Tynwald Day – a public holiday here in the Isle of Man, and yes, I did go…nevertheless –
5th July 2019
EUROPE TRADE CHANNEL WITH IRAN CLOSE TO FIRST DEAL IN DAYS
On 5th July, KYC 360 reported that French Finance Minister Bruno Le Maire has said that he hoped INSTEX, a special trade channel set up with Iran, would complete a first, limited transaction in the coming days. Instex is a barter trade mechanism that aims to avoid direct financial transfers by offsetting balances between importers and exporters on the European side.
FORMER RIO DE JANEIRO GOVERNOR TELLS JUDGE HE PAID $2 MILLION BRIBE TO HOST 2016 OLYMPICS
KYC 360 on 5th July reported that Sergio Cabral, the former governor of Rio de Janeiro state said in court testimony that he paid $2 million to buy votes to ensure the sprawling Brazilian seaside city would be chosen to host the 2016 Olympic Games.
IN AMERICA, UFO SIGHTINGS PEAK ON THE 4th OF JULY
BORROWING AGAINST ART IS GROWING AT A STUNNING RATE
In its 6th July edition The Economist carried an article saying that Deloitte estimates that the outstanding value of loans against art in the US reached $17 billion-20 billion in 2017, up 13% from the previous year. Industry insiders say such lending has continued to grow at double-digit rates since then.
PANAMA SAYS IT CUT TANKER FROM REGISTER AFTER TERRORISM ALERT
The Jerusalem Post on 5th July reported that Panama’s Maritime Authority said that Grace 1, an Iranian oil tanker seized by British Royal Marines in Gibraltar, was no longer listed in Panama’s international boat registry as of May 29th. Panama de-listed the vessel after receiving an alert indicating that the ship had participated in or was linked to terrorism financing. Although the tanker flies a Panama flag, Iran claimed ownership and objected to the seizure of its ship.
AS US HITS IRAN AND VENEZUELA WITH SANCTIONS, THE TRICKS USED TO GET AROUND THEM
The South China Morning Post on 5th July carried an article detailing the methods oil tankers can use to avoid being caught breaching sanctions – “going dark” by turning off AIS; ship-to-ship transfers – common locations for transfers are the Sharjah and Khor Fakkan anchorages off the UAE, the Malacca Strait and Nipah anchorage off Indonesia and areas off Sri Lanka and the Maldives; fake destinations; rebranding of the source of the oil.
THAI CUSTOMS ENACTS URGENT WASTE SMUGGLING MEASURES
Thai Visa News reported that the Customs Department has implemented urgent measures to prevent smuggling of electronic and plastic waste into the country after a large shipment of waste shipments were intercepted. 103 cases of smuggling the waste were handled by officials during the 2018 to 2019 budget year. In early 2017, the import quota of plastic waste was reduced to 70,000 tonnes yearly and the legitimate imports have been declining.
PODCAST: SANCTIONS BUSTING, DATA INTEGRITY AND SHIPPING’S GREY AREAS
A 17-minute timely podcast about the grey area of shipping, where it is used to evade sanctions – saying things not changed much since when Iran used the Isle of Man and companies with the innocuous names of British towns to evade sanctions. It also examines how reliable data from the shipping industry is reliable, as initial results from the EU’s attempts to record CO2 emissions from shipping has thrown up some serious questions about the industry’s collective ability to verify its own data quality.
SALE OF TUTANKHAMEN STATUE IN LONDON TO PROCEED DESPITE THE EGYPTIAN AUTHORITIES’ CLAIM THAT THE BUST MAY HAVE BEEN STOLEN
ENCS on 5th July reported that Christie’s auction house has said it will go ahead with the sale of a Tutankhamen statue in London despite an outcry from the Egyptian authorities, which claim the bust may have been stolen. The statue of Pharaoh Tutankhamen, portrayed as god Amun, is said to be more than 3,000 years old. The Egyptian Ministry of Antiquities said it has contacted the auction house and UNESCO to try to halt the sale and to request to see the documents of ownership related to the artefact. Christie’s said in a statement that it has established legal rights and ownership of the statue.
