2nd July 2019
A DEFENDANT SEEKING A STAY OF PROCEEDINGS ON THE GROUND OF FORUM NON CONVENIENS MUST IDENTIFY THE SINGLE MOST APPROPRIATE FORUM IN ORDER TO OBTAIN RELIEF
Harneys blog on 27 June carried a post about a recent BVI court case involving a Lichtenstein law governed trust in which the Commercial Court confirmed that a defendant seeking a stay of proceedings on the ground of forum non conveniens (a mainly common law legal doctrine whereby courts may refuse to take jurisdiction over matters where there is a more appropriate forum available to the parties) must identify the single most appropriate forum in order to obtain relief — it is not sufficient to point to a number of other available jurisdictions as being more appropriate than the BVI.
GLOBAL CHIP SUPPLY AT RISK AS JAPAN AND SOUTH KOREA FEUD
Nikkei Asian Review on 2nd July reported that Japan’s new export controls on South Korea, a country that produces the bulk of the world’s memory chips, threaten a ripple effect that spreads to electronics manufacturing globally. South Korea said it was considering retaliatory measures and left chipmakers to confront an immediate supply challenge after Japanese suppliers were told to approval for individual exports of 3 semiconductor industry chemicals to South Korea in a row over wartime forced labour compensation. Japan’s decision to tighten curbs on tech material exports to South Korea violates WTO rules and South Korea would respond firmly, a senior official at South Korea’s trade ministry said.
CATEGORY 2 STATUS IN GIBRALTAR – A SPECIAL TAX STATUS DESIGNED FOR HIGH NET WORTH INDIVIDUALS AS A MEANS OF LIMITING THEIR POTENTIAL TAXABLE LIABILITY
Hassans, a law firm in Gibraltar, has produced a briefing on Category 2 tax status. It says that tax benefits are extended to high net worth individuals (known as ‘Category 2 Individuals’) and to highly skilled workers (known as the Higher Executive Possessing Specialist Skills, or HEPSS, status). It explains that, as a Category 2 Individual, you will only be taxed on the first £80,000 of your worldwide taxable income, irrespective of how much your income actually is; and a Category 2 Individual’s minimum annual tax payable is £22,000, or £1,833.33 for each complete month or part-month for which the certificate is in force. At current rates, a Category 2 Individual would pay approximately a maximum of £28,360 per annum. However, it cautions that a Category 2 Individual certificate will not shield any individual from being considered tax resident in a different country.
http://www.gibraltarlaw.com/category-2-gibraltar/
FORMER ISRAELI GENERAL SEEKS OFFICIAL ASSISTANCE AGAINST ILLEGAL ARMS TRADE ALLEGATIONS
The CTECH website on 1st July reported that, in December, the US imposed financial sanctions against retired Israeli Maj. Gen. Israel Ziv claiming he supplied weapons and ammunition to both sides in the civil war in South Sudan. It reports that he has attempted to recruit the Israeli administration to assist him in lifting the sanctions against him. It claims to have seen a letter from the Defense Export Control Agency saying that the Ministry of Defense had not found evidence of unlawful activity in regards to defence exports by Israel Ziv or his companies. The US alleges that Ziv allegedly used Global CST, an agricultural company he owns, to sell $150 million worth of arms to the South Sudanese government, and that he was involved in organising attacks by mercenaries on South Sudanese oil fields and infrastructure, in an effort to “create a problem that only his company and affiliates could solve”. The US also designated 6 additional business entities owned or controlled by Ziv and his Sudanese business partner, Obac William Olawo. In March, Bank Leumi, froze accounts belonging to him and several of his companies, pending their permanent closure by the end of December.
https://www.calcalistech.com/ctech/articles/0,7340,L-3765435,00.html
AML COMPLIANCE ACROSS MALAYSIAN FINANCIAL SERVICES FIRMS ESTIMATED AT $890 MILLION
The Edge Markets website on 2nd July reported that the true cost of AML compliance across all Malaysian financial services firms is estimated to be $890 million, according to a LexisNexis Risk Solutions’ “True Cost of AML Compliance” study. Though this spend is largely attributed to larger asset-sized firms, it is smaller firms that spend somewhat more as a percentage of assets, said the study by the US-based company – and cost of AML compliance is higher among smaller firms at an average of 0.14% than larger firms at 0.07%.
