10th September 2019
FRANCE TO WIN BRITAIN’S FINANCE CROWN IN EU AFTER BREXIT
KYC 360 on 10th September reported that on a report from the New Financial think tank which says that France will likely win Britain’s financial services crown in the EU after Brexit.
PAKISTAN SUBMITS ANSWERS TO FATF’S 125 QUERIES
On 10th September, KYC 360 reported that Pakistan has submitted detailed answers to 125 questions posed by FATF on moves taken by it to strengthen AML/CFT, as it seeks to move out of the FATF grey list.
CANADIAN AML LAWS AMENDED TO INCLUDE BUSINESSES DEALING IN VIRTUAL CURRENCIES AND FOREIGN MSB
On 5th September, Strikeman Elliott LLP published an article saying that amendments to Canadian federal AML legislation will now specifically capture non-Canadian money service businesses (MSB), including those dealing in virtual currencies. Scheduled to come into force on June 1st 2020 (with certain changes effective June 1st 2021).
LEGAL PRIVILEGE: THE US PERSPECTIVE
In the 3rd edition of The Practitioner’s Guide to Global Investigations is a chapter providing information on legal privilege in the context of the US – attorney/client privilege; the crime-fraud exception and attorney work product; employee interviews; non-legal advice and waiving privilege, etc.
US-BASED MASTERCARD HAS SUSPENDED ITS SERVICES TO 2 VENEZUELAN BANKS
On 10th September, the EU Sanctions Blog reported that US-based Mastercard has suspended its services to 2 Venezuelan banks following wide-ranging sanctions imposed against the Venezuelan government and its Central Bank.
PODCAST: RULES FOR ‘MADE IN USA’ MARKETING ARE BEING EXAMINED
On 7th September, AdAge published a podcast saying that, against the backdrop of the US-China trade war, government regulators are considering strengthening rules related to false “Made in the USA” marketing claims, which some consumer advocates say lack teeth. The policy is not considered a federal regulation, but merely offers guidance and critics say that is not enough.
UN ATOMIC WATCHDOG CONFIRMS IRAN INSTALLING NEW CENTRIFUGES
On 9th September, the Boston Herald reported that the IAEA confirmed that Iran is preparing to use more advanced centrifuges, another breach of limits set in the country’s slowly unravelling nuclear deal with major powers. The International Atomic Energy Agency reported its inspectors verified the installation of new centrifuges, saying that all had been “prepared for testing” but none yet tested at the time of the inspection.
HOUSTON ATTORNEY CONVICTED OF OFFSHORE TAX EVASION SCHEME INVOLVING ISLE OF MAN ACCOUNT
A Houston-based blog reported that Jack Stephen Pursley, aka Steve Pursley has been convicted in an offshore tax evasion scheme. His friend Shaun Mooney ran a company that, until 2009, provided personnel services to clients who owned offshore oil rigs, primarily in the Middle East. However, Mooney had a problem – he had $18 million held in an offshore bank account in the Isle of Man and wanted to remit it back to the US without paying tax on it.
LOGISTICS SECTOR EXPRESSES CONCERNS OVER DEVELOPMENT OF NEW UK CUSTOMS SYSTEM
On 10th September, the British International Freight Association (BIFA) has expressed numerous concerns over the progress of the development of a new computer system that will replace an existing system used for processing Customs declarations. With the freight and logistics sector facing numerous challenges including the increasing likelihood of a no-deal Brexit, and the demands that it will put on the companies that are responsible for moving the UK’s visible trade, BIFA is concerned that progress with the development of the new system has been inconsistent, with periods of activity and progress, and then little concrete news.
FRENCH MINISTER REVEALS PLANS TO REFORM VAT COLLECTION IN THE E-COMMERCE REALM
On 9th September, HK TDC reported that the French Minister of Public Action and Accounts, has revealed plans to reform the collection of VAT from e-commerce platforms; France’s second attempt at targeting the taxation of e-commerce platforms. France is once again focusing on the taxation of e-commerce platforms. However, the new plan focuses on VAT. The fraud linked to VAT is said to have amounted to €147 billion at the EU level, €20.9 billion of which concerned France alone.
GOLDMAN SACHS VICE-PRESIDENT ARRESTED ON CHARGES OF SIPHONING $5.4 MILLION
On 10th September, the Indian Express reported that he was accused of abusing the company’s internal computer systems of his junior colleagues.
INDONESIA NAMES FORMER TRADER GRAFT SUSPECT IN ‘OIL MAFIA’ PROBE
On 10th September, Reuters reported that Indonesia’s Corruption Eradication Commission (KPK) named a former MD of the trading arm of state energy company PT Pertamina a suspect in a graft case linked to oil trading with a Singapore-based company, and what authorities have described as an “oil and gas mafia”. The agency charged the former managing director of Pertamina Energy Service Pte. Ltd. (PES), with receiving bribes from Singapore-based Kernel Oil Pte Ltd to secure oil trading deals.
