Day: April 1, 2019

1^st April 2019

 SWITZERLAND TO SUE NIGERIA OVER SEIZED OIL TANKER

Swissinfo on 31^st March reported that authorities in Switzerland are considering legal proceedings after failed diplomatic efforts to secure the release of a Swiss-flag-carrying oil tanker, blocked in the bay of Biafra for over a year.  The San Padre Pio oil tanker, registered by ABC Maritime, was seized by Nigerian authorities in January 2018, who accused the ship and its crew of violating territorial waters and diesel smuggling.

https://www.swissinfo.ch/eng/international-spat_switzerland-to-sue-nigeria-over-seized-oil-tanker/44863116

NEW ZEALAND: FINANCIAL MARKETS AUTHORITY SAYS MONEY LAUNDERING SAFEGUARDS STILL NOT FIT FOR PURPOSE

On 1^st April, Scoop reported an FMA news release saying that the FMA had released AML/CFT monitoring report setting out the areas requiring further attention by the management and boards of the reporting entities it supervises.  The FMA is one of 3 supervisors for AML/CFT in New Zealand, alongside the Reserve Bank of New Zealand and the Department of Internal Affairs.  Amongst the issues raised is that an increasing number of entities are using electronic identify verification, but the FMA noted a number of deficiencies with their AML/CFT programmes in this regard.  It also said that when undertaking operational reviews, the FMA will focus more on front-line staff who perform tasks such as client on-boarding, to assess their understanding of the obligations.

http://www.scoop.co.nz/stories/BU1904/S00006/amlcft-monitoring-report-highlights-concerns-sets-focus.htm

http://www.sharechat.co.nz/article/b53a23c8/fma-says-money-laundering-safeguards-still-not-fit-for-purpose.html

MALTA: OPPOSITION LEADER ASKS FOR INVESTIGATION INTO HIS “FORGED” SIGNATURE ON DOCUMENTS AND ASKS IF LINKED TO MONEY LAUNDERING PROBE

On 1^st April, the Times of Malta reported that opposition leader, Adrian Delia, went to the FIAU with documents which he says had his forged signature and asked them to investigate whether the documents were in any way linked to the findings of a money laundering probe, of which he was the subject last year.  It is reported that in 2018 the FIAU had concluded there was reasonable suspicion that he had been involved in laundering the proceeds of a London brothel back in the early 2000s which had been deposited in an account in Jersey.  Reports had linked Delia to the company said to have run the brothel, as well as others linked to the man said to be behind the operation.

https://www.timesofmalta.com/articles/view/20190401/local/forged-signature-documents-linked-to-shelf-firm.706139

INDIA: DEMONETISATION TRIGGERS RECORD 14-TIMES GREATER NUMBER OF SAR LINKED TO TAX CRIMES

On 31^st March, Money Control reported that the 2016 removal of 2 high-value currency notes has led to an all-time high number of suspicious activity reports, a record 1,400% jump over the pre-demonetisation period, by banks and other financial institutions in the country, according to a FIU report.

https://www.moneycontrol.com/news/business/economy/demonetisation-triggers-record-14-times-high-generation-of-suspicious-reports-linked-to-tax-crimes-fiu-report-3734501.html

HOW SHADOWY TAX HAVENS SKIRT CONSERVATION EFFORTS

The Salon website on 29^th March reported on an investigation into the data by Victor Galaz and colleagues from the Stockholm Resilience Center.  It says that they were most interested in the environmental consequences of the global financial system.  They used publicly available data from INTERPOL and other sources to uncover how secret financial dealings fuel 2 major conservation threats: overfishing in the world’s oceans and deforestation of the Brazilian Amazon.  It says that illegal, unreported, and unregulated (IUU) fishing is a serious cause of declining fish populations worldwide, and criticises Belize, Panama, and many other tax haven countries.

https://www.salon.com/2019/03/29/how-shadowy-tax-havens-skirt-conservation-efforts_partner/

FUGITIVE TYCOON TO CHALLENGE HONG KONG’S EXTRADITION PLANS
Channel News Asia on 1^st April reported that Joseph Lau is set to launch a legal challenge against Hong Kong’s controversial plan to sign an extradition agreement with Macau, Taiwan and mainland China.  Hong Kong property tycoon Joseph Lau is wanted in Macau where he was convicted in absentia for bribery in the gambling enclave in 2014.  He remains a free man because Hong Kong and Macau do not currently have an extradition agreement.

https://www.channelnewsasia.com/news/asia/fugitive-tycoon-to-challenge-hong-kong-s-extradition-plans-11399672

GIBRALTAR: NO-DEAL BREXIT – CIVIL LITIGATION INVOLVING EU MEMBER STATES

A news release from the Gibraltar Government on 29^th March sets out to explain the effect of a No-Deal exit from the EU on the handling of civil legal cases involving other EU jurisdictions.  It covers rules such as those concerning applicable legislation in cross-border civil and commercial disputes, cross-border insolvency proceedings and matters of family law.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2019/Press%20Releases/232-2019.pdf

SPANISH EURO COUNTERFEITING PRINT-SHIP BUSTED

A news release from Europol on 30^th March reported that the Spanish National Police have dismantled the most active counterfeit euro print shop in Spain with the support of Europol. The specialised crime ring, based in Tenerife, manufactured fake banknotes in €10 and €20 denominations, earning the gang around €7,500 every month.

https://www.europol.europa.eu/newsroom/news/spanish-euro-counterfeit-print-shop-busted

FIATA PUBLISHES BEST PRACTICE ON PREVENTION OF CYBERCRIME FOR FREIGHT INDUSTRY

On 28^th March, the International Federation of Freight Forwarders Associations (FIATA) issued “Best Practice Guide on Prevention of Cybercrime” for FIATA members and the industry at large.

https://fiata.com/fileadmin/user_upload/documents/initiatives/FIATA_Best_Practice_on_Prevention_of_Cybercrime.pdf

WHAT IS GOING ON IN LIBYA?

An article from War on the Rocks on 1^st April looks at the situation in Libya, including the links between Libya’s petrodollars, the feuding factions, and the foreign states backing them.  It says that Earlier this year, the armed coalition led by eastern-Libyan-based commander Khalifa Haftar seized an oil-rich desert expanse 3 times as large as Syria called the Fezzan.  There is now speculation on whether he will attempt to take the capital, Tripoli.  Haftar has not recognised the UN-backed Government of National Accord in Tripoli, and its prime minister and his cabinet co-exist with a set of powerful militias there, but do not control them.

https://warontherocks.com/2019/04/libyas-looming-contest-for-the-central-bank/

EUROPEAN BORDER AND COAST GUARD: COMMISSION WELCOMES AGREEMENT ON A STANDING CORPS OF 10,000 BORDER GUARDS BY 2027

On 1^st April, a news release from the EU said that the EU Council has approved the political agreement reached to reinforce the European Border and Coast Guard, giving it the right level of ambition to respond to the common challenges Europe is facing in managing migration and borders.  The centre piece of the reinforced Agency will be a standing corps of 10,000 border guards – ready to support Member States at any time.

http://europa.eu/rapid/press-release_IP-19-1929_en.htm

THIRD COUNTRIES ALIGN WITH EU SANCTIONS ON ZIMBABWE

A news release from the EU on 1^st April announced that North Macedonia, Montenegro, Serbia Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway and Armenia have aligned with EU sanctions which the EU has extended to 20^th February 2020.

https://www.consilium.europa.eu/en/press/press-releases/2019/04/01/declaration-by-the-high-representative-on-behalf-of-the-eu-on-the-alignment-of-third-countries-with-the-council-decision-concerning-restrictive-measures-against-zimbabwe/

UK: EMPLOYING EU, EEA AND SWISS CITIZENS AND THEIR FAMILY MEMBERS AFTER BREXIT

On 1^st April, the Home Office issued updated information for employers on “right to work” checks and the immigration status of EU, EEA and Swiss citizens and their family members working in the UK after Brexit.  It says that there will be no change to the way EU, EEA and Swiss citizens prove their right to work until 1^st January 2021.  This remains the same if the UK leaves the EU without a deal.

https://www.gov.uk/guidance/employing-eu-eea-and-swiss-citizens-and-their-family-members-after-brexit

7 ALGERIAN BUSINESSMEN INVESTIGATED FOR CORRUPTION

On 1^st April, Arab News said that Algerian authorities have seized the passports of 7 businessmen under investigation over corruption allegations, the private Ennahar TV channel reported.

http://www.arabnews.com/node/1475906/middle-east

MALTA: FINANCE MINISTER CLAIMS UNFAIR TREATMENT AFTER DRAFT MONEYVAL REPORT WAS LEAKED

On 1^st April, Malta Today reported the Finance Minister’s complaints that leaked extracts from an ongoing Moneyval evaluation process claimed that Malta has failed the initial test of its AML systems.  Sources told the Times of Malta that, in the last evaluation, out of 11 measures of effectiveness graded (known as “IO”) – ranging from international cooperation to local supervisory functions and policing – none were considered good enough to score a “high”.  The minister said that that it was unfair that, due to the leak, the evaluation process had to be stopped in the middle, while, in other countries, it is allowed to take its due course.

https://www.maltatoday.com.mt/news/national/94024/finance_minister_claims_unfair_treatment_after_draft_moneyval_report_was_leaked

AUTHORITIES SAY FORMER GAMBIA PRESIDENT STOLE $363 MILLION

OCCRP on 1^st April reported that Gambia’s official inquiry into the corruption of former President Yahya Jammeh found he had looted at least $363 million of public funds during his more than 2 decades in power.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9487-authorities-say-ex-gambia-president-stole-us-363-million

PAKISTAN PLANS TO REGULATE CRYPTOCURRENCY TO PREVENT ‘TERRORISM FINANCING’

Baker McKenzie on 1^st April reported that Pakistan has announced plans to regulate cryptocurrencies in accordance with recommendations of FATF.  The regulations will be introduced immediately.

http://www.riskandcompliancehub.com/pakistan-regulates-cryptocurrency-to-prevent-terrorism-financing/

 

On 1^st April, Baker McKenzie published a very good briefing that sets out some of the main sanctions and export controls issues arising from a no-deal Brexit which are likely to impact upon companies operating in the UK and EU, and provides guidance on what companies can do to prepare for this eventuality.

http://bakerxchange.com/rv/ff00496e6b99a86c5e02b22c7047b6b72b1bfccd

On 1^st April, a report from Global Witness said that millions of tonnes of timber enters China every year, with its vast wood manufacturing sector dependent on raw materials from overseas.  But much of that timber comes from countries where corruption and weak rule of law is leading to high levels of illegal logging.  The country’s exposure to high-risk timber is damaging to its own and its trading partners’ long-term development.  It is time, it says, for China to take responsibility for this, step up to this global challenge and lead the way on tackling the spread of illegal timber.  It says that most of the 10 largest suppliers of tropical timber to China rank in the bottom quarter of global ranking on measures of governance.  Not only this, but the research we have compiled shows widespread and worrying levels of illegalities in countries from which China sources over 80% of its tropical timber.  The report lays out a range of recommendations, outlining action China could take.

https://www.globalwitness.org/en-gb/campaigns/forests/lessons-from-chinas-global-forest-footprint/

On 1^st April, Malta Today reported that the government has authorised the publication of a report on Malta drawn up by the Council of Europe’s Group of States against Corruption (GRECO), the Justice Ministry said.  The government faced criticism for not having agreed to the publication of the report, which was leaked at the weekend.

https://www.maltatoday.com.mt/news/national/94026/government_authorizes_publication_of_greco_report

Following publication of the MER on the Cayman Islands, FATF issued an updated schedule of consolidated ratings on 1^st April.

http://www.fatf-gafi.org/publications/mutualevaluations/documents/assessment-ratings.html

On 1^st April, FATF published the mutual evaluation report on the Cayman Islands prepared by the regional FATF-style body, CFATF.  The on-site visit for the evaluation took place in December 2017.  The report says that there are some important deficiencies within the technical compliance framework.  Shortcomings in the area of simplified measures, reliance on third parties, higher risk countries inter alia, represent deficiencies that have the potential to weaken the jurisdiction’s AML/CFT regime from meeting expectations standards if left unaddressed.  Some deficiencies identified in technical compliance are considered serious, and lack of adequate implementation in some cases were considered major shortcomings in effectiveness.

http://www.fatf-gafi.org/media/fatf/documents/reports/mer-fsrb/CFATF-Cayman-Islands-Mutual-Evaluation.pdf

In an article dated 1^st April about the settlement between OFAC and Stanley Black & Decker Inc and its foreign subsidiary, Jiangsu Guoqiang Tools Co Ltd, Wilmer Hale said that the enforcement action and ensuing settlement agreement are particularly notable for 2 reasons –

• on the settlement agreement, OFAC has provided significant guidance on what it appears to consider to be best practices in maintaining a risk-based sanctions compliance programme. Although it was unusual for OFAC to communicate that guidance in a settlement agreement, the firm says it expects that OFAC’s compliance and enforcement guidance will increasingly take that form; and
• the action hints at the trends that OFAC enforcement actions may follow in 2019.

It says that OFAC identified 5 overarching elements that are the pillars of what constitutes an effective compliance programme –

• management commitment;
• risk assessment;
• internal controls;
• testing and audit; and

The article says that the enforcement action is also consistent with the general increase in the ratio of OFAC enforcement actions against non-financial institutions.⁷ We expect that these trends will continue in 2019, particularly in the context of the US escalation of pressure on Iran and parties that transact with Iran.

https://wilmerhalecommunications.com/26/3279/april-2019/ofac-crystallizes-expectations-for-sanctions-compliance.asp

Radio New Zealand reported on 1^st April that Victor Rory had appeared in court after he was found guilty of the charges, which relate to money from the European Development Fund, being convicted on 20 counts of obtaining money by deception and money laundering.  A Commission of Inquiry found $875,000 is still unaccounted for, and Victor Rory is the first conviction that stemmed from the scandal, but the inquiry recommended that more than 20 people be investigated.

https://www.radionz.co.nz/international/pacific-news/386065/former-vanuatu-aid-negotiator-convicted-for-fraud

Coindesk on 1^st April reported that Canadian police have frozen assets owned by the founders of blockchain services company Vanbex, as part of a fraud investigation into a 2017 initial coin offering that raised $22 million.

https://www.coindesk.com/police-freeze-bank-accounts-seize-luxury-cars-in-probe-of-22-million-ico-promoter-vanbex

On 29^th March, Katten Muchin Rosenman LLP published an article saying that the OECD Working Group on Bribery (Working Group) published its “Phase 4 Two-Year Follow-Up Report” on the UK implementation of the OECD anti-bribery convention.  The Working Group’s report follows the written responses the UK submitted in March 2019 to the OECD’s “Phase 4” evaluation in March 2017.  The report expresses some concern at the low level of finalised and ongoing foreign bribery enforcement cases in the UK, given the size of the UK economy.  However, the Working Group welcomed the adoption of the Criminal Finances Act 2017, which grants new powers to the UK FIU. The UK has to report back report back by March 2021 on outstanding recommendations, and will make annual update reports.

https://www.corporatefinancialweeklydigest.com/2019/03/articles/uk-developments/oecd-publishes-follow-up-report-on-uks-implementation-of-anti-bribery-convention/#page=1

The report is at –

http://www.oecd.org/corruption/United-Kingdom-phase-4-follow-up-report-ENG.pdf