OTHER THINGS YOU MAY HAVE MISSED – OCTOBER 16

16th October 2019

UK SUSPENDS ARMS SALES TO TURKEY

On 15th October, the Financial Times reported that the UK has confirmed the suspension of all new arms sales to Turkey because of fears the weapons may be used in the country’s escalating military conflict in Syria.

https://www.ft.com/content/bde7fa7e-eebb-11e9-ad1e-4367d8281195

THE ONGOING QATAR CRISIS AND REGIONAL RAMIFICATIONS

On 15th October, the House of Commons Library published a briefing paper saying that the dispute between Qatar and its Arab neighbours remains unresolved and is playing out in other conflict situation across the region.  The dispute built up after the 2011 Arab uprisings, has not been resolved and may even be becoming more entrenched, the paper warns.  The dispute has manifested itself in proxy conflicts across the Middle East, North Africa and the Horn of Africa, and has proved more intractable than many expected.

http://researchbriefings.files.parliament.uk/documents/CBP-8690/CBP-8690.pdf

EX-CREDIT SUISSE BANKERS WILL TESTIFY IN MOZAMBIQUE BRIBERY CASE

On 16th October, KYC 360 reported that 2 former Credit Suisse Group AG bankers will testify for the US at a federal trial, describing their roles in what the DoJ says was a $2 billion kickback scam in Mozambique.  Andrew Pearse, who headed the global financing group in the bank’s London office, will be one of the government’s first witnesses at the trial of Jean Boustani, a former executive at the ship builder Privinvest Group.  Detelina Subeva, who worked for Pearse, will also testify.  Boustani, a Lebanese national, is accused of procuring contracts to sell ships and related equipment to three Mozambican entities while secretly agreeing to pay $50 million in bribes to government officials and $12 million to conspirators at Privinvest.

https://www.riskscreen.com/kyc360/news/ex-credit-suisse-bankers-will-testify-in-mozambique-bribery-case/

HMRC SETS UP 6-MONTH ACCESS TO TRANSITIONAL SIMPLIFIED PROCEDURES (TSP) FOR ALL TRADERS IN EVENT OF A NO-DEAL BREXIT

On 15th October, ICAEW reported that traders will have up to 6 months to pay import duties and submit customs declarations, under new rules designed to ease congestion at the border if the UK leaves the EU without a deal.  TSP arrangements will become active if the UK leaves without a deal, from the date of its departure.  Businesses under TSP will still have to check if their goods attract tariffs, and get a Duty Deferment Account if they do.

https://economia.icaew.com/news/october-2019/hmrc-sets-up-nodeal-sixmonth-leeway-for-traders

UK: MAN HID GUNS AND WEAPONS IN SECRET BASEMENT PANIC ROOM

On 15th October, a NCA news release advised that Douglas Urquhart, who illegally imported handguns from Spain into Scotland, has been jailed for 3 years and 10 months, following an investigation by the joint NCA and Police Scotland Organised Crime Partnership.  4 illegal firearms and over 40 bladed weapons were recovered.

https://www.nationalcrimeagency.gov.uk/news/midlothian-man-hid-guns-and-weapons-in-secret-basement-panic-room

WHY IS IRELAND UNIQUELY PLACED TO FLOURISH AS A FINTECH HUB?

On 15th October, Irish law firm Matheson published a chapter from Lexology, Getting the Deal Through: Fintech 2020.  This, it says, answers the questions: why is Ireland uniquely placed to flourish as a Fintech hub, what are the triggers for regulated activities requiring authorisation, how does the regulatory landscape operate for Fintech firms and what trends are emerging in the Irish market?

https://www.matheson.com/news-and-insights/article/why-is-ireland-uniquely-placed-to-flourish-as-a-fintech-hub

IRELAND AND BENEFICIAL OWNERSHIP – HOW TO AVOID REJECTION

On 15th October, Matheson published an article saying that, with the 22nd November deadline looming, less than 10% of companies have successfully filed beneficial ownership details and rejection rates are currently running at 26%.  The article addresses some of the practical issues to watch out for when complying with the regulations.  It says that the Registrar has published the main reasons for the surprisingly high level of rejections.  It says that if there is the slightest mismatch between the name and social security number filed as against the personal information held on the government system, the submission will be rejected.  The article therefore advises that it is important to carefully check all details gathered to minimise the chances of rejection – mentioning that it is also worth noting that the system will not save draft submissions.

https://www.matheson.com/news-and-insights/article/beneficial-ownership-how-to-avoid-rejection

BELGIUM: CUSTOMS SEEKS TO INCREASE DRUG-SCREENING OF CONTAINERS AT ANTWERP PORT TO 100%

On 16th October, the Brussels Times reported that Customs authorities want to scan every container arriving at the port of Antwerp in an effort to fight against growing flows of cocaine entering the country.  Due to a lack of technological material, only 1% of shipping containers arriving in Europe’s second-largest port are currently screened and it has been estimated that customs officials in Antwerp are seizing approximately a third of all cocaine pouring into Europe through the port.

