OTHER THINGS YOU MAY HAVE MISSED – MAY 21

21st May 2019

CHINA: NEW CRIMINAL STANDARDS TARGET ILLEGAL FOREIGN EXCHANGE TRADERS

On 16th May, R+P China Lawyers published an article about China’s foreign exchange restrictions as a challenge for Chinese individuals who want to invest or hold assets abroad.  Every Chinese individual has a yearly quota of $50,000 (or equivalent) that can be converted into foreign currency, but restrictions continue to apply on how these funds can be used.  For example, funds cannot be exchanged into foreign currency for investment purposes, and it is prohibited to use the quota of another.  It says that regulation has now been tightened, with a very detailed definition of “illegal fund and settlement business”.  The article says that the interpretations seem to be particularly focused on Chinese individuals that need foreign currency for private investment purposes, and (especially) intermediaries that assist Chinese individuals or companies with currency swaps.

http://www.mondaq.com/article.asp?articleid=806138

PANAMA SEIZES A SHIPMENT OF MORE THAN 1,500 PACKAGES OF COCAINE PACKS FROM CUBA HEADED TO TURKEY

The Maritime Herald on 20th May reported that the National Aeronaval Service (Senan) seized a shipment of drugs said to worth around $90 million in a container that arrived at Puerto de Cristobal, Colon, from Cuba with final destination of Istanbul – and although the container was destined for Turkey, it would first dock in Rotterdam.

http://www.maritimeherald.com/2019/panama-seizes-a-shipment-of-more-than-1500-packages-of-cocaine-packs-from-cuba-headed-to-turkey/

HUAWEI: WHY THIS EXPORT COMPLIANCE CONSULTANT IS ‘MAD AS HELL’

An article in American Shipper on 20th May concerned a complaint about the handling of the notification of restrictions on Huawei by the US Commerce Department.  He says that in 40 years involvement with export control regulation he had never seen “such a terrible mishandling of rulemaking rollout” that he had witnessed with this latest placement of Huawei and 68 of its overseas affiliates on the Commerce Department’s Entity List, saying that there has been mass confusion within the export industry, as well as among the legal community, when the effective date for the Entity List restrictions are to commence.  However, he praises BIS, which he says has done a great job in posting real-world FAQ and detailed answers on its website.

https://www.americanshipper.com/news/why-this-export-compliance-consultant-is-mad-as-hell?autonumber=848462

See also –

https://www.bis.doc.gov/index.php/documents/regulations-docs/2394-huawei-and-affiliates-entity-list-rule/file

https://www.bis.doc.gov/index.php/all-articles/17-regulations/1555-addition-of-certain-entities-to-the-entity-list-final-rule-effective-may-16-2019

STOP PRESS – on 21st May, it was announced that the implementation of the restrictions had been postponed for 3 months to assist US businesses to adapt.

EX-CREDIT SUISSE BANKER PLEADS GUILTY TO US CHARGE OVER MOZAMBIQUE LOAN

KYC 360 on 21st May reported that Detelina Subeva, 37, a former Credit Suisse Group AG banker has pleaded guilty to a charge that she helped launder money from a kickback scheme involving $2 billion in loans to state-owned companies in Mozambique.  Credit Suisse has said that the defendants hid their contact from the bank.  She said the kickback came from Privinvest, an Abu Dhabi-based company that contracted with Mozambican state-owned companies.

https://www.riskscreen.com/kyc360/news/ex-credit-suisse-banker-pleads-guilty-to-u-s-charge-over-mozambique-loan/

NEW ZEALAND: FORFEITURE OF ASSETS LEADS TO $620,000 RECOVERED IN CASE INVOLVING FORMER GOVERNMENT OFFICIAL

Scoop on 21st May reported that a Police Asset Recovery Unit investigation into the misappropriation of funds from a government department is leading to the recovery of about $620,000.  Since June 2016, the Unit has been investigating Ms Joanne Harrison, former General Manager at the Ministry of Transport, who was sentenced to 3 years 7 months’ imprisonment for the misappropriation of $726,836.07 from the Ministry.

