OTHER THINGS YOU MAY HAVE MISSED – JUNE 11

11th June 2019

CANADA IMPORT CONTROLS: IF YOU DON’T LIKE THE ANSWER, JUST IGNORE THE RULES

On 4th June, Borden Ladner Gervais published an article saying that the Canadian government had introduced amendments to Canadian law to eliminate, for 2 years, limitations on Canada’s ability to re-impose safeguard measures on imported goods, following lobbying by domestic steel producers.  The article explains that “safeguards” are trade restrictions that can be applied to address a sharp increase in imports that is causing or threatening to cause serious injury to a domestic industry, and because safeguards are imposed on fairly traded goods rather than on goods that are being dumped or subsidised, WTO international trade rules strictly limit their use – to an initial 200 days before independent review.  WTO rules specifically prohibit the re-imposition of a safeguard on the same products for a certain period.  The proposed amendments would repeal the provisions of Canadian law that give effect to the WTO rules prohibiting the re-imposition of safeguards on the same goods within 2 years – this being framed carefully as a so-called “hit and run” tactic, meaning the restrictions would expire before any challenge to it by trading partners can run its course through the WTO’s dispute settlement system.  However, the article cautions that other countries may decide that they too can disregard the WTO and retaliate immediately.

https://blg.com/en/News-And-Publications/Publication_5699

CANADA: FRAUD AND KNOWING ASSISTANCE

On 22nd May, Gowling WLG published an article asking what happens when one victim of fraud accuses another of being liable for knowing assistance?  A recent case before the Supreme Court considered this point in a case involving an investment fraud scheme.  The Court considered what constitutes “participation” or “assistance” in a fraudulent scheme, and confirmed that “participation” and “assistance” require more than passive involvement in the fraudulent scheme to attract liability.  “Knowing assistance” is a tort which requires the existence of a fiduciary duty; a fraudulent and dishonest breach of that duty; the “stranger” to the fiduciary relationship having have had actual knowledge of both the fiduciary relationship and the fiduciary’s fraudulent and dishonest conduct; and he must have participated in or assisted the fiduciary’s fraudulent and dishonest conduct.  The Court also considered the application of the “corporate attribution” doctrine, as the “strangers” accused of knowing assistance in the fraudulent scheme were corporations.  The article concludes that the decision involves a rejection of any lowering of the fault requirements for knowing assistance – meaning that recovery against other parties, including those who are incidentally connected to a fraudulent scheme, will likely not be available.

https://gowlingwlg.com/en/insights-resources/articles/2019/fraud-and-knowing-assistance-scc-weighs-in/

 UK: FRAUD BY FOREX BROKERS – XCORE CAPITAL

On 7th June, Giambrone Law ILP published an article saying that the “scourge” of Forex fraud still remains and the case against Xcore Capital, heard in the High Court, starkly highlights the nature of the perpetrators.  In the case, Jonathan Chitty, a director of Xcore Capital, lost to the FCA and the Court has ordered him to pay a fine amounting to £917,231.  It is said that he used investor’s money to open an office in Mayfair, pay the staff wages and fund his luxury lifestyle, and that a considerable amount was applied to his personal spending, such as £24,000 Rolex and £102,000 of cryptocurrencies; a further £58,000 was spent on other luxury purchases as well as £20,000 towards his wedding.

http://www.mondaq.com/article.asp?articleid=812914

COUNTERING THE USE OF CHEMICAL WEAPONS IN SYRIA

A paper published by Relief Web on 10th June and from the Stockholm International Peace Research Institute provides some background on the international norm on the non-use of chemical weapons, describes pertinent developments in Syria since 2012 with a special focus on 2018, and analyses the current state of play for the Organisation for the Prohibition of Chemical Weapons (OPCW) and chemical weapons disarmament.  It contains reflections on the strength of the non-use norm, on the relevance of efforts to identify the perpetrators of chemical weapon attacks and to create the conditions to eventually hold them to account, and on the need to maintain the OPCW’s viability in the face of the current crisis.  The final section contains options and recommendations for action in these areas.

