14th March 2019
JAPAN SANCTIONS THREAT ON SOUTH KOREA SPARKS SUPPLY CHAIN FEARS
The Nikkei Asian Review on 14th March reported that the prospect that Japan could impose economic sanctions on South Korea over a legal dispute concerning wartime labour cases has raised anxiety in Seoul and among companies on both sides that depend on cross-border supply chains. Japan-based industrial groups have been ordered to compensate forced-labour victims, and it is reported that Japan could take “various retaliatory measures” against Seoul, “including not only tariffs, but also halting remittances and visa issuances”.
INDIAN AND US AGREE TO BUILD 6 US NUCLEAR POWER PLANTS IN INDIA
The Statesman and others on 14th March reported that India and the US said they have agreed to build 6 American nuclear power plants in India, in a boost to bilateral civil nuclear energy co-operation.
AUSTRALIA: ATO TO CRACK DOWN ON LEGAL PROFESSIONAL PRIVILEGE ‘MISUSE’ AFTER PANAMA PAPERS TAX LEAK
On 14th March, ABC News reported that the Australian Taxation Office is stepping up its crackdown on tax and legal professionals it suspects may be misusing LPP. It is said that lawyers are claiming privilege on thousands or tens of thousands of documents and a Tax Commissioner is quoted as saying that “we start to wonder if it’s a genuine claim or an effort to conceal a contrived tax arrangement”.
IRAN’S PANAMA-REGISTERED TANKER FLEET RE-REGISTERED
On 13th March, WSAU in the US reported that exploratory talks between Iran and South Korea for up to 10 new supertankers have stalled and Panama has also removed at least 21 Iranian tankers from its registry forcing their re-registration under the Iranian flag. It also says that potential sellers of vessels are more wary under the new round of sanctions after a Greek network that helped Iran buy tankers under previous restrictions was designated by the US. Approximately 60 Panama-registered ships that are related to Iranian and Syrian owners” are said to have been affected, and it mentions specifically 2 vessels, with owners (on paper) in the BVI. It also mentions the fear that renewed US sanctions have also meant Iran has been unable to secure vital certification services from foreign providers to ensure its ships remain seaworthy.
https://wsau.com/news/articles/2019/mar/13/iran-hunts-for-more-ships-to-keep-its-oil-flowing/
EVERYTHING YOU NEED TO KNOW ABOUT THE BIGGEST GOLD SMUGGLING RACKET IN NEPAL
Eleven Media on 14th March published an article about a “high-level probe” by the Home Ministry which investigated both a murder and the whereabouts of 33 kg of smuggled gold, identifying 293 people in connection with the biggest gold smuggling racket operating in the country. It says that big names are involved in the racket, including senior police officers and businessmen, according to the probe committee. The gold, which it is said belongs to an Indian businessman, arrived on a FlyDubai flight from the UAE in January 2018. It avoided customs control but the men who were transporting the gold, were reportedly robbed in by a group of unidentified people who introduced themselves as police officers. It is said the import was part of racket that had seen 4 tons of gold imported in 4 years. It also refers to other gold smuggling still underway, by air and across land borders with India and China.
ART LAW IN THE UK
As part of a series of article on the art law of various countries, Constantine Cannon LLP contributed an extremely useful and informative article in Q&A format on that of the UK. Included are references to an owner or insurer being able to register lost art works on the Art Loss Register or with Interpol. The stolen art database of the Art Loss Register is not publicly available. Whilst saying that there are no mandatory due diligence requirements placed on a buyer or seller, they should be mindful of the Dealing in Cultural Objects Offences Act 2003; the Cultural Property Armed Conflict Act 2017; and any UN Security Council Resolutions enacted from time to time restricting the import or trade in cultural property. This legislation creates criminal offences of dealing in cultural property unlawfully excavated, removed or exported from certain countries; and a buyer should also be mindful not to acquire criminal property as defined in the Proceeds of Crime Act 2002. The article also touches upon export controls applicable to art, saying that in England, export licences are issued by the Export Licensing Unit of the Arts Council England. It explains that artist’s resale right (ARR), also known as the droit de suite, applies in the UK, and sets out the costs. The rules for the return of cultural property illegally exported from another country is explained, as are the AML obligations placed on the buyer, seller etc. The relevance of CITES and the involvement of any endangered species parts are discussed.
