9th July 2019
GIBRALTAR SANCTIONS LAW AND THE GRACE 1 SEIZURE
The always-useful EU Sanctions Blog on 8th July, in the context of the recent seizure of an oil tanker said to be en route to Syria, published links to the Sanctions Act 2019, which the blog says was enacted in March, and the Sanctions Regulations 2019, which were adopted on 3rd July and which includes the power to designate and detain “specified ships” if the Chief Minister has “reasonable grounds to suspect that the ship […] has been, or is likely to be, involved in a breach of the EU Regulation”.
A SIMPLE GUIDE TO UNDERSTANDING INCOTERMS
A short article from Tabacks in South Africa on 12th March provides a short explanation of the series of predefined commercial terms which are used for, and which are aimed at, assisting parties to unambiguously and efficiently communicate some of the terms applicable between the buyer and seller. They can be seen on invoices, bills of lading etc.
EU: NEW TASK FORCE ESTABLISHED TO TARGET MOST DANGEROUS MIGRANT SMUGGLING GROUPS
On 3rd July, Homeland Security Today reported that Europol has launched the Joint Liaison Task Force Migrant Smuggling and Trafficking in Human Beings (JLT-MS). This new operational platform will allow liaison officers from all EU Member States to step up the fight against constantly adapting criminal networks.
IRELAND: WITHDRAWAL OF NAVAL SERVICE SHIPS ‘NEON SIGN’ TO DRUG SMUGGLERS
On 9th July, the Irish Times reported that the mothballing of almost one-quarter of the Naval Service’s ships (i.e. 2 vessels), due to severe manpower shortages, will have a significant effect on the State’s ability to stop drug smuggling through Irish waters, security sources say. It also says that the mothballing of one of the ships would also have implications for the service’s search-and-rescue capabilities, sources said. It is the only ship capable of refuelling helicopters at sea which effectively doubles the range of the Coast Guard’s Sikorsky helicopters.
ERDOĞAN GOVERNMENT “SHIELDS TURKISH FIRMS IMPLICATED IN ARMS, OIL SMUGGLING IN LIBYA”
An article from Nordic Monitor and said to be based on reports from a UN sanctions panel of experts claims that the Turkish government has shielded Turkish manufacturers from a UN probe, declining at times to respond to inquiries from the Panel of Experts that was investigating violations of UN sanctions on Libya. It says that one of the incidents the UN inspectors looked into was the seizure of explosives, detonators and detonation cords on board the Tanzanian-flagged Andromeda in January 2018. It was seized by Greek authorities after it was spotted with the vessel’s AIS tracker turned off. Turkish-based Orica-Nitro, the producer and distributor of the commercial explosives on the ship, contracted Armada Shipping, an Istanbul-based freight agent which in turn used a vessel owned by Andromeda Shipmanagement SA, a company registered in the Marshall Islands, to transport the explosives.
BRITISH MUSEUM: SMUGGLED IRAQI AND AFGHAN ARTEFACTS WILL BE RETURNED
The Journal in Ireland on 8th July reported that looted ancient artefacts from Iraq and Afghanistan seized in Britain will be returned to their country of origin after appraisal by the British Museum. Among the artefacts to be sent back to Afghanistan are Gandharan sculptures illegally exported to Britain in 2002, and 154 Mesopotamian texts written on clay in cuneiform script – one of the earliest systems of writing – seized on entry in 2011 and to be returned to Iraq. The article says that the British Museum has also developed a collaborative project with antiquities authorities, collectors, dealers and law enforcement agencies which aims to identify and return trafficked objects to Egypt and Sudan. The scheme has identified almost 700 illicit artefacts looted and trafficked from the 2 countries over the past year.
