Day: May 11, 2019

11^th May 2019

435 MILLION ILLEGAL CIGARETTES SMOKED IN IRELAND LAST YEAR

The Irish Examiner reported on 11^th May that 1 in 5 packets of cigarettes smoked in Ireland last year were either illegal or imported legally from abroad.  The Revenue estimates that 13% of all packs smoked in Ireland in 2018 were illegal, the same rate as in 2017 – the average across the EU is 10.4%.  A further 9% of cigarettes in 2018 were classified as legal, cross-border purchases, also the same level as the previous year, and research also highlighted a large increase in the level of illegal packs of roll-your-own tobacco in use during 2018.

https://www.irishexaminer.com/breakingnews/ireland/435m-illegal-cigarettes-smoked-here-last-year-923462.html

 EX-BHS OWNER DOMINIC CHAPPELL CHARGED WITH MONEY LAUNDERING AND TAX EVASION

The Daily Mail on 10^th May reported that the tycoon blamed for the collapse of High Street giant BHS has been charged with money laundering and tax evasion linked to profits from his bankrupt finance company Swiss Rock Ltd and involving the purchase of 2 yachts.

https://www.dailymail.co.uk/news/article-7015817/Ex-BHS-owner-Dominic-Chappell-charged-money-laundering-tax-evasion.html

ITALIAN ANTI-MAFIA CHAMPION SENTENCED FOR CORRUPTION

Politico on 11^th May reported that a Sicilian member of Italy’s employers’ organisation found guilty of links to the mob.  Antonello Montante was sentenced to 14 years in jail for a string of offences including corruption.  He was the national spokesman on legal issues for Italy’s employers’ organisation, Confindustria, as well as the head of its Sicilian branch.  The reports says that a probe was launched in 2015 after a string of mafia turncoats told prosecutors that, despite his attacks on organised crime, Montante was actually involved with Sicilian mob bosses.

https://www.politico.eu/article/antonello-montante-italian-anti-mafia-champion-sentenced-for-corruption/

CONFISCATION OF ALL THE AMOUNT OF UNDECLARED MONEY BY CUSTOMS VIOLATES PRINCIPLE OF PROPORTIONALITY

An old case, reported in October 2018 by ECHR Case Law, concerns a case where Sergey Gyrlyan, a Russian national, had $90,000 taken from him by customs officers at a Moscow airport in 2014 whilst en route to Odessa – the money being part of the proceeds of a house sale.  He argued that he thought the customs controls came after security checks, which is why he had failed to declare the currency.  Russian courts ordered confiscation of all of the cash involved.  However, the European Court of Human Rights determined that to confiscate the whole amount was disproportionate and violated Article 1 of the First protocol to the and awarded damages ECHR.

https://www.echrcaselaw.com/en/echr-decisions/topics/property/confiscation-of-all-the-amount-of-the-undeclared-money-at-customs-violates-the-principle-of-proportionality/

CAN NATURALISED US CITIZENS HOLD DUAL CITIZENSHIP? IT DEPENDS!

On 10^th May, Harris Beach PLLC published an article saying that, despite what the oath of allegiance of new US citizens may suggest, the US government does not control whether foreign nationals retain foreign citizenship; the foreign governments do, and each government handles the issue differently.  It gives the example of Canada, which allows dual nationality, and Germany, which regards the oath of having the effect of revoking any previous German nationality.

https://www.jdsupra.com/legalnews/can-naturalized-u-s-citizens-hold-dual-18008/

INTERNATIONAL CRIMINAL COURT CHIEF PROSECUTOR CALLS FOR 3 OUTSTANDING ARREST WARRANTS FOR LIBYANS ACCUSED OF VARIOUS WAR CRIMES AND CRIMES AGAINST HUMANITY TO BE EXECUTED

On 10^th May, Jurist reported that the ICC chief prosecutor before the UN Security Council for the execution of 3 outstanding arrest warrants for Libyans accused of various war crimes and crimes against humanity.  The ICC has issued multiple warrants for the arrests of Saif Al-Islam Gaddafi (the son of the country’s previous ruler), Al-Tuhamy Mohamed Khaled, and Mahmoud Mustafa Busayf Al-Werfalli over the last decade, accusing the men of various crimes ranging from unlawful imprisonment of political foes to torture and mass murder, but all 3 remain at large in Libya.

https://www.jurist.org/news/2019/05/icc-prosecutor-urges-arrest-of-three-libyans-for-war-crimes/

REPORTS ON THE NEW EXTERNAL SECURITY POLITICS OF THE HORN OF AFRICA REGION

The Stockholm International Peace Research Institute has announced that it has expanded its research on security issues in the Horn of Africa region by launching a new series of publications investigating major questions for the future security and stability of the region.  Notably, it highlights the increasing importance of geopolitical, commercial and military competition as the driver of foreign military deployments to the region.  Papers include one on foreign military presence in the Horn of Africa region-

https://www.sipri.org/publications/2019/sipri-background-papers/foreign-military-presence-horn-africa-region

https://www.sipri.org/news/2019/sipri-launches-reports-new-external-security-politics-horn-africa-region

AMID OUTCRY OVER YEMEN WAR, SAUDI SHIP LEAVES FRANCE WITHOUT ARMS CARGO

Reuters on 11^th May reported that a Saudi vessel that had been due to load weapons at a northern French port set sail without them and headed for Spain, after a rights group unsuccessfully tried to block the cargo on humanitarian grounds.

https://www.reuters.com/article/us-yemen-security-france-arms/amid-outcry-over-yemen-war-saudi-ship-leaves-france-without-arms-cargo-idUSKCN1SG15N

