1st November 2019
MARITIME CLAIMS IN THE INDO-PACIFIC
The Asia Maritime Transparency Initiative has produced an interactive map showing the competing claims of 40 states in the Indo-Pacific area.
US EXTENDS CIVIL NUCLEAR COOPERATION WAIVERS FOR IRAN
On 31st October, VoA reported that the Trump administration extending sanctions waivers that allow foreign companies to work with Iran’s civilian nuclear program without US penalties. The waivers had been due to expire but were extended for another 90 days. They will permit European, Russian and Chinese companies to continue to work at Iranian civilian nuclear facilities.
SPAIN’S FCC SAYS CO-OPERATING OVER PANAMA CORRUPTION PROBE
US News on 31st October reported that Spanish building and infrastructure company FCC said that it was fully co-operating with a corruption investigation linked to €82 million in payments it allegedly made in Panama. Spain’s High Court has charged FCC with corruption and money laundering in connection with the Panama payments to obtain metro and hospital contracts in the Central American country between 2010 and 2014, having overcharged for supplies as part of a consortium including Brazilian company, Odebrecht. FCC is now controlled by Mexican tycoon Carlos Slim through his Grupo Carso.
THE FIFTH MONEY LAUNDERING DIRECTIVE AND LEGAL COMPLIANCE
Lawyer Monthly has published an article saying that the 10th January is a date that the business world cannot afford to ignore. It is the date the Fifth Anti-Money Laundering Directive will become law throughout the EU, and that it places plenty of responsibility on many of those in business by boosting existing transparency rules.
UK GAMBLING COMMISSION CEO SAYS MALTA OPERATORS MUST IMPROVE COMPLIANCE STANDARDS
On 1st November, KYC 360 reported that the Gambling Commission CEO Neil McArthur has said that the level of compliance among UK-facing operators based in Malta is currently “not good enough”.
AUSTRALIA STARTS TO MOVE ON MODERN SLAVERY
On 23rd October, BAL Lawyers published an article saying that Australia passed the Modern Slavery Act 2018 in November last year. The Act came into effect on 1st January and imposes requirements on entities based, or operating, in Australia, which have an annual consolidated revenue of more than $100 million. An annual report will be made to the Minister for Home Affairs and will be listed on the Modern Slavery Statements Register, which will be publicly available, and it is envisaged that those who fail to report will be subjected to a ‘name and shame’ regime.
UK: GAMBLING-RELATED HARMS
On 31st October, the House of Lords Library published a briefing paper that contains a selection of material relevant for the forthcoming question for short debate on gaming and gambling that takes place on 5th November.
TAIWANESE DEFENSE MINISTRY WINS DAMAGES IN MINESWEEPER LOAN FRAUD CASE
On 1st November, Focus Taiwan reported that the Ministry of National Defense (MND) was awarded damages of US$2.40 million in a high-profile case of loan fraud related to a Navy contract dating back to 2014 and involving a contract to build 6 minesweepers. It is reported that Ching Fu, the biggest private shipbuilding company in Taiwan which was then experiencing cash flow problems, falsified some of the documents required to obtain a government loan.
PROBE OF ORIGIN FRAUD LIKELY IMPACT CHINA’S ALUMINIUM EXPORTS TO VIETNAM
The Shanghai Metals Market on 1st November reported that China’s exports of aluminium extrusion to Vietnam, around 10-12% of China’s total exports since 2018, will likely face impact after a place-of-origin fraud was uncovered. Vietnam authorities seized a suspicious aluminium shipment worth $4 million that was heading to the US and other countries.
VIETNAM AND, US CUSTOMS JOIN HANDS IN FIGHT AGAINST ORIGIN FRAUD
Vietnam Plus on 1st November reported that claims that the customs authority of Vietnam has been proactively fighting fraud of origin and illegal trans-shipment.
