On 31st May, a news release from the Government of Gibraltar advised the publication of the Financial Services Bill, described as the key part of the Legislative Reform Programme (LRP) that was launched in 2016, and is the single largest review and reform of the territory’s Financial Services legislation. The Bill will provide the legislative framework for all the financial services sectors in Gibraltar. The Bill consolidates and rationalises over 90 financial services legislative instruments into one Act and additional supporting, sector-specific regulations.
Month: May 2019
FUNDRAISING FOR RIGHT-WING EXTREMIST MOVEMENTS: HOW THEY RAISE FUNDS AND HOW TO COUNTER IT
On 31st May, RUSI published an article saying that efforts to prevent fundraising for extremist organisations tend to overlook the characteristics of right-wing movements. It looks at how right-wing terrorist and extremist movements raise funds, and how this should be reflected in counter-extremism and counter-terrorism financing strategies.
THE 5th EU MONEY LAUNDERING DIRECTIVE AND THE ART MARKET
On 28th May, Stephenson Harwood published a briefing saying that, despite fierce resistance from the art world, January 2020 is likely to see the 5th EU Money Laundering Directive take effect in the UK, requiring auction houses and art dealers to undertake AML checks on customers. It contrasts the current position with the likely position under the new Directive. EU Member States have until 10th January 2020 to give effect to its provisions. Even if the UK leaves the EU under a “no deal” situation, the article says that it is unlikely that the government would let UK AML standards fall behind those applicable elsewhere in Europe. This much was acknowledged by the Department for Business, Energy and Industrial Strategy. One item it highlights as being of particular relevance to the art market is the provision which requires verification checks to be undertaken in respect of any intermediary who is making a purchase on behalf of somebody else.
https://www.shlegal.com/insights/the-fifth-eu-money-laundering-directive-and-the-art-market
THE HEART OF AFRICA’S ORGANISED CRIME: LAND, PROPERTY AND URBANISATION
On 8th May, ENACT Africa published a report saying that there have been few studies of what may be the largest type of organised criminal activity in Africa: land allocation, real estate and property development, which includes infrastructure and the delivery of basic public services such as water and electricity, particularly in urban areas. It says that development in African urban areas occurs in an organised crime environment: and policy-makers, development agencies and practitioners need to rethink, revise and update their basic approaches and methodologies to recognise existing African realities. The report concludes that the involvement of organised crime, including international networks, in urban real estate in Africa makes it unlikely that responsible property development can readily be achieved; but improvements are possible. It makes a number of pragmatic policy and operational recommendations – including taking organised crime into account in all urban development initiatives.
https://enact-africa.s3.amazonaws.com/site/uploads/2019-05-10-urbanisation-policy-brief-001.pdf
USING BLOCKCHAIN FOR KYC/AML COMPLIANCE
On 28th May, Dentons published an article on using blockchain to improve KYC/AML compliance regimes. It says that, according to a 2016 Thomson Reuters report, financial institutions individually spend anywhere from $60 million to $500 million annually on KYC/AML compliance, but that, in many cases, current compliance programs are manual, fragmented and slow, all of which impedes the client’s business and can potentially damage the client relationship. The article says that it is increasingly clear that the private, permission-based model offered by distributed leger technology (DLT) – a type of blockchain – is best suited for handling KYC and AML compliance, and can solve inefficiencies in existing KYC/AML processes and reduce compliance costs.
https://www.dentons.com/en/insights/articles/2019/may/28/using-blockchain-for-kyc-aml-compliance
Example of a Blockchain-Based KYC/AML Compliance System
OTHER THINGS YOU MAY HAVE MISSED – MAY 30
30th May 2019
THE NEW GERMAN TRADE SECRETS ACT – A GAME CHANGER
On 7th May, Reed Smith published a briefing saying that, almost a year after the implementation deadline, the Geschäftsgeheimnisgesetz (Trade Secrets Act came into effect on April 26th. It replaces the provisions of the Unfair Competition Act on misappropriation of trade secrets and introduces new procedural rules for trade secret litigation. Many perceive the Act as a game changer, and companies doing business in Germany are well advised to take action rather sooner than later. The article provides a brief summary of the Act and its effects.
https://www.reedsmith.com/en/perspectives/2019/05/the-new-german-trade-secrets-act
HOW THE WAYFAIR RULING WEIGHS DOWN DROP SHIPPERS: WHAT YOU NEED TO KNOW
On 2nd March, HBK, a US financial services business, published a briefing that provides a guide on how drop shipping relationships have changed following the new tax laws and regulations after the decision in South Dakota v. Wayfair. This decision said that US states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state and overturned Quill Corp. v. North Dakota, with implications in particular for the booming online sales business. The article explains that in “drop shipping”, the seller then places an order with the supplier to fulfil the customer’s order and who will ship that product directly to the shipping address provided. The supplier never invoices or deals directly with the customer; they engage in a sale solely with the seller.
