9th May 2019
DENVER VOTES TO BECOME FIRST US CITY TO DECRIMINALISE ‘MAGIC MUSHROOMS’
The Epoch Times on 9th May reported that an initiative called for Colorado’s capital to end the imposition of criminal penalties for individuals at least 21 years of age for using or possessing psilocybin. A poll suggests the vote on 16th May is, at present, likely to narrowly be in favour of decriminalising the substance. However, psilocybin would still remain illegal under both Colorado and federal law.
ANTIQUES SMUGGLED TO US FROM INDIA COULD BE RETURNED SOON
On 9th May, The Hitavada carried an article saying that a cache of ancient Indian antiques and valuable artefacts, seized by the US Immigration and Customs Department from arrested art smuggler Subhash Kapoor, have been identified by Indian archaeologists and could soon be returned to India. Over 300 antique objects, including idols dating to the Gupta period (5th-6th century AD) and terracotta objects of the Harappan culture are involved. Kapoor was arrested in 2011 in Frankfurt, extradited to India and is being tried for theft of objects from various places.
INDONESIA HAS BEGUN REPATRIATING CREW OF DETAINED NORTH KOREAN VESSEL HELD SINCE APRIL 2018 FOR LARGE-SCALE ILLICIT COAL SMUGGLING
NK News on 8th May reported that the process of repatriating the 25 crew members of the detained DPRK-flagged Wise Honest had begun. The ship was detained last year whilst using a false identity. Authorities had reported that a South Korean company called Enermax was the “final destination/recipient of the coal upon the STS transfer of the coal in Balikpapan”, but that company denied any knowledge of the coal’s origins, saying “we simply received an offer of Indonesia-origin coal from someone who seemed to be a local broker in Indonesia”. The vessel is to remain detained in Indonesia.
BRAZILIAN AUTHORITIES ARREST WARRANTS FOR 3 EXECUTIVES OF THE BANCO PAULISTA
KYC 360 on 9th May reported that Brazilian authorities have issued arrest warrants for 3 executives of the Banco Paulista as part of a sweeping investigation into money laundering linked to the construction conglomerate Odebrecht. Federal police say the bank hired front companies that issued fictitious contracts to justify non-existent services, and that about $12.2 million was laundered between 2009 and 2015.
GERMANY BLOCKING EU PLANS TO STOP SPYWARE TRADE WITH DICTATORS
An exclusive on EurActiv on 9th May reported that EU proposals to establish export restrictions on spyware are being held back by Germany, which has adopted an ambiguous stance on the matter. The amendment on dual-use items originally arose after the 2011 Arab Spring, where European technology was allegedly being used by authoritarian regimes to oppress activists. It aims to clamp down on exports that can be used in the surveillance of citizens in countries with less than democratic regimes. The 2016 proposal for a reform in this area were rubber stamped by the European Parliament in January 2018, but have since then suffered setbacks in the Council of Ministers. In May 2018, a group of Member States, including the UK and since joined by France, published a paper criticising the move.
EU COMMISSION NEW IT TOOL TO TRACK ILLEGAL, UNREPORTED AND UNREGULATED FISHING (IUU) FROM THIRD COUNTRIES
On 9th May, EurActiv carried a report about the new import database, called CATCH, launched at this year’s Seafood Expo Global, the world’s biggest seafood fair taking place in Brussels. Only fishery products coming from legal catches are allowed to enter the EU Single Market. The new real-time database includes catching certificates, processing statements and importer declaration, covering the majority of direct and indirect fishing captures imported in the EU. It is said to be just the first step, as new versions of CATCH will be deployed in the coming years, with the aim of a fully digital system.
CHINA ARRESTS PRIVATE FUND EXECUTIVES IN MASSIVE FRAUD CASE
Banking & Finance in Singapore on 9th May reported that Chinese authorities have arrested 5 senior executives of Shanghai Fuxing Group, a conglomerate that has missed billions of dollars in payments in one of the nation’s most high-profile financial investigations. Fuxing Group’s chairman, Zhu Yidong, fled the country last year as investors protested their losses, but was arrested and sent back to China.