SERBIA WEAK ON PENALISING MONEY-LAUNDERERS, SAYS ANALYSIS
An article in the Eurasia Review on 9th July says that only 15% of money laundering cases end up before the Serbian courts, with minor sentences often handed down to those who are put in the dock. Less than a fifth of reported cases of money-laundering in Serbia end up in courts, with those convicted often handed a minor sentence of less than a year in prison or fines of fewer than €100. These are said to be among the findings of a survey by the Balkan Investigative Reporting Network (BIRN). BIRN collected data from all high prosecutor’s offices and courts in Serbia for 2008 to December 31st 2017. FATF put Serbia on its ‘grey list’ in February 2018 because of what it said were deficiencies in the country’s system of prevention of money-laundering and the financing of terrorism, but in June 2019, FATF decided that Serbia had addressed the deficiencies and took it off the list.
CREDIT SUISSE PROBED OVER ALLEGED MONEY LAUNDERING
Finews on 8th July reported that Operation Bulco began in 2008 in Switzerland, and centres on an alleged drug-running from South America by a Bulgarian mafia kingpin. In addition to 10 people currently accused, the criminal probe was widened in 2013 to include Credit Suisse for suspicion of organisational deficiencies in connection with money laundering.
WAR CRIMES UNIT INVESTIGATES RWANDA GENOCIDE SUSPECTS LIVING IN UK
On 5th July, Kingsley Napley reported that following the decision not to extradite to Rwanda persons suspected of involvement in the 1994 genocide against the Tutsis, that 5 people living in the UK are being investigated by the Metropolitan Police War Crimes Unit. Some war crimes, such as genocide, can be prosecuted in the UK even if they occurred abroad – giving rise to the possibility of these individuals being tried in the UK.
PROSECUTOR URGES ARREST OF THREE LIBYANS FOR WAR CRIMES
On 5th July, Kingsley Napley reported that the International Criminal Court Chief Prosecutor has called on the UN Security Council to execute 3 outstanding arrest warrants for Libyans accused of war crimes and crimes against humanity – Saif Al-Islam Gaddafi, Al-Tuhamy Mohamed Khaled and Mahmoud Mustafa Busafy Al-Werfalli.
CHAD REBEL CHIEF CHARGED WITH CRIMES AGAINST HUMANITY IN FRANCE
On 5th July, Kingsley Napley reported that General Mahamat Nouri, the exiled leader of the Union of Forces for Democracy and Development (UFDD) had been detained in France, in connection with his involvement in alleged crimes against humanity between 2005 and 2010, involving the recruitment of child soldiers in Chad and Sudan and for his participation in a criminal conspiracy to commit a crime against humanity.
US PHARMACEUTICAL DISTRIBUTOR AND EXECUTIVES HIT WITH HEAVY PENALTIES FOR FRAUDULENT SCHEME
Fisher Broyles in the US has published a Client Alert saying that a Long Island-based pharmaceutical company, Devos Ltd, along with 2 of its top executives, have been hit with large fines and ordered to pay some $94 million in restitution by a federal judge following their convictions on a number of charges, including mail fraud, wire fraud, theft of government property, money laundering conspiracy, obstruction of justice, and false statements. The company was a reverse pharmaceutical distributor which developed to manage large-scale returns of expired drugs for healthcare entities in exchange for a percentage on the return value. Devos Ltd managed the return of expired drug products for a number of hospitals, pharmacies and long-term care facilities, in addition to the Department of Defense. Through a scheme, the executives managed to steal over $100 million from over 13,000 clients.
CHINESE WEALTH MANAGER CLAIMS $490 MILLION FRAUD BEHIND MISSED REPAYMENTS
KYC 360 on 9th July reported that one of China’s largest wealth managers has levied accusations of fraud against a Hong Kong-listed company that has said that its chairman had been detained by police. The asset manager has filed a lawsuit and reported the Hong Kong company to regulators in relation to a $490 million asset management product that’s in danger of default.
GET YOUR BUSINESS READY TO IMPORT, EXPORT OR TRANSPORT GOODS FROM THE UK TO THE EU AFTER BREXIT
On 8th July, HMRC published a news release explaining what a business needs to do now to make sure it is able to send goods from the UK to the EU, if the UK leaves the EU without a deal. What it needs to do is different if it imports or transports goods, and links to information on those is also supplied.
