OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 8

8th November 2019

OFAC SETTLEMENT AGREEMENT WITH APOLLO AVIATION GROUP LLC OVER SUDAN SANCTIONS

On 7th November, OFAC announced a $210,600 settlement with Apollo Aviation Group LLC re 12 apparent violations of the Sudanese Sanctions Regulations.  It is said that it leased 3 aircraft engines to an entity incorporated in the UAE, which then subleased the engines to a Ukrainian airline, which then installed the engines on an aircraft wet leased to Sudan Airways.

https://content.govdelivery.com/accounts/USTREAS/bulletins/26ac16e

REVISION TO SWISS SANCTIONS AGAINST NORTH KOREA

On 6th November, Baker McKenzie reported on changes implementing the exceptions to the export ban agreed by the UN Sanctions Committee and coming into force on 1st December.  The amendment will clarify authority for the delivery of humanitarian aid and other goods for which an exception has been granted by the UN Sanctions Committee to also be authorised under Swiss law, with prior advice of such shipments and physical inspection.

http://sanctionsnews.bakermckenzie.com/revision-to-swiss-sanctions-against-the-democratic-peoples-republic-of-korea/#page=1

UK DRAFT FINANCE BILL 2020: JOINT AND SEVERAL LIABILITY OF COMPANY DIRECTORS IN INSOLVENCY

A post on Weil Tax Blog on 6th November comments on new proposed powers that, if enacted, would enable HMRC to make directors and certain other individuals connected to companies which, for these purposes, includes LLP, jointly and severally liable for the company’s tax liabilities if the company is subject to, or there is a risk that it may be subject to, insolvency proceedings (including liquidation and administration); and proposed rules issued in July by HMRC.  The post says that HMRC’s intention seems to be to enact the draft legislation in its current form and narrow its application through guidance.

https://tax.weil.com/business-finance-restructuring/draft-finance-bill-2020-and-corporate-insolvency/#page=1

MALAYSIA TO IMPOSE CASH TRANSACTION LIMIT OF RM 25,000 (ABOUT £4,700) STARTING NEXT YEAR

On 8th November, KYC 360 reported that Malaysia is planning to impose a cash transaction limit (CTL) of RM 25,000 starting next year and will apply to all transactions involving physical cash payments including payments of goods and services and donations and transfers between parties, which are applicable to individuals, businesses and other entities.  There are to be exemptions for any cash transactions to or with regulated financial institutions and for humanitarian aid.  In January, the central bank lowered the daily cash threshold report (CTR) for banks from RM 50,000 to RM 25,000.

https://www.riskscreen.com/kyc360/news/malaysia-to-impose-cash-transaction-limit-of-rm25000-starting-next-year/

PROSECUTORS DROP INVESTIGATION INTO MILLIONS MISSING FROM MONTENEGRO BANK

On 8th November, KYC 360 reported that prosecutors in Montenegro halted an investigation into nearly €22 million illegally paid to privileged clients of a failing financial institution, Atlas Bank, while it was under the management of the Central Bank.  In June 2018, state prosecutors ordered Atlas to freeze about €63 million of funds suspected of being laundered through an e-commerce scheme, and OCCRP has reported that about €4.4 million of those funds disappeared from Atlas’ books after the Central Bank imposed interim management.  The Central Bank took the bank over and managed it until April this year, when it went into bankruptcy.

https://www.riskscreen.com/kyc360/news/prosecutors-drop-investigation-into-millions-missing-from-montenegro-bank/

TERRORISM FINANCING CHARGE UPHELD AGAINST FRENCH COMPANY LAFARGE OVER SYRIA

On 8th November, KYC 360 reported that a French court has upheld preliminary criminal charges against one of France’s biggest companies over allegations that it financed the Islamic State and other armed groups in Syria.  It is said that multinational cement-maker Lafarge violated international embargoes as it sought to maintain business in Syria despite the civil war.  However, the court rejected a separate, and more serious charge that the company was complicit in crimes against humanity after former employees accused Lafarge of abetting terrorist groups operating in the region by funnelling financing to them.

https://www.riskscreen.com/kyc360/news/terrorism-financing-charge-upheld-against-french-company-lafarge/

SWITZERLAND: DUAL-USE CONTROL LIST UPDATE 2020

On 7th November, MME Legal Tax Compliance published an article on updated goods control lists which take effect from 1st January.  The majority of the changes result from the modifications agreed in the Wassenaar Arrangement, the international agreement on dual-use items, with some changes result from modifications agreed in the framework of the Missile Technology Control Regime (MTCR).  Other adjustments included significant editorial changes to adjust controls and the correction of minor errors.

