22nd August 2019
NEW POLICY ON REGISTRATION OF SHIP VESSELS IN CYPRUS REGISTRY
On 19th August, Cypriot law firm AGP published a briefing saying that in May the Deputy Ministry of Shipping updated its policy regarding the eligibility of ships registered under Cyprus law by issuing a new Circular. This contained additional or modified requirements for ship registration, and include increased inspections for certain types of older vessels.
GOALS 5-A-SIDE SOCCER CENTRES AND THE FCA INVESTIGATION
On 20th August, Rahman Ravelli published a short article about the FCA investigation into allegations of accounting irregularities at Goals Soccer Centres in the UK. The operator announced earlier this month that it was to de-list from the stock market after an investigation into its accounting practices found improper behaviour.
IRISH MILITARY EXPORTS NOW WORTH MORE THAN €37 MILLION
The Irish Times reported on 21st August that the value of Irish exports of military equipment rose by 29% last year to €37.3 million, with almost two-thirds of all military components, software and technology being sold to the US. More than €24 million worth of military equipment was exported to the US in 2018. This included military equipment used in aircraft and unmanned aerial vehicles specially designed or modified for military use, fire control and related alerting and warning equipment. The value of Irish exports of “dual-use” equipment increased by 11% last year to almost €3.57 billion. It was also said that no applications to export military equipment to Saudi Arabia have been received since August 2013.
ROSNEFT TO SELL OIL PRODUCTS IN EUROS TO AVOID POSSIBLE NEW US SANCTIONS
Oil Price.com reported on 21st August that the largest Russian oil producer has told customers earlier this month that oil product sales in tender contracts will be priced in euros instead of US dollars. US designation of Rosneft since 2014 do not currently prohibit Rosneft accepting US dollars as payments for the oil and oil product it sells. Rosneft exports around half of the oil products its refineries in Russia produce.
SWISS AND US EXPORT CONTROLS ALSO COVER THE TRANSFER OF INTANGIBLE TECHNOLOGY
MME Tax Compliance has published an article in the light of the Swiss authorising body, SECO, publishing a guidance document covering the topic of intangible technology transfer. It suggests that the reason for this may be the increasing number of intangible exports subject to licensing due to digitalisation of industry and emergence of new manufacturing methods such as 3D printing. It says that all these developments raise new questions in the field of export controls, which SECO tries to clarify in their guidance document. The article summarises the contents of the new guidance. The article also says that often the export control know-how and processes are set up for to the export of physical dual-use goods, and the risks around the export of intangible controlled technologies does not get sufficient level of management attention. However, a robust ICP (Internal Compliance Programme) must always include a technology control plan that ensures access protection as well as a controlled transfer of intangible technology. The article also cautions that US export controls must be taken into account, not only for exports of goods and technology from Switzerland, but also for know-how transfer between individuals of different nationalities within Switzerland (a so-called “deemed export”).
BUSINESS JET CREW ‘WAS COMPLICIT’ IN ALLEGED DRUG SMUGGLING BETWEEN EUROPE AND SOUTH AMERICA
Corporate Jet Investor claims an “exclusive” on a report on 21st August saying that members of the crew of a business jet impounded during a drugs raid in Europe in May are alleged to have been complicit in the smuggling of millions of pounds worth of cocaine between South America and Europe. The crew of the Gulfstream V were said to be part of an international criminal gang involved in smuggling the cocaine, luxury goods and cash. A 600 kg cocaine shipment were made at an airport in Switzerland.
See also –
GERMAN GOVERNMENT IMPLEMENTS STRICTER AML RULES FOR REAL ESTATE SECTOR
On 21st August, US law firm Jones Day published an article saying that the German Government is about to implement stricter AML rules in line with the 4th Money Laundering Directive and, in particular, includes extended risk assessment and reporting requirements for real estate agents.
NORWEGIAN MINISTRY BACKS LOTTERY AND BINGO AML EXEMPTIONS
iGaming Business on 21st August reported that Norway’s Ministry of Finance has given its backing to a proposal from Lotteritilsynet, the national lottery authority, to make lottery and organisers of bingo tournament exempt from new AML regulations. A consultation on the proposal continues to 1st October. The proposal is for operators that do not rely on third-party contractors for their bingo or lottery offerings to be exempt from the country’s new money-laundering regulations.
NORWAY WATCHDOG FINDS DNB BANK FAILED TO COMPLY WITH AML RULES
KYC 360 on 22nd August reported that the Financial Supervisory Authority (FSA) found significant shortcomings in DNB’s compliance with AML regulations during a late-2018 inspection. FSA found improvements had been made since an earlier review in 2016 by DNB, but said the lender still had significant shortcomings and had taken too long to start to rectify earlier problems.
