2nd August 2019
IMF TELLS PANAMA IT NEEDS TO DO MORE TO COMBAT MONEY LAUNDERING
International Investment on 1st August reported that a staff team from the IMF visited Panama during July, invited by the Panamanian authorities. The team is quoted as saying that, despite recent progress on financial integrity, including the recognition of tax evasion as a predicate offence to money laundering, the legal framework needs to be further strengthened and its effectiveness needs to be demonstrated; and that sustained efforts to enhance the AML framework and tax transparency will be crucial to strengthen Panama’s position as a regional financial centre. The country has made a high-level political commitment to implement the FATF Recommendations, which include adequate verification and update of beneficial ownership information.
ECONOMIC ESPIONAGE AND THE US-CHINA TRADE WAR
On 31st July, Global Trade magazine in the US published an article saying that combatting Chinese theft of US intellectual property (IP) has been a principal policy focus of the Trump Administration and explaining the role and implications of the Economic Espionage Act of 1996 (EEA) and Defend Trade Secrets Act (DTSA). They allow federal and private actions for the theft of trade secrets, and the article says that have been critical enforcement mechanisms for the US government and private businesses in recent years to combat theft of corporate IP and trade secrets. Since 2011, the DoJ reports that more than 90% of its economic espionage prosecutions involve China. The article says that the broad reach of the DTSA makes it important for every US business to understand its nuances.
NEW ZEALAND: CUSTOMS SEIZES HALF A MILLION SMUGGLED CIGARETTES
On 2nd August, the New Zealand Herald and others reported that an Auckland businessman accused of hiding 2,418 cartons of Chinese-brand cigarettes inside boxes of food in a shipping container has appeared in court.
US SANCTIONS FOR RUSSIA OVER CHEMICAL WEAPONS USE
On 2nd August, Politico reported that President Donald Trump has signed an Executive Order imposing sanctions on Russia for its use of chemical weapons in the 2018 attack on the Russian double agent Sergei Skripal and his daughter. It had imposed a round of sanctions last year, as required by a 1991 law, and the same law required the President to impose a second round of sanctions if he could not determine that the state in question (i.e. Russia) had stopped using chemical weapons. The article says that Trump was moved to impose the fresh round of sanctions by a bipartisan letter sent to the White House from the leaders of the House Foreign Affairs Committee.
MALTA: FIAU PUBLISHES REVISED AML/CFT IMPLEMENTING PROCEDURES
MAMO TCV on 31st July published an article saying that the Financial Intelligence Analysis Unit (the FIAU) has published an amended version of the Implementing Procedures Part 1, with changes taking effect from the 19th July. The FIAU has also published a copy of the initial consultation document with all changes made following the consultation exercise tracked out for ease of reference. The Implementing Procedures Part I are intended to be supplemented by sector-specific Implementing Procedures and ad-hoc guidance which address specific matters or issues particular to a given category of business. At present there are sector-specific Implementing Procedures addressed to banks, land-based casinos and the remote gaming sector, and a news release from the FIAU mentions the ad-hoc guidance issued by the FIAU.
BENEFICIAL OWNERSHIP REQUIREMENTS FOR BUSINESSES IN COSTA RICA
On 31st July, TMF Group published an article saying that Costa Rica has enacted new Ultimate Beneficiary Owner (UBO) requirements to combat against tax evasion in the country. The new regulation substantially amends the Tax Regulation and Procedures Code in Costa Rica and puts the obligation on companies to disclose their capital and individuals with majority ownership. Legal persons and legal structures domiciled in Costa Rica are obligated to provide a registry of shareholders and ultimate beneficiaries that have substantive ownership, which is between 15%- 25% of the share capital – and submitted through a secure online platform with the Central Bank of Costa Rica (BCCR). The article says that there are 2 difficulties – the need for a digital signature using a special device, and the need for Spanish translations.
PODCAST: TRADE SECRET IDENTIFICATION, IRREPARABLE HARM AND MORE
On 1st August, Greenberg Traurig published the third part of a series of podcasts, in which hosts Jordan Grotzinger and Jena MacCabe discuss the latest trade secret cases worth talking about, including trade secret identification and irreparable harm.
