31 January 2020
HOW THE ‘ART OF THE DEAL’ HURT LATIN AMERICA’S CORRUPTION FIGHT
An interesting article in Americas Quarterly on 30 January argued that Trump’s transactional approach to foreign policy has weakened anti-corruption measures in the region. It says that for 3 decades after the Cold War, US diplomats across administrations were charged with promoting the rule of law. The efforts to create CICIG in Guatemala (under the George W Bush administration) and MACCIH in Honduras (under the Obama administration) were successful examples of such diplomacy. The approach has changed under the Trump administration’s narrow, transactional approach.
UK: JUDGE FINDS DAUGHTER OF FORMER ENRC DIRECTOR GUILTY OF WITHHOLDING DOCUMENTS
The Wall Street Journal on 30 January reported that the daughter of a former director of Eurasian Natural Resources Corporation, a mining company at the centre of an ongoing bribery probe since 2013, has been found guilty of withholding documents. Anna Machkevitch was convicted of failing to comply with a request for documents and ordered to pay £800. She is the daughter of Alexander Machkevitch, a founder and former director of ENRC.
THE ONLY PERSON DETAINED IN PANAMA IN THE MULTIMILLION-DOLLAR ODEBRECHT CORRUPTION INVESTIGATION RELEASED
On 31 January, Newsroom Panama reported that the Supreme Court had declared the arrest warrant issued by the Special Anti-Corruption Prosecutor’s Office illegal and ordered the release of Fredy Barco Vera, an Ecuadorian, who had been detained in May 2019.
ITALIAN PROSECUTORS INVESTIGATED UBS EUROPE FOR POSSIBLE MONEY LAUNDERING AND OBSTRUCTING THE WORK OF REGULATORS
On 31 January, KYC 360 reported that the investigation was part as part of a fraud inquiry into small asset manager Sofia SGR. Under Italian laws the companies can be held responsible for the actions of their employees. It is said that the investigation examined if Sofia committed fraud by applying higher-than-average fees to clients and by failing to disclose conflicts of interest on deals that generated losses for customers.
TUNISIA’S EFFORTS AT ADDRESSING HUMAN TRAFFICKING REQUIRE BETTER IMPLEMENTATION OF THE LAW
On 2 December, ENACT Africa carried an article which says that Tunisia has achieved significant advances in its efforts against human trafficking since 2016. Laws have been passed, anti-trafficking institutions created, and growing numbers of victims identified and rescued. However, it says, more needs to be done. It says that Tunisia has long been both an origin and destination country for human trafficking, as well as having poor and marginalised Tunisians forced into servitude in the country itself.
THE ILLICIT CIGARETTE TRADE IN SOUTH AFRICA
On 20 January, an article in ENACT Observer says that cheap and readily available illicit cigarettes are becoming a lucrative source of income for organised criminals. The estimated loss through the illicit trade of cigarettes in South Africa for the 2015/16 financial year was R6 billion, and the illegal cigarette trade forms part of a broader illicit economy which involves counterfeit goods, motor vehicles, clothing and textiles, movies and music. In South Africa, the largest share of the illicit cigarette market is occupied by those manufactured locally, with other brands smuggled from neighbouring countries. It gives the example of Kenya, where such a technology has succeeded in reducing illicit trade in cigarettes – but also says that criminal networks must be targeted. However, currently, despite the large profit generated from illicit cigarette trafficking, the penalties associated with the crime are moderate compared to other crimes such as drug or weapon trafficking.
IS DAKAR IN SENEGAL A NEW DESTINATION OF CHOICE FOR DRUG TRAFFICKERS?
An article on 20 January in ENACT Africa looks at the drugs trade through Dakar. It cites cases in 2019, such as in 5 days in June/July 2019, Senegalese customs seized 1.3 tons of cocaine from 2 Italian-flagged ships at the Autonomous Port of Dakar. This was the second-largest haul of cocaine in Senegal since 200, and a further seizure of almost a ton from a vessel destined for Dakar took place on the high seas in early November. The final destination for most of the drugs was likely to be Europe. However, the Autonomous Port of Dakar is an important transit zone for goods from all over the world and the article says that if Dakar is becoming a port of choice for criminals, then responses beyond seizures are required to keep pace with the wily traffickers of the high seas and their portside allies.
CERTAIN THIRD COUNTRIES ALIGN WITH EU SANCTIONS REGIMES
On 31 January, a news release announced that North Macedonia, Montenegro, Serbia, Albania and Iceland had undertaken to align their laws with EU Council Decision (CFSP) 2019/1894 concerning restrictive measures in view of Turkey’s unauthorised drilling activities in the Eastern Mediterranean.