http://www.hbkcpa.com/how-the-wayfair-ruling-weighs-down-drop-shippers-what-you-need-to-know/
GUERNSEY 2-REG AIRCRAFT REGISTRY REACHES 500 AIRCRAFT
On 8th May, the States of Guernsey Aircraft Registry announced that it had registered its 500th aircraft, a little more than 5 years from the registry’s launch in December 2013. Run by the Dutch company SGI Aviation, 2-REG pays royalties to the Guernsey government on operating income.
https://www.weareguernsey.com/news/2019/2-reg-aircraft-registry-reaches-500-aircraft/
US CUSTOMS TAKES STEPS TO REINVIGORATE EXPORT OVERSIGHT
On 29th May, American Shipper reported that the increased national security controls placed on US exports has US Customs and Border protection working to strengthen its outbound cargo oversight. It says that CBP worked with industry members of the Commercial Customs Operations Advisory Committee (COAC) at the start of this year to establish the Export Modernization Working Group. The aims of the Group included creating operational requirements for electronic export manifest and to assist in expansion of the current carrier pilots to full operation; and to help CBP mandate the use of electronic manifest across all modes of transport. After 9/11, the US Congress and the Bush administration began to press for the processing of all export declarations through the Automated Export System (AES) and its Internet-based counterpart, AESDirect and, in 2002, Congress passed the Security Assistance Act, which mandated this activity. The article considers how AES works in relation to exports requiring an export licence, and proposed changes. It says that CBP is considering new ways to better train its officers with export enforcement responsibilities – a continuous problem for it is that resources for export enforcement activities are traditionally much smaller than what’s provided to import targeting and interdiction.
CHINA HINTS AT RARE EARTH EXPORT CURBS IN US TRADE WAR
Argus Media on 29th May reported that the Chinese government has given the strongest hint yet that it may restrict exports of rare earths to the US as part of the trade war between the countries. China will continue to keep most of its rare earth resources for domestic use, while meeting “reasonable demand” from other countries, top planning body the National Development and Reform Commission (NDRC) said – whilst singling out the US use of the materials for adverse comment. China accounts for more than 90% of global supplies of rare earths, while 70-80% of all US imports of rare earth oxides and metals come from China. China exported 4,100 tonnes of rare earth magnetic materials to the US last year. China has also put import duties of 5% to 25% on imports of rare earth ores and concentrates, oxides of several elements such as yttrium, praseodymium, terbium and mixed rare earth carbonates from the US, which will make it less viable to process the material in China.
https://www.argusmedia.com/en/news/1911167-china-hints-at-rare-earth-export-curbs-in-us-trade-war
HONG KONG REJECTS US WARNING ON SHIP BREACHING IRAN SANCTIONS
On 29th May, Yahoo News reported that Hong Kong has dismissed US warnings that it could face penalties if it does business with an oil tanker – the Pacific Bravo – headed for the city that allegedly violated sanctions on Iran. The ship is said to be owned by China’s Bank of Kunlun.
https://www.yahoo.com/news/hong-kong-rejects-u-warning-122706014.html
https://macaudailytimes.com.mo/us-warns-hong-kong-to-avoid-tanker-in-breach-of-iran-sanctions.html
IRELAND: CENTRAL BANK NOT IMPOSING SANCTIONS ON VULTURE FUNDS BREAKING CONDUCT CODE
On 29th May, the Irish Times reported claims by a member of the parliament that the Central Bank has not imposed a single sanction on vulture funds who do not comply with the code of conduct on mortgage arrears despite finding a “litany of breaches” of its terms.
TURKEY BREAKS UP EUROPE’S BIGGEST HUMAN SMUGGLING RING
TRT World on 29th May reported that 20 people, including alleged ringleader Akbar Omar Tawfeeq, have been detained in operations in 4 Turkish provinces after a year-long investigation into the organisation, Istanbul police say. It is said that the network mainly helped Afghan, Iraqi and Syrian nationals cross into European countries from Turkey by land and sea, police said, adding that the group had also worked with other smuggling groups in Ukraine, Italy and Greece. The leaders are mainly from northern Iraq, earned an average of €2 million annually.