MALTA CREATING NEW UNIT TO TACKLE COMPLEX, INTERNATIONAL FINANCIAL CRIMES AND FREEZE ASSETS
ACFCS on 27th June reported that Malta is creating a new unit to more aggressively uncover and prosecute large-scale, complex financial crime cases, and increase the power authorities have to freeze the assets of illicit entities, according to the country’s Ministry of Finance.
HIGH COURT REMINDER THAT THE DUTY OF FULL AND FRANK DISCLOSURE APPLIES TO ANY APPLICATION MADE WITHOUT NOTICE TO THE OTHER PARTY
On 2nd July, RPC published an article saying that the English & Wales High Court has issued a reminder that the duty of full and frank disclosure applies to any application made without notice to the other party. Although this is most typically an issue in applications for injunctions, permission to serve a claim out of the jurisdiction was recently set aside on the grounds of the claimant’s failure to disclose to the court a potential limitation defence to the claim. The case in question involved the Libyan Investment Authority (LIA) v JP Morgan Markets Limited (JPM), Mr Walid Mohamed Ali Al-Giahmi (a Libyan individual) and Lands Company Limited (his vehicle), in relation to an allegedly corrupt $200 million derivative transaction concluded between the LIA and Bear Stearns International Limited (which had subsequently been bought by JPM) in November 2007. Public policy dictates that defendants, and the courts, should not be burdened with weak cases wrongly brought into the jurisdiction.
MALAYSIA: MAS EXTENDS AML/CFT REQUIREMENTS TO PAYMENT SERVICE PROVIDERS
On 1st July, Herbert Smith Freehills published an article saying that on 6th June MAS issued a consultation paper on proposed AML/CFT requirements which will apply to most payment service providers. The article outlines the key AML/CFT requirements that providers will have to comply with. It says that currently-regulated providers will need to assess whether their existing AML/CFT policies, procedures and processes will continue to meet the new AML/CFT requirements and any identified gaps will need to be addressed; and newly- regulated providers will need to consider outlined in the article.
SFO FACES QUESTIONS OVER DECISION TO DROP BRIBERY INVESTIGATION
On 30th June, the Guardian reported that the SFO is facing questions over its decision to drop an investigation into a trio of executives accused of paying multimillion-pound bribes in the energy industry, in the Unaoil case. However, soon after within hours it was announced that the oil and gas services multinational TechnipFMC had admitted to the US DoJ paying bribes to Iraqi officials through Unaoil, and paying $296 million in penalties. TechnipFMC, a multinational formed 2 years ago through a merger of the US company FMC Technologies and French company Technip, admitted its predecessor firms had both engaged in separate bribery schemes to land contracts in Iraq and Brazil respectively.
NOKIAN TYRES IN BIGGEST TRADE SECRETS TRIAL IN FINLAND
A briefing from Bird & Bird said that on 19th June, The Turku Court of Appeal has passed sentences on 9 former Nokian Tyres employees that had moved to work for Black Donuts Engineering. The sentences were given for infringement and misappropriation of Nokian Tyres’ trade secrets. Black Donuts Engineering Oy was ordered to pay corporate fines and return the proceeds of crime to the Finnish state.
EUROPE TAKES ON CHINA’S GLOBAL DOMINANCE OF RARE EARTH METALS
On 2nd July, EurActiv reported that a new industry association was launched in Brussels with the aim of bringing together all the players in the supply chain of rare earth metals, which are vital to renewable and low-carbon technologies. The Rare Earths Industry Association (REIA) has 12 founding members from nations such as the UK, Germany, France, the Netherlands, Japan and China. It is the first rare earths trade association in Europe and the only one outside of China. It says that rare earths are a group of 17 metals usually found together in nature. They are relatively common, but their mining can be expensive and environmentally damaging. They improve the performance of technologies such as catalytic converters, X-ray machines and smartphones and make strong magnets used in electric cars and wind turbines.