https://www.brusselstimes.com/all-news/belgium-all-news/73552/customs-looks-to-scan-all-containers-in-antwerp-port-to-crackdown-on-cocaine-trafficking/

https://www.lesoir.be/254007/article/2019-10-16/cocaine-la-douane-veut-scanner-100-des-containers-au-port-danvers

SPANISH POLICE AND EUROPOL HELP SMASH COUNTERFEIT CURRENCY NETWORKS IN MADRID AND BOGOTA

On 15th October, Illicit Trade reported that police in Spain have arrested 8 people in a Europol-backed operation targeting a counterfeit currency network that investigators believe was responsible for the distribution of large quantities of bogus €50 banknotes in multiple locations across the country.  The suspects, the majority of whom are said to have been Senegalese nationals, were detained during raids on 4 properties in Madrid.

https://www.illicit-trade.com/2019/10/spanish-police-and-europol-help-smash-counterfeit-currency-networks-in-madrid-and-bogota

MALWARE THAT SPITS CASH OUT OF ATM HAS SPREAD ACROSS THE WORLD

On 15th October, Vice reported that a joint investigation with the German broadcaster Bayerischer Rundfunk (BR) has uncovered new details about a spate of so-called “jackpotting” attacks.  In Germany in 2017 these saw thieves make off with more than a million euros.  It explains that jackpotting is a technique where cybercriminals use malware or a piece of hardware to trick an ATM into ejecting all of its cash, no stolen credit card required. Hackers typically install the malware onto an ATM by physically opening a panel on the machine to reveal a USB port.  In January 2018, the US Secret Service financial institutions of the first jackpotting attacks in the US, although using different ATM malware.

https://www.vice.com/en_us/article/7x5ddg/malware-that-spits-cash-out-of-atms-has-spread-across-the-world

ISLE OF MAN: 3 RUSSIAN MEN ARRESTED AT CASINO HAVE MONEY LAUNDERING CHARGES AGAINST THEM WITHDRAWN

On 15th October, IOM Today reported that the 3 Russians were all arrested at the Palace Hotel and Casino on October 3rd after it was alleged they were acting suspiciously and using IT equipment.  However, there was not enough evidence to proceed and they have been released.

http://www.iomtoday.co.im/article.cfm?id=51368

UK HIGH COURT DISSOLVES 2 COMPANIES FOR £1 MILLION ART FRAUD

On 16th October, the Art Law & More blog site from Boodle Hatfield posted a report saying that the High Court had wound up 2 companies involved in a fraudulent art investment scheme after they were found to be “abusing” nearly £1 million of investor’s money – Warrington-based Gem Tobin Ltd and York-based Dionysus Design Services Ltd.

https://artlawandmore.com/2019/10/16/high-court-dissolves-two-companies-for-1-million-art-fraud/

THE COMMON TRAVEL AREA AND THE SPECIAL STATUS OF IRISH NATIONALS IN UK LAW

On 16th October, the House of Commons Library published this briefing paper.  The Common Travel Area is a special travel zone between the Republic of Ireland and the UK, Isle of Man and Channel Islands.  It dates back to the establishment of the Irish Free State in 1922.  This briefing focuses on how the CTA operates between the UK and the Republic of Ireland.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7661

CONSERVATION GROUP EXPOSES WIDESPREAD SEAFOOD FRAUD IN CANADA

On 16th October, Radio Canada International reported that Ocean Canada, a Canadian ocean conservation group is renewing its calls on the federal government to clamp down on seafood mislabelling, saying its latest investigation provides mounting evidence of a widespread and unchecked seafood fraud problem in Canada.

https://www.rcinet.ca/en/2019/10/16/oceana-canada-seafood-fraud-mislabelling/?src=ilaw

UK: NEW SOLICITOR CONDUCT RULES WILL IMPOSE TOUGHER SELF-REPORTING THRESHOLD

On 16th October, an article from Out-Law reported that solicitors in England and Wales will face tougher self-reporting requirements once new conduct rules come into force on 25th November.  It also said that firms would be reviewing their professional conduct policies, particularly around the use of alcohol, personal relationships, social media and personal conduct both inside and outside the workplace in preparation for the new regime.  The new requirements strengthen protection for consumers of legal services and client money and include separate codes of conduct for individuals and firms; simpler account rules and a revised enforcement strategy.  Solicitors will be required to promptly report any regulatory breaches by firms or individuals, including themselves, to the SRA.

https://www.pinsentmasons.com/out-law/news/new-solicitor-conduct-rules-will-impose-tougher-self-reporting-threshold

 

 

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INVOICE HIJACKING FRAUD – ENGLISH HIGH COURT ADOPTS PRACTICAL APPROACH TO ASSIST RECOVERY

