10th October 2019
US UNILATERAL SANCTIONS DISRUPT TANKER MARKET
On 23rd September, Clyde & Co published an article about the fallout from OFAC listing COSCO Shipping Tanker (Dalian) Co. and COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co (the Subsidiaries) as SDN subject to sanctions in connection with involvement with Iran. COSCO is one of the world’s largest tanker owners, operating more than 50 supertankers and transporting a large part of China’s oil needs, and it is said that oil traders began cancelling bookings and trying to find alternative vessels, pushing the spot rates for very large crude carriers up as much as 28%.
See also –
NORTH KOREAN SHIP SEIZED FOR SANCTIONS VIOLATIONS LEAVES AMERICAN SAMOA
NK News reported on 10th October that the tanker Wise Honest, seized earlier this year for violations of international sanctions has departed American Samoa. It has been held in Pago Pago since May, but has now left the port under tow and will now be transferred to its new owner, whose identity was not publicly revealed. It was originally detained in Indonesia in 2018. It also reports that a US federal court in July ruled that proceeds from the sale of the Wise Honest could be transferred to the family of Otto Warmbiers, who last year successfully sued the North Korean government for $500 million after Otto died in 2017 after a year in custody in DPRK.
TOUGHER US SANCTIONS MAKE CUBA EVER MORE DIFFICULT FOR WESTERN BUSINESSES
On 9th October, Yahoo Finance reported that the measures, including allowing lawsuits for use of property originally seized in 1959, have led international banks to avoid transactions involving the island, while prospective overseas investors put plans on hold and foreign companies operating in the country consider restructuring to lower their risk exposure. Just a few years ago, it says, foreign businesses were rushing to take a first hand look at Cuba’s opening economy. PostFinance, the last Swiss bank to process Cuba-related transactions, informed clients last month it would no longer do so.
IRAN’S 3-PART PLAN TO OUTSMART SANCTIONS
Yahoo Finance on 9th October published an article detailing what it said was Iran’s plan to mitigate US sanctions on its oil industry. This involved increasing development of its own oil fields, and that shared with Iraq, as well as developing alternative export routes to avoid use of the Straits of Hormuz. It reports recent statements made on all 3 fronts.
STR PODCAST: HOW INNOVATION COULD BE USED TO SOLVE A NUMBER OF PROBLEMS IN THE AML/CFT REGIME
In the 3rd of the STR podcast series from RUSI, looks at how innovation could be used to solve a number of problems in the AML/CFT regime. The latest financial crime news is discussed with Denisse Rudich and Nick Parfitt, who consider a case brought against BNP Paribas, UK companies being exploited for crime and the latest sanctions update. Juan Zarate from the Financial Integrity Network is also interviewed on how innovation will be essential to overcome policy tensions that prevent progress in combating financial crimes.
IRELAND: AN INTRODUCTION TO INVESTMENT LIMITED PARTNERSHIPS (ILP)
On 7th October, LK shields published a briefing on ILP, formed under the Investment Limited Partnerships Act 1994, and a common law partnership structure in Ireland that does not have a separate legal personality. An asset manager, it says, may use the ILP to house a regulated AIF with a focus on investment strategies such as credit, private equity, sustainable finance and real estate. The briefing says that this legislation is currently being modernised. The briefing provides details of the ILP, including that GP is responsible for managing the business of the partnership and, as an ILP does not have power to enter contracts in its own name, the General Partner usually enters into contracts on its behalf, and he/she is also liable for the ILP’s debts and obligations. It also discusses changes proposed in the Investment Limited Partnerships (Amendment) Bill.
EU WORKING ON A NEW APPROACH FOR FLAGGING COUNTRIES WITH WEAK AML LAWS
On 10th October, KYC 360 reported that the UK is working on a new approach for flagging countries with weak AML laws after the bloc’s previous attempt to create a blacklist failed. The Council of Economic and Financial Affairs is scheduled to discuss the proposed methodology, which is intended to give countries a clearer sense of how they could be designated as high-risk, as well as a process to respond.
