUREMENT SCANDAL
112 UA on 28 February reported that the Commission was to investigate a corruption scheme to smuggle spare military-equipment parts from Russia in 2015. State defence facilities are said to have purchased the smuggled spare parts from private companies at highly inflated prices.
US STATE AND COMMERCE DEPARTMENTS SHOULD SHARE WATCH LIST INFORMATION
The Government Accountability Office on 1 March said that proposed changes would transfer export control responsibility for firearms, artillery and explosives to the Commerce Department for many of these items. Different laws and regulations would apply to the items transferring to Commerce. It says that State and Commerce also use different watch lists to screen potential exporters. Commerce does not have direct access to State’s watch list, which contains information from past screenings of export licences. The GAO recommends that if the changes are made, State and Commerce should develop a process for sharing State’s watch list.
https://www.gao.gov/products/GAO-19-307
UK: MPs IN RENEWED ATTEMPT TO FORCE MONEY LAUNDERING CRACKDOWN
On 1 March, the BBC reported that a group led by Tory MP Andrew Mitchell and Labour’s Margaret Hodge have launched a fresh move to make UK Overseas Territories and Crown Dependencies introduce a beneficial ownership register. More than 40 MPs have signed an amendment to the Financial Services Bill requiring the UK to help all overseas territories and Crown dependencies set up a publicly accessible register of the beneficial ownership of companies within their jurisdictions. If passed, it would oblige them to do so by the end of 2020. The UK says it is committed to “influencing” overseas territories and Crown Dependencies when it comes to beneficial ownership registers, with the aim of them becoming the global standard by 2023.
https://www.bbc.co.uk/news/uk-politics-47422975
EUROPEAN COMMISSION WARNS UK OVER DIVIDEND TAX AVOIDANCE
On 1 March, The Times reported that the EU has accused Britain of enabling tax avoidance by big business in a move that may foreshadow a post-Brexit battleground. In its annual report on the UK, the European Commission drew particular attention to dividend tax arrangements, which it claimed made Britain attractive for “treaty shopping” and “aggressive tax planning”.
REPORT: EU NAVAL CAMPAIGN INEFFECTIVE AGAINST SMUGGLERS
EU Observer on 1 March reported that leaks from a report show that the EU’s naval operation Sophia is unable to fully carry out its mandate. Politico Europe says the papers show that Sophia is understaffed, underequipped, and underfunded in its efforts to crack down on migrant smugglers emanating from Libya.
https://euobserver.com/tickers/144298
FATF BUSINESS BULLETIN – MARCH 2019
On 1 March, FATF issued its latest Bulletin which provides a brief update on outcomes from the February 2018 FATF plenary meeting that are relevant for the private sector.
http://www.fatf-gafi.org/media/fatf/documents/bulletin/FATF-Business-Bulletin-March-2018.pdf
HIZBALLAH, ANSAROUL ISLAM AND JAMAAT NUSRAT AL-ISLAM WAL-MUSLIMIN
On 1 March, the Home Office issued a news release saying that an order proscribing Hizballah, Ansaroul Islam and Jamaat Nusrat al-Islam Wal-Muslimin came into force at midnight, outlawing the 3 organisations from 1 March.
https://www.gov.uk/government/news/hizballah-banned-in-the-uk
UK EXTENDS SCHEDULE 23 HMRC VAT DATA-GATHERING POWERS TO “POSTAL OPERATORS
The Finance Act 2011, Schedule 23 (Data-gathering Powers) (Amendment) (EU Exit) Regulations 2019 also provides that the power to require a postal operator to provide relevant data is only exercisable by HMRC in relation to the discharge of HMRC’s tax functions relating to VAT. The change will take effect when further regulations bring the change into effect.
http://www.legislation.gov.uk/uksi/2019/397/contents/made
SANCTIONS (AMENDMENT) (EU EXIT) (NO 2) REGULATIONS 2019
These Regulations make amendments to a number EU sanctions Regulations as they will apply in the UK post-Brexit.
http://www.legislation.gov.uk/uksi/2019/380/made
UK PROSCRIBED TERRORIST GROUPS OF ORGANISATIONS
On 1 March, the Home Office issued an updated list of organisations banned in the UK.
https://www.gov.uk/government/publications/proscribed-terror-groups-or-organisations–2
NO-DEAL WOULD HOBBLE FIGHT AGAINST CRIME, THE LAW SOCIETY WARNS IN NEW BREXIT GUIDANCE
The Law Society Gazette on 1 March reported that the Law Society has highlighted the damage that crashing out of the EU without an agreement could do to the criminal justice system; saying that a no-deal Brexit will make it harder to investigate cross-border crime and arrest suspects, and harder for victims to get compensation.
