OTHER THINGS YOU MAY HAVE MISSED – JULY 19

19th July 2019

legis

https://www.statista.com/chart/16016/the-us-legislative-process/

PANAMA’S SHIPPING TAX REGIME IS DECLARED “NON-PERNICIOUS” BY OECD

On 15th July, the Bulletin Panama reported that the Panama Shipping Tax Regime was declared by OECD as “not pernicious”, i.e. it does not present a risk, nor is it prejudicial to the tax or tax base of other countries in the region, at the 52nd Session of the Forum on Pernicious Tax Practices (FHTP) in Paris.  In addition to the Shipping Tax Regime, the OECD evaluated the fiscal regimes of the Panama Pacifico Special Zone and the Multinational Corporation Headquarters (SEM).

http://thebulletinpanama.com/2019/07/panamas-shipping-tax-regime-is-declared-non-pernicious/

IRAN CLAIMS IT SEIZED SMALL TANKER FOR FUEL-SMUGGLING

Maritime Executive and others on 18th July reported the seizure by the Iranian Revolutionary Guards of a small product tanker, the Panama-flagged Riah, in the Strait of Hormuz.   12 people on board were reportedly detained.  The IRGC said the tanker was carrying 1 million litres of smuggled fuel in a surprise operation.  It was reported that the ship had turned off its transponder the day before but an Emirati official said it sent no distress call

https://www.maritime-executive.com/article/iran-claims-it-seized-small-tanker-for-fuel-smuggling

GHANA LOSES $12 MILLION TO FERTILISER SMUGGLING IN 2018

On 19th July, Ghana Business News reported claims by a minister who said that Ghana lost about $12 million in 2018 to fertiliser smuggling to neighbouring countries and he called on security agencies to beef up security to prevent smuggling activities.  He urged the security agencies in the region to heighten security and impound any truck transporting fertiliser to neighbouring Burkina Faso through Sissala East and West Districts.

https://www.ghanabusinessnews.com/2019/07/18/ghana-loses-12m-to-fertilizer-smuggling-in-2018-minister/

HOW GAMBLING GIANT SPORTPESA MADE WAVES IN AFRICA – AND PREMIER LEAGUE

An article in the Guardian on 18th July says that Everton’s sponsors are hailed by the club for supporting community schemes, but there are concerns about how the Kenyan-Bulgarian firm profits from an online gambling craze.  Founded in Nairobi as a partnership of wealthy, politically influential Kenyans with Bulgarian investors, SportPesa mined its huge fortune exploiting an online gambling craze in Kenya.  For its UK operations, it makes use of the “white label” system, allied to a company, TGP Europe, registered in the Isle of Man.  The owners of TGP Holdings are listed as 3 Isle of Man trusts and 1 trust based in the BVI.  This means SportPesa does not require a licence from the UK Gambling Commission and, according to the Guardian, no SportPesa company appears to pay UK corporation tax on those revenues, nor contribute to UK gambling welfare programmes.  SportPesa grew rapidly in Kenya to dominate online gambling by zealously exploiting the mass arrival of mobile phone technology from 2014, and sponsors the country’s Premier League.  However, recently SportPesa was among a number of gambling companies in Kenya whose licences were suspended because of reported concerns about non-compliance with regulations, although SportPesa continues to operate because of a court order.  The article mentions its Bulgarian shareholder, Guerassim Nikolov, a casino owner, who moved to Nairobi in 1999 from Sofia, where he operated a casino.

https://www.theguardian.com/football/2019/jul/18/sportpesa-gambling-company-premier-league-kenya

RUSSIA: USE OF NEW APPROACH IN PROSECUTING BUSINESSMEN

In its Moscow Corporate crime and investigations newsletter for July 2019, law firm Herbert Smith Freehills reported that Russian investigative authorities are very inventive when it comes to the prosecution of businessmen. Recently, they have started using a new instrument which we hadn’t seen being applied before – such as using a serious offence criminalising foreign exchange transactions where funds were transferred to a bank account of a non-resident based on the documents which are knowingly false to combat more advanced species of fraud where Russians set up sham entities abroad, such as various “laundromats” (in particular, see the criminal case against the ex-head of the European Express bank, Oleg Kuzmin, in relation to the so-called “Moldova Laundromat”).  Data shows the relevant Article of the Criminal Code being increasingly used – and the newsletter gives examples.

