22nd October 2019
2 COMPANIES IN JAPAN “UNKNOWINGLY” INVOLVED IN CAR SMUGGLING TO NORTH KOREA
Nippon.com on 21st October reported that 2 companies in Japan allegedly involved in the smuggling of German-made luxury cars to North Korea handled the vehicles without knowing that they were bound for the reclusive country, according to a summary of an investigation report. Mino Logistics Japan Co and affiliated Zuisyo Co were named in a report released in July by C4ADS.
SPAIN: MOROCCAN “HASH BARONS” TARGETED BY AML CAMPAIGN
On 21st October, Yabaladi reported operations by Spain’s National Police and Civil Guard, which have targeted some Moroccan “hash barons”. Over the last 2 months, Spanish authorities have led a massive campaign against drug traffickers and money launderers in southern Spain.
https://en.yabiladi.com/articles/details/84648/spain-moroccan-barons-targeted-anti-money.html
D&O INSURANCE: DE FACTO DIRECTORS AND POLICY IMPLICATIONS
D&O insurance covers payments to the directors and officers of a company, or to the organisation(s) itself, as indemnification for losses or advancement of defence costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. On 18th October, Womble Bond Dickinson published an article saying that D&O policies typically provide cover for claims and investigations against directors including de facto directors – in the light of a recent English High Court case, it asks exactly what does de facto director mean The case considered involved a dispute between 2 brothers, where one claimed the other was a de facto director which gave rise to a fiduciary duty to the company equivalent to that of a de jure director, and that he was in fraudulent breach of that fiduciary duty. In its decision, the Court provided useful guidance on what would constitute acting in the capacity of a director for the purposes of the insurance.
https://www.womblebonddickinson.com/uk/insights/articles-and-briefings/de-facto-directors
DE-RISKING IN THE CARIBBEAN
On 22nd October, KYC 360 carried an article examining the effects of de-risking on banks and other businesses in the region. It says that, from the perspective of international banks, mainly from Canada, the US, and Europe, as well as their governmental regulatory agencies, the Caribbean is high risk due to weaker compliance and AML regimes — or at least it has been treated this way. To avoid the pain of being stung by financial fraud, paying large fines, and suffering from reputational risk, many banks opted to radically reduce their exposure to the region. Banks pulling out of the region include the Bank of America, Scotiabank, Royal Bank of Canada, and CIBC. Banks from the Netherlands, Germany, and the UK also restricted their correspondent banking relationships business with Caribbean jurisdictions. It says that de-risking has been a major economic problem, and that a 2017 survey found that 21 of the 23 banks in 12 Caribbean countries had lost at least one correspondent banking relationship. The impact was particularly hard on countries in the Eastern Caribbean (in particular Antigua and Barbuda and St. Kitts-Nevis), Suriname, and Belize.
https://www.riskscreen.com/kyc360/news/is-there-a-new-normal-for-de-risking-in-the-caribbean/
NIGERIAN ANTI-GRAFT OFFICE CHARGES 2 BRITONS IN CONNECTION WITH FAILED GAS DEAL
KYC 360 on 22nd October reported that James Richard Nolan and Adam Quinn have pleaded not guilty to charges of alleged money laundering in connection with an ill-fated gas deal that has left the government facing a disputed bill of more than $9 billion. 16 counts of money laundering were put forward by the Economic and Financial Crimes Commission (EFCC). Nolan is remanded in custody and Quinn is still at large. The charges relate to a 2010 contract with BVI-based firm Process and Industrial Developments to build and operate a gas-processing plant.
COURT SCRAPS 3-YEAR CORRUPTION SENTENCE FOR FORMER ROMANIAN MP SOVA, CASE TO BE RE-TRIED
On 22nd October, Romania Insider reported that the case against former MP Dan Sova, a close partner of former prime minister Victor Ponta, will be retried after the High Court scrapped a 3-year final sentence on technical grounds. He received a 3-year jail sentence and €100,000 fine last year, having alleged claimed and received a total of €100,000 in exchange for influence peddling.
https://www.romania-insider.com/sova-sentence-scrapped-october-2019
ENGLAND’S CHILDREN COMMISSIONER CALLING FOR LOOT BOXES TO BE CLASSIFIED AS GAMBLING
On 22nd October, Calvin Ayre relates a Guardian report that the Commissioner is calling for loot boxes to be classified as gambling. To help curb potential symptoms of gambling problems in children, she also wants maximum spending limits applied to the practice.
https://calvinayre.com/2019/10/22/business/englands-children-commissioner-wants-loot-box-regulation/
CHINESE POLICE RAID MAJOR CREDIT CARD COMPANY LINKED TO ONLINE GAMBLING
Calvin Ayre on 22nd October reported that Chinese media reported that police had staged a raid on the Hangzhou offices of 51 Credit Card Inc, a Hong Kong-listed fintech company that claims to be China’s largest credit card bill management service with over 83 million active users. It is said that media reports have cited a variety of reasons that may be behind the raid, including improper use of customer data. Another source reported that the raid was the result of allegations that the company was involved in processing payments for internationally-licensed online gambling operators – as, with the exception of the state-run lotteries, gambling is strictly forbidden on the Chinese mainland.
