8th August 2019
AFRICAN SWINE FEVER THREATENS 200 MILLION PIGS IN CHINA
The Economist on 6th August reported that, despite it being the Year of the Pig in the Chinese calendar, African swine fever, a highly contagious virus, has spread to every province in China – the world’s biggest pork producer. It reports one estimate that by year-end as many as 200m pigs could be lost to disease or slaughter, leading to a 30% drop in pork production.
OECD RECOGNISES LOW-TAX JURISDICTIONS AS COMPLIANT AND ‘NON-HARMFUL’
International Investment reported on 31st July that the OECD’s Forum on Harmful Tax Practices has concluded that all but 1 of 12 countries on its low-tax jurisdictions list are compliant with its standards for “substantial activity legislation”, and as such are considered not harmful. Anguilla, the Bahamas, Bahrain, Barbados, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Isle of Man, Jersey and the Turks and Caicos Islands were found to be “wholly compliant”. The UAE, has a single “technical point” which is in the process of being resolved, the OECD said.
ITALIAN TAX AUTHORITIES ASK SWISS FOR INFORMATION ON UBS CLIENTS
On 8th August, KYC 360 reported that Italy’s tax authorities have made a request to their Swiss counterparts for information about possible tax evasion by UBS clients, seeking help on Italian residents who held UBS accounts in Switzerland between 2015 and 2016 and who have not given evidence their account were tax compliant. UBS is facing 2 separate investigations in Italy and a court case in France over allegations it enabled cross-border tax cheats to hide assets in Switzerland.
BRAZIL POLICE MAKE NEW MOVE AGAINST FIRST CAPITAL COMMAND (PCC) ORGANISED CRIME GANG’S FINANCE ARM
On 8th August, KYC 360 reported that police had had executed 30 arrest warrants in an operation is aimed at dismantling a PCC unit that helps manage the group’s finances. Police also carried out 55 search warrants and blocked 400 bank accounts tied to the organisation. The PCC faction in charge of finances is said to be based in a jail in the southern state of Parana.
INDONESIA DETAINS FORMER GARUDA AIRLINES CEO EMIRSYAH SATAR IN CORRUPTION PROBE
The Straits Times on 8th August reported that Indonesia’s anti-corruption agency has detained, Emirsyah Satar, the former head of PT Garuda Indonesia, as part of a long-running investigation. The agency also detained an Indonesian businessman for the same suspected violation. While admitting that he received money from the businessman, Satar denies any money laundering allegations. Authorities in Singapore have also seized an apartment and blocked various bank accounts.
RAID TO ARREST KYRGYZSTAN’S FORMER PRESIDENT ON CORRUPTION CHARGES FAILS
The Daily Mail and others reported on a raid at ex-president Almazbek Atambayev’s residence south of Kyrgyzstan’s capital of Bishkek which came after the first attempt to detain Atambayev also failed and a throng of his supporters reportedly barricaded themselves inside. A special forces serviceman has died and at least 35 other people have been injured in the fight. Atambayev was in office from 2011 to 2017 and he is accused of a range of crimes, including corruption and the expropriation of property.
PODCAST: DEFERRED PROSECUTION AGREEMENTS IN THE UK
The first podcast from Herbert Smith Freehills in its Corporate Crime & Investigations series discusses the Deferred Prosecution Agreements landscape and, in particular, the latest DPA agreed between the SFO and a subsidiary in the Serco Group of companies.
CANADIAN AND AMERICAN REGULATORS HAVE ISSUED EMERGENCY ORDERS AGAINST 2 NEW JERSEY-BASED ICO
On 7th August, Coindesk reported that Canadian and American regulators under co-ordinated action have issued emergency orders against Zoptax and UNOcall initial coin offerings, alleging that both ICO were offering fraudulent securities offerings.
FCA TO DELAY ONLINE PAYMENTS RULES AFTER THREAT TO SALES
Fintech Futures reported on 7th August that the UK Financial Conduct Authority is set to delay enforcement of new EU online payments regulations by more than 18 months, after warnings that the rules would hamstring online sales. The FCA had asked the trade group, UK Finance, to design an alternative timetable for the UK.