https://www.lexology.com/library/detail.aspx?g=afd5c01f-be92-4723-b174-122b43eee188
NEW ZEALAND: NEW LAW TO RESTRICT CASH PAYMENTS FROM AUGUST 1ST
On 13th March, India Links reported that cash payments are likely to be capped in the sale and purchase of cars, motorcycles, jewellery and art as the New Zealand government moves to tighten its AML legislation. It is said that that the Justice Ministry has determined the cash thresholds as $5000, $10,000 and $15,000 depending on the items traded, and puts in place a rigid compliance regime with the onus on both buyers and sellers dealing in cash.
http://www.indiannewslink.co.nz/new-law-to-restrict-cash-payments-from-august-1-2019/
AMERICAN BANKERS ASSOCIATION AND TRADE GROUPS CALL FOR NATIONAL BENEFICIAL OWNERSHIP REGISTRY
The ABA Banking Journal on 13th March reported that, as the House of Representatives Financial Services Committee, held a hearing on financial crime, the American Bankers Association joined 8 other financial trade organisations in a letter to committee leaders highlighting the need for a national beneficial ownership registry.
DISCLOSURE IN JERSEY: WHAT, WHEN AND FROM WHOM?
Baker & Partners has published a 2-part guide to disclosure in civil proceedings in Jersey. The first focuses on the differences between pre-action and post-judgment disclosure, and the second will address trustee disclosure and the position of foreign insolvency office-holders following the decision of the Royal Court in Smith v Nedbank.
UK COURT OF APPEAL CONSIDERS APPROACH TO ENTRAPMENT DEFENCE
On 13th March, 6KBW College Hill published a briefing saying that the Court had restated the approach that ought to be taken when a defendant applies to stay proceedings as an abuse of process on the basis that he was lured into committing criminal offences by agents of the State.
https://blog.6kbw.com/posts/court-of-appeal-considers-approach-to-entrapment-defence
US REFINERS CITGO AND VALERO TRY TO RETURN VENEZUELAN OIL FOLLOWING SANCTIONS
KYC 360 on 14th March reported that PDVSA’s US refining subsidiary Citgo Petroleum and Valero Energy are proposing to return 2 million barrels of crude loaded before sanctions, while a third US oil company, Chevron, has sought so far unsuccessfully to legally pay for 4.3 million barrels. It says that, in effect, more than 6 million barrels of Venezuelan crude remain in limbo as a result of US sanctions.
PROLIFERATION TO AND FROM CHINA OVER 4 DECADES
In the Spring/Summer edition of Strategic Trade Review there is an article which examines the role of Chinese state-owned enterprises and private actors in proliferation-related trade both to and from China and how that role has evolved over time. It says that proliferation from China over the past few decades has shown a steady trend away from direct involvement by the government and by state-owned enterprises. China remains a key source of supply for countries with programs of proliferation concern, the role of these enterprises has gone from active participant to sometime supplier and passive observer – but at the same time, the role played by private actors has increased in importance. It says that China may pass its new Export Control Law in the near future; and this would put in place a comprehensive export control system in place, and also apply to “intangible” items, such as technologies and services, will cover re-exports and deemed exports, and goods involved in transit or transshipment via special customs supervision areas.
SANCTIONS ON RUSSIA: ARE THEY WORKING, WORKABLE, AND WORTH IT?
In the Spring/Summer edition of Strategic Trade Review there is an article which addresses why effectiveness has been limited – is it a matter of scope, enforcement, or priority? What is meant by effectiveness in this context and what would it look like? It also asks were they ever meant to have an economic impact? However, it says, running counter to, and fatally undermining, the sanctions is the ongoing need among EU countries for Russian oil and gas.