https://www.herbertsmithfreehills.com/latest-thinking/moscow-corporate-crime-and-investigations-newsletter-july-2019

RUSSIA: CHANGE IN THE PROCEDURE OF BRINGING FOREIGN COMPANIES TO ACCOUNT FOR IMPROPER PAYMENTS

Another item in the Moscow Corporate crime and investigations newsletter for July 2019 from law firm Herbert Smith Freehills reported on an initiative which is part of the Russian National Anti-Corruption Plan for 2018–2020.  A new draft law extends the length that any relevant investigation and which, if adopted, may lead to more intensive information exchange between Russian and foreign anti-corruption enforcement agencies.

https://www.herbertsmithfreehills.com/latest-thinking/moscow-corporate-crime-and-investigations-newsletter-july-2019

WHAT ARE THE PENALTIES FOR TAX FRAUD IN AUSTRALIA?

An article from Sydney Criminal Lawyers on 18th July reported on tax evasions offences and penalties in Australia, in the light of a case involving a couple who said that taxes were contrary to the Bible and the word of God.

https://www.sydneycriminallawyers.com.au/blog/what-are-the-penalties-for-tax-fraud-in-australia/

JEFFREY EPSTEIN’S OFFSHORE FORTUNE TRACED TO PARADISE PAPERS

On 18th July, the ICIJ reported that wealthy financier and sex offender Jeffrey Epstein, currently facing fresh charges in the US, cloaked his fortune in a series of offshore shell companies registered in secretive tax havens.  It says that the Paradise papers leaked from Appleby in 2017 reportedly show Epstein’s firm had in working with Appleby to help it navigate the secretive and low-tax world of offshore finance.

https://www.icij.org/investigations/paradise-papers/jeffrey-epsteins-offshore-fortune-traced-to-paradise-papers/

MARSHALL ISLANDS TO BE REMOVED FROM EU’S TAX HAVEN LIST

Shipping Watch on 18th July reported that the Marshall Islands has promised the EU to change its policies in several areas so as to be removed from the EU list.

https://shippingwatch.com/secure/regulation/article11507813.ece

RECORD NUMBER OF CZECH COMPANIES LEAVING TAX HAVENS

Radio Prague on 16th July reported that there are now 12,400 Czech companies based in tax havens, the fewest since 2011, after a record 405 moved operations this year.  It is said that estimates that only 2.47% of Czech companies are now controlled from tax havens, with Hong Kong and the UAE increasingly popular.

https://www.radio.cz/en/section/news/bisnode-record-number-of-czech-firms-leaving-tax-havens

COUNTERFEIT MOBILE DEVICES: MORE THAN JUST A SECURITY RISK

On 18th July, Bird & Bird published an article quoting statistics that 180 million fake mobile phones are sold globally each year and giving an overview of some of the security and health problems caused by fake mobile devices. It says that the risks of a malfunctioning device are even more acute in counterfeit devices where defective software and imitation parts may be used to create a cheaper product – a somewhat extreme example of malfunctioning being battery overheating caused by battery management system failures.  The article identifies and explains the key security concerns relating to counterfeit electronic devices – malware, ransomware, key logging and data theft.  According to a WCO report, 2 out of the 3 most counterfeited brands worldwide are global technology companies who produce mobile devices as a key part of their product offering.

https://www.twobirds.com/en/news/articles/2019/uae/counterfeit-mobile-devices-more-than-just-a-security-risk

IFS

https://www.ifs.org.uk/publications/14258

UKRAINE INTRODUCES SPECIAL DUTIES ON DIESEL AND LIQUEFIED GAS IMPORTED FROM RUSSIA

On 19th July, Ukrinform reported that the new duties are to be introduced from 1st August.

https://www.ukrinform.net/rubric-economy/2743491-ukraine-introduces-special-duties-in-response-to-new-russian-economic-sanctions.html