SWITZERLAND’S LOST EU FINANCIAL EQUIVALENCE STATUS
On 7th August, Dentons published an article which looks at the dispute between the EU and Switzerland, where negotiations have broken down and Switzerland has lost its equivalence status (i.e. that permitting Swiss and EU financial market participants relative freedom to access each other’s markets and infrastructure). Since 2014, Switzerland and the EU have been attempting to hash out a common institutional framework intended to replace more than 100 bilateral agreements relating to matters as varied as agriculture, labour and air transport. A draft agreement was rejected after Switzerland refused to concede on issues such as state subsidies, wage protection for Swiss workers, and EU citizens’ right to free movement; hence, the EU let its provisional financial equivalence agreement with Switzerland – which was contingent upon progress made towards the framework – expire at the end of June. Until now, the article says, no negative side effects for Switzerland have arisen, but it is unclear whether this will remain the case. This loss of equivalence status is not only of relevance to 2 key financial markets but also represents a proxy for the future relationship between the EU and other, what it terms “third countries”. The article considers the effects of the stand-off and concludes that the EU is unlikely to change its course of action anytime soon, given that it will likely want to appear resolute in the lead up to Brexit.
RUSSIA’S ARMS EXPORTS TO THE MIDDLE EAST & NORTH AFRICA (MENA) REGION: TRENDS AND DRIVERS
A Policy Brief from EuroMesco in April says that, according to the SIPRI Arms Transfers Database, 5 MENA states (Algeria, Egypt, Saudi Arabia, Turkey and the UAE) are listed among the top 10 largest importers of major arms, accounting for 22% of the total volume of arms imports in the world in 2009-2018. Russia is the second largest exporter of major arms in the world. In 2009-2018, Russia was the second-largest arms supplier to the MENA region – with the country accounted for 18% of the total volume of arms imports by MENA states, following the US (44%), the world’s leading exporter of arms. In recent years, Russia has further expanded its arms transfers to MENA seeking to re-establish its influence in the region. It is said that the paper is a first step to a better understand the changing role of Russia in the MENA region. The paper identifies both the strategy and motivations driving Russia’s arms exports, and equally the region, and the demand for arms by MENA countries. It then reviews the cases of 3 of Russia’s traditional arms trading partners – Algeria, Syria and Egypt. It also examines the case of the Persian Gulf, a region with which Russia is currently attempting to deepen co-operation. Conclusions and recommendations are provided in the final section.
EuroMeSCo (the Euro-Mediterranean Study Commission) is a think-tank and claims to be the main network of research centres on politics and security in the Mediterranean.
SEA SHEPHERD SHOWS THE FUTURE OF FISHERIES PROTECTION
An article from War on the Rocks on 8th August involved a visit to the Brigitte Bardot, a patrol boat belonging to the Sea Shepherd organisation, which has signed agreements with Gambia, Namibia and Liberia to provide fishery protection vessels and crews. The article says that this public-private maritime partnership between a maritime non-government organization and nation-states is kick-starting a new era of maritime security, in particular changing how fisheries protection can be conducted. The 27-knot, 115-feet vessel was preparing for a campaign west of the Galapagos where the crew will observe, record, and report illegal fishing.
TRADING IN DRUG PRECURSORS IF THERE’S NO BREXIT DEAL
On 8th August, the Home Office issued updated information on how trading in drug precursor chemicals would be affected if the UK leaves the EU with no deal.
KENYA: DPP ORDERS ARREST OF ALCOHOL TYCOON HUMPHREY KARIUKI OVER ALLEGED TAX EVASION
Capital News on 8th August reported that the DPP had ordered the the arrest and prosecution of billionaire Humphrey Kariuki for evading tax through Africa Spirits and Wines of the World (WoW) Beverages where he holds major stakes. He is to be prosecuted alongside 3 directors of WoW Beverages Limited, 4 others from Africa Spirits Limited and a driver said to be an accomplice. An investigation on the 2 companies started early this year when the detectives launched a major raid at factories located in Thika where over a million bottles of assorted alcoholic drinks and 24,000 counterfeit excise stamps were seized. An audit is said to have further revealed that the production system at the Africa Spirits Limited factory plant in Thika had been tampered with, leading to the submission of false tax declarations.
