OTHER THINGS YOU MAY HAVE MISSED – SEPTEMBER 6

Note: off on wanderings again, so blog might not be full of interesting (or other) items as usual…

6 September 2019

TITLE III SUITS INVOLVING “CONFISCATED” PROPERTY IN CUBA UNDER THE HELMS-BURTON ACT

On 30 August, Freshfields published a briefing on the use of this recently-implemented provision which, it explains,  allows US nationals to bring suit against a party who “traffics” in property that was confiscated from them by the Cuban government. The definition of “traffics” is very broad and potentially includes any activity that benefits commercially from the confiscated property; however, the Act carves out several activities as exempt from claims, including “transactions and uses of property incident to lawful travel to Cuba, to the extent… necessary to the conduct of such travel”.  Carnival Cruises tried to use this defence, but judges have ruled that having an OFAC licence to do business in Cuba does not in itself enough to have the lawsuit dismissed. This, the briefing says, is a concern and that, following the decisions, the same plaintiffs they brought 5 new Helms-Burton cases against other cruise lines.

http://knowledge.freshfields.com/en/Global/r/3993/title_iii_suits_under_the_helms-burton_act

WHAT IS THE NSG AND WHY IS INDIA SO INTERESTED IN IT?  UN DENIES ENDORSEMENT OF INDIA IN NUCLEAR SUPPLIERS GROUP

An article in In Depth News is concerned with India’s attempt to join the Nuclear Suppliers Group.  The NSG was established in 1975 and is comprised of 48 states that have voluntarily agreed to coordinate their export controls to non-nuclear-weapon states, and aims to prevent nuclear exports for commercial and peaceful purposes from being used to make nuclear weapons. It  is a cartel that controls trade in nuclear fuel and technology and it operates by consensus – so all of its 48 members have to agree to any decision to admit new members. In any case, it says, membership of the NSG will have no impact on India’s nuclear energy programme as , thanks to a waiver that NSG members agreed to in 2008, India can already import nuclear reactors and uranium.  Both India followed by Pakistan have formally applied for NSG membership, and many NSG states are inclined to admit India but not Pakistan – China and Turkey are said to have held up consensus in the NSG on Indian membership, arguing that either both or none are admitted. If India gets in, it can deny consensus for Pakistan getting in.

https://www.indepthnews.net/index.php/the-world/asia-pacific/2950-un-denies-endorsement-of-india-in-nuclear-suppliers-group

ICE REMOVES GERMAN MAN CONVICTED OF VIOLATING US ECONOMIC SANCTIONS ON IRAN

On 5 September, US Immigration and Customs Enforcement announced that officers had removed a German man, Olaf Tepper, 51, who recently concluded a 24-month federal prison term for conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and US sanctions against Iran.

https://www.ice.gov/news/releases/ice-removes-german-man-convicted-violating-us-economic-sanctions-iran

UK; FORMER MANAGER OF BANKNOTE-MAKER ORDERED TO PAY BACK EARNINGS FROM ALLEGED BRIBERY 

On 6 September, the Wall Street Journal reported that A former employee of a currency note company entangled in foreign bribery allegations was ordered to pay back the proceeds of alleged bribery in Africa.  Peter Chapman, a former manager at polymer banknote manufacturer Securency Pty Ltd., was ordered to pay about £442,000, according to a statement by the SFO.

https://www.wsj.com/articles/securencys-former-manager-ordered-to-pay-back-earnings-from-bribery-act-11567721044

RUSSIAN EXECUTIVE ARRESTED IN ITALY ON US INDUSTRIAL ESPIONAGE CHARGES 

On 6 September, the Wall Street Journal reported that Italian police had arrested a top executive of Russia’s state-owned aircraft-engine maker on U.S. charges that he tried to steal aviation secrets.  The DoJ alleges Alexander Korshunov, head of business development at United Engine Corporation and who was detained upon his arrival at an airport in Naples, illegally obtained GE Aviation trade secrets.

https://www.wsj.com/articles/russian-executive-arrested-in-italy-on-u-s-charges-11567727274