FIRST DEDICATED ALIBABA CHINA-EUROPE CARGO TRAIN ARRIVES IN LIÈGE
On 31st October, Lloyds Loading List reported that the service is said to be the ‘first dedicated rail line serving cross-border e-commerce between the Yangtze River Delta region, Central Asia and Europe’. The ‘China Railway Express (Yiwu-Liège) Alibaba eWTP Cainiao train’, loaded with 82 cargo containers, arrived in Liège for the first time recently after a 17-day trip which saw it travel through Kazakhstan, Russia, Belarus, Poland and Germany, before arriving at the Belgian logistics hub. Last year, Liège was designated by Alibaba’s logistics arm, Cainiao Smart Logistics Network, as one of 5 global hubs, the others being Kuala Lumpur, Dubai, Moscow and Hangzhou. China-Europe e-commerce traffic has been an important factor in the resurgence of Liège Airport in the last few years.
PORT OF DUISBURG AND COSCO SHIPPING TO BUILD EUROPE’S LARGEST INLAND CONTAINER TERMINAL TO TAP INTO “BOOMING” SILK ROAD RAIL VOLUMES
Loadstar on 31st October reported that, according to port operator Duisport, the €100m ‘Duisburg Gateway Terminal’ will be built by 2022 on a 240,000sq metre site at the German port.
UK SUPREME COURT: BANK FAILED IN DUTY TO DETECT ‘ONE-MAN COMPANY’ FRAUD
On 31st October, Out-Law reported that an investment bank breached its ‘Quincecare’ duty to detect and prevent fraud when it made payments from a client account on the fraudulent instruction of the client’s director and sole shareholder; and that it was irrelevant whether or not the fraud was attributable to the company, which is now in liquidation. In considering the recent Supreme Court judgment, the article points out that banks are not generally liable to compensate customers for fraudulent payments if the customer authorised the payment. However, the 1992 Quincecare principle is that a banker is under a duty to refuse an ordered payment where “he has reasonable grounds (although not necessarily proof) for believing that the order is an attempt to misappropriate the funds of the company”.
VIETNAM ARRESTS TANKER OVER ILLEGAL SHIP-TO-SHIP TRANSFER OF OIL
Insurance Marine News on 31st October reported that a Mongolian-flagged tanker, the Oki Maru, was arrested in Vietnamese waters over an alleged illegal ship-to-ship (STS) transfer of oil with a Vietnamese-flagged vessel, though the Vietnam-flagged vessel that received oil was not identified. At the time of the arrest, the 2,000 dwt clean tanker was loaded with 350,000 litres of diesel oil without legal documentation and had 11 Thai crew.
SOUTH FLORIDA RESIDENT ARRESTED FOR ATTEMPTING TO ILLEGALLY EXPORT CONTROLLED ITEMS TO LIBYA
On 30th October, a DoJ news release advised that Peter Sotis, 55, had been arrested based on an indictment charging him with conspiracy to violate and attempted violation of the International Emergency Economic Powers Act (IEEPA) and the Export Administration Regulations (EAR), as well as smuggling of goods. He was the owner and principal of Add Helium, a Fort Lauderdale diving company, and he is said to have transferred dual-use goods (rebreathers – apparatus that absorbs the carbon dioxide of a scuba diver’s exhaled breath to permit the rebreathing/recycling of each breath, and produces no bubbles, thereby concealing the diver’s activities from those on the surface, and allowing a diver to stay underwater longer compared with normal diving equipment) for export to Libya without the required Department of Commerce licence.
CAMBODIAN OIL: THE DREAM THAT REFUSES TO DIE
Nikkei Asian Review on 1st November reported that a sector beset by delays and corruption now pins its hopes on debt-crippled energy company, Singapore-based KrisEnergy, which it hopes will have oil on stream next year.
