7th October 2019
MONEY LAUNDERING SUSPICIONS ABOUT 5 KUWAIT COMPANIES RELATED TO US ARMY TENDERS
MENA-FN on 6th October reported on investigations into the involvement of 5 Kuwaiti companies in suspicious money laundering activities through logistics services contracts related to US Army tenders. They recently won a tender worth $140 million to provide services vehicles to US camps and provide drivers inside and outside the country. It is alleged that there is a possibility the source of financing is illegal since the prices submitted by companies in the tender are 30% lower than normal.
US: ALLEGED RINGLEADER IN GOFUNDME SCAM THAT RAISED $400,000 FACING FEDERAL CHARGES
An ABC affiliate in Texas reported on 6th October that a New Jersey man, Mark D’Amico, 40, accused of pulling off a GoFundMe scam that raised $400,000 for an invented feel-good story is now facing federal charges.
NIGERIA: PRESIDENT BUHARI ALLY, NASIR DANU, REPORTEDLY ARRESTED IN UK FOR MONEY LAUNDERING
On 6th October, the Sundiata Post reported on calls for the President to comment on the reported arrest of President Muhammadu Buhari’s known confidant, Nasir Danu, at Heathrow Airport for alleged passport scam and money laundering. It is reported that Nasir Danu’s carry-on bag was searched and over £200,000 in cash, Danu is said to have told investigators that he paid $30,000 to an agent who helped him procure his Malta Passport, and that he was carrying the cash to deliver to someone in UK.
THE IMPACT OF US TRADE SANCTIONS ON EUROPEAN GOODS: A CLOSER LOOK
On 4th October, EurActiv published an article saying that the US announced on 2nd October that it would hit European products with punitive tariffs worth $7.5 billion after receiving the green light from the WTO, following a 15-year legal battle between aircraft manufacturers Boeing and Airbus. It announced it would impose tariffs that amount to 10% on aircraft and 25% on certain German and British industrial products, as well as on French, Spanish and Italian food products. The article notes that the automobile industry will escape this round of US sanctions. It looks at what will be caught by the new tariffs, including Italian products (although Italy in not a part of the Airbus consortium). For the UK, it says, a “strange” collection of textiles such as cashmere, cotton sweaters, men’s suits, women’s pyjamas, cotton blankets and sheets will be affected.
TENSIONS GROW AS CYPRUS SAYS TURKISH DRILLING SHIP VIOLATES ITS RIGHTS
EurActiv reported on 4th October that tensions between Cyprus and Turkey over offshore drilling intensified on after Cyprus said that a decision to send a ship to an area it had already licensed was a “severe escalation” of Turkish violations of its sovereign rights. Turkey announced that it had sent an oil-and-gas drilling ship to waters off southern Cyprus where Cypriot authorities have already awarded hydrocarbon exploration rights to Italian and French companies.
UK AND IRELAND: REGULATORY COOPERATION AND WAIVER OF PRIVILEGE
On 3rd October, Artur Cox in Ireland published an article saying that the regulatory authorities in Ireland and the UK have begun to adopt a more aggressive stance on legal professional privilege in the context of regulatory investigations. The article is concerned with the handling of privileged information in the course of such investigations, saying that communications which are privileged whether because of legal advice privilege or litigation privilege do not have to be disclosed in the course of legal or regulatory action. It points out that co-operation with a regulator during the course of an investigation may result in a swifter conclusion to the matter and a significant resource saving to the regulator involved. These factors are often of relevance to the regulator in considering what level of sanction or fine to impose after conclusion of an investigation.
US: WHY DOESN’T MCDONNELL APPLY TO FOREIGN BRIBERY?
