13th March 2019
ANOTHER US REGULATOR TARGETING BRIBERY AND CORRUPTION
On 13th March, Law.com reported that, along with the SEC and DoJ, the US Commodity Futures Trading Commission (CFTC) is now also on the lookout for bribery intended to secure business related to trading, advising, or dealing in swaps or derivatives, according to its head of enforcement. Whilst it cannot bring charges under the principle law prohibiting foreign bribery, the Foreign Corrupt Practices Act, corrupt practices overseas could constitute fraud, manipulation, false reporting, or a number of other types of violations of commodities trading law.
MONEY LAUNDERING: WHISTLEBLOWERS TO GET EU-WIDE PROTECTION UNDER NEW RULES
KYC 360 on 13th March reported that EU lawmakers and its Member States have agreed on a new set of rules in a draft Regulation that would guarantee whistleblowers protection against demotion and dismissal when they report money laundering, tax fraud and other financial crimes. It will set EU-wide standards of protection for whistleblowers, protecting them in judicial proceedings, and national authorities will also have to inform citizens about whistleblowing procedures and protection available.
3D PRINTING INDUSTRY RESPONDS TO PROPOSED EXTENSION OF US EXPORT CONTROLS
On 12th March, the 3D Printing Industry website reported on reaction to the proposed extension of export controls covering 3D printing, additive manufacturing, and other technology including AI, robotics and machine learning. The public consultation on the changes generated over 200 responses. It has analysed the responses, including those from Boeing and Airbus. Airbus is quoted as saying that 3D printing controls should be driven by the characteristics and end-use of the final product manufactured, not just the underlying manufacturing process. Responses also commented that US visa laws, that could prohibit foreign nationals from working on emerging technologies in the US – and one may need an export licence to employ a foreign national in sensitive areas – the proposed controls could yield a result opposite to that intended, and drive technology and development overseas. In conclusion, it says that much more rigorous clarification and delineation of the various 3D printing technologies is required, and that great care should also be taken to avoid adverse effects.
CALL TO INVESTIGATE MISUSE OF EU FUNDS BY TUNA OPERATORS
Newsbook in Malta on 12th March reported that an EU Commissioner has been asked by an NGO to investigate the possible misuse of EU funds, notably from the European Maritime Fisheries Fund (EMFF) by Spanish tuna fishing operators in the wake of Operation Tarantelo into illegal, unreported and unregulated bluefin tuna fishing. An operator in Malta is also being investigated. Bluefin tuna caught in Maltese waters was illegally imported into Spain using documents from legal fishing and authorised farms.
JORDAN: DOZENS OF DEFENDANTS PLEAD ‘NOT GUILTY’ AS ‘TOBACCO CASE’ TRIAL BEGINS
The Jordan Times reported on 13th March that 29 individuals and 25 companies have been charged in a case which involves the illegal manufacturing, counterfeiting and smuggling of cigarettes. The prime suspect in the operation reportedly fled the country to Lebanon last year, a day ahead of a crackdown on the alleged illegal tobacco manufacturing and smuggling factory, but was later extradited from Turkey. Defendants include a former minister, military officials and a free trade zone manager. http://jordantimes.com/news/local/dozens-defendants-plead-‘not-guilty’-‘tobacco-case’-trial-begins
‘NO ARRESTS’ IN MALTA OVER INTERNATIONAL CAR SMUGGLING RACKET
The Times of Malta on 12th March reported that a wide-ranging investigation into an international car smuggling racket has yielded no arrests here despite the alleged involvement of 2 Maltese, said by Italian police to have acted as intermediaries in the smuggling of stolen vehicles. A criminal ring was involved in stealing luxury cars and other vehicles in Italy and then shipping them to Libya via Malta. Some 40 people were held during the operation, codenamed ‘Coast to Coast’.
PAKISTAN: TYCOON AND SONS SUMMONSED IN $95 MILLION ALLEGED MONEY LAUNDERING
On 13th March, ARY News reported that the National Accountability Board had summonsed businessman Mian Muhammed Mansha, and his 2 sons, for a third time in connection with an investigation into a money laundering case. The case involves the St James Hotel and Club in London and allegedly illegal money transfers to the UK.
SOUTH AFRICA: STANDARD BANK PRESENTS RECORDS OF ALLEGED MONEY LAUNDERING OPERATION INVOLVING GUPTA-LINKED ENTITIES
All Africa on 13th March reported that the bank has provided records of an alleged money laundering operation involving various Gupta-linked entities. Testifying before the State Capture commission for a second time, the bank’s former group legal counsel Ian Sinton produced a string of bank statements and a spreadsheet showing money flows.