https://reliefweb.int/report/syrian-arab-republic/countering-use-chemical-weapons-syria-options-supporting-international

EGYPT CALLS ON CHRISTIE’S AUCTION HOUSE IN LONDON TO STOP SALE OF TUTANKHAMEN STATUE HEAD

Ahram Online on 10th June reported that the Egyptian government has called on Christie’s auction house and UNESCO to stop the sale of a quartzite head from a statue of King Tutankhamen, scheduled for 4th July.  Christie’s says the head will be auctioned off from the private collection in a sale that includes marble heads from ancient Rome, a painted wooden Egyptian coffin, and a bronze Egyptian statue of a cat.

http://english.ahram.org.eg/NewsContent/1/64/335997/Egypt/Politics-/Egypt-calls-on-Christies-auction-house-in-London-t.aspx

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https://www.gibsondunn.com/webcast-anti-money-laundering-and-sanctions-enforcement-and-compliance-in-2019-and-beyond/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=inter-article-link

DOES A TRUSTEE OF A PENSION SCHEME OWES A FIDUCIARY OR EQUITABLE DUTY TO THE EMPLOYER SPONSORING THE SCHEME

In a blog post on 3rd June, Bridget A Lucas QC of Harneys says that the recent High Court case of Keymed (Medical & Industrial Equipment) Limited v Hillman and others provided inter alia an answer to the question of whether a trustee of a pension scheme owes a fiduciary or equitable duty to the employer sponsoring the scheme: an issue on which there was previously no direct authority in English Law. The judge’s analysis will be relevant, she says, to offshore structures where fiduciaries act as common trustees, or directors of related entities.  The judge said that trustees are entitled to have regard to the employer’s interests even if the protecting of those interests is a matter of indifference to the beneficiaries of the scheme.  If the employer’s interests conflict with those of the beneficiaries, the trustee’s course is clear – the employer’s interests are subordinate to those of the beneficiaries of the trust.

https://www.harneys.com/our-blogs/offshore-litigation/2019/06/03/qc-corner-bridget-a-lucas-qc

OECD: €4.9 TRILLION IN OFFSHORE HOLDINGS

On 11th June, KYC 360 reported that an intergovernmental initiative to crack down on tax cheats has uncovered €4.9 trillion held offshore for individual and corporations in approximately 47 million bank accounts.

https://www.riskscreen.com/kyc360/news/oecd-automatic-exchange-program-ids-e4-9-trillion-in-offshore-holdings/

INDONESIA:  AUTHORITY DECLARES TYCOON SJAMSUL NURSALIM AND WIFE AS GRAFT SUSPECTS IN BLBI BAILOUT CASE

On 11th June, the Jakarta Globe reported that Indonesia’s anti-graft agency had declared tycoon Sjamsul Nursalim and his wife Itjih as graft suspects in the long-running Bank Indonesia Liquidity Assistance (BLBI) bailout case.  During the 1997-1998 Asian financial crisis, the Indonesian government disbursed $10.7 billion in bailout funds under the BLBI scheme to 48 commercial banks including Sjamsul’s BDNI.  It says that, according to the Supreme Audit Agency, 95% of the BLBI bailout funds were misappropriated.  It says that KPK investigators now believe Sjamsul and Itjih, who reside in Singapore, had profited, or caused the state to lose, money during the BLBI bailout.  Indonesia does not have an extradition treaty with Singapore.

https://jakartaglobe.id/context/kpk-declares-tycoon-sjamsul-nursalim-and-wife-as-graft-suspects-in-blbi-case

NEW ZEALAND: FOREX DIRECTOR ENTERS NO PLEA AGAINST SFO FRAUD CHARGES

Finance Magnates on 11th June reported that the SFO had announced that Russell Maher of Forex Brokers Limited (FBL), a foreign exchange broker which is now in liquidation, has entered no plea to fraud charges. According to the SFO, through the FX broker FBL, Maher provided forex services to residents of New Zealand and provided his customers with forged documents.  He operated FBL from 1995 until 2017. He is the sole director of the FX broker and shares of the company were held by himself and his wife.

