OTHER THINGS YOU MAY HAVE MISSED – AUGUST 5/6

5th August 2019

CHINA AND OTHERS TAKE OIL FROM 12 IRANIAN TANKERS

KYC 360 on 5th August reported that The Times had examined the movements of more than 70 Iranian tankers since US sanctions took full effect in May.  12 of the tankers loaded oil and delivered it to China or the Eastern Mediterranean, where the buyers may have included Syria or Turkey. Only some of those 12 tankers were previously known to have recently delivered Iranian oil.

https://www.riskscreen.com/kyc360/news/defying-u-s-sanctions-china-and-others-take-oil-from-12-iranian-tankers/

HONDURAN PRESIDENT DENIES LINKS TO DRUG TRAFFICKING

On 5th August, KYC 360 reported that Juan Orlando Hernandez has denied reports from a US court filing linking him to drug trafficking, accusing criminals of seeking revenge against him.

https://www.riskscreen.com/kyc360/news/honduran-president-denies-links-to-drug-trafficking/

MALAYSIA: 35 BANK ACCOUNTS FROZEN, CASH AND PROPERTIES SEIZED IN RAIDS ON UNLICENSED MSB IN PENANG

On 5th August, KYC 360 reported raids on a network of illegal money services business operators around the Klang Valley and Penang, which also saw the seizure of documents, computers and mobile phones related to the activities.

https://www.riskscreen.com/kyc360/news/35-bank-accounts-frozen-cash-and-properties-worth-rm4m-seized-in-raids-on-unlicensed-msbs-in-penang-klang-valley-says-bank-negara/

OECD FORUM ON HARMFUL TAX PRACTICES LATEST REVIEW INCLUDES APPROVALS FOR GUERNSEY AND JERSEY

Carey Olsen on 1st August reported that the review has concluded that the domestic legal frameworks of Guernsey and Jersey are in line with agreed standards and therefore “not harmful”.

https://www.careyolsen.com/briefings/oecd-latest-review-includes-approvals-guernsey-and-jersey

CFIUS UNBOUND: FOREIGN INVESTOR DEALS CONTINUE TO DRAW INTENSE NATIONAL SECURITY SCRUTINY IN US

On 1st August, an article from Cadwalader provides the background to CFIUS, and how the approval process has changed, providing tips if facing such a review.  It says that a CFIUS analysis must be a part of any M&A deal involving foreign investors.

https://www.cadwalader.com/resources/clients-friends-memos/cfius-unbound-foreign-investor-deals-continue-to-draw-intense-national-security-scrutiny

UN URGES SANCTIONS ON MYANMAR ARMY BUSINESSES AND SAYS FOREIGN PARTNERS COULD BE COMPLICIT

Reuters on 5th August reported that UN human rights investigators urged world leaders to impose targeted financial sanctions on companies linked to the military in Myanmar and it action against the Rohingya minority, and said foreign companies doing business with them could be complicit in international crimes.  Investigators identified at least 59 foreign companies with some form of commercial ties to the Myanmar military, including firms from France, Belgium, Switzerland, Hong Kong and China.  Of those, 15 operate joint ventures with the 2 military conglomerates or their subsidiaries – Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corp (MEC), holding companies with investments spanning various sectors including gems, copper, telecoms and clothing, and own 2 of the country’s largest banks (Myawaddy and Innwa).  They also named 14 companies that have sold weapons and related equipment to security forces in the country since 2016, including state-owned entities in Israel, India, South Korea, and China.

https://uk.reuters.com/article/uk-myanmar-military/u-n-urges-sanctions-on-myanmar-army-businesses-says-foreign-partners-could-be-complicit-idUKKCN1UV0DC

https://europeansanctions.us11.list-manage.com/track/click?u=2fb90754a22d68a94ac3708f9&id=999d7c27d6&e=e36166c3cb

ZAMBIA SEEKS TO EXPEL COPPER MINING COMPANY VEDANTA OVER ALLEGED UNDERINVESTMENT AND UNDERPAYMENT OF TAXES

On 5th August, The Guardian reported that the Zambian national mining vehicle, ZCCM, is seeking to have Vedanta subsidiary Konkola Copper Mines (KCM), its partner in the country’s largest copper mine, placed into liquidation.  The government has accused KCM of underpayment of dividends and taxes, as well as underinvestment in the mine, a crucial plank in Zambia’s copper-fuelled economy and it appointed a liquidator to run the company in May.