IMPORTING AFTER BREXIT: HMRC INTRODUCES TRANSITIONAL SIMPLIFIED PROCEDURES
On 11th March, Brodies LLP published a handy, and short, brief on the Transitional Simplified Procedures (TSP) designed to streamline the customs process at the UK border as of 29th March if there is no deal – in an effort to mitigate the challenges of importing goods from the EU after Brexit.
EU SECTORAL SANCTIONS IN THE UK POST-BREXIT
On 11th March, Travers Smith published an article which described financial institution “sectoral sanctions” as, in general terms, not banning investments or freezing assets, but which apply to specific transactions and entities in a given sector. One of the primary purposes was to limit the access of Russian State-owned financial institutions (and their non-EU majority-owned subsidiaries) to EU capital markets. It says 11 entities are affected – Gazprombank; Gazprom Neft; OPK Oboronprom; Rosselkhozbank; Rosneft; Sberbank; Transneft; United Aircraft Corporation; Uralvagonzavod; Vneshconombank (VEB); and VTB Bank.
UK RULES GOVERNING CUSTOMS CLASSIFICATION OF GOODS IN THE CASE OF A NO-DEAL BREXIT
On 13th March, HMRC published a Tax Information and Impact Note which sets out the rules governing the classification of goods if the UK leaves the EU without an agreement. It assesses the impact of the package of legislation that will establish and give effect to a UK tariff (which would replace EU customs duties), and will set out the rules governing the classification of goods, and contain rules for determining the amount of duty applicable to those goods in the event that the UK leave the EU without an agreement.
UK GUIDANCE ON MODERN SLAVERY STATEMENTS
On 12th March, the Home Office published updated guidance to help businesses identify if they need to publish a modern slavery statement and best practice guidance on producing such a statement. Certain large commercial organisations (i.e. with a turnover of over £36 million) must publish an annual statement setting out the steps they take to prevent modern slavery in their business and their supply chains. This is a requirement under section 54 of the Modern Slavery Act 2015.
LEBANON: DIRECTOR GENERAL OF HIGHER EDUCATION ARRESTED ON ‘FRAUD’ CHARGES
On 13th March, Nahamet reported that police have arrested Director General of Higher Education in Lebanon, Ahmed el-Jammal, on suspicion of being involved in issuing fake certificates in return for money.
NCA USES ACCOUNT FREEZING ORDERS FOR FIRST TIME
On 12th March, Wilmer Hale published an article saying that on 7th February, NCA announced that it had, for the first time, successfully used its powers of account freezing orders to forfeit over £400,000 from 3 UK bank accounts suspected of harbouring dirty money. 3 weeks later, the National Economic Crime Centre indicated its intention to use AFO to apply to freeze a further 95 accounts suspected of being funded by laundered money. AFO were introduced in January 2018 by an amendment to the Proceeds of Crime Act 2002 made by the Criminal Finances Act 2017, and allow the NCA and SFO to apply to freeze, and subsequently forfeit, funds held in bank accounts and building societies. The AFO used had originally been applied for in May 2018.
UK LAW COMMISSION SMART CONTRACTS PROJECT PAUSED
On 12th March, the Law Commission reported that its project on smart contracts has been paused to avoid potential duplication with other initiatives. It had been asked to include work on Electronic Signatures and Smart Contracts. It has prioritised work on Electronic Signatures and is currently analysing consultation responses.
UK SENTENCING COUNCIL TO INCLUDE EXPANDED EXPLANATIONS IN GUIDELINES
On 13th March, an article from Out-Law reported that plans to require judges and magistrates to consider additional contextual information when weighing up aggravating and mitigating factors during the sentencing process for particular offences have been published for consultation by the Sentencing Council. The aim is mainly to improve transparency for victims, defendants and the wider public.
CANNABIS MAIL SEIZURES SOAR IN HONG KONG
The Asia Times on 13th March reported that legalisation of marijuana in Canada has likely contributed to the steep rise in confiscations. 92 kg of cannabis packages were seized in the 5 months from October 2018, more than the total amount seized in the past 3 years.
BIG PHARMA MUST WORK WITH LAW ENFORCEMENT AND GOVERNMENT TO CURB THE TRADE IN SMUGGLED AND COUNTERFEIT MEDICINES
An article on Illicit Trade on 12th March said that whilst action against illegal and counterfeit medicines mainly involved erectile dysfunction tablets, slimming pills, painkillers, hypnotic and sedative agents, and anabolic steroids, the situation was different in the developing world – where the sale of fake versions of medicines that are intended to treat serious conditions has long been a significant problem in poorer countries. However, a recent Europol exercise in Europe revealed that prescription drugs used to treat major illnesses such as cancer and heart conditions are now being sold illegally in Europe. Falsified and substandard medicine is also thought to be costing the global economy as much as $200 billion a year, while is at the same time contributing to increasing antimicrobial resistance. It also says that fake medicines, many of which are said to originate from countries such as China and India, have been known to contain toxic ingredients such as arsenic, paint and printer ink. A 2017 WHO report is cited which found that 10% of all pharmaceutical products circulating in low and middle-income countries at that time were either fake or of substandard quality.