https://www.financemagnates.com/forex/regulation/nz-forex-director-enters-no-plea-against-sfo-fraud-charges

BRITISH CO-CONSPIRATOR OF PONZI SCAMMER RENWICK HADDOW CONVICTED IN US

On 11th June, Finance Feeds reported that James Moore has been convicted at trial of wire fraud and conspiracy for engaging in a scheme to defraud investors by making misrepresentations about the management and operations of Bar Works Inc.  From 2015 to 2016, Moore and others partnered with Renwick Haddow, another British citizen and who was extradited from Morocco to the US to face charges (to which he pleaded guilty last month), in soliciting investments into workspace leases in a co-working business called Bar Works through material misrepresentations.

https://financefeeds.com/co-conspirator-ponzi-scammer-renwick-haddow-gets-convicted

FRANCE STEPS UP VAT FRAUD MEASURES AHEAD OF EU REFORMS

Accounting Web on 11th June reported that France has announced a raft of VAT measures for 2020 to combat B2C e-commerce and B2B carousel fraud.  In an article, VAT expert Richard Asquith examines the main proposals and how they may affect the UK government’s future thinking.  The measures include: making online marketplaces such as Amazon, eBay and Etsy collect VAT on behalf of non-EU sellers; introducing live invoice reporting to the tax authorities; and a fulfilment house VAT due diligence scheme.

https://www.accountingweb.co.uk/tax/business-tax/france-steps-up-vat-fraud-measures-ahead-of-eu-2021-reforms

US IMPORT RESTRICTIONS POSSIBLE UNDER NEW CRITICAL MINERALS STRATEGY

On 11th June, Sandler Travis Rosenberg reported that a new federal strategy aimed at ensuring secure and reliable supplies of critical minerals includes a recommendation that the US examine how imports of these minerals are affecting national security, raising the prospect that import restrictions could be imposed at some point.  It lists the materials identified last year by the Commerce Department, which has issued a strategy to ensure the supply of these minerals and the resiliency of their supply chains.  Among the goals included in the strategy are to enhance international trade and cooperation related to critical minerals.

https://www.strtrade.com/news-publications-critical-minerals-trade-import-restrictions-232-061119.html

EUROPEAN COMMISSION IS REVIEWING PREVIOUS SANCTIONS AND AML CASES INVOLVING EU BANKS

On 11th June, the EU Sanctions Blog reported that the aim is to produce a report on failures to prevent financial crime and identify areas for legislative improvement.

https://www.europeansanctions.com/2019/06/european-commission-reviewing-previous-sanctions-and-aml-cases/

BLACK MARKET ACCOUNTS FOR 2 OF 3 FEDERAL WEAPONS PROSECUTIONS IN US

The Crime Report on 11th June reported that, according to DoJ data, 2 out of every 3 weapons prosecutions filed in the US district court during the first 7 months of 2019 resulted from the “unlawful shipment, transfer, receipt, or possession of a firearm by a felon,” according to the Transactional Records Access Clearinghouse (TRAC), and indicates a projected 11% increase in such prosecutions during Fiscal Year 2019.  TRAC counted 6,562 weapons prosecutions between October 1st and April 30th — also representing an increase of nearly 69% over the same period 5 years ago.

The article includes a link to the TRAC report.

https://thecrimereport.org/2019/06/11/black-market-accounts-for-two-out-of-three-federal-weapons-prosecutions-report/

PHOTOS OF TRAVELLERS COMING IN AND OUT OF THE US HAVE BEEN HACKED AND STOLEN

Buzz Feed and others on 10th June reported that a Border Patrol database of traveller photos and licence plate images was “compromised by a malicious cyber-attack”.  The database of identifying traveller photos and licence plate images had been transferred to a CBP subcontractor’s network without the federal agency’s authorisation or knowledge, CBP explained.  The subcontractor’s network was then hacked, though CBP said its own systems had not been compromised.  The compromised photos were taken of travellers in vehicles coming in and out of the US through specific lanes at a single Port of Entry over a 1½ months period.  No other identifying information was included with the photos and no passport or other travel document photos were compromised, the official said. Images of airline passengers from the air entry and exit process were also not involved.

