30th April 2019
FORMER MOSSAD CHIEF SAYS US MUST BLOCK USE OF MALAYSIA TO CIRCUMVENT IRAN SANCTIONS
The Jerusalem Post on 29th April reported that Danny Yatom has said that the US, not Israel, must take the lead in preventing the use of Malaysia to circumvent sanctions on Iran. With the end of the oil waiver due on 2nd May, he says it not just the big countries like China that matter. The article says there have been past reports of close contact between Iran and the Malaysian state-owned oil company, Petronas, and that the two countries have established an alliance to evade sanctions.
ANATOMY OF A MUDDLE: US SANCTIONS AGAINST RUSAL AND OLEG DERIPASKA
On 29th April, the Foreign Policy Research Institute in the US published a paper which looks at this recent case, and argues that the sanctioning of replaceable individuals should be abandoned in favour of sanctioning irreplaceable Russian industries, and that the US should announce that sanctions will be imposed on a given Russian company only after a relatively long grace period of perhaps 9 months to a year, during which time US partners and allies could find new sources of supply (although surely this gives time for the company affected, its suppliers, customers and associates, time to find and set up alternative arrangements?).
TACKLING THE TRADE IN ENDANGERED MARINE SPECIES
Eco-Business on 30th April reported that earlier this year in Rome, scientists from around the world debated the need to control trade in the endangered shortfin mako shark. The meeting of the UN Food and Agriculture Organisation (FAO) was to determine if this species, along with a handful of others, should be given protection under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) – but the expert panel declaring insufficient evidence to list the species. The article says that, in theory, a CITES listing should put a species on the radar of law enforcement agencies, as the treaty calls for strict controls on imports and exports – but that doesn’t stop smugglers. One estimate quoted is that only 10% of smuggled species are confiscated or interdicted, and the remainder is either not discovered or not identified
SECRECY OVER $300,000 SEIZED FROM MEMBER OF A FOREIGN DELEGATION INVITED TO NEW ZEALAND
The New Zealand Herald on 30th April reported that an anonymous tip in the mail prompted Official Information Act requests which confirmed a member of a foreign delegation failed to declare a large sum of cash, in breach of New Zealand’s money laundering laws. The cash was confiscated but no arrest made, a decision which one expert said “seemed odd”. More than $300,000 has been seized from a mysterious foreign diplomat after he failed to declare the vast sum of cash in his luggage. Passengers who fail to declare cash of $10,000 or more are breaching AML/CFT laws.
SWISS INVESTIGATING OIL TRADER GUNVOR FOR FOREIGN BRIBERY
Swissinfo on 29th April reported that Switzerland’s Attorney General said it is investigating Gunvor Group Ltd on “suspicion of bribery of foreign public officials” in the Republic of Congo, underscoring the energy traders’ legal troubles in the long-running case.
BANK OF MONTREAL IRELAND FINED €1.24 MILLION FOR BREACHES OF LICENCE
RTE on 29th April reported that the Central Bank of Ireland has reprimanded and fined Bank of Montreal Ireland a total of €1,246,189 for breaching a condition of its banking licence. It said that Bank of Montreal Ireland failed to submit 3 operational risk returns to it. This is the Central Bank’s 127th settlement since 2006 under its Administrative Sanctions Procedure, bringing total fines imposed by it to over €70 million.
WILL THE 2019 FATF MUTUAL EVALUATION OF SOUTH AFRICA REFLECT THE 2018 BASEL AML INDEX?
An article from Cliffe Dekker Hofmeyr on 29th April says that FATF regional body, the Eastern & Southern Africa Anti-Money Laundering Group (ESAAMLG), is expected to complete its assessment of South Africa’s compliance with international AML standards in the last quarter of this year. It also says that, in preparation for such assessment, a workshop was hosted by the Financial Intelligence Centre (FIC) in March to prepare the different private sector institutions in respect of the nature and extent of information required to demonstrate South Africa’s compliance with FATF standards. It then says that the question is whether South Africa will be found to be compliant with global AML/CTF standards or whether the chickens of corruption and state capture will come home to roost. It looks at the country’s previous performance in an evaluation, and says that recent global reports have not provided any comfort. In September 2018, Transparency International published its annual report on enforcement of the OECD Anti-Bribery Convention and labelled South Africa as a country with “limited enforcement of foreign bribery”. The Corruption Perceptions Index gave South Africa a score of 43 in 2017, a score below 50 is indicative of a country struggling with corruption issues – in 2016, the score was 45. It ends by saying that in the latest Basel AML Index of 2018 South Africa is listed as one of the “top 10 decliners” under the list of countries which have significantly worsened their scores – South Africa’s score has declined from 4.59 in 2017 to 5.34 in 2018, a negative change in score of 0.75.