https://www.theguardian.com/world/2019/aug/05/zambia-seeks-to-expel-london-listed-copper-miner-vedanta

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https://www.rferl.org/a/30089235.html

THE HISTORY AND EVOLUTION OF GLOBAL TRADE FINANCE

On 5th August, an article on VOX, the CEPR Policy Portal, reconstructs the evolution of global trade finance from the Middle Ages until today.  Just like in medieval times, today’s global trade is predominantly financed through banks so that banking problems automatically transmit to international trade.  In contrast, from the 16th to the 20th Century, trade finance was mostly market-based.  The decline of market-based trade finance was triggered by major geopolitical shocks.  The article concludes that the decentralised structure that prevails nowadays makes international control over the trade finance market less feasible. While this market structure clearly has advantages, it says, it also makes exporting and importing firms more dependent on local credit conditions and pushes back the governance of the trade finance market into a sort of anarchy.

https://voxeu.org/article/structure-global-trade-finance-very-long-run-view

HOW RUSSIAN “BLOOD MONEY” FLOWED INTO MONTENEGRO

On 3rd July, OCCRP published an article saying that documents obtained by OCCRP suggest that 1 sleek 21-metre yacht was more than just a pleasure cruiser for the rich: It was a vessel for moving money of dubious origin via inflated yacht rental fees.  With Belize and BVI companies used as conduits for millions of dollars, with companies whose beneficial owner was a key organizer of the infamous Magnitsky tax fraud in Russia.

https://www.occrp.org/en/troikalaundromat/how-russian-blood-money-flowed-into-montenegro

COSTA RICA’S “BEFORE-AND-AFTER” CORRUPTION SCANDAL CASTS A LONG SHADOW

Americas Quarterly on 5th August carried an article about the cementazo a corruption scandal linked to efforts to import cement from China to undercut Cemex and Holcim (2 multinationals with a hold on the Costa Rican market) in 2017.  So far, none of the key figures in the case have been convicted of a crime, and whether the cementazo will mark a true turning point in Costa Rica’s fight against corruption remains to be seen.

https://www.americasquarterly.org/content/costa-ricas-and-after-corruption-scandal-casts-long-shadow

WARRANT ISSUED FOR FORMER CHAIRWOMAN OF KYRGYZ STATE REGISTRATION SERVICE

On 5th August, Rferl reported that an arrest warrant has been issued for Alina Shaikova, the former chairwoman of Kyrgyzstan’s State Registration Service (MKK) after she failed to show up for questioning in a corruption case.  Shaikova was fired and her 2 deputies arrested in mid-April in the wake of the probe. Her current whereabouts is unknown.

https://www.rferl.org/a/warrant-issued-for-former-chairwoman-of-kyrgyz-state-registration-service/30093008.html

UKRAINE: INVESTIGATION INTO EMBEZZLEMENT OF MILLIONS DURING RECONSTRUCTION OF CANAL IN ODESA REGION

Interfax Ukraine on 5th August reported that the Security Service of Ukraine (SBU) has unmasked large-scale embezzlement of the state funds during a reconstruction of the channel that connects Tylihul Estuary and Black Sea in Odesa region.

https://en.interfax.com.ua/news/general/605543.html

US: WINE STORAGE FRAUDSTER JAILED FOR SELLING CLIENTS’ WINE  

On 5th August, The Drinks Business reported that William Holder of Safe Harbour Wine Storage in Maryland has been jailed for 18 months and ordered to pay $1.5 million restitution.  He sold on a large number of wines to wine brokers and retailers, and used to funds to fuel his gambling and opioid addictions and repay loans taken on keep his business afloat.

https://www.thedrinksbusiness.com/2019/08/wine-storage-fraudster-gets-18-months-in-prison/

WOMAN AT THE RUSSIAN FEDERAL EMERGENCY MANAGEMENT MINISTRY (MCHS) USED HER CONNECTIONS, INCLUDING A ROMANCE WITH THE EX-MINISTER, TO MAKE MORE THAN $100 MILLION

On 5th August, OCCRP reported that Elena Shebunova was allegedly a MChS flight attendant at the time when Sergey Shoigu, the country’s current Defence Minister, was the head of Emergency Management Ministry.  In 2015 she was sentenced to 5 years in jail for fraud, but was soon released on parole.  She married the ex-Defence Minister in 2018.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/10397-the-insider-embezzlements-at-the-ministry-of-romance