https://www.trtworld.com/turkey/turkey-breaks-up-europe-s-biggest-human-smuggling-ring-27101
SPANISH POLICE BUST DRUG RING THAT SMUGGLED COCAINE-LACED PLASTIC
Today Online on 29th May reported that Spanish police have busted a cocaine-smuggling ring that dodged detection by mixing the drug with industrial plastic pellets before chemically removing it in 3 specially-designed laboratories. 12 people were arrested in what was described as the country’s biggest-ever seizure of cocaine-processing infrastructure. One of the laboratories was capable of producing up to 500 kg of cocaine per month. The crime ring was run by a family of Colombian origin.
https://www.todayonline.com/world/spanish-police-bust-drug-ring-smuggled-cocaine-laced-plastic
CYPRUS: MONEYVAL AML report due in December
The Financial Mirror reported on 29th May that a MONEYVAL delegation carried out an onsite visit to Cyprus from 13th-24th May, analysing – in the form of a mutual evaluation report – Cyprus’ level of compliance with the FATF 40 Recommendations and the level of effectiveness of Cyprus’s AML/CFT system, and with providing recommendations on how the system could be strengthened. The MER will be scheduled for discussion and adoption at MONEYVAL’s Plenary meeting, on December 3rd-6th.
http://www.financialmirror.com/news-details.php?nid=37037
INDIA’S PLAN TO TACKLE FINANCIAL CRIME, MONEY LAUNDERING IN MALDIVES
NDTV in India on 29th May reported that India had decided to appoint a panel of experts to work on money laundering and financial crime matters in the Maldives. Seconded to the Maldives, they would help develop strategies for law enforcement etc, local and international.
CHANNEL ISLANDS (AND ISLE OF MAN) ‘AMONG WORST TAX HAVENS’ WORLDWIDE
The BBC and local media reported on a Tax Justice Network study containing a list of corporate tax havens has named Jersey as the 7th most “aggressive” in the world. The TJN assigned a “haven score” based on 20 different criteria. Both Jersey and Guernsey scored 98 out of a possible 100, putting them “up there with the worst”. The top 3 are the BVI, Bermuda and the Cayman Islands, with Guernsey in 15th place and the Isle of Man in 17th.
https://www.bbc.co.uk/news/world-europe-jersey-48354081
https://www.manxradio.com/news/isle-of-man-news/iom-17th-worst-tax-haven-in-the-world/
UK: IVORY ACT 2018 – A POLITICAL TRIUMPH AT THE ART MARKET’S EXPENSE?
On 28th May, an article from Stephenson Harwood saying that the Act received Royal Assent on 20th December and is expected to come into force later this year. The Act introduces a near total-ban on the trade of ivory in the UK. It caused some consternation in the art market, particularly amongst dealers in antique ivory who are concerned their businesses will crumble. The article looks at the Act, exemptions, penalties, and how it may affect dealers, private collectors and museums. It also says that a further consultation is also due to take place on the extension of the elephant ivory ban to include hippopotamus, walrus and narwhal ivory.
https://www.shlegal.com/insights/ivory-act-2018-a-political-triumph-at-the-art-market’s-expense
THAILAND: NEW TRADE CONTROL ON WMD-RELATED ITEMS ACT TO BECOME EFFECTIVE ON 1ST JANUARY
An article from Baker McKenzie on 29th May is concerned with a WMD Act which regulates all items that are related to the spread of WMD. The regulated items include, WMD themselves, armaments and dual-use items as well as tangible and intangible items that could have commercial interest, technology or even software. Controlled activities under the WMD Act not only include export, but also re-export, transshipment, transit, being a brokerage and other actions with the purpose of spreading WMD.
https://www.bakermckenzie.com/en/insight/publications/2019/05/new-trade-control-on-weapons
DIAMONDS ARE NOT FOREVER: SEC STOPS ALLEGED DIAMOND-RELATED ICO
Hogan Lovells on 23rd May reported that the SEC has halted an alleged $30 million cryptocurrency Ponzi scheme targeting more than 300 investors in the US and Canada. The SEC claims that Jose Angel Aman operated a purported crypto business called Argyle Coin as a Ponzi scheme, using new investor funds to pay prior investors, and that that he allegedly sold unregistered securities in the 2 companies since May 2014, “falsely promising” investors that the companies would invest in whole diamonds to cut down and sell for profit.
https://www.hlengage.com/diamonds-are-not-forever-u-s-sec-stops-alleged-diamond-related-ico
FOREIGN BRIBERY AND AUSTRALIAN CRIMINAL LAW: AN OVERVIEW OF RECENT CASES
On 24th May, Nyman Gibson Miralis published an article starting with a\ revisiting to 2009, when the Australian Federal Police launched an investigation into an alleged international bribery racket involving politicians and government officials in the Asia-Pacific region. Codenamed ‘Operation Rune’, it was the first investigation of foreign bribery by an Australian law enforcement agency which resulted in foreign bribery charges. It then looks at the outcome of subsequent cases and the sentencing principles applied to foreign bribery cases.