IMF ASKED TO EVALUATE NORDIC AND BALTIC MONEY LAUNDERING PREVENTION
KYC 360 on 10th October reported that the IMF has been asked to conduct an independent evaluation of money laundering prevention in the Nordic and Baltic region, and findings could be released next year.
A COURT IN HELSINKI DISMISSES ALL CHARGES IN THE LARGEST MONEY LAUNDERING CASE EVER TRIED BY A FINNISH COURT
KYC 360 on 10th October reported that the court dismissed all charges in a case where 2 Estonian nationals were suspected of laundering €135 million in total, said to be Russian money laundered into third countries via a Finnish company and relating to an alleged scheme involving a motorway to be built in the Karelia region of Russia. The district court’s decision is not final and can be appealed.
BREXIT: UK TRADE TARIFFS IF THERE IS NO DEAL
On 9th October, the House of Commons Library published a briefing saying that if there is a no-deal Brexit, the UK will have to implement its own set of tariffs. This briefing explains what tariffs are, how they work in the EU, what the Government has announced and the role the House of Commons will play in scrutinising them.
THE MISUSE OF DRUGS ACT 1971 (AMENDMENT) ORDER 2019
This Order in the UK amends the 1971 Act and reduces the scope of the generic definition for a range of synthetic cannabinoids controlled as Class B drugs and continues to exclude compounds otherwise controlled and compounds with legitimate medical uses. It is to remove compounds which were not intended for control whilst retaining those which are known to be, or likely to be, misused, and where the misuse is having, or is capable of having, harmful effects.
MOLDOVA: ANTI-CORRUPTION PROSECUTOR DETAINED
Moldpres, the state news agency in Moldova, reported on 10th October that an anti-corruption prosecutor was arrested on 9 October by his colleagues, being suspected of “passive corruption”. No further details had thus far been revealed.
BOSNIA HERZOGOVINA: MAN IN CUSTODY SUSPECTED OF SMUGGLING LARGE NUMBER OF VEHICLES
The Sarajevo Times on 10th October reported that the UK citizen is suspected of bringing a large number of motor vehicles across international border crossings and to the territory of Bosnia and Herzegovina.
PHILIPPINE POLICE ARREST OVER 500 MOSTLY CHINESE PERSONS FOR FRAUD
On 10th October, The Fresno Bee in the US reported that Philippine police and immigration authorities said they have arrested 542 illegally working foreigners in Manila, mostly Chinese involved in telecommunications and investment scams, in one of the biggest such mass arrests this year. Other workers are said to come from Myanmar, Malaysia, Vietnam, Taiwan and Indonesia.
SODASTREAM CEO ALLEGEDLY PROFITED FROM INSIDER TRADING
Haartez reported on 10th October that Daniel Birnbaum, the former SodaStream international CEO, alleged by Israel Securities Authority investigators to have helped an associate earn $44,500 in insider profits on the company’s stock.
US: GENE-TESTING COMPANY GETS 25-YEAR BAN FROM FEDERAL PROGRAMMES IN $42.6 MILLION KICKBACK SETTLEMENT
The Irish Independent on 10th October reported that New Orleans-based genetics testing company – UTC Laboratories Inc (which has also been known as Renaissance RX or RenRX) and its 3 principals will pay $42.6 million to resolve charges they defrauded the federal government by paying kickbacks for referrals and billing for medically unnecessary tests. The 3 principals, including founder Dr Tarun Jolly, Barry Griffith and Patrick Ridgeway will pay $1 million.
BREXIT: REPLACEMENT OF “CE” MARKING WITH “UKCA”
A briefing from Walker Morris, part of its Countdown to Brexit series, looks at the UKCA (UK Conformity Assessed) marking, the new UK product marking that will be used for certain goods placed on the UK market in the event of a no-deal Brexit. If UK leaves the EU without a deal, this marking will replace the long standing CE marking that has indicated conformity with health, safety and environmental protection standards for products sold within the EEA since 1993.
