9th December 2019
THE WTO APPELLATE BODY AND THE CRISIS FACING THE ORGANISATION
On 4th December, Stephenson Harwood LLP published an article saying that the operations of WTO’s Appellate Body, which is an integral part of the WTO’s Dispute settlement mechanism, are to be suspended in December as the term of another two of its members runs out and no replacement of them is in sight. The article looks at the background to the crisis in the body necessary to resolve trade disputes between WTO members, the Dispute Settlement Body (DSB). It concludes that the current multilateral trading system is therefore facing some daunting challenges, and that a collapse, or paralysis in the system would translate into a 20-year step backwards for global trade rules, undermining the predictability, relative stability and fairness of multilateral trade relations.
https://www.shlegal.com/insights/saving-the-wto
UK: WITNESS EVIDENCE WORKING GROUP – THE USE OF FACTUAL WITNESS EVIDENCE IN TRIALS BEFORE THE BUSINESS AND PROPERTY COURTS
On 6th December, Herbert Smith Freehills published an article about an article from the working group established in 2018 to examine concerns that witness statements were often ineffective in performing their core function of achieving best evidence at proportionate cost. The report considered responses to an online survey of court users. It is said that the report does not propose radical change but makes a number of recommendations for improvement. Recommendations include developing an authoritative statement of best practice, beefing up the statement of truth, introducing a solicitors’ certificate of compliance, greater use of costs sanctions and judicial criticism where there is non-compliance, and a recommendation aimed at encouraging the use of examination-in-chief on specific issues/topics where appropriate. It also recommends introduction of a pre-trial statement of facts setting out a party’s factual case.
The report is at –
DRIVING INTEGRITY INTO THE SUPPLY CHAIN – TRUST, BUT VERIFY
On 6th November, the Red Flag Group published an article on how an organisation can establish an effective programme for verifying their supply chain partners, and saying that trust without verification will leave your organisation open to significant regulatory risk and reputation damage when things go bad. The article says that, given the size of modern supply chains, there is no expectation that all risks will be reduced to zero. However, by deploying an effective programme, integrated with appropriate tools and techniques to verify the integrity of supply chain partners, you can be confident that all reasonable measures were taken to make an informed decision about doing business with a third party.
https://insights.redflaggroup.com/articles/trust-but-verify
THE SIPRI TOP 100 ARMS-PRODUCING AND MILITARY SERVICES COMPANIES 2018
On 9th December, the Stockholm International Peace Research Institute published an annual report said that sales of arms and military services by the sector’s largest 100 companies (excluding those in China) totalled $420 billion in 2018, marking an increase of 4.6% compared with the previous year. The database used excludes Chinese companies due to the lack of data to make a reliable estimate. For the first time since 2002, the top 5 spots in the ranking are held exclusively by arms companies based in the US: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. 80 of the 100 top arms producers in 2018 were based in the USA, Europe and Russia and, of the remaining 20, 6 were based in Japan, 3 in Israel, India and South Korea, respectively, 2 in Turkey and 1 each in Australia, Canada and Singapore. The combined arms sales of the 10 Russian companies in the 2018 ranking were $36.2 billion—a marginal decrease of 0.4% on 2017. The combined arms sales of the 27 European companies in the Top 100 increased marginally in 2018, to $102 billion. Arms sales by companies based in the UK fell by 4.8%, to $35.1 billion, but remained the highest in Europe – with BAE Systems the 6th largest arms producer in the world.
https://www.statista.com/chart/12221/the-worlds-biggest-arms-companies/
SETBACK IN AUSTRALIAN WINE COPYRIGHT CASE IN CHINA
The Australian on 9th December reported that a Chinese court has delivered a major blow in the long battle to protect the valuable Penfolds wine brand from fakes and counterfeiters, overturning a decision by another court that had invalidated the trademark of a Penfolds’ copycat label.
US CHARGES OVER SCHEME TO EXPORT TURBINE TO SANCTIONED RUSSIAN COMPANY
On 5th December, a post on the Kharon Brief was concerned with a scheme to evade sanctions by exporting a US-made power turbine, designed and manufactured for integration with gas generators to enable direct drive of high-power gas compressors, to a Russian state-controlled company. It reports that a Russian media outlet has named the company as Gazprom Neft, which is subject to US export licensing requirements, technology transfer prohibitions and debt financing restrictions in the US and EU. The Gazprom subsidiary is said to have sought the turbine for its Prirazlomnaya platform, the first Russian Arctic offshore oil project.