https://www.buzzfeednews.com/article/daveyalba/the-us-governments-database-of-traveler-photos-has-been

NEW RULES AND GUARANTEES IN CRIMINAL PROCEEDINGS NOW APPLY ACROSS THE EU

A news release from the EU on 11th June advised that a Directive on special safeguards for children had started to apply.  It is the last in a set of 6 EU Directives guaranteeing procedural rights for people across the EU, completing a full set of rights.  In addition to these new rights for children, the Directive guaranteeing access to legal aid started to apply on 5th May.  This package of EU rules ensures that EU citizens’ fundamental rights of fair and equal treatment are respected in criminal proceedings and that they are applied in a similar way in all Member States.  If suspected or accused, people have the right to legal aid; for example, if they do not have the resources to cover the costs of the proceedings.  Member States that have not yet implemented the rules must do so as soon as possible.  The Commission will continue to work closely with Member States to ensure the rules are applied correctly for the benefit of citizens.

http://europa.eu/rapid/press-release_IP-19-2910_en.htm

NEW RULES TO MAKE EU SECURITY, MIGRATION AND BORDER MANAGEMENT INFORMATION SYSTEMS WORK TOGETHER IN A MORE INTELLIGENT AND TARGETED WAY ENTER INTO FORCE

On 11th June, the EU advised that the inter-operability measures will ensure that border guards and police officers have access to the right information whenever and wherever they need it to perform their duties. The new measures are said to help them detect identity fraud more easily while ensuring the highest standards of data protection and respect for fundamental rights.  The work of developing the inter-operability tools is expected to be complete by 2023.

http://europa.eu/rapid/press-release_MEX-19-2949_en.htm

US DoJ REMINDS THE PUBLIC TO BE AWARE OF FRAUD WHEN DISASTER STRIKES AND REPORT IT TO THE NATIONAL CENTER FOR DISASTER FRAUD

A news release from the DoJ on 11th June, and in the light of reports of fraud in Puerto Rico, advised the public to be on the lookout for fraud against natural disaster victims, and report it to the National Center for Disaster Fraud (NCDF).  The Atlantic Hurricane Season opened June 1st and runs through November 30th.  The DoJ established the NCDF in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region.  The NCDF serves as a centralised clearinghouse for disaster fraud complaints and information relating to both natural and man-made disasters.

https://www.justice.gov/opa/pr/department-justice-reminds-public-be-aware-fraud-when-disaster-strikes-and-report-it-nation-0

CANADA: SNC-LAVALIN CHIEF NEIL BRUCE RETIRES SUDDENLY AS CORRUPTION TRIAL LOOMS

Global Construction Review on 11th June reported that Canadian construction firm SNC-Lavalin has promoted Ian L. Edwards to the post of interim president and CEO to replace Neil Bruce, a British construction executive whom the company said was retiring effective immediately.  Prosecutors allege that former executives of the company bribed officials in Libya to win contracts under the regime of Muammar Gaddafi, and also that they defrauded Libyan officials.  Pleading not guilty to the charges laid in 2015, the company has campaigned to be allowed to defer prosecution in exchange for fines, remediation and cooperation under a new scheme set up by the Canadian government for that purpose. However, the DPP refused any such deal.

http://www.globalconstructionreview.com/news/snc-lavalin-chief-neil-bruce-retires-suddenly-corr

ALBANIA ON THE EDGE?