PRINCIPAL CHANGES IN THE REVISED AIC CODE OF CORPORATE GOVERNANCE FOR BOARDS OF DIRECTORS OF GUERNSEY AND JERSEY
On 20th August, Ogier published an article about the code of best practice in respect of the governance of investment companies published by the Association of Investment Companies (AIC) in February. AIC represents a broad range of closed-ended investment companies, incorporating investment trusts, offshore investment companies, real estate investment trusts and venture capital trusts. The article highlights issues that may be relevant to boards of directors of Guernsey and Jersey companies whose shares are quoted or listed on any of the London Stock Exchange markets. Using the Code may be chosen by investment companies to meet their obligations under the UK Corporate Governance Code issued by the Financial Reporting Council. It is endorsed by the FRC and the Guernsey FSC and is supported by the Jersey FSC.
ENGLISH HIGH COURT CONFIRMS THERE MUST BE A CREDIBLE RISK OF ASSET DISSIPATION TO JUSTIFY A FREEZING ORDER
An article in a newsletter from Buddle Findlay on 20th August was concerned with the continuing case involving a dispute between 2 Russian oligarchs over a stake in the Norebo Group, an international fishing business. In a recent hearing, one successfully challenged a worldwide freezing order on the basis that the other party had not complied with his duty of disclosure to the Court in the without notice application. There was no credible risk of the dissipation of assets so the application was not regranted.
MODERN SLAVERY IN THE FASHION INDUSTRY
In July, Taylor Wessing published an article saying that governments and consumers are increasingly demanding transparency into the fashion supply chain. This can be a challenge for businesses with long and complex supply chains. It reminds one that, following the fashion industry’s Rana Plaza deadly disaster in Bangladesh, over 200 fashion brands took action to clean up their supply chains by signing a legally binding agreement to make garment factories a safe place to work – the Bangladesh Accord. This gave workers greater protections, improved working conditions and increased accountability by setting up an international arbitration mechanism and shutting down factories that fail to address safety concerns. It has been able to clean up some of fashion’s supply chains on an unprecedented scale due to the volume of brands and trade unions involved. It also highlighted fashion brands power to bring about change – but more needs to be done. The article notes that fashion items pass through a long international supply chain before purchase, making it very difficult to trace a particular component and almost impossible to work out whether a garment has or has not been produced using slavery; and rise of “fast fashion” and persistent profit drive has led to intense price and production competition between fashion brands, putting suppliers under pressure to accept declining prices and tighter deadlines. The article details the requirements of the UK Modern Slavery Act and the consequences of non-compliance. Saying that the globalisation of the fashion industry makes it practically difficult for fashion brands to retain control – article suggests AI (data collection) and blockchain as possible solutions. The firm also offers a modern slavery assessment tool to assess a company’s risk profile and if the business needs to produce a statement for the purposes of the Act.
SLOVAKIA: DETERMINED ACTION NEEDED TO FIGHT CORRUPTION IN EXECUTIVE GOVERNMENT AND POLICE
On 22nd August, the Council of Europe issued a news release about an evaluation report from the Council of Europe’s Group of States against Corruption (GRECO) urges the Slovak Republic to strengthen the effectiveness of its legal framework and policies to prevent corruption amongst persons with top executive functions (ministers and other senior government officials) and the police force. The report was prepared against the backdrop of repeated mass demonstrations demanding stronger integrity of politicians and the police in the wake of the murder of a journalist who was investigating corruption links between the political world and criminal networks.
GEORGIA: CRIMINAL CASE LAUNCHES AGAINST AVTANDIL TSERETELI IN MONEY LAUNDERING XASE LINKED TO TBC BANK
On 22nd August, Georgia Today reported that the Prosecutor’s Office of Georgia has launched a criminal case against businessman Avtandil Tsereteli, this being said to be linked to an investigation launched into money laundering by the Chairman and the Deputy Chairman of the Supervisory Board of TBC Bank, Mamuka Khazaradze and Badri Japaridze.
UK: RESTRICTIONS ON THE IMPORT OF FORESTRY MACHINERY
DEFRA announced on 21st August that, from 1st September, machinery or vehicles that have been used for agricultural or forestry purposes will be subject to plant health regulations when imported from any third country. Importers must ensure that machinery or vehicles of this kind are accompanied by an official statement such as a phytosanitary certificate, detailing that they have been cleaned and are free from soil and plant debris. The requirements do not apply to new machinery and vehicles.