OVERVIEW OF THE FAR-RIGHT IN THE UK

On 19th July, the Commission for Countering Extremism published a report intended to provide readers with an overview of the far-right in the UK.  It covers the various ideological strains that inhabit the far-right space (broadly interpreted) as well as some of their different aims and objectives.  The paper finishes by setting out some of the available indicators of the scale of far-right support in the UK – both the radical right (democratic) and extreme right (anti-democratic).  It says that far-right activism is transnational, and so it has not been possible to limit this research exclusively to the UK, nor can the UK far-right be considered in isolation from the wider far-right.  Among its conclusions are that, while the frequency of lone actors makes far-right terrorism unpredictable, developments at the extreme end of the far-right spectrum in the UK seemingly have the most potential for terrorist violence; and the majority of far-right activity takes place online.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/816692/Ben_Lee_-_Overview_of_the_far_right.pdf

See also –

https://extremismcommission.blog.gov.uk/2019/07/19/commission-publishes-new-extremism-statistics-and-academic-papers/

GERMANY PUBLISHES GUIDANCE ON INNOVATION AND EXPORT CONTROL

World ECR reported that Germany’s export control regulatory authority, BAFA has published in English a document entitled ‘Export Control in Science and Research’.

https://www.worldecr.com/news/germany-publishes-guidance-on-innovation-and-export-control/

The guidance is available at –

https://www.bafa.de/SharedDocs/Downloads/EN/Foreign_Trade/afk_awareness_academia.html

General guidance on German export controls is available at –

https://www.bafa.de/EN/Foreign_Trade/Export_Control/export_control_node.html;jsessionid=28013B41EB4DEAA91CC2DAF7C400A335.2_cid371

MARITIME SECURITY LICENSING FOR GERMAN SHIPS

The German export control agency BAFA provides comprehensive information and guidance (in English) for private security companies to perform security functions to counter piracy on board ocean-going vessels sailing under the German flag.  Since 2013, a licence issued by the Federal Office for Economic Affairs and Export Control (aka BAFA) has been required.  A licence is required for –

  • national and foreign security companies intending to offer security functions on board ocean-going vessels flying the German flag; and
  • security companies that are established in Germany and intend to operate on ocean-going vessels under other flags since tasks of maritime security provided outside the German exclusive economic zone are generally removed from the scope of section 34a of the Trade Regulation Code because of their specific requirements.

https://www.bafa.de/EN/Foreign_Trade/Maritime_Security/maritime_security_node.html;jsessionid=28013B41EB4DEAA91CC2DAF7C400A335.2_cid371

INNOVATIVE NEW LAW OPENS GUERNSEY UP TO ARTIFICIAL INTELLIGENCE

On 18th July, Ogier published an article saying that the recently enacted Electronic Transactions (Electronic Agents) (Guernsey) Ordinance 2019, which came into force on 1st March, signals a turning point in law for companies using artificial intelligence (AI) which itself represents an area of exponential growth and critical importance for future development in many areas and sectors worldwide.  It is said to contain a pioneering definition of the legal effect of using AI in contract formation procedures, and it gives electronic agents the authority to form, create, execute and terminate contracts without the input of humans, and makes it clear that the validity of any such contractual exchange will not be denied due to the use of an electronic agent.

https://www.ogier.com/publications/innovative-new-law-opens-guernsey-up-to-ai

CHINA INTRODUCES “INTENT TO USE” PROVISION TO COMBAT TRADEMARK PIRACY

On 18th July, Gowling WLG published an article saying that the national legislature in China swiftly approved the 4th amendment to the country’s Trademark Law and which comes into effect on 1st November.  China is introducing the concept of “intent to use” into the trademark application procedure, and the new law requires that “Bad faith trademark applications filed without intent to use shall be refused”. Procedurally, this clause becomes a legal ground for trademark opposition and invalidation.  The article also says that the new law has tightened the responsibilities of trademark agency, and these are not to accept client instructions in case they know or should know the applications are filed without intent to use or in bad faith.

https://gowlingwlg.com/en/insights-resources/articles/2019/china-introduces-intent-to-use/

REPORT: HOW TECHNOLOGY SHAPES THE FUTURE OF CRIME AND LAW ENFORCEMENT

On 18th July, Europol announced a new report which aims to identify the security threats associated with new and emerging technologies and points to ways for law enforcement to use the opportunities brought by these technologies to combat crime and terrorism.  It says that it is of paramount importance that the voice of law enforcement is heard when legislative and regulatory frameworks are being discussed and developed, in order to have an opportunity to address concerns and needs, particularly with regard to the accessibility of date and lawful interception.

