After wi-fi problems…two days’ worth…
7 March 2019
RUSSIA’S SANCTIONED RUSFINCORP “TO TAKE ON VENEZUELA’S PDVSA ACCOUNTS”
On 7 March, KYC 360 reported that sources repeated reports that Russian accounts of Venezuelan companies, including state oil firm PDVSA, will be moved to the Russian Financial Corporation Bank (Rusfincorp).
SOUTH SUDAN (SANCTIONS) (EU EXIT) REGULATIONS 2019
DEMOCRATIC REPUBLIC OF THE CONGO (SANCTIONS) (EU EXIT) REGULATIONS 2019
On 7 March, these 2 sets of Regulations were published in the UK, made under the Sanctions and Anti-Money Laundering Act 2018, establish a new sanctions regime for each South Sudan and the DRC, to replace the previous EU sanctions regimes in the event of a UK withdrawal from the EU.
http://www.legislation.gov.uk/uksi/2019/433/contents/made
http://www.legislation.gov.uk/uksi/2019/438/contents/made
KENYA: BANKS GIVE THE TOUGH AML LAWS SEAL OF APPROVAL
The Daily Nation reported on March 7 that commercial banks have backed the Central Bank of Kenya (CBK) stringent AML laws, despite plans by legislators to relax them, saying that the laws were necessary to protect the integrity of the banking system. MPs seeking to soften the anti-money laundering laws were warned that the proposed amendments would frustrate the war on corruption and cut off Kenya’s banking sector from the global financial system.
ALMOST A THIRD OF BRITISH BILLIONAIRES HAVE MOVED TO TAX HAVENS, OR ARE IN THE PROCESS OF RELOCATING
The Daily Mail on 7 March reported that analysis by The Times found that of 93 British billionaires, 28 had either relocated or were in the process of moving. Monaco was the most popular destination for British billionaires, followed by the Channel Islands, Switzerland and the Isle of Man.
SINGAPORE PLAN TO ADOPT E-BILLS OF LADING TO CUT GLOBAL TRADE COSTS
On 6 March, Customs Today reported that Singapore is planning to shift international trade to a paperless system with the implementation of e-bills of lading later this year. The aim is to cut costs for businesses and to also reduce delays for container ships during docking and unloading at ports. A bill of lading is evidence for the contract of carriage and receipt and ownership of goods. The paper-based bill of lading is still the most commonly used form of trade document in shipping, although some countries are slowly moving to adopt digital bills of lading. Electronic bills of lading are generated through blockchain technology, The project is backed by Singapore Shipping Association, the Maritime and Port Authority of Singapore (MPA), Singapore Customs, Infocomm Media Development Authority and Bank of China’s Singapore unit.
http://www.customstoday.com.pk/singapore-plan-to-adopt-e-bills-of-lading-to-cut-global-trade-costs/
ISLE OF MAN GOVERNMENT LAUNCHES BREXIT CHECKLIST FOR ISLE OF MAN FOOD MANUFACTURES
On 7 March, the Isle of Man issued an online Brexit checklist for Isle of Man food manufacturers. It is said that the checklist has been produced to ensure that food exporters consider all aspects that may affect their ability to export products and provides advice and links to more detailed guidance; and as more clarity on some areas affecting exports becomes available further information will be added.
ISLE OF MAN CONFIRMS ADDING OF HAMZA USAMA MUHAMMAD BIN LADEN TO SANCTIONS LISTS
On 7 March, a news release advised that Hamza Usama Muhammad BIN LADEN had been added to the Al-Qaida/ISIL sanctions lists.
https://www.gov.im/news/2019/mar/07/financial-sanctions-isil-daesh-and-al-qaida/
EU COURT REJECTS CHALLENGE TO SYRIAN SANCTIONS IMPOSED ON ENTITIES LINKED TO RAMI MAKHLOUF
On 7 March, the EU Sanctions Blog reported that the EU General Court has dismissed 3 applications to annul EU-Syria sanctions listings of Souruh SA, Almashreq Investment Fund and Drex Technologies SA. The applicant companies had not seriously contested the fact that Mr Makhlouf owned or controlled the companies.