A NEW GLOBAL REGIME FOR CROSS-BORDER ENFORCEMENT OF CIVIL AND COMMERCIAL JUDGMENTS
On 21st August, Latham & Watkins LLP published an article about the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, recently adopted by the Hague Conference on Private International Law. It explains that the Convention aims to provide a new global regime for the recognition and enforcement of civil and commercial judgments, much like the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) does with respect to arbitral awards and the Recast Brussels Regulation does with respect to the recognition and enforcement of civil and commercial judgments within the EU. If successful, the 2019 Hague Convention will provide a single uniform instrument pursuant to which civil and commercial judgments may be enforced worldwide. It applies to the recognition and enforcement of judgments in civil or commercial matters, but excludes judgments given in insolvency, defamation, privacy, intellectual property, family law matters, and most anti-trust matters. The Convention also does not apply to arbitration and judgments given in arbitration-related proceedings. As far as when (or if) it might have effect, it will only enter into force once at least 2 states have ratified it, and at present only Uruguay has signed the Convention. While further signatories and the entry into force of the Convention are expected, its true benefit will only be realised once a large number of states become party to the Convention, and thereby expands the number of jurisdictions in which cross-border recognition and enforcement of judgments can be sought.
“E-DOPING” IN E-SPORTS
On 22nd August, CMS Law published an article about a player who was caught cheating at the Extremesland 2018 Asia Finals and was banned from all esports-related activity for five years by the Esports Integrity Coalition (ESIC). The article says that it is clear is that doping has many faces, and is no longer limited to traditional sports. It points out that esports is one of the most rapidly developing sectors of entertainment, with revenues generated by game organisers predicted to reach $1.8 billion in 2022. It says that both traditional sports and esports suffer from unfair practices. In esports, these include “e-doping”, a manipulation of the game outcome against fair play rules that increases the chance of winning for a given player. It explains that online users, just like regular athletes, may use pharmaceuticals to “support” their game, but that e-doping aims to affect intellectual efficiency, not just physical fitness.
BREXIT AND EU-UK DATA SHARING: WHERE ARE WE AFTER YELLOWHAMMER?
On 20th August, an article from Field Fisher posed this question after leaked “Operation Yellowhammer” documents reveal the UK government’s assessment that there will be “disruption” to data flows in a no-deal Brexit, if no alternative legal basis for transfer has been put in place – and show that the government considers that negotiations on an EU adequacy decision for the UK may take “many years”. Leaving without a deal means that, overnight, the UK becomes a “third country” and the principle of the free flow of data will no longer apply. The article says that UK legislation in place to preserve EU legislation, as it applies to the UK pre-departure. This means that the same standards will apply in the UK after exit day as they did immediately before it exited the EU. This will provide a measure of continuity on the domestic level, but cannot mitigate the potential disruption cited in the Yellowhammer documents – because the central aim of the legislation – harmonisation, facilitating cross-border commerce and data flows – will have ended.
UK’S BRIBERY ACT: WHAT DOES THIS HAVE TO DO WITH HR?
On 21st August, Out-Law published an article explaining that the Bribery Act creates an obligation for organisations to prevent their employees engaging in bribery. Organisations are responsible for that activity unless they can show that they have ‘adequate procedures’ in place to prevent it. The article asks how does this affect human resources departments, and outlines the steps the department should take – such as a risk assessment and review current procedures to determine if they are adequate.
CAMEROON : 383 KG OF PANGOLIN SCALES SEIZED BY CUSTOMS
On 20th August, Business in Cameroon reported that a customs’ mobile unit of Bamenda recently seized 383 kg of giant pangolin scales.
SAUDI CUSTOMS THWART ATTEMPTS TO SMUGGLE MORE THAN 2.5 MILLION CAPTAGON PILLS
Arab News on 21st August reported that Saudi customs had thwarted 2 attempts to smuggle a large quantity of Captagon pills found hidden in 2 vehicles that came in to the Kingdom via a seaport. 2,579,000 Captagon pills were found hidden in 2 vehicles: a truck and a private vehicle. Captagon is a psychostimulant which is made of a combination of amphetamine and theophylline, and a one brand name of a group of drugs known as Fenethylline. It became notorious for its use by ISIS fighters in Iraq and Syria. Unlike amphetamines, it does not increase the patient’s blood pressure but it is highly addictive – and became illegal in most countries in the 80s. It keeps users awake for long periods of time, makes users feel energetic and happy – and has been dubbed “chemical courage”.
NO-DEAL BREXIT CHECKLIST FOR CONSULTANCIES, STAFFING AND RECRUITMENT COMPANIES
On 20th August, Osborne Clarke produced an article with a checklist of what consultancies, staffing and recruitment companies may need to think about.