IRISH TAX STRATEGY GROUP EYES PROPERTY FUNDS, GAMBLING AND CARBON TAX
On 2nd July, the Irish Times reported that a review of how foreign institutional investors are impacting Ireland’s property market is just one of the areas to be considered later this month, along with betting duty, carbon tax and VAT, as part of the Tax Strategy Group’s pre-budget review. The papers from the public-sector group, which publishes a number of reports each summer aimed at informing budgetary policy, are expected to be published at the end of the month. Papers will include a review of real-estate investment trusts (REIT), Irish real estate funds (IREF) and section 110 companies as they invest in the Irish property market.
SHIPMENTS FROM THIRD COUNTRIES TO US SEEING MORE SCRUTINY AMID EFFORTS TO AVOID CHINA TARIFFS
On 2nd July, Sandler Travis Rosenberg reported that some importers are taking shortcuts by simply transshipping goods from China and labelling them as products of a third country to avoid the 25% tariff on some Chinese products. Importers should pay closer attention to their supply chains to avoid such illegal activity. According to press reports, Vietnam has been a particular target of scrutiny by US officials on the hunt for Chinese goods seeking to avoid the Section 301 tariffs.
https://www.strtrade.com/news-publications-origin-301-tariff-China-transship-Vietnam-CBP-070219.html
US CFTC AWARDED 2 “MODEL” WHISTLEBLOWERS A COMBINED AMOUNT OF $2 MILLION
On 1st July, the FCPA Blog carried a post saying that the Commodity Futures Trading Commission awarded 2 whistleblowers a combined amount of $2 million for providing the agency with “significant information” that led to an investigation. The award will be divided evenly between the whistleblowers because they jointly submitted the tip and award application to the CFTC. The CFTC regulates the US derivatives markets, including futures, options, and swaps.
http://www.fcpablog.com/blog/2019/7/1/cftc-jointly-awards-two-model-whistleblowers-2-million.html
FCPA ENFORCEMENT REPORT FOR Q2 OF 2019
On 1st July, the FCPA Blog reported that during the second calendar quarter, there were 3 corporate FCPA enforcement actions. The settling companies – including Walmart – paid a total of about $583 million for the resolutions. The post also details other actions, guilty pleas, convictions and declinations.
http://www.fcpablog.com/blog/2019/7/1/fcpa-enforcement-report-for-q2-2019.html
HM TREASURY CORRECTS 1 ENTRY ON IRAN SANCTIONS LISTS
On 2nd July, HM Treasury advised that in accordance with EU Implementing Regulation 2019/855, the listing for Sayed Shamsuddin Borborudi has been corrected and he remains subject to an asset freeze.
TURKEY STOCKPILES CRUCIAL WEAPONS PARTS, ANTICIPATING US SANCTIONS
Bloomberg on 1st July reported that Turkey has stockpiled crucial spare parts for US-made weapons in case Congress sanctions it over a contentious Russian missile purchase. Turkey’s military has been amassing parts for F-16 jets and other military hardware, according to Turkish officials.
STATEMENT BY UK SECRETARY OF STATE AS BETTING COMPANIES FUND MEASURES TO HELP PROBLEM GAMBLERS
On 2nd July, the Secretary of State for Digital, Culture, Media and Sport said that 5 of Britain’s leading gambling companies – bet365, Flutter (Paddy Power and Betfair), GVC (Ladbrokes and Coral), Sky Betting and Gaming and William Hill, have announced they will fund measures aimed at helping problem gamblers and creating a healthier gambling environment.