QATAR FINANCIAL REGULATOR FINES AND BANS DIRECTORS OF GUARDIAN WEALTH
International Investment on 4th July reported that the Qatar Financial Center Regulatory Authority (QFCRA) has banned directors of Guardian Wealth Management Qatar, an insurance brokerage company that is primarily involved in selling long-term savings plans in the kingdom, to carry out their duties and fined them $400,000. David Howell and John Hasberry were directors of GWMQ, which is now in liquidation. They are also prohibited from performing any function or being employed by any authorised firm in the QFC for 3 year.
PRIVATE TRUSTS, FOUNDATIONS AND CHARITIES IN LIECHTENSTEIN
An article from ATU on 4th July addresses the rules and procedures governing the establishment and maintenance of private trusts, foundations and charities in Liechtenstein.
CAN A BUSINESS CONTINUE TO TRADE AFTER A DIRECTOR’S DEATH?
An article from Boyes Turner on 3rd July says that if you are a sole director of a company difficulties can arise following your death if there is no other director and/or company secretary appointed. It says that operating a longstanding established company with only a sole director and subject to Articles of Association incorporated under Table A Regulations may well have catastrophic consequences upon the death of the sole director.
THE VALUE OF A BILL OF LADING IN THE HANDS OF A TRADE FINANCE BANK
A briefing from Stephenson Harwood on 3rd July is about a recent Singapore High Court which considered the rights of a trade finance bank seeking to enforce its security over cargoes pledged to it. Until relatively recently, there has been no detailed consideration by a common law Court of the intersection between trade finance law, shipping law, and insolvency law. There are now 2 relevant authorities – one from Australia and the one from Singapore considered in the briefing. The decision confirms that banks can and should act on the face of the documents presented to them.
CHARTERED PRIVATE JETS IN CHINA
An article in the Nikkei Asian Review on 5th July reported that demand for chartered private jets is soaring in China as companies adopt more cost-effective travel polices for their high-flying executives, as well as both for convenience and as symbols of status. However, as companies realize the high cost of ownership and the economy begins to cool, many have sold off their private aircraft and turned to more economical charter jets.
CANADA TO INVESTIGATE POSSIBLE VIOLATIONS OF SANCTIONS REGIME BY A MONTREAL-BASED LOBBYING FIRM, DICKENS & MADSON
The EU Sanctions Blog on 5th July reported that the Canadian Global Affairs department has asked the RCMP to investigate possible violations of Canada’s sanctions regime by a Montreal-based lobbying firm, Dickens & Madson, which signed a $6 million contract with Sudan’s military regime.
See also –
SOCIAL MEDIA TERRORIST AND EXTREMIST CONTENT REMOVAL
On 3rd July, RUSI published a paper which offers a unique view on current practices and challenges regarding terrorist and extremist content removal from social media platforms, focusing particularly on human-based and automated approaches and the integration of the two.
PIF DIRECTIVE ON THE FIGHT AGAINST FRAUD TO THE EU FINANCIAL INTERESTS BY MEANS OF CRIMINAL LAW ENTERING INTO FORCE
On 5th July, the EU advised that the PIF Directive comes into force on 6th July. Member States need to have the Directive transposed into their national laws. Its new rules will increase the level of protection of the EU budget by harmonising the definitions, sanctions and limitation periods of criminal offences affecting the EU financial interests. By harmonising the definitions, sanctions and prescription periods of the criminal offences linked to fraud to the EU budget, it will make work of judicial and police authorities more efficient to fight these types of crimes. The Directive will also be the basis of the work of the European Public Prosecutor’s Office, which is scheduled to be operational by the end of 2020.
MALAYSIAN BUSINESSMAN FACING $26.5 MILLION FRAUD ALLEGATIONS LIVED LUXURY LIFE AS MOTOR RACING TEAM OWNER IN NEW ZEALAND
The New Zealand Herald in its 6th July edition reported that a motor racing team owner has been revealed as a wanted Malaysian businessman accused of a $26.5 million fraud after private investigators found him in New Zealand. Michael Chua Khian Keng, 44, is said to have fled Malaysia in 2015 after the Mudajaya Corporation Berhad (Mudajaya), a large public company, accused its former employee of defrauding it.
