12th March 2019
TASK FORCE SEIZES MORE THAN $1 MILLION COUNTERFEIT ITEMS ON WAY INTO MICHIGAN
Click on Detroit on 11th march reported that in just one week a small group of Homeland Security and Border Patrol agents made a big dent in criminal profits by seizing $1.1 million in counterfeit goods and drugs – that includes $540,000 worth of Rolex watches. The items get into the US from foreign countries through commercial carriers or the mail.
BANGLADESH BANK TO ISSUE LICENSING GUIDELINES FOR GOLD DEALERS
New Age Business on 12th March reported that Bangladesh Bank is set to issue licensing guidelines for gold importers, making banks and other suitable entities eligible for importing gold from the authorised dealers or producers. The guidelines would be issued under the Gold Policy adopted by the government in 2018 with a view to making import and export of gold easy, preventing smuggling of the precious metal along with bringing transparency in its trading. The guidelines would be issued within a couple of days to facilitate bringing gold to the country through legal channel and to prevent illegal trade of gold. 2.2 tonnes of seized illegal gold worth $90 million had been added to the foreign currency reserves in the period between 1971 and 2015.
TANZANIA DESTROYS 11 TONNES OF TOXIC FISH SMUGGLED INTO COUNTRY
IPP Media on 12th March reported that mercury and DDT were amongst toxins found in the tilapia fish in a container. Illegal fishing and overfishing is said to have resulted in shortages, leading to the import of the fish from abroad, including China.
http://www.ippmedia.com/en/news/govt-destroys-11-tonnes-imported-toxic-tilapia
EGYPT TO PROBE FAKE CLEOPATRA CIGARETTES FROM BALKANS
On 11th March, Balkan Insights reported that the Egyptian parliament’s Industry Committee has urged the country’s state prosecutor to start a criminal investigation into cigarette smuggling – after a series of in-depth reports published by BIRN/ARIJ revealed that the country’s most popular brand was being mass-produced and smuggled in from the Balkans. The December reports showed both state-owned and private factories in Albania, Bosnia, Kosovo, Montenegro and Greece were involved. Cleopatra is the country’s most important cigarette brand. OLAF has also said that cigarettes were being channelled to Libyan smugglers who distributed them illegally across North Africa. Lawlessness in neighbouring Libya since the 2011 overthrow of dictator Muammar Gaddafi is said to have turned the country into a smuggler’s paradise.
https://balkaninsight.com/2019/03/11/egypt-to-probe-fake-cleopatras-after-birn-arij-revelations/
AML/CFT MUTUAL EVALUATION UNDERWAY IN BELARUS
Belarus News on 11th march reported that the regional FATF-style body EAG evaluation is underway and the on-site visit will be completed on 21st March. The previous MER took place in Belarus in 2008. the EAG experts will draft a report to be discussed at the EAG plenary session in November 2019.
https://eng.belta.by/society/view/eag-on-site-mer-underway-in-belarus-119338-2019/
FORMER ZAMBIAN AIR FORCE COMMANDER DENIES MONEY LAUNDERING
On 12th March, Zambia Reports reported that former Zambia Air Force (ZAF) commander Lieutenant General Eric Chimese, his wife Sharon, and a Lusaka businessman (Chita Lodge Limited MD, James Chungu, aka “Jimmy Fingers”) have pleaded not guilty to 7 counts of abuse of authority and money laundering.
https://zambiareports.com/2019/03/12/chimese-wife-deny-money-laundering-charges/
ESTATE AGENTS: IMPLEMENTING YOUR RISK ASSESSMENT
On 11th March, Estate Agent Today published a blog post which considers how to put together a risk assessment and what steps one can put in place to ensure an estate agent complies with the Money Laundering Regulations 2017.
https://www.estateagenttoday.co.uk/sponsored-content/2019/3/implementing-your-risk-assessment
SWISS GOVERNMENT ANNOUNCES RESTRICTION ON LICENCES FOR WAR MATERIALS EXPORTED TO LEBANON
Baker McKenzie on 6th March reported that the Swiss Government recently announced that licences will no longer be permitted for war materials (“Kreigsmaterial”) exported to end users in Lebanon.