RUSSIAN TELECOMMUNICATIONS COMPANY PAYS $850 MILLION TO SETTLE BRIBERY CHARGES
The Wall Street Journal on 7 March reported that Mobile Telesystems (MTS) is to pay $850 million to the SEC, as it bribed an Uzbek official who was a relative of the former president of Uzbekistan to win business in the country, the SEC said. MTS is listed on the New York Stock Exchange.
CARLISLE LAKE DISTRICT ANNOUNCES LOGANAIR AS FIRST OPERATOR
The Regional Gateway website reported on 7 March that Scottish regional carrier, Loganair, has announced it will commence a 5-times weekly service from George Best Belfast City Airport to Carlisle Lake District Airport on 4 July. Loganair will be the first operator to offer commercial flights to the airport airport since 1993.
US FINANCIAL SERVICES AND MARKETING COMPANY PAYS $28 MILLION TO SETTLE FRAUD ALLEGATIONS
The Wall Street Journal on 7 March reported that Baton Holdings LLC, successor to financial services and marketing company Bankrate Inc, has agreed to pay $28 million to settle allegations that a former finance executives artificially inflated the company’s earnings, causing shareholders to suffer at least $25 million in losses.
US FOREIGN CORRUPT PRACTICES ACT ENFORCEMENT IN THE ENERGY SECTOR
On 7 March, Wilmer Hale published a briefing, the latest of 10 planned articles which share insights on current and emerging issues affecting the US energy sector. This edition looks at use of the FCPA during 2018, including in respect of Petrobras of Brazil and PDVSA of Venezuela, as well as PetroEcuador. It also says that regulators across Latin America have also increased their focus on corrupt conduct in the energy sector. It concludes that, looking forward from 2018, FCPA enforcement in the energy sector will likely continue to remain a priority for US authorities, especially considering DoJ’s continued investigations into the Petrobras, PDVSA, and PetroEcuador bribery schemes.
BANGLADESH AUTHORITIES IDENTIFY 19 AREAS OF CORRUPTION IN AVIATION
On 3 March, the Dhaka Tribune reported that the Anti-Corruption Commission (ACC) identified a total of 19 areas of aviation corruption in Bangladesh. It identified 8 and 11 areas of corruption in the national flag carrier, Biman Bangladesh Airlines, and the civil aviation sector, respectively. The watchdog also prepared 11 recommendations to combat the issue. The report said that the 11 areas of corruption include maintenance, repair, purchase, property management, construction, development work, appointment of consultants, recruitment of staff, promotions and transfers, lease of airport spaces, and stalls and billboard fare. Aside from this, 8 types of corruption including purchase, lease of aircraft, ticket sales, export and import of cargo, catering, recruitment and transfer, hit the national flag carrier.
UK MODERN SLAVERY ACT – SECOND INTERIM REPORT INTO TRANSPARENCY IN SUPPLY CHAINS
An article from Bird & Bird on 7 March says that increasing transparency in the supply chain has been identified as a major tool in the fight against modern slavery in the business environment and, as a result, the section 54 transparency requirements of the Act are at the core of this second review by the Government. The article looks at the key findings of the report and ask what this means for affected businesses.
AUSTRALIA: GLENCORE BANKROLLED COVERT CAMPAIGN TO PROP UP COAL
The Guardian in Australia reported on 6 March that multinational mining giant Glencore spent millions bankrolling a secret, globally co-ordinated campaign to prop up coal demand by undermining environmental activists, influencing politicians and spreading sophisticated pro-coal messaging on social media; orchestrated from 2017 by a firm founded by Sir Lynton Crosby and Mark Textor. It says that intelligence was collected about key coal detractors, including Greenpeace and 350.org, detailing their budgets, social media reach, and issues that could be used to embarrass or undermine them; and a sophisticated digital campaign was mounted to help shift public sentiment towards coal, using messaging informed by research, focus groups and polling conducted in multiple countries.