GUERNSEY: INSOLVENT TRUST FIRM WOULD HAVE BEEN FINED FOR FAILINGS IN RELATION TO ITS COMPLIANCE AND COMPETENCE
Guernsey Press on 22nd October reported that a trust company which helped to manage some armed forces pensions has been found to have failings in relation to its compliance and competence. Certes Capital Limited, formerly Marlborough Pension Trustees Limited, has gone into voluntary liquidation and is insolvent.
https://guernseypress.com/news/2019/10/22/insolvent-trust-firm-would-have-been-fined/
GUERNSEY FOUNDATIONS UPDATE
On 21st October, Ogier published an article reviewing the position since foundations were introduced in Guernsey in 2012, saying that 107 foundations have been registered and sets out to provide a general update on developments that practitioners need to be aware of. The only major legal changes was that in 2017 which had the effect of requiring foundations to have a resident agent. It says that the firm has seen an increase in the use of foundations established specifically to act as trustee of one or more trusts, but highlights developments on this front that practitioners should be aware of.
https://www.ogier.com/publications/guernsey-foundations-update
FREIGHT FORWARDERS BODY FIATA PUBLISHES BEST PRACTICES ON PREVENTION OF BRIBERY
In its e-Flash on 21st October, FIATA reminds one that it has released a best practices paper on prevention of bribery during its 2019 World Congress in Cape Town. This paper aims at addressing the challenge of corruption and bribery in the international logistics and freight forwarding industry. It provides practitioners with advices on internal control measures against bribery and on cooperating with other stakeholders to prevent it.
https://fiata.com/media/documents-for-download.html
CHINA’S GREAT GAME IN THE MIDDLE EAST
On 21st October, the European Council for Foreign Relations published a paper saying that China has significantly increased its economic, political, and – to a lesser extent – security footprint in the Middle East in the past decade, becoming the biggest trade partner and external investor for many countries in the region. It also says that Europeans should monitor China’s growing influence on regional stability and political dynamics, especially in relation to sensitive issues such as surveillance technology and arms sales.
https://www.ecfr.eu/page/-/china_great_game_middle_east.pdf
BERMUDA BECOMES FIRST COUNTRY TO ACCEPT STABLECOINS FOR GOVERNMENT PAYMENTS
On 22nd October, Greenberg Traurig published an article saying that on 16th October, the Bermuda Premier announced that Bermuda has committed to accept, for payment of government taxes, fees, and services, 1:1 US-dollar-backed digital currencies of entities licensed by the Bermuda Monetary Authority (BMA) under the 2018 Digital Asset Business Act (DABA), becoming the first nation to do so. In launching its “Currency Standard Initiative,” Bermuda aims to drive adoption of regulated 1:1 US-dollar-backed stable coins issued by private entities, rather than create its own digital fiat currency. It says that the government has stated that it intends to explore payment of the stable coins to civil servants and contractors on an opt-in basis to encourage and support adoption and to provide a friendly jurisdiction for innovation for the international fintech community. Another programme that was announced is an intention to create a digital identity authentication mechanism and bridge for Bermuda residents.
AMENDMENTS TO UK PROCEEDS OF CRIME ACT USE FOR INTERNATIONAL CASES
On 22nd October, 2 Orders were published that provide the rules for implementing changes to the use of POCA 2002 from November. The changes involved were introduced by means of the Criminal Finances Act 2017, and have applied in respect of domestic cases from April 2018. Their use in respect of international cases and mutual assistance will be available from 22nd November.
http://www.legislation.gov.uk/uksi/2019/1369/contents/made
http://www.legislation.gov.uk/uksi/2019/1368/contents/made
UK – EXTRADITION (PROVISIONAL ARREST) BILL: IMPACT ASSESSMENT
On 22nd October, the Home Office published an Impact Assessment about the Bill which amends Part 2 of the Extradition Act 2003 to create a new power of arrest for extradition purposes. The new power deals with extradition to territories which are not EU Member States (where, at least pre-Brexit the European arrest warrant powers are available) but with which the UK has formal extradition arrangements. The new power of arrest will enable law enforcement officers to arrest individuals without a warrant of arrest from a UK court in certain cases. Currently, when a person is wanted for a serious crime by an international partner under Part 2 of the Extradition Act, but not subject to a provisional arrest or extradition request, the police cannot make an arrest without a warrant from a UK court.
