OTHER THINGS YOU MAY HAVE MISSED – JUNE 7

7th June 2018

VENEZUELA LOSES $1.4 BILLION OF GOLD TO BANKS

On 7th June, KYC 360 reported that Citibank and Deutsche Bank have taken control of around $1.4 billion of Venezuelan government gold, which they received as guarantees for loans, as a result of US sanctions on the Venezuelan Central Bank, according to sources.  Citibank took control of gold for around $400 million that the central bank was supposed to repay in 2020 and, for a separate guarantee, Deutsche Bank took $1 billion.

https://www.riskscreen.com/kyc360/news/venezuela-loses-1-4-billion-of-gold-to-banks-for-guarantees-sources/

MEXICAN JUDGE SUSPENDS ARREST WARRANT FOR EX-PEMEX HEAD

KYC has reported on 7th June the lifting of an arrest warrant issued for Emilio Lozoya, a former head of the state oil company Petroleos Mexicanos, last month in a corruption investigation.  However, Lozoya has to appear in court within 3 days to and to make himself available to prosecutors as needed.

https://www.riskscreen.com/kyc360/news/mexican-judge-suspends-arrest-warrant-for-ex-pemex-head/

WHAT EXACTLY IS THE STORY WITH CHINA’S RARE EARTHS?

On 31st May, an article from Chinafile.com that starts by saying that China produces roughly 70% of the world’s output of rare earths, a set of elements vital for the manufacturing of products like smartphones, electric vehicles, and wind turbines, and asks will rare earths become a counter weapon for China against US measures?  It says that this is not the first time China has politicised the export of rare earths (when it had a 97% share or world output) – in late 2010, amid a dispute with Japan over uninhabited islands in the East Sea, it restricted the exports of rare earths, though this reportedly did not work out well.  In due course, China tried to more formally restrict exports with quotas, but the US, EU and Japan won a WTO case in 2014 and since then the sector has moved in a direction that gives China even less leverage, with production in Australia and the US.

http://www.chinafile.com/conversation/what-exactly-story-chinas-rare-earths

US TO LABEL NUCLEAR WASTE AS LESS DANGEROUS TO QUICKEN CLEAN-UP

The Guardian on 5th June reported that the US Department of Energy says labelling some waste as low-level at sites in Washington state, Idaho and South Carolina will save $40 billion.  The material that has languished for decades in 3 states would be taken to low-level disposal facilities in Utah or Texas.  An environmental group claimed that the change means that some of the “most toxic and radioactive waste in the world” would not have to be buried deep underground.

https://www.theguardian.com/world/2019/jun/05/us-to-label-nuclear-waste-as-less-dangerous-to-quicken-cleanup

2 FRIENDS WILL SUE NATIONAL LOTTERY AFTER BEING DENIED £4 MILLION SCRATCHCARD WIN

On 7th June, MSN reported a story from the Daily Mirror saying that 2 men who claimed a National Lottery prize (and celebrated accordingly) have had their win suspended, as Camelot suspects that the winning ticket was bought with a stolen bank card – as neither man has a bank account, and hence no card.  One of the two has 22 convictions, was jailed last year for stealing from a garage, and when arrested he had someone else’s bank card.  The other was once jailed for 16 weeks for bank card fraud.

https://www.msn.com/en-gb/news/uknews/two-pals-will-sue-national-lottery-after-being-denied-£4million-scratchcard-win

COLOMBIA, PANAMA, AND US SEIZE MORE THAN 2 TONS OF COCAINE OFF COLOMBIA’S PACIFIC COAST

Diálogo on 6th June reported that, in 2 combined operations, Colombia, Panama, and the US seized more than 2 tons of cocaine off Colombia’s Pacific coast in early April.  The forces also confiscated a semi-submersible, 2 speedboats, and captured 9 criminals — 7 Colombians and 2 Ecuadoreans.  The 3-man carried semi-submersible carried 42 bags containing 917 kg of cocaine.  Authorities carried out both operations within the framework of maritime cooperation agreements between Colombia, the US, and Panama.

https://dialogo-americas.com/en/articles/colombia-panama-us-block-maritime-narcotrafficking-routes