IRELAND: MALE MODEL ACCUSED OF HAVING €1.2 MILLION IN ALLEGED CRIME PROCEEDS

The Journal reported on 6 September that Mark Andrew Adams, 39, is to stand trial.  He is described as a lone parent, who once appeared in a Garda TV advertisement as part of a drink-drive awareness campaign, who is currently unemployed.  It is alleged he had in his possession various sums of money which are alleged to have been proceeds of criminal conduct, amounting to approximately €1,186,900, over a 5-year period.

https://www.thejournal.ie/male-model-money-laundering-trial-4799235-Sep2019

IRELAND: DETECTIVE AND BUSINESSMAN CHARGED IN CONNECTION WITH INVESTIGATION INTO ALLEGED GARDA CORRUPTION

The Irish Independent on 6 September reported that a detective and a director of a car sales firm targeted by the Criminal Assets Bureau (CAB) are both to face trial on charges linked to a major investigation into alleged garda corruption. 

https://www.independent.ie/irish-news/courts/detective-and-businessman-charged-in-connection-with-investigation-into-alleged-garda-corruption-38474022.html

BOSNIA: 3 EX-SBERBANK EMPLOYEES ARRESTED FOR MONEY LAUNDERING 

On 6 September, OCCRP reported that authorities in Bosnia arrested 3 former Sberbank employees who are suspected of money laundering – being suspected of “’abuse of position and authority’ and of laundering $617,192.41.  It is alleged that the 3 used their personal bank accounts to make electronic purchases of foreign currencies according to exchange rates that were not valid on the dates the conversions were made.

https://www.occrp.org/en/daily/10632-bosnia-3-ex-sberbank-employees-nabbed-for-money-laundering

US CONGRESSIONAL PROBE FINDS POSSIBLE FAILURES IN DEUTSCHE BANK CONTROLS WITH RUSSIAN OLIGARCHS

The Hill reported on 6 September that investigators with the House Financial Services Committee have reportedly found possible failures by Deutsche Bank in its money laundering controls concerning the bank’s dealings with Russian oligarchs, and to have found that the bank may have been involved in transfers of illegal cash to the US, where the bank processes transactions for other companies.  The site links the report to the potential for involving President Trump.

https://thehill.com/policy/finance/460206-us-congressional-probe-finds-possible-failures-in-deutsche-bank-controls-with

MASSACHUSETTS MAYOR ARRESTED FOR SECOND TIME IN A YEAR, ACCUSED OF ‘BRAZEN’ CORRUPTION

Law & Crime in the US on 6 September reported that Jasiel Correia, 27, Democratic Mayor of Fall River in Massachusetts had been arrested by the FBI  accused of “outrageous” and “brazen” corruption in the form of extorting marijuana companies. The plot was described as a “pay-to-play” conspiracy wherein marijuana companies were extorted to pay bribes that would allow them to operate in Fall River.

https://lawandcrime.com/high-profile/mayor-of-massachusetts-city-arrested-for-second-time-in-a-year-accused-of-brazen-corruption

UK EXPORT CONTROL TRAINING BULLETIN

On 6 September, the Department for International Trade issued the latest bulletin containing details of courses, seminars and workshops to help exporters understand their obligations under export control legislation. 

https://www.gov.uk/government/publications/export-control-training-bulletin

OECD RESEARCH FINDS PACE OF TAX REFORMS HAS SLOWED

Accountancy Daily on 5 September reported that the pace of tax reforms has slowed across most leading economies and bolder tax reforms will be needed to address future challenges, according to a new OECD report.  The report identifies major tax policy trends and highlights that fewer countries have introduced comprehensive tax reform packages in 2019 compared to previous years.

https://www.accountancydaily.co/cch_uk/cln/news_009480_potslow

HMRC DELAYS VAT REVERSE-CHARGE FOR CONSTRUCTION INDUSTRY AMID PRESSURE 

On 6 September, Construction Manager reported that the VAT reverse charge, which was due to be introduced this October, has now been put on hold until 1 October 2020.  HMRC acknowledged that concerns had been raised about the construction sector’s readiness for the changes.

http://www.constructionmanagermagazine.com/news/hmrc-delays-reverse-vat-charge-amid-pressure/