US BEGINS FINAL CHEMICAL WEAPONS DESTRUCTION
In its July/August edition of its newsletter. The Arms Control Association included an article saying that the US has begun to eliminate its stockpile of more than 100,000 chemical munitions stored at the Blue Grass Army Depot in Kentucky. Workers destroyed the first weapon on June 7th. The site being used is the last of 9 US chemical weapons storage facilities to begin destroying their stocks, and the elimination work is scheduled to be completed in 2023. The site stored 524 tons of chemical weapons, about 1.8% of the 29,918 tons declared in 1997 when the US ratified the 1993 Chemical Weapons Convention (CWC) and committed to the destruction of all US weapons and bulk agent. The munitions include artillery shells and rockets filled with mustard, sarin, and VX agents. The only other remaining US chemical weapons stocks are at the Pueblo Chemical Depot in Colorado, where a neutralisation and biotreatment process for eliminating 2,611 tons of mustard agent began in 2016.
https://www.armscontrol.org/act/2019-07/news/us-begins-final-cw-destruction
KOSOVO SERBS CLOSE SHOPS TO PROTEST IMPORT TARIFFS
On 1st July, Haaretz reported that shops, restaurants and bakeries in Serb-dominated northern Kosovo closed their doors on 1st July to protest against a 100% tax the country has imposed on goods imported from Serbia, in a move that could further sour ties between Belgrade and Pristina. The government introduced the tax last year in retaliation for Serbia blocking Kosovo, its former province, from joining Interpol.
https://www.haaretz.com/world-news/wires
UKRAINE: WORKERS OF KHARKIV TANK FACTORY DETAINED FOR TAKING BRIBES
On 2nd July, 112 UA reported that that a department chief and the inspector of the department demanded money from entrepreneurs, when they asked to rent rooms at the factory’s enterprise. The men were detained as they were getting another part of that bribe.
SINGAPORE HIGH COURT ORDERS TO FREEZE BANK ACCOUNT OF NIRAV MODI’S SISTER
The Deccan Chronicle on 2nd July reported that the Singapore High Court has ordered the freezing of bank deposits kept in that country by PNB bank fraud accused Nirav Modi’s sister and brother-in-law as part of a money laundering probe in India. The bank account is in the name of Pavillion Point Corporation based in the BVI, a company “beneficially owned” by Purvi Modi and Maiank Mehta. Recently, 4 Swiss bank accounts of Nirav Modi, the main accused in the $2 billion PNB case, and his sister were similarly “frozen” by authorities in Switzerland as part of the money laundering probe being conducted against them in India.
US JAILS RWANDAN FOR HIDING GENOCIDE INVOLVEMENT FROM IMMIGRATION
The BBC on 2nd July reported that Jean Leonard Teganya, a Rwandan man who hid his involvement in the 1994 genocide has been sentenced to 8 years in jail. US authorities say that he committed “the most serious form of immigration fraud” by “lying about his status as a war criminal to win asylum.
https://www.bbc.co.uk/news/world-africa-48837948
LATIN AMERICA TOLD TO TACKLE TAX EVASION BY UN AGENCY
On 2nd July, Public Finance International reported that the head of the Economic Commission for Latin America and the Caribbean has said that Latin American and Caribbean countries must bolster their capacity to mobilise public revenues by strengthening tax collection if they are to achieve the UN Sustainable Development Goals.
https://www.publicfinanceinternational.org/news/2019/07/tackle-tax-evasion-latin-america-told
LASTING POWERS OF ATTORNEY PROCESS ‘NEEDS SAFEGUARDS AGAINST FRAUD’
On 2nd July, the Law Society Gazette reported a study by a Westminster thinktank (DEMOS) and fraud prevention body which said that new safeguards on the lasting power of attorney process, including a register of active powers, should be introduced to protect vulnerable people from fraudsters. According to the study digital fraud is the fastest growing type of fraud against vulnerable people, with much of it committed by people abusing a position of trust, whilst the legal framework provides little protection against abuse.