CLAIMS THAT DEUTSCHE BANK VICARIOUSLY LIABLE FOR BRIBES
On 9th May, the Irish Independent reported litigation in which Stichting Vestia, a Dutch affordable-housing provider that nearly collapsed as a result of derivatives losses, is suing Deutsche Bank, saying the bank is responsible for bribery. It is claimed that the bank paid €3.5 million in commissions to a Dutch company, and about €1.75 million of that went to a man who single-handedly conducted the affordable-housing provider’s derivatives trading – and who it is said the bank wined and dined. The argument appears to be that, even if the bank did not know of the bribery, it should have done.
DEVOLUTION OF VAT REVENUES TO SCOTLAND DELAYED OVER ‘ENORMOUS RISKS’
The National in Scotland on 9th May reported that it has been delayed because of fears it would result in a “significant hit to the Scottish budget”. The deal would see the Scottish Government take in the first 10p of standard rate of VAT, and the first 2.5p of the reduced rate; and in return, the block grant to Scotland from Westminster would have been reduced accordingly.
BELGIAN TAX EVADER EYES DUBLIN STUDENT FLATS PLAN
The Irish Independent on 9th May reported that Didier De Witte, a Belgian millionaire who was this year sentenced to prison for a €1 million-plus tax dodge, is behind plans for a 319-bed student accommodation scheme in Dublin. De Witte is using an Irish firm called Molaga Capital to advance the student accommodation scheme, which has recently been approved for the planning process as a strategic housing development.
WARREN BUFFETT COMPANY TAKES $377 MILLION CHARGE TIED TO SOLAR COMPANY THAT US AUTHORITIES LINKED TO FRAUD
On 9th May, Reuters reported that Berkshire Hathaway Inc has said a $377 million charge it incurred recently was tied to a solar generation company, DC Solar – though this was not named by the company, that US authorities have linked to fraud. The SEC has accused DC Solar’s owners by name of engaging in a Ponzi scheme, according to a separate court filing.
LIVERPOOL HOSTS ‘LARGEST-EVER’ £3.8 BILLION GROUP ACTION AGAINST MINING COMPANY
The Law Society Gazette on 9th May reported that a $5 billion group action pitting representatives of potentially more than 200,000 Brazilians against mining giant BHP Billiton has been filed – said to be largest in UK history. It is seeking compensation for victims of the Samarco dam collapse in Brazil in 2015, which was reported to have killed 19 people and displaced around 700, destroying many nearby villages. The claim was filed in the Business and Property Courts in Liverpool,
HELMS-BURTON TITLE III ON CUBA ACTIVATED
On 8th May, Gowling WLG published a helpful guide to this piece of legislation – more correctly called Title III of the Cuba Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 -concentrating on its possible effects on Canadian companies.
PROOF THAT BELGIAN ARMS SOLD TO SAUDI ARABIA ARE BEING USED IN YEMEN
The Brussel Times on 8th May follows up a report that Saudi Arabia is using weapons and arms technology in the civil war in Yemen, despite assurances given by the Walloon regional government when export licences were granted. It says that, when issuing export licences for the arms deliveries from Mecar and FN Herstal, the Walloon government received assurances the weapons were intended only for internal use by the Saudi national guard. It also reports that despite an embargo by Wallonia on new export licences to Saudi Arabia following the murder last year of journalist Jamal Khashoggi, arms are still being exported under licences issued before last October.
UN PANEL FINDS CHINESE MISSILES, UAV IN LIBYA
On 8th May, Missile Threat reported that UN experts are currently investigating the use of Chinese-made missiles and drones after they identified a Chinese-made Blue Arrow air-to-surface missile and the probable use of a Wing Loong UAV in missile strikes near Tripoli.
US BLOCKED ISRAEL’S BID TO SELL DAVID’S SLING MISSILE SYSTEM TO SWITZERLAND
Breaking Defense on 8th May reported that the US has apparently pressured Israel to keep its David’s Sling anti-missile system out of a Swiss competition for an anti-missile system in favour of Raytheon’s Patriot. The Israeli system was developed with the help of the US FMF (Foreign Military Financing) funds, and in spite of the fact that Raytheon is the partner of Rafael in the programme, the US administration has acted in the interest of the US company.
US FEDERAL AUTHORITIES NOW TRACKING 850 POSSIBLE DOMESTIC TERRORISTS ACROSS US, AS WHITE SUPREMACY CASES JUMP
ABC News on 8th May reported that the FBI is currently investigating nearly 850 people across the US as possible domestic terrorists, and the number of cases targeting white supremacists, white nationalists and other racially-motivated extremists has jumped in the past 6 months – and about 40% target subjects who adhere to racist ideologies, and “a significant majority” of them are white nationalists or white supremacists.