http://www.scoop.co.nz/stories/PO1905/S00321/forfeiture-of-assets-leads-to-620000-recovered.htm

DISHONEST CLAIMANT FACING CONTEMPT CHARGE AS COURT RAILS AT PI FRAUD TACTICS

The Law Society Gazette on 20th May reported that the Court of Appeal has issued a stern warning that dishonest claimants – and their lawyers – will not escape the consequences of their unscrupulous conduct simply by dropping the cases when they begin to unravel.  The case involved a claim for noise-induced hearing loss against a former employer but gave false submissions about not playing electric guitar in a rock band.

https://www.lawgazette.co.uk/law/dishonest-claimant-facing-contempt-charge-as-court-rails-at-pi-fraud-tactics/5070365.article

HUNDREDS ARRESTED AND MORE THAN £310,000 CASH SEIZED AS PART OF NATIONAL ACTIVITY TARGETING COUNTY LINES DRUG GANGS

On 21st May, a NCA news release saying that County Lines drug gangs have been targeted in a week of co-ordinated law enforcement activity across the UK, leading to more than 500 arrests, £312,649 cash and 46 weapons seized.

https://www.nationalcrimeagency.gov.uk/news/hundreds-arrested-and-more-than-310k-cash-seized-as-part-of-national-activity-targeting-county-lines-drug-gangs

IRELAND – CENTRAL REGISTER OF BENEFICIAL OWNERSHIP OF CORPORATES – WEBSITE GOES LIVE

On 17th May, a newsletter from Walkers advised that the website of the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies went live on 29th April, and the requirement to file beneficial ownership information with the Central Register enters into force from 22nd June.  The newsletter details who has access to the Register and the information they can access.

https://www.walkersglobal.com/images/Publications/Advisory/2019/Ireland_Update_-_Central_Register_of_Beneficial_Ownership_of_Corporates_-_Website_Goes_Live_-_May_2019.pdf

SAUDI ARABIA EXPANDS ANTI-BRIBERY LEGISLATION TO THE PRIVATE SECTOR

On 16th May, DLA Piper reported replacement of the former anti-bribery law, under which crimes were limited to transactions involving a “public official”.  “Public official” was broadly defined to include employees, directors, and chairmen of state enterprises or companies maintaining public facilities or performing public services, and companies engaged in “banking operations”. It says that, overall, the new changes expand the scope of anti-bribery and anti-corruption legislation in both public and private sectors.

https://www.dlapiper.com/en/belgium/insights/publications/2019/05/saudi-arabia-expands-anti-bribery-legislation-to-the-private-sector/

TERRORISM IN AFRICA

An article in Defence Web on 21st May contained a list of terrorist groups active in Africa.

https://www.defenceweb.co.za/security/national-security/by-the-numbers-terrorism-in-africa/

ARGENTINA’S EX-PRESIDENT KIRCHNER FACES TRIAL FOR CORRUPTION

Al-Jazeera on 21st May published a video that looks at the impact it could have on her future political ambitions. The trial will take place as she herself is running for vice-president in the upcoming election.

https://www.aljazeera.com/news/2019/05/argentinas-ex-president-cristina-kirchner-faces-corruption-charges-190521104433135.html

5 WAYS PACKAGING IS BRINGING THE FIGHT TO FAKE DRUGS

The European Pharmaceutical Manufacturer on 21st May published an article saying that, with drug counterfeiters increasing in number and determination, it’s crucial to be able to spot fraudulent medicines to stay safe, and this article outlines 5 technological advancements that are taking the fight to fake drugs.  These include use of RFID, hand-held spectrometers and the blockchain.

https://www.epmmagazine.com/opinion/how-packaging-is-bringing-the-fight-to-fake-drugs/