https://www.europol.europa.eu/sites/default/files/documents/report_do_criminals_dream_of_electric_sheep.pdf

CODE AIMS TO IMPROVE STANDARD OF PRIVATE PROSECUTIONS IN ENGLAND & WALES

On 18th July, the Law Society Gazette reported that lawyers advising clients in the controversial area of private prosecutions have published a code that aims to improve the standard of prosecutions and increase judicial understanding of the process.

https://www.lawgazette.co.uk/news/code-aims-to-improve-standard-of-private-prosecutions/5071035.article

The Private Prosecutors’ Association code is at –

https://private-prosecutions.com/ppa-code-foreword/

THE HOME OFFICE REVOKED TENS OF THOUSANDS OF VISAS USING “MISLEADING, INCOMPLETE AND UNSAFE” EVIDENCE, AN OFFICIAL REPORT REVEALS

On 18th July, The Independent carried an article saying that the Home Office ignored expert advice and relied on “dodgy” evidence when it accused almost 34,000 students of cheating in English language tests in 2015, according to a new report published by the all-party parliamentary group.  With no proper right to challenge the decision, these students were told their studies had been terminated and that they had no right to stay in the UK. Some were detained in removal centres, lost their jobs and were left homeless as a result, even though they were in the country legally.

https://www.independent.co.uk/news/uk/home-news/home-office-english-tests-foreign-students-toeic-scandal-evidence-appg-report-a9008211.html

INDIA’S DEFENCE EXPORTS CONTINUE TO GROW

On 19th July, Janes.com reported that Indian defence exports climbed to about $1.5 billion in fiscal year 2018-19, according to media reports – more than double the value of India’s international defence sales in 2017-18 and 7 times the value of such exports in 2016-17.

https://www.janes.com/article/89959/india-s-defence-exports-continue-to-grow

SWISS ARMS TRADE IS BOOMING

On 16th July, Swissinfo reported that Swiss companies exported nearly $276 million worth of war materiel in the first half of 2019.  This compares with $205 million for the same period last year.  Armoured and other motor vehicles accounted for the largest share of exports in the first half of the year, then ammunition for personal shoulder weapons and handguns, and aircraft and UAV, with 57 countries on the export list.   In March, the senate rejected 2 motions to restrict Swiss arms exports.

https://www.swissinfo.ch/eng/war-materiel_swiss-arms-trade-is-booming/45099948

INTERNATIONAL CRIMINAL COURT APPEAL: RULING THAT CONVICTED WARLORD FROM THE DRC LIABLE FOR $10 MILLION IN REPARATIONS TO HUNDREDS OF VICTIMS UPHELD

On 18th July, the Washington Post reported that ICC appeals judges have upheld a ruling that found a convicted warlord from the Democratic Republic of Congo liable for $10 million in reparations to hundreds of victims.  Thomas Lubanga was sentenced to 14 years in prison in 2002 for using child soldiers.  It is reported that Lubanga has no money and any reparations will have to be paid by a fund set up by the court, possibly with help from Congolese authorities.

https://www.washingtonpost.com/world/africa/icc-panel-upholds-congo-child-soldiers-reparation-order/2019/07/18/b485df82-a942-11e9-8733-48c87235f396_story.html

BIOMEDICAL RESEARCH – THE NEXT VICTIM OF A US-CHINA TRADE WAR?

On 17th July, Torres Law published an article warning that biomedical research appears to be the latest unlikely victim of the ongoing trade dispute.  Historically, the US has maintained export controls to restrict exports to specific countries and to restrict the use of and access to controlled information, goods, and technology for national security and foreign policy reasons.  In particular, the U.S. has a long history of restricting certain exports of sensitive items and technologies to China.  In recent years, however, there has been an increased focus on intellectual property amid heightened concerns over suspected leaks of US technology to China.  The article says that news outlets are speculating that the economic trade war with China has spread to the search for cancer cures, and relates the story that a cancer centre has discharged 3 scientists over Chinese espionage concerns.

http://www.torrestradelaw.com/posts/Biomedical-Research-–-the-Next-Victim-of-a-U.S.-045%3BChina-Trade-War%3F/175