FRENCH COMEDIAN DIEUDONNÉ SENTENCED FOR FRAUD AND MONEY LAUNDERING
RFI on 5th July reported that the comedian was sentenced to 2 years in jail for tax fraud and money laundering, relating to more than €1 million of undeclared earnings. Dieudonné, a convicted anti-Semite, was also slapped with a €200,000 fine. Under the court arrangement, he will likely do community service instead of jail time.
MAN WHO LAUNDERED PROCEEDS FROM THE SALE OF COUNTERFEIT ERECTILE DYSFUNCTION AND SLIMMING PILLS THROUGH BANK ACCOUNTS LINKED TO A CHARITY HAS BEEN JAILED
A news release from the Metropolitan Police on 5th July reported that Edward Cohen, 67, has been sentenced to a total of 7½ years for money laundering and theft offences, and 2 years and 3 months’ imprisonment for benefit fraud. The sentences are to run concurrently. A large number of websites offering erectile dysfunction medication and slimming aids – primarily aimed at customers in Austria, Germany, Switzerland and France – were identified. Further enquiries established that a group of UK-based companies linked to the Chabad UK charity was receiving card payments for these products via a number of merchant accounts. Edward Cohen was the Administrator of Chabad UK charities, and operated the financial accounts.
LATVIA’S FINANCIAL WATCHDOG CHIEF RESIGNS
Reuters reported on 5th July that Peters Putnins, head of Latvia’s bank watchdog, is to step down following a move by the parliament to reform the finance industry regulator as part of efforts to combat money laundering.
NEW ZEALAND: OVERSEAS INVESTORS FINED $3 MILLION FOR ILLEGAL PURCHASE OF AUCKLAND PROPERTIES
The New Zealand Herald on 5th July reported that the overseas owners of 2 properties – Chinese businessmen Zhongliang Hong and Xueli Ke, and IRL Investment Limited and Grand Energetic Company Limited (which are owned by Hong and Ke) – have been fined $2.95 million after an Overseas Investment Office (OIO) investigation found they were bought illegally. Because both properties are rural land of more than 5 hectares, the owners should have applied to the OIO for consent to purchase them. People from overseas must get consent through the OIO before they can invest in New Zealand’s sensitive land, significant business assets and fishing quota.
For more information on the OIO, see –
NORDIC BANKS JOIN FORCES TO COMBAT MONEY LAUNDERING
On 5th July, Reuters reported that the region’s 6 major banks – Danske Bank, Swedbank, Handelsbanken, Nordea, SEB and DNB – announced the creation of a customer checking centre, with the initiative expected to help their efforts to crack down on money launderers and recover from a scandal that has damaged the sector’s reputation.
MAKING CO-OPERATION EASIER BETWEEN FIU, AND BETWEEN EUROPOL AND FIU
On 5th July, Europol reported on a meeting on the fringe of the Egmont Group conference in The Hague, when over 100 representatives from 46 FIU visited Europol. It explains that Europol hosts the FIU.net, the tool which enables all FIU in the EU to exchange information among themselves and with Europol. The future creation of a European Financial and Economic Crime Centre at Europol will encourage building even stronger ties between Europol and FIU.
FORMER ROMANIAN HEALTH MINISTER TARGETED IN CORRUPTION INVESTIGATION
Romania Insider on 5th July reported that Prosecutors from the National Anticorruption Directorate (DNA) have requested the Senate to green light the prosecution of former health minister Florian Bodog for abuse of office and forgery. As the former minister is now a senator, the prosecutors need the Senate’s permission to prosecute him.