IRAN AND AFGHANISTAN SIGN MoU FOR CUSTOMS CO-OPERATION

The Tehran Times on 5th August reported that the MoU was designed to address issues such as synchronising the 2 customs authorities’ work hours, strengthening training co-operation, managing risk and eliminating transit problems.

https://www.tehrantimes.com/news/438911/Tehran-Kabul-ink-MOU-for-customs-co-op

DUBAI CUSTOMS MAKES MASSIVE SEIZURE OF “JIHADIST’S DRUG”

Maritime Executive on 4th August reported that Dubai Customs has foiled a drug smuggling attempt, seizing 274,000 Captagon amphetamine pills.  It says that Captagon manufacturing has escalated in Europe and the Middle East over the past few years and that it has been by extremist groups such as Islamic State to enhance their soldiers’ abilities.  The highly addictive, amphetamine-based drug is said to enhance courage.

https://www.maritime-executive.com/article/dubai-customs-makes-massive-seizure-of-jihadists-drug

GERMAN CUSTOMS UNCOVERS MORE THAN $1 BILLION OF COCAINE IN A SHIPPING CONTAINER FROM URUGUAY

On 2nd August, CBS News reported the single largest haul of the drug ever in Germany’s history. Authorities said they confiscated 4.5 tonnes of cocaine worth €1 billion after they were examining cargo of soya beans that arrived in the Port of Hamburg en route to Antwerp.

https://www.cbsnews.com/news/germany-cocaine-bust-hamburg-drug-uruguay-montevideo/

US CONGRESS CONSIDERS EXTORTION ACT TO PLUG FCPA GAPS

A post on the FCPA Blog on 5th August reported that 4 Representatives have introduced legislation that would criminalise extortion by foreign officials, enabling the DoJ to indict the officials for demanding bribes to fulfil, neglect, or violate their official duties.  The legislation would plug a gap in the FCPA, under which only bribe payers can be prosecuted.

http://www.fcpablog.com/blog/2019/8/5/to-plug-gap-in-fcpa-congress-considers-foreign-extortion-pre.html

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https://www.statista.com/chart/18909/figures-related-to-gun-violence-in-the-us/

UN GRANTS SANCTIONS EXEMPTIONS FOR HUMANITARIAN PROJECTS IN NORTH KOREA

On 5th August, NK News reported that the relevant UN Sanctions Committee has granted exemptions to Worldvision and Agrotec sanctions exemptions to import into the DPRK equipment that would otherwise be prohibited, for food security and water projects.

https://www.nknews.org/2019/08/un-grants-humanitarian-sanctions-exemptions-for-food-security-water-projects/

NEW IBM BLOCKCHAIN SYSTEM FOR SHIPPERS

On 5th August, Loadstar reported that IBM has launched a new blockchain solution, aimed at improving supplier validation, onboarding and life cycle information management, and some major shippers, including GlaxoSmithKline, Lenovo, and Vodafone, have already signed up.  Trust Your Supplier (TYS) creates a ‘digital passport’ for supplier identity on the blockchain network that allows suppliers to share information with any permitted buyer on the network.

https://theloadstar.com/major-shippers-quick-to-form-a-link-with-new-ibm-blockchain-solution

HONG KONG PROTESTS SPREAD TO AIR CARGO OPERATIONS

On 5th August, Loadstar reported that air traffic controllers, flight crews, and pilots have joined the protests gripping Hong Kong, resulting in severe delays for the world’s busiest cargo gateway.  It reported that, on 5th August alone, more than 100 passenger services have been cancelled, with 6 freighter flights axed by the likes of Emirates, Etihad, Nippon Cargo, Polar Air Cargo and UPS.

https://theloadstar.com/hk-protests-spread-to-airport-cargo-operations

https://www.aircargonews.net/cargo-airport/hong-kong-strikes-hit-cargo-operations/

IMPLEMENTATION OF 5th AML DIRECTIVE IN GERMANY: LEGISLATIVE PROPOSALS

An article from Bird & Bird on 5th August says that legislative proposal to implement the 5th EU AML Directive, Germany’s federal government proposes many amendments compared to the initially published first draft proposal by the Ministry of Finance.  However, not all the amendments are, according to the article, for the better.