An article on CEPA on 11th June reported that Albania is sliding toward conflict and chaos, and the repercussions could be more far-reaching than the state collapse witnessed over 20 years ago.  Domestic political radicalism, social unrest, and institutional fragility may also generate regional instability, block Albania’s path toward EU integration, weaken its relations with the US, and open a new front for Moscow.  It says that clientelism and corruption have deeply infected both major parties while there is no viable third alternative.  Even more destabilizing than official corruption is the extreme polarisation of Albania’s politics.

https://www.cepa.org/albania-on-the-edge

EX-DEUTSCHE BANK BANKER HELPED GAME GLOBAL FINANCIAL SYSTEM, EURIBOR TRIAL TOLD

Investing.com on 11th June reported that a former Deutsche Bank managing director was part of a group that gamed the global financial system in a 5-year plot to rig Euribor interest rates, a prosecutor alleged at the first day of his trial in London.  He is charged with conspiracy to defraud over the alleged manipulation of Euribor (the euro interbank offered rate), a Brussels-based benchmark that helps determine rates on around $180 trillion of global financial contracts and loans.

https://www.investing.com/news/stock-market-news/exdeutsche-bank-banker-helped-game-global-financial-system-euribor-trial-told-1894344

IRELAND: MEDICAL EQUIPMENT SUPPLIER FACES €12 MILLION TAX BILL IN LATEST DEFAULTERS LIST FROM REVENUE

On 11th June, the Irish Examiner and others reported that the Revenue has published its list of tax defaulters and it includes company directors, landlords and financial consultants.  The latest list covers January to March 2019 and reveals 62 tax settlements worth more than €21 million – 16 cases were for amounts exceeding €100,000, while 4 exceeded €500,000 and 2 exceeded €1 million.  One of the defaulters named by Revenue was medical equipment supplier Eurosurgical which was hit with a €12 million tax bill.

https://www.irishexaminer.com/breakingnews/business/–930109.html

INTERNET FUELLING WHITE SUPREMACIST DOMESTIC TERRORISM, FEDS SAY

On 5th June, Homeland Security Today reported a Washington Times article saying that the internet is fanning the flames of white supremacist domestic terrorism, a group of federal law enforcement officials told the US Congress.  Domestic terrorist movements are borrowing from the ISIS handbook, using social media to recruit, radicalise, inspire and mobilise Americans to violence.

https://www.hstoday.us/subject-matter-areas/counterterrorism/internet-fueling-white-supremacist-domestic-terrorism-feds-say/

A NEW US FEDERAL BILL WOULD BAN LOOT BOXES

An article from Manatt Phelps & Phillips LLP on 6th June says that loot boxes typically contain something of value specific to the video game in which they appear — such as a new skill, accessory or weapon for a character — and can be either won or purchased.  Over the years, games have become dependent on loot boxes as a source of revenue, and a black market has even developed for loot boxes due to their value.  The Protecting Children from Abusive Games Act would prohibit loot boxes and pay-to-win microtransactions in video games aimed at those under the age of 18, as well as those “whose developers knowingly allow minor players to engage in microtransactions”.  Enforcement of the proposed legislation would fall to the Federal Trade Commission (FTC).

https://www.manatt.com/Insights/Newsletters/Advertising-Law/Game-Over-for-Loot-Boxes-in-New-Proposed-Legislati

The Bill is available at –

https://www.congress.gov/bill/116th-congress/senate-bill/1629/text?r=1&s=4

MQM FOUNDER ALTAF HUSSAIN ARRESTED IN LONDON

Customs Today and the BBC on 11th June reported that Muttahida Qaumi Movement (MQM) founder Altaf Hussain was arrested in London.  MQM is a Pakistani political party and despite a split in the MQM, he still wields considerable influence in the party and its main power base, Karachi.  Hussain, 65, requested asylum in the 1990s and later gained UK citizenship.

https://www.bbc.co.uk/news/world-asia-48591974

http://www.customstoday.com.pk/mqm-founder-altaf-hussain-arrested-in-london/

GDPR IMPACT ON DATA BREACH NOTIFICATION

An article from Out-Law on 11th June said that organisations operating in the UK are reporting data breaches in greater number than in many other parts of the EU, according to international law firm Pinsent Masons.  UK’s Information Commissioner’s Office (ICO) has received a monthly average of 1,276 data breach notifications – 43 notifications per day.

https://www.out-law.com/en/articles/2019/june/report-gdpr-data-breach-notification-/