UK CONSULTATION: THE FUTURE OF UK CARBON PRICING

The Department for Business, Energy and Industrial Strategy published a news release on 21st May advising of consultation that sets out the UK government’s and the devolved administrations’ approach to UK carbon pricing once the UK has left the EU, and seeks stakeholders’ views on the design of a future scheme.

https://www.gov.uk/government/consultations/the-future-of-uk-carbon-pricing

FROM JANUARY 2020, CIGARETTE PACKAGES SOLD IN BELGIUM WILL ALL HAVE NEUTRAL PACKAGING

TJI reported on 20th May that cigarettes, rolling tobacco and tobacco for use in water pipes, as well as cigarette papers and filters will be affected by the implementation of the new rules.  All such products will be sold in greenish-brown packaging, with no sign of the familiar branding, and retailers will have until the end of 2020 to clear stocks of old, non-compliant packaging.

http://www.tobaccojournal.com/Plain_packs_go_on_sale_2020.55272.0.html

GERMAN REPORT ON “TAX HAVEN JERSEY: OFFSHORING IN EUROPE”

On 21st May, Deutsche Welle published a video report saying that Jersey’s “special status has made it rich by enabling global corporations to avoid tax elsewhere.  Now this tax haven faces the prospect of tighter regulation”.

https://www.dw.com/en/tax-haven-jersey-offshoring-in-europe/av-48800776

DUTCH MAN ARRESTED OVER $2.2 MILLION BITCOIN MINING FRAUD

Coindesk on 21st May reported that a 33-year-old man in the Netherlands has been arrested for bitcoin mining fraud worth over €2 million.  The suspect started his businesses in 2017 by promising investors return of around 0.3 bitcoin a month (currently worth around $2,389), it says.  When investors did not get the returns and their mining computers back, several of them filed complaints.

https://www.coindesk.com/dutch-man-arrested-over-2-2-million-bitcoin-mining-fraud

MONEY LAUNDERING AND SHELL COMPANIES DEBATED IN US CONGRESS

The Senate Banking Committee held a hearing on combating money laundering and illicit financing by anonymous shell companies.  C-SPAN in the US on 21st May published a video recording of the hearing where witnesses from the US Treasury and FBI discussed the challenges of tracking illicit financing without a centralised database of beneficial ownership information.

https://www.c-span.org/video/?460929-1/senate-banking-committee-holds-hearing-illicit-financing-anonymous-shell-companies

CYPRUS: SUSPECT WANTED IN GERMANY FOR €10 MILLION TAX EVASION FLEES

The Cyprus Mail reported on 21st May that a 45-year-old Chinese man arrested in Cyprus last year on a European arrest warrant issued in Germany in connection with tax evasion has apparently fled after he was released on bail.

https://cyprus-mail.com/2019/05/21/suspect-wanted-in-germany-for-e10m-tax-evasion-flees

JERSEY – WINDING UP OF INSOLVENT TRUST

On 21st May, Appleby published an article saying that the Royal Court had recently handed down an important decision regarding winding up an insolvent trust, determining the proper insolvency regime for such a situation, and who should carry out the winding up.

https://www.applebyglobal.com/publications/royal-court-of-jersey-directs-the-winding-up-of-an-insolvent-trust/

GAFILAT PRE-ASSESSMENT VISIT TO CHILE

On 21st May, GAFILAT (the relevant FATF-style regional body) advised that the necessary pre-assessment visit had been made to Chile.  This marks the start of a process for a mutual evaluation of the country’s AML/CFT system, with on-site visits due in January 2020, with a report on the outcomes due for July 2020.

http://www.gafilat.org/index.php/es/espanol/19-noticias/85-visita-pre-evaluacion-a-chile

US LIST OF CORRUPTION SUSPECTS IN CENTRAL AMERICA INCLUDES OFFICIALS WITH TIES TO SITTING PRESIDENTS

Insight Crime on 21st May reported that the US State Department report accuses more than 50 current or former senior officials of engaging or facilitating corruption in El Salvador, Guatemala and Honduras – 11 Salvadoran officials, 27 Guatemalan officials, and 13 Honduran officials.