FROZEN ASSETS VERSUS BUSINESS AS USUAL: WHERE TO DRAW THE LINE AND THE ANGEL BELL EXCEPTION
On 4th March, Hardwicke published an article which asks when is it appropriate to apply the Angel Bell exception to a freezing injunction (aka Mareva injunctions), thereby permitting some of the otherwise frozen assets to be used in the ordinary course of business? Does it matter whether the injunction is granted pre- or post-judgment? The article refers to exceptions permitted for dealings or dispositions in the ordinary and proper course of business in the standard form known as the Angel Bell exception. The article says that this case helpfully clarifies the nature and purpose of what are now commonly known as ‘freezing’ injunctions. It considers if it is appropriate to remove the Angel Bell exception where the freezing order is obtained post-judgment to aid execution. The decision to grant such relief, however, will, it says, remain discretionary and reached on a fact-specific basis.
https://hardwicke.co.uk/frozen-assets-v-business-as-usual-where-to-draw-the-line/
CAYMAN COURT ISSUES FIRST MAJOR INTERNATIONAL SANCTIONS DECISION ON “USE” OF FUNDS IN AN ASSET FREEZE
On 8th March, an article from Stewarts (which acted for one party in the case) says that the Grand Court of the Cayman Islands has handed down an important decision in relation to the meaning of “use” of funds subject to an asset freeze under a global sanctions regime. It says that the judge’s reading of the international sanctions regimes as a “single harmonious code” and the restrictive interpretation applied by the court is likely to be the subject of further debate – and an appeal is pending in the case in question. In the case, a firm was removed as a director of 3 Cayman Island funds by resolutions passed by the funds’ shareholders, and it sued the shareholders claiming that this was a breach of the relevant sanctions order.
UK: AGENCY IS NOT ALWAYS ENOUGH TO ENGAGE LAW OF BRIBERY AND SECRET COMMISSIONS
An article from RPC on 12th march concerned a Court of Appeal case which held that a seller paying a fee to an acquisition agent without the buyer’s knowledge does not render the contract for sale void or voidable. The decision turned on the nature of the relationship between the buyer and the acquisition agent; the court found that because (on the facts) the agent’s relationship with the buyer was not a fiduciary relationship of trust and confidence, the law relating to bribes or secret commissions was not engaged.
UK TO SET UP NEW WATCHDOG TO POLICE AUDITORS
KYC 360 on 12th March reported that a new, more powerful regulator would replace the Financial Reporting Council (FRC) after audit failures and criticism of recent years.
https://www.riskscreen.com/kyc360/news/britain-to-set-up-new-watchdog-to-police-auditors/
WARNING OF ATTACKS ON TANKERS IN THE GULF OF GUINEA REGION
On 7th March, the UK P+I Club reported that it had received a security bulletin from INTERTANKO regarding attacks on tankers in the Gulf of Guinea region; saying that a number of ships belonging to INTERTANKO Members have been attacked in the Gulf of Guinea, with 1 attack resulting in 3 seafarers being kidnapped and taken ashore. INTERTANKO urges all Members operating ships in the area to follow the Guidelines for Owners, Operators and Masters for protection against piracy and armed robbery in the Gulf of Guinea region.
UPDATED COMMON MILITARY LIST OF THE EUROPEAN UNION
On 12th March, the Official Journal published the updated Common Military List of the European Union for equipment covered by the common rules governing the control of exports of military technology and equipment.
CANADA: 4 QUESTIONS WITHOUT ANSWERS ABOUT THE SNC-LAVALIN SCANDAL
CBC on 12th March carried an article about the SNC-Lavalin/Libya scandal, saying that there are a lot of questions linked to one big one —whether the Prime Minister and his senior staffers exerted improper pressure on the Attorney General.
https://www.cbc.ca/news/politics/snc-lavalin-wilson-raybould-trudeau-1.5051909
FIJI TO RETAIN CONFISCATED ASSETS OF NEW ZEALAND DRUG TRAFFICKER
On 12th March, the Fiji Sun reported that Fiji was to retain the confiscated assets of Christopher Chase, convicted in 2015 in New Zealand for drugs-related offences. $89,623 was frozen in Fiji, and which could be repatriated to New Zealand, but New Zealand has waived this right.