https://ngm.com.au/foreign-bribery-australia-recent-cases/
ISLE OF MAN CONFIRMS REMOVAL OF 1 NAME FROM ISIL/AL-QAIDA SANCTIONS LISTS
On 30th May, a news release confirmed that, following UK and EU actions, MOHAMMED MAZEN SALAH has been removed from ISIL/Al-Qaida sanctions lists.
https://www.gov.im/news/2019/may/30/financial-sanctions-isil-daesh-and-al-qaida/
US TREASURY FINDS NO CURRENCY MANIPULATION BY TRADING PARTNERS IN MOST RECENT REPORT
HKTDC on 30th May reported that the US Treasury semi-annual foreign exchange rate report does not list any US trading partner as a currency manipulator although it expanded the list of trading partners targeted for close scrutiny of their currency practices from 6 to 9 – mainland China, Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore and Vietnam. Mainland China met only one of the criteria but remains on the list because it accounted for “an extremely large, persistent, and growing bilateral trade surplus with the United States”. The Trade Facilitation and Trade Enforcement Act established a process to determine whether a country may be pursuing foreign exchange policies that could give it an unfair competitive advantage against the US, engage countries that may be pursuing such policies, and impose penalties on those that fail to adopt appropriate policies.
NEW EU LAW GOVERNING SALE OF GOODS BETWEEN SELLERS AND CONSUMERS PUBLISHED
HKTDC on 29th May reported on EU Directive 2019/771 on certain aspects concerning contracts for the sale of goods. It says that the purpose of the new Directive is, among others, to lay down common rules concerning sales contracts concluded between sellers and consumers, in particular rules on the conformity of goods with the contract of sale, remedies in the event of a lack of such conformity, the modalities for the exercise of those remedies, and rules on commercial guarantees (e.g. a manufacturer’s warranty). The new Directive overhauls the earlier EU rules on legal guarantees which have been in place since 1999, and Member States have to apply the new Directive’s measures from 1st January 2022.
BERNIE MADOFF’S WIDOW TO PAY HUSBAND’S VICTIMS $600,000
The Mail Online on 29th May reported that Ruth Madoff has been ordered to pay $594,000 as part of a settlement with a court-appointed trustee who is liquidating her late husband’s asset and raising money for victims.
HUAWEI REVIEWS DEALINGS WITH FEDEX AFTER PACKAGES ARE ‘DIVERTED’
Lloyds Loading List on 29th May reported that logistics companies including DHL confirm new processes for handling Chinese tech firm’s shipments after US places it on ‘Entity List’ or trade ‘blacklist’. It says that Chinese telecoms equipment maker Huawei is reviewing its dealings with FedEx after it claimed the US package delivery company diverted 2 parcels destined for Huawei addresses in Asia to the US and attempted to divert 2 others, without detailed explanation, according to media reports.
3 ARRESTED IN FRANCE FOR LOOTING ARCHIVES OF LIBRARIES THROUGHOUT FRANCE
Europol on 29th May issued a news release saying that French National Police (OCBC – National Unit in charge of Cultural goods trafficking) and the Spanish Guardia Civil (UCO) have dismantled an organised crime group suspected of stealing maps in the archival collections of libraries throughout Europe.
SPANISH POLICE INVESTIGATE ALLEGED MATCH-FIXING IN FOOTBALL’S TOP FLIGHT
A news release from Europol on 29th May reported that Spanish National Police (Policía Nacional) searched 8 houses in 6 provinces across Spain in connection with match-fixing, money laundering and criminal gangs. Spanish law enforcement officers arrested 11 people, including current and retired football players and senior club figures. In addition, € 100 000 in cash was seized.
MEXICO’S CRIMINAL ASSET FORFEITURE PLAN FACES TEETHING PROBLEMS
Insight Crime on 29th May reported that the President has promised to use assets seized from criminal actors to fund a wave of social spending – with a new governmental entity called the Instituto para Devolverle al Pueblo lo Robado (IDPR), or the Institute for the Return of Stolen Goods to the People. This novel shift of a longstanding practice in other nations is, however, not without its defects. Mexico first passed an asset seizure law in 2009, and the new proposal follows a series of recent efforts to reform the 2009 law. However, the article points out that the President has a long history of publicity stunts that ultimately have little practical impact, from pledges to abolish political corruption to the creation of the new National Guard – but it says that, at least in theory, there is no reason that confiscated goods cannot fund social infrastructure projects. The article highlights a number of barriers to the IDPR emerging as an effective policy tool.
https://www.insightcrime.org/news/analysis/mexicos-criminal-asset-forfeiture-teething-problems/
FRENCH BOAT DEALER JAILED FOR SELLING SMALL INFLATABLE VESSELS TO UK-BOUND IRREGULAR MIGRANTS
Illicit Trade on 27th May reported that a man from the north of France who ran a company that sold used boats has been jailed for 18 months after being convicted of selling small inflatable vessels to illegal migrants looking to sneak across the English Channel to the UK.
