15th August 2019
PANAMA CANAL WILL NOT BLOCK VENEZUELA VESSELS DESPITE US SANCTIONS
Street Insider and others reported on 14th August that the Panama Canal will continue authorising vessels coming from Venezuela provided they present the necessary paperwork. The Panama Canal Authority said that that the waterway authorities should not submit to pressure from third countries on the issue of whether or not vessels could use the canal, which connects the Atlantic and Pacific oceans, citing it being a signatory to a treaty of neutrality, also signed by the US. However, Panama’s Maritime Authority last month said the country will continue de-flagging vessels that violate sanctions and international legislation.
MUSEUMS ACROSS THE UK ARE MAKING “DOOMSDAY” PLANS FOR NO-DEAL BREXIT.
ArtNet News on 14th August reported that UK Museums are preparing for the worst as it looks increasingly likely that Britain will abruptly leave the EU on October 31st. Registrars are working on the assumption that the transportation of cultural artefacts between the UK and Europe will be disrupted after Brexit unless a last-minute transition deal is put in place. It warns that the additional resources that will be required in the wake of Brexit will mean fewer and less ambitious loan exhibitions for the UK public, and the likelihood of delays at Britain’s ports, as some fear that customs paperwork could potentially quadruple. Works of art on loan that are due to return to the EU after a no-deal Brexit may need an export licence and registrars have been advised to gather alternative evidence to satisfy customs that goods were in free circulation to help obtain a licence.
TRADE ASSOCIATION PROPOSES CODE OF PRACTICE FOR SINGAPORE CRYPTOCURRENCY INDUSTRY
Bitcoin Magazine on 14th August reported that the Association of Cryptocurrency Enterprises and Startups, Singapore (ACCESS) has released a draft version of an industry code of practice targeted at cryptocurrency participants operating in Singapore, including exchange operators, payment and remittance services firms, cryptocurrency custodians and blockchain network infrastructure service providers. It aims to set out standards of good practice regarding AML/CFT measures for crypto firms to comply with on a voluntary basis.
HOUSE OF COMMONS TREASURY COMMITTEE REPORT ON TAX DISPUTES
On 13th August, Bryan Cave Leighton Paisner published an article saying that on 23rd July, the Committee published the “Disrupting Tax Report” explaining the findings and recommendations resulting from 2 inquiries undertaken by a sub-committee appointed to conduct reviews into HMRC’s approach and powers. A summary of the key points raised in the report is contained in the article. The article concludes that, whilst the Report highlights a number of interesting and important issues, the extent to which any of the recommendations of the Committee will be implemented and lead to any meaningful change is not clear. It also comments on the apparent unwillingness of the Committee and the government to undertake a formal review of HMRC’s powers and policies.
This blog is intended to provide a unique insight into this age-old practice, while at the same time assembling a mechanism to track their occurrence and gain an understanding of the true toll, both economic and societal.
ECONOMIC SUBSTANCE AND THE BERMUDA FUNDS INDUSTRY
On 2nd August, Carey Olsen published an article saying that Bermuda has introduced legislation in order to meet the commitment it had made to address certain concerns raised by the EU Code of Conduct Group (Business Taxation) in relation to the need for relevant businesses to demonstrate economic substance in Bermuda. This article explores the ways in which Bermuda’s Economic Substance Act 2018 could impact the island’s funds industry.
US CUSTOMS PROPOSES NEW RULES FOR CUSTOMS BROKER VERIFICATION OF AN IMPORTER’S IDENTITY
On 14th August, International Trade Compliance Update reported that, also on 14th August, US Customs and Border Protection published a notice of proposed rulemaking to amend the CBP regulations to require customs brokers to collect certain information from importers to enable the customs brokers to verify the identity of importers, including non-resident importers. It is consulting on the proposed rule to 15th October. The rule would create and standardise the process by which customs brokers verify the identity of their clients, specifically importers and non-resident importers and set forth the minimum requirements a customs broker must meet to verify the importer’s identity prior to transacting customs business on behalf of the importer or non-resident importer client.
ARGENTINA’S EVOLVING ROLE IN THE GLOBAL ARMS TRADE
Insight Crime on 14th August reported on an investigation, started in late 2018, found that the arms — including rifles, machine guns and anti-aircraft ammunition — were part of an intricate international operation. Investigators said parts shipped from the US and Europe were assembled in locations across Argentina. The arms were then sent by land to neighbouring Paraguay. Authorities believe the arms were then sold to Brazil’s top criminal organisations.
