19th October 2019
CHINESE NATIONAL SENTENCED TO 40 MONTHS IN PRISON FOR CONSPIRING TO ILLEGALLY EXPORT MILITARY AND SPACE-GRADE TECHNOLOGY FROM THE US TO CHINA
On 18th October, a news release from the US Immigration and Customs Enforcement advised that Tao Li, a 39-year-old Chinese national, had been sentenced to 40 months in prison, followed by 3 years of supervised release. Between December 2016 and January 2018, Li worked with other individuals in China to purchase radiation-hardened power amplifiers and supervisory circuits and illegally export them from the US to China. Such components are primarily used for military and space applications. Li, who resided in China, used multiple aliases to contact individuals in the US, including representatives of US-based private companies, to try to obtain the electronic components; and, Li and his co-conspirators agreed to pay a “risk fee” to illegally export the electronic components to China.
BREXIT AND THE FUTURE OF EXPORT CONTROLS
On 17th October, Brodies LLP published an article that reviews what has been done to prepare the UK export controls system for Brexit. It points out that while the UK is still part of the EU, most of the legislation applicable to export rules is based on EU law. The key changes to export rules as a result of Brexit broadly fall into 2 categories –
- changes to licensing processes and applicable licensing authorities in relation to trade involving the EU; and
- the potential for divergence between the EU and UK’s approach to export and sanctions regulation in a post-Brexit future.
The update is most relevant to businesses that operate internationally or export goods or services to or via the EU. It may also be relevant to businesses that import goods or services from the EU.
SEC CHAIR LAMENTS PERCEIVED LACK OF INTERNATIONAL ANTI-CORRUPTION ENFORCEMENT EFFORTS
In a round-up of anti-corruption matters for September, SEC Chair Jay Clayton argued that the FCPA enforcement efforts of the SEC may be having unintended consequences due to a lack of coordinated global anti-corruption enforcement efforts. It is said that it is not clear why Clayton seems to have reverted to a less positive position on international anti-corruption efforts, but he did signal in his September 2019 remarks that he would be pressing this issue when he engages with his international counterparts.
US SLAPS NEW SANCTIONS ON CUBA OVER HUMAN RIGHTS AND SUPPORT FOR VENEZUELA
On 18th October, it was announced that the Department of Commerce said in a statement that it is revoking existing licences for aircraft leases to Cuban state-owned airlines and will deny future applications for aircraft leases. It will also expand the sanctions on Cuba to include more foreign goods containing US contents.
COMPANY PLEADS GUILTY TO SMUGGLING ENDANGERED SPECIES GOODS INTO US
On 17th October, WTOP in Virginia reported that court documents indicate The British Shop used false shipping labels to ship the items to the US, including suitcases and cigar boxes made from crocodile leather, sawfish blades and multiple pieces made from sea turtle shell. The company agreed to forfeit $175,000 in a plea deal. A Virginia antique dealer and golf course architect, Keith Foster, had previously pleaded guilty to importing the items to his Middleburg shop.
MALTA: MONEY LAUNDERING CASE LINKED TO DEATH OF DAPHNE CARUANA GALIZIA RETURNED TO MAGISTRATES COURT
On 18th October, the Times of Malta reported that the Attorney General had exercised his discretion and sent the case of brothers George and Alfred Degiorgio from the Criminal Court to a magistrates’ court. If the case was tried before the Criminal Court, the maximum punishment is 18 years or a fine of €2.5 million or both. When the case is decided by magistrate, the maximum punishment goes down to 9 years or a fine of €250,000 or both. The decision was taken after the prosecution had declared that it had no further evidence to put forward. Although both men claimed to be unemployed, they did not file tax returns and had mostly dormant bank accounts – but appeared to lead a lavish lifestyle, owning luxury cars and pleasure boats.
ISLE OF MAN: TRUST SERVICES COMPANY ACCUSED OF DIVERTING MILLIONS OF POUNDS OF CLIENT MONEY – AND USING IT TO FUND THE LIFESTYLE OF THE FAMILY OF ITS BOSS
IOM Today on 18th October reported the case of Montpelier (Trust and Corporate) Services Ltd. The Deemster (high court judge) appointed an inspector to investigate the company’s affairs and Montpelier says that it will appeal the decision. The Financial Services Authority had applied for the appointments in the public interest. the FSA alleged that millions of pounds of client money were paid to companies beneficially owned by Edward Watkin Gittins.
HONDURAN PRESIDENT IMPLICATED IN BROTHER’S BRIBERY CONVICTION
On 19th October, Reuters reported that Honduran President Juan Orlando Hernandez emerged battered from the trial and conviction of his brother after the US DoJ concluded that the evidence showed narcotraffickers had bribed the president and his party. Juan Antonio “Tony” Hernandez was found guilty of conspiring to import cocaine, illicit weapons possession and lying to US authorities.
TRANSPARENCY AND TAX EVASION: EVIDENCE FROM THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)
On 1st February, a Working Paper from the Graduate School of Stanford Business examines how US individuals respond to regulation intended to reduce offshore tax evasion. Specifically, it studies investment responses to FATCA, which requires foreign financial institutions to report information to the US government regarding US account-holders. It documents a $15.3 billion decrease in equity foreign portfolio investment to the US from tax haven countries after FATCA implementation. The paper also provides evidence of other important consequences of this regulation, including increased expatriations of US citizens and greater investment in alternative assets not subject to FATCA reporting, such as residential real estate and artwork.
UNDERCOVER POLICING IN ENGLAND AND WALES
On 18th October, the House of Commons Library published a briefing which explains the regulatory framework that governs undercover policing operations in England and Wales and the oversight mechanisms intended to ensure compliance with that framework. It also looks at the ‘undercover policing scandal’ which followed revelations that undercover officers had in the past engaged in intimate relationships with surveillance subjects and used the identities of dead children for cover. It explains the resultant litigation and the forthcoming public Inquiry into undercover policing.
PIRACY AND ARMED ROBBERY AGAINST SHIPS IN ASIA
On 19th October, Hellenic Shipping News reported on a report on Q3 2019 piracy and armed robbery against ships in Asia. It says that there were a total of 54 incidents of piracy and armed robbery against ships (comprising 49 actual incidents and 5 attempted incidents) were reported in Asia during January-September 2019. This compared to 64 incidents during January-September 2018 (comprising 50 actual incidents and 14 attempted incidents), and this represents a 16% decrease in the total number of incidents reported. However, in terms of actual incidents, there was only 1 incident less during January-September 2019 compared to the same period in 2018.
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