UK EXPORT CONTROLS: MILITARY GOODS, SOFTWARE AND TECHNOLOGY 

On 6 September, the Department for International Trade published online comprehensive guidance to licensing requirements and restrictions for trade control and the export of controlled military goods, software and technology. 

https://www.gov.uk/guidance/export-controls-military-goods-software-and-technology

SWEDEN’S AMBASSADOR FOR COUNTERING HYBRID THREATS 

On 6 September, RUSI published a Commentary by Fredrik Löjdquist, who was appointed last year as the Swedish Foreign Ministry’s first ambassador and special envoy for countering hybrid threats. In the article, he assesses his challenges and responsibilities in fulfilling a trailblazing role for his country.  He says that his mission is threefold: to coordinate the activities of the Foreign Ministry relating to hybrid aggression, and analyse the consequences of the hybrid threat environment for foreign and security policy; to represent Sweden in the growing international co-operation and discussion on countering hybrid threats; and to be part of the intra-governmental coordination effort to understand and counter hybrid threats. 

https://rusi.org/commentary/ambassador-countering-hybrid-threats

CAMBODIA SEES CHINESE EXODUS FOLLOWING GAMBLING BAN

On 6 September, Calvin Ayre reported that, as China doesn’t allow gambling, enterprising individuals decided to set up shop just across the border in Cambodia in a seaside town called Sihanoukville, with 75% of casinos there being owb=ned by Chinese nationals.  However, the article says, Cambodia, under pressure from China, has recently made changes to its gambling laws that are turning the tables on gambling operators. Cambodia has banned online gambling, and the government has said it will not issue any new licences and that existing licences will not be renewed.  It expects virtually all online gambling operations to cease by the end of the year.

https://calvinayre.com/2019/09/06/business/sihanoukville-cambodia-sees-chinese-exodus-following-gambling-ban/

STEEP RISE IN DEBARMENTS BY WORLD BANK DETERS CORRUPTION

On 6 September, an article from Out-Law claimed that the increase in companies being banned from bidding for World Bank projects has led to a fall in corruption.  This as the organisation puts in place strict anti-corruption measures to ensure that its funding is properly directed. It says that debarment is usually for a period of 3 years with conditional release – but warns that debarment itself carries risks for the projects themselves.

https://www.pinsentmasons.com/out-law/analysis/steep-rise-in-debarments-by-world-bank-deters-corruption

UK: THIRD PARTY FUNDING OFFERS GREATER ACCESS TO JUSTICE FOR LITIGANTS

An article from Out-Law on 6 September argues that such funding offers businesses a way of pursuing meritorious legal claims while avoiding the burdens and risks of financing litigation or arbitration; and says that the market is developing and refining and funding is now available to legal departments at an increasingly reasonable price.

https://www.pinsentmasons.com/out-law/analysis/third-party-funding-offers-greater-access-to-justice-for-litigants

FRAUD CHARGES AGAINST FORMER US CONGRESSMAN DROPPED UNDER DEFERRED PROSECUTION AGREEMENT

Baker McKenzie reported on 6 September that charges had been dropped against  former Representative  Aaron Schock, 6 months after he reached a deal with federal prosecutors.  He agreed to pay more than $40,000 in back taxes, reimburse his campaign committees approximately $68,000 and avoid any future legal problems.  Charges had included alleged fraud and theft of government funds, against the Illinois Republican Party.

http://www.riskandcompliancehub.com/fraud-charges-against-former-u-s-congressman-dropped/

IRELAND: REVENUE SEIZES €80,000 CASH IN DUBLIN PORT 

On 6 September, the Revenue Commissioners announced the seizure of €36,750 and £40,000 in Dublin Port.  The cash was discovered following routine examinations of vehicles travelling from Holyhead. 

https://www.revenue.ie/en/corporate/press-office/press-releases/2019/pr-06092019-cash-dublin-port.aspx

SPANISH POLICE ARREST MAJOR DARK WEB CANNABIS DEALER IN MALAGA

Illicit Trade on 6 September reported that detectives from Spain’s national police force have arrested a man described as a major dark web cannabis dealer, and on suspicion of using 3online tools designed to shield their users’ location, namely the Tor onion browser, encryption technology and the Bitcoin cryptocurrency.

https://www.illicit-trade.com/2019/09/spanish-police-arrest-major-dark-web-cannabis-dealer-in-malaga