On 3rd October, Buckley LLP published an article about the scope of the so-called “McDonnell” decision. This requires that an official act must be on a specific and focused pending question or matter involving a formal exercise of government power, or must exert pressure or provide advice to another public official to take such official act. The underlying rationale, the article says, was to limit prosecutorial overreach and the risk of criminalising conduct fundamental to a functioning democracy. However, 2 recent court decisions have held that the Supreme Court’s McDonnell decision, which limited the scope of acts that constitute domestic bribery, does not apply in cases alleging bribery of foreign officials. The article says that defendants in 2 separate foreign bribery cases asked federal appellate courts to import the same restrictions articulated in McDonnell to the foreign bribery context but, for different reasons, both courts refused. Hence the courts rejected the Supreme Court concerns about criminalising routine conduct.
CHINA: AUTHORITIES RAMP UP ENFORCEMENT OF FOREIGN COMPANIES’ NON-COMPLIANCE WITH NATIONAL ANTI-BRIBERY LAWS
On 7th October, Anjie Law Firm published an article saying that prosecution of commercial bribery has once again become a key issue in China following the amendment of the Anti-unfair Competition Act (AUCA) and the restructuring of its anti-bribery provision. The article says that this, and the national anti-corruption movement, indicates that the government appears to be cracking down on unlawful commercial activities by both domestic and foreign companies. The article warns that foreign companies’ compliance with Chinese anti-bribery laws is set to become as big a focus area as domestic companies’ compliance with foreign laws. It goes on to explain what is meant by “commercial bribery” under the Act, and what are the possible penalties.
MALAYSIA FINES 80 PEOPLE AND COMPANIES IN 1MDB CASE
On 7th October, KYC 360 reported that Malaysia has fined 80 individuals and entities for allegedly receiving money from state fund 1MDB, according to the country’s anti-graft chief. The agency is aiming to recover $100 million from individuals and entities who had allegedly received funds laundered through accounts linked to former prime minister Najib.
2 FUTURES TRADERS GET PRISON SENTENCES IN SINGAPORE FOLLOWING FRAUD CONVICTION
Finance Feeds on 7th October reported that the Monetary Authority of Singapore (MAS) has announced that 2 futures traders of proprietary trading firm Joerik Financial Pte Ltd have been convicted of fraud charges. The court proceedings against a third individual in the case are ongoing.
OECD TAX REFORM FOR MULTINATIONALS ATTACKED AS ‘INTENSIFYING INEQUALITIES’
On 7th October, Accountancy Daily reported that campaigning groups are warning that OECD proposals designed to ensure multinationals pay the tax due in the territories in which they operate, will reduce profits booked in corporate tax havens by only 5%, and are likely to intensify global inequalities. This news is in the light of the planned announcement by the OECD on the latest developments in its base erosion and profit shifting (BEPS) project, which is committed to overhauling the way the international tax regime operates.
PORT OF ROTTERDAM INTRODUCES TRACK AND TRACE APP FOR CONTAINERS
Lloyds Loading List on 4th October reported that, drawing on status information from vessels and inland and deep-sea terminals, ‘Boxinsider’ can track containers and determine expected and actual arrival and departure times for vessels, as well as container unloading and departures at container terminals. It allows shippers and freight forwarders to see where their containers are located at any given moment.
FIATA AND TRAFFIC LAUNCH FREE DIGITAL COURSE FOR FORWARDERS ON PREVENTION OF WILDLIFE TRAFFICKING
On 4th October, FIATA, the International Federation of Freight Forwarders Associations, and TRAFFIC, the wildlife trade monitoring network, have launched a new digital course “Prevention of Wildlife Trafficking”. The 3-hour digital course provides freight forwarders with essential information to detect, respond to, and report instances of wildlife trafficking; and it is available, free of charge through the FIATA Logistics Academy.
ESA IDENTIFY WEAKNESSES LEAVING HIGH-VOLUME TRANSACTION FIRMS OPEN TO MONEY LAUNDERING RISKS
On 7th October, Fintech Futures reported that the 3 European Supervisory Authorities (ESAs) – the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA) – have published their second joint opinion on the money laundering and terrorist financing risks impacting the EU financial industry. They found that transaction monitoring and reporting suspicious transactions is still a cause for concern, particularly for firms processing high volume transactions, and worry that those financial institutions processing the most transactions in the industry have “weaknesses” in their control frameworks.