RUSSIA-EU TRADE TURNOVER UP 20% IN 2018 DESPITE SANCTIONS
Customs Today on 12th March reported that trade between Russia and the EU grew by 20% year on year in 2018 despite sanctions, Russian Industry and Trade Minister Denis Manturov said. According to the Russian Federal Customs Service, the EU’s share in the total turnover of Russia’s foreign trade grew to 42.7% in 2018 from 42.1% in 2017.
http://www.customstoday.com.pk/russia-eu-trade-turnover-up-20-pct-in-2018-despite-sanctions/
CHINA PROPOSES BAN ON PANGOLINS IN TRADITIONAL MEDICINE
OCCRP on 11th March reported that members of the National People’s Congress, China’s legislature, announced a proposal to ban the use of pangolin products, the world’s most trafficked animal, in traditional Chinese medicine. Also included in the 2019 proposals were a number of other pieces of environmental legislation: strengthening the fight against illegal fishing; banning the trade and use of rhinoceros and its products; improving the system of protected natural lands.
RECORD LEVELS OF SYNTHETIC DRUGS SEIZED AS PRICES DROP ACROSS SOUTH-EAST ASIA
The UN Office of Drugs and Crime on 12th March reported that there has been a significant increase in methamphetamine production in SE Asia over the past year, leading to an oversupply of the drug in the region. A report covers major developments and challenges in the drug market in the region, which has been undergoing a profound change for the better part of a decade driven by increases in the production, trafficking and use of synthetic drugs. The scale of the increase in seizures of methamphetamine has been significant across the region, but in particular in countries of the Mekong.
PRECAUTIONARY APPROACH OVER MARINE GEOENGINEERING SOLUTIONS FOR CLIMATE CHANGE
On 12th March, the International Maritime Organisation published a new report – published by the Joint Group of Experts on the Scientific Aspects of Marine Environmental Protection (GESAMP), in which marine and social scientists are urging a precautionary approach towards these techniques which involve deliberate large-scale manipulation of the environment. It says that a co-ordinated framework for proposing and assessing marine geoengineering activities should be developed. The report catalogues 27 approaches, mainly focused on marine geoengineering but also on fisheries’ enhancement and integrated marine trophic aquaculture and it examines 8 illustrative examples in detail.
http://www.imo.org/en/MediaCentre/PressBriefings/Pages/04-marinegeoengineeringGESAMP.aspx
$990,000 PENALTY FOR ILLEGAL BITCOIN-RELATED TRANSACTIONS BY MARSHALL ISLANDS BUSINESS
On 12th March, Mondo Visione reported that the US Commodity Futures Trading Commission had announced that a federal court entered a Consent Order (Order) resolving a CFTC action against 1pool Ltd, located in the Marshall Islands, and its CEO and owner, Patrick Brunner, for illegally offering retail commodity transactions that were margined in bitcoin, failing to register as a futures commission merchant (FCM), and failing to meet its supervisory duties by not having the required anti-money laundering procedures in place. In total, the defendants are paying a total of $990,000 in resolution of the CFTC action.
3 INCIDENTS OF PIRACY AND ARMED ROBBERY AGAINST SHIPS IN ASIA IN FEBRUARY 2019
Hellenic Shipping News on 12th March reported that a total of 3 incidents of armed robbery against ships were reported in Asia in February 2019. There was no report of abduction of crew in the Sulu-Celebes Seas and waters off Eastern Sabah; and no hijacking of ships for theft of oil cargo reported in February 2019. However, the abduction of crew for ransom in the Sulu-Celebes Seas and waters off Eastern Sabah remains a serious concern.
OECD HOLDING PUBLIC CONSULTATION ON THE TAX CHALLENGES OF DIGITALISATION
On 12th March, Akin Gump reported that the public consultation follows the release of OECD discussion draft on potential tax changes to address potential difficulties in taxation caused by the digital economy. The OECD hopes to produce “consensus document” with proposed solution by 2020.