SWISS GROUP FILES CRIMINAL COMPLAINT AGAINST CREDIT SUISSE OVER MOZAMBIQUE LOANS
KYC 360 on 30th April reported that Public Eye, a Swiss anti-corruption lobby group, has filed a criminal complaint against Credit Suisse over alleged fraud in the arrangement of $2 billion of loans to Mozambique. 3 former Credit Suisse bankers were arrested in London in January on US charges of conspiring to violate anti-bribery law and to commit money laundering and securities fraud, while former Mozambique finance minister Manuel Chang was arrested in South Africa as part of the same case.
JAPAN – BAN ON IMPORTS FROM AND EXPORTS TO NORTH KOREA EXTENDED
Baker McKenzie on 26th April reported that the Ministry of Economy, Trade and Industry (METI) had announced that it was extending the ban on all exports destined for North Korea, and all imports originating in or shipped from North Korea, to 13th April 2021.
BRITISH AMERICAN TOBACCO SHIFTS NEARLY $1 BILLION OUT OF DEVELOPING COUNTRIES INTO ONE UK OFFICE
On 30th April, an article on Ekklesia claims that, for every dollar British American Tobacco (BAT) paid in tax in the countries it operates in, the giant multinational shifted more than half a dollar that would have been taxed locally to a UK subsidiary where BAT paid almost no tax. New analysis by the Tax Justice Network estimates Bangladesh, Indonesia, Kenya, Guyana, Brazil and Trinidad and Tobago together stand to lose a total of nearly $700 million in tax revenue by 2030 from the financial manoeuvring of just one tobacco company if business continues as usual. The TJN report claims that BAT used a range of mechanisms to shift income equivalent to over 12% of its pre-tax profits to BAT Holdings Ltd, a UK-based subsidiary where BAT paid almost no corporate income tax; and, by charging itself royalties, rerouting loans through tax havens and paying interests fees on loans made between regional offices, BAT shrunk its tax contributions in low and middle income countries where public funding is high in need and short in availability. However, it says, this picture remains incomplete: BAT has over 100 offshore subsidiaries spread across 19 tax havens and books hundreds of millions of dollars each year to ‘other operating charges’ without further explanation.
The report itself can be found at –
DUTCH STATE RAILWAY FORMALLY WINDS UP IRISH TAX AVOIDANCE STRUCTURE
On 30th April, the Irish Times reported that the Dutch state railway has moved to formally wind up a Dublin-based company structure that had been the subject of fierce controversy in its home country over tax avoidance.
3 MEN EXTRADITED TO COSTA RICA OVER 5DIMES SPORTSBOOK OWNER
On 29th April, Calvin Ayre reported that the case surrounding the kidnap-for-Bitcoin and murder of the founder of the Costa Rica-based 5Dimes sportsbook, William Sean Creighton, continues to move forward. 3 men have been extradited from Spain – with 12 arrests so far in all, including several police officers.
CUBAN ENTITIES SUBJECT TO US EXPORT RESTRICTIONS UPDATED
Sandler Travis Rosenberg on 30th April reported that the US State Department has published an updated list of entities and sub-entities, with 5 additional sub-entries, that are under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel and with which direct financial transactions would disproportionately benefit such entities at the expense of the Cuban people or private enterprise in Cuba.
The updated list is at –
CLARIFICATION OF ITALIAN GAMING BAN
On 30th April, Intergame reported that the ban on advertising for online gaming in Italy will apply to companies operating in the country with a registered office, including secondary offices. It will also apply to persons with a registered office in other countries offering paid gaming in Italy or authorised to provide audio-visual media services in Italy. However, purely trade publications such as Gioco News are not affected.