YOUTUBE VIDEO, “NUCLEAR 101: HOW NUCLEAR BOMBS WORK”, PASSES 1 MILLION VIEWS
The Belfer Center in the US reported that the video prepared for students at the Havard Kennedy School is now used in courses around the world.
LEGAL ADVICE PRIVILEGE “SURVIVES” COMPANY’S DISSOLUTION
On 7th October, Legal Futures reported a Court of Appeal case in which it was held that legal advice privilege attaching to communications between a company and its lawyers survives the dissolution of the company, even if the Crown has disclaimed all interest in its former property, the Court of Appeal has ruled, and that it remained in existence unless and until it was waived. The ruling came in a case involving a claim by a group of investors over what they allege was a fraudulent scheme marketed by a Cypriot company, Anabus Holdings Ltd. It was said that to hold that privilege was lost if there was no person entitled to assert it would “undermine the essential rationale for the very existence of legal advice privilege”.
NCA AND OFAC SAID TO BE EXAMINING A NUMBER OF ACTIONS INVOLVING VLADIMIR GUSINSKY
EU Reporter on 7th October carried an article saying that a disgraced Russian oligarch is being investigated on both sides of the Atlantic following a series of collapsed civil court cases. The NCA and OFAC have been sent details of a number of actions involving Vladimir Gusinsky.
US RETURNS SIXTH CENTURY MARBLE STATUE TO LIBYA
A news release from US Immigration and Customs Enforcement on 4th October advised that the US had returned a 6th Century marble statue known as the “Head of a Veiled Woman,” during a repatriation ceremony at the Libyan Embassy – the culmination of an 11-year investigation led by HSI New York’s Cultural Property, Arts and Antiquities Unit, in conjunction with the Department of State and US Customs and Border Protection. It revealed that an antiquities dealer illegally shipped 50 items of cultural property originating from various nations to major museums, galleries and art houses in New York City.
THE DARK SIDE OF OUR DRONE FUTURE – WEAPONISED AND/OR TERRORISM
An article in the Bulletin of the Atomic Scientists on 4th October considers the potential downsides of the drone revolution. As well as Fedex delivering your parcels, or Deliveroo your pizza, drones bring with them a novel set of risks and challenges — and these need to be confronted. It says that “drone” has become a somewhat amorphous term, used to describe a vast array of systems. Yet in all forms, from fixed-wing systems to quadcopters, drones present novel risks to security. These are unlikely to be resolved quickly, if at all.
HOW THE JONES ACT HARMS AMERICA
An article from the Hoover Institute on 7th October argues that the Jones Act (whose official title is the Merchant Marine Act of 1920), which prohibits foreign ships from transporting goods between 2 places in the US, and the Passenger Vessel Services Act of 1886, which prohibits foreign ships from transporting passengers between 2 places in the US, harm the country. The article says the Acts add to the congestion on major US highways, especially on both coasts, raises the cost of shipping goods within the country and also creates extra carbon dioxide. The Jones Act demands that cargo to be shipped by water between 2 ports must be in ships which are US-owned, crewed by Americans, registered in the US, and built in the US. The Act was introduced after the First World War, to prevent undercutting of US shipping by foreign vessels.
DRIVERS AND ENABLERS OF SERIOUS ORGANISED CRIME IN SOUTH-EAST ASIA
On 30th August, the UK Department for International Development published a review which looks at drivers and enablers of serious organised crime in SE Asia. The 4 main drivers are illicit drugs; human trafficking and migrant smuggling; environmental crimes (e.g. illegal logging, wildlife trade); and counterfeit goods. While the situation in each country is different, and there are many country-specific factors involved in serious organised crime in SE Asia, the review identified a number of common issues relevant across many countries in the region.
US SUPREME COURT REJECTS INSIDER TRADING APPEAL BY LAS VEGAS GAMBLER
On 7th October, Reuters reported that the Supreme Court had refused to hear Las Vegas sports gambler William “Billy” Walters’ appeal of his 2017 insider trading conviction. He had claimed that an FBI agent leaked grand jury details about the investigation to reporters.