MISSING BILLIONS, LOSING PATIENCE: LIBERIA PROBE TARGETS FORMER OFFICIALS
Africa Arguments on 10th September reported that 5 former central bank officials have pleaded not guilty to charges of money laundering and economic sabotage in a scandal related to the illegal printing of over $2.6 billion Liberian dollars (US$16.3 million). The accused include the former executive governor of the central bank, Milton Weeks, and his former deputy, Charles Sirleaf.
ZIMBABWE: STATE TO CONFISCATE MANSIONS AND CARS BELONGING TO ZIMRA “FRAUD” MILLIONAIRE
Pindula News on 10th September reported plans to seize 2 mansions, a flat in Harare’s city centre and a top-of-the-range vehicle which belong to former Zimbabwe Revenue Authority (Zimra) employee, Tapiwa Evans Chidemo, who is alleged to have fraudulently siphoned about $1.2 million. He worked as an accounting officer in the VAT department and earned a total of $76,279 during his period of employment stretching from 2010 to 2016.
ISO 27701 RELEASED AS A NEW STANDARD FOR PRIVACY COMPLIANCE
On 9th September, Foley & Lardner LLP published an article saying that on August 6th the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) released ISO/IEC 27701 (ISO 27701), a privacy extension to ISO/IEC 27001 and ISO/IEC 27002 designed to help organisations protect and control the personal information they handle. It says the new standard provides specific requirements and guidance for establishing, implementing, maintaining, and continually improving a Privacy Information Management System (PIMS) as an extension of the flexible Information Security Management System (ISMS) defined in ISO 27001 to take into account the privacy protections required for processing PII in addition to information security. A high-level overview of certain key ISO 27701 requirements applicable to controllers and processors is provided.
US: EXPORTS OF ITEMS WITH SURVEILLANCE CAPABILITIES ARE SUBJECT OF NEW DRAFT GUIDANCE
On 10th September, Sandler Travis Rosenberg reported that the US State Department has published a draft guidance document that seeks to provide exporters of hardware, software, and technology having intended and unintended surveillance capabilities with insight on considerations to weigh prior to exporting these items. Comments on this draft are due by October 4th. The guidance applies to hardware, software, technology, technical assistance, services, and/or parts/know-how that are marketed for or can be used for the monitoring, interception, collection, preservation and/or retention of information that has been communicated, relayed, or generated over communications networks to a recipient or group of recipients.
EXPRESS AIR DOMINATES AS THE PATHWAY FOR COUNTERFEIT GOODS
A newsletter from FIATA on 10th September said that more than 90% of merchandise seizures for intellectual property rights violations for the fiscal year ending September 2018 were in the express consignment and international mail environment, according to the latest statistics released by US Customs and Border Protection.
CENTRAL BANK OF IRELAND PUBLISHES AML GUIDELINES
On 9th September, McCann Fitzgerald published an article saying that the Central Bank of Ireland has published its “Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector”, which set out the Central Bank’s expectations on AML/CFT compliance following the implementation of the 4th EU AML Directive. The Guidelines are divided into 10 main sections, including sections on Risk Management, CDD, Governance, STR, Training and Record Keeping.
ITAR AMENDMENT EXPANDS LICENCE EXEMPTION FOR TRANSFERS BY OR FOR THE US GOVERNMENT
On 9th September, Williams Mullen published an article saying that the US Directorate of Defense Trade Controls had issued a long-awaited revision to the ITAR licence exemption for transfers by or for agencies of the US Government. The amendment clarifies and expands the licence exemption for use when parties are dealing with US Government agencies in ITAR-related activities, and if used properly can provide significant benefits for government contracts firms.
AUSTRALIA AWARDS FUNDING TO BOOST SMALL BUSINESS EXPORT POTENTIAL
Janes.com on 10th September reported that the Australian government has awarded funding to local companies supporting their efforts to expand in defence export markets, with the money sourced through the Defence Global Competitiveness Grants initiative. The funding includes support for local companies to procure specialist tooling, equipment to boost the production of explosives, equipment for product accreditation, testing facilities, tooling, and wire-cutting machinery.
ELECTRONIC SIGNATURES CAN BE USED TO EXECUTE DOCUMENTS AS LONG AS USUAL RULES ARE MET, SAYS UK LAW COMMISSION
On 9th September, Local Government Lawyer reported the view of the Law Commission that electronic signatures can be used to execute documents, including where there is a statutory requirement for a signature.