US AMENDS BANNED EXPORT ENTITY LIST
On 14th August, the International Trade Compliance Update reported a new rule that 17 entities have been determined by the US Government to be acting contrary to the national security or foreign policy interests of the US and these entities will be listed on the Entity List under the destinations of Armenia, Belgium, Canada, China, Georgia, Hong Kong, Malaysia, the Netherlands, Russia, UAE, and UK. The rule also modifies a total of 23 entries on the Entity List under the destinations of China, Hong Kong, and Russia. Finally, this rule removes a total of three entities under the destinations of China and the UAE. The removals are made in connection with requests for removal and a review of information provided in those requests. The UK entry is for Nicolas Kaiga (aka Nicholas Kaiga), who is also listed under Belgium and Netherlands.
essDOCS ENABLES FIRST FULLY INTEGRATED PAPERLESS IRON ORE TRADE
On 15th August, Fintech Future reported that essDOCS, has managed the first fully integrated paperless trade transaction in iron ore from Australian mining group, Rio Tinto, to one of US distributor Cargill’s Chinese customers. It says that the trade, which was supported by HSBC Singapore and BNP Paribas, travelled on an end-to-end data flow from the sales of goods contract on Chinsay’s ICP platform, the letter of credit management on the Voltron blockchain and the shipping documentation on CargoDocs DocEx.
LAW SOCIETY ADVICE TO WORKERS ON NON-DISCLOSURE AGREEMENTS AT ODDS WITH GUIDANCE GIVEN TO SOLICITORS
On 15th August, Legal Futures reported that the Law Society has launched what it called “a public legal education initiative” to help employees understand their rights when faced with non-disclosure agreements (NDA) – but it appears at odds with both its own guidance and that of their regulator. It is said to be significantly briefer than the Solicitors Regulation Authority’s (SRA) warning notice on NDA, and also appears inconsistent with it.
WHAT DRIVES THE BOOMING TRADE IN TUNISIA’S ANTIQUITIES?
On 12th August, ENACT Africa carried an article saying that corruption and a weak legal framework turn cultural artefacts into easy pickings for traffickers, and that seizures of looted antiquities occur on a weekly basis in Tunisia. Trafficked objects vary from statues and coins to precious metals, mosaics and manuscripts. Experts also mention rare and precious Punic ceramics from ancient Carthage. These objects are sent abroad, often to European art and antiquities auctions or to collectors in the Gulf states.
CANADA’S PM FOUND TO HAVE BROKEN LAW IN BID TO AID MONTREAL COMPANY IN BRIBERY CASE
The Wall Street Journal reported on 15th August that Canada’s Office of the Conflict of Interest and Ethics Commissioner has delivered a blow to Mr. Trudeau and his incumbent Liberal government, weeks before his re-election campaign is set to start. The Office ruled that Prime Minister Justin Trudeau broke conflict-of-interest laws by trying to steer the then-attorney general away from criminally prosecuting SNC-Lavalin Group Inc and have it avoid a criminal trial on bribery and fraud charges. A report found that actions by Trudeau and his aides were improper because they were contrary to the principles of prosecutorial independence.
His statement is at –
UKRAINE: COURT OBLIGES ANTI-CORRUPTION BUREAU TO OPEN CASE ABOUT POSSIBLE ABUSE OF POWER BY PROSECUTOR GENERAL
Interfax Ukraine reported on 15th August that a district court has obliged NABU to register criminal proceedings due to the fact of possible abuse of power by Ukrainian Prosecutor General Yuriy Lutsenko.
UK INVESTMENT SCAMS UP BY OVER A THIRD IN 5 YEARS
International Adviser reported on 15th August that reports of investment fraud have been steadily increasing in the UK since 2013, a freedom of information (FOI) request has revealed. The National Fraud Intelligence Bureau (NFIB) showed 6,908 cases reported in 2013, compared to 9,398 reports in 2018, a 36% increase over the 5 years.
RECRUITMENT FRAUDSTERS ORDERED TO REPAY £300,000 TO VICTIMS
On 15th August, Recruiter reported that 2 convicted fraudsters found to have defrauded 3 recruitment agencies through an elaborate payroll scam have been jailed and ordered to repay almost £300,000. Both had pleaded guilty to multiple fraud offences in 2017 following an investigation by Cheshire Constabulary’s Economic Crime Unit. The investigation into the duo began in November 2013 when 3 unnamed Warrington-based recruitment agencies reported that they had been hit by a payroll scam.