DETROIT TASK FORCE TO COMBAT COUNTERFEIT IMPORTS COULD SERVE AS NATIONAL MODEL FOR US
HKTDC on 14th March published an article saying that a new multi-agency task force designed to protect national security and combat counterfeit goods was launched recently in Detroit and could serve as a national model for related investigations. The Global Trade Task Force is led by Immigration and Customs Enforcement’s Homeland Security Investigations and combines the investigative, interdiction, regulatory and licencing capabilities of a variety of agencies, including HSI, US Customs and Border Protection, DEA, the Bureau of Industry and Security, and the FDA’s Office of Criminal Investigations.
US AUTHORITIES CAST WIDER NET IN FIGHT AGAINST BINARY OPTIONS FRAUDSTERS
Finance Feeds on 14th March reported that sales representatives for BigOption and BinaryBook are charged with fraud, as the number of criminal cases related to the illicit activities of Yukom Communications grows – and the trial of Lee Elbaz, the former CEO of Yukom Communications approaches. There are at least 3 other cases related to the lawsuit against Lee Elbaz. In one of them, Lissa Mel (aka “Monica Sanders”), an Israeli citizen, pleaded guilty to conspiracy to commit wire fraud.
https://financefeeds.com/us-authorities-cast-wider-net-fight-binary-options-fraudsters/
HOUSE OF LORDS COMMITTEE SLAMS SFO AND CPS FOR SLOW PACE OF BRIBERY INVESTIGATIONS
City AM on 14th March reported that, in a report on the Bribery Act 2010, the Committee said that the slow pace of investigations, and in particular the failure to update companies on their progress, is a matter of concern. It called for the director of the SFO Lisa Osofsky and the director of public prosecutions Max Hill QC to outline how they will speed up investigations and communicate better with those being investigated.
http://www.cityam.com/274638/house-lords-committee-slams-fraud-office-slow-pace-bribery
https://www.lawgazette.co.uk/peers-urge-speedier-bribery-investigations-/5069588.article
FAKE PASTORS AND FALSE PROPHETS ROCK SOUTH AFRICAN FAITH
A video report on the BBC website dated 14th March says that rape and fraud scandals involving fake pastors have prompted calls for regulation of churches in South Africa.
UK FIREARMS LAW
On 13th March, the House of Commons Library publishing a briefing paper on firearms controls in the UK, including controls on antique firearms and air weapons.
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8521
EU COMMISSION WELCOMES AGREEMENT REACHED BY MEMBER STATES ON DETAILED MEASURES NEEDED TO SIMPLIFY VAT RULES FOR SALES OF GOODS ONLINE
On 14th March, EU Reporter reported that new rules have been approved that which will come into force in January 2021. The rules agreed specify in more detail when online marketplaces are considered to facilitate such supplies or when they are not considered to do so, based on whether or not they are setting the terms and conditions of the supply as well as their involvement in the payment or ordering and delivery of the goods. They also specify in detail what kind of records have to be kept by platforms facilitating supplies of goods or services to customers in the EU; and that a new VAT system is ready for all businesses that sell goods online as of 2021. Member States have until the end of 2020 to transpose the new rules of the VAT Directive into national legislation, and businesses wishing to make use of an extended VAT One Stop Shop system can start registering in Member States as of 1st October 2020.
https://www.avalara.com/vatlive/en/vat-news/eu-agrees-2021-marketplace-deemed-supplier-vat.html
TURKEY’S FOREIGN BRIBERY ENFORCEMENT FRAMEWORK NEEDS TO BE URGENTLY STRENGTHENED AND CORPORATE LIABILITY LEGISLATION REFORMED
A news release from the OECD on 14th March said that, in view of Turkey’s continued failure to implement key aspects of the OECD Anti-Bribery Convention and to enforce its foreign bribery laws, the OECD Working Group on Bribery will send a high-level mission to Ankara in 2020, unless Turkey takes concrete action by October 2019. Turkey has still not enacted legislation to address long-standing recommendations notably to reform its laws on liability of legal persons for the bribery of foreign public officials. In addition, Turkey’s corporate liability framework does not clearly cover state-owned and state-controlled enterprises, and the prosecution or conviction of a natural person is a necessary basis for sanctioning a legal person. Furthermore, sanctions for legal persons are not sufficiently effective, proportionate and dissuasive.