https://www.twobirds.com/en/news/articles/2019/germany/umsetzung-der-5-geldwaescherichtlinie

IRAQ RECOVERS OVER $1 BILLION IN STOLEN STATE FUNDS

Al Arabiya reported on 5th August that Iraq’s anti-corruption commission reported that it has recovered $1 billion in money stolen from state coffers in the first 6 months of the year, and that 857 arrest warrants had been issued against government officials, of whom 407 had been detained.  It is said that, since 2004, almost $250 billion of public funds has vanished into the pockets of shady politicians and businessmen, an amount is twice the government’s budget and more than the country’s GDP.

http://english.alarabiya.net/en/News/middle-east/2019/08/05/Iraq-recovers-over-1-BN-in-stolen-state-funds.html

ROYAL MAIL REVENUE PROTECTION AND CANCELLED LABELS

On 5th August, Tamebay carried an interesting article about Royal Mail Revenue Protection, who are the people who try to stamp out postage label fraud.  Such fraud, it explains include printing a label twice and sticking it on 2 different packages; printing a label, cancelling it and then using it anyway; under-declaring the weight of individual items or mail bags; and fudging the number of items sent via PPI.  However, the article says that it is the label printing that Royal Mail appear to have taken recent steps to address.

https://tamebay.com/2019/08/royal-mail-revenue-protection-cancelled-labels.html

RESPONSE TO UK CONSULTATION ON OPTIONS TO ENHANCE THE ROLE OF COMPANIES HOUSE AND INCREASE THE TRANSPARENCY OF UK CORPORATE ENTITIES

On 5th August, both the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT) published their responses to the consultation launched by the Department of Business, Energy and Industrial Strategy.  Both say that, overall, they do not think that the proposals in this consultation have any direct tax implications, but they make a few broad points from a tax perspective.

https://www.tax.org.uk/sites/default/files/190802%20Corporate%20Transparency%20and%20register%20reform%20BEIS%20consultation%20-%20CIOT%20final.pdf

https://www.att.org.uk/sites/default/files/190802%20Corporate%20Transparency%20and%20register%20reform%20BEIS%20consultation%20-%20ATT%20final.pdf

US IDENTIFIES CHINESE TANKERS CARRYING IRANIAN OIL

On 4th August, the Financial Times reported that the US is tracking a fleet of tankers employed by the Bank of Kunlun, a subsidiary of the China National Petroleum Corporation, to transport oil from Iran to China.

https://www.ft.com/content/62220484-b37c-11e9-8cb2-799a3a8cf37b

 

6th August 2019

PODCAST: HOW BRITAIN CAN HELP YOU GET AWAY WITH MILLIONS – A 5-STEP GUIDE

This Guardian article is available both as a text and a podcast version on the Guardian website

https://www.theguardian.com/news/audio/2019/aug/05/how-britain-get-away-with-stealing-millions-guide-podcast

https://www.theguardian.com/world/2019/jul/05/how-britain-can-help-you-get-away-with-stealing-millions-a-five-step-guide

US TREASURY DESIGNATES CHINA AS A CURRENCY MANIPULATOR

On 5th August, the US Treasury designated China for manipulating the rate of exchange between its currency and the US dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade, and the US will engage with the IMF to eliminate the unfair competitive advantage created by China’s latest actions.

https://home.treasury.gov/news/press-releases/sm751

CANADA: FURTHER CONVICTIONS IN CRYPTOMETRICS INDIA BRIBERY CASE

Davies Ward Phillips & Vineberg published an article on 27th March saying that 2 further individuals were recently sentenced to 30 months’ imprisonment after being convicted of agreeing to bribe a foreign public official.  The article notes that the jurisdiction of Canadian courts was greatly expanded by an amendment to the relevant Act in 2013, and since then, any Canadian individual and any Canadian company may be prosecuted in Canada for bribing public officials abroad (or accounting falsification), despite the absence of any additional territorial links with Canada – nationality is sufficient for Canadian jurisdiction.  Cryptometrics is a Canadian company that specialised in security software, and the case arose after an anonymous disclosure to the US DoJ in 2007.

https://www.dwpv.com/en/Insights/Publications/2019/Corruption-of-Foreign-Public-Officials-Act

IS TAX EVASION A CRIMINAL OFFENCE IN ITALY?