CIGARETTE PLAIN PACKAGING IN NETHERLANDS FROM JANUARY 2020
On 30th April, TJI reported that, from January 2020, cigarette packages sold in the Netherlands will all have the same shape and neutral colours. It says that the State Secretary also wants to extend the smoking ban from 1st July 2020 – this would include the ban on e-cigarettes in the same public spaces as regular cigarettes.
WORLD MILITARY EXPENDITURE GROWS TO $1.8 TRILLION IN 2018
USING CANNABIS AND TOBACCO/NICOTINE TOGETHER IS LINKED TO HEAVIER USE AND POORER FUNCTIONING AMONG YOUNG ADULTS
A report from the US-based RAND Corporation on 29th April says that more than a third of young adults report using both cannabis and tobacco or nicotine products, providing a unique challenge to public health officials as cannabis is legalised in more jurisdictions. Studying a group of young adults from California, researchers examined the many different ways that cannabis and tobacco or nicotine products are used together — a by-product of the introduction of new vaping devices and other delivery methods.
RUSSIA-NORTH KOREA SUMMIT: 5 KEY QUESTIONS ANSWERED
On 26th April, Chatham House published an article in which Chatham House experts analyse the summit meeting between President Vladimir Putin and North Korean leader Kim Jong-un, and examine wider contexts for international security. The 5 questions include: what does Russia want out of it, and has anything concrete come out of the summit?
ISLE OF MAN AMENDS ISIL/AL-QAIDA SANCTIONS – DELETES 1 NAME, AMENDS ANOTHER
On 30th April, an Isle of Man news release advised that it had followed the UK and EU and that 1 person had been removed from the sanctions list, with another entry amended.
1MDB-LINKED SUPERYACHT EQUANIMITY RENAMED TRANQUILITY AFTER SALE TO GENTING, DOCKED IN SINGAPORE
The Strait Times on 30th April reported that the superyacht was one of many luxury items seized by the Malaysian government as part of its probe into 1MDB and was owned by fugitive businessman Low Taek Jho (aka Jho Low). It was seized off Bali’s coast by Indonesia in February last year at the request of the US authorities as part of a multibillion-dollar corruption investigation into the 1MDB scandal.
NIGERIA DEPLOYS SATELLITE TECH TO TRACK OIL SMUGGLERS
Reuters on 30th April reported that one Nigerian government agency hopes it can use new technology to tackle theft which has cost the country billions. It says Nigeria has turned to French data firm Kpler to help it ferret out the smugglers from the thousands of ships plying Nigerian waters – among other tech-focused plans to detect what it calls “rogue” or “dark” ships. Kpler’s platform monitors 24/7, logging erratic journeys and changes to ships’ drafts which indicate on or off-loading of cargoes into an algorithm.
CHAIRMAN OF FRENCH TELECOMS COMPANY FINED €600,000 FOR INSIDER DEALING
The Irish Times on 30th April reported that the French Financial Markets Regulator said it had fined Maxime Lombardini, then CEO telecoms company Iliad, for “breaching insider dealing regulations”. Iliad must pay €100,000 “for breach of its disclosure requirements”. The case involves his sale of shares in the telecoms company weeks before they dropped during the failed 2014 takeover approach for T-Mobile USA. Iliad owns Eircom, aka Eir, a former state monopoly in Ireland (hence the newspaper’s interest).
CORE INCIDENT REPORT Q1 2019: POLITICAL VIOLENCE AND VIOLENT ORGANISED CRIME INCIDENTS AROUND THE WORLD
On 30th April, Control Risks published this report which draws upon and highlights the extensive incident mapping data and analysis that is available within CORE, the essential risk monitoring toolkit from Control Risks.
BVI DRAFT ECONOMIC SUBSTANCE CODE PUBLISHED
On 29th April, Appleby reported that the International Tax Authority in the BVI had published this draft Code which provides guidance on the interpretation of the Economic Substance (Companies and Limited Partnerships) Act 2018 and on the manner in which the ITA will carry out its obligations under the legislation. It provides clarification for entities which may be subject to economic substance requirements to assist with compliance under the Act. Appleby highlight some key points to note, and says that the final version is due in May, together with an educational package.