INTERPOL URGES PUBLIC TO #BECAREFUL OF BEC FRAUD
On 10th October, a news release from Interpol explains that BEC fraud – also sometimes called CEO fraud – is a type of social engineering scam where criminals deceive company employees into transferring money to them. A new public awareness campaign launched by Interpol is encouraging the public to be careful about BEC fraud and know the warning signs to avoid falling into the criminals’ trap.
GERMANY’S ARMS EXPORT APPROVALS HEADED FOR RECORD HIGH
On 7th October, Deutsche Welle reported that the German government is approving more and more arms exports despite stricter regulations and bans on some countries. The main destination is a fellow EU Member State, Hungary. German arms exports could be on track to reach record levels this year, with the government approving sales to the tune of €6.35 billion by the end of September. Among the top 10 destinations for German arms exports are 3 other NATO countries — the US, the UK and Norway — along with Australia and South Korea.
UK: CRIME (OVERSEAS PRODUCTION ORDERS) ACT 2019 IN FORCE
PNLD on 10th October reported that the Act addresses the constraints of existing domestic court orders and the limits of Mutual Legal Assistance (MLA) in being able to compel the production of electronic data from another jurisdiction quickly. The new overseas production order, has extra-territorial effect and provides that where a relevant international agreement is in place, the Act will allow an appropriate officer to make an application for an overseas production order. Once granted, the order will require the production of stored electronic information directly from a person or company located overseas, as if the information were located or controlled in the UK. To date, the only suitable agreement is with the US.
RECENT MEDICINAL CANNABIS DEVELOPMENTS IN AUSTRALIA
On 10th October, Dentons published a briefing saying that there have recently been a series of developments advancing the Australian medicinal cannabis industry, with recommendations for relaxing laws and money being put into research by the government. It is said that the Australian Federal Government has a fully established cannabis production and manufacturing regulatory regime. Since legislation came into effect in 2016 to allow the legal cultivation, production and manufacturing of medical cannabis products in Australia, there have been a series of developments advancing the Australian medicinal cannabis industry. The article considers developments and says that it is anticipated some of the reforms arising from a recent report will be implemented at the end of this year.
IRS UPDATES GUIDANCE ON VIRTUAL CURRENCY TRANSACTIONS
On 7th October, Cadwalader reported that the IRS had released updated guidance and FAQ on the US tax treatment of virtual currency, updating the guidance originally released in 2014. Fortune reports that the Washington-based Coin Center said in a blog post that the IRS document raises messy new questions, especially in the issue of situations where new types of cryptocurrency are delivered to a user. Fortune also said that the new guidance failed to address a longstanding request of the crypto industry to exempt those who engage in petty transactions such as purchasing a cup of coffee with bitcoin from taxation.
ADOBE BLOCKS ACCESS TO ITS SOFTWARE PROGRAMS TO THOSE IN VENEZUELA TO COMPLY WITH US SANCTIONS
Software company has announced that it has cancelled the subscriptions to such programs as such as Photoshop and Acrobat Reader of those persons and entities located in Venezuela in order to comply with US sanctions, with the exception of the Adobe social media platform Behance. The arrangement allows for users to download their content until 28th October.
EU COMMISSION REFERS HUNGARY TO EU COURT FOR FAILING TO APPLY THE MINIMUM EU EXCISE DUTY ON CIGARETTES
A news release on 10th October announced that the Commission had decided to refer Hungary to the Court of Justice for failing to apply the minimum EU threshold for excise duty on cigarettes set out in EU rules on manufactured tobacco. The Commission had allowed a long transitional period until 31st December 2017 in order to gradually increase the excise duty on cigarettes and reach the required minimum threshold.