On 30th July, Arnone & Sicone in Italy published an article answering this question, saying that in Italy tax evasion is considered a criminal offence only in case where the amount of unpaid taxes overcomes a specific threshold, otherwise it is regarded as an administrative offence, and it is punished with administrative sanctions.  The thresholds vary, depending on whether it is a case of fraudulent declarations, inaccurate declarations or failure to submit or pay a tax return.

https://arnonesicomo.com/news/294/tax-evasion-in-italy

NEW UK GUIDANCE ON RECLAIMING IMPORT VAT

On 30th July, DLA Piper reported that HMRC has recently released new policy guidance on the appropriate steps for the deduction of VAT on the import of goods into the UK.  It says that it is important for businesses who reclaim import VAT on goods imported into the UK when not owning the goods, “toll operators”, advisers and agents who deal with businesses importing goods to the UK.

https://www.dlapiper.com/en/us/insights/publications/2019/07/new-uk-guidance/

THE UK TRUST REGISTER – DO YOU NEED TO REGISTER?

On 2nd August, Withers Worldwide published an article addressing the questions –

  • when is registration required for trusts that have not paid UK tax before?;
  • when is registration not required?;
  • what information must be provided on the register?; and
  • what happens to the information?

The information on the register is not currently publicly accessible, but may be inspected by any law enforcement authority in the UK and the other EU Member States.  The article discusses the possible effects of the provisions of the 5th AML Directive, which provides that beneficial ownership information for trusts will need to be made available to persons who can demonstrate a ‘legitimate interest’ in access to that information and to persons who have reason to access information about trusts with a controlling interest in a non-EEA company.

http://www.mondaq.com/article.asp?articleid=832616

FOREIGN CRIMINALS “LAUNDERING FUNDS THROUGH NEW ZEALAND CASINOS”

Radio New Zealand reported on 6th August a statement by the Department of Internal Affairs AML group director that casinos were flagged as a high-risk.  The article also reports that a committee created under the Anti-Money Laundering and Countering Financing of Terrorism Act was developing a cross-agency national strategy of the law.  The National Co-ordination Committee consisted of representatives from the DIA, the Ministry of Justice, Customs, police, the Financial Markets Authority and Reserve Bank.  It had agreed to develop a strategy in 2017, but it was put on hold due to ‘competing priorities’, but is now due to be completed by September.

https://www.rnz.co.nz/news/business/396064/foreign-criminals-laundering-funds-through-nz-casinos-dia

ONLY 5% OF COMPANIES IN LUXEMBOURG HAVE REVEALED WHO THEIR OWNERS ARE

International Investment on 5th August reported that, of over 129,000 companies based in Luxembourg only 5.5% have said who their owners are.

https://www.internationalinvestment.net/news/4003439/-companies-luxembourg-revealed-owners

INDONESIA: NEW REGULATION ESTABLISHES PENALTIES FOR FAILURE TO REPATRIATE PROCEEDS OF NATURAL RESOURCES EXPORTS

On 5th August, ABNR Counsellors at Law published an article saying that the start of 2019 saw a renewed attempt by the Indonesian government to compel exporters of natural resources-based commodities to repatriate their export earnings and deposit them in the Indonesian financial system.  However, the article notes that the relevant regulations provide no exceptions which account for longstanding business practices and commercial arrangements.

https://www.lexology.com/library/detail.aspx?g=b5311104-2a98-4ade-9d18-e487f259afb8

WHAT MAKES A QUISTCLOSE TRUST?

An article from RPC on 5th August about a recent Court of Appeal case addressed the question: when does a Quistclose trust arise in the context of bank transfers?  It exists where a creditor has lent money to a debtor for a particular purpose and, in the event that the debtor uses the money for any other purpose, it is held on trust for the creditor – with any inappropriately spent money can then be traced, and returned to the creditors.

https://www.internationallawoffice.com/Newsletters/Litigation/United-Kingdom/RPC/What-makes-a-Quistclose-trust

NORTH KOREA TOOK $2 BILLION IN CYBERATTACKS TO FUND WEAPONS PROGRAMME

KYC 360 on 6th August reported that a UN report says that North Korea has generated an estimated $2 billion for its WMD programmes using “widespread and increasingly sophisticated” cyberattacks to steal from banks and cryptocurrency exchanges.

