OTHER THINGS YOU MAY HAVE MISSED – JUNE 12

12th June 2019

AMERICAN MUSEUMS TAKE MEASURES MINDFUL OF REPATRIATION OF AFRICAN ART

ART News on 11th June reported that, in February, the Metropolitan Museum of Art in New York ended an exhibition earlier than expected when the centerpiece of “Nedjemankh and His Gilded Coffin” — after 7 months on view with robust attendance figures nearing 450,000 — was found to have been looted from Egypt in 2011.  It says that the question of how such a tainted treasure could work its way through the hallowed museum’s acquisition process remained.  The article says that calls for repatriation of holdings in American museums may be about to get much more heated, as attention to the matter migrates beyond Europe and demands for closer scrutiny intensify across the globe.  It cites an example of the Baltimore Museum, which is in the process of creating a Cultural Property Working Group responsible for assessing the museum’s current collection policies as well as recommending revisions to past procedures, then going on to consider other institutions’ positions and pointing out that much of the debate has been centred in Europe, where museums are typically government-owned.  In the US, on the other hand, where most museums are privately run and funded, guidelines might need to come from outside bodies such as the American Alliance of Museums and the Association of Art Museum Directors.

http://www.artnews.com/2019/06/11/african-art-repatriation-american-museums/

CANADIAN CRICKETER AMONG 4 HELD FOR SMUGGLING GOLD IN INDIA

On 12th June, the Hindustan Times and others reported that 4 people, including a 22-year-old Canadian cricketer, were arrested from New Delhi’s Indira Gandhi International Airport for allegedly trying to smuggle 5.2 kg of gold into the country.  Officers said that the arrested suspects were members of a family that owns a jewellery shop in the Punjab and had arrived from Bangkok.  The cricketer, Mamik Luthra, an all-rounder, had played the Under-19 World Cup for Canada held in Bangladesh in 2016.

https://www.hindustantimes.com/delhi-news/canadian-cricketer-among-four-held-for-smuggling-gold/story-XCFRHHDyqvFpRXXPz1LEzL.html

SERBIAN MURDERS IN SOUTH AFRICA, A REFUGE FOR CRIMINALS FROM THE BALKANS

News 24 in South Africa carried an article on 11th June about connections between the criminal underworld in Serbia and a spate of murders in South Africa.  It is said that South Africa is seen as attractive because there are not strong channels for information-sharing and extradition with Serbia and, on the other hand, South Africa is considered to be a good place for business opportunities, whether legal or illegal,  It is said that so-called Balkan cocaine “kingpin” Darko Saric, is believed to have hidden in South Africa for several years.  Originally from Montenegro, Saric is now imprisoned in Serbia, but it is claimed he lived under a pseudonym in Gauteng and that he was “protected by mafia and police”.  The article claims that South Africa offers underworld figures the opportunity to establish business networks through legitimate structures but without recourse for criminal activity from law enforcement officials because of high levels of corruption.  Sources in South Africa and Serbia say it is likely that the lucrative drug trade is the motive for the spate of hits around Johannesburg, and mentions that ports in Africa have been used as transit points in cocaine smuggling operations.  Journalist Miloš Lazic is reported as saying that he believes that what has been happening in South Africa could be related to a spate of big drug busts in Europe recently – with syndicates hunting down those who tipped off authorities.

https://www.news24.com/SouthAfrica/News/serbian-murders-faraway-sa-has-become-a-refuge-for-criminals-from-the-balkans-20190611

CHINA: SMUGGLING SHIP COLLIDES WITH PATROL VESSEL AS IT TRIES TO FLEE

On 11th June, the Shine website in China reported (with amazing photo and video) that a tanker, Hongpu 228, suspected of smuggling crashed into a Shanghai Maritime Safety Administration patrol vessel as it tried to escape inspection.  The vessel was suspected to be smuggling refined oil when it was spotted.