REMINDER: COMMERCE DEPARTMENT PROHIBITIONS PERTAINING TO HUAWEI CAN APPLY TO TRANSACTIONS BY NON-US COMPANIES
On 29th May, Akin Gump published an article saying that some commentators and companies seem to be under the mistaken impression that non-US companies cannot be affected by the listing merely because they are not US companies or because they are working with non-US-origin commodities, software, or technology. Such conclusions are not necessarily correct. It stresses that violations of the Entity List prohibitions by a non-US company can lead to civil or criminal penalties, or other sanctions that would affect its ability to receive US-origin items. Thus, non-US companies engaging in transactions involving Huawei should not assume that they are not affected by the Entity List prohibitions merely because they are outside the US or because the products involved were manufactured outside the US.
WORLD BANK DEBARS 2 SUBSIDIARIES OF PARIS-BASED VEOLIA WATER TECHNOLOGIES FOR “FRAUDULENT AND COLLUSIVE PRACTICES” INVOLVING A PROJECT IN COLOMBIA
A post on the FCPA Blog on 29th May reported that France’s OTV was debarred for 2 years and Veolia Water Technologies Brasil Ltda was debarred for 1 year. The $410 million Río Bogotá Environmental Recuperation and Flood Control Project in Colombia was designed to improve water quality, reduce flood risks, and create multi-functional areas along the river.
The post also provides a list to all companies currently ban from bidding for World Bank funds and projects –
http://www.worldbank.org/en/projects-operations/procurement/debarred-firms
CANADA: SNC-LAVALIN TO STAND TRIAL ON BRIBERY CHARGES
On 30th May, the Wall Street Journal reported that a judge in Quebec has ruled that SNC-Lavalin Group Inc., which is at the centre of a political scandal for Canada’s Liberal government, will face a trial over bribery and fraud charges. A conviction could trigger a 10-year ban on the company’s ability to bid on Canadian government contracts, and the newspaper says that there is a risk that other governments across the world would honour that ban as part of their anti-corruption guidelines.
MIAMI EXECUTIVE PLEADS GUILTY IN VENEZUELA BRIBERY CASE
The Wall Street Journal reported on 29th May that José Manuel González Testino pled guilty, admitting to bribing Petróleos de Venezuela SA officials to secure and keep lucrative contracts. The case is part of a wider US federal investigation into Venezuela’s state-owned oil giant and its subsidiaries, including Houston-based oil refiner, Citgo Petroleum Corp. He admitted to bribing a former manager at PdVSA’s procurement unit, Bariven SA, and conspiring to make payments to other executives at PdVSA and its subsidiaries over a period of about 6 years through 2018, when he was arrested.
https://www.wsj.com/articles/miami-executive-pleads-guilty-in-venezuela-bribery-case-11559173318
https://buckleyfirm.com/blog/2019-05-30/executive-pleads-guilty-pdvsa-bribery-case
NETANYAHU’S WIFE AGREES TO PLEAD GUILTY IN CATERING CASE
On 29th May, the Wall Street Journal reported that Sara Netanyahu, the wife of Israeli Prime Minister, agreed to plead guilty to a lesser charge and pay a $15,000 fine to avoid trial on charges of misusing state funds for lavish catering at the couple’s official residence.
https://www.wsj.com/articles/netanyahus-wife-agrees-to-plead-guilty-in-catering-case-11559153304
FRENCH BANKING REGULATOR HAS BROUGHT SANCTIONS ENFORCEMENT ACTION AGAINST 3 COMPANIES IN THE PAST YEAR OR SO
On 30th May, the EU Sanctions Blog reported that the Sanctions Committee of the French Banking Regulator has brought enforcement action against 3 companies in the past year or so: Raguram International, La Banque Postale and CNP Assurances.
https://www.europeansanctions.com/2019/05/recent-sanctions-enforcement-by-french-banking-regulator/
US CUSTOMS AND SHANNON AIRPORT AUTHORITY SIGN MoU FOR EXTENDED PRE-CLEARANCE SERVICES
On 29th May, Homeland Security Today reported that the US Customs and Border Protection and the Shannon Airport Authority in Ireland have signed an MoU, which allows CBP pre-clearance to extend service hours at Shannon Airport starting June 1st. CBP service hours will be from 8 a.m. to 9 p.m. local time (they are currently 9 to 5). Shannon Airport, in 1986, became the first airport in Europe to offer US pre-clearance services for commercial carriers, and in 2010, the first in the world to offer full pre-clearance for private aircraft. Shannon remains the only airport in North America, Europe, and the Middle East providing this unique service. Such pre-clearance means the strategically stationing of CBP law enforcement personnel overseas to inspect travellers prior to boarding US-bound flights. This allows CBP officers to conduct the same immigration, customs, and agriculture inspections of international air travelers typically performed upon arrival in the US. Pre-clearance operations allow CBP to work with foreign law enforcement and commercial carriers to prevent the boarding of potentially high-risk travellers and air cargo while still providing efficient travel and trade facilitation benefits.