https://www.mme.ch/en/magazine/magazine-detail/url_magazine/swiss_seco_publishes_dual_use_list_update_2020/

WHAT YOU NEED TO KNOW ON CLASSIFICATION CHANGES AND THE UPCOMING MODERNISATION OF THE EU DUAL-USE REGIME

On 7th November, Hogan Lovells published a briefing which provides a high-level overview of the recent activity in this area of trade law.  This is said to include the upcoming revised list of dual-use items, which includes a new definition of controlled encryption algorithms, which will extend controls to quantum-resistant encryption, and a new decontrol note for information security items specially designed for a ‘connected civil industry application; the revival of the recast of the EU Dual-Use Regulation – now in the final stages of inter-institutional negotiations; and UK preparatory work to adapt the control of dual-use items after Brexit.

https://www.jdsupra.com/post/fileServer.aspx?fName=2491d8c0-174f-4185-be48-416fb6f53c20.pdf

PANAMA PAPERS: US COURT CASE UPDATE

On 7th November, ICIJ provided an update on definitions, legal principles and documents discussed in US court cases of men charged with financial crimes and arising from the Panama Papers revelations.

https://www.icij.org/investigations/panama-papers/fugitive-or-not-panama-papers-pre-trial-continues/

IRELAND: GARDAÍ PROBE BULGARIAN SMUGGLING ROUTES AFTER CAB RAIDS IN MONAGHAN

On 8th November, The Journal reported that Gardaí have launched a crackdown on haulage companies operating in the border region as officers turn their attention to Bulgarian smuggling routes believed to be used by criminals to bring illicit contraband into Ireland.  These raids were not part of the investigation into the Essex trailer tragedy, where 39 Vietnamese were found dead in a trailer.

https://www.thejournal.ie/cab-raids-monaghan-bulgaria-4882734-Nov2019/

https://www.itv.com/news/utv/2019-11-07/searches-in-co-monaghan-as-part-of-international-smuggling-probe/

LIBERIA: FIU FINES ORANGE-LIBERIA FOR FAILURE TO SUBMIT STR

Front Page Africa on 8th November reported that the FIU had fined the mobile money component of the Orange-Liberia GSM company for failing to file no STR for the period of 2 years – the company had not reported since 2017.  It was also said that the FIU would shortly be instituting whistleblower hotline numbers to the public so that community members can participate in reporting incidents of money laundering, properties related to the proceeds of crimes and other predicate offences.

https://frontpageafricaonline.com/front-slider/financial-intelligence-unit-fines-orange-liberia/

FORMER RUSSIAN GOVERNMENT OFFICIAL IN COSTA DEL SOL ARRESTS IN MONEY LAUNDERING CORRUPTION INQUIRY

On 7th November, Euro Weekly reported a former high-ranking official of the Russian Ministry of Culture was amongst those arrested.  The case is said to revolve around the purchase of a €4 million villa and tax crimes and corruption in the Russian Federation.  Russian authorities issued an international arrest warrant for the extradition of the suspect.  Police say their investigations have shown that the people arrested used a complex business network, making it difficult to ascertain the illegal origin of the funds and the identity of the people behind this real estate money laundering operation.

https://www.euroweeklynews.com/2019/11/07/costa-del-sol-arrests-in-russian-money-laundering-corruption-inquiry/

DANISH NGO GRANTED UN EXEMPTION TO SEND AGRICULTURAL MACHINERY TO NORTH KOREA

NK News on 7th November reported that Mission East was granted an exemption in order to mitigate food shortages in the country.

https://www.nknews.org/2019/11/danish-ngo-granted-un-exemption-to-send-agricultural-machinery-to-north-korea/

BRAZIL’S SUPREME COURT USED TO TERRIFY POLITICIANS. NOT ANYMORE

Americas Quarterly on 5th November reported that political support for Lava Jato (the Car Wash investigation) has faded – along with judges’ incentives to crack down on corruption.  The article says that the Court is expected to reverse recent precedents by ruling that defendants can only be put in jail after they’ve gone through all of the appeals processes available to them.  This could have significant implications for at least 15 defendants – including former President Luiz Inácio Lula da Silva, who is currently in jail but would be released on appeal if the Court does indeed reverse itself.

https://www.americasquarterly.org/content/brazils-supreme-court-used-terrify-politicians-not-anymore

OFAC AMENDS 1 NICARAGUA SANCTIONS ENTRY

On 8th November, OFAC announced an amendment to the entry for Roberto Jose LOPEZ GOMEZ.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20191108.aspx