ANGOLA: INTERESTS CONFLICTED IN ANGOLA’S SELECTIVE GRAFT WAR
All Africa on 15th August reported on the situation in Angola and asking if having one of Angola’s richest entrepreneurs, serving as a provincial governor, is contrary to the assurance made by the new administration to fight corruption. Government appointments include the selection of the multimillionaire Luís da Fonseca Nunes, as the governor of the south-western Huila Province, among the surprise appointments in the ruling People’s Liberation Movement of Angola (MPLA). Nunes, or his companies, are accused of unfairly benefitting from provincial government contracts.
UK BANS TRANSFER OF SUBMERSIBLES TO RUSSIA
On 15th August, Janes.com reported that the British government has extended its prohibition on the transfer of defence and dual-use goods to Russia. The amended controls explicitly forbid the export of submersible vessels and related equipment, as well as software and technology, to Russia, with aims of frustrating the country’s development of the ability to locate and disrupt undersea communications cables. In addition, the new wording includes acoustic, communications, and navigation systems, as well as control and handling devices.
FBI CONDUCTING MORE THAN 1,000 INVESTIGATIONS OF “ATTEMPTED THEFT OF US INTELLECTUAL PROPERTY,” WITH “ALMOST ALL [OF THE INVESTIGATIONS] LEADING BACK TO CHINA”
In the Trade & Manufacturing Alert for August from US law firm King & Spalding, an item reported testimony before the Senate Judiciary Committee on July 23rd of Christopher Wray, Director of the FBI. He said that there is no country that poses a more severe counterintelligence threat to the US right now than China, and that a variety of actors within the Chinese government and the Chinese Communist Party, as well as “private sector entities” and “non-traditional collectors”, are involved.
COLOMBIA NATIONAL AIRLINE AVIANCA REPORTS FCPA INVESTIGATION INVOLVING FREE TICKETS AND UPGRADES
On 15th August, the FCPA Blog carried a post saying that Colombia’s national airline said in a US securities’ filing that it is investigating possible violations of the Foreign Corrupt Practices Act and other anti-bribery laws because of free and discounted tickets and upgrades given to government officials in various countries.
SINGAPORE COMPANY CHARGED WITH SHIPPING ALCOHOL TO NORTH KOREA
NK News on 15th August reported that SinSMS Pte Ltd (an affiliate of the China-based Dalian Sun Moon Star International Logistics Trading Co), designated under US sanctions last year, has been charged in Singapore with facilitating shipments of alcohol worth US$432,384 to North Korea in 2016-17, and thereby violating the country’s UN sanctions law.
Q2 2019 CYBER THREATS & TRENDS REPORT
Neustar has released its cyber threats and trends report for the second quarter of 2019, saying that small-scale Distributed Denial of Service (DDoS) attacks are becoming more frequent and sophisticated, and the report reveals how DDoS attacks changed and who’s behind today’s DDoS attacks? It also details attack statistics and behavioural trends that emerged in Q2 2019.
UK ONLINE SHOPPING ANTI-FRAUD SYSTEM DELAYED BY 18 MONTHS
Moneyexpert.com reported that the Strong Customer Authentication (SCA) was due to be implemented on September 14th. But banks, payment providers, and retailers reportedly aren’t ready to launch the anti-fraud system and along with consumer groups had raised concerns about customers without mobile phones, or living in mobile signal black spots, being locked out of online shopping. The FCA has announced a 18-month delay in implementation.
ANGOLA JAILS MOST SENIOR OFFICIAL YET AFTER CORRUPTION TRIAL
Bloomberg on 15th August reported that the Supreme Court sentenced a former government minister to 14 years in prison for corruption – the first conviction for graft of a senior official under President Joao Lourenco. Former Transport Minister Augusto da Silva Tomas was found guilty of embezzlement, misappropriation of public funds, abuse of power and violating budgeting standards.