UK: MOTHER OF EPILEPTIC GIRL HAS MEDICINAL CANNABIS SEIZED FOR SECOND TIME

The Guardian on 7th June reported that the mother of a severely epileptic nine-year-old girl has had medical cannabis seized at Gatwick airport for the second time, even though she had a private prescription for the medicine.  She has been told she needs an import licence, which she said she cannot afford.

https://www.theguardian.com/society/2019/jun/07/mother-of-epileptic-girl-teagan-appleby-has-medicinal-cannabis-seized-for-second-time

CAYMAN ISLANDS: CASH AND AIRCRAFT SEIZED AND 4 ARRESTED IN VENEZUELA “GOLD SMUGGLING” CASE

On 6th June, the Cayman News Service reported that police have confirmed that 4 foreign nationals have been arrested and a small private plane and a large quantity of cash seized in a case relating to the movement of gold through the Cayman Islands, and believed to involve the illegal movement of money and gold from Venezuela.

https://caymannewsservice.com/2019/06/gold-smuggling-case/

FINANCIAL STABILITY BOARD (FSB) PROGRESS REPORT ON INDUSTRY EFFORTS TO TACKLE THE CONTINUING DECLINE IN THE NUMBER OF CORRESPONDENT BANKING RELATIONSHIPS (CBR)

On 6th June, the Global Trade Review said that the report raises concerns around the negative consequences of the ongoing de-risking by banks for the global trade finance network.  It is said that the number of correspondent banking relationships has shrunk by 20% over the past 7 years.  One of the primary drivers of the decline in CBRs is the widespread de-risking by international banks, which is largely caused by the high cost involved in performing due diligence procedures on foreign counterparts to comply with regulatory requirements.  The FSB says that it and partners, including the WTO and the International Finance Corporation, are working to increase awareness of regulatory expectations around KYC and AML regulations, along with other due diligence requirements.

https://www.gtreview.com/news/global/84235/

ISRAELI SUPREME COURT “PASSES LANDMARK VERDICT” ON CRYPTO EXCHANGES

European Gaming on 6th June reported what it described as a landmark ruling, saying that Leumi Bank cannot freeze the cryptocurrency exchange Bits of Gold’s account because of regulatory concerns.  Leumi Bank still maintains its stance against dealing with the exchange, but the ruling sets precedent for Israeli cryptocurrency firms to legally use traditional banking services.  The Court had previously ruled in favour of Leumi in a separate case, in which the bank restricted the exchange’s account on the grounds that bitcoin (BTC) transactions could not comply with Israel’s AML laws; but then in 2018 the Court said that the bank could not block account transactions on the grounds that they went to BTC exchanges, purportedly as “websites that execute gambling transactions”.

https://europeangaming.eu/portal/compliance-updates/2019/06/06/46853/israeli-supreme-court-passes-landmark-verdict-on-crypto-exchanges/

UK: A CIVIL APPROACH TO TACKLING CRIMINAL FINANCES

The Royal United Services Institute has announced that it will launch a new Paper on 11th June that will explore the extent to which powerful tools now available to enforcement authorities in the UK are being used to best effect in the fight against serious and organised crime.  This is in light of the Government’s Serious and Organised Crime Strategy 2018, launched in November 2018, which made a bold commitment that it would use “new and improved powers and capabilities to identify, freeze, seize or otherwise deny criminals access to their finances, assets and infrastructure”.

https://rusi.org/event/paper-launch-civil-approach-tackling-criminal-finances

GUIDELINES FOR THE CARRIAGE OF METAL SCRAP IN CONTAINERS

In January 2018, the Cargo Incident Notification System published these Guidelines for carrying metal scrap as bulk in containers.  The UK P+I insurance club has recommended its members to read these, following a rise in the number of enquiries relating to the transport of metal scrap in containers.  CINS is a shipping line initiative, launched in September 2011, to increase safety in the supply chain, reduce the number of cargo incidents on-board ships and on land, and highlight the risks caused by certain cargoes and/or packing failures.  Membership of CINS comprises over 80% of the world’s container slot capacity.

http://www.cinsnet.com/wp-content/uploads/2017/11/CINS-Metal-Scrap-Guidelines-January-2018-Final.pdf

SEC PROBES SIEMENS, GE, PHILIPS IN ALLEGED CHINA MEDICAL EQUIPMENT BRIBERY SCHEME

On 7th June, Reuters reported that the SEC is investigating Siemens AG, Philips NV and General Electric Co for allegedly using local middlemen to negotiate bribes with Chinese government and hospital officials to sell medical equipment.  This is said to be part of a new effort by US regulators to crack down on alleged corruption in sales of costly medical equipment worldwide.