HIDDEN IN PLAIN SIGHT: DOMESTIC CORRUPTION, FRAUD AND THE INTEGRITY DEFICIT
The Fraud Advisory panel in the UK has published a report asking does the UK have a corruption problem? Officially, no. In reality, we just don’t know. It starts by saying that “corruption” is hard to define. Domestic corruption all the more so. That’s why the UK has a Bribery Act, not one that tries to define the term and offence of ‘corruption’. The report argues that it is almost as if those in the UK think corruption is something that only happens elsewhere – but is this really the case? It provides examples of how domestic corruption – from clearly unlawful acts to the steady, background erosion of integrity and ethical standards – easily damages the prospects and well-being of people going about their everyday lives. It ends by providing 5 initiatives that could be adopted –
- greater transparency and openness in the courts and court procedures;
- an easy-to-use central public reporting system, with a systematic approach to recording and analysing the data;
- improve the use of the Bribery Act in small-scale cases by improved police training and reducing the bureaucracy involved in bribery cases;
- hold corporate offenders to account and to the same criminal standards as “ordinary” citizens; and
- hold a public consultation on a statutory framework on conflicts of interest.
CAMBRIDGE UNIVERSITY VAT RULING ‘COULD COST CHARITIES MILLIONS’
Third Sector on 5th July reported that UK charities could lose millions of pounds in previously recoverable VAT following a decision by the Court of Justice of the EU decision in favour of HMRC against Cambridge University. The case centred on an application by the university in 2009 to reclaim VAT incurred between 1973 and 1997 and from 2006 to 2009 on the fees for managing an investment fund made up of donations to the university and endowments.
FOREIGN TRADEMARK APPLICANTS NOW NEED US ATTORNEYS, SAYS TRADEMARK OFFICE
On 5th July, McCarter & English LLP published an article saying that the United States Patent and Trademark Office has announced that all foreign trademark applicants and registrants and all parties to Trademark Trial and Appeal Board proceedings must be represented by a US-licensed attorney. The new rule applies to any party filing in the Trademark Office or appearing before the Trademark Board whose permanent legal residence or principal place of business is outside the US.
NCA RESPONSE TO STATE OF POLICING REPORT
A news release from the NCA on 4th July, responding to criticisms in Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services 2018 State of Policing Report, said that the NCA was supportive of the report’s findings, and that its ability to confront the rapidly evolving serious and organised crime threat is undermined by a fragmented and inefficient system. Demand on law enforcement is high and increasing. There are increases in prevalence, complexity and harm across crime types resulting in continuous pressure on the system, which requires sustainable future investment.
See the report in question at –
MAJOR FORWARDERS JOIN IATA AIR CARGO RATES DISTRIBUTION PLATFORM
On 5th July, Lloyds Loading List reported that DB Schenker, Agility Logistics and Hellmann Worldwide Logistics have become the first major global freight forwarders to sign up to use IATA’s air cargo rates distribution platform IATA Net Rates, which aims to fully digitalise and streamline the distribution of air freight prices.
GIBRALTAR SUPREME COURT ORDERS EXTENSION OF GRACE 1 DETENTION
On 5th July, a news release from Gibraltar advised that the Attorney General of Her Majesty’s Government of Gibraltar has obtained an Order from the Supreme Court of Gibraltar extending the period of detention of the Grace 1 by 14 days. The ship, said to be carrying Iranian oil destined for Syria, was detained under the Regulations made pursuant to the Gibraltar Sanctions Act, which allowed the authorities to detain the ship for an initial 72 hours.
DIRECTOR’S ATTEMPT TO DEFRAUD BANKRUPT’S CREDITORS WAS FRAUDULENT TRADING
An article from Out-Law on 5th July was concerned with a recent High Court case in London. The firm comments that it is rare for fraudulent trading claims to be brought by office holders, but this case is a reminder that in the right circumstances they can be successful. In the case, a director of a company that played a significant part in a third party bankrupt’s scheme to distance his assets from creditors was found to have breached her fiduciary duties to the company and engaged in fraudulent trading. It was the liquidator brought the successful action against director for fraudulent trading and misfeasance.
PHARMACEUTICAL EXECUTIVE WHO RUINED OWN COMPANY AND A PUERTO RICO BANK TO LIVE THE HIGH LIFE
On 5th July, Baker McKenzie reported that, according to prosecutors, Jack Kachkar, 56, ruined his pharmaceutical company along with one of Puerto Rico’s biggest banks — all “to live an uber-lavish lifestyle far beyond his legitimate means”. He has been sentenced to 30 years in prison and ordered to pay $103.5 million in restitution to Westernbank, the Puerto Rico institution that collapsed as a result of his loan scam.