NEW PSYCHOACTIVE SUBSTANCES ADDED TO THE DEFINITION OF A PSYCHOACTIVE ‘DRUG’ UNDER EU LAW
EU Directive 2019/369/EU added a new psychoactive substances to be included in the Annex to Framework Decision 2004/757/JHA. Notably, the UK is not bound by relevant EU Directive 2017/2103 and is therefore not taking part in the adoption and application of this delegated Directive and is not bound by it or subject to its application. Other Member States (except Denmark) shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 7 September.
8 March 2019
HMRC LATEST LETTER TO EXPORTERS ON ARRANGEMENTS IF NO-DEAL BREXIT
On 6 March, HMRC published the latest of letters to VAT-registered businesses trading with the EU and/or the rest of the world explaining how to prepare for changes to customs, excise and VAT if the UK leaves the EU without a deal. This latest letter dealt with getting a UK Economic Operator Registration and Identification (EORI) number; Transitional Simplified Procedures for customs; customs facilitations; moving goods within the EU using the Common Transit Convention; further controls for exports; changes to accounting for VAT; VAT registration checks; and EU VAT refunds.
MUSIC TUNER’S VAT FRAUD FALLS FLAT
Accountancy Daily on 8 March reported that a Somerset company boss, who fraudulently reclaimed more than £230,000 of VAT, has been jailed for 2 years following an HMRC investigation. Richard Whittall, from Minehead, was a supplier of precision tuners for stringed instruments and a director of Self Tune Systems Ltd and Clair Price Trading Ltd. When his business started to struggle, he began conducting tax fraud.
https://www.accountancydaily.co/music-tuners-vat-fraud-falls-flat
WHEN COMMON LAW JURISDICTION AND CIVIL LAW JURISDICTION RULES COLLIDE
On 7 March, Harneys re-published an article discussing situations where a testator resides in a civil-law jurisdiction, but has assets registered in a common-law one, the jurisdictions’ legal systems may be in conflict, eg regarding local rules for forced heirs and matrimonial shares; such as where Russian citizens or residents hold shares in BVI companies.
https://www.harneys.com/media/1849/when-common-met-civil.pdf
MONEYVAL TO VISIT CYPRUS IN MAY
On 1 March, Harneys reported that, with Moneyval due to undertake on on-site evaluation of the AML/CFT systems in Cyprus in May, the Cyprus Bar Association had issued advisory notices to members.
https://www.harneys.com/insights/moneyval-to-visit-cyprus-advisories-issued-to-the-industry/
UK VULNERABLE TO MONEY LAUNDERING ON A MASSIVE SCALE, FINDS PARLIAMENTARY REPORT
The Guardian and others on 8 March covered a report that says that hundreds of billions of pounds could be being laundered through the UK every year, but the government is unable to give a precise figure of the scale of the problem. In a report on economic crime, the Treasury Committee said the scale of the problem in the UK was very uncertain, with estimates ranging from tens of billions of pounds upwards. It called on the government to provide a more precise estimate in order to formulate more effective strategies to tackle the problem.
https://www.out-law.com/en/articles/2019/March/uk-economic-crime-review-call-mps-report/
DAUGHTER OF FORMER UZBEKISTAN PRESIDENT KARIMOV AND THE HEAD OF MTS TELECOMS UZBEK SUBSIDIARY CHARGED FOR ALLEGED ROLES IN $1 BILLION SCHEME
The Wall Street Journal on 7 March reported that Gulnara Karimova, the daughter of the former president of Uzbekistan, was charged alongside the former head of the Uzbek subsidiary of a Russian telecommunications company (listed in New York) for their alleged roles in a $1 billion bribery and money laundering scheme. This came a day after the SEC announced a related $850 million settlement with the company, Mobile TeleSystems PJSC, and an Uzbek subsidiary.
https://eurasianet.org/karimova-back-to-prison-in-uzbekistan-indicted-in-us
‘EL CHAPO’ CASE RENEWS US LAW ENFORCEMENT CONCERNS ABOUT MONEY LAUNDERING VIA PREPAID CARDS
On 8 March, KYC 360 reported that there remains no requirement that individuals moving cards loaded with cash report the funds when crossing US borders.