https://www.riskscreen.com/kyc360/news/north-korea-took-2-billion-in-cyberattacks-to-fund-weapons-program-u-n-report/

CHINA MAY HALT FRENCH POLICE CO-OPERATION OVER INTERPOL CASE

On 6th August, KYC 360 reported claims that Chinese officials are threatening to stop all police co-operation with France after it gave political asylum to the wife of the former Interpol chief who has been jailed in China.  A Chinese court said in June that Interpol president Meng Hongwei, a former vice-minister of public security, had pleaded guilty to accepting $2.1 million in bribes from 2005 to 2017.

https://www.riskscreen.com/kyc360/news/china-may-halt-french-police-cooperation-over-interpol-case-source/

AUSTRIAN COURT UPHOLDS €2.75 MILLION FINE AGAINST RAIFFEISEN BANK FOR AML FAILINGS

On 6th August, KYC 360 reported that an administrative court has rejected Raiffeisen Bank International’s challenge against a fine over insufficient AML checks.

https://www.riskscreen.com/kyc360/news/austrian-court-upholds-2-75-mln-euro-fine-against-raiffeisen/

ARTIFICIAL TONGUE MAY HELP LICK WHISKY COUNTERFEITERS

The Daily Business on 6th August reported that an artificial ‘tongue’ which can taste subtle differences between drams of whisky could help cut down on the trade in counterfeit alcohol, scientists say.  It is said to be able to taste the differences between the drinks with greater than 99% accuracy and capable of picking up on the subtler distinctions between the same whisky aged in different barrels, as well as identifying the difference between the same whisky aged for 12, 15 and 18 years.

https://dailybusinessgroup.co.uk/2019/08/artificial-tongue-may-help-lick-whisky-counterfeiters/

US DoJ REPORTS SETTLEMENT WITH SWISS BANK OVER TAX PROGRAMME ACCUSATIONS

An article on Mondo Visione on 5th August announced that the DoJ has reached a settlement with LLB Verwaltung (Switzerland) AG, formerly known as “Liechtensteinische Landesbank (Schweiz) AG” (LLB-Switzerland), a Swiss-based private bank.  As part of the agreement, LLB-Switzerland will pay a penalty of $10,680,554.64 to the US.  It is said that LLB-Switzerland and some of its employees, including members of the bank’s management, conspired with a Swiss asset manager and US clients to conceal those clients’ assets and income from the IRS.  Compliance Week reported that the bank ignored the warnings of its own compliance staff.

http://www.mondovisione.com/media-and-resources/news/us-justice-department-announces-resolution-with-llb-verwaltung-switzerland-ag/

https://www.complianceweek.com/regulatory-enforcement/swiss-bank-ignores-compliance-officer-pays-107m-for-tax-evasion/27531.article

AN ASSESSMENT OF THE US PRIVATE MILITARY INDUSTRY AND ITS ROLE IN THE IRAQ AND AFGHANISTAN WARS

Real Clear Defense on 5th August carried an article saying that during the Vietnam War, it is estimated that there was 1 contractor for every 55 uniformed military personnel.  In Iraq the ratio has hovered around 1 contractor for every 1 military personnel and in Afghanistan the number is 1.43 for every 1 military personnel.  During specific time periods, the number of contractors has even surpassed that of uniformed military personnel.  It says that private military firms have played vital roles in the wars in Iraq and Afghanistan and their roles will only continue to expand.  However, it also says that problems and controversies have hindered rather than aided the US in completing their already difficult missions in Iraq and Afghanistan.

https://www.realcleardefense.com/articles/2019/08/05/an_assessment_of_the_private_military_industry_and_its_role_in_the_iraq_and_afghanistan_wars_114638.html

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https://www.rferl.org/a/30093447.html

TAXING MOBILE PHONE TRANSACTIONS IN AFRICA: LESSONS FROM KENYA

On 5th August, the Brookings Institute published a paper saying that taxation on mobile phone-based transactions and on airtime has been introduced in Kenya and is spreading to other African countries.  Some countries in sub-Saharan Africa view mobile phones as a booming subsector easy to tax due to the increasing turnover of transactions and the formal nature of such transactions by both formal and informal enterprises.  In addition to a 2003 excise tax on airtime, since 2013, Kenya has introduced and reworked taxes on goods such as mobile phones, computer hardware, software, and, more recently, retail financial transactions.  The most recent adjustments in taxation in the Finance Act 2018 increased the excise tax on money transfer services by banks from 10% to 20%, on telephone services (airtime) from 10% to 15%, on mobile phone-based financial transactions from 10% to 12%, and introduced a 15% excise tax on internet data services and fixed-line telephone services.

