October 30, 2019 – raytodd.blog

CANNABIS-RELATED DUE DILIGENCE: WHAT ARE THE RED FLAGS FOR CORRUPTION?

A post on the FCPA Blog on 30^th October (and which originally appeared on a Baker McKenzie blog) says that if the DoJ or state regulators discover that a state licence was acquired through corrupt means, the licence will not provide any protection from US federal law enforcement. The post says that there is no suitable corruption risk guidance on potential red flags with respect to the state-legal marijuana industry, and seeks to be the first step in providing such guidance. It lists factors which may make a state licensing scheme more susceptible to corruption and should be taken into account when evaluating the relative corruption risks in any particular state. It then suggests some red flags indicating a business may have obtained a state licence improperly.

https://fcpablog.com/2019/10/29/cannabis-related-due-diligence-what-are-the-red-flags-for-corruption/

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UNAOIL CASE: OIL EXECUTIVES PLEAD GUILTY IN US FOR ROLES IN BRIBERY SCHEME INVOLVING FOREIGN OFFICIALS

A news release from the US DoJ on 30^th October announced that the former CEO and chief operations officer of a Monaco-based intermediary company have pleaded guilty for their roles in a scheme to corruptly facilitate millions of dollars in bribe payments to officials in multiple countries. These included Algeria, Angola, Azerbaijan, the Democratic Republic of Congo, Iran, Iraq, Kazakhstan, Libya and Syria. The company’s former business development director also pleaded guilty for his role in paying bribes in Libya. Cyrus Ahsani, 51, and Saman Ahsani, 46, both of the UK, had pleaded guilty to conspiracy to violate the FCPA, and UK resident Steven Hunter, 50, a former business development director, later also pleaded guilty to conspiracy to violate the FCPA. Cyrus and Saman Ahsani are set for sentencing in April 2020, and Hunter’s sentencing is scheduled for March 2020. It is said that the governments of Australia, Canada, France, Guernsey, Italy, Monaco, the Netherlands, Portugal, Switzerland and UK provided significant assistance in this matter as did the SEC and Eurojust.

https://www.justice.gov/opa/pr/oil-executives-plead-guilty-roles-bribery-scheme-involving-foreign-officials

FATF METHODOLOGY FOR ASSESSING COMPLIANCE WITH THE FATF RECOMMENDATIONS AND THE EFFECTIVENESS OF AML/CFT SYSTEMS

On 30^th October, FATF issued an updated Methodology covering how it (and regional FATF-style bodies) carries out its mutual evaluations. The amendments made are connected to assessments relating to virtual assets and their providers, and are detailed on page 179 of the guidance, including –

a new paragraph and footnote to provide guidance on how to assess requirements relating to virtual assets and virtual asset service providers;
the addition of references to virtual assets and virtual asset service providers; and
the addition of further guidance on how to assess requirements relating to virtual assets and virtual asset service providers and new criteria to reflect the amendments to the FATF Standards.

http://www.fatf-gafi.org/media/fatf/documents/methodology/FATF%20Methodology%2022%20Feb%202013.pdf

UPDATE OF THE EU CONTROL LIST OF DUAL-USE ITEMS

The World Trade Control blog reported on 29^th October that an update of the dual-use export Control List in Annex I to the Dual-Use Regulation was adopted on 17^th October by the European Commission to align it with the changes that occurred with the decision taken within the framework of the international non-proliferation regimes and export control arrangements in 2018. The post says that the mains changes for 2019 result from the amendments agreed at the Wassenaar Arrangement and from minor changes introduced by the Missile Technology Control Regime. The post highlights some of the changes made. It says that the Commission Delegated Regulation will enter into force approximately 2 months after its adoption by the Council and the European Parliament.

http://www.worldtradecontrols.com/new-update-of-the-eu-control-list-of-dual-use-items/

A detailed summary of all the changes is available at –

http://www.worldtradecontrols.com/new-update-of-the-eu-control-list-of-dual-use-items/

IDENTIFYING LAW ENFORCEMENT NEEDS FOR CONDUCTING CRIMINAL INVESTIGATIONS INVOLVING EVIDENCE ON THE DARK WEB

On 30^th October, the RAND Corporation in the US published a paper that flows from a workshop that the RAND Corporation and the Police Executive Research Forum (PERF) convened on behalf of the National Institute of Justice (NIJ) to bring together a diverse group of practitioners and researchers to identify the highest-priority problems and potential solutions related to evidence on the dark web. Participants identified 46 potential solutions, or needs, which include improving training for law enforcement officers, sharing information across jurisdictions, and investigating the gaps and shortcomings in current laws related to searching packages. Key findings were that improving training and information sharing will likely have the greatest impact, and there is a lack of knowledge about what the dark web is and how criminals leverage it. The paper makes a number of recommendations to overcome the shortcomings identified.

https://www.rand.org/pubs/research_reports/RR2704.html

MANAGING SANCTIONS RISK IN CONTRACTS: THE HIGH COURT PROVIDES GUIDANCE

On 24^th October, HFW published a briefing which recommends that all contracts for international trade should contain a robust sanctions clause, and that 2 recent decisions of the High Court provided useful guidance on the interpretation of such clauses.

http://www.hfw.com/Managing-sanctions-risk-in-contracts-the-High-Court-provides-guidance

The Dual-Use Game – can you identify all the dual-use items?

https://accuity.com/resources/dual-use-goods-game/?intcmp=summary-resources-dual-use-goods-game&cmpid=PSC%25257CACCU%25257CBACOM-20190610-GLOB-EN-AccuityBrand2019&sfid=7011v000001Ag3nAAC

GLOBAL CARGO INDUSTRY WAKES UP TO TRADE SANCTIONS AND EXPORT RISK

The Bob’s Guide website on 29^th October contained a post reporting a survey of the global cargo industry from Accuity (a provider of financial crime screening, payments and KYC solutions) which revealed that 80% of cargo businesses named reputational risk as driving their trade sanctions and export risk compliance programmes, and that while 73% still use at least some paper-based systems to deal with air waybills and house waybills, 78% list automation as a high priority when considering a screening solution. The post comments that since OFAC has filed a record $1.3 billion of penalties so far this year spanning a range of industries, it is clear the cargo sector cannot afford to be a weak link in the supply chain, and the survey shows that the industry is increasingly aware of the risks of non-compliance and beginning to take proactive steps to address them. It notes that a guidance paper published recently by IATA said this was “a priority for airlines which are all doing their utmost to develop appropriate due diligence procedures to manage shipments of so-called dual use goods, military cargo or embargoed/prohibited/restricted items”.

https://www.bobsguide.com/guide/news/2019/Oct/29/global-cargo-industry-wakes-up-to-trade-sanctions-and-export-risk/

https://accuity.com/resources/addressing-challenges-in-trade-sanctions-export-risk-a-2019-industry-snapshot/?intcmp=summary-resources-addressing-challenges-in-trade-sanctions-export-risk-a-2019-industry-snapshot&cmpid=PSC%25257CACCU%25257CBACOM-20190610-GLOB-EN-AccuityBrand2019&sfid=7011v000001Ag3nAAC

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