12 November 2019

Official Report calls on SFO To Improve Its Approach To Examining Digital Material

An article from Rahman Ravelli on 11th November reported on an inspection of the SFO by Her Majesty’s Crown Prosecution Service Inspectorate which found that the time it took SFO staff to work through digital material was causing a ‘key blockage’ in the progression of cases and should take a new approach to resourcing.  


Canada Imposes Informal Export Restrictions On Military Exports To Turkey

On 7 November, Lex Sage reported that, in October, Canadian authorities said that new export permits of military equipment and technology and brokering permits in respect of goods destined for Turkey would not be approved. There were no Canada formal restrictions nor did not mention the period of time for this “temporary” export restriction.


Still use of The Last First Sale for import valuations in the EU?

On 10 November, Baker McKenzie published a client update about an European Court of Justice case concerned with post-clearance amendment of a customs declaration.  The update provides an overview of the relevant facts, the issue in the main proceedings, ECJ’s ruling and the takeaway for EU importers/distributors.  It says that the crux of the matter is that EU customs regulations only allow for such amendment in case of “incorrect or incomplete” information. An error made in respect of the tariff classification is associated with the issue relating to the declared value and so could be allowed.  Under the wording of the Union Customs Code (UCC), the use of a prior sale within an import supply chain is no longer possible, and thus many EU importers now declare the last higher sales value even when a lower sales value is available. The article says that, nevertheless, there are, however, solid arguments that back the conclusion that the “Last Sale Principle” should be possible even under the UCC, despite the wording of the new provisions.


Export controls in Brazil 

On 16 September, Pinheiro Neto Advogados produced a guide on the Lexology website which provides essential basic information on the controls on exports from Brazil.  Amongst other things it provides a link to a  list of products subject to special controls and to export duty.  Unsurprisingly, it says that special attention should be paid to the regulation of the export of goods and services with potential military applications and, consequently, to the export of goods or related services with potential application in the development of WMD, whether nuclear, chemical or biological, and their delivery vehicles, such as missiles. Brazil has expressed its intention to implement the WCO Framework of Standards to Secure and Facilitate Global Trade and it implemented an AEO programme in 2017.  


Israel’s Prosecution Policy for the Criminal Prosecution and Punishment of Corporations

Barnea, a law firm in Israel, published on 6 November an article about  a new guideline issued in October by the  Israel State Attorney on the policy when considering the prosecution of a corporation, as well as on how it should determine its position on the manner of punishing corporations.  It notes that the guideline aims at imposing criminal liability on a corporation designed to give corporations and their officers incentives to create control mechanisms that may prevent the commission of offences in advance.  It therefore stresses the importance of an internal control programme.


Kuwait: Russian woman sentenced to 15 years in jail with hard labour for money laundering

On 12 November, Arabian Business reported that Marsha Lazareva, a Russian businesswoman, has been sentenced to 15 years in prison with hard labour for two counts of money laundering, garnering widespread condemnation from her prominent international team of supporters.  She was originally arrested in November 2017 and sentenced to 10 years imprisonment in May 2018, but this was successfully appealed – when it was discovered documents used as evidence against her were proven to be forgeries and the funds o she was accused of embezzling were actually frozen in Dubai.


Game over for loot boxes in UK?

On 11 November, an article from White & Case reflected on the publication in September of  the findings of its investigation into immersive and addictive technologies by the UK parliament’s Digital, Culture, Media and Sport Committee.  The Committee recommended that the UK regulate loot boxes, which may lead to a requirement for gaming companies to hold gambling licences. The Government is expected to respond to the Report in 2020.


FinCEN Reissues Geographic Targeting Order for 2019-2020

Cadwalader on 12 November reported that FinCEN had renewed a Geographic Targeting Order (GTO) requiring title insurance companies to collect and report beneficial ownership information for certain real estate purchases, the renewal applying to 9th May.  However, unlike previously, title insurance companies no longer will be required to report purchases made by entities that are US publicly-traded companies. The GTO only covers specific areas identified in the report from Cadwalader.