https://www.brookings.edu/wp-content/uploads/2019/08/Taxing_mobile_transactions.pdf

OFAC AMENDS TERRORISM SANCTIONS ENTRY FOR FADI HUSSEIN SERHAN

On 6th August, a notice from OFAC announced an extensive amendment of the entry relating to a Lebanese national, Fadi Hussein SERHAN (aka Fadi Husayn SARHAN, Fadi SIRHAN).

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190806_33.aspx

NEW CORPORATE INSOLVENCY RULES FOR SCOTLAND COMMENCED ON 6th APRIL

The Insolvency Service has advised that the new rules are contained in 2 instruments –

  • The Insolvency (Scotland) (CVA and Administration) Rules 2018 made by the UK Government which make provision in relation to the reserved insolvency processes of CVA and administration; and
  • The Insolvency (Scotland) (Receivership and Winding Up) Rules 2018 made by the Scottish Government which make provision in relation to the devolved process of receivership and the mixed-competence process of winding up.

2 further instruments were laid on the 1st July and came into force on 23rd July, making consequential amendments to the Scottish Rules –

  • The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2019; and
  • The Insolvency (Scotland) Rules 2018 (Miscellaneous Amendments) Rules 2019

The devolution position for corporate insolvency is complex, with competence for winding up being divided between the UK and Scottish Parliament (the “general legal effect” of winding up is reserved to the UK Parliament and the “process” of winding up is devolved to the Scottish Parliament).

https://content.govdelivery.com/accounts/UKIS/bulletins/25699b9

TANKER WHICH SMUGGLED OIL TO NORTH KOREA LEAVES SOUTH KOREA

NK Pro reported on 5th August that the 16,500-ton Lighthouse Winmore, which was detained in South Korea, has been released, has left South Korea and headed to China.

https://www.nknews.org/pro/tanker-which-smuggled-oil-to-north-korea-leaves-south-korea/

NIGERIA: COURT FREEZES ACCOUNTS LINKED TO FORMER LAGOS GOVERNOR OVER ALLEGED FRAUD

The Premium Times on 6th August reported that the Federal High Court has ordered the freezing of 3 bank accounts allegedly linked to the Lagos State government and former governor, Akinwunmi Ambode.

https://www.premiumtimesng.com/news/headlines/345340-court-freezes-accounts-linked-to-former-lagos-governor-ambode-over-n9-9bn-alleged-fraud.html

HMRC CLAMPING DOWN AND GOING AFTER CRYPTOCURRENCY TRADERS

On 6th August, Finance Magnates reported that HMRC has sent letters to at least 3 exchanges– Coinbase, eToro and CEX.IO – to inform the regulator about users’ transactions in order to identify tax evasion.  The article says that HMRC sees digital assets as property rather than as forms of money and, as a result, cryptocurrency investors may owe corporation tax, income tax, or capital gains tax depending on their activities and transactions type.

https://www.financemagnates.com/cryptocurrency/news/uk-tax-office-tracks-down-crypto-investors-to-combat-evasion/

https://cointelegraph.com/news/uks-tax-authority-requests-user-data-from-crypto-exchanges-report

HONG KONG REGULATOR BANS FORMER UBS DIRECTOR FOR LIFE OVER BRIBERY CHARGES

On 6th August, International Adviser reported that the Securities and Futures Commission (SFC) has banned Tu Bing, a former associate director at UBS in Hong Kong, from re-entering the industry for life following his conviction for bribery.

https://international-adviser.com/hong-kong-regulator-bans-former-ubs-director-for-life

ALGERIAN COURTS ORDER ARREST OF 3 FORMER MINISTERS FOR GRAFT, PUBLIC DISORDER

OCCRP on 6th August reported that Algerian courts ordered the arrest of 3 former ministers from President Abdelaziz Bouteflika’s administration, the latest in a series of corruption charges against the previous President’s allies.  They are former Public Works and Transportation Minister Abdelghani Zaalane, Minister of Labor Mohamed El Ghazi and former Minister of Defense Khaled Nazar.

https://www.occrp.org/en/daily/10413-algerian-courts-order-arrest-of-former-ministers-for-graft-public-disorder