US GOVERNMENT OPENS PUBLIC CONSULTATION ON ROCKET, MISSILE, LAUNCH VEHICLE, SPACECRAFT AND SATELLITE EXPORT CONTROLS
On 12th March, Akin Gump reported that the Departments of Commerce and State were inviting comments by 22nd April. The article explains that, in 2014, Categories IV (launch vehicles and missiles) and XV (spacecraft) of the US Munitions List (USML) were substantially revised to move commercial items and less-sensitive military items to new or amended controls on the Commerce Control List (CCL). This was part of a move to revise the USML to only control articles providing a critical military or intelligence advantage and not inadvertently control items in normal commercial use. The Departments’ questions include: are there any emerging or new technologies or articles that warrant control under USML? Are there any defence articles in the USML for which commercial use is proposed, intended or anticipated in the next 5 years? Are there any other technologies controlled in USML that should move to the CCL? There are also a number of particular topics relevant to specific US space programme activities and the commercial space industry.
VIDEO PRESENTATION: CHATHAM HOUSE PRIMER: ‘LEAVING ON WTO TERMS’
On 11th March, Chatham House published this useful and interesting 53-minute presentation by Peter Ungphakorn, a freelance journalist, and a former Senior Information Officer at the WTO Secretariat 1997-2015. He discusses some issues (often ignored or got wrong – even by a former Australian PM…) about the UK simply leaving the EU ‘on World Trade Organisation terms’ or ‘under WTO rules’.
UAE BACK IN EU FIRING LINE OVER ITS LAX TAX REGIME
Forbes on 12th March reported that the EU first published a list of what it describes as “non-cooperative jurisdictions for tax purposes” in December 2017, and UAE was included on the first version of the list. However, after agreeing to address the EU’s concerns, the UAE (and 8 other countries) was taken off the list the following month, although it remained subject to close monitoring. However, Forbes reports, the UAE has now been reinstated on the list, along with Barbados and the Marshall Islands which had also previously been removed from the list. The EU Council said that the UAE facilitates offshore structures and arrangements aimed at attracting profits without real economic substance and has not yet resolved this issue.
40% OF E-COMMERCE SHIPPERS UNAWARE OF DANGEROUS GOODS REGULATIONS
On 13th March, Loadstar carried an article saying that a recent IATA survey had revealed that 40% of e-commerce shippers were unaware of the regulations designed to provide for the safe transportation of air cargo. IATA Cargo chief Glyn Hughes said the industry had to respond and do everything it could to educate shippers – and there were numerous calls by industry leaders to criminalise shippers who deliberately circumvent dangerous goods regulations. A spokesperson for the TT Club shipping insurers is also quoted as saying that “about 150,000 containers every year are, effectively, ticking bombs”. The article also said that Air France KLM Cargo had announced that it was the first carrier to adopt IATA’s DG AutoCheck for the acceptance of dangerous goods shipments, which tests the compliance of the shipper’s declaration. Airlines are particularly affected as they have little direct contact with the shipper, leaving the responsibility in the hands of the forwarder. DG AutoCheck is described by IATA as a digital solution that allows the air cargo supply chain to check the compliance of the Shipper’s Declaration for Dangerous Goods (DGD) against all relevant rules and regulations contained in the IATA Dangerous Goods Regulations – which are concerned with how one can prepare, handle or accept dangerous goods shipments by air.
PODCAST: US DEPUTY ATTORNEY GENERAL ROD ROSENSTEIN
The latest TRACE podcast is said to probably be Rod Rosenstein’s last speech while in office — given at the TRACE Forum — ranging broadly across his career, the work of the Department of Justice and the FCPA.
EU FOREIGN DIRECT INVESTMENT REPORT: CONTINUOUS RISE OF FOREIGN OWNERSHIP IN KEY SECTORS
On 13th March, a new report was published by the EU which provides a detailed overview of the foreign direct investment situation in the EU. It confirms a continuous rise in foreign company ownership in key sectors in the EU and an increase in investments from emerging economies, such as China; and is said to illustrate the need for effective implementation of the freshly adopted EU investment screening framework.
UK GENERAL AVIATION OPERATORS AND PILOTS NOTIFICATION OF FLIGHTS: ONLINE NOTIFICATION NOW AVAILABLE
On 13th March, Border Force and the Home Office published updated information and forms to submit a general aviation report (GAR) online if you are a pilot or carrier of a general aviation aircraft intending to travel to or from the UK.