‘TINDER SWINDLER’ EXTRADITED BACK TO ISRAEL TO FACE CHARGES
On 7th October, the Times of Israel reported that Shimon Hayut, 29, is accused of defrauding Scandinavian women he met on dating app out of hundreds of thousands of dollars by posing as millionaire’s son. He fled Israel in 2017 to avoid trial for various fraud-related offences but was arrested in Greece for using a fake passport after a joint operation between Interpol and Israel Police.
AIRBUS UNIT’S 7-YEAR UK CORRUPTION PROBE PROMPTS CALL FOR ACTION FROM OECD OFFICIALS
A report in MLex Market Insight on 7th October says that the SFO has been investigating GPT Special Project Management since 2012 after a former company executive blew the whistle on alleged bribery linked to a Saudi Arabian defence contract. It is reported that the OECD Working Group on Bribery will talk to UK government officials at a scheduled group meeting in Paris over the handling of the case and press them for a quick decision. There are concerns that a decision is being delayed or charges could be blocked because of GPT’s link to the UK government and Saudi Arabian state involvement, and that the UK could in theory cite national-security concerns and drop the case.
US: ANTI-TERRORISM ACT LIABILITY REQUIRES MORE THAN MERE FAILURES OF CUSTOMER DUE DILIGENCE
On 7th October, an article from Ballard Spahr LLP was concerned with a claim brought by victims of rocket attacks in Israel perpetrated in 2006 by Hizbollah, operating in Lebanon against the Lebanese Canadian Bank. They alleged that the Lebanese Canadian Bank SAL provided banking services to 5 members of Hizbollah, and by doing so, they materially supported an act of international terrorism. Specifically, they alleged, among other things, that the bank failed to take certain due diligence measures, including reviewing public sources, and as a result continued to bank with members of Hizbollah; and that the bank had a duty to perform due diligence on its customers, monitor and report suspicious or illegal banking activities, and not provide banking services to terrorist organisations.
SANCTIONS: ENGLISH HIGH COURT CONSIDERS THE EFFECT OF FOREIGN ILLEGALITY ON ENGLISH OBLIGATIONS
On 7th October, White & Case became the latest law firm to publish an article about the implications of a court decision in England on the effects of US secondary sanctions, saying that the debtor in the case did not default under its English law facility agreement by failing to pay where compliance with the payment obligation would risk a penalty under new US sanctions. However, it cautions that the decision, to a large extent, turns on the particular circumstances and language used involved. It warns that without express language to derogate from the common law position, parties could still be on the hook to perform obligations that risk infringing foreign law, with the attendant risk of significant financial penalties.
AN ARMS RACE IN MEXICO IS DRIVING RECORD KILLINGS AND AMERICAN GUNS ARE TO BLAME
The LA Times on 6th October carried a feature saying that millions of weapons are in private hands — in direct violation of Mexico’s strict gun laws. Some of those firearms once belonged to the military or police and were sold into the underworld. But the vast majority were smuggled from the world’s largest gun market: the US, and have helped fuel record levels of violence. Last year, Mexico saw 20,005 gun homicides — nearly 7 times as many as in 2003.
HOW INDIA COULD LEAD THE WORLD IN DRONES
On 4th October, the World Economic Forum published an article explaining why India could become a world leader in the development and production of drones. It says that India has just the right mix of the 3 main elements it identifies as being necessary.
US AND AUSTRALIA NEGOTIATING DATA EXCHANGE AGREEMENT UNDER CLOUD ACT
A news release from the US DoJ announcing that the two countries had entered into formal negotiations also says that a bilateral CLOUD Act agreement would enable Australian law enforcement to serve domestic orders for communications data needed to combat serious crime directly on US-based companies, and vice versa. The UK and US recently signed the first such agreement. The US enacted the CLOUD Act in 2018 to speed access by foreign partners to electronic information held by US-based global providers that is critical to such foreign partners’ investigations of serious crime.
More information on the CLOUD Act is at –
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