ISLE OF MAN CONFIRMS AMENDMENT OF DETAILS OF 9 INDIVIDUALS AND 2 ENTITIES SUBJECT TO IRAN SANCTIONS
On 30th May, a news release confirmed that changes had been to 11 entries on the Iran sanctions lists, following the decisions of the EU and UK.
https://www.gov.im/news/2019/may/30/financial-sanctions-iran-nuclear-proliferation/
THE DIFFICULTIES IN PROSECUTING ILLEGAL FISHING AND OTHER MARITIME CRIME
An article in Defence Web on 30th May looks at the conviction in Sao Tome et Principe of a Chilean captain and 2 Spanish crew members of the notorious fishing vessel, Thunder, were sentenced to 2 to 3 years in prison and fined a total of $15 million. The article says that the case illustrates just how hard it is to bring maritime criminals to justice. The ship fished for years across the globe, from Antarctica to the West African coast. It flew a Nigerian flag but was owned by a Spanish investor and operated through a shell company in Panama. It had changed hands many times over the years. When the Thunder’s crew intentionally scuttled it off the coast of São Tomé, activists boarded the boat to collect and preserve evidence. However, charges had to do with forged documents, recklessness and pollution, not illegal fishing; and the punishment didn’t fit the crime, as Interpol estimates that, as of 2013, the Thunder had made $60 million by illegally fishing for toothfish. The article goes on to provide an overview of the legal challenges posed in fighting maritime crime and what is being done to fight back.
https://www.defenceweb.co.za/security/maritime-security/maritime-trials-and-tribulations/
AUSTRALIA: FAKE BOOZE KINGPIN’S TAX BILL ‘SUBSTANTIALLY GREATER’ THAN $87 MILLION, REPORT SAYS
ABC News on 30th May that Rex D’Aquino’s, the man behind a multi-million dollar fake alcohol operation has been referred to ASIC to investigate possible fraud offences after a report claimed his tax bill may exceed $87 million. He was the sole director of Fernbrew Pty Ltd, an Orange-based alcohol manufacturer and wholesale that went into voluntary liquidation in January. A report suggests that it may have been trading while insolvent for up to 4 years.
https://www.abc.net.au/news/2019-05-31/fake-alcohol-boss-tax-bill-could-exceed-87-million/11162706
CANADA’S TOP SECURITIES REGULATOR TO SHARE INFO WITH MONEY LAUNDERING WATCHDOG TO FIGHT TERRORISM FINANCING
CBC News on 30th May reported that the Investment Industry Regulatory Organization of Canada, the national self-regulatory body that oversees all investment dealers and their trading in debt and equity markets says it will share more information with the country’s FIU, FINTRAC, to better protect against money laundering and terrorist financing.
https://www.cbc.ca/news/business/iiroc-fintrac-1.5156071
ALGERIA INVESTIGATES 50 CORRUPTION CASES INVOLVING SENIOR OFFICIALS
On 30th May, the Middle East Monitor reported that Algerian judiciary is investigating about 50 cases of corruption, in which ministers and former senior officials affiliated to the regime of former President Abdelaziz Bouteflika are suspected to be involved.
BAHAMAS: $1¾ MILLION MONEY LAUNDERING CHARGES AGAINST URBAN RENEWAL DEPUTY DIRECTOR AND 4 OTHERS
On 30th May, the Nassau Guardian reported that a magistrate ordered to continue money laundering charges against former Urban Renewal Deputy Director Michelle Reckley and 4 others. Reckley is accused of defrauding the government of $1,255,637.83 through the Urban Renewal Small Homes Repair programme in Grand Bahama, and laundering the money with the assistance of the others. The crimes allegedly occurred between 2016 and 2017 but the defendants were not charged until February 2019. The magistrate had originally dismissed the case, but the DPP had appealed the decision on the grounds that the magistrate had made errors in law.
https://thenassauguardian.com/2019/05/30/money-laundering-charges-against-reckley-others-reinstated
A CERTIFICATION SCHEME FOR EXPERT WITNESSES WILL START THIS SUMMER IN ENGLAND & WALES
The Law Society Gazette on 30th May reported that this is said to follow a growing public row about the collapse of a fraud trial after an ‘expert’ was found to be unqualified. The scheme, run by the Expert Witness Institute (EWI) in conjunction with the Judicial Institute at University College London, aims to create a ‘gold-standard’ register of experts. It will consist of an intensive assessment process to assess experts’ competency as witnesses.