UBS Fined in Hong Kong for Misleading and Overcharging Wealthy Clients for a Decade 

The Wall Street Journal on 11 November reported that the Hong Kong Securities and Futures Commission said client advisers and assistants at the Swiss bank regularly added extra fees and padded out spreads on bond and structured-note trades and, as a result,UBS Group AG overcharged and misled wealthy clients for a decade without detection.  It fined the bank US$51 million and demanded HK$200 million in customer compensation.


New SIPRI/Cordaid study on CAR and DRC 

On 12 November, the Stockholm International Peace Research Institute published a new report on efforts to secure legitimate stability in the Central African Republic (CAR) and the Democratic Republic of the Congo (DRC).


Products from the occupied territories must be labelled, says EU top court

On 12 November, EurActiv reported that products from Israeli settlements in the Occupied Territories must be labelled to avoid confusion with products that come from Israel itself, the ECJ ruled, in a move that provoked an angry response from pro-Israel lobbyists.  Since the EU considers the Israeli settlements as illegal under international law, it maintains that the labelling policy does not constitute a boycott of Israel.



EU Venezuela sanctions Regulation amended to take account of GDPR

EU Regulation 2019/1889/EU has amended Regulation 2017/2063/EU to add a new Article 18a to ensure that the 2017 Regulation complies with the data protection law.


OECD Global Forum on Transparency and Exchange of Information for Tax Purposes second round peer review reports for 7 countries

On 11 November, Accountancy Daily reported that 2019 Peer Review Reports on the Exchange of Information on Request have now been published for UAE, Saudi Arabia, Samoa, Andorra, Marshall Islands, Panama, and Dominican Republic.


US adds new entities to export restrictions list

With effect from 13, 2 entities in Bahrain, 1 entity in France, 1 entity in Iran, 1 entity in Jordan, 4 entities in Lebanon, 1 entity in Oman, 7 entities in Pakistan, 1 entity in Saudi Arabia, 1 entity in Senegal, 4 entities in Syria, 2 entities in Turkey, 6 entities in the UAE, and 1entity in the UK have been added to the so-called Entity List.  They are restricted from receiving US exports of goods controlled under the Export Administration Regulations. The US also modified the listing for 1 entity in Pakistan and removes 1 entity each from Pakistan, Singapore, and the UAE.


Jersey cited in FATF guide on best practice for beneficial ownership registers 

A news release from Jersey on 12 November announced that the island had been named in a new FATF guide on best practices on beneficial ownership as having some good examples of best practice.  


Italy: 71 ‘Ndrangheta arrests in northern Italy

On 12 November, OCCRP reported that Italian authorities have announced the arrest of 71 suspected members of the country’s most powerful crime syndicate on drug trafficking and money laundering charges.


Criminal group producing and circulating fake euro banknotes in Spain and Portugal busted

A news release from Europol on 12 November advised that the Spanish National Police have dismantled a counterfeit euro print shop in Spain with the support of Europol.  The criminal group, based in the port city of Huelva, manufactured fake banknotes in €10, €20 and €50 denominations. The operation has prevented €250,000 in fraudulent cash from circulating in Spain and Portugal.


Netherlands: seized cocaine shipments have already surpassed 2018 numbers

Fresh Plaza reported on 12 November that the Port of Rotterdam has this year has already surpassed the record amount of cocaine caught there in 2018, according to an investigation by De Telegraaf.  Some 23 tonnes of cocaine was intercepted at the largest port in Europe, a 28% increase over the 18 tonnes captured during all of last year.


Germany: customs officers stop a woman with 7 kg of smoked rotten cowhide

Modern Ghana on 12 November reported that a woman tried to import kilograms of rotten cow-skin meat into Germany, but was stopped by customs officers.  It was a delicacy from Cameroon, she said. Officers at Düsseldorf airport had noticed an unpleasant smell after the woman had arrived from Cameroon via the UK.