HACKERS STEAL BITCOIN FROM GLOBAL CRYPTOCURRENCY EXCHANGE
On 7th May, Cadwalader reported that Binance, a global cryptocurrency exchange, has reported a security breach in which hackers seized over 7,000 bitcoin (worth approximately $41 million) in a single transaction. Hackers obtained user information using phishing, viruses and other attacks.
BIOLOGICS SCANDAL THREATENS ENTIRE SAMSUNG GROUP
Korea Joongyang Daily in its 10th May edition reported that the Samsung BioLogics accounting scandal threatens to engulf other Samsung companies and drag the entire group, and some of its top executives, into the fray. Fraud was alleged after raids located stashes of information hidden under the floor of a factory and testimony claiming that the destruction of evidence was ordered at the highest levels. Prosecutors have requested arrest warrants for 2 Samsung Electronics executives for ordering Samsung BioLogics employees to hide servers with data detailing the accounting being scrutinised by regulators. A court has arrested a Samsung BioLogics employee in charge of security on the charge of concealing accounting data and a server. The biopharmaceutical arm of Samsung Group has claimed that its changes of accounting methods are in line with international accounting standards. Investigators suspect that the Samsung Group as a whole was involved in the accounting scandal.
GUINEA PRESIDENT TO TAKE LEGAL ACTION OVER BOLLORE CORRUPTION CASE IN FRANCE
On 4th May, the Sowetan Live in South Africa reported that Guinean President Alpha Conde said he would file a complaint in the French courts over allegations raised in a corruption case involving French billionaire Vincent Bollore. Bollore was charged last month over contracts to operate 2 African ports is by far the most prominent business leader to be investigated in France for suspicious activities in Africa, after an investigation into how its African logistics subsidiary secured contracts to run Lome port in Togo and Conakry port in Guinea. It says that prosecutors are looking at whether Bollore Group’s communications arm, Havas, undercharged Guinean President Alpha Conde and Togolese President Faure Gnassingbe for work on their campaigns.
MATTEO SALVINI ALLY SACKED FROM ITALY’S CABINET AMID CORRUPTION PROBE
Euronews on 9th May reported that Armando Siri, the undersecretary of transport, stands accused of taking bribes worth €30,000 from renewable energy companies operating in the south of Italy.
TAX AVOIDANCE AND TAX EVASION
On 9th May, the House of Commons Library published a briefing which provides an introduction to the issue of tax avoidance, looking in detail at the development of follower notices and accelerated payments, before discussing the current Government’s approach, including the introduction of the 2019 Loan Charge.
UK SANCTIONS POST-BREXIT GUIDANCE – RUSSIA
On 9th May, the FCO and OFSI issued guidance for implementation of Russia sanctions in the UK after the UK leaves the EU (if it ever does…). It contains guidance on the prohibitions and requirements imposed by the Regulations. It additionally provides guidance on best practice for complying with the prohibitions and requirements; the enforcement of them; and circumstances where they do not apply.
THE RICH AND POWERFUL CASH IN ON UKRAINE’S GREEN ENERGY GOLD RUSH
An article from OCCRP on 9th May says that Ukraine is now undergoing a boom in green energy investment, pushed by big government incentives that will become less lucrative for plants that start service after January 1st 2020. However, analysis has found that Ukraine’s green energy boom disproportionately benefits powerful, politically-connected businessmen. Among these are the country’s richest man, Rinat Akhmetov, Interior Minister Arsen Avakov, and a parliamentary ally of President Petro Poroshenko. Moreover, growing government support for green energy production may put pressure on the state energy provider to pass costs on to consumers who can ill afford them.
BRADFORD BANKRUPT HAS RESTRICTIONS EXTENDED FOR 8 YEARS
The Insolvency Service on 9th May issued a news release saying that a Bradford resident who spent £48,000 on luxury items despite being insolvent has bankruptcy restrictions extended for 8 years.
US: BASKETBALL BRIBERY TRIAL CONCLUDES
On 9th May, Baker McKenzie reported that a prospective agent and a former shoe company consultant were convicted of conspiring to commit bribery in the final major case to go to trial as part of a vast federal investigation into college basketball recruiting practices. In this most recent case, the defendants were accused of scheming to pay college basketball coaches in exchange for their help in funnelling players with NBA potential to their sports agency.