RUSSIA INVESTMENT IN EUROPE GROWS DESPITE SANCTIONS
On 12th March, the Wall Street Journal reported that Russia is taking advantage of opaque corporate-registration laws, permissive tax environments and uneven anti-corruption practices to expand its economic footprint in certain Western Europe nations, according to a report by the Center for Strategic and International Studies. For example, Russian investment in Austria nearly doubled since the 2014 crisis over Moscow’s annexation of Crimea – the investment accounted for more than 16% of foreign direct investment in Austria in 2017. Italy and the Netherlands are the other EU countries identified – with the Netherlands now Russia’s second-largest trading partner, the report says.
The report is at –
https://www.csis.org/features/kremlin-playbook-2
CALL FOR AUSTRALIA TO ABANDON PLANNED BIOSECURITY TAX OVER STINK BUG
On 12th March, Loadstar reported that 14 industry associations in Australia have called on the government to scrap its “reckless” and “unfair” biosecurity tax on maritime imports, which is scheduled to begin in July. The Biosecurity Import Levy will raise A$10.02 per TEU for containerised traffic and A$1 per tonne of non-containerised cargo, with the government aiming to collect around $360 million over 3 years. The tax is seen as targeting in particular the stink bug, which has a season which runs from September to April, and has seen considerable supply chain disruption following several instances of vessels requiring fumigation.
https://theloadstar.com/unfair-australian-biosecurity-tax-just-a-smokescreen-of-spin-says-industry/
DOVER AND EUROTUNNEL NOT CITES PORTS IN THE EVENT OF A NO-DEAL BREXIT
On 12th March, Loadstar reported that, in the event of a no-deal Brexit, neither Dover nor Eurotunnel will be designated ports for the import into the UK of endangered species under CITES.
https://theloadstar.com/new-advice-on-transporting-endangered-species-after-a-no-deal-brexit/
ISLE OF MAN BLOCKCHAIN OFFICE AND SANDBOX ARE NOW OPEN FOR APPLICATIONS
On 12th March, the Isle of Man Government advised that both the Isle of Man Blockchain Office and Sandbox are now open, and are ready to receive joining applications. A news release says that Established to guide blockchain businesses through current and future regulatory landscapes, the primary function of the Blockchain Office is to facilitate a dialogue between businesses and local and international regulators, where appropriate, and to help blockchain platforms design and future-proof their concepts in accordance with regulation. It also sets out to provide expertise and guidance, marketing support, and to facilitate and encourage collaboration between companies.
US LAMINATE FLOORING COMPANY PAYS $33 MILLION PENALTY FOR LYING TO INVESTORS AFTER TV EXPOSÈ
A news release from the US DoJ on 12th March advised that a US importer of laminate flooring from China, which had been accused of importing product that did not meet import requirements concerned with formaldehyde in its products, made materially false and misleading statement to investors. It has agreed a deferred prosecution agreement and agreed to pay $33 million in total to resolve the case.
ALLEGATIONS AGAINST ANTI-CORRUPTION BUREAU IN UKRAINE MILITARY PROCUREMENT SCANDAL
On 12th March, BNE Intellinews reported that the National Anti-Corruption Bureau of Ukraine (NABU) has found out itself front and centre of the ongoing corruption scandal over alleged illegal profit of associates of President Petro Poroshenko from the war in Donbas. It is alleged that NABU removed the name of a company from a 2016 list of suspicious entities involved in military procurement; and other law-enforcement bodies also failed to follow up on suspicions regarding the company’s activities.
NIRAV MODI “CREATED 3 LAYERS OF SHELL COMPANIES TO DUPE PNB” BANK
India Today on 12th March claimed that fugitive Modi, currently fighting extradition from the UK, created 3 layers of dummy companies in UAE, Hong Kong, BVI, the US, Barbados and other places using consultants from UAE and secret servers that were created for communicating secretly with one other.
US ACCUSES ACTRESSES AND OTHERS OF FRAUD IN MASSIVE COLLEGE ADMISSIONS SCANDAL
NPR on 12th March reported that Federal officials have charged dozens of well-heeled parents in what the DoJ says was a multimillion-dollar scheme to cheat college admissions standards. The parents allegedly paid a consulting firm that then fabricated academic and athletic credentials and arranged bribes to help get their children into prestigious universities. 33 parents are said to have “paid enormous sums” to ensure their children got into schools such as Stanford and Yale, sending money to entities controlled by a man named William Rick Singer in return for falsifying records and obtaining false scores on important tests.