INDIA: SEIZURE OF 4,500 TURTLES
On 8th December, the Times of India reported that 3 passengers arriving from Bangkok were arrested with 4,500 red-eared slider turtles in their baggage. It is also reported that 9,000 of the species have been discovered in the last 3 months. The species are also described as a potentially risky invasive species that can harm the natural environment if released.
EX-ST. KITTS PM UNDER INVESTIGATION AFTER TRYING TO LEAVE UK WITH $92,000 IN CASH
KYC 360 reported on 9th December that former long-serving Prime Minister Dr. Denzil Douglas is under investigation by NCA following reports after he recently tried to leave the UK with £70,000 in cash at Gatwick Airpprt in November. Though it is said that he was allowed to travel to Dubai, his money was detained while the investigation proceeds. Dr. Douglas was Prime Minister of Saint Kitts and Nevis for 20 years.
BUSINESSES’ ATTITUDES TOWARDS CORRUPTION IN THE EU
On 9th December, the EU published this report says that on International Anti-Corruption Day: new survey shows corruption seen as less widespread in the EU than in 2013. This is despite a significant number (63%) of businesses of the opinion that corruption is widespread. This is down from 75% in 2013. Companies are sceptical about how corruption is tackled, with 51% of them believing that corrupt people or businesses are unlikely to be caught by or reported to the police or prosecutors.
EU OPENS IN-DEPTH INVESTIGATION TO ASSESS WHETHER THE SPECIAL TAX TREATMENT OF PUBLIC CASINOS OPERATORS IN GERMANY IS IN LINE WITH EU STATE AID RULES
On 9th December the EU also announced that, in a separate decision, the Commission has also opened an in-depth investigation into specific measures adopted in North Rhine-Westphalia with regard to the public casinos operator active in that region. It explains that, in Germany, public casinos operators (Spielbankunternehmen) are subject to a specific tax regime that replaces a series of otherwise applicable general taxes, in particular corporate, income and trade taxes.
https://ec.europa.eu/commission/presscorner/detail/en/MEX_19_6707
US GOVERNMENT AGENCIES OUTLINE EXPECTED REGULATORY ACTIONS FOR THE NEXT YEAR
On 9th December, HKTDC published an article listing some of the activity planned for next year, which includes, from the Commerce Department –
- tighter controls on exports of specific products and to particular destinations (including mainland China), as well as an updated steel import monitoring system;
- potential export controls on quantum computers;
- reviewing certain foundational technologies pursuant to applicable sections of the Export Control Reform Act (ECRA);
- removal of the availability of licence exceptions strategic trade authorisation (STA) and technology and software restricted (TSR) for certain items;
- clarifying the availability of licence exception STA for exports, re-exports and transfers (in-country) of certain items under the EAR;
- expanding licence requirements on exports, re-exports and transfers (in-country) of items intended for military end-use or military end-users in mainland China, Russia or Venezuela;
- proposed rule on export controls for additive manufacturing equipment for energetic materials;
- adding to the Commerce Control List (CCL) an export control on computer forensic systems, equipment, components and related development, production and use software;
- review of certain technology transfers that would not otherwise require licences according to the CCL; and
- amending certain 600 series export control classification numbers (ECCN) to clarify the controls on items related to military vehicles, vessels of war, submersible vessels, oceanographic equipment, and auxiliary and miscellaneous military equipment.
From US Customs and Border Protection –
- consultation on a continuing education requirement for licensed customs brokers;
- amending the regulations pertaining to the importation of goods that violate or are suspected of violating the copyright laws in accordance with the Trade Facilitation and Trade Enforcement Act and certain provisions of the Digital Millennium Copyright Act;
- modernising the customs broker regulations;
- to update, modernise and streamline the process for enforcing the prohibition against the importation of goods mined, produced or manufactured in any foreign country by convict or forced labour or indentured labour under penal sanctions; and
- a proposed rule to debar from entering US ports any vessel owned or chartered by an entity found to be in violation of certain laws and regulations relating to the performance of longshore work by non-immigrant crew members.