NEW YORK COURT ORDERS VERITASEUM TO PAY BACK $8 MILLION FROM ILLEGAL ICO
Coin Telegraph on 1st November reported that Reggie Middleton, the CEO of Delaware-registered blockchain firm Veritaseum LLC and New York-registered Veritaseum Inc has been ordered to pay $8.4 million in disgorgement, and is liable for a civil penalty of $1 million, as part of a settlement of a securities fraud case against several defendants involved in Veritaseum. The SEC had acted over an unregistered $14.8 million initial coin offering from 2017-18.
HIGH COURT CLAIMS BY FAILED UK TAX AVOIDANCE SCHEME USERS STRUCK OUT
In an article published on 1st November, Out-Law explained that the Court of Appeal has held that claims by several hundred individuals who had participated in film schemes and other tax avoidance schemes against HMRC that, although other proceedings had decided that the relevant schemes failed to generate the intended losses, they claimed that HMRC’s procedural errors meant that they were entitled to the tax relief claimed.
ENGLISH COURTS KEEP CONTROL OVER DISCLOSURE CONFLICTS – WHEN THE LAW OF ONE JURISDICTION EXPOSES A PERSON FOR CONDUCT THAT THE LAW OF THE OTHER JURISDICTION OBLIGES THEM TO PERFORM
A briefing from Corker Bining on 1st November was concerned with the conundrum of recognising the law of another jurisdiction when the laws of the two jurisdictions are in conflict. The article is concerned with cases heard before the English courts where foreign claimants in civil litigation sought to depart from the usual rules of disclosure in order not to commit a crime contrary to the laws of their home countries. In both cases involved the courts decided that the mere threat of criminal sanction under foreign law was insufficient to displace the domestic obligations imposed by the Civil Procedure Rules. The article examines the judgments involved and asks how they relate to the judgment of the High Court in another case, which concerned the power of the SFO to compel the production of documents held overseas by foreign persons.
WHERE THERE’S A (DIRECTING MIND AND) WILL, THERE’S A WAY (TO PROSECUTE A CORPORATE)
A blog post from Corker Bining on 1st November about the Alstom case in the Court of Appeal, where it was held that it is not generally unfair to try a corporate in the absence of its directing mind and will – the post saying that this opens the door to a swathe of questions as to how the SFO can or should approach the prosecution of a corporate when one or more of its directing mind(s) and will(s) is absent from the trial. The situation also brings in the question of whether the prosecution can make use of a compelled interview – and was someone interviewed in their own right individual as a suspect or as a directing mind and will for the corporate suspect. Th post poses the question – is the compelled testimony of a directing mind and will admissible against the corporate at trial?
RUSSIA TAKES A BIG STEP TOWARD THE ‘INTERNYET’
On 1st November, Rferl provided an article seeking to explain the creation of a Russia-only internet – a measure that is expected to ultimately enable the government to monitor electronic information flows in real time, cut off access to content it deems “dangerous,” and isolate the Runet as a defence against foreign cyberattacks.
A MARITIME CYBER ATTACK COULD COST $110 BILLION AND CRIPPLE GLOBAL SUPPLY CHAINS
On 31st October, Homeland Security Today reported claims that a new report depicts a hypothetical cyber attack launched via a computer virus carried by ships, which then scrambles the cargo database records at major ports and leads to severe disruption. The report is the second publication from the Cyber Risk Management (CyRiM) project, the Singapore-based public-private initiative that assesses cyber risks, of which Lloyd’s is one of the founding members.
PROPOSED US DEMURRAGE AND DETENTION RULE SPOTLIGHTS SHIPPING INDUSTRY SCHISM
On 1st November, American Shipper reported on a proposed interpretive rule by the US Federal Maritime Commission (FMC) to address demurrage and detention fee assessment practices under the Shipping Act. Demurrage is charged for the time an import container sits in a container terminal, with carriers responsible for collecting penalties on behalf of the marine terminals. Detention relates to shippers holding containers for too long outside the marine terminals. The FMC would provide guidance under the Shipping Act on what it would consider fair and reasonable practices for ocean carriers and marine terminals to assess demurrage and detention fees on shippers.
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