UK: MERGER AND ACQUISITION DEAL FLUSHES OUT BRIBERY SCHEME
An article from Greenberg Traurig on 8th July saying that the SFO had issued a press release announcing that Carol Ann Hodson, the former director and owner of a company named ALCA Fasteners Ltd had pleaded guilty to paying bribes amounting to £300,000 to a purchasing manager in Germany over 5 years, in order to secure contracts worth £12 million. The case was opened in December 2017 following a report by ALCA’s current owners who purchased the company from Ms Hodson in early 2017, and it is said that she had lied to the purchasers of her company by claiming that the company had not been involved in any unlawful conduct. The article highlights the potential risks when buying a company and is a reminder of the importance of both pre- and post-acquisition due diligence.
INTERNATIONAL DNA AND FINGERPRINT EXCHANGE POLICY FOR THE UK
On 8th July, the Home Office published a news release which sets out the policy governing the international exchange of data held on forensic information databases under the FIND Strategy Board’s remit, being –
- DNA samples, DNA profiles, the searching of UK DNA profiles against non-UK DNA databases and the searching non-UK DNA profiles against UK DNA databases; and
- fingerprints (Tenprints and scene of crime marks), the searching of UK fingerprints against non-UK fingerprints databases and the searching of non-UK fingerprints against UK fingerprint databases.
INDIA: AUTHORITIES SEARCH 110 LOCATIONS IN 19 STATES IN CORRUPTION AND ARMS SMUGGLING CASES
On 9th July, the Economic Express reported that the CBI in India had recorded 30 separate new cases involving, amongst other things, corruption and arms smuggling.
JAMAICA: “MILLIONS FOUND IN ACCUSED’S BEDROOM” IN 2016
The Gleaner reported on 9th July that a police officer assigned to the Major Organised Crime and Anti-Corruption Agency (MOCA) has revealed that more than $2 million was found in the house of one of the accused in a fraud trial that continues in Kingston. He said that when the house of former deputy superintendent of roads and works at the local authority, Sanja Elliott, was raided in 2016, a little over J$1.5 million and US$5,021 was found and seized. She was one of 8 people charged in the case.
RUSSIA ADDS MORE NAMES TO ONLINE GAMBLING PAYMENT BLACKLIST
On 8th July, Calvin Ayre reported that Russia’s online gambling payment blacklist has grown larger, while tech giant Google is looking at another fine for failing to filter blacklisted domains from Russian search results. Russia’s Federal Tax Service (FTS) added 16 names to its list of companies for whom Russian financial institutions are forbidden from processing payments with local gamblers. The majority of the new additions are operators based in Curacao and Cyprus. It says that Russia shows no sign of giving up its efforts to prevent its citizens from gambling with anyone other than those licensed by the authorities there.
SRI LANKA URGING CHINESE MANUFACTURERS TO MAKE USE OF ITS PREFERENTIAL DUTY-FREE TREATMENT BY THE US AND EUROPE AS A WAY TO OFFSET TRADE WAR
On 8th July, Customs Today reported that China is one of Sri Lanka’s largest trading partners and – sometimes controversially – the largest financier of its booming new infrastructure. Other big lenders to the island nation are the Asian Development Bank and Japan. A minister is quoted as saying China could make use of the preferential market access – Sri Lanka having duty-free access to EU countries and we free-trade agreements with Pakistan, Singapore and India. He also said that, since the cost of manufacturing in China is going up, Sri Lanka would like the Chinese to look at Sri Lanka for their manufacturing and export goods back to China.
FORMER HEAD OF CHINESE AIRCRAFT CARRIER BUILDER JAILED FOR CORRUPTION
On 8th July, OCCRP reported that the former head of one of China’s largest shipbuilding companies, Sun Bo, former general manager of the state-owned China Shipbuilding Industry Corporation (CSIC), has been sentenced to 12 years in prison for taking bribes and for abuse of power.