ANALYSIS SHOWS GROWTH IN DANGEROUS FAKE GOODS 

Police Professional on 11th June reported that most counterfeiting activity is carried out by increasingly professionalised organised crime networks, according to the first EU-wide intellectual property crime threat assessment in a report from Europol and the European Union Intellectual Property Office (EUIPO).  The assessment identified that although most counterfeits in the EU market are produced outside Europe, in particular in parts of Asia, domestic manufacturing within Europe is an increasing trend. Also, it identified a growth in the supply of fake goods via small parcels and express couriers, which are more difficult for enforcement authorities to detect.  Online, illegal digital content continues to be distributed through BitTorrent portals and peer-to-peer networks, but also, increasingly, via cyberlockers 

https://www.policeprofessional.com/news/first-of-its-kind-analysis-shows-growth-in-dangerous-fake-goods/

THE SURPRISINGLY EFFECTIVE PILOT PROGRAMME “STOPPING” REAL ESTATE MONEY LAUNDERING IN THE US

On 11th June, Quartz reported that, in 2016, the US Treasury set up a pilot programme to tackle laundering through real estate in 2016, with a rather modest measure: it forced title insurance companies to find out who actually owned LLC buying luxury real estate in a handful of US cities, and to give that information to the Treasury.  The Geographical Targeting Order programme seems to have had an effect on the market, and since the scheme started, there has been an almost 70% drop in companies buying real estate with just cash.

https://qz.com/1635394/how-the-us-can-stop-real-estate-money-laundering/

TRADE WAR RESHAPING US SUPPLY CHAINS

On 10th June, American Shipper reported that Drewry, in its Container Insight Weekly, said this year there has been an upsurge in US imports from other parts of the world as imports from China have continued to fall.  It says that last year, China accounted for $539.5 billion of the $2.6 trillion goods the US imported; and currently $250 billion worth of Chinese goods are subject to tariff – and this could rise.  Drewry is also reported as saying that there are anecdotal reports that Chinese goods are being transshipped to places such as Vietnam and Malaysia, simply to have the Made in China label replaced to avoid the duties.

https://www.americanshipper.com/magazine/daily/?year=2019&month=6&day=10&page_number=2&via=asdaily

REMINDER THAT NEW ISLE OF MAN AML/CFT CODE IN FORCE

On 11th June, the FSA reminded businesses in a news release that the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 (‘the 2019 Code’) came into operation on 1st June.  It also advised that Schedule 4 to the Proceeds of Crime Act 2008 (which details those subject to the various relevant Codes) has also been amended to improve its layout and flow, and some definitions have been amended.  Links to both the new Code and the new Schedule 4 are provided.

https://www.iomfsa.im/fsa-news/2019/jun/amlcft-code-2019/

SRI LANKA: PRESIDENT’S FORMER CHIEF OF STAFF AND FORMER TIMBER CORPORATION CHAIRMAN TO BE INDICTED IN BRIBERY CASE

Ceylon Today on 11th June reported that the Commission to Investigate Allegations of Bribery or Corruption has said that the probe into the bribery case involving the former Chief of the President’s Staff, Dr. Kusumdasa Mahanama and the former Chairman of the State Timber Corporation Piyadasa Dissanayaka has been concluded, and it will shortly indict them at the Colombo High Court.

http://www.ceylontoday.lk/news/8/news-more/5320

COMPANY VOLUNTARY ARRANGEMENTS (CVA)

On 11th June, the House of Commons Library published a briefing paper that provides a detailed overview of the Company Voluntary Arrangement (CVA) procedure.  A CVA enables a viable company in financial difficulty to enter into a legally binding agreement with its unsecured creditors in which the company’s debts are compromised. The company’s directors, an administrator or a liquidator may make a proposal for a CVA which is then put before a meeting of creditors and shareholders for their approval.  While an agreement is being pursued, the existing management stays in place.  It is described as a relatively simple procedure with minimum court involvement.  The paper also provides a summary of recent Government consultation papers and a report commissioned by R3 (the insolvency trade body) on the reasons for the limited success of CVA.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06944