INCREASED VAT RECOVERY FOR FINANCIAL INSTITUTIONS IN EVENT OF NO-DEAL BREXIT
On 1 March, an article from Out-Law says that changes to the UK VAT legislation in the event of no-deal Brexit will bring the VAT treatment of financial service supplies made to clients in the EU in line with the current treatment of those supplies to clients in the rest of the world.
https://www.gov.uk/government/news/vat-recovery-for-financial-services-exports-in-a-no-deal-scenario
GIBRALTAR: UNILATERAL SPANISH CONTINGENCY MEASURES
A news release from Gibraltar on 28 February said that Spain announced a series of unilateral contingency measures which will take effect in the event of a no deal Brexit in respect of the UK and Gibraltar. The legislation is expected to be approved by the Spanish Council of Ministers and then by the Parliament. The legislation will be unilateral and of a temporary nature, given that the future relationship will be defined once the UK becomes a third country.
https://www.gibraltar.gov.gi/new/sites/default/files/press/2019/Press%20Releases/140-2019.pdf
UK’S “RIGHT TO RENT” POLICY INCOMPATIBLE WITH HUMAN RIGHTS LAW
Jurist on 1 March reported that the High Court had ruled on the “right to rent” policy that required private landlords to verify the immigration status of prospective renters. Under this policy, landlords who rented to undocumented tenants could face unlimited fines or prison time. This policy was a key aspect of the “hostile environment” scheme developed by current-Prime Minister Theresa May during her tenure as Home Secretary from 2010-2016. A nonprofit immigrant-advocacy group, challenged the “right to rent” policy on the grounds that it violated human rights law.
https://www.jurist.org/news/2019/03/uk-court-strikes-right-to-rent-immigration-housing-policy/
UK: COURT OF APPEAL REFUSES TO INTERFERE WITH FREEZING ORDER RESTRICTIONS
An article from Out-Law on 1 March says that the Court of Appeal has upheld the terms of a post-judgment freezing order, preventing the person subject to that order from making payments ‘in the ordinary course of business’. A freezing order was granted against BVI law firm Michael Wilson and Partners (MWP) in 2014.
AUSTRALIA: POLICE ARREST COMPANY DIRECTOR IN NAB BANK FRAUD SCANDAL INVESTIGATION
On 1 March, Baker McKenzie reported that the director of a company at the centre of an alleged $40 million corporate fraud scandal involving National Australia Bank has been arrested and charged with more than 50 bribery and corruption offences. Helen Rosamond, 43, is the owner and director of Human Group, an events and human resources company that has held lucrative contracts with NAB going back 12 years and worth almost $120 million.
THE ARMED GROUPS PROPPING UP VENEZUELA’S GOVERNMENT
Insight Crime on 1 March reported on 3 main government-backed groups: the Bolivarian National Guard (Guardia Nacional Bolivariana – GNB); the Special Action Forces (Fuerzas de Acciones Especiales – FAES) of the national police (Policía Nacional Bolivariana – PNB); and what are known as “colectivos” – groups that supported former President Hugo Chávez that over the years have grown increasingly armed and prone to engage in criminal activities.
https://www.insightcrime.org/news/analysis/armed-groups-propping-venezuelas-government/
DOJ CHARGES 2 MORE BUSINESSMEN WITH BRIBERY IN CONNECTION WITH VENEZUELAN BRIBERY SCHEME
On 1 March, Buckley, in its FCPA Scorecard Blog, reported that the US DoJ had indicted a former sales representative, Rafael Enrique Pinto Franceschi, and the president of a US-based company, Franz Herman Muller Huber, with conspiracy to commit bribery, wire fraud, and money laundering, and substantive wire fraud, for their alleged roles in a scheme to corruptly secure business advantages, including contracts and payment on past due invoices, from Venezuela’s state-controlled energy company, PDVSA, 2009-13.
LONDON-BASED OIL AND GAS SERVICES COMPANY SETS ASIDE $280 MILLION FOR BRIBERY SETTLEMENTS
On 1 March, Buckley, in its FCPA Scorecard Blog, reported that TechnipFMC had set aside $280 million as an estimate for the settlement of investigations by US, Brazilian, and French authorities regarding potential violations of anti-corruption laws in several countries. The company’s predecessor, Technip SA, previously paid $338 million to settle FCPA charges.
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