https://www.reuters.com/article/us-brazil-corruption-sec-china-exclusive/exclusive-sec-probes-siemens-ge-philips-in-alleged-china-medical-equipment-scheme-idUSKCN1T5151

SHIPPING LINES ADD “WAR RISK” SURCHARGES ON VENEZUELA SHIPMENTS

Loadstar on 7th June reported that shippers in and out of Venezuela will have to face up to higher transport costs, with large shipping lines reportedly imposing surcharges for shipments in the region – with claims the charge is being referred to by at least one line as a “War Risk Premium”.

https://theloadstar.com/lines-slap-war-risk-surcharges-on-venezuela-shipments

AUTHORISED ECONOMIC OPERATOR (AEO) FOR IMPORTS AND EXPORTS

On 7th June, HMRC published updated information on the benefits of Authorised Economic Operator (AEO) status, who can be an AEO and how to apply.

https://www.gov.uk/guidance/authorised-economic-operator-certification

PENTAGON EYES RARE EARTH SUPPLIES IN AFRICA IN LIGHT OF LIMITATIONS ON SUPPLIES FROM CHINA

Defence Web on 7th June reported that the US Department of Defense has held talks with rare earth miners across the world about their supplies of strategic minerals, part of a plan to find diversified reserves outside of China – as China threatens to curb exports to the US of rare earths, a group of 17 minerals used in a plethora of military equipment and high-tech consumer electronics.  The article mentions discussions said to have been held with African mining companies and suppliers.

https://www.defenceweb.co.za/daily-news/international-news/pentagon-eyes-rare-earth-supplies-in-africa-in-push-away-from-china/

ISLAMIC STATE CLAIMS PRESENCE IN MOZAMBIQUE

On 7th June, Defence Web reported that Islamic State has claimed responsibility for an attack in northern Mozambique.  The article says that members of Ahlu Sunnah Wa-Jamâ (which translates roughly as ‘adherents of the prophetic tradition’) are believed to be trained both locally and externally in Tanzania and the Great Lakes Region and finance themselves from illicit activities such as wood, charcoal, ivory and ruby smuggling and outside donations.

https://www.defenceweb.co.za/security/national-security/islamic-state-claims-presence-in-mozambique/

NEW ZEALAND: MALAYSIAN BUILDING BOSS AND FAMILY FACE DEPORTATION AFTER IMMIGRATION FRAUD

On 7th June, the New Zealand Herald reported that a wealthy Malaysian businessman granted permanent residency while working in the booming Auckland construction industry now faces deportation after lying to immigration officials.

https://www.nzherald.co.nz/crime/news/article.cfm

GREECE: 2 OPERATIONS LEAD TO ARRESTS OVER ILLEGAL COINS AND ARTEFACTS

On 7th June, Ekathimerini reported that 2 men were arrested in northern Greece on Friday for attempting to sell ancient coins over the internet.  A raid on the homes of the suspects yielded 12 bronze coins and a wide range of ancient artefacts, including bronze buckles, broaches, rings and copper clothing accessories.  Separately, on Crete police arrested a 76-year-old man in his home over the illegal possession of 642 coins from different historical periods and 42 fragments of ancient clay vessels.

http://www.ekathimerini.com/241362/article/ekathimerini/news/two-operations-lead-to-arrests-over-illegal-coins-and-artifacts

SOUTH KOREAN ENVOY TO VIETNAM FIRED FOR VIOLATING ANTI-BRIBERY LAW

The Korea Times on 7th June reported that South Korea’s ambassador to Vietnam, Kim Do-hyun, has been dismissed for violating the anti-graft law and other misconduct, government officials said.

http://www.koreatimes.co.kr/www/nation/2019/06/356_270241.html

SPAIN DEPORTS 94 TAIWANESE TO CHINA FOR TELECOM FRAUD

Reuters on 7th June reported that 94 people from Taiwan landed in Beijing after being deported from Spain as part of a joint operation against telecom fraud launched 3 years ago, and which drew criticism from Taiwan.

https://www.reuters.com/article/us-china-taiwan-spain/spain-deports-94-taiwanese-to-beijing-for-telecom-fraud-idUSKCN1T80IP