OFAC DESIGNATES SYRIAN OLIGARCH SAMER FOZ AND HIS LUXURY RECONSTRUCTION BUSINESS EMPIRE

On 11th June, the US Treasury announced that it had designated 16 individuals and entities associated with an international network benefiting the Assad regime.   These designations are said to serve to cut off critical supplies and financiers for the regime’s luxury reconstruction and investment efforts.   It is said that Samer Foz, his relatives, and his business empire have leveraged the atrocities of the Syrian conflict into a profit-making enterprise, and that this Syrian oligarch is directly supporting the murderous Assad regime and building luxury developments on land stolen from those fleeing his brutality.  Samer Foz is the Chairman and General Manager of Aman Holding, which was formerly known as the Aman Group.  Aman Holding owns and controls over a dozen companies, all of which benefit Samer Foz personally, and serves as an umbrella for over a dozen different ventures, and in some of these companies, Samer Foz shares ownership and managerial duties with his siblings Amer Foz and Husen Foz.

At the same time, OFAC also designated 2 businesses for shipments of Iranian-origin petroleum to Syria:  Synergy SAL (Offshore) and BS Company (Offshore).

https://home.treasury.gov/news/press-releases/sm704

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190611.aspx

REACHING THE UNREACHABLE: ATTACKING THE ASSETS OF SERIOUS AND ORGANISED CRIMINALITY IN THE UK IN THE ABSENCE OF A CONVICTION

On 11th June, RUSI published a new paper from the CFCS, the Centre for Financial Crime & Security Studies, which looks at the origins of the UK’s non-conviction-based confiscation regime, including the Unexplained Wealth Order, and evaluates the experience of other jurisdictions to consider whether the UK can learn lessons from their deployment of the powers.  This paper explores the extent to which the hardline rhetoric of the government has been matched by reality, with regards to greater use of the powers available under Part 5 of the Proceeds of Crime Act 2002 (POCA), to allow for the confiscation of unlawfully obtained assets in the absence of a conviction – known as non-conviction-based (NCB) confiscation.  It looks at the Irish model, which it says is often held up as a good example, and the US regime.  It makes a number of recommendations for UK policymakers.

https://rusi.org/publication/occasional-papers/reaching-unreachable-attacking-assets-serious-and-organised

TRANSPOSITION OF THE EU 5TH MONEY LAUNDERING DIRECTIVE – CHARTERED INSTITUTE OF TAXATION COMMENTS

On 11th June, the CIOT published its comments on the HM Treasury consultation on the EU Directive.  Amongst its comments are that it believes that the planned expansion of the definition of “tax adviser” is unlikely to greatly impact the position of its members or of firms in which they work.  It says that the government proposes to mandate requirements to verify all directors and senior officers of corporations, but the CIOT preference is to retain the current risk-based approach, saying that the change risks a return to a “box ticking” situation.  It says that it believes that, for EDD purposes, tracing an ownership right through the corporate client may not be necessary where ultimate beneficial ownership is not in doubt.  It expresses some concerns in relation to the proposal to require obliged entities to directly inform Companies House of any discrepancies between the beneficial ownership information they hold, and information held on the public register at Companies House.  On control of trusts, it says that, as the Directive is aimed at registration of the beneficial ownership of ‘entities’, only where a UK trust may constitute an ‘entity’ comparable to a corporate, should it be fall to be registered; and most bare trusts and nominee arrangements would not require registration.  It also has some concerns that there are currently insufficient safeguards to prevent disclosure of personal information about trustees and beneficiaries to someone claiming to have a ‘legitimate interest’ in such disclosure, and believes that an ombudsman should determine such requests.

https://www.tax.org.uk/sites/default/files/190610%20Transposition%20of%20the%20Fifth%20Money%20Laundering%20Directive%20-%20CIOT%20comments.pdf

The consultation document was available at –

https://www.gov.uk/government/consultations/transposition-of-the-fifth-money-laundering-directive