Illegal tobacco factory dismantled in Hungary

A news release from Europol on 12 November advised that 6 million cigarettes and enough tobacco to produce 21 million cigarettes have been found in an illegal factory in Budapest, and  customs officers arrested 20 factory employees and the ringleaders behind the operation. The criminal group – primarily Romanian and Moldavian citizens – sourced their materials from abroad, such as machines, tobacco, filters, cigarette papers and cigarette packs.  Some of the material was stored in Hungary and used in the dismantled factory; the rest was sent abroad. Officers found one assembly line in operation and another under construction. They also discovered apparatus for tobacco cutting, fermentation and cigarette packing. In total, investigators found 6 million cigarettes and 35 tonnes of fine-cut smoking tobacco – enough for another 21 million cigarettes – in the factory.  A further 300 kg of tobacco powder was also found during the operation (1 kg of tobacco powder can make around 3 million cigarettes).


FATF: Ireland AML/CFT assessment follow-up report

On 12 November, FATF published a follow-up report on the AML/CFT system in Ireland following its mutual evaluation report of 2017.  Since then, Ireland has been in the enhanced follow-up process, and its efforts have resulted in it being uprated in its ratings for a number of Recommendations.  The report also looks at whether Ireland’s measures meet the requirements of FATF Recommendations that have changed since the 2017 mutual evaluation. Ireland is now rated compliant on 17 Recommendations of the 40 FATF Recommendations and largely compliant on 16.  It remains partially compliant on 7 of the 40 Recommendations.  Therefore, Ireland will move from enhanced to regular follow-up and will continue to report back to the FATF on progress to strengthen its implementation of AML/CFT measures. 


EU amends details of 8 entries on its Venezuela sanctions list

EU Regulation 2019/1891/EU has replaced the entry details for 8 individuals designated under Regulation 2017/2063/EU.



EU Regulation imposing sanctions regime over Turkish drilling in Eastern Mediterranean

EU Regulation 2019/1890/EU has created the new sanctions regime intended to provide for designations to penalise individuals and entities, but to date no names have been listed.

HM Treasury issued a Notice on these new sanctions on the same day.




UK and Isle of Man remove 1 name from Al-Qaida/ISIL sanctions lists

On 12 November, a Notice from HM Treasury and news release from the Isle of Man advised that Mourad Ben Ali Ben Al-Basheer AL-TRABELSI had been removed from their sanctions lists, following the decisions of the UN and EU.



HMRC fines 9 exporters for export licence irregularities

Notice to Exporters 2019/15 on 12 November advised that between May and October 2019, HMRC issued compound penalties between £5,000 and £90,000 to 9 UK exporters, related to unlicensed exports of dual-use goods, military goods and related activity.


Ukraine Ex-Central Bank Official Among 7 Detained Over Loan To Troubled Bank

On 12 November, KYC 360 reported that 7 people have been detained on suspicion of embezzling $49 million that was part of a loan the National Bank of Ukraine (NBU) gave to stabilise a struggling bank, VAB Bank, owned by one of the country’s biggest agricultural producers.  One of the detainees was Oleksandr Pysaruk, the current CEO of Austrian-owned Raiffeisen Bank Aval, and who was the first deputy chairman of the NBU.


Basel Committee on Banking Supervision consultation document on interaction between AML/CFT and prudential supervision

A release on Mondo Visione on 11 November reported that the Committee proposes to amend its 2017 guidelines on the management of AML/CFT risks.  It intends to provide detailed and practical guidelines on the interaction and cooperation between prudential and AML/CFT supervision – to enhance the effectiveness of supervision of banks’ risk management in line with its and FATF standards.  Comments are required by 6 February. The Committee involves and supports central banks in their pursuit of monetary and financial stability, and seeks to foster international co-operation in those areas and to act as a bank for central banks.


The Basel Committee on Banking Supervision says better information exchange would improve supervision of AML

An article from Out-Law on 12 November reported on the content and recommendations of the Basel Committee on Banking Supervision report proposing new guidelines to improve the supervision of the ways banks tackle AML/CFT.