https://www.shine.cn/news/metro/1906116449/

KENYA SEIZES HIGH-END CARS SMUGGLED FROM UK AND DESTINED FOR UGANDA

On 11th June, the Daily Monitor reported that the Kenya Revenue Authority (KRA) has seized 14 luxury vehicles that were smuggled into the country from the UK.  They are suspected to have been stolen and smuggled into Kenya from UK and were in transit to Uganda.  12 of the vehicles have been reshipped back to UK while the 2 are awaiting reshipment.  The article says that Uganda has been a destination for high-end stolen vehicles and many have been seized and returned to UK and other European countries.  The cars are mainly stolen from UK and France, among others countries.  They are, according to a Daily Monitor investigation, stolen from Europe before they are driven to France and shipped to Oman through Port Le Havre.  In 2016, 36 motor vehicles were returned to UK after they were seized from Ugandans.

https://www.monitor.co.ug/News/National/Kenya-seizes-high-end-cars-destined-Uganda/688334-5153632-73usaf/index.html

GREECE LOSES €690 MILLION YEARLY TO SMUGGLED TOBACCO

The National Herald on 12th June reported that Greece ranks first in the EU for smuggled tobacco, losing €690 million annually in revenues.  It says that taxes make up some 85% of the cost of a pack with the government anxious to rake in as much money as possible during a more than 9-year-long economic crisis that has started to abate in some sectors.  A report showed the unlawful cigarette market in Greece rose to 23.6% last year, up 5.6% from 2017.

https://www.thenationalherald.com/248934/up-in-smoke-greece-loses-690-million-euros-to-smuggled-tobacco/

1MDB SCANDAL FALLOUT DRIVING UP REGULATORY COSTS FOR FINANCIAL INSTITUTIONS IN ASIAN COUNTRIES

The South China Morning Post on 12th June reported that compliance costs, which have risen 9% to 10% in the past 24 months in SE Asia, are set to increase further, according to LexisNexis Risk Solutions report, but that annual costs still significantly below North America.  The report says that regulators are putting increasing pressure on financial institutions to determine beneficial ownership and improve overall screening requirements, particularly in the wake of the 1MDB scandal.

https://www.scmp.com/business/investor-relations/article/3014033/1mdb-scandal-fallout-driving-regulatory-costs-financial

WORLDWIDE FREEZING ORDERS UPHELD IN MULTINATIONAL SHIPPING FRAUD CASE INVOLVING ISLE OF MAN COMPANY

On 31st May, an article from Wikborg Rein of Norway said that, in a recent High Court decision 2 worldwide freezing orders in a multinational shipping fraud case were upheld, rejecting the defendant’s allegations of breaches of full and frank disclosure and providing useful confirmation of the standing of an intermediary charterer to claim for the full value of the hire.  Manchester Shipping Ltd chartered 3 vessels from an Isle of Man company, Silverburn Shipping (IoM) Ltd, and had sub-chartered them to a Russian company called Caspian Hydra Technologies (KGK).  During the charter period, KGK stopped paying hire for the vessels and Manchester suspected that hire was fraudulently being diverted from KGK to a UK company.  Manchester was granted 2 worldwide freezing orders in May 2018 in support of its claim.  Th firm says that this is a useful and thorough judgment from the English High Court and outlines 3 reasons.

https://www.wr.no/en/news/publications/shipping-offshore-update-june-2019-nor-shipping/worldwide-freezing-orders-upheld-in-multi-national-shipping-fraud-case/

SFO REACHES INTO AUSTRALIA – MUTUAL LEGAL ASSISTANCE, EXTRADITION AND THE HAGUE CONVENTION

On 10th June, Nyman Gibson Miralis has published an article addressing the questions: can a law enforcement agency from Country A request mutual legal assistance from Country B, for the purposes of obtaining a signed witness statement from a Country B resident, for a criminal prosecution in Country A?; and does Country A have the power to compel a Country B resident to give evidence at a criminal trial?  It concludes that whilst the SFO may request the assistance of the Australian Government and law enforcement agencies, it ultimately has no power to compel an Australian resident to give evidence at a criminal trial, either by returning the person to the UK or by compelling them to give evidence (for example by video link) from Australia.

https://ngm.com.au/uk-serious-fraud-office-reaches-into-australia/

WHEN CAN COMMUNICATIONS BE PROTECTED BY LEGAL ADVICE PRIVILEGE?