UK: CONSULTATION ON LEGAL UNCERTAINTY IN THE APPLICATION OF ENGLISH PRIVATE LAW TO CRYPTOASSETS, DISTRIBUTED LEDGER TECHNOLOGY AND SMART CONTRACTS
On 30th May, Shearman & Sterling published an article saying that the UK Jurisdiction Taskforce has published a consultation paper on key issues of legal uncertainty regarding cryptoassets, distributed ledger technology and smart contracts. The UKJT is part of the LawTech Delivery Panel, which was established in 2018, with the aim of identifying barriers and opportunities for growth. The UKJT is involved in preparing an authoritative legal statement on the status of cryptoassets and smart contracts under English private law. The consultation closes on June 21st.
The consultation document is on the Law Society website –
https://www.lawsociety.org.uk/news/stories/cryptoassets-dlt-and-smart-contracts-ukjt-consultation/
https://finreg.shearman.com/UK-Consultation-on-Legal-Uncertainty-in-the-Appli
ITALIAN POLICE DETAINS 35 SUSPECTED MAFIOSI AND SEIZE ASSETS
OCCRP on 30th May reported that Italian police said that it detained 35 people and seized assets worth €30 million in a crackdown on a newly-discovered powerful ‘Ndrangheta clan near the south-eastern coastal town of Crotone. Suspects were charged with mafia association, drug trafficking, racketeering and illegal firearms possession.
AFRICAN CONTINENTAL FREE TRADE AGREEMENT ENTERS INTO FORCE
Clifford Chance on 30th May published a briefing describing the Agreement as a key milestone towards the establishment of a single African market. The CFTA Agreement was signed by 44 member states of the African Union at a summit in Kigali, Rwanda in 2018. It required ratification by 22 member states to take effect. If fully implemented, the CFTA will create a single African market for goods and services, covering an estimated 1.2 billion people with a combined GDP of over $2.5 trillion across 55 member states. The CFTA will be then largest free trade zone by numbers of countries since the WTO was formed.
https://www.cliffordchance.com/briefings/2019/05/african_continentalfreetradeagreemententer.html
CAN SAND MINING BE SUSTAINABLE?
On 30th May, an article from Chatham House says that sand is a critical ingredient for many of the materials that we take for granted: concrete, glass and asphalt. Sand and coarse aggregates form the backbone of the modern world and also, through land reclamation, the ground on which we live. A growing global population increasingly living in cities has led to a spiralling rise in the extraction of sand and aggregates, with serious environmental, political and social consequences. The UN estimates that overall extraction could be in the region of 40 billion tonnes per year – that equates to 18 kg of sand each day for every person on the planet. Among the statistics used is to say that, since 2003, China has poured more concrete every 3 years than the US did in the entire 20th Century; and that Singapore has increased its land area by 20% since the mid-1960s using large volumes of Indonesian and Malaysian marine sand. Sand extraction has also caused tensions between countries. Indonesia, Vietnam and Malaysia have imposed limits or temporary bans on the export of sand to Singapore which has been the world’s largest importer of sand over the past 20 years mostly for land reclamation. There is also illegal sand mining and export and, in India, ‘sand mafias’ have taken control of sand mines and there have even been reports of murders of local community members who complained.
https://hoffmanncentre.chathamhouse.org/article/driven-to-extraction-can-sand-mining-be-sustainable/
UN SECURITY COUNCIL RENEWS SANCTIONS AGAINST SOUTH SUDAN
On 30th May, the UN announced that the Security Council had decided to renew until 31st May 2020 the arms embargo imposed on South Sudan last year, as well as the sanctions put into place in 2015 on that blocking peace in the country.
https://www.un.org/press/en/2019/sc13827.doc.htm
TURNING A BLIND EYE TO KHAT USE IN THE WEST DOES VULNERABLE COMMUNITIES IN WHICH IT IS CONSUMED FEW FAVOURS
On 30th May, an article in Illicit Trade was concerned with a paper published by scientists at the Kenya Medical Research Institute (Kemri) in the BMC Psychiatry Journal earlier this month revealed that consumption of a herbal stimulant popular with East African communities across the globe could elevate “psychotic symptoms”. Consumption of the drug did appear to contribute to mental health disorders. Khat is an amphetamine-like psychostimulant that is thought to be consumed by some 10 million people worldwide. It is derived from the Catha Edulis plant that grows in and around the horn of Africa, and contains ephedrine-like compounds, primarily the psychoactive chemical cathinone – providing mild euphoria. The UK allowed its possession, sale and use to remain lawful until 2014 and, until then, the UK had acted as a global hub through which international traffickers would process tonnes of the drug each day to be sent on to countries where it was banned. Now that khat is outlawed by most Western nations, organised criminals control a global illicit trade in the drug worth billions of dollars a year.