 

UN PANEL OF EXPERTS REPORT ON SANCTIONS ON NORTH KOREA

On 6 September, the UN Panel of Experts report dated 30 August was released.  Amongst other things, it says that the investigations carried out by the Panel of Experts show continued violations of the resolutions.  For example, the DPRK continued to violate sanctions through ongoing illicit ship-to-ship transfers and the procurement of WMD-related items and luxury goods.  These and other sanctions violations are facilitated through the country’s access to the global financial system, through bank representatives and networks operating worldwide.  It has also used cyberspace to launch increasingly sophisticated attacks to steal funds from financial institutions and cryptocurrency exchanges to generate income. Furthermore, ongoing deficiencies in the implementation by Member States of financial sanctions, combined with the deceptive practices of the DPRK, enabled the country to continue to access the international financial system –  with more than 30 overseas representatives controlling bank accounts and facilitating transactions, including for illicit transfers of coal and petroleum. The country’s bank representatives and designated entities make use of complicit foreign nationals to obfuscate their activities. It also says that large-scale attacks against cryptocurrency exchanges allow the DPRK to generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector.  The Panel recommends a series of designations and practical measures in order to provide the UN Security Council, the 1718 Committee and Member States additional tools by which to address the current challenges and shortcomings in the implementation of the resolutions. 

At the same time, on 5 September, website 38 North published an interview with Stephanie Kleine-Ahlbrandt, former Finance and Economics Expert on UN Panel of Experts Established Pursuant to UN SCR 1874, about the key findings of the report.

https://undocs.org/en/S/2019/691

https://www.38north.org/2019/09/skleineahlbrandt090519/

10 THINGS FOR ASSET MANAGERS TO NOTE IF THERE IS A NO-DEAL BREXIT

Eversheds Sutherland on 5 September published a briefing saying that, with a no-deal Brexit on 31 October appearing to be increasingly likely, with all of the political noise, it is easy to forget the technical regulatory aspects of a no-deal Brexit as they apply to the asset management industry.  Therefore, it has set out, in no particular order, 10 points for asset managers to remember or action.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Brexit/10-am-no-deal-brexit-050919

MONEYVAL ISSUES FOLLOW UP REPORT ON UKRAINE

On 6 September, Moneyval issued the first follow-up report following the mutual evaluation assessment report on Ukraine of December 2017.  It says that Ukraine has made limited progress since the adoption of its mutual evaluation report and encourages the country to accelerate its efforts in addressing the remaining deficiencies in view of currently pending legislative reforms.  It has re-rated the country on the recently amended Recommendation 21 on tipping-off and confidentiality, originally rated “compliant”, to “largely compliant”. 

https://rm.coe.int/moneyval-2019-7-sr-5th-round-fur-ukraine/1680971959

MONEYVAL PUBLISHES SECOND FOLLOW-UP REPORT ON ISLE OF MAN

On 6 September, the Council of Europe’s AML/CFT body, Moneyval, has issued a further update report on the Isle of Man.  It says that, overall, it has made progress in addressing the technical compliance deficiencies identified in its 5th Round mutual evaluation report in December 2016.  Moneyval has re-rated as “compliant” 4 FATF Recommendations: 3 Recommendations on record keeping, PEP and reliance on third parties originally rated as “largely compliant” and 1 Recommendation on transparency and beneficial ownership of legal arrangements originally rated as “partially compliant”.  The Isle of Man will remain in enhanced follow-up and should report back to within 1 year on further progress to strengthen their implementation of anAML/CFT measures.

https://www.coe.int/en/web/moneyval/-/moneyval-publishes-follow-up-report-on-the-united-kingdom-crown-dependency-of-the-isle-of-man

US Treasury Issues Changes to Strengthen Cuba Sanctions Rules

On 6 September, the US Treasury announced that OFAC had amended the Cuban Assets Control Regulations (CACR) which amend certain authorisations related to the provision of remittances to Cuba and eliminate the authorisation for specific financial transactions known as “U-turn” transactions.

https://home.treasury.gov/news/press-releases/sm770

https://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_fact_sheet_20190906.pdf

https://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_faqs_new.pdf