On 16th October, Eversheds Sutherland published a briefing on a recent High Court case which it says is a useful case study and a welcome outcome.  World Proteins had paid some €2,000,000 to a fraudster, under the mistaken pretence that it was paying a genuine supplier that was chasing payment of genuine invoices and, after cancelling certain payments, World Proteins was out of pocket for €500,000.  World Proteins successfully applied for a freezing injunction over the bank account to which the payments were made – thus immediately preventing the fraudster from further dissipating remaining funds, and then set about recovering the funds in High Court proceedings.  The briefing said that the key to quickly recovering the funds is obtaining a declaration from the Court that the victim of the fraud has a proprietary interest in the funds held in the frozen bank account – that way the funds can be returned by the bank – but something that in the past courts were reluctant to do without a trial.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Commercial_dispute_resolution/Invoice_hijacking_fraud_-_Court_adopts_practical_approach_to_assist_recovery

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TRANSPARENCY IN THE BACKBONE OF GLOBAL SUPPLY CHAINS: FOREIGN TRADE ZONES

On 16th October, RUSI published a Commentary saying that while foreign trade zones bring many benefits, they require greater transparency in order to operate securely and ethically.  It says that foreign trade zones anywhere are defined by 3 key characteristics –

  1. they are geographically delineated areas considered to be outside of the normal customs area;
  2. they have a management authority that can be public, private or mixed; and
  3. their authorities offer special benefits in exchange for locating within the zone.

It says that FTZ form the backbone of global supply chains and are the lubricant to the cogwheels of globalisation – yet their importance is frequently overlooked or misunderstood in everything from international development goals to efforts at combating terrorism, transnational organised crime and trade fraud.  It warns that the absence of a standardised set of regulations for zones means that in many places they are the ‘Wild West’ of globalisation, cowboy capitalism at its worst.

https://rusi.org/commentary/transparency-backbone-global-supply-chains-foreign-trade-zones

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HM TREASURY PUBLISHES ISLE OF MAN “PARADISE PAPERS” VAT REVIEW

On 16th October, HM Treasury (finally) released its review of the so-called “Paradise Papers” claims about VAT evasion/avoidance involving yachts and private jets using the Isle of Man aircraft register.  It says that there is no evidence of aircraft VAT avoidance in the Isle of Man but further compliance checks should be implemented.  It says that the Isle of Man Government has correctly implemented and administered UK and EU VAT law for aircraft and yachts but should implement additional post-registration compliance procedures to ensure that the right VAT continues to be collected.  Following a series of allegations of VAT avoidance in late 2017, the Isle of Man Government invited HM Treasury to carry out a review of its VAT rules and procedures regarding aircraft and yacht importations.  Under the Isle of Man Act 1979, the island must apply VAT rules in a very similar way to the UK, but it is the responsibility of the Isle of Man to assure those rules.  The report finds that the Isle of Man Government carries out extensive and effective compliance checks during VAT registration but (perhaps surprisingly, if existing checks were “extensive and effective”) should implement further compliance checks in the years after registration to ensure that the right amount of VAT continues to be collected.  The accompanying news release also says that HMRC investigations into other aspects of the Paradise Papers continue.

https://www.gov.uk/government/publications/isle-of-man-aircraft-and-yachts-vat-review

https://www.theguardian.com/news/2017/nov/06/lewis-hamilton-avoided-taxes-jet-isle-of-man-scheme-paradise-papers

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PANAMA PAPERS LAW FIRM SUES NETFLIX OVER “THE LAUNDROMAT” FILM

On 16th October, OCCRP reported that Mossack and Fonseca are taking Netflix to court.  In a lawsuit in the US, the firm alleges defamation, invasion of privacy, trademark infringement, and false advertising, and requests that the film’s release be put on hold.  The suit states that the plaintiffs did not authorize the use of the Mossack Fonseca logo, which is used “in disparaging ways” a total of 8 times between the trailer and the film.

https://www.occrp.org/en/daily/10895-panama-papers-lawfirm-sues-netflix-over-the-laundromat-film

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UK: NICARAGUA (ASSET-FREEZING) REGULATIONS 2019

These Regulations make provision relating to the enforcement of EU Regulation 2019/1716/EU of 14th October concerning restrictive measures in view of the situation in Nicaragua.  It includes licensing and penalty provisions.  However, to date no person or entity has been designated under the EU Regulation. The sanctions measures include travel restrictions and freezing of funds and economic resources of persons responsible for serious human rights violations or abuses or for the repression of civil society and democratic opposition in Nicaragua, as well as persons whose actions, policies or activities otherwise undermine democracy and the rule of law in Nicaragua, and persons associated with them.

http://www.legislation.gov.uk/uksi/2019/1353/contents/made

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UK AMENDS ISIL/AL-QAIDA SANCTIONS LIST – REMOVES 1 NAME; ISLE OF MAN FOLLOWS SUIT

On 16th October, HM Treasury issued a Notice advising that Fabien CLAIN had been removed from the Consolidated List following EU Regulation 2019/1717/EU.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/839954/161019_ISIL_2019_1717.pdf

https://www.gov.im/news/2019/oct/16/financial-sanctions-isil-daesh-and-al-qaida/

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