CPS SUCCESSFULLY PROSECUTES SECOND MAJOR MODERN SLAVERY CASE
On 29th July, the CPS issued a news release reporting that a father and son have been convicted for their roles in long-running conspiracy to exploit Eastern European workers they trafficked into the UK. Victims from the Czech Republic and Slovakia were promised jobs with good pay – but on arrival were housed in poor quality accommodation in Kent and given very little money. The vulnerable men, often homeless in their own countries, were forced to work up to 36 hours at a time doing hard manual labour, with some going without a day off for years.
SPECIAL REPORT: RUSSIA’S GROWING INFLUENCE IN AFRICA
On 26th July, EXX Africa produced a report which explores Russia’s growing influence in Africa. We look at the drivers of this foreign policy shift, the locations of interest, and the implications for traditional players across the continent as, in October 2019, Russia will host its very first Russia-Africa Summit, which will bring together more than 50 African leaders in Sochi. It says that the man reportedly driving this shift to Africa is known as Yevgeny Prigozhin, a businessman and close ally of Putin who is believed to be a funder of Wagner Group: a private military contractor with a presence in Africa.
STATE AID: FRANCE TO RECOVER €8.5 MILLION OF ILLEGAL AID TO RYANAIR AT MONTPELLIER AIRPORT
On 2nd August, an EU news release advised that the European Commission has found that the marketing agreements concluded between the local Association for the Promotion of Touristic and Economic Flows (APFTE) and Ryanair at the airport of Montpellier are illegal under EU State aid rules. Ryanair now has to return €8.5 million of illegal State aid.
GERMANY: STEPPING UP THE FIGHT AGAINST MONEY LAUNDERING
On 31st July, the German Government website carried a release saying that the Federal Cabinet has adopted new AML/CFT measures. Among other things, the new draft bill provides public access to the Transparency Register and gives additional powers to Germany’s FIU. This is as it implements the 4th EU AML Directive.
US ARRESTS FORMER COLOMBIA GOVERNOR WHO WAS DEA WITNESS
On 2nd August, Colombia Reports reported that US authorities arrested Alejandro Lyons, was governor of the northern Cordoba province between 2012 and 2015, after he had been acting as a protected witness of the Drug Enforcement Agency (DEA) for more than 2 years. He is sought for alleged corruption in Colombia, as well in connection with a murder. He was arrested by ICE immigration officers, reportedly after his visa ran out.
TUNISIA: “CORRUPTION ON THE RISE”
On 2nd August, ANSA Med reported that Transparency International, which has found that 67% of Tunisians polled said they believe corruption has increased over the past 12 months, and that 64% of Tunisians in particular ”believe the government is not serious in its fight against corruption” as anti-corruption efforts ”have no impact in everyday life”.
AUDIO: REBRANDING NORTH MACEDONIA
On 2nd August, Deutsche Welle carried an audio piece saying that despite hopes for wide-ranging reforms to reduce corruption and improve prosperity, after 6 months on, results have been mixed.
MOZAMBIQUE SUES CEO OF SHIPBUILDER PRIVINVEST FOR FRAUD AFTER DEBT SCANDAL
On 2nd August, Reuters reported the latest episode in the ongoing Tanzanian debt scandal. The government is suing the CEO of a shipbuilding company at the centre of the country’s $2 billion debt scandal for fraud, according to a court filing at the High Court’s commercial court in London. Iskandar Safa, a Lebanese-French billionaire and CEO of Abu Dhabi-based shipbuilder Privinvest, which proposed, helped arrange financing for and supplied a project in Mozambique that US authorities say was a front for a bribery and corruption scheme.
TRADE SECRETARY ANNOUNCES FREEPORTS ADVISORY PANEL WILL ENSURE UK IS READY TO TRADE POST-BREXIT
On 1st August, a news release from various Departments said that ports and airports across the UK will be invited to bid to become one of up to 10 Freeports. It reveals the membership of the Freeports Advisory Panel, which will include Ministers from the Department for International Trade and HM Treasury, as well as outside technology and tax experts.