GULF OF GUINEA PIRATES KIDNAP 13 CREW FROM 2 EUROPEAN-FLAGGED SHIPS

On 5th November, Homeland Security Today reported that, in a matter of 3 days, pirates operating in the Gulf of Guinea have kidnapped a total of 13 people on 2 European-flagged ships – 4 crew members on a Greek oil tanker were kidnapped off the coast of Togo, and 8 people were kidnapped from a Norwegian cargo ship off the coast of neighbouring Benin.

https://www.hstoday.us/subject-matter-areas/maritime-security/gulf-of-guinea-pirates-kidnap-crew-of-two-european-flagged-ships/

UK: REPORTS OF LOST AND STOLEN CONTROLLED DRUGS INCREASE BY 19% IN ONE YEAR

The Pharmaceutical Journal reported on 8th November that 1,387 instances of lost, stolen or missing controlled drugs were reported in 2018/2019.

https://www.pharmaceutical-journal.com/20207317.article

FUTURE ANTI-CORRUPTION TRENDS—REASONS TO BE OPTIMISTIC

On 7th November, an article from Transparency International is the second of 2 articles reflecting on the key findings of an in-depth, participatory strategic research project. The first identified key trends that will drive corruption over the next decade.  This second article explores reasons to nevertheless remain optimistic about the future –

  • Corruption is now on the agenda;
  • Young people across the globe are demanding change;
  • Tech offers new tools to fight corruption; and
  • More allies are joining the fight.

https://voices.transparency.org/future-anti-corruption-trends-4-reasons-to-be-optimistic-21d7902f980d

https://voices.transparency.org/facing-future-corruption-challenges-trends-of-the-next-decade-a78267cbf621

TOWER RESEARCH TO PAY $67 MILLION TO SETTLE SPOOFING CLAIMS

The Wall Street Journal on 7th November reported that New York-based high-speed trading firm Tower Research Capital LLC has agreed to pay $67 million in a deferred prosecution agreement to settle regulatory allegations that its traders manipulated the price of stock-index futures, the biggest penalty ever imposed by the US derivatives watchdog CFTC in such a case.  This follows the guilty plea of 2 former traders who were involved in the scheme, while a grand jury indicted a third trader on similar charges.

https://www.wsj.com/articles/tower-research-to-pay-67-million-to-settle-spoofing-claims-11573155230

NEW RULES FOR EU VAT SYSTEM AGREED BY MEMBER STATES TO TACKLE FRAUD IN THE E-COMMERCE SECTOR

On 8th November, a news release from the EU advised that anti-fraud experts in EU Member States are to have access to VAT-relevant data held by payment intermediaries such as credit card and direct debit providers that facilitate over 90% of online purchases in the EU.  Similar provisions in place in some Member States and other countries.  The new rules will now need to be confirmed by the European Parliament before entering into force in January 2024.  EU finance ministers also reached a political agreement on an update to already-existing special VAT rules for EU SME, and the new and improved VAT scheme for SME should enter into force in January 2025.  Other new rules will exempt supplies to armed forces from VAT and excise duties when these forces are deployed outside their own Member State and take part in a European defence effort.

https://ec.europa.eu/commission/presscorner/detail/en/IP_19_6232

WHAT CAN WE LEARN FROM THE US STATE DEPARTMENT’S TERRORISM REPORT ON PAKISTAN?

The Diplomat in its 9th November edition carried an article about the report which criticised Pakistan for failing to uniformly implement the FATF Recommendations and not taking action against regionally-focused terrorist groups, but does not carry the punitive language which was prevalent in the previous 2017 report.  It is said that there appears no convincing evidence that could suggest that Pakistan has choked India-focused groups’ operational capability or capacity to act in the future.

https://thediplomat.com/2019/11/what-can-we-learn-from-the-us-state-departments-terrorism-report-on-pakistan

The report is at –

https://www.state.gov/wp-content/uploads/2019/11/Country-Reports-on-Terrorism-2018-FINAL.pdf

BELGIUM’S BANKS TO JOIN FORCES AGAINST MONEY LAUNDERERS

The Brussels Times on 8th November reported that Belgian banks are studying better ways to exchange information on suspicious financial transactions, under a pilot project launched by the banking sector federation, Febelfin.

https://www.brusselstimes.com/belgium/77931/belgiums-queen-mathilde-wins-prestigious-german-bambi-award/

EU REMOVES BELIZE FROM ITS TAX HAVEN BLACKLIST

On 8th November, Reuters reported that EU finance ministers have removed Belize from its list of tax havens, as Belize has passed the necessary reforms to improve its tax regime for international business companies that was due to be implemented by end-2018.