On 11th June, Morton Fraser in Scotland published a briefing which says that the scope of legal advice privilege was outlined by Lord Rodger in the House of Lord’s judgement in the English case of Three Rivers No.6.  It comments on a recent Scottish case which it says contains some interesting discussion about when the protection offered by legal advice privilege can apply in Scotland – and of particular interest was the adoption by both parties, which was followed by the court, of the assumption that there was no material difference between Scots law and English law in this area.

https://www.morton-fraser.com/knowledge-hub/when-communications-protected-legal-advice-privilege

ITALY PROPOSES TAX ON SAVINGS HIDDEN IN SAFETY DEPOSIT BOXES

Reuters on 12th June reported that Italy’s government may tax cash and other valuables locked away in safety deposit boxes held with banks, Italian newspapers have said.  Those who voluntarily declared their deposit-box holdings would be taxed at a low rate of about 15%.

https://uk.reuters.com/article/us-italy-politics-budget/italy-proposes-tax-on-savings-hidden-in-safety-deposit-boxes-idUKKCN1TD0G5

FBI PRAISES GUERNSEY (AND OTHER CROWN DEPENDENCIES) IN FIGHT AGAINST FINANCIAL CRIME

On 12th June, Guernsey Press reports that the FBI has highlighted to US senators the ‘immense value’ of Guernsey’s information-sharing in helping combat financial crime, and said information exchange agreements with the Crown Dependencies were an example of how to fight financial crime.

https://guernseypress.com/news/2019/06/12/fbi-praises-island-in-fight-against-financial-crime/

THE BASICS: WHAT DOCUMENTS MUST BE DISCLOSED TO AN OPPONENT IN A LEGAL DISPUTE?

On 11th June, Gowling WLG published a briefing on disclosure, whereby the parties to a claim must identify and make available to each other documents that help their own case, and on which they intend to rely, that help the other party to understand the claim or defence they have to meet and, crucially, that are adverse to their own claim.  It explains what are “documents” and the disclosure obligations.  Amongst the points it highlights are that – as soon as a party is aware that litigation might be possible, it has an immediate duty to preserve all documents that may be relevant to the claim (or any defence to that claim); the duty to preserve relevant documents is ongoing and lasts until the claim is concluded; “documents” include all electronic communications including email, text messages, voicemail and audio or video recordings; and parties to a claim are required to disclose adverse documents.

https://gowlingwlg.com/en/insights-resources/articles/2019/what-documents-must-be-disclosed-to-an-opponent/

UK LAW COMMISSION BEGINS REVIEW OF INTERMEDIATED SECURITIES SYSTEM

On 11th June, the Law Commission announced that the Commission has begun reviewing the system of intermediated securities in order to identify potential issues for both investors and companies.  It says that shares and bonds are increasingly held through a system of “dematerialisation” and “intermediation” – in other words, paper certificates have been replaced by a system in which most investors “own” securities through computerised credit entries held through a chain of intermediaries.  This system of intermediated securities has made trading significantly quicker, cheaper and more convenient.  The Department for Business, Energy & Industrial Strategy (BEIS) has asked the Commission to investigate the system of intermediated securities to identify any legal issues and potential avenues for reform.  The Commission will produce a scoping report to inform future work on improving the system.

https://www.lawcom.gov.uk/law-commission-begins-review-of-intermediated-securities-system/

NEW THREAT ASSESSMENT CONFIRMS LINKS BETWEEN COUNTERFEITING AND ORGANISED CRIME IN EU

On 12th June, a news release from Europol about the first EU-wide intellectual property crime threat assessment from Europol and the European Union Intellectual Property Office (EUIPO).  It says that most criminal activity involving counterfeiting is carried out by increasingly professionalised organised crime networks, which can reap large profits while running relatively few risks, and that domestic manufacturing within Europe is an increasing trend.  Online, illegal digital content continues to be distributed through BitTorrent portals and peer-to-peer networks, but also, increasingly, via cyberlockers, the threat assessment finds.