JERSEY-REGISTERED MINING COMPANY IN $2 BILLION DISPUTE IN ARMENIA
The Jersey Evening Post on 2nd August reported that the Lydian International mining company is involved in a $2 billion dispute over its Amulsar project with protesters and campaigners in Armenia who claim its operations are threatening their environment and livelihood. A documentary claims that pollution has already affected water supplies, affecting the local economy including its spa facilities, fish farms and agriculture.
UK: 3 SIBLINGS WHO LAUNDERED NEARLY £1 MILLION FOR THE LEADER OF A NOTORIOUS NIGERIAN CRIME GANG HAVE BEEN JAILED FOR A TOTAL OF 16 YEARS
A news release from the CPS on 2nd August announced that the 3 siblings were working directly for the leader of a notorious Nigerian crime gang and laundered nearly £1 million for the Black Axe organised crime syndicate through UK bank accounts. The leader of the Black Axe, Augustus Bemigho-Eyeoyibo, is the brother-in-law of the 3 defendants. Black Axe is a banned organisation in Nigeria and has been linked to decades of murders, rapes, extortion and drug dealing in Nigeria and across the world, with members allegedly swearing a ‘blood oath’ to join.
CYBER CRIME COST WORLDWIDE ECONOMY $2.9 MILLION EVERY MINUTE LAST YEAR
An article in Illicit Trade on 25th July said that online criminals cost the global economy $2.9 million every minute last year, according to a report from cyber security firm RiskIQ. This adds up to $1.5 trillion over the 12-month period. $17,700 was lost to phishing attacks every minute last year, while ransomware events will cost a projected $22,184 each 60 seconds in 2019.
“K” LINE SHIPPING COMPANY FINED $23.4 MILLION IN AUSTRALIA FOR CONSPIRACY
American Shipper reported on 2nd August that the Japanese-owned Kawasaki Kisen Kaisha or K-Line shipping line, an automotive (car) carrier. The A$34.5 million equates to US$24 million, and would have been much more but for a guilty plea and co-operation. It admitted being involved in a global conspiracy with numerous other ocean shipping companies not to attempt to win business from each other and to fix ocean freight rates for shipping vehicles.
BRITAIN HAS EXPORTED MORE THAN 50 TONNES OF SHARK FINS SINCE 2017
Unearthed reported on 29th July that shark fins worth hundreds of thousands of pounds have been sold to Spain in recent years, with the trade fuelled by demand in Asia. The UK sent almost 12 tonnes of shark fins, worth £92,000, to Spain in the first 5 months of this year.
BLOOD DIAMONDS AND LAND CORRUPTION IN SIERRA LEONE
On 2nd August, Transparency International published an article about a mine that described as a former centre of the “blood diamond” trade, and which is now owned by a private company founded by a former mercenary and owned by company controlled by a man said to have been investigated by several countries for alleged corruption-related offences. Since the company took over many residents have been displaced, with allegedly corrupt practices within both customary and statutory land administration. The article says that until now little or no attention was paid to the role of corruption in shaping decisions over land use and access –decisions that allowed the company, Koidu Limited, to evict communities from their homes. The company was registered in the BVI by Mossack Fonseca, and pays no national or local taxes in Sierra Leone. The parent company of the holding company which in turn owns Koidu Limited is based in Guernsey. That parent company has been found liable for fraudulent misrepresentation by a London court, including a bribery scheme, by a London arbitration court with regard to the same Guinea project.
ICE REMOVES CONVICTED IRANIAN ILLEGAL ARMS DEALER FROM THE US
A news release on 2nd August from US Immigration and Customs Enforcement advised that Arash Sepehri had been deported from the US in July. He was arrested in Spain in 2017 on a US warrant from 2016. In February 2019 he was convicted for violating the International Economic Powers Act and sentenced him to 26 months imprisonment, and to be deported for visa violations.
HM TREASURY PROMISES £434 MILLION TO SUPPORT MEDICINES SUPPLY CHAIN AFTER NO-DEAL BREXIT
The Pharmaceutical Journal on 2nd August reported that the Chancellor has committed to spending an extra £434 million on ensuring the continued supply of medicines in the event of a no-deal Brexit, as part of a larger announcement of funding worth £2.1 billion for no-deal Brexit preparations across several government departments.
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