US AUTHORITIES SANCTION FORMER GOLDMAN SACHS BANKERS OVER 1MDB MONEY LAUNDERING SCANDAL
Reuters on 12th March reported that the Federal Reserve said that Tim Leissner and Roger Ng have been permanently barred from the banking industry for their role in a money-laundering scandal involving 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned investment fund.
TRADE FRAUD HAMPERS UGANDA’S STRUGGLING ECONOMY
The East African on 12th March reported that, as Uganda struggles to recover revenue lost in international trade, the Prosecutor’s Office reported about $6.6 billion was lost through trade misinvoicing between 2006 and 2015. It is said that agents in the trade supply chain engage in tax evasion practices such as distortion of import and export values to conceal and transfer income overseas. Losses tied to imports amounted to 10% of total trade between 2006 and 2015 and losses tied to exports were equivalent to 8%. A local lawyer is quoted as saying that there is a need for a tax moratorium to encourage those engaging in trade misinvoicing “to come clean on their dirty deals, pay their tax bills and move on”.
GUIDANCE FROM FRENCH CUSTOMS AUTHORITIES FOR UK BUSINESSES IN THE EVENT OF A NO DEAL BREXIT
http://www.douane.gouv.fr/Portals/0/fichiers/douane/brexit/brexit-customs-guidelines.pdf
CANNABIDIOL: IS CBD LEGAL IN THE UNITED STATES IN 2019?
An article from Morrison Foerster on 12th March was concerned with CBD and says that CBD’s legality remains largely in flux. It points out as well that, while hemp seed oil differs from CBD oil, the legalities of the two are intertwined. It cautions that, despite advances in federal law, the passage of the 2018 Farm Bill does not render all CBD legal, and manufacturers must take care to ensure and document that the CBD they use in their products comes from legal sources; and any CBD derived from cannabis plants with more than 0.3% THC (marijuana) remains illegal under federal law.
https://www.jdsupra.com/legalnews/cannabidiol-is-cbd-legal-in-the-united-39897/
JERSEY: MEDICINAL CANNABIS CULTIVATION LEGALISED
On 12th March, the Jersey Evening Post reported that Jersey is to start issuing licences to grow medicinal cannabis in a move which could generate hundreds of millions of pounds a year for the economy. It says that several companies have already shown an interest in developing the highly lucrative crop, and the Economic Development Department hopes that by moving quickly to get production under way Jersey could become a world leader in the emerging market of medicinal cannabis.
https://jerseyeveningpost.com/news/2019/03/12/medicinal-cannabis-cultivation-legalised/
LEADER OF BILLION-DOLLAR CRYPTO FRAUD ARRESTED IN US
Baker McKenzie reported on 12th March that US Federal agents arrested Konstantin Ignatov, the top leader of an international pyramid scheme that stole billions from investors through the marketing of a fraudulent cryptocurrency called OneCoin at Los Angeles airport. He and his sister, Ruja Ignatova – the founder and original leader of OneCoin – were indicted with charges of wire fraud, securities fraud, and money laundering offences. Ruja Ignatova remains at large.
http://www.riskandcompliancehub.com/leader-of-billion-dollar-crypto-fraud-arrested-in-us/
MALAYSIA ARRESTS 9 SUSPECTED FOREIGN MILITANTS, SAID TO BE PLANNING MASS ATTACKS ABROAD
Homeland Security Today on 10th March reported that Malaysia has deported and blacklisted 7 suspected Islamic militants – 6 Egyptians and a Tunisian – who police say were involved in plans to launch large-scale attacks in several countries.
AL-QAEDA CONTINUES TO VIEW AFGHANISTAN AS A ‘SAFE HAVEN’
On 10th March, Homeland Security Today reported the latest UN report about Al-Qaeda and the Islamic State; saying that both groups maintain a significant presence in Afghanistan. The UN describes Al-Qaeda’s relationship with the Taliban as “long-standing” and “strong,” finding that it “continues to see Afghanistan as a safe haven for its leadership.”
The UN assessment is at –
https://www.un.org/sc/ctc/wp-content/uploads/2019/02/N1846950_EN.pdf
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