TRANSPARENCY SRI LANKA SURVEY FINDS PAYING BRIBES ACCEPTABLE TO A QUARTER OF SRI LANKANS
Colombo Page on 9th December reported that Transparency International Sri Lanka (TISL) has launched the 2019 Global Corruption Barometer (GCB) report for Sri Lanka, which among others has found that 25% of the Sri Lankan public accepts the practice of bribing officials to obtain or expedite public services.
http://www.colombopage.com/archive_19B/Dec09_1575900757CH.php
UK: 2 MORE JAILED FOR MONEY LAUNDERING FROM CHATHAM MINI-MARKET
On 9th December, a news release from the Kent Police advised that 2 more people have been jailed for their role in a money laundering operation that received cash from the victims of online scams worldwide. A total of more than £510,000 was sent and received via the Latom “O” Store mini-market during 2014. The shop had been registered as a money service business (MSB) for the purpose of exchanging currency, cashing cheques and sending funds abroad, but it is reported that it was instead being used to help trick people into giving up their savings.
https://www.kentonline.co.uk/medway/news/money-laundering-scam-run-from-corner-shop-218057/
CROATIAN POLICE ARREST AND DISMANTLE ORGANISED CRIME GROUP IN LARGE INTERNATIONAL INVESTIGATION
On 9th December, a news release from Europol announced a complex international criminal investigation of an organised crime group for acting in a criminal enterprise, tax evasion, money laundering, forgery of documents and fraud. The group is said to have been involved luxury vehicle trading with several missing trader companies in different EU countries, giving the impression of carrying out legitimate business. At the same time, they were forging documents and invoices to evade taxes and excise and provided money laundering services to other criminals.
GUYANA’S MINING REGION IS OPEN DOOR TO VENEZUELAN ORGANISED CRIME
On 9th December, Insight Crime said that a recent report explores criminal dynamics in the Guyanese mining region bordering Venezuela, revealing how the chaos and violence of Venezuela’s mining arc is spilling over into the neighbouring country. It says that, with an army of only 3,500 men, Guyana lives in fear of an armed incursion and Guyanese security officials interviewed for the report express concern that foreign military intervention in Venezuela could cause criminal armed groups to move their operations across the border.
https://www.insightcrime.org/news/analysis/guyana-mining-venezuelan-organized-crime/
https://www.freightwaves.com/news/the-digital-wave
US CUSTOMS EXPANDS E-COMMERCE DATA PILOT TO OCEAN FREIGHT AND INTERNATIONAL MAIL
American Shipper on 9th December reported that US Customs and Border Protection (CBP) will add ocean and international mail shipments to an electronic pilot program that collects advance data on e-commerce shipments with import values of less than the $800 de minimis. Begun in August, it is intended to better understand how to effectively target high-risk e-commerce shipments. Initially, the pilot excluded ocean and international mail shipments, focusing instead on those consignments moved by air, truck and rail.
https://www.freightwaves.com/news/cbp-expands-e-commerce-data-pilot-to-ocean-international-mail
OFFICIALS IN SINGAPORE LOOK SET TO CONFISCATE RUSSIAN FREIGHTER BLACKLISTED BY THE US FOR HER OWNER’S ALLEGED DEALINGS WITH NORTH KOREA
On 9th December, Insurance Marine News reported that Singapore had sent papers that the ship is arrested due to berthing debts. Russia has said that the action was a commercial dispute rather than a sanctions-enforcement action. The ship’s auxiliary diesel engines broke down after she arrived in Singapore in February, but US sanctions meant that most of the Singaporean companies contacted refused to have anything to do with the vessel. The US Treasury has said that tanker owned by the shipowner conducted 2 ship-to-ship transfers of petroleum products with North Korean ships in early 2018.
OFAC PUBLISHES 2 NEW VENEZUELA SANCTIONS FAQ
On 9th December, OFAC announced the release of 2 FAQ, numbers 808 and 809.