OECD RELEASES DATA ON AUTOMATIC EXCHANGE OF INFORMATION

On 7th June, OECD released data showing automatic exchange of information is improving tax compliance.  More than 90 jurisdictions participating in a global transparency initiative under the OECD’s Common Reporting Standard (CRS) since 2018 have now exchanged information on 47 million offshore accounts, with a total value of around €4.9 trillion.

http://www.oecd.org/newsroom/implementation-of-tax-transparency-initiative-delivering-concrete-and-impressive-results.htm

BELGIUM LAUNCHES DIGITAL CUSTOMS PLATFORM TO FACILITATE E-COMMERCE

On 7th June, Lloyds Loading List reported that Belgium has launched a digital customs platform, BE-GATE, specially designed for the fast-growing e-commerce market and which serves to accelerate and increase the efficiency of customs clearance in the cross-border flow of goods.  It was developed on the initiative of Belgium’s Customs and Excise and is said to be “unique in Europe”.  The new platform is already supported by 4 important e-commerce hubs, the ports of Antwerp and Zeebrugge and the airports of Brussels and Liege.

https://www.lloydsloadinglist.com/freight-directory/news/Belgium-launches-digital-customs-platform-to-facilitate-e-commerce/74419.htm#.XPqtN3dFx9A

GERMAN CUSTOMS SEIZES ILLEGAL US FIREARM ACCESSORIES

On 7th June, Deutsche Welle reported that German customs officers have stopped a shipment of half a tonne of illegal weapons accessories from the US to Austria.  German law forbids equipment designed to make firearms more accurate and thus more dangerous.  The consignment was said to have arrived at Frankfurt Airport for transport by truck to an arms dealer in Austria.  Items seized included laser sights, tactical lights and pistol grips with integrated lasers.  Laser systems and tactical lights, which are used to improve a weapon’s aim by directing a beam at the target, are banned as illegal arms under German law, while pistol grips are seen as banned weapons components.

https://www.dw.com/en/german-customs-seizes-illegal-us-firearm-accessories/a-49102812

NEW CYBER SECURITY CLAUSE FOR SHIPPING COMPANIES FROM BIMCO NOW AVAILABLE

On 7th June, the Insurance Marine News reported that, in response to recent cyber-attack incidents, which have cost a number of major shipping companies millions, BIMCO has developed and drafted a new cyber security clause.  BIMCO said that it was drafted in a way for it to be easily incorporated in a wide range of contracts, as means of allocating cyber security related responsibilities, liabilities and obligations for contractual performance.

https://insurancemarinenews.com/insurance-marine-news/new-cyber-security-clause-from-bimco-now-available/

SINGAPORE: MAN JAILED FOR LYING TO POLICE AFTER PIRATES HIJACKED OIL TANKER

Insurance Marine News reported on 7th June that company director Louis Lau Xuanhong, 34, was sentenced to 2 weeks’ jail after lying to police after pirates hijacked tanker MT JoaquimHis company, the Yu Tat wholesale trading company, had chartered the vessel, but he did not want the authorities to know that it was carrying 2,000 tonnes of crude oil that had been purchased illegally.  In 2015, the tanker had collected the oil from a Maltese vessel in the Strait of Malacca before the tanker was hijacked by pirates.

https://insurancemarinenews.com/insurance-marine-news/man-jailed-for-lying-to-police-after-pirates-hijacked-oil-tanker/

INDIA: CASE AGAINST MEDIA OWNER RAGHAV BAHL OVER LONDON PROPERTY

NDTV on 7th June reported that media owner Raghav Bahl has been accused by the Enforcement Directorate of money laundering in a case alleging he understated the value of investment of a London property by around £2.73 million and failed to satisfactorily explain the source of investment.

https://www.ndtv.com/india-news/enforcement-directorate-files-money-laundering-case-against-raghav-bahl-2049783

AUSTRALIA TO CRACK DOWN ON CRYPTOCURRENCY TAX AVOIDANCE SCHEMES

Coindesk on 7th June said that the Australian Taxation Office (ATO) may soon crack down on major tax avoidance schemes using cryptocurrencies, and is said to be is working on 12 tax avoidance cases involving abuse of crypto assets – said to be part of a global investigation by tax authorities from 5 countries (Australia, US, UK, Netherlands and Canada).  These agencies, known as the “J5,” are pursuing a further 50 similar investigations globally.