https://www.insightcrime.org/news/analysis/us-corruption-list-highlights-criminal-ties-northern-triangle-presidents/

The report can be accessed at –

https://www.insightcrime.org/wp-content/uploads/2019/05/US-CentAm-Corruption-List.pdf

MEMBER OF SYRIA’S RULING ASSAD FAMILY HAS FORFEITED THE CONTENTS OF HER UK BANK ACCOUNT

AN NCA news release on 21st May advised that Aniseh Chawkat, 22, the niece of Syrian ruler Bashar al-Assad, who received hundreds of thousands of pounds while studying in London has forfeited the contents of her UK bank account.  A forfeiture order was made for £24,668.24.

https://www.nationalcrimeagency.gov.uk/news/al-assad-family-cash-forfeited-in-london-court

US FINES BILLIONS FOR WALL STREET FRAUD – BUT NEARLY HALF THE TIME IT DOESN’T COLLECT

The Wall Street Journal on 20th May that the SEC over 5 fiscal years that ended in September 2018 only obtained 55% of the $20 billion in enforcement fines set through settlements or court judgments, according to agency statistics.  During the prior 5 years, from 2009 through 2013, the SEC collected on 60% of $14.6 billion.  The lowest recovery rate was in 2018 just 28% of almost $4 billion, said to be due in part to an unusual $1.7 billion settlement with the Brazilian oil company Petrobras that may never require payment to the SEC.  The article says that the SEC has struggled to get defendants to pay more of their fines, although some are almost certain to avoid payment forever.  This includes people who went to prison on related criminal charges, or people behind Ponzi schemes who spent the funds they took from defrauded investors.

https://www.wsj.com/articles/some-securities-fraudsters-escape-paying-sec-fines-11558344601

SECURING THE US AIR CARGO SUPPLY CHAIN

On 17th April, Freight Waves published an article (informative and well worth reading) about the US air cargo supply chain.  It looks at the effect of 9/11 on security in the supply chain.  It looks at the security arrangements, such as how third-party industry participants who tender air cargo such as freight forwarders and third-party logistics firms (3PL) must be certified annually for the Indirect Air Carrier Standard Security Program, administered by the Transportation Security Administration (TSA).  Shippers, freight consolidation centres and others can apply with the TSA to become a Certified Cargo Screening Facility (CCSF), and 2019 has seen introduction of the Third-Party Certified Canine Screening Program for private canine companies to perform security screening for air cargo at airline, handler, forwarder or other facilities.   Air cargo shippers can also enrol and qualify, through an airline or indirect air carrier, in the TSA’s Known Shipper Management System.  The article, after looking at the structures and organisations, then looks at technologies used, as well as sniffer dogs.  Looking at air cargo entering the US, outside of US international air cargo bound for the US is managed through a Customs’ programme called Air Cargo Advance Screening (ACAS), which uses a risk-based approach and intelligence-sharing of many data sources to assess a shipment before boarding an aircraft.  From 2021, all cargo boarded on all commercial transport aircraft will need to be 100% secured under ICAO requirements, which will drive further process changes for shippers, airlines and indirect air carriers.

https://www.freightwaves.com/news/airfreight/securing-the-air-cargo-supply-chain

CYBER-ATTACKS (ASSET-FREEZING) REGULATIONS 2019 IMPLEMENT EU SANCTIONS IN UK

These UK Regulations (SI 2019/956) make provision relating to the enforcement of Council Regulation (EU) 2019/796 concerning sanctions against cyber-attacks threatening the EU. or its Member States.  Measures include the freezing of funds and economic resources of any persons and entities listed in Annex I to the Council Regulation and ensuring that funds and economic resources are not made available to them or for their benefit.

https://www.legislation.gov.uk/uksi/2019/956/contents/made