BRAZIL ARRESTS 2 OF THE WORLD’S MAIN COCAINE DEALERS
On 8th July, OCCRP reported that Brazilian police arrested 2 Italian mafiosi who are considered by European and American anti-drug authorities to be the world’s main cocaine brokers. Nicola Assisi, his son Patrick and several of their associates including a Peruvian citizen were arrested in the State of Sao Paulo in a luxurious, high security house. The Assisi are said to be among the most powerful and most successful ‘Ndrangheta cocaine brokers, and ‘Ndrangheta controls at least 40% of the global cocaine trade.
ORGANISED CRIME RINGS IN PAKISTAN AND CHINA TRAFFIC BRIDES
OCCRP on 8th July carried an article about a report which says that men in China and Pakistan are trafficking women intended to become brides from across the region in a vicious circle of exploitation. Men from poor rural parts of the country are struggling to find a bride because of the low female population and a high bride price. Organised crime rings are taking advantage of the problem by having the men “import” brides from Pakistan, promising the women a better life in China. However, they instead find themselves forced to marry a man who hides them away from society and subjects them to sexual abuse and forced prostitution.
AN INTRODUCTION TO THE LAW OF BLOCKCHAIN AND DISTRIBUTED LEDGER TECHNOLOGIES
On 8th July, CMS Law published Part 3 of a planned 5-part series of articles. This looks at jurisdictional issues, regulation and governance.
Part 2 (on legal personality, liability issues and existing legal concepts) is at –
Part 1 is also available at –
THE BASICS: FUNDING OPTIONS FOR COMMERCIAL DISPUTES
On 9th July, Gowling WLG published a guide saying that there are a number of funding tools commonly available to help parties manage their potential exposure to legal costs – as an award of costs is always at the discretion of the court and that rule can be displaced; the ‘winning’ party may still face an adverse costs order for a number of reasons including following an unsuccessful interim application during the claim, where success is only partial, if an opponent’s Part 36 offer is not beaten or where there have been procedural breaches.
FREEZING INJUNCTIONS AGAINST ‘PERSONS UNKNOWN’
On 5th July, Walker Morris published a short article saying that explains why injunctions against ‘persons unknown’ can be a tactically and financially worthwhile option. It refers to a previous article about a case involving push-payment fraud, and in which the court granted a freezing injunction against ‘persons unknown’, where the respondent was an unnamed cyberfraudster. It says that the use of a freezing injunction (and ancillary orders) against persons unknown in the case in question acted as a precursor to the swift and decisive resolution of the matter via default judgment, which will result in the almost immediate return of €500,000 which could otherwise have been lost forever to fraud.
DATA PROTECTION: THE GUERNSEY TRANSITIONAL ARRANGEMENTS HAVE ENDED – WHAT NEXT?
On 26th June, Carey Olsen published a briefing saying that in 2018 Guernsey enacted a law rather like the EU GDPR. However, unlike the GDPR the new Law ‘grandfathered’ certain aspects of the previous data protection regime for one further year to allow businesses locally to prepare. The article points out that, on 25th May, the transitional relief largely came to an end with one exception, and this means that any companies need to be fully in compliance with the Law. There remains one exception, extending the transitional exemptions relating to registration and fees until 31st December.
HOUSE OF LORDS COMMITTEE OPENS INQUIRY INTO GAMBLING HARM
On 9th July, an article from Out-Law was concerned with a new inquiry focused on gambling-related harm and protections for consumers. The House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry has sought views, with evidence to be submitted by 6th September.
US CUSTOMS SEIZES $3.7 MILLION INSIDE ABANDONED VESSEL IN PUERTO RICO
On 8th July, US Customs & Border Protection reported that it and the DEA had seized Sunday $3.7 million in undeclared currency found inside 5 duffle bags on board an abandoned vessel near the coast of Fajardo. The vessel had been detected navigating without lights moving east from Fajardo towards the US Virgin Islands. The vessel abruptly turned around towards Fajardo, landing the vessel near the entrance to the Rio Fajardo. The occupants were seen unloading duffle bags from the vessel, immediately abandoning their cargo and absconding. The agents found 5 abandoned duffle bags containing bulk US currency.