BRAZIL’S BOLSONARO SIGNS DECREE EASING GUN IMPORTS AND AMMUNITION LIMITS

On 7^th May, Reuters reported that President Jair Bolsonaro had signed a decree to ease restrictions on gun imports and increase the amount of ammunition a person can buy.  Previously, imported arms were banned if there was a similar domestic-made product.

https://www.reuters.com/article/us-brazil-politics-guns/brazils-bolsonaro-signs-decree-easing-gun-import-ammo-limits-idUSKCN1SD2OU

See also the Small Arms Survey website for update database and interactive guide.

http://www.smallarmssurvey.org/de/weapons-and-markets/stockpiles/unplanned-explosions-at-munitions-sites.html

And a factsheet at –

http://www.smallarmssurvey.org/fileadmin/docs/V-Fact-sheets/SAS-Fact-Sheet-UEMS.pdf

UNDERSTANDING THE TRADE IN SMALL ARMS: KEY CONCEPTS

This Chapter is part of An Introductory Guide to the Identification of Small Arms, Light Weapons, and Associated Ammunition, published by the Small Arms Survey in November 2018.  The goal of the Handbook is to provide the reader with a basic understanding of how to identify and analyse small arms and light weapons, and to track their proliferation.

http://www.smallarmssurvey.org/fileadmin/docs/Q-Handbooks/HB-06-Weapons-ID/SAS-HB-06-Weapons-ID-ch2.pdf

On 10^th May, White & Case published an article saying that correspondent banking relationships are once again in the news.  As regulators and correspondent banks increase their scrutiny of these relationships and, in the case of correspondent banks, demand more and more rigorous controls, respondent banks face the threat of account terminations and de-risking by their correspondent banks.  It argues that it is time for the banks affected to re-examine the sufficiency of their own anti-financial crime controls to ensure continued access to major financial centres.  The firm says that the article is intended to help respondent banks understand the regulatory, supervisory, and enforcement pressures on correspondent banks and provide an overview of how to best manage correspondent banking relationships.  AML/CFT practitioners have long recognised the risks posed by correspondent bank accounts, and these are highlighted in the USA PATRIOT Act.  US authorities expect correspondent banks to manage their risks wherever they lie, and therefore they need to analyse both general and customer-/transaction-specific risks.  It concludes that, at a minimum, establishing and maintaining a solid anti-financial crime programme is a foundation element for a respondent bank seeking to establish a long-lasting partnership in a correspondent banking relationship.

https://www.whitecase.com/sites/default/files/2019-05/correspondent-risk-financial-crimes-and-correspondent-banking.pdf

On 10^th May, Accountancy Daily reported that HMRC has issued Spotlight 51 about a tax avoidance scheme that attempts to disguise income and other taxable profits as loans or fiduciary receipts – marketed as a wealth management strategy and claims to provide remuneration or profits free of tax.

https://www.accountancydaily.co/cch_uk/cln/news_008668_spotlight51

Spotlight 51 is at –

https://www.gov.uk/guidance/remuneration-trust-tax-avoidance-using-loans-or-fiduciary-receipts-spotlight-51

The Solicitors Regulatory Authority has published a Thematic Review which says that the credibility of solicitors and the services they offer makes them an attractive target for criminals, who want to launder their gains – and hence, solicitors have a vital role – and opportunity – to help tackle the problem.  Therefore, the SRA has produced this document to highlight relevant money laundering and terrorist financing risks that it considers relevant to those firms and individuals it supervises.  It says that trusts and companies are attractive to money launderers because individuals can:

• obscure the beneficial ownership and control of assets and wealth;
• create and control multiple legal entities at a relatively low cost;
• create complex and opaque structures;
• operate across multiple jurisdictions; and
• avoid tax or duties.

The SRA says that, in July 2018, its Risk Outlook highlighted its growing concern about the risks and challenges posed to the profession by those looking to launder the proceeds of crime and finance terrorism; and it explored this further in an Autumn update, where the concern was raised as a priority risk.  In 2018, it reviewed 59 law firms in England and Wales that told the SRA that they carried out trust and company service provider (TCSP) work.  The report summarises what was found, and builds on 2 previous money laundering reviews in 2016 and 2017.  The findings included –

• most law firms who carry out TCSP work are adequately meeting their obligations to tackle money laundering – but a “significant minority” are not doing enough, with some falling seriously short;
• a risk assessment is required in legislation and should be the backbone of a firm’s AML approach – but the SRA found that too many firms’ approach was inadequate;
• concerns included inadequate processes to manage risks around politically exposed persons (PEP) – an issue in around a quarter of firms; and some firms are also not doing ongoing customer due diligence (CDD);
• only 10 firms had submitted SAR in the last 2 years – which tallies with concerns raised by the NCA that generally law firms are not being proactive enough in looking to identify and then report suspicious activity; and
• it has referred 26 firms into its disciplinary processes.

Following the review, the SRA is setting up a new dedicated AML team, with increased resource to monitor and ensure compliance in the area.

https://www.sra.org.uk/sra/how-we-work/reports/aml-thematic-review.page

CTV and others reported on 10^th May that Canadian rail, aerospace and snow plough company, Bombardier, is facing a possible ban from World Bank-financed projects after it received a show-cause letter related to a rail equipment deal plagued by corruption allegations.  A Bombardier-led consortium received a contract in 2013 to supply signalling equipment for a 500-kilometre section of a rail corridor connecting Asia and Europe via Azerbaijan.  The bulk of the Azerbaijan project received funding from the World Bank, which could blacklist Bombardier from projects it backs.

https://www.ctvnews.ca/business/bombardier-facing-world-bank-ban-over-azerbaijan-corruption-allegations-1.4417175

See also the TRACE Compendium entry for Bombardier for details of this, and other, allegations involving the company –

https://www.traceinternational.org/TraceCompendium/Detail/651?type=0