A NEW EU REGULATION ON FDI SCREENING IN EUROPE
On 13th March, Schoenherr published an article saying that on 5th March, the Council of the EU approved a new framework to screen foreign direct investments coming into the EU. The Regulation aims to protect the EU’s strategic critical assets against investments that are detrimental to the legitimate interests of the EU or its Member States. The article explains the process involved.
BABYLONIAN TREASURE SEIZED AT HEATHROW TO BE RETURNED TO IRAQ
On 10th March, the Guardian reported that an attempt to smuggle a Babylonian treasure into the UK has been foiled after it was seized at Heathrow airport. The inscribed cuneiform stone antiquity, which is about 30 cm high, had been looted from Iraq. Dating from the 2nd millennium BC, it is worthy of the world’s greatest museums and valued at hundreds of thousands of pounds.
EL SALVADOR TOP COURT SUSPENDS SCRAPPING OF TAIWAN TRADE ACCORD
Reuters on 14th March reported that the court had temporarily suspended the cancellation of a free trade pact with Taiwan, after the Central American nation’s sugar industry sought an injunction, arguing the move would hurt its business interests. Last year the country announced a switch in diplomatic ties to the People’s Republic instead of Taiwan. The free trade agreement gives El Salvador an 80,000-tonne, tariff-free quota to export sugar to Taiwan.
DRUG TRAFFICKING WITHIN THE VENEZUELAN REGIME
Insight Crime on 14th March carried an article which says that, in Latin America, criminal entrepreneurs in the form of cartels, have traditionally run drug trafficking. In Venezuela, it is managed from within government, and if Nicolás Maduro wins another term in office, Venezuela’s position in the global cocaine business will solidify. The term “Cartel of the Suns” (Cartel de los Soles) is used, and comes from the golden stars that generals in the Venezuelan National Guard (Guardia Nacional Bolivariana – GNB) wear on their epaulettes.
https://www.insightcrime.org/investigations/drug-trafficking-venezuelan-regime-cartel-of-the-sun/
QATAR DIPLOMATIC CRISIS – SHIPPING BOYCOTT STILL STANDS
Baker McKenzie on 13th March reported that the UAE Federal Transport Authority has refuted the suggestion of a partial easing of the Qatar boycott and confirmed that there is no change in its policy regarding access to Qatar via UAE ports and border crossings. – and parties should continue to operate on the basis that there has been no relief or relaxation of the boycott whether on the part of the UAE or Qatar.
https://globalcompliancenews.com/qatar-diplomatic-crisis-shipping-boycott-still-stands-20190228/
COMPANIES ACT 2006 (EXTENSION OF TAKEOVER PANEL PROVISIONS) (ISLE OF MAN) ORDER 2019
This Order, which comes into operation on Brexit “exit day”, replaces a 2008 partly to reflect changes in responsibility for company registration on the Isle of Man and partly to deal with the UK withdrawal from the EU. It applies Chapter 1 of Part 28 of the Companies Act 2006 to the Isle of Man afresh, subject to the modifications set out in the Schedule to the Order.
http://www.legislation.gov.uk/uksi/2019/567/contents/made
DESPITE TERRITORIAL DEFEAT, ISLAMIST TERRORISM WILL CONTINUE TO BE A THREAT
On 14th March, a Commentary from RUSI says that Daesh, Al-Qa’ida and other terrorist organisations may appear to be in current retreat. But rather than being eradicated, they have scattered. The violent extremism they have spawned has not entirely disappeared and understanding how it might evolve is going to be a central preoccupation for security planners.
https://rusi.org/commentary/despite-territorial-defeat-islamist-terrorism-will-continue-be-threat
FIFA BANS FORMER OFFICIAL FOR 7 YEARS IN BRIBERY CASE
Baker McKenzie on 14th March reported that FIFA has handed a 7-year ban to Rafael Salguero, who was a FIFA executive committee member for 8 years until 2015, was offered hundreds of thousands of dollars in return for his vote for the 2018 World Cup.
http://www.riskandcompliancehub.com/fifa-bans-former-official-for-seven-years-in-bribery-case/
BELGIUM APPROVES FAR-REACHING COMPANY LAW REFORM
On 14th March, Dentons published an article on what it describes as the most far-reaching postwar reform of Belgian company law.
raytodd.blog 