LEBANON: CUSTOMS SEIZES 44 KG OF GOLD FROM PAIR AT AIRPORT
On 9th July, The Daily Star reported that customs officials at Beirut’s Rafik Hariri International Airport seized 44 kg of gold from 2 passengers arriving from Istanbul.
GUATEMALA: THE LARGEST DEVELOPING ECONOMY IN CENTRAL AMERICA
Another article in the July edition of the FIATA Review magazine is concerned with what is described as the strongest developing economy in Central America – with 3 multipurpose ports and 8 airports that form the backbone of its transport and logistics infrastructure.
UK REPORT: TACKLING SERIOUS AND ORGANISED CRIME
The UK Government watchdog, the National Audit Office, on 28th June published a report which examined the UK government’s strategic response to serious and organised crime, and the extent that the enablers to successful implementation of the serious and organised crime strategy revised in 2018 have been put in place. It examines the work of the Home Office and the NCA, who together oversee and co-ordinate the government’s response. The report does not look in detail at how other government bodies are set up to contribute.
- Part One examines the nature of serious and organised crime and the government’s strategic response to tackling it;
- Part Two looks at the quality of data on the scale of serious and organised crime, how data are produced and used, and the availability of data to decision-makers;
- Part Three examines the extent of government’s work to tackle serious and organised crime under its 4 ‘P’ work strands, the effectiveness of funding, governance and accountability structures; and
- Part Four assesses the extent to which the efforts of law enforcement are co-ordinated.
Amongst the conclusions are that the government is therefore not yet able to show that it is delivering value for money in this area. The Home Office and the NCA do not know whether their efforts are working and are not yet able to target resources against the highest-priority threats. Despite ongoing efforts to improve them, governance and funding arrangements remain complex, inefficient and uncertain. Unless the government addresses these issues there will continue to be a mismatch between its ambitious plans to respond to serious and organised crime and its ability to deliver on them.
OECD WELCOMES GIBRALTAR INTO BEPS FRAMEWORK
The Gibraltar Chronicle on 8th July reported that the OECD has welcomed and agreed that Gibraltar should become a full member of the Inclusive Framework on Base Erosion Profit Shifting (BEPS), a global mechanism to strengthen tax transparency. Gibraltar’s entry in to the BEPS framework had been blocked by Spain but Madrid has lifted its veto following the signing of the tax treaty covering Gibraltar and Spain.
AML: UK ESTATE AGENTS REMINDED THAT THEY MUST CARRY OUT INDEPENDENT AUDITS
Estate Agent Today on 9th July carried a reminder that estate agents are required to undertake an annual independent audit of their AML processes by the 4th AML Directive. It says that ID verification platform Credas says the process is currently overlooked by many agents, but that with the 5th Directive on the horizon, more customers are asking about independent audits.
TURKEY BRINGING SECOND DRILL SHIP FOR OIL & GAS EXPLORATION OFF CYPRUS
Insurance Marine News on 9th July reported that a second Turkish drillship will begin drilling for oil and natural gas near Cyprus within a week, Turkey’s energy minister has said. The move could exacerbate the ongoing conflict between Turkey and Cyprus, and the EU, over exploration rights – in June EU leaders warned Turkey to end its gas drilling in disputed waters or face a response from the EU.
US CUSTOMS SEIZES CONTAINER SHIP LINKED TO RECORD COCAINE SEIZURE
On 8th July, American Shipper reported that US Customs and Border Protection had formally seized the 10,776-TEU MSC Gayane – the largest ship seized in the 230-year history of US Customs. 20 tons of cocaine was found on the ship in Philadelphia on 17th June.
UK GOVERNMENT TO LAUNCH NEW MODERN SLAVERY RESEARCH CENTRE
On 9th July, a news release from the Home Office advised that a £10 million policy centre is a part of the government response to the Independent Review into the Modern Slavery Act. The Policy and Evidence Centre for Modern Slavery and Human Rights is a new research centre, funded by UK Research and Innovation (UKRI) Strategic Priorities Fund and led by UKRI’s Arts and Humanities Research Council (AHRC). It will bring together academics, businesses and charities to drive forward new studies, share knowledge, and improve collaboration both at home and overseas, to further strengthen official response.