13 TAIWANESE ARRESTED IN THAILAND ON TELECOMS FRAUD CHARGES
Focus Taiwan on 15th August reported that they were recently detained by the Thai authorities in Bangkok on information provided by victims after a 6-month investigation and have been deported to Taiwan. One is believed to be a senior figure in the criminal ring. They allegedly defrauded people in Taiwan by posing as law enforcement and national health officials. Since May 2016, 244 Taiwanese were convicted of cross-border fraud crimes in foreign countries, and are currently serving their sentences in those countries, and a total of 770 fraud suspects have been deported to Taiwan, while 652 have been sent to China.
PHILIPPINE POLICE HAVE VOWED TO STEP UP THEIR CRACKDOWNS ON CASINO KIDNAPPINGS
Calvin Ayre on 15th August reported that the Philippine National Police (PNP) Anti-Kidnapping Group (AKG) announced that it was conducting “intensified operations” to deal with the rising number of gaming-related kidnappings of foreign nationals, predominantly citizens of China who cannot gamble legally at home. Since 2017, the PNP-AKG has recorded 52 instances of Chinese nationals being held against their will in the Philippines.
SEO CHARGES FORMER CFO OF FLORIDA CASH ADVANCE COMPANY WITH MASSIVE FRAUD
A release on Mondo Visione on 15th August reported that the SEC had charged 1 Global Capital LLC’s former chief financial officer, Alan G. Heide, with defrauding retail investors. The now-bankrupt Florida-based cash advance company allegedly fraudulently raised more than $322 million from 3,600 investors between 2014 and last year. The company allegedly promised investors profits from its short-term cash advances to businesses, the company used substantial investor funds for other purposes, including paying operating expenses and funding Ruderman’s lavish lifestyle.
SEC RELEASES A SERIES OF SHORT EDUCATIONAL VIDEOS DESIGNED TO PROVIDE ORDINARY INVESTORS WITH BASIC INFORMATION ABOUT CHOOSING AND WORKING WITH A FINANCIAL PROFESSIONAL – A BROKER OR INVESTMENT ADVISER
A release on Mondo Visione on 15th August reported that the SEC had released a series of short educational videos designed to provide ordinary investors with basic information about choosing and working with a financial professional. They are designed to describe, generally and in plain language, the differences between brokers-dealers and investment advisers, arming investors with the information they need to ask better questions and help them make sound decisions for themselves and their families.
The videos are at –
BELGIAN ARMS DEALER JACQUES MONSIEUR DETAINED AT THE PORTUGAL
On 15th August, RTBF reported that Belgian federal police announced the arrest of the arms dealer Jacques Monsieur, 66. He was sentenced to 4 years imprisonment in 2018 for illicit arms trade and participation in a criminal organisation, but was still at large.
THE FINANCES AND PROSPECTS OF ISLAMIC STATE (IS) AFTER THE CALIPHATE
A research paper from the RAND Corporation says that the Islamic State (ISI) will almost certainly attempt a comeback and that such efforts will require money. Lacking now the “taxation” option, the group will go with activities that it has used successfully in the past, as an insurgency. Criminal activities will prove useful, with its members seeking to extort, kidnap, steal, smuggle, and traffic to obtain the money they need to finance the group’s activities. It also appears to have sizable assets in reserve. Amongst the recommendations made is that, as the group has an international network of financial relationships, and even though donations have not provided a large share of Islamic State revenue, the group has raised money around the world – international co-operation will thus be needed to address these connections. It will also be important for law enforcement entities to protect affected populations in Iraq and Syria as reconstruction progresses.
THE SYNTHETIC OPIOID SURGE IN THE UNITED STATES – INSIGHTS FROM MORTALITY AND SEIZURE DATA
Another research paper from the RAND Corporation says that the synthetic opioid surge in the US is a public health emergency. Synthetic opioids, principally fentanyl, were reported in more than 31,000 fatal overdoses, or two-thirds of all opioid-involved deaths, in 2018. In less than 6 years, the number of fatal overdoses involving synthetic opioids in the US has risen tenfold, surpassing drug overdoses for heroin or prescription opioids by a factor of 2. Perhaps even more troubling is the possible diffusion of synthetic opioids into non-opioid markets. Amongst its findings, from analysing mortality data at the state level across several drug classes to better understand the evolution and concentration of overdose fatalities, are that overdose deaths involving synthetic opioids remain concentrated in certain states, with sharp increases in the share of heroin or cocaine overdoses that involve synthetic opioids, with the suggestion that people who use cocaine are increasingly exposed to these drugs.
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