PANAMA, WITH IAEA SUPPORT, ENSURES NUCLEAR SECURITY AT WORLD YOUTH DAY
The International Atomic Energy Authority on 1 March published an article saying that Panama’s authorities, which had to ensure security during the event, sought IAEA assistance to incorporate nuclear security into the overall security arrangements. Panama authorities started their planning years in advance with support from the IAEA and the US Department of Energy’s National Nuclear Security Administration. The events’ proximity to the Panama Canal, a passage used by more than 13,000 ships a year to travel between the Atlantic and Pacific Oceans, also had to be considered.
3 AML TRENDS FINANCIAL INSTITUTIONS SHOULD KNOW IN 2019
Forbes on 7 March published an article that explores 3 of the key AML trends and challenges for 2019 – AML compliance for cryptocurrency becomes standard; AML becomes automated as false positives continue to increase; and financial institutions work to combat identity theft.
BIFA ISSUES WARNING ABOUT THE PERILS OF CONTAINERS ABANDONED OVERSEAS
On 8 March, the British International Freight Association, the trade association for UK freight forwarding and logistics companies, is warning its members about the cost of containers abandoned overseas for which they may be liable and how to implement safeguards to prevent this situation occurring. BIFA says that one of the most frequent questions it receives regarding problems on maritime shipments is about abandoned and unclaimed containers sitting in overseas ports. It says that often its member company has closed the file with the goods shipped and the carriage paid, and is then surprised to receive a demand for storage and quay charges from the shipping line. A spokesperson says most of the enquiries received on this matter involve scrap materials, personal effects and charity goods, all of which tend to be low value. In regards to scrap materials, members should note that countries such as China are tightening up regulations, which may lead to an increased amount of such commodities being abandoned.
BREXIT: TRADE TARIFFS IF THERE IS NO DEAL
On 8 March, the House of Commons Library published a briefing paper saying that the UK will need its own tariffs if it leaves the EU without a deal, and that this note explains the background.
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8518
OneCoin FOUNDERS CHARGED WITH ‘BILLIONS’ IN ALLEGED FRAUD
Coin Telegraph on 8 March reported that a US Attorney has charged the founders of an international cryptocurrency pyramid scheme that involved the marketing of an allegedly fraudulent digital currency called “OneCoin.”
FRENCH CUSTOMS GUIDANCE AFTER BREXIT
On 8 March, the UK Department for Transport published guidance from French customs authorities for UK businesses in the event of a no-deal Brexit.
https://www.gov.uk/government/publications/french-customs-guidance-after-brexit
SPANISH MAGISTRATE ACCUSES STATE-OWNED AGENCY OF CORRUPTION
OCCRP on 8 March reported that a magistrate of the Spanish National Court has found evidence that scandal-ridden state-owned company Defex, now in liquidation, allegedly engaged in corruption in the supply of military equipment to Saudi Arabia, implicating Saudi Arabian government officials. The company chose to enter voluntary dissolution in 2017, approved by the Spanish government, because of the damage to its reputation from the investigation. The company was 51% owned by the Spanish state, while the other 49% is in the hands of private businesses whose main activity is arms sales.
https://www.occrp.org/en/daily/9326-spanish-magistrate-accuses-state-owned-agency-of-corruption
IMPORTANT EU EXIT INFORMATION FOR UK NATIONALS IF THERE’S NO BREXIT DEAL
A news release from the FCO provided exit information for UK nationals in the EU in the absence of a withdrawal agreement.
https://www.gov.uk/guidance/important-eu-exit-information-for-uk-nationals-if-theres-no-deal
NEW JERSEY CONFISCATES $90,000 FROM MAN WHO GAMBLED ONLINE FROM CALIFORNIA BREACHING FEDERAL LAW
On 8 March, Calvin Ayre reported that over $90,000 sitting in online gambling accounts in New Jersey will have to be forfeited after regulators in the state uncovered a connection between the money and its source. It appears that, somehow, a gambler from 3,000 miles away in California was able to gain access to the 2 online gambling sites, against federal regulations.