INDIA: FRAUD PROBE INTO JET AIRWAYS INDIA AND NARESH GOYAL
Fin 24 in South Africa on 9th July reported that Indian authorities had refused Naresh Goyal, founder of India’s once largest airline by market value, permission to fly overseas after the government told the court a $2.6 billion fraud investigation involving Jet Airways India is underway. Jet Airways owes at least $1.1 billion to banks, and is undergoing bankruptcy resolution. South Africa interest in the case stems from 2013, when a chartered Jet Airways Airbus A330-200 (a large airliner) landed at an air force base with several hundred guests set to attend the Gupta family wedding at Sun City. In 2015, state flag carrier SAA cancelled its route between Johannesburg and Mumbai, with the route was taken over by Jet Airways – with the former CEO of SAA saying his board had been pressured into giving up the route.
INTERNAL FRAUD COSTS UK CHARITIES ‘OVER £2.5 BILLION A YEAR’
On 9th July, Civil Society reported that the Annual Fraud Indicator (AFI) report, published by accountancy firm Crowe, estimates that “frauds of extraction” cost the sector £2.5 billion a year – up from the 2017 estimate of £2.3 billion. In addition, a partner at the firm said that “frauds of diversion”, when money intended for a charity is sent elsewhere, are a whole other source of losses.
GUERNSEY POLICE INVESTIGATING CORRUPTION IN NEW ELECTRIC LINE THROUGH ALDERNEY
ITV News on 9th July reported that Guernsey Police are investigating an accusation of corruption in Alderney in relation to the building of FAB Link, a new underwater electric cable that will link the UK to France.
FRENCH TYCOON BERNARD TAPIE AND ORANGE CEO ACQUITTED OF FRAUD
On 9th July, AP reported that a French court has acquitted French tycoon Bernard Tapie of fraud over a €404 million payment linked to the sale of sportswear company Adidas in the 1990s. The pay out to Tapie came from state funds, prompting public indignation and questions about whether he benefited from political connections, including with then-president, Nicolas Sarkozy. In 2016, a special court convicted then-finance minister Christine Lagarde of negligence in her management of the 2008 arbitration but didn’t level any punishment. The Paris court also acquitted 4 others of complicity for having referred the case to arbitration, one of whom was Stephane Richard, former chief-of-staff at the economy ministry under Lagarde and now head of French telecoms giant Orange.
MEXICO’S ANTI-CORRUPTION PUSH
On 9th July, Americas Quarterly carried an article which features Santiago Nieto, head of Mexico’s FIU (UIF in Spanish) and the work of his agency. In the first 6 months of 2019, the UIF has frozen nearly $250 million in assets and blocked accounts belonging to over 1,000 people, compared to $1.4 million and 25 people in the same period in 2018. It says that Nieto has been front and centre in the administration’s anti-corruption push, occasionally informing the media about ongoing cases.
THAILAND: USED-CAR IMPORT BAN TAKES EFFECT DECEMBER 10th
The Bangkok Post on 9th July reported that imports of second-hand vehicles will no longer be allowed after December 9th as authorities step up curbs on fraud, irregularities, corruption and pollution.
PARENTS OF US STUDENT WHO SUFFERED INJURIES IN DETENTION IN DPRK FILE SUIT TO SEIZE NORTH KOREAN SHIP
On 6th July, Homeland Security Today reported that the parents of Otto Warmbier have filed a petition to seize the North Korean bulker Wise Honest in order to satisfy a court award for wrongful death. After his death in 2017, his family filed a civil suit against the government of North Korea in US federal court and, last December, a judge awarded them a judgement of $500 million. The parents say that North Korea has not been willing to discuss a settlement, and they will move instead to seize Pyongyang’s assets to partially fulfil the judgment. The Wise Honest is currently in US custody, having been seized in Indonesia last year after Indonesian authorities caught her carrying 25,000 tonnes of North Korean coal.
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