RAMPANT CORRUPTION” SCARES GLOBAL INVESTORS FROM KENYA

An article in the Brussel Times on 6th August said that Kenya, the 6th largest economy in Africa by GDP, continues to lose more than just money: her image and reputation among visitors and potential international investors has been severely battered.  It says that Kenya continues to lose massive investment opportunities to the negative effects of uncontrolled corruption levels.

https://www.brusselstimes.com/opinions/kenyas-top-officials-charged-with-stealing-550491608-euros-donor-funds/

IRS IS SENDING “EDUCATIONAL” LETTERS TO VIRTUAL CURRENCY OWNERS ADVISING THEM TO REPORT CRYPTO TRANSACTIONS PROPERLY AND PAY TAX

An article from Cole Schotz on 6th August says that this is an indication of increased IRS collection and enforcement activity in the area of virtual currency.  It says that there are 3 variants of the letter, and that they follow an earlier one which explains that the IRS treats virtual currency as property for federal tax purposes, and discusses the tax treatment of the sale or exchange of virtual currency and mining operations.

https://www.jdsupra.com/legalnews/irs-is-sending-educational-letters-to-56601/

https://www.irs.gov/newsroom/irs-has-begun-sending-letters-to-virtual-currency-owners-advising-them-to-pay-back-taxes-file-amended-returns-part-of-agencys-larger-efforts

EU RESTRUCTURING DIRECTIVE

On 6th August, Irish law firm Mathesons published a briefing about an EU Directive aimed at harmonising Member State restructuring and insolvency laws and which was published on 26th June.  The Directive is a key deliverable under the Commission’s Capital Markets Union Action Plan and is intended to complement the Recast Regulation on Insolvency 848/2015.  The article says that it is anticipated that it will have its biggest effect in Germany, as Germany is one of the few remaining jurisdictions in the EU that does not provide for a preventative restructuring proceeding.  The article identifies the 3 key elements of the Directive and then goes on to discuss specific provisions.

https://www.matheson.com/news-and-insights/article/eu-restructuring-directive

US APPEALS COURT UPHOLDS CONVICTION OF GUINEA’S FORMER MINISTER OF MINES IN BRIBERY AND MONEY LAUNDERING CASE

On 6th August, Jurist reported that US citizen Mahmoud Thiam used his official position as Minister of Mines in 2009 and 2010 to help a Chinese conglomerate to obtain exclusive and highly valuable investment rights in Guinea.  He was convicted in 2017 of accepting $8.5 million in bribes and engaging in money laundering.

https://www.jurist.org/news/2019/08/federal-appeals-court-upholds-conviction-of-guineas-former-minister-of-mines/

50% RISE IN SUSPECTED HUMAN TRAFFICKING VICTIMS IN FINLAND

On 6th August, Baker McKenzie reported that Finnish authorities have seen a rise in the number of people seeking help as victims of human trafficking compared to last year, and most of the suspected human trafficking cases that come to light in Finland are related to forced labour and forced marriages – officials identified 12 instances of each.

http://www.riskandcompliancehub.com/report-50-rise-in-suspected-human-trafficking-victims-in-finland/

FBI ISSUES CYBER ALERT AS ORGANISED CRIMINALS DRIVE DATING SITE FRAUD UP 70%

On 6th August, Baker McKenzie reported that the FBI has issued a warning for Americans to be wary of “confidence/romance scams,” after the Bureau saw a 70% annual rise in reported fraud, where dating sites were used to trick victims into sending money, purchasing items or even laundering or acting as money mules for people met online.

http://www.riskandcompliancehub.com/fbi-issues-cyber-alert-as-organized-criminals-drive-dating-site-fraud-up-70/

https://www.ic3.gov/media/2019/190805.aspx

OOCL SHIPPING LINE CLAMPS DOWN ON DANGEROUS AND HAZARDOUS CARGO SHIPMENTS

Insurance Marine News on 6th August reported that the Hong Kong-based Orient Overseas Container Line (OOCL), now a unit of China-based Cosco, is to accelerate its inspection of containers as part of an initiative to reduce on the transportation of misdeclared dangerous and hazardous cargo.

https://insurancemarinenews.com/insurance-marine-news/oocl-clamps-down-on-dangerous-and-hazardous-cargo-shipments/

 

 

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

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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