BULK CASH SMUGGLER ARRESTED AT MALTA INTERNATIONAL AIRPORT WITH €200,000
Kenneth Rijock in his blog on 7 March reported that Omar Ozumi, a Maltese national, was arrested at the airport by Customs, when he attempted to smuggle $200,000 onto a flight bound for Istanbul.
http://rijock.blogspot.com/2019/03/bulk-cash-smuggler-arrested-at-malta.html
ROMANIAN CEMENT INDUSTRY’S DIRTY SECRET
On 8 March, OCCRP carried a report saying corruption, multiple levels of crime and negligence in Europe’s growing waste-to-energy trade. It says that Romania’s $750 million cement industry now runs largely on trash, sometimes smuggled in from foreign countries with little regard for health or safety. It says Italian criminals are also exploiting corruption and a lax inspection regime in Romania.
https://www.occrp.org/en/documentaries/cements-dirty-business/
MORE THAN €165 MILLION OF TRAFFICKED MEDICINES SEIZED IN EUROPE IN OPERATION MISMED 2
On 8 March, a news release from Europol said that a crackdown by law enforcement, customs and health regulatory authorities from 16 countries in Europe has netted a haul of more than 13 million doses worth in excess of €165 million. These seizures were part of the Europol-coordinated operation MISMED 2 targeting the illicit trafficking of misused medicines throughout Europe in April to October 2018.
FRENCH CUSTOMS PREVENTED 24.6 TONNES OF AUTOMOTIVE WASTE FROM BEING EXPORTED TO TOGO LAST YEAR
On 7 March, Togo First reported that 24.6 tonnes of automotive waste, including 3 road tractors’ engine blocks, 40 used truck tires, 8 lorry axles, bumpers with licence plates, reservoirs and batteries. It is forbidden in the EU to export waste to countries that do not have the adequate capacity to process this waste.
A TIMELY BUT QUALIFIED SUCCESS FOR CANADA’S CORRUPTION OF FOREIGN PUBLIC OFFICIALS REGIME
On 8 March, Dentons published a briefing saying that amidst the media and political storm engulfing the Prime Minister’s Office over its handling of the ongoing SNC-Lavalin proceedings, the conviction of 2 businessmen on charges of bribing foreign public officials in India appears to have crept under the radar. However, it says that it is worthy of note in the context of enforcement of Canada’s Corruption of Foreign Public Officials Act (CFPOA), because of the Court’s views on who is a “foreign public official”, and the requirement that the Crown prove the accused had knowledge of that status.
REVENUE SEIZE OVER 2 MILLION CIGARETTES WORTH OVER €1 MILLION IN DUBLIN PORT
On 7 March, the Irish Revenue Commissioners reported that, as a result of routine profiling, Revenue officers seized 2.3 million smuggled cigarettes which originated in Belarus, and that had arrived into Dublin Port in a container from Rotterdam.
THE US FOREIGN AGENTS REGISTRATION ACT (FARA)
On 8 March, Wilmer Hale published a briefing which says that, after decades in which FARA received relatively little attention, a confluence of recent events has given the statute newfound prominence. Together, these developments compound the compliance challenges and enforcement risks for US firms assisting foreign clients on matters implicating US policy and public opinion — the principal arenas that FARA seeks to protect from undisclosed foreign influence. An overhaul of the DoJ’s FARA enforcement practices has been announced, together with a shift toward more aggressive FARA enforcement. FARA requires “agents” of “foreign principals” to register with the DoJ and to file periodic reports regarding their work, unless their activities fit within one of FARA’s important statutory and regulatory exemptions.
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