The study is available at –
https://demos.co.uk/wp-content/uploads/2019/06/Cifas-digital-final.pdf
CANADIAN TERRORISM SANCTIONS LIST
The list of organisations subject to sanctions in Canada is on the Government’s Public Safety Canada web pages.
https://www.publicsafety.gc.ca/cnt/ntnl-scrt/cntr-trrrsm/lstd-ntts/crrnt-lstd-ntts-en.aspx#59
BOSNIA: PROSECUTION TURNS ON MAN WHO REVEALED ALLEGED CORRUPTION
On 2nd July, OCCRP reported that a Bosnian businessman who revealed an ongoing corruption scandal shaking the country’s judiciary was questioned at the state Prosecutor’s Office as a suspect. Nermin Alesevic secretly filmed and released a video that alleged that the president of Bosnia’s High Judicial and Prosecutorial Council (HJPC) – which is in charge of appointing and disciplining judges and prosecutors – had taken bribes through a middleman. Alesevic is now suspected of bribery and unauthorised recording. He had previously asked to be granted immunity but his request was denied.
NEW TASK FORCE AT EUROPOL TO TARGET MOST DANGEROUS CRIMINAL GROUPS INVOLVING IN HUMAN TRAFFICKING AND MIGRANT SMUGGLING
On 2nd July, a news release from Europol announced that the Joint Liaison Task Force Migrant Smuggling and Trafficking in Human Beings (JLT-MS) was launched at Europol. This new operational platform will allow liaison officers from all EU Member States to step up the fight against constantly adapting criminal networks. The new task force, coordinated by Europol’s European Migrant Smuggling Centre (EMSC), will focus on intelligence-led coordinated action against criminal networks involved in migrant smuggling and trafficking of human beings.
SENEGAL: TONNE OF COCAINE DISCOVERED IN CAR SHIPMENTS FROM BRAZIL
The Business Standard on 1st July reported that Senegalese authorities have discovered more than a tonne of cocaine hidden in shipments of new cars from Brazil waiting to be offloaded in the port of Dakar. This was just days after 238 kg was found in another car shipment.
HMRC SEEKS £3 MILLION PARTNER TO HELP MEET ‘AMBITIOUS TIMELINE’ FOR CUSTOMS PLATFORM
Civil Service World on 2nd July reported that HMRC is looking for a commercial partner to help it meet “ambitious timelines” for moving traders over to the Customs Declaration Service (CDS). It says that the new system is thus far used only by “a minimal user base”, but over the coming months, HMRC will be working to migrate users from the outgoing CHIEF platform, with the 2 systems operating in parallel, before the old technology is decommissioned. HMRC is looking to sign a 2-year contract with a “delivery partner” that can supplement internal teams based at HMRC offices in Southend.
US CUSTOMS BEAGLES SNIFF OUT ILLEGAL SNAILS
On 2nd July, WPTV reported that 2 beagles who work for the US Customs patrol are being credited with sniffing out 2 Giant African Snails in luggage from a passenger traveling from Nigeria to Atlanta.
https://www.wptv.com/news/local-news/water-cooler/customs-beagles-sniff-out-illegal-snails
BITCOIN CRIMINALS SET TO SPEND $1 BILLION ON DARK WEB THIS YEAR
Baker McKenzie on 2nd July reported that Bitcoin’s use in illegal online marketplaces peddling everything from drugs to child porn is on pace to set a record this year at more than $1 billion, according to a report by Chainalysis. It says that while the proportion of Bitcoin transactions dedicated to illegal purchases is declining, about $515 million of the digital coin has already been spent this year on the so-called dark web.
http://www.riskandcompliancehub.com/bitcoin-criminals-set-to-spend-1-billion-on-dark-web-this-year/
NORWAY FSA FINES SANTANDER BANK $1 MILLION FOR AML BREACH
On 2nd July, Reuters reported that Norway’s Financial Supervisory Authority has ordered Santander to pay a fine of $1 million for violations of the country’s AML laws. A failure in the bank’s electronic monitoring system meant that some 1.6 million transactions, affecting around 300,000 customers, were not controlled for money laundering in 2018.
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