https://www.europol.europa.eu/newsroom/news/new-threat-assessment-confirms-links-between-counterfeiting-and-organised-crime-in-eu

UNFAIR DISMISSAL CASE HIGHLIGHTS NEED FOR COMPANIES TO UPDATE POLICIES AND PROCEDURES AND TO OBTAIN FULL CONSENT BEFORE USING BIOMETRIC DATA IN THE WORKPLACE

An article from Out-Law on 11th June about an Australian case says that technology to use fingerprints, iris scanners and implanted chips is becoming cheaper and more readily available, meaning that more and more companies are seeking to use the technology.  But an employment dispute has revealed some of the pitfalls of adopting technology before changing workplace policies and practices.

https://www.out-law.com/en/articles/2019/june/fingerprint-case-biometric-policies-and-consent/

JERSEY TAX SCHEME SPV WERE NOT UK RESIDENT, SAYS UPPER TRIBUNAL

An article from Out-Law on 11th June says that 3 special purpose vehicles (SPV) incorporated in Jersey as part of a tax planning arrangement were not tax resident in the UK for tax purposes, the UK’s Upper Tribunal has decided, overturning a previous First-tier Tribunal decision on application of the residence test – in the very common case of a subsidiary company acting in accordance with its parent company’s wishes.

https://www.out-law.com/en/articles/2019/june/tax-scheme-spvs-not-uk-resident-tribunal-/

DRC ELECTION OFFICIALS CHALLENGE US SANCTIONS LISTING

On 12th June, the EU Sanctions Blog reported that 3 officials in the Democratic Republic of the Congo’s Electoral Commission (CENI) were added to US sanctions lists in March.  They are now said to be challenging the listing.

https://www.europeansanctions.com/2019/06/congolese-elections-officials-to-challenge-us-listings/

https://www.ceni.cd/assets/bundles/documents/declaration-de-la-ceni-en-rapport-avec-les-sanctions-imposees-par-le-departement-d-etat-americain-et-l-ocae-du-ministere-du-tresor-americain.pdf

US PRESENTED FILE ON NORTH KOREAN SANCTIONS BUSTING TO CHINESE

The Washington Post on 11th June reported that at a meeting between acting US Defense Secretary Patrick Shanahan and his Chinese counterpart, the former presented the latter with a “gift”.  It says that what looked like a coffee table book was actually 32 pages of photographs and satellite images of North Korean ships getting and delivering shipments of oil.  Many of the photos are stamped with dates, times, locations and descriptions, and, according to officials, represent proof that North Korea is violating punishing economic sanctions right off China’s coast.

https://www.washingtonpost.com/world/national-security/us-photos-show-china-not-enforcing-north-korea-oil-sanctions/2019/06/11/4e050538-8c75-11e9-b6f4-033356502dce_story.html

CITING PRESSURE FROM US SANCTIONS, FINNISH NGO ENDS AID WORK IN NORTH KOREA

On 12th June, NK News reported that Fida International has said that OFAC measures are making DPRK operations “impossible”.

https://www.nknews.org/2019/06/finnish-ngo-to-end-north-korean-aid-work-over-u-s-sanctions-pressure/out

VAT CAROUSEL FRAUDSTERS ARRESTED WITH THE SUPPORT OF EUROJUST

A news release from Eurojust on 12th June reported that, during a joint action day co-ordinated by Eurojust, judicial authorities from Italy, Germany, Spain, Austria and Romania took down 2 organised crime groups suspected of large-scale VAT fraud in the EU drinks market.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2019/2019-06-12b.aspx

EUROJUST HELPED ITALIAN NATIONAL AUTHORITIES CRACK DOWN ON AN ORGANISED CRIME GROUP INVOLVED IN LARGE-SCALE TAX FRAUD AND OTHER FINANCIAL CRIMES