ANTIGUA & BARBUDA: CUSTOMS OFFICERS INVESTIGATING FRAUD IN CUSTOMS & EXCISE DIVISION GET POLICE PROTECTION
On 22nd October, the Daily Observer reported that the investigations into the alleged more than $3 million fraud at the Customs and Excise Division will continue despite rising fears by Customs officers after the recent shooting of one of their own. It is alleged that a scam masterminded by brokers and officers had caused a revenue shortfall to the tune of over $3 million in unpaid port taxes.
https://www.antiguaobserver.com/customs-officers-investigating-fraud-get-police-protection
SWISS ATTORNEY GENERAL FILES FIRST INDICTMENT IN PETROBRAS “CAR WASH” SCANDAL
On 22nd October, Reuters and others reported that the Office of the Attorney General (OAG) says it has filed its first Petrobras indictment with the Federal Criminal Court against a Swiss-Brazilian intermediary charged with money laundering and bribery linked to the Operation “Car Wash” international bribery and corruption case – an investigation into the state-run Petrobras oil company and Odebrecht, Latin America’s largest construction company. The OAG said good bilateral co-operation with the Brazilian and Portuguese prosecuting authorities has contributed, with criminal proceedings for money laundering of funds derived from corruption had already been opened in Brazil and Portugal against the same individual involved. To date, with something like 60 cases in Switzerland alone, Switzerland has seized assets worth over CHF620 million (around $627 million) of which CHF390 million has been returned to Brazil.
MALDIVES: FIGHTING CORRUPTION AND CONSTRUCTION IN A TROPICAL PARADISE
Deutsche Welle on 22nd October published a video saying that construction is threatening the fragile coral reefs and azure blue lagoons of the Maldives, but some locals are taking a stand against the building boom. It says that with the capital already over-developed, investors are building artificial islands and recreating lagoons. In the process, they’re damaging reefs and are flying in palm trees from neighbouring islands.
CROATIA TAKES GUERNSEY OFF BLACKLIST
On 22nd October, the Bailiwick Express reported that Croatia has taken Guernsey off its national tax blacklist, recognising the island as a co-operative jurisdiction with respect to tax.
https://gsy.bailiwickexpress.com/gsy/business/croatia-takes-guernsey-blacklist/
UK STAFF GUIDANCE FOR STAFF ON THE COMMON TRAVEL AREA
On 22nd October, UK Visas and Immigration published comprehensive guidance for staff on the CTA (UK, Ireland, Channel Islands and Isle of Man) including its legal basis, immigration rules, treatment of legal and illegal immigrants, instructions and requirements for people travelling to and within the CTA and in-country encounters.
EU: DOZENS ARRESTED IN CONNECTION WITH MULTI-MILLION VAT EVASION SCHEMES
A news release from Europol on 22nd October announced a clampdown which targeted a Hungarian-led organised crime group responsible for defrauding the EU of approximately €3 million. In total, police searched 193 premises, and seized more than €2.3 million in cash and goods, including real estate and luxury vehicles. European Investigation Orders were carried out simultaneously in Poland, Slovakia and the UK, and the ringleader was arrested in the US. Fake companies were set up that provided fictitious invoices to other enterprises, without in reality delivering the goods and services. In addition, earlier in October, 6 people were arrested in a separate fraud investigation led Hungary for their involvement in a VAT evasion scheme which defrauded EU citizens of over €12 million in tax revenues via companies selling mobile phones. This ring imported mobile phones VAT-free from Austria, sold these phones in Hungary including a VAT charge and then went missing without paying the VAT owed to the Hungarian authorities.
VENEZUELA MULLING “OUTLANDISH” PLAN TO ACCESS FROZEN GOLD IN LONDON
On 22nd October, Insight Crime published an article saying that a little-known British financier has been wooing Venezuelan officials with a plan to liberate $1.5 billion of Venezuelan gold retained in the Bank of England. Charles Vincent, of the Geneva-based firm Pipaud and Partners Saul, is said to have presented the proposal to Venezuelan central bank officials in August, the proposal involving lobbying the British government to sell the gold to an Austrian bank at a 30% discount on its market value.
https://www.insightcrime.org/news/brief/venezuela-gold-repatriation-frozen-assets-london/
ISLE OF MAN REPEALS THE FRAUDULENT MEDIUMS ACT 1952
The latest Isle of Man Legislation Newsletter advises that this Act (or rather its remnants) is to be repealed with effect from 30th October by means of the Consumer Protection from Unfair Trading Regulations 2019. At present, still available online, was said to be a replacement of certain provisions of section 2 of the Vagrancy Act, 1896, and to provide express provision for the punishment of persons who fraudulently purported to act as spiritualistic mediums or to exercise powers of telepathy, clairvoyance or other similar powers. Of course, being a “fraudulent” medium depends on one believing that there is such a thing as a “genuine” one… It mirrored a similar UK Act of 1951 (which repealed the Witchcraft Act 1735 in the UK), which was repealed in 2008, when a new EU Directive on consumer protection (not medium protection…) came into force. Both Acts provided an exemption where one was acting as a psychic etc solely for the purpose of entertainment.
NEW REPORT REVEALS GLOBAL EXPRESS AND SMALL PARCELS MARKET GROWTH
On 22nd October, Parcel & Postal Technology International reported that new research from logistics and supply chain consultancy Transport Intelligence (Ti) has found that the global parcels market grew to a value of €306.2 billion in 2018 as domestic market growth of 8.8% outpaced international growth of 6.9%. E-commerce continued to be a key driver in both the domestic and international markets. Ti also expects market growth to slow in 2019, with the international market slowing most significantly with a forecast expansion of 5.5%.
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