JOINT STATEMENT BY EU, FRANCE, GERMANY AND UK ON THE JCPOA
On 9th May, this statement said that the parties remain fully committed to the preservation and full implementation of the JCPoA, a key achievement of the global nuclear non-proliferation architecture, which is in the security interest of all; and they urged Iran to continue to implement its commitments under the JCPoA in full as it has done until now and to refrain from any escalatory steps.
FCA DECISION NOTICE RE 3 FIRMS AND 5 INDIVIDUALS OVER PENSION ADVICE AND MISLEADING FCA
On 9th May, a news release advised that the Financial Conduct Authority (FCA) has published Decision Notices in respect of 3 firms (Financial Page Ltd, Henderson Carter Associates Limited and Bank House Investment Management Limited) and 5 individuals (Andrew Page, Thomas Ward, Aiden Henderson, Robert Ward and Tristan Freer).
ISLE OF MAN: VAT ORDER TO REPLICATE EU VIES INFORMATION DISCLOSURE POWERS IN EVENT OF BREXIT
The Value Added Tax (Disclosure of Information Relating to VAT Registration) Order 2019 is on the May Order paper for the Isle of Man’s parliament. It provides for the Treasury to disclose specified information to a person who makes an enquiry about a VAT registration number. The Treasury, may in response to such an enquiry, inform the enquirer whether or not the number is a VAT registration number allocated to a person registered on the Island’s VAT register, and if is disclose that person’s name and address. The Order is designed to replicate broadly the current EU VIES legislation which will no longer be available after the United Kingdom leaves the EU. Currently, one can verify the validity of EU-wide VAT numbers using the online VIES system.
ISLE OF MAN FIU STRATEGIC DELIVERY PLAN 2019-20
The Order Paper for May before the Island’s parliament includes this Plan.
4 LATIN AMERICAN COUNTRIES SIGN SEIZED ASSET SHARING AGREEMENT
On 9th May, the FCPA Blog carried a post saying that at the end of 2018 4 Latin American states signed a multilateral framework agreement regarding the disposition of confiscated property resulting from crimes linked to transnational organised crime, significantly advancing the discourse on asset sharing – but it is limited to only certain organised crimes. The post says that this signals the political willingness to develop international legal frameworks around asset sharing and the necessity of it. Argentina, Brazil, Paraguay and Uruguay signed the Framework Agreement for the Disposition of Forfeited Assets for Transnational Organized Crime in the MERCOSUR (MERCOSUR Framework Agreement) in December 2018. The post says that, as the MERCOSUR Framework Agreement is put into action, other countries and multilateral organisations can use it as a model for co-operation and legislation.
DOJ ISSUES UPDATED GUIDANCE ON EVALUATION OF CORPORATE COMPLIANCE PROGRAMMES
On 9th May, Wilmer hale joined those commenting on, and analysing the updated guidance from the DoJ. It says that the new guidance is the most expansive effort to date by the DoJ to publicise and explain its views on effective compliance programmes. It also says that while much of the content may not be new to seasoned compliance professionals, there are some key areas where additional colour and nuance have been provided relating to otherwise familiar topics, and for these reasons, the 2019 Guidance is worthy of close consideration.
UN LAUNCHES PROGRAMME TO DETECT AND DISRUPT TERRORIST TRAVEL
Homeland Security Today on 8th May reported that a new programme aimed at improving the tracking of suspected terrorists, using state-of-the-art software, was launched by the United Nations Office of Counter-Terrorism (UNOCT). It is designed to help countries to enhance the detection of foreign terrorist fighters (FTF) and serious criminals, through the collection, identification, and analysis of their passenger data. Several UN counter-terrorism departments, as well as the International Civil Aviation Organization, will work closely together to implement the initiative, which provides countries with free access to advanced “goTravel” software, which analyses travel data to help countries detect and disrupt terrorists’ movements.
ADVANCED CARGO SCANNER SET FOR TESTS AT JFK INTERNATIONAL AIRPORT
On 8th May, Homeland Security Today reported that the new system, Multi-View Computed Tomography (MVCT) combines the complementary techniques of multi-view radiographic X-ray transmission and 3D CT (on a static gantry) to screen densely packed cargo in pallets without the need to individually take items out for security inspection.