https://uk.reuters.com/article/uk-eu-tax-blackslist/eu-removes-belize-from-its-tax-haven-blacklist-statement-idUKKBN1XI1JB?rpc=401&

COM MIRZA: DUBAI-BASED ENTREPRENEUR ACCUSED OF DEFRAUDING INVESTORS WORLDWIDE HAS BEEN ARRESTED

On 8th November, the 5 Pillars website reported that Canadian Aziz “Com” Mirza was taken into custody on October 27th.  This followed a complaint by a UAE resident.

https://5pillarsuk.com/2019/11/08/entrepreneur-com-mirza-arrested-in-dubai-after-fraud-allegations/

MALAYSIAN AUTHORITIES WIDEN INVESTIGATION INTO GOLDMAN SACHS

On 8th November, an article from the Society of Corporate Compliance and Ethics (SCCE) reports an additional 17 employees of Goldman Sachs in connection with the 1Malaysia Development Berhad (1MDB) scandal, which includes individuals who, it is said, occupied the highest executive positions in those 3 Goldman Sachs subsidiaries, and exercised or ought to have exercised decision-making authority over the transactions of those corporate bodies.

https://compliancecosmos.org/malaysian-authorities-widen-investigation-goldman-sachs?authkey=89d9d30a5cb1e454e188fff2966fab07904c55aa864b5967eea4320b65147821

SAUDI ARABIA RETURNS STOLEN HISTORICAL DOCUMENTS TO IRAQ

On 6th November, the Saudi Gazette reported that Saudi Arabia has handed over stolen historical documents to Iraq.  The documents were in the custody of an Arab expatriate in the Kingdom, who possessed them illegally and posted some of them on the Internet.

http://www.saudigazette.com.sa/article/581932/SAUDI-ARABIA/Saudi-Arabia-returns-stolen-historical-documents-to-Iraq

RECORD 400 KG OF COCAINE SEIZED AT KOBE PORT

On 8th November, the Japan Times reported that a record 400 kg of cocaine was seized by customs authorities in October at Kobe port, found in shipping containers.  The article speculates that smugglers may have sent the cocaine to Kobe by mistake, possibly intending to deliver it to another destination.

https://www.japantimes.co.jp/news/2019/11/08/national/crime-legal/record-shipment-400-kilograms-cocaine-seized-kobe-port-last-month-investigative-sources-say

DANISH CUSTOMS SEIZES 12,000 ILLEGAL WEAPONS IN ONE YEAR

The Local on 7th November reported that increased staff numbers and better scanning equipment have resulted in a marked increase in customs confiscations of illegal weapons; and that the last 3 years have seen a 7-fold increase in the number of illegal weapons seized by the Danish Customs Agency.

https://www.thelocal.dk/20191107/danish-customs-seize-12000-illegal-weapons-in-one-year

FREIGHT FORWARDERS BODY FIATA CRITICAL OF DETENTION AND DEMURRAGE PROCESS IN US

A news release from FIATA on 7th November said that, in its submission to the US Federal Maritime Commission (FMC) Review of container detention and demurrage charges FIATA supported a more transparent, equitable and business-orientated process as regards the determination and levy of such charges not only in the US but in other  economies where industry  operated under similar processes.  FIATA is critical of the practice which surrounds the determination of detention and demurrage charges which were highlighted in the FMC Review and questioned the rationale for such charges in achieving the orderly movement of containers to, and from, ports, terminals or depots rather than being pure finance generators.

https://fiata.com/media/press-releases/2019/7-november-1914.html

VENEZUELA’S LOS ROQUES ARCHIPELAGO A NEW HOTSPOT FOR DRUG SMUGGLING

On 8th November, an article on Insight Crime reported that this group of islands off Venezuela’s northern coast known for their white sand beaches and turquoise waters has become a staging ground for smuggling drugs and gold through the Caribbean; with an organized crime gang was operating from the islands offshore from Venezuela’s Vargas state to move drugs and gold.  The article also says that the Dutch Caribbean islands of Aruba, Bonaire and Curaçao are increasingly being used to smuggle illegal gold and move cocaine coming from Colombia via Venezuela.

https://www.insightcrime.org/news/brief/venezuela-archipelago-gold-drug-smuggling/

 

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

MALTA: CUSTOMS’ RECORD-BREAKING SEIZURE WITH 36 CONTAINERS HIDING COUNTERFEIT SHOES AND CLOTHES

On 8th November, Malta Today reported that officers found 36 containers out of 44 checked carrying counterfeit mobile accessories, clothes, shoes, and game controllers.  The seizure, the biggest in customs history, was thanks to an operation carried out by the Containers’ Monitoring Unit, the Scanning Unit and the Intellectual Property Rights Unit, while using specialised scanners.  Legal items were used to hide the counterfeits.  It is said that the containers originated from Asia and were headed to an African country.