ITALIAN OIL FIRM ENI ACCUSED OF DEALING WITH CORRUPT CONGOLESE OFFICIAL
Sahara Reporters on 10th October reported that Eni has been accused of dealing with a company owned by a Congolese, who served under the government of dictator, Denis Sassou Nguesso. This was according to anti-corruption organisation, Global Witness, and involves Africa Oil and Gas Corporation (AOGC), said by Global witness to have a public record of fraud, payments to companies owned by the president’s son and ties to 3 PEP.
EXPORTING GOODS CONTROLLED UNDER THE UK TORTURE REGULATION (INCLUDING LICENSING OF DRUGS USED IN EXECUTION BY LETHAL INJECTION)
On 10th October, the Department for International Trade published updated information in a guide which explains which goods are prohibited from export and which are controlled for export under the regulation. Goods controlled by torture legislation include drugs used in executions by lethal injection. The export of the drug propofol to the US is also controlled.
BAIL PERIOD REFORM IN UK LEADS TO 193,000 “RELEASED UNDER INVESTIGATION” AND IN LEGAL LIMBO
On 10th October, the Law Society Gazette reported that reforms to prevent people languishing for long spells under pre-charge bail have left at least 193,000 people languishing in legal limbo, according to police figures. A 28-day time limit for police bail was introduced through the Policing and Crime Act 2017 from April 2017.
UK GOVERNMENT PUBLISHES CRIMINAL COURT GUIDANCE FOR DEFENDANTS
On 10th October, the MoJ published a how-to guide designed to make the criminal court process more accessible and understandable for all. It is said to be designed to be understood by all defendants, including those with low literacy levels, and will be available online and in courts. It explains complicated legal jargon; flags available legal advice; explains Crown and magistrates’ court processes; and give advice on practicalities such as childcare.
BREXIT: TRANSFER WINDOW FOR UK CHEMICALS USERS REGISTERED UNDER REACH ONLY OPEN TO END OF OCTOBER
On 10th October, an article from K & L Gates LLP said that UK-based entities who rely on or currently hold REACH registrations need to take immediate action to ensure continued access to the EU market in the event of the UK’s possible withdrawal from the EU on 31st October. In the event of no-deal Brexit, existing UK REACH registrations will be void and access to such registrations on REACH-IT will be lost unless the registration transfer to an EU entity is initiated before the withdrawal date.
US CUSTOMS AND BORDER PROTECTION SEIZE OVER $2 MILLION OF FAKE NIKE SHOES
On 10th October, ABC News in California reported that US Customs and Border Protection officers intercepted almost 15,000 pairs of counterfeit shoes at the LA Long Beach seaport, in 2 containers on a ship from china labelled “napkins”.
WILL PERU’S “GOLD KING” EVER BE HELD ACCOUNTABLE?
On 10th October, Insight Crime reported that Peru has agreed to send accused international gold smuggler Peter Ferrari to the US to face trial — but it says that it is unclear when, or even whether, he will face justice. Ferrari had already been in a Peru jail for a year. After being arrested in January 2017 on charges that he exported 13 tons of illicit gold, worth $600 million. Since the 1990s, Ferrari has been linked with illegal gold mining, drug trafficking, and money laundering — but has always managed to avoid being convicted, though first arrested in 1999.
US CUSTOMS’ CHEMICAL SCREENING DEVICES SAID TO BE INADEQUATE
On 5th October, an article in Homeland Security Today reported that the Office of the Inspector General (OIG) at the Department of Homeland Security has reported its findings from an audit to determine to what extent US Customs and Border Protection uses small-scale chemical screening devices at ports of entry to identify fentanyl and other illicit narcotics. According to the RAND Corporation, deaths in the US involving synthetic opioids increased from approximately 3,000 in 2013 to more than 30,000 in 2018. The article says that OIG wants to see comprehensive analysis on the ability of any chemical screening device to identify the presence of fentanyl and other narcotics at lower purity levels in field environments, perform reproducibility test runs, and obtain a third-party verification of the results. It also makes other recommendations to improve the performance and use of devices and that, it says, when implemented, should help officers better identify fentanyl and other illicit narcotics at ports of entry.
The OIG report is at –
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