On 12th June, a news release from Eurojust said that the estimated damage, caused by tax evasion and other criminal activities, amounts to over €80 million.  The gang members are accused of having participated in a criminal organisation to commit excise and VAT fraud, as well as large-scale money laundering and other related crimes.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2019/2019-06-12a.aspx

ELITE GERMAN STATE POLICE ACCUSED OF FUNNELLING AMMUNITION TO ‘PREPPER’ SCENE

Deutsche Welle on 12th June reported that one active and 3 former state-level police commando members have been arrested in north-eastern Germany and 14 premises searched.  3 are accused of diverting ammunition to the doomsday ‘Prepper’ scene for years. They were members of SEK, special operations commandos who are maintained by each of Germany’s 16 regional states (Länder).  The Preppers are far-right survivalists’ groups which reportedly aimed to stash supplies for a post-apocalyptic scenario.

https://www.dw.com/en/elite-german-state-police-accused-of-funneling-ammunition-to-prepper-scene/a-49166663

CUSTOMS FRAUD IS THRIVING THANKS TO TRUMP’S TRADE WAR

An article in The Hill on 12th June said that the increased incentive to commit customs fraud – such as with Chinese-made products being transhipped and relabelled as originating in other countries.

https://thehill.com/opinion/finance/448205-customs-fraud-thrives-thanks-to-trumps-trade-war

ALGERIA’S EX-PM AND FORMER MINISTER DETAINED OVER ALLEGED CORRUPTION

On 12th June, the Middle East Monitor reported that Algeria’s Supreme Court has ordered former Prime Minister Ahmed Ouyahia be held in custody after he faced a judge over a corruption investigation.  The court later also detained former transport and public works minister Abdelghani Zaalane after a hearing over alleged involvement in corruption.  They are the most senior politicians to be detained since mass protests broke out earlier this year demanding the removal of the ruling elite and the prosecution of people demonstrators see as corrupt.

https://www.middleeastmonitor.com/20190612-algerias-ex-pm-former-minister-detained-over-alleged-corruption/

VIETNAM JAILS SHIPBUILDING EXECUTIVE IN GRAFT CRACKDOWN
CAN on 12th June reported that a Vietnam shipbuilding magnate has been sentenced to 13 years in jail for embezzlement, according to state media, the latest victim of an anti-corruption drive.  Nguyen Ngoc Su, the former board chairman of state-run Vietnam Shipbuilding Industry Group (Vinashin), for “abusing position and power to appropriate assets”.  Former director Truong Van Tuyen was jailed for 7 years on the same charges, while an ex-deputy director Pham Thanh Son got 6 years.

https://www.channelnewsasia.com/news/asia/vietnam-jails-shipbuilding-executive-in-graft-crackdown-11621434

EGYPT SEIZES $178 MILLION IN MONEY LAUNDERING CRACKDOWN

OCCRP on 12th June reported that, in just one year Egyptian authorities seized a record $178 million from money laundering crimes, government officials said.  A significant portion of this sum was being laundered through illegal drug trafficking channels in the country.  Egypt’s illegal drug trade was worth around $22 billion last year, according to the Operations Director of the Egyptian Center for Public Opinion Research.

https://www.occrp.org/en/daily/9934-egypt-seizes-178-million-in-money-laundering-crackdown

UK: DRUG TRAFFICKERS CONVICTED AFTER LAUNDERING MILLIONS THROUGH SHAM COMPANIES

An NCA news release on 12th June reported that an extensive criminal organisation, which supplied Class A drugs and laundered millions of pounds in illicit profits, has been dismantled following an investigation by the joint NCA and Metropolitan Police Organised Crime Partnership (OCP).  The gang used encrypted smartphones as well as a succession of unregistered ‘burner’ phones to direct the group’s activity, and members of the crime group trafficked millions of pounds-worth of illegal drugs across England.  The proceeds were then deposited in cash into front company bank accounts, before being transferred to a destination account in Dubai.

https://www.nationalcrimeagency.gov.uk/news/drug-traffickers-convicted-after-laundering-millions-through-sham-companies

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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