https://www.maltatoday.com.mt/news/national/98522/customs_recordbreaking_bust_of_36_containers_hiding_counterfeit_shoes_and_clothes

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US SANCTIONS MALI ISLAMIST GROUP LEADER

On 8th November, Defence Web reported that the US has imposed sanctions on a leader of an al Qaeda-linked Islamist militant group in Mali.  It has designated Amadou Koufa, a Salafist preacher and a leader of Jama’at Nusrat al-Islam wal-Muslimin (JNIM), an al Qaeda affiliate in the Sahel region.

https://www.defenceweb.co.za/joint/diplomacy-a-peace/us-sanctions-mali-islamist-group-leader/

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

CAYMAN ISLANDS: AML STEERING GROUP RELEASES CASE STUDIES AND TYPOLOGIES

On 7th November, the Cayman Compass reported that the Cayman Islands Anti-Money Laundering Steering Group (AMLSG) has compiled real-life crime cases, from Cayman and abroad, in its publication ‘Money Laundering Typologies and Trends’ to demonstrate how different industry sectors can be misused by criminals.  It includes diagrams illustrating how sanctions designation was avoided, and sections on terrorist financing and proliferation financing.

cayman

The publication, dated September 2019, is available at –

http://www.gov.ky/portal/page/portal/amlhome/publications/Money%20Laundering%20Typologies%20and%20Trends1

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

US: RISK THAT “OUTSOURCED” CRIMINAL INVESTIGATIONS MIGHT VIOLATE FOREIGN BLOCKING STATUTES

A blog post from the New York University School of Law comments on a ruling from of the United States District Court for the Southern District of New York.  This is said to have significant implications for the conduct of corporate internal investigations by outside law firms in the US.  If there is “extensive coordination” between lawyers conducting a corporate investigation and the prosecutor’s office with whom they are in discussions or negotiations, the lawyers’ acts are “fairly attributable to the government”, and so those providing any information have been compelled to do so, and hence any such evidence cannot be used against them (as this would seem to violate their right against self-incrimination).  However, the post highlights another potential aspect involving so-called “blocking statutes” of other countries.  It explains that the term is used as a general description of laws that attempt to impose territorial sovereignty over access to information (including witness testimony) by prohibiting or limiting the international transfer of information gathered locally for use by a foreign government, and could render the lawyers involved to prosecution in their other country.  The post says that the best/worst example is found in French law, and provides that anyone located in France or of French nationality who transfers information of potential economic significance outside of France for use in a “judicial or administrative proceeding” commits a crime, unless the transfer is conducted pursuant to a bilateral or international agreement to which France is a party – though the US Supreme Court had rejected this as a defence against use of the information.

https://wp.nyu.edu/compliance_enforcement/2019/11/06/united-states-v-connolly-and-the-risk-that-outsourced-criminal-investigations-might-violate-foreign-blocking-statutes/

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EU GUIDANCE ON INTERNAL COMPLIANCE PROGRAMMES FOR DUAL-USE TRADE CONTROLS

On 6th November, Steptoe & Johnson published a briefing on the non-binding guidance and recommendations on internal compliance programs (ICP) for dual-use trade controls under Council Regulation (EC) No 428/2009.  It points out that (implicitly) the EU Regulation provides that Member States shall take into consideration whether the exporter applies proportionate and adequate means and procedures for compliance when assessing applications for global export authorisations (i.e. authorisations granted in respect of a type or category of dual-use item which may be valid for exports to one or more specified end users and/or in one or more specified third countries).  The guidance aims to provide a framework to help exporters identify, manage and mitigate risks associated with dual-use trade controls and to ensure compliance with the relevant EU and national laws and regulations; and the ICP should be tailored not only to the company’s specific business activity and related risks but also to the size, the structure and scope of the business.  The briefing identifies the 7 core elements of the guidance –

  • Top-level management commitment to compliance;
  • Organisation structure, responsibilities and resources;
  • Training and awareness raising;
  • Transaction screening process and procedures;
  • Performance review, audits, reporting, and corrective actions;
  • Recordkeeping and documentation; and
  • Physical and information security.

Annexes to the guidance provide a list of helpful questions pertaining to a company’s ICP, a list of “red flags” relating to suspicious inquiries or orders, and a list of EU Member States competent export control authorities.

https://www.steptoe.com/en/news-publications/eu-issues-guidance-on-internal-compliance-programs-for-dual-use-trade-controls.html

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y