https://www.coindesk.com/australia-to-crack-down-on-crypto-tax-avoidance-schemes

OECD RELEASES DATA ON AUTOMATIC EXCHANGE OF INFORMATION

On 7th June, OECD released data showing automatic exchange of information is improving tax compliance.  More than 90 jurisdictions participating in a global transparency initiative under the OECD’s Common Reporting Standard (CRS) since 2018 have now exchanged information on 47 million offshore accounts, with a total value of around €4.9 trillion.

http://www.oecd.org/newsroom/implementation-of-tax-transparency-initiative-delivering-concrete-and-impressive-results.htm

SETTLEMENT AGREEMENT BETWEEN OFAC AND WESTERN UNION FINANCIAL SERVICES

On 7th June, a news release from OFAC advised that Western Union has agreed to settle its potential civil liability for 4,977 apparent violations of the Global Terrorism Sanctions Regulations, between 2010 and 2015 totalling approximately $1.275 million.  These were paid out to third-party, non-designated beneficiaries who chose to collect their remittances at a Western Union Sub-Agent in The Gambia, Kairaba Shopping Center (KSC), an entity that was designated by OFAC.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190607_33.aspx

https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20190607_western_union.pdf

EU REGULATION ON THE IMPORT AND INTRODUCTION OF CULTURAL GOODS

EU Regulation 2019/880/EU has been developed as part of a plan to evolve common rules on trade with third countries so as to ensure the effective protection against illicit trade in cultural goods and against their loss or destruction, the preservation of humanity’s cultural heritage and the prevention of terrorist financing and money laundering through the sale of pillaged cultural goods to buyers in the EU.  The Regulation, which does not apply to cultural items created or discovered within the customs territory of the EU, sets out the conditions for the introduction of cultural goods into the EU, and the conditions and procedures for the import of cultural goods, to safeguard cultural heritage and preventing the illicit trade in cultural goods, in particular where such illicit trade could contribute to terrorist financing.  The cultural goods involved are those of importance for archaeology, prehistory, history, literature, art or science.  The Regulation provides for a ban on the import of goods illicitly removed from their country of origin or discovery, and a requirement for certain other items to have both an import licence and an importer statement.  Applicable in all Member States, the Regulation takes effect from 27th June.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.151.01.0001.01.ENG&toc=OJ:L:2019:151:TOC

THE CRIMINAL FINANCES ACT 2017 (CFA) AND HMRC’S NEW APPROACH TO ITS BUSINESS RISK REVIEW

On 5th June, Bird & Bird published an article saying that, in March 2019, HMRC published the results of a research study into the impact of the CFA offences.  These were, the article says, designed to drive a behavioural shift among businesses by placing a responsibility on them to take active steps to prevent the facilitation of tax evasion.  It is understood that the purpose of the study was to measure how successful the offences have been in achieving HMRC’s desired goal.  A random telephone survey of 1,002 businesses took place in August/September 2018.  The key findings of the study are reported, and the article says that HMRC notes that UK businesses appear to have a “relatively low” level of awareness of the CFA offences.  The article says that businesses should remember that it is their responsibility, not HMRC’s, to take active steps to prevent the facilitation of tax evasion – and the article elaborates on what “active steps” HMRC expects.  It also says that the firm expects HMRC’s activities to significantly increase in this area as it seeks to raise awareness and to engineer the hoped-for behavioural shift.  In addition, as part of the new approach to conducting business risk reviews, HMRC will be scrutinising what active steps have been taken by relevant bodies to prevent the facilitation of tax evasion.

The article goes on to say that HMRC has recently confirmed that it will be shortly signing off on its new Business Risk Review (BRR).  Businesses will become subject to a risk assessment by HMRC – with 4 levels of risk with a separate rating for each tax regime (i.e. VAT, Corporation tax, PAYE, etc) and 3 behavioural factors.  The article advises on what businesses should be doing – as a minimum, HMRC expect all businesses to have demonstrated top-level commitment; conducted an inherent risk assessment; and developed an implementation period plan.

https://www.twobirds.com/en/news/articles/2019/uk/the-criminal-finances-act-2017-and-hmrcs-new-approach-to-its-business-risk-review