SHOULD ARMS-MAKERS BE HELD RESPONSIBLE FOR HOW THEIR WEAPONS ARE USED?
On 9th September, Forbes magazine published an article by a defence analyst posing this question, following a report from Amnesty International which raises a question that is rarely asked in discussions of the devastating consequences of armed conflict: do weapons supplying firms bear responsibility for how their products are used? The report says that major industry players including Airbus, BAE Systems and Raytheon are not undertaking adequate human rights due diligence which could prevent their products from being used in potential human rights violations and war crimes.
THE ARMS TRADE AND SYRIA
An article from the Georgetown Journal of International Affairs in the US on 2nd September says that the story of weapons in Syria reads as a cautionary tale about the unintended and lasting consequences of arms transfers, especially to countries in conflict. All parties to the conflict have leveraged an array of conventional weapons — as well as unconventional weapons, like the chemical weapons predominately used by the Assad regime — to sustain more than 5 years of conflict. Syria is saturated with weapons, raising concerns about the longer-term consequences of a steady supply of arms amid the country’s ongoing civil war. According to the Stockholm International Peace Research Institute, Russia supplied 71% of Syria’s imports of major conventional weapons from 2008-2012, and continued to provide weapons to government forces after the war started. Armed opposition groups have received weapons from a variety of sources, including foreign governments, illicit arms markets, and Syrian national stockpiles and battlefield captures.
FARC DISSIDENTS EXPLOIT VENEZUELA’S TURMOIL
The International Institute for Strategic Studies on 6th September published an article saying that the recent announcement that some senior FARC members were returning to arms is a heavy setback to Colombia’s peace process. As dissidents capitalise on the crisis in Venezuela and establish themselves in the Colombia–Venezuela border area, the insurgency is moving away from the jungle and into cities. It reminds one that, nearly 3 years ago, the Colombian government and the leftist FARC guerrilla group signed a peace treaty, bringing an end to what had been the longest-running insurgency in the Western hemisphere, but several senior FARC leaders have said they are returning to arms. The return to arms of such senior FARC commanders is a huge blow to the peace process, but it is not necessarily a lethal one, the article says.
IT’S JUST GOT A LOT HARDER TO SPOT A FAKE ROLEX. HERE’S WHAT TO LOOK FOR
On 7th September, Wired reported that counterfeit watches are no longer easy to identify. Fake timepieces now have previously unseen levels of sophistication. However, there are still subtle clues to tell the knock-offs from the genuine articles.
CONFISCATION ORDER AGAINST FORMER BANKER IN IBORI CASE A WAKE-UP CALL FOR UK PROFESSIONALS
A post from Global Witness on 7th September reacted to the news of a former Goldman Sachs banker who was convicted for helping launder money for a former Nigerian Governor, and has been hit with a £7.3 million confiscation order by the NCA.
WINDWARD: EUROPE SHIPPING THREAT MAP Q1 2019
SEC CHAIRMAN SCOLDS WEAK ANTI-CORRUPTION ENFORCEMENT ABROAD
On 9th September, the Wall Street Journal reported that the chairman of the SEC chided counterparts around the world for spotty enforcement of anti-bribery laws.
US FILES CRIMINAL CHARGES AGAINST CHINESE PROFESSOR LINKED TO HUAWEI
On 9th September, the Wall Street Journal reported that the US has filed criminal charges against Bo Mao, a Chinese professor in Texas who had earlier been accused in a civil suit of stealing a US start-up’s technology for China’s Huawei Technologies Co., marking an escalation of the Justice Department investigations into issues related to the telecom giant. The criminal complaint doesn’t mention Huawei by name – but it says closely parallels a civil suit filed by CNEX Labs Inc against Huawei.
INCOTERMS® 2020 – THE WAIT IS OVER
On 10th September, the International Chamber of Commerce announced the availability of new pocket guides, wallcharts and (free) app providing guidance and information about the new Incoterms 2020 – the newest edition of the renowned trade terms for the sale of goods. The new series includes more detailed explanatory notes with enhanced graphics to illustrate the responsibilities of importers and exporters for each Incoterms® rule.
THE DEVELOPMENT OF TUNISIA’S DOMESTIC COUNTER-TERRORISM FINANCE CAPABILITY AND 107-NAME SANCTIONS LIST
In the latest edition of CTC Sentinel from the Combating Terrorism Center at West Point contains an article saying that Tunisia’s National Counterterrorism Commission has established an AML/CFT regime to supplement its law enforcement and military action against its local jihadi movement. Tunisia’s efforts go beyond what is technically required under international standards and has created a sanctions list of 107 terrorist individuals, organisations, and associations as of mid-August 2019. This capacity, it says, still under development, may help alleviate pressure on Tunisia’s judiciary and provide more transparency to civil society, as well as deter financial support to local fighters and foreign fighters abroad.