MIDDLE EAST MISSILE MANIA: IT’S NOT JUST IRAN THAT HAS MISSILES OR CAN MAKE THEM
On 28th May, NTI published a report by Jeffrey Lewis of CNS and Arms Control Wonk podcast fame, saying that, given the amount of press attention, one might be forgiven for focusing on Iran’s missiles to the exclusion of all others. And yet, Iran’s missile programme does not exist in a vacuum. It is part of a decades-long process during which many regional states have acquired similar capabilities. In fact, Iran is one of 11 different countries in the region that possess long-range missiles — missiles that either approach or exceed the threshold defined by the MTCR for “Category I” missiles. Countries with long-range missiles include: Bahrain, Egypt, Iran, Israel, Qatar, Saudi Arabia. Syria, Turkey, UAE and Yemen. While many of these missile systems have been imported, 6 of the 11 countries on this list either possess or are developing a domestic manufacturing capability. The report includes an interactive map that details all major missile programmes in the region, highlighting production facilities, testing grounds and missile bases. It also touches upon non-state actors missile use and combat launches, as well as open-source case studies. The report looks at the origin of Iranian missiles in North Korean Scuds (the missiles infamous from Iraqi use against Israel during the Gulf War). The report then says that, while the presence of long-range missiles has been a problem in the region for decades, their proliferation appears to be entering a new and more dangerous phase, with programmes becoming increasingly sophisticated and indigenous – Iran is far from the only country developing new and potentially destabilising missile capabilities.
https://www.nti.org/analysis/articles/middle-east-missile-mania-its-not-just-iran/
PROCUREMENT – WORLD BANK LISTING OF INELIGIBLE FIRMS & INDIVIDUALS
The businesses and individuals listed by the World Bank are ineligible to be awarded a World Bank-financed contract for the periods indicated because they have been sanctioned under the Bank’s fraud and corruption policy.
http://www.worldbank.org/en/projects-operations/procurement/debarred-firms
ESAAMLG FOLLOW-UP AML/CFT REPORTS – BOTSWANA, ZIMBABWE, MAURITIUS
On 24th/25th May, the FATF-style regional body published follow-up reports for these 3 states in technical compliance (TC) matters. Overall, the expectation is that countries will have addressed most if not all TC deficiencies by the end of the third year from the adoption of their mutual evaluation reports (MER).
Botswana is said to have made good progress in addressing most of the TC deficiencies identified in its MER. It has made progress in addressing deficiencies; and the ESAAMLG has re-rated the country on 31 of the 40 Recommendations.
https://esaamlg.org/reports/FUR%20Botswana-April%202019.pdf
Mauritius has made progress in addressing deficiencies; the ESAAMLG has re-rated the country on 11 of the 40 Recommendations.
https://www.esaamlg.org/index.php/all_news/readmore_news/414
Since its 2016 mutual evaluation, Zimbabwe has made progress in addressing deficiencies; the ESAAMLG has re-rated the country on 10 of the 40 Recommendations.
Overall, in light of the progress made by Zimbabwe since the adoption of its MER, the re-ratings for its technical compliance with the FATF Recommendations were considered and approved by the ESAAMLG Task Force of Senior Officials Plenary as indicated in the schedule below.
UK: FRAUD TRIAL COLLAPSES AS ‘EXPERT’ WITNESS USED IN AT LEAST 20 OTHER CASES FOUND TO BE UNQUALIFIED
The Evening Standard and others reported on 29th May that Andrew Ager, who has been used in a string of court cases, was found to have no academic qualifications and could not remember if he had passed his A-levels, defence lawyers said. It is reported that he also admitted he had never read a book on carbon credits, although he had once watched a documentary about such permits. This occurred in case involving alleged carbon credits fraud, which saw 8 men acquitted. A law firm is quoted saying that the safety of the convictions in every previous carbon credits prosecution is now in question. The defence team also said that the CPS and the police did not disclose the fact that another expert witness, Peter Buckie, had faced misconduct allegations in 2013.
https://www.theguardian.com/law/2019/may/29/trial-abandoned-because-expert-witness-had-no-expertise
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