FBI SEEKING INFORMATION ON CANNABIS INDUSTRY BRIBERY
On 22nd August, Baker McKenzie reported that, in its weekly podcast, the FBI announced it was aware of public corruption – including bribes – in cannabis business licensing and is seeking information into companies that may have obtained a permit illegally.
EX-MAJOR LEAGUE BASEBALL PLAYERS LINKED TO DRUG TRAFFICKING, MONEY LAUNDERING RING
On 22nd August, Baker McKenzie reported that authorities in the Dominican Republic have arrested former MLB pitcher Octavio Dotel and cited ex-infielder Luis Castillo for their alleged links to a drug-trafficking and money-laundering ring. They are linked to the “Peralta Drug Organisation”, recently made subject to sanctions by OFAC.
COUNTERFEIT BOOKS ON AMAZON
Retail Wire on 20th August carried an article about the widespread availability of counterfeit books on Amazon. For example, George Orwell books had typos, covers that were not the same as originals, missing pages and other inconsistencies from the originals. Many of the counterfeits in an investigation were sold by Amazon directly and shipped from their own warehouses. It is said that Amazon now sells more than half of all books in the US and even has an issue with counterfeit medical handbooks sold on its site, which are so poorly printed that doctors could make errors in prescribing medication because of hard to read copy.
ISRAEL EASES CYBER WEAPON EXPORT CONTROL
On 22nd August, Defence Web reported that Israel is easing export rules on offensive cyber weapons, despite accusations by human rights and privacy groups its technologies are used to spy on political foes and crush dissent. Industry specialists say the change makes a speedier approval process possible for the sale of cyber weapons, or spyware, used to break into electronic devices and monitor online communications. The Israel defence ministry said the rule change “was made to facilitate effective service to Israeli industries while maintaining and protecting international standards of export control and supervision”.
US INDICTMENT CHARGES 80, MAINLY NIGERIAN, WITH FRAUD AND MONEY LAUNDERING
The Seattle Times on 22nd August reported that US authorities had unveiled a 252-count indictment for 80 persons allegedly involved in major fraud schemes, laundering the money through its Los Angeles network. 14 persons were arrested, mostly in the Los Angeles area.
ALGERIA COURT DETAINS FORMER JUSTICE MINISTER OVER ALLEGED CORRUPTION
Reuters on 22nd August reported that the Supreme Court placed former justice minister Tayeb Louh in custody over alleged corruption under former president Abdelaziz Bouteflika. The 8th ex-minister to be detained since mass protests broke out this year demanding the prosecution of people suspected of corruption and the departure of the ruling elite.
TOWIE STAR LEWIS BLOOR ACCUSED OF £3 MILLION DIAMOND FRAUD
On 22nd August, the BBC reported that a reality TV star has appeared in court accused of conspiring to defraud investors in a £3 million scam. The Only Way Is Essex personality Lewis Bloor, 29, appeared alongside 5 other men at Westminster Magistrates’ Court for allegedly dishonestly marketing coloured diamonds for investment purposes.
OECD RELEASES ACTION 14 PEER REVIEWS FOR 6 COUNTRIES
On 22nd August, Tax News reported that the OECD has released follow-up reports for Belgium, Canada, the Netherlands, Switzerland, the UK, and the US on their efforts to implement BEPS recommendations on dispute resolution, which look at how the countries have responded to recommendations resulting from their stage 1 reviews, into their dispute resolution frameworks. The reviews focus on the Mutual Agreement Procedure (MAP), which is used to settle disputes between countries and taxpayers concerning cross-border tax arrangements for trade and investment where double taxation of the same income occurs.
SCOTLAND: PROPERTY DEVELOPMENT COMPANY IS TRYING TO HAVE THE LAWYER IMPRISONED IN LEGAL DISPUTE OVER THE WHEREABOUTS OF MILLIONS OF POUNDS IN MISAPPROPRIATED FUNDS
Evening Standard on 14th August reported that Stephen Jones is said to have lied to clients, the courts and the NCA about £17.5 million that had been diverted from his firm’s client account. US developers Discovery Land Company (DLC) used his law firm Jirehouse to oversee the purchase of Taymouth Castle, but the money supplied is said to have been lent on to others, and it is alleged that Jones lied about what had happened.
REPORT: ADHERENCE TO/COMPLIANCE WITH ARMS CONTROL, NON-PROLIFERATION AND DISARMAMENT AGREEMENTS AND COMMITMENTS
The US State Department has released its annual report providing a detailed assessment of the adherence of the US and other nations to obligations undertaken in all arms control, non-proliferation, and disarmament agreements or commitments to which the US is a participating state.
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