5 PEOPLE CHARGED IN AUSTRALIA OVER A COLD-CALL CRYPTOCURRENCY INVESTMENT FRAUD
On 8th August, Coindesk reported that detectives allege that the 3 men and 2 women duped over 100 investors into handing over A$2.7 million believing that they were generating significant profit. From 2017, victims were said to have been persuaded to invest cryptocurrency in a legitimate-seeming firm called Exmount Holdings Group, which had a website, call centre and sales staff. It says that other entities and websites alleged to have been linked to the fraudulent scheme included “Exmount Holdings Ltd,” “The Quid Pro Quo Foundation,” “The Atlas Group,” “AFG Associates Pty Ltd,” “tradex123,” “exmounttrading,” “atlasfxgroup” and “amazonqus”.
GIBRALTAR ADOPTS EU DISPUTE RESOLUTION RULES
On 8th August, Tax News reported that Gibraltar has enacted new regulations to transpose the EU’s new tax dispute resolution mechanisms, set out in EU Council Directive 2017/1852, into Gibraltar’s domestic tax law. The new rules aim at ensuring the quicker and more effective resolution of tax disputes between EU Member States and at offering greater certainty to businesses and individuals experiencing double taxation issues.
13 ARRESTED IN LITHUANIA IN €1 MILLION CAR PARTS THEFT RING
A news release from Europol on 8th August reported that an organised crime network originating from Lithuania and which specialised in the theft of car parts has been dismantled this week by the German police, together with the support of Europol, the Belgian Federal Judicial Police and Lithuanian Police. Since 2017, the criminals were operating throughout Germany and Belgium, breaking cars and removing the navigation systems and multifunction steering wheels. After being stored in external depots, the stolen items were then shipped to Lithuania for resale purposes.
SMUGGLERS MAKE HAY AS INDIAN GOVT HIKES IMPORT DUTY ON GOLD
The Connected to India website on 7th August carried an article saying that, with the Indian government jacking up import duty on gold, smuggling from Persian Gulf countries, Singapore and Malaysia is in full swing. Customs duty on the precious metal was raised from 10% to 12.5% on July 5th. It says that among other ingenious modus operandi, smugglers have been hiding gold in toys, radios, bag handles, brass pipes, induction cookers, damaged chairs, emergency lights, vacuum cleaners, and hidden cavities of cars.
ISRAELI WOMAN CONVICTED IN US IN $145 MILLION BINARY OPTIONS SCHEME TO DEFRAUD INVESTORS
On 8th August, Baker McKenzie reported that Lee Elbaz was CEO of Yukom Communications, an Israel-based company that operated in the “binary options” industry under the brand names BinaryBook and BigOption. Elbaz trained employees to lie to investors and rigged the odds against them making and recouping any money.
LARGE FINE FOR SHIPPERS WITH HAPAG-LLOYD IF CAUGHT WITH MISDECLARED HAZARDOUS CARGO
Insurance Marine News on 8th August reported that Germany-based container liner Hapag Lloyd is to slap fines of $15,000 per container on shippers with misdeclared hazardous cargo, beginning 15th September. Hong Kong-based Orient Overseas Container Line (OOCL), part of China-based Cosco, also revealed plans to reduce levels of misdeclared hazardous cargo.
PAKISTAN SUSPENDS BILATERAL TRADE WITH INDIA AFTER KASHMIR DECISION
EU Sanctions Blog reported on 8th August that Pakistan had suspended bilateral trade after India announced its decision to change the constitutional position of the disputed region of Kashmir. According to the blog, in 2018, trade between the countries accounted for approximately 3% of Pakistan’s and 0.3% of India’s total trade.
NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION (NASAA) OPERATION CYBERSWEEP INITIATIVE
On 7th August, Cadwalader reported that the US-Canadian NASAA had announced that regulators had opened 130 new investigations into questionable cryptocurrency-related investment offerings and have 35 pending or completed enforcement actions since the beginning of this year under the Operation launched in April 2018. The article said that NASAA is also releasing a new video for retail investors on common crypto investment schemes and how to guard against them. The video raises red flags for investors regarding volatility, a lack of recourse and the untraceability of many of these crypto-related investments.