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20191209_44.aspx
https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#808
OFAC ANNOUNCES SETTLEMENT WITH ALLIANZ GLOBAL RISKS OVER APPARENT VIOLATIONS OF CUBAN SANCTIONS REGULATIONS
On 9th December, OFAC announced that the wholly-owned subsidiary of Allianz SE, a German financial services provider, which operates a Canadian branch office in Toronto. The US company has agreed to remit $170,535 to settle its potential civil liability for 6,474 apparent violations of the Cuban Assets Control Regulations. The violations relate to fronted travel insurance policies that included occasional coverage relating to Canadian residents’ travel to Cuba. “Fronting” insurance business, OFAC explains, involves an arrangement between 2 or more insurance companies to allow a company to issue a policy in a jurisdiction where it is not licensed, and it is said that the practice continued for several years without either the US company or Canadian branch addressing requirements to be in compliance with OFAC regulations.
https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20191209_agr.pdf
OFAC ANNOUNCES SETTLEMENT WITH THE CHUBB LIMITED INSURANCE COMPANY (AS SUCCESSOR LEGAL ENTITY OF THE FORMER ACE LIMITED) FOR APPARENT VIOLATIONS OF CUBAN SANCTIONS REGULATIONS
On 9th December, OFAC announced a settlement with Chubb Limited (successor to ACE Limited, a Swiss company that provided insurance and reinsurance services for commercial and individual customers worldwide). Prior to the merger involving Chubb Inc and ACE, the latter had a UK-based subsidiary called ACE Europe and which conducted operations involving business in Europe. Chubb has agreed to remit $66,212 to settle its potential civil liability for 20,291 apparent violations of the Cuban sanctions regulations. The apparent violations related to travel insurance for travel to Cuba, and appear to have been caused by ACE’s misunderstanding of the applicability of US sanctions on Cuba with respect to this activity.
https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20191209_ace.pdf
UPDATE ON PROGRAMME FOR 100% SCANNING OF AIR CARGO ENTERING THE US
On 4th December, Homeland Security Today carried an article providing an update on the programme launched in 2007, when the US Congress enacted legislation that would require the Transportation Security Administration (TSA) to screen 100% of cargo transported on any passenger flights. The mandate was fully implemented in 2010, and the article looks at progress in keeping skies safe almost 10 years later. It says that, in the US, about 1,000 entities are validated and certified in the TSA Certified Cargo Screening Program and are allowed to screen cargo away from the airport, in their facilities, independent locations, or even agricultural fields following strict guidelines imposed and frequently audited by TSA. The barrier to entry is challenging, with the most stringent standards imposed on those enrolled in the programme. It also says that, in June 2018, TSA recognised the national country security programmes (NCSP) of the EU and 12 other countries as equivalent to that of the US. Also in 2018, the Air Cargo Advanced Screening (ACAS) programme began, requiring the submission of advanced air cargo information on shipments arriving in the US from a foreign location – initially voluntary, it is now mandatory for all airlines flying into the US. A recently-passed Act provides for third parties to provide canine detector services as well.
BELGIAN LAWYER GUILTY SWISS MONEY LAUNDERING CASE
On 9th December, Reuters reported that a Swiss court has convicted an unnamed Belgian lawyer of money laundering and forgery for taking shares worth more than $60 million from Belgium’s richest family and stashing them in accounts and offshore companies.
PAKISTANI CRICKETER ADMITS BRIBING PLAYERS TO FIX MATCHES
On 9th December, a news release from the NCA in the UK announced that ex-professional Pakistani cricketer, Nasir Jamshaid, has admitted bribing cricketers to fix elements of international matches. At Manchester Crown Court, Jamshaid, 32, pleaded guilty to conspiracy to commit bribery. British nationals Yousaf Anwar, 35, , and Mohammad Ijaz, 33, had also admitted their roles in the conspiracy on 2nd December. It is said that the group were plotting to fix elements of the 2016 Bangladesh Premier League T20 tournament which Jamshaid was due to play in.
OUTCOME OF FATF-STYLE REGIONAL BODY GAFILAT MEETING
On 9th December, GAFILAT, the FATF-style regional body for Central and South America reported on a plenary meeting held in Peru on 5th and 6th December. At the meeting, a mutual assessment report on Uruguay was adopted, and requalification reports of Honduras, Nicaragua and Peru were approved. In addition, the FIU of Cuba, Panama and Uruguay signed the update of the MoU for the Cooperation and Exchange of Information between the FIU of GAFILAT countries.
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