CYBER SECURITY – WHAT REGULATORS ARE SAYING AROUND THE WORLD
On 5th July, Clifford Chance published a paper saying that as regulators are responding to cyber risks and attacks with new cyber and data laws, new audit powers and mandatory reporting requirements are putting businesses in the spotlight, and a serious attack could mean significant reputational and financial impact and loss of customers. In the paper experts discuss the new regulations taking effect globally, and how these will impact now and in the future.
ILLICIT DIAMOND TRADING ON THE DARK WEB
A new intelligence blog from Janes.com carries a post saying that the company has identified discussions between illicit diamond dealers on the dark web. Dark web search engines show that in addition to the dealers of stolen or imitation jewellery, the ‘classic’ diamond market is dominated by 2 suppliers, both of whom are present on several sites.
THAILAND: NEW TRADE CONTROL ON WMD-RELATED ITEMS ACT TO BECOME EFFECTIVE ON 1ST JANUARY
Baker McKenzie on 5th July reported that the new Trade Control on Weapons of Mass Destruction Related Items Act was enacted on 30th April and announced in the Royal Gazette, and its main provisions will become effective on 1st January. The Act regulates all items that are related to the spread of WMD. The regulated items include, WMD themselves, armaments and dual-use items as well as tangible and intangible items that could have commercial interest, technology or even software. Controlled activities under the Act not only include export, but also re-export, transshipment, transit, being a brokerage and other actions with the purpose of spreading WMD.
US: DHS DEVELOPS GUIDANCE FOR FIRST RESPONDERS IN DEALING WITH DIRTY BOMBS
Homeland Preparedness News on 5th July reported that the Department of Homeland Security (DHS) has published guidance for first responders and emergency managers on how to respond in the first minutes of a radiological dispersal device (RDD, aka “dirty bomb”). The guidance, called the Radiological Dispersal Device Response Guidance Planning for the First 100 Minutes, includes 5 missions and ten tactics to address initial response efforts.
ISLE OF MAN: INCOME TAX (SUBSTANCE REQUIREMENTS) (AMENDMENT) ORDER 2019
The Order Paper for the final sitting of the Island’s parliament on 16th July includes this Order which follows a Temporary Taxation Order approved in December, part of which amended the Income Tax Act 1970 to introduce substance requirements for companies that are tax resident in the Isle of Man and which operate in certain business sectors. The Treasury says that as the matter of substance has now become a worldwide issue and therefore an international standard, the legislation approved in December needs to be modified to reflect this change and to clarify some of the definitions and points regarding intellectual property.
25 SUPERCARS SEIZED BY SWITZERLAND IN 2016 FROM TEODORO NGUEMA OBIANG MANGUE, VICE-PRESIDENT OF EQUATORIAL GUINEA AND SON OF THE PRESIDENT, WILL BE AUCTIONED IN SEPTEMBER
A post in the FCPA Blog on 5th July reported that the auction is expected to raise around $13 million, auction handlers Bonhams said. The auction will take place in Geneva on 29th September. He has been involved in a series of actions over the years involving assets and properties he had amassed, the most recent in September 2018, when police in Brazil confiscated a bag of luxury watches and cash from Obiang and his entourage after their private plane landed at an airport near São Paulo.
CHINA RAISES SECURITY WARNING ON SHIPS PLYING MALACCA STRAIT
On 4th July, Homeland Security Today reported that China has raised the security level for its vessels heading through the Strait of Malacca, a key Asian trade route and major oil choke point.
25 CORRUPTION SCANDALS THAT SHOOK THE WORLD
To mark its 25th anniversary, Transparency International published an article on 26th June listing the top 25 corruption scandals.
RULE OF LAW AND JUDICIAL INDEPENDENCE UNDER THREAT IN MONGOLIA
On 4th July, an article from Transparency International said that it is extremely concerned by the dismissal of 17 judges over corruption accusations in Mongolia, using new laws that Transparency had criticised as threatening to “undermine the separation of powers and systems of checks and balances designed to prevent abuse and ensure respect for the rule of law”. In May, the head and deputy head of Mongolia’s anti-corruption agency were removed from their posts under the amended laws.
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