UNPRECEDENTED $1 MILLION PENALTY FROM US FOREIGN INVESTMENT WATCHDOG MAY SIGNAL NEW ERA

An article from Torres Law on 17th July was concerned with a penalty imposed by the Committee on Foreign Investments in the United States (CFIUS), following a change in the law in 2018 which tightened controls, broadened the agency’s jurisdiction and authority by expanding the scope of foreign investments subject to review.  The article says that most CFIUS experts expect CFIUS to become increasingly active and proactive in its reviews going forward.  The article briefly examines the role of CFIUS and potential penalties.

http://www.torrestradelaw.com/posts/U.S.-Foreign-Investment-Watchdog-Grows-Teeth%3A-Unprecedented-%241-Million-Penalty-May-Signal-New-Era/178

MONEY LAUNDERING – HOW CAN HOUSING ASSOCIATIONS MITIGATE THE RISKS?

On 19th July, 24 Housing carried an article saying that housing associations in the UK are particularly vulnerable to money laundering, yet the sector doesn’t report its suspicions as much as it perhaps should.  The National Housing Federation (NHF) recommends housing associations carry out risk assessments, embracing the principles within the UK’s AML regime to mitigate their risks.

https://www.24housing.co.uk/opinion/money-laundering-how-can-housing-associations-mitigate-the-risks/

SWEDEN’S LOOMIS CASH-HANDLING COMPANY FINDS FAILINGS IN MONEY LAUNDERING OVERSIGHT

On 19th July, Reuters reported that Loomis AB has reported flaws in its AML oversight and vowed to fix them.  It launched an investigation into its operations in May after a journalist alleged it was implicated in a Danish money laundering scandal involving foreign exchange agencies.  It said it had informed Danish and Norwegian financial authorities about the shortcomings it uncovered and would strengthen its procedures.

https://www.reuters.com/article/us-europe-moneylaundering-loomis/swedens-loomis-finds-failings-in-money-laundering-oversight-idUSKCN1UE0ZQ

UKRAINE: SBU CLOSES DOWN MONEY LAUNDERING CENTRE

On 19th July, Ukrinform reported that the he Security Service of Ukraine (SBU) has stopped the activities of an interregional money laundering centre with a total turnover of hundreds of millions of Ukrainian hryvnias.  It is said that searches of the offices of the centre, at places of residence and in the cars of the suspects, law enforcement officers found seals of a number of fictitious companies, means of communication, laptops, tax reporting and documentation that proves the conduct of financial transactions, as well as more than UAH 2.6 million in cash.

https://www.ukrinform.net/rubric-crime/2743572-sbu-closes-money-laundering-center-with-turnover-of-hundreds-of-millions-of-hryvnias.html

AN EARLY ASSESSMENT OF THE NEW ENGLISH COURT DISCLOSURE REGIME

On 8th July, the UK Defence Club, a mutual maritime insurance legal costs body, published an article involving, after 6 months since the Business & Property Courts formally commenced a 2-year pilot scheme for documentary disclosure, a first assessment on the initial impact of the scheme and what changes it may foreshadow going forwards.  It notes that the principles underlying the scheme were already being ‘softly’ applied in the final months of 2018. The aim of the pilot scheme, which commenced on 1st January 2019, is to improve the current disclosure process by encouraging co-operation between litigating parties and more active supervision by the court to combat the perceived faults of the current disclosure regime.  Developments in commercial practice and increased use of electronic documents and communications have meant that the exercise of searching through all of a party’s documents for items which are disclosable on the ‘standard’ basis has become very time- and cost- intensive.  The new scheme seeks to address this issue in particular.  The article says that initial indications are that the court will take a sensible and purposive approach to the new regime, retaining what is worth keeping from the current rules while piloting the new scheme.

https://www.ukdefence.com/fileadmin/uploads/uk-defence/Documents/Soundings/2019/UKDC-Soundings-Court-Disclosure-WEB.pdf

HONEYWELL INTERNATIONAL CO-OPERATING WITH BRIBERY INVESTIGATIONS BY US AND BRAZILIAN AUTHORITIES

On 18th July, the Wall Street Journal reported that industrial conglomerate Honeywell International Inc had said its cooperating with bribery investigations which focus on Honeywell’s compliance with the FCPA and similar laws in Brazil, and Honeywell’s use of third parties that previously worked for its oil products business in connection with Brazil’s state-controlled oil company, Petróleo Brasileiro (Petrobras).  US authorities are also said to be investigating a Honeywell subsidiary’s previous engagement with oil-services firm Unaoil SAM in Algeria.