Another news release on 31 January advised that North Macedonia, Montenegro, Serbia, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Moldova, Armenia and Georgia had undertaken to align their laws and procedures with recent changes to EU ISIL/Al-Qaida sanctions.
A final news release on 31 January advised that North Macedonia, Montenegro, Serbia, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Moldova and Armenia have aligned with the EU renewal of its DR Congo sanctions.
BREXIT: WHAT’S NEXT FOR THE UK ART MARKET?
On 31 January, the Art Newspaper carried an article by a former MEP says that leaving the EU will make business with its Member States more difficult but is likely to offer opportunities further ahead. It cautions that the post-transition period will likely mean new paperwork, licences, tariffs and in some cases pre-certification by EU officials. Existing free movement rules will also end, therefore a visa and possibly a licence is likely to be needed before most work can be carried out in Europe. However, the article warns, for the art market the situation will be even more complex, partly because of new EU legislation on the import of cultural goods, which will be gradually implemented between now and 2025, when a fully electronic system comes into force. This will also apply to cultural goods imported into the EU once the UK has left the customs union. However, while currently exports from the EU to the UK are covered by EU rules covering inter-EU transfers, after Brexit, EU exports to the UK will require an EU export licence and would be governed by a similar regime to the new import rules. The article warns that it is already virtually impossible to export cultural goods from some EU countries, such as Italy, and the European Commission is keen to ensure further restriction on the export of European cultural heritage from Europe.
US: HAVARD CHEMIST IS SUSPECTED OF ILLEGAL DEALINGS WITH CHINA
On 30 January, The Economist carried an article about Charles Lieber, a pioneer of nanoscience who is now the chairman of Harvard University’s chemistry department, seen as a potential Nobel laureate and a part of Elon Musk’s ambitious scheme to supercharge the human brain with nanotechnology. In 2013, he visited the Wuhan University of Technology (WUT), in China, to celebrate the founding of a lab he was credited by that university with helping to establish and oversee; and is said to have received $200,000 a month under China’s Thousand Talents programme to bring foreign scientists, and return Chinese expatriates, to that country’s research laboratories. He was arrested by the FBI on 28 January, accused of lying to federal authorities after his having denied his alleged participation in the Thousand Talents programme. The DoJ also announced charges against 2 Chinese nationals who had been in Boston ostensibly as researchers.
NEW UK GOVERNMENT GUIDE ADDRESSES ‘INCREASINGLY COMPLEX’ CYBERSECURITY AT MARITIME PORTS
On 28 January, Homeland Security Today carried an article about the release in the UK of a “Good Practice Guide” for maritime cybersecurity, intended primarily for port operators and port system providers. In cyber security incidents, the shipping line Maersk and port assets have been infected with malware and there has been unintentional jamming or interference with wireless networks. It says that the new guide provides advice on measures including cyber security assessments and plans for important assets, how to handle security breaches, and having the correct governance structures, roles, responsibilities and processes, and includes a model cybersecurity plan for a port which includes training, management, information security, and supply chain security.
FRANCE: CLIMATE CHANGE CASE AGAINST TOTAL OIL COMPANY REFERRED TO COMMERCIAL COURT
On 31 January, EurActiv reported that the case where oil company Total was being sued by a group of French and Ugandan NGO , alleging human rights abuses resulting from the company not observing France’s “corporate vigilance” law, has been referred to a lower commercial court. The article explains that, as a French company, Total is subject to the ‘duty of vigilance’ – a 2017 law to monitor the abuses by multinationals in terms of respect for human rights in developing countries and nicknamed the “Rana Plaza” law, after the building which held garment factories that collapsed in Bangladesh killing more than 1,000 people. In partnership with the Chinese National Offshore Oil Corporation (CNOOC) and British company Tullow, Total has launched 2 major projects in Uganda. The NGO allege that the oil company’s due diligence plan was not in line with the law, including on the question of about 5,000 people living off the land have been displaced without being offered sufficient compensation that would enable them to acquire land equivalent to the land that was expropriated from them. NGO allege that French multinationals in general have only slightly complied with the law’s requirement of preparing vigilance plans, and that those that have done so already have provided only incomplete commitments, as is the case for Total.
MACAU JOINS KIMBERLEY PROCESS FOR ROUGH DIAMONDS
On 31 January, EU Regulation 2020/130/EU made amendments to the relevant EU Regulation concerned with the Kimberley Process, to which the EU and Member States are parties, to recognise that the Macao Special Administrative Region of the People’s Republic of China formally implemented the Kimberley Process certification scheme from 1 October 2019. The Kimberley Certification Process Scheme (KCPS) is a system for supervising and controlling the import and export trade of rough diamonds. It was reported that Macