29th April 2019
CAMBODIA: POLICE SEIZE $3.5 MILLION IN CASH FROM MEN AT PHNOM PENH AIRPORT
The Phnom Penh Post on 29th April reported that 3 Chinese nationals were charged with money laundering and held in detention by police after they were caught smuggling wads of $100 notes amounting to $3,520,000 in their bags at Phnom Penh International Airport after arriving from Hong Kong.
CONVICTED MONEY LENDER LOSES APPEAL AGAINST CONTEMPT OF COURT FOR BREACH OF COURT ORDER
6KBW in its blog on 28th April reported that, following an ex parte application made by the FCA, a restraint order was made against the Appellant along with a number of companies under his control. As a result of the breach of that restraint order, he was held in contempt of court on 2 separate occasions and sentenced to a term of imprisonment. He raised a number of challenges to the finding of contempt, all of which were rejected on the grounds they provided no basis for a finding of contempt that was entirely justified and, in the court’s view, he had deliberately and repeatedly flouted the restraint order in a sophisticated manner.
SWITZERLAND: CO-OPERATION WITH FOREIGN JUDICIAL AUTHORITIES – ARTICLE 271 OF CRIMINAL CODE REMAINS SERIOUS OBSTACLE
An article from CMS Law member firm in Switzerland on 29th April was concerned with a recent case where the Federal Supreme Court ruled that a Swiss-based asset management company’s disclosure of client information to US authorities with a view to facilitating the conclusion of a non-prosecution agreement violated Article 271 of the Criminal Code. Under Article 271(1)(1) of the Criminal Code, anyone who acts on Swiss territory on behalf of a foreign state without official approval of the federal authorities will be punished if such acts are attributable to an authority or a civil servant – intended to prevent the exercise of foreign official power on Swiss territory and thus to protect the state monopoly of power and Swiss sovereignty. The proper routes for assistance are established in the law and have been upheld by the Federal Supreme Court. The firm says that decision reiterates that it does not look favourably on persons who take matters into their own hands and bypass the competent Swiss authorities in furtherance of foreign state interests.
HAMAS USING INCREASINGLY COMPLEX METHODS OF RAISING FUNDS VIA BITCOIN
KYC 360 on 29th April reported that the armed wing of Hamas – Izz el-Deen al-Qassam Brigades – is using increasingly complex methods of raising funds via bitcoin, researchers say, highlighting the difficulties regulators face in tracking cryptocurrency financing of outfits designated by some as terrorist groups.
REGULATION IN GUERNSEY – WHAT CAN HAPPEN WHEN IT GOES WRONG
On 26th April, Ogier published an article about another decision from the Royal Court of Guernsey which shows how far-reaching the penalties and sanctions can be when an individual working in a regulated industry fails to put the right procedures in place or is unaware of a rule or requirement – implications can include heavy financial penalties, a public statement and, at worse, a loss of livelihood.
A DETAILED LOOK INTO THE IMPLICATIONS OF THE TAX BLACKLISTING OF THE UAE AND OMAN BY THE EU
An article from Omani law firm, Al Tamimi & Co, on 12th March sets out the background and discusses the implications of the EU list of non-cooperative tax jurisdictions for businesses operating and seeking to invest in the UAE. The UAE and Oman have been added to the list.
MALTESE CITIZEN ARRESTED IN NEW YORK ON FRAUD CHARGES
The Malta Independent on 29th April reported that Mustafa Abdel-Wadood, former Abraaj Group managing partner, is said to have been arrested in New York on charges relating to fraud, for allegedly misappropriating millions of dollars at Abraaj Group, the largest private equity firm in the Middle East.
USE DUE DILIGENCE AND AVOID UNORTHODOX BUSINESS PRACTICES TO PREVENT SANCTIONS VIOLATIONS, OFAC SAYS
Sandler Travis Rosenberg on 29th April reported that OFAC is encouraging companies to exercise enhanced due diligence in business relationships with entities subject to the sectoral sanctions identification list and to avoid the use of unorthodox business practices such as the amendment or alteration of trade documents or the re-submission of payment information without a sanctions-related term, phrase, or location. It also said that the development and implementation of a risk-based sanctions compliance programme can give companies the ability to assess prospective and real-time transactions for potential prohibitions and violations.
IRELAND’S TRANSFER PRICING RULES
On 26th April, Mathesons made available a chapter on recent developments in Ireland’s transfer pricing rules.
CMS EXPERT GUIDE TO SECURITY TOKEN OFFERINGS
CMS has published a guide covering a number of countries, including the UK, Colombia, Switzerland and a number of EU states. It explains that Security Token Offerings (STO) are a new means for companies to emit securities. The idea is to sell a virtual, blockchain-based token which is unique and transferable, and which represents, for example, a profit participation right or a share in the emitting company. Profits could be distributed to the token holders directly without the need of a bank account. It says that STO can be considered the successor of so-called Initial Coin Offerings (ICO).
A guide to ICO is also available at –
KERCH STRAIT STANDOFF DEEPENS AS UKRAINE TRAINS TO SEIZE SHIPPING
Janes.com on 26th April reported that the Ukraine’s 73rd Maritime Special Purpose Centre at Ochakiv has begun extensive visit, board, search, and seizure (VBSS) training.
WCO AND EU PARTNERS IN NEW PROJECT “COLIBRI” FOR INTERNATIONAL CO-ORDINATION AND COMBATING ORGANISED CRIME AND CHALLENGES RAISED BY COCAINE TRAFFICKING IN LATIN AMERICA AND THE CARIBBEAN, AS WELL AS IN WEST AND CENTRAL AFRICA
A news release from the World Customs Organisation on 29th April reported that the purpose of the COLIBRI Project, which aims to monitor and control general aviation along the entire length of the cocaine route, is to rally Customs and its partners around the risks of fraud in this little-monitored channel and to step up the regional, international and inter-departmental co-operation that is so essential in the fight against drug trafficking.
DISCLOSURE CONSENT FORMS ROLLED OUT UNDER THREAT OF LEGAL CHALLENGE
Police Professional on 29th April reported that victims of crime, including those alleging rape, are being asked to give police access to their phones and social media accounts or risk prosecutions not going ahead. The move is part of a series of new measures introduced by the DPP to address failures in the system around disclosure in England and Wales that led to the collapse of a number of rape and serious sexual assault cases. Consent forms asking for victims to give permission for officers to access personal information including emails, messages and photographs are being rolled out across the CPS. However, the forms face a legal challenge from campaign groups.
THE EU–RUSSIAN SANCTIONS OF 2014
On 28th April, a paper on the VOX CEPR Policy Portal estimates that the value of trade lost due to Western sanctions over 2014-2016 amounts to $1.3 billion, while trade lost due to the Russian counter-sanctions amounts to $10.5 billion. There appears to be no evidence that Russian importers switched between suppliers from sanctioning countries to competitors from non-sanctioning countries. It concludes that, while there is evidence that the targeted Western sanctions have had a significant impact on the Russian firms and individuals on whom these sanctions were imposed, it cannot confirm similar findings from the international trade standpoint.
IMF AND ANTI-CORRUPTION 1 YEAR ON
On 12th April, Transparency International said that new research from the IMF shows that curbing corruption would deliver an additional $1 trillion in tax revenues annually across the world, money that could support much needed investments in health, education and infrastructure. It looks at the situation one year on from the 2018 International Anti-Corruption Conference (IACC).
OVERSIGHT AND ACCOUNTABILITY IN THE US SECURITY ASSISTANCE SECTOR
On 29th April, the Center for International Policy said that the CSIS had published a report saying that, despite efforts to implement sweeping reforms to the Security Sector Assistance (SSA) enterprise across the US government, substantial gaps remain in the policy planning, implementation, and review process. SSA is not new, the US has been providing assistance to allies and partners and pursuing an array of SSA-related engagements with them since WW2. Increasingly, however, the US government is relying on SSA to further its global objectives. The aim is to work by, with, and through allies and partners so that they own the spaces where this co-operation occurs
The chart above illustrates the top 5 country recipients for section 333 security aid between fiscal years 2017 and 2019. You can see a full picture of section 333 recipients at –
US DEFENCE MATERIAL EXEMPTION AMENDMENTS
On 19th April, the Center for International Policy reported that the US Directorate of Defense Trade Controls has published an amendment to the International Traffic in Arms Regulations (ITAR) that substantially expands and clarifies the circumstances under which transfers of defence articles and services by or for a Department or Agency of the US government may occur without a licence. This amendment furthers the objectives outlined in the President’s Conventional Arms Transfer Policy.
US STATE DEPARTMENT FACTSHEETS: CONVENTIONAL ARMS TRANSFER POLICY AND ARMS SALES
On 25th April, the State Department issued a factsheet on a new and updated US Conventional Arms Transfer (CAT) Policy to support Allies and partners, expand opportunities for US industry and create US jobs, and maintain US national security while thoroughly reviewing arms transfers to ensure that they are in the US interest.
A second factsheet on US sales of arms and defence materials, Foreign Military Sales (FMS) and Direct Commercial Sales (DCS) by companies.
FINANCING OF NORTH KOREA’S NUCLEAR AMBITION REMAINS ALIVE AND WELL
On 29th April, a Commentary from RUSI says that a lack of awareness-raising by governments and misinterpretation by the private sector mean efforts to restrict North Korea’s finances are failing; and the global ambition to counter proliferation finance continues to suffer from a lack of awareness and sparse implementation and remains a poor relation to AML/CFT.
EXPORT POTENTIAL: TURKEY’S HOMEMADE DRONES COULD BOOST LOCAL INDUSTRY
Defense News on 22nd April carried an article saying that several unmanned systems designed, developed and produced by Turkey’s industry have in recent years proven their export potential, providing hope for future deals with foreign customers – the Turks stressing that Turkish drones do not require foreign (e.g. US or EU) export licences, and they are combat-proven. The article provides examples of the drones available.
RUSI ANNOUNCES LAUNCH OF TASK FORCE ON THE FUTURE OF UK SANCTIONS POLICY
On 29th April, the always useful EU Sanctions Blog reported that the Royal United Services Institute in London is hosting an event on 28th May to launch its Taskforce on the Future of UK Sanctions Policy, composed of former officials, academic and policy experts, who will provide recommendations on UK sanctions policy post-Brexit over the next 12 months.
MAERSK LAUNCHES ONLINE CUSTOMS CLEARANCE SERVICE
On 29th April, Loadstar reported that Maersk is now offering digital customs clearance for ocean customers. It says that the online shipping management platform is available in 7 European countries and will be rolled out worldwide by the end of the year. It gives customers full compliance with local customs rules online, with pricing displayed for all import and export declarations.
NEW EU ANTI-FRAUD STRATEGY
On 29th April, the EU announced that the European Commission has adopted its new Anti-Fraud Strategy that seeks to further improve the detection, sanctioning and prevention of fraud and will support the Commission’s ongoing efforts to bring fraud against the EU budget further down. The vision behind the new Strategy is to strengthen the corporate oversight of the Commission regarding all issues related to fraud and to reinforce the anti-fraud system that is already in place.
3 WORKERS KIDNAPPED FROM OIL RIG IN NIGERIA
On 29th April, Defence News reported that Gunman have kidnapped 3 oil workers from Canada, Scotland and Nigeria from a rig in Nigeria’s Delta region officials said, the second abduction in the area in less than a week.
HOLOCAUST (RETURN OF CULTURAL OBJECTS) (AMENDMENT) BILL
On 29th April, the House of Lords Library published a briefing in preparation of the 2nd Reading of the Bill in the Lords on 7th May. The Bill would confer powers on specified national museums and galleries to return certain cultural objects on grounds relating to events during the Nazi era. The Government supports the extension of the Act’s provisions and wants the legislation to apply indefinitely.
TAIWAN MURDER SUSPECT JAILED IN HONG KONG FOR MONEY LAUNDERING
The Taipei Times in its 30th April edition reported that a Hong Kong man wanted in Taiwan for allegedly strangling his pregnant girlfriend in a case used by the territory to justify controversial changes to its extradition laws has been jailed, but not for murder. It says that the killing sparked sympathy for the family and was used by the Hong Kong Government to advocate changing the territory’s laws to allow extraditions on a case-by-case basis to Taiwan, Macau and China. However, the decision to include China in those proposals sparked huge protests and a major backlash within the territory’s business and legal communities. With Hong Kong prosecutors unable to charge Chan for murder, he was instead charged with money laundering related to his possession of his victim’s smartphone, camera and money he withdrew from her account, and a judge sentenced him to 29 months in jail.
US SEC FREEZES ASSETS OVER SUSPECTED INSIDER TRADING IN ANADARKO BEFORE ITS TAKEOVER BY CHEVRON
Reuters on 29th April reported that the SEC has obtained an asset freeze in connection with suspected insider trading in Anadarko Petroleum before the oil company agreed to be acquired by rival Chevron. The unknown buyers of Anadarko securities, who the SEC said stood to make roughly $2.5 million in illicit profits, according to a court filing.
FIRST CHALLENGE TO A DECISION OF THE CHANNEL ISLANDS FINANCIAL OMBUDSMAN HEARD BY THE ROYAL COURT OF JERSEY
On 29th April, Ogier carried an article about a case where the court upheld the Ombudsman’s decision that local mortgage broker and lender Future Finance pay 2 individuals over £63,000 in compensation. The Ombudsman was established at the end of 2015. He has the power to investigate and determine individual customer complaints regarding financial services provided in both Jersey and Guernsey. He can award compensation up to a maximum of £150,000.
BLOOD TIES AND FAMILY CLANS SHAPE ARGENTINA’S UNDERWORLD
On 22nd April, Insight Crime published an article which says that criminal groups made up by close relatives come in all shapes and sizes in Argentina. Small-time micro-trafficking organisations proliferate alongside mid-sized, more sophisticated groups, who have access to resources and contacts within security forces and the political sphere as well as in nearby drug-producing countries. It says that the port city of Rosario, strategically located on the Paraná River that acts as a transit point for drug shipments coming from neighbouring Bolivia and Paraguay, is seen as the mecca for this phenomenon.
TRUMP TRANSFERS BACKGROUND INVESTIGATION POWER TO PENTAGON
The Federal Times on 25th April reported that the US Department of Defense will have full responsibility for conducting background investigations of federal employees and contractors, under an Executive Order signed by President Donald Trump on April 24th.
BELUGA WHALE WITH RUSSIAN HARNESS RAISES ALARM IN NORWAY
On 29th April, Rferl reported that Norwegian officials say they are concerned that a harnessed beluga whale found in the Arctic Sea may have come from a Russian military facility. The white whale was wearing a harness that had “Equipment St. Petersburg” written on it, and also had a mount for a camera. Russia does not have a known history of using whales for military purposes although the USSR. had a training program for dolphins. The facility in Sevastopol, Crimea, was closed following the collapse of the Soviet Union.
SHIPPING COMPANY AND SHIP CAPTAIN SENTENCED IN SEIZED MILITARY VEHICLE CASE IN HONG KONG
On 29th April, Hellenic Shipping News reported that, more than 2 years after 9 Singapore Armed Forces armoured vehicles worth were seized in Hong Kong, a court there has imposed fines on both the shipping firm APL and ship captain Pan Xuejun for their roles in the case. Singapore-based APL and Pan were found guilty earlier of importing strategic commodities without the necessary licence. The APL vessel which was transporting the 9 Singapore-made Terrex troop carriers back to Singapore after a military exercise in Taiwan in November 2016.