US PROSECUTIONS FOR DOMESTIC TERRORISM OUTNUMBER INTERNATIONAL CASES
On 6th September, The Crime Report carried an article saying that in 2019, prosecutions for domestic terrorism have so far outnumbered those for acts of international terrorism by a 2 to 1 margin, according to records from the DoJ. Of 204 prosecutions, 71 were for acts of domestic terrorism. In contrast just 34 were classified by federal prosecutors as international terrorism.
US: CYBERCRIMINALS ATTACKING SCHOOLS AND GOVERNMENTS WITH RANSOMWARE
On 4th September, The Crime Report reports that cybercriminals have been wreaking havoc across America in recent months, with the latest target being local governments and even schools.
SOUTH AFRICA: ARMOURED COMBAT VEHICLES LEAD DEFENCE EXPORTS
On 10th September, Defence Web reported that armoured combat vehicles continue to lead the way as the South African defence industry puts most of its effort – and production – into foreign markets. 38 local armoured combat vehicles were exported to 4 countries, including Mali and Saudi Arabia, between 1st January and 31st March. In 2018, 137 were bought by 26 countries with the UN a separate buyer of 120 vehicles on behalf of Somalia’s federal government. The certifying authority approved 203 export permits to 37 unnamed countries in the first three months of the year and 107 import permits from 20 countries.
ALBANIA: EX-MINISTER FACES 12-YEAR TERM IN CANNABIS PROBE
AP News reported on 10th September that Albanian prosecutors are seeking a 12-year prison term for Saimir Tahiri, a former Albanian interior minister accused of being tied to a crime network suspected of trafficking large amounts of cannabis.
US: DESIGNATION OF 2 RUSSIAN OFFICIALS FOR HUMAN RIGHTS ABUSES OF JEHOVAH WITNESSES
A news release from the US State Department on 10th September announced that it was publicly designating Vladimir Petrovich Yermolayev, the Head of the Investigative Committee in the city of Surgut, Russia, and Stepan Vladimirovich Tkach, Senior Investigator at the Investigative Committee of Surgut, Russia, for their involvement in gross violations of human rights. The individuals and their immediate family members are ineligible for entry into the US. They are said to have been involved in torture and/or cruel, inhuman, or degrading treatment or punishment of Jehovah’s Witnesses.
INDONESIA’S PLANS FOR ANTI-GRAFT AGENCY RISK BREACHING UN CONVENTION
MLex on 9th September reported that the chair of the OECD Working Group on Bribery had warned that proposals to overhaul the law that that governs Indonesia’s anti-graft agency risk breaching international anti-corruption conventions by formally bringing the agency under the government’s oversight and creating a supervisory board for it appointed by lawmakers. These planned changes are said to risk breaching international conventions, such as the UN Convention against Corruption and the OECD Convention against Bribery of Foreign Public Officials in International Business Transactions.
LEBANESE BANK SANCTIONED BY US TO BE SOLD OR LIQUIDATED
Kenneth Rijock in his blog on 10th September reported that Jammal Trust Bank SAL (aka JTB Bank), which was recently designated by the US for its close association with Hezbollah, will be sold off, or liquidated. The primary reasons are that the bank no longer has access to the American financial structure, as its US correspondent banking relationships have been abruptly terminated, and it can no longer deal in US Dollars.
US: TELEMEDICINE CEO PLEADS GUILTY TO ROLE IN $424 MILLION MEDICARE FRAUD SCHEME
On 10th September, Baker McKenzie reported that the CEO of a telemedicine company has pleaded guilty for his role in one of the largest healthcare fraud schemes US federal agencies have ever investigated – a “complex, multi-layered scheme” to defraud Medicare, with losses totalling $1.2 billion. Lester Stockett, 52, was the owner of Video Doctor USA and Telemed Health Group, or AffordADoc, with the two companies known collectively as the Video Doctor Network. He also served as CEO of AffordADoc.
SANCTIONS LAW IMPLICATIONS FOR VIRTUAL AND DIGITAL CURRENCIES
On 10th September, Dentons published an article saying that individuals and entities transacting with virtual and digital currency, but especially virtual and digital currency service providers, should be aware of their sanctions obligations; and that regulators are paying increasing amounts of attention to virtual and digital currencies. It looks at the subject from a US and Canadian sanctions perspective. It also cautions that virtual and digital currencies may also generate sanctions compliance exposure through investment in such services among other acts. For example, it says, administrators and investors in Initial Coin Offerings (ICO) may find themselves subject to potential sanctions liabilities if designated individuals or entities are able to participate in the ICO, or trade tokens issued after the ICO is completed.
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