WESTERN BALKANS FOREIGN FIGHTERS AND HOMEGROWN JIHADIS: TRENDS AND IMPLICATIONS
In the latest edition of the CTC Sentinel, an article says that over 1,000 adult male foreign fighters, women, and minors from the Western Balkans spent time in Syria and Iraq and around 500 from the region are still there, including children born in theatre, and there remains in Iraq is a modest ethnic Albanian combat unit fighting with Hay’at Tahrir al-Sham in Idlib. It says that some 460 others have gradually returned home, making the Western Balkans the region with the highest concentration of returning foreign terrorist fighters in Europe and creating a long-term security challenge compounded by inadequate resources and the threat posed by homegrown jihadi militants.
INTERVIEW WITH SUZANNE RAINE, FORMER HEAD OF THE UK JOINT TERRORISM ANALYSIS CENTRE
The latest edition of the CTC Sentinel carries an interview with Suzanne Raine, who worked for the FCO 1995-2019, specialising in counterterrorism, and between January 2015 and September 2017, she was head of the JTAC. She talks about the role of JTAC, her assessment of current threats, and possible future ideologies of concern.
ZIMBABWE’S MNANGAGWA FIRES TOURISM MINISTER IN $95 MILLION ALLEGED CORRUPTION CHARGE
On 8th August, Reuters reported that Prisca Mupfumira is the first cabinet minister to be charged by the newly formed anti-graft agency.
IRELAND: MAN ARRESTED IN GARDA CRACKDOWN ON €29 MILLION VAT FRAUD SCHEME
On 8th August, The Journal reported that an investigation by the Garda National Economic Crime Bureau into a €29 million “VAT carousel” fraud scheme led to the arrest of a man. It is said that the scheme which saw funds move through bank accounts linked to companies both in Ireland and across the border, was being managed by a crime gang. Garda are also working with the PSNI, the UK National Crime Agency and HMRC.
UK: INTERNATIONAL ROAD HAULAGE AFTER BREXIT
On 8th August, the Department for Transport issued guidance on what UK goods vehicle operators need to do to carry out international road haulage if there’s a no-deal Brexit.
NUMBER OF BRITONS WITH NON-DOMICILE STATUS DROPS TO RECORD LOW
The Guardian reported on 8th August that HMRC data shows that the number of super-rich people who live in the UK but pay no tax on their offshore income has fallen to a record low. So-called ‘“non-doms” in the 2017-18 financial year totalled 78,300, a fall of 13% on the previous year. The amount of tax they paid fell from £9.5 billion in 2016-17 to £7.5 billion last year.
POLAND EXEMPTS THE UNDER-26 FROM INCOME TAX TO STOP EXODUS
Public Finance International on 8th August reported that 2 million young people in Poland will no longer pay income tax, as the government tries to keep them from leaving the country for work.
URUGUAY EMERGES AS NEW CENTRE OF INTERNATIONAL DRUG TRADE
On 8th August, an article from OCCRP said that Uruguay’s reputation for stability on a continent wracked with political and social unrest has made its law enforcement authorities too complacent to prevent the country from becoming a drug trafficking hub in recent years. Several shipments of cocaine seized in Europe have originated in Uruguay.
PCC AND ‘NDRANGHETA, THE INTERNATIONAL CRIMINAL ALLIANCE FLOODING EUROPE WITH COCAINE
An article in Insight Crime on 8th August says that recent arrests have further highlighted the increasingly close partnership between the Italian mafia and Brazil’s PCC — 2 of the world’s most powerful criminal groups. It says that much of the cocaine seized in Brazil was intended for Europe, where the ‘Ndrangheta controls trafficking routes across much of the continent. Each group controls one side of the cocaine flow, posing no risk to the other. In the last few years, the PCC has worked to dominate smuggling networks and transportation hubs in Brazil and its neighbours, including Bolivia and Paraguay.
JAPAN POST BANK TO CAP OVERSEAS REMITTANCES TO COMBAT MONEY LAUNDERING
On 8th August, Jiji Press reported that Japan Post Bank and the Japan Post Company will place a limit on the amount of funds that can be sent via their overseas bank transfer service to tackle money laundering. Overseas remittance will be limited to 5 million yen per day (around $47,000).
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