https://www.wsj.com/articles/honeywell-discloses-foreign-bribery-probes-11563487162

http://www.riskandcompliancehub.com/honeywell-brazil-oil-units-petrobras-ties-targeted-by-fcpa-probe-filing/

GUATEMALA’S STATE CORRUPTION AND THE HEIRS OF COLONIAL PRIVILEGE

On 18th July, Al Jazeera published an article providing background to the mess in Guatemala, and explaining why the Guatemalan business elites have turned against an institution – the UN International Commission against Impunity in Guatemala (CICIG), mostly funded by the US – tasked with upholding the rule of law.  It says that business groups hold extraordinary sway over the executive and legislative branches, the constitutional court and the retrograde military establishment, which has been an instrument of class interests throughout Guatemalan history.  It looks at the role of the Coordinating Committee of Agricultural, Commercial, Industrial, and Financial Associations (CACIF), whose members are said to have members illegally financed politicians and ordered laws and policies in their favour, and it was the politicians (like the military during the dictatorship) who ran the political cost of implementing the development model.

https://www.aljazeera.com/indepth/opinion/guatemala-state-corruption-heirs-colonial-privilege-190705150858561.html

ANGOLA EYES RARE GLIMPSE OF HOPE IN FIGHT AGAINST CORRUPTION

A fascinating article from Ozy.com on 19th July looks at the situation in Angola.  It says that oil-rich Angola is one of the richest countries in Africa, but it is also one of the most unequal, with a gulf separating a rich, politically connected elite from the mass of the 30 million population.  After the devastating civil war, which ended in 2002, the county’s oil-fuelled economy, boosted by huge investment in infrastructure from China, became one of the fastest growing in the world, piling on near-double-digit growth over the course of more than a decade.  However, it also became one of the most corrupt, a crony capitalist state run by the winner of the civil war, the People’s Movement for the Liberation of Angola (MPLA), led for 38 years by President José Eduardo dos Santos.  In a 2011 audit, the IMF identified a $32 billion discrepancy linked largely to “quasi-fiscal operations” by state oil company Sonangol that did not appear in official budget accounts.  Now there is a hint of change, with a new president, hand-picked to succeed dos Santos in 2017.  Lourenço has set about dismantling at least part of his predecessor’s legacy.  The president has spoken of the need to help the poor in what analysts see as an attempt to shore up the MPLA’s legitimacy against an opposition UNITA party that has steadily improved its electoral performance.  He has waged a public war on corruption that has ensnared some of the former president’s children, including one of his sons, José Filomeno dos Santos, who had been put in control of the country’s $5 billion sovereign wealth fund toward the end of his father’s tenure.  But is the anti-corruption drive designed to consolidate power, a vendetta against his former patron, or is it a chance for Angola to correct its course?  The central bank has long been associated with weak supervision — including lax oversight of AML regulations — and poor control of financial institutions, which have often been treated as personal piggy banks by those with political connections.  A new head has stepped up the rhetoric against money laundering, and wants to restore correspondent-banking relationships with US banks.  However, there are doubts and one incident that has raised eyebrows -Manuel Vicente, a former vice-president was accused of corruption and money laundering by Portuguese prosecutors.  Lourenço pressed hard for a trial in Angola, rather than Portugal, accusing Lisbon of interfering in its sovereignty, but since his release by Portuguese authorities last May, no trial has taken place in Angola.

https://www.ozy.com/fast-forward/angola-eyes-rare-glimmer-of-hope-in-fight-against-corruption/95537

ISLE OF MAN AMENDS SOUTH SUDAN AND NORTH KOREA SANCTIONS LISTS

On 19th July, a news release from the Isle of Man advised that the details for Paul MALONG AWAN ANEI (formerly Paul Malong AWAN), subject to sanctions in respect of South Sudan, had been amended; and it had followed the EU and UK in making changes to entries on the list of those persons and entities subject to sanctions in connection with North Korea.

https://www.gov.im/news/2019/jul/19/financial-sanctions-south-sudan/

https://www.gov.im/news/2019/jul/19/financial-sanctions-democratic-peoples-republic-of-korea-north-korea/

FATF BUSINESS BULLETIN

On 19th July, FATF published its latest Business Bulletin newsletter about recent developments, including outcomes from the recent 30th anniversary Plenary.

On mutual evaluations –

  • it reported that the conclusion that Greece has a sound legal framework to support effective action against money laundering and terrorist financing, but that the country needs to improve its prosecution of these crimes, the supervision of its designated non-financial professions and businesses and NPO sector, and the confiscation of proceeds of crime (the report on Greece is due in September); and
  • it also reported that the Plenary had discussed the joint APG-FATF assessment of Hong Kong/China and concluded that the jurisdiction has a strong legal foundation to underpin its AML/CFT regime. It understands its risks, has effective measures in place to combat terrorist financing and to confiscate the proceeds of crime, and actively co-operates with international partners. However, it needs to prioritise efforts to prosecute money laundering linked to foreign predicates, increase risk understanding and AML/CFT implementation by smaller institutions, and strengthen supervisory measures for some sectors.

The Plenary agreed an upgrade of a number of technical compliance markings for Iceland.

The Plenary also issued a statement on Brazil and its progress in addressing deficiencies identified in its mutual evaluation report.

It lists new guidance issued – including that for TCSP and for virtual currencies.

http://www.fatf-gafi.org/media/fatf/documents/bulletin/FATF-Business-Bulletin-July-2019.pdf

UK PUBLISHES POST-BREXIT SANCTIONS REGULATION FOR BURUNDI AND THE REPUBLIC OF GUINEA

On 19th July, 2 sets of regulations were published, made under the Sanctions and Anti-Money Laundering Act 2018 to establish a sanctions regime for each.  Following the UK’s withdrawal from the EU, these Regulations replace the EU sanctions regimes currently in force under an EU Council Decision and Regulation.

http://www.legislation.gov.uk/uksi/2019/1145/contents/made

http://www.legislation.gov.uk/uksi/2019/1142/contents/made

INDIA TIGHTENS AML LAWS AND WIDENS AMBIT OF PROCEEDS OF CRIME

Business Standard on 19th July reported that the Indian government has expanded the ambit of the “proceeds of crime”, which now includes properties and assets created through any criminal activity even if it is not under the Prevention of Money Laundering Act (PMLA) – these crimes will now be considered as an “relatable offence”.  Proceeds will encompass property not only derived or obtained from the scheduled offence, but also that which is directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence.

https://www.business-standard.com/article/economy-policy/govt-tightens-anti-money-laundering-laws-widens-ambit-of-proceeds-of-crime-119071901320_1.html

UK: REVIEW INTO THE FINANCIAL SERVICES REGULATORY FRAMEWORK LAUNCHED

On 19th July, HM Treasury announced that the first phase of the Financial Services Future Regulatory Framework review had been launched, with a call for evidence will look at how co-ordination between the regulatory authorities could be improved.  Future phases will look how the framework needs to adapt to UK leaving the EU.

https://www.gov.uk/government/news/review-into-the-financial-services-regulatory-framework-launched

BRITISH COLUMBIA CASINO TABLE TAKINGS SLIDE UNDER NEW AML RULES

Calvin Ayre reported on 19th July that British Columbia’s gambling monopoly saw its casino table game revenue tumble in its latest annual report after the provincial government tightened its AML policies, following recent scandals.

https://calvinayre.com/2019/07/19/casino/british-columbia-casino-table-revenue-slides/

THE LANDSCAPE OF BERMUDA FINANCIAL SANCTIONS

On 19th July, Appleby published an article first published in the Royal Gazette in Bermuda.  It explains that Bermuda enforces the same financial sanctions imposed in the UK. Sanctions are generally brought into force under the International Sanctions Act 2003, and the International Sanctions Regulations 2013 set out all the regime-related sanctions orders in force in Bermuda and are referred to as the “Bermuda International Sanctions Regime”.  All individuals and legal entities who are within or undertake activities within Bermuda must comply.

https://www.applebyglobal.com/publications/landscape-of-bermuda-financial-sanctions/

 

 

 

 

AML/CFT MUTUAL EVALUATION REPORT: HAITI

haiti

On 19th July, the Caribbean Financial Action Task Force (CFATF) published its 4th round Mutual Evaluation Report on Haiti, which was adopted at the CFATF Plenary in Trinidad.  The on-site visit to Haiti took place in June/July 2018.  The report, perhaps understandably, is a very poor one.  For example, it notes that Haiti has not conducted any AML/CFT risk assessment that is geared towards identifying and understanding its ML/TF risks; and as a result of the absence of any ML/TF risk assessment, the jurisdiction’s authorities have not taken any measures to mitigate its ML/TF risks.

https://www.cfatf-gafic.org/documents/4th-round-meval-reports/11839-haiti-4th-round-mer

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AFRICAN UNION AND THE SMALL ARMS SURVEY RELEASE FIRST-EVER CONTINENTAL STUDY MAPPING ILLICIT ARMS FLOWS IN AFRICA

This study sets out to identify the scale, availability, characteristics, and supply patterns of illicit small arms in Africa. It finds that cross-border trafficking by land is the most prominent type of illicit arms flow affecting countries on the continent. The weapons trafficked comprise both those sourced from within the continent — such as legacy weapons recycled from earlier conflicts and weapons diverted from national stockpiles — as well as arms sourced from other parts of the world, including embargo-breaking transfers from the Middle East and Eastern Europe.  The report provides practical recommendations for African Union member states to tackle illicit arms flows by noting specific assessments that can be generated to fill knowledge gaps; practical guidance and tools to develop; and ways in which to support and co-ordinate the implementation of those recommended actions.

One section highlights gaps in end-use and end-user controls.  It says that Ineffective end-use(r) control systems have resulted in cases of diversion where end-use(r) documentation was utilised to illegally acquire arms through document forgery, copying, or fraudulent use, or through corrupt officials. In other cases, arms have been legally transferred and imported, but have then been re-exported by the importing state in contravention of assurances provided to the original exporting state not to re-export the arms without its prior notification or authorisation. In yet other cases arms diversions have resulted from the importing states’ lack of capacity to monitor and control end use(s) and end user(s), including their failure to securely manage stocks of imported arms

http://www.smallarmssurvey.org/fileadmin/docs/U-Reports/SAS-AU-Weapons-Compass.pdf

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SUSPECTED $650 MILLION “SWEETHEART DEAL” AND SENEGAL OIL AND GAS

On 19th July, an article from OCCRP said that a Romanian-Australian businessman with a history of fraud, corruption, and misleading investors appears to have received at least $650 million from a West African oil and gas deal carried out with the help of well-positioned relatives of 2 consecutive Senegalese presidents.  The deal involved Vasile Frank Timis, 55, who went from being twice-convicted for possessing heroin with intent to distribute to earning a fortune in mining and petrochemical exploration deals — many in poorly governed and impoverished countries.  OCCRP claims to have documents that reveal serious irregularities, and potential illegal conduct, related to deals.

https://www.occrp.org/en/investigations/senegals-offshore-oil-reserves-a-pricey-pawn-in-covert-deal

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INDIA TIGHTENS AML LAWS AND WIDENS AMBIT OF PROCEEDS OF CRIME

Business Standard on 19th July reported that the Indian government has expanded the ambit of the “proceeds of crime”, which now includes properties and assets created through any criminal activity even if it is not under the Prevention of Money Laundering Act (PMLA) – these crimes will now be considered as an “relatable offence”.  Proceeds will encompass property not only derived or obtained from the scheduled offence, but also that which is directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence.

https://www.business-standard.com/article/economy-policy/govt-tightens-anti-money-laundering-laws-widens-ambit-of-proceeds-of-crime-119071901320_1.html

 

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OFAC ADDS 4 NEW NAMES TO VENEZUELA SANCTIONS LIST

On 19th July, OFAC announced that it had added 4 persons to its Venezuela sanctions list.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190719_33.aspx

 

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OFAC ADDS 1 NEW PERSON TO HIZBOLLAH-RELATED TERRORISM SANCTIONS LIST

On 19th July, OFAC added Salman Raouf SALMAN (he has many aliases), a Colombian or Lebanese national and holder of a Colombian passport and ID, to its sanctions lists.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190719.aspx

https://home.treasury.gov/news/press-releases/sm737

https://www.voanews.com/usa/pompeo-confirms-us-sanctions-against-hezbollah-suspect-1994-argentina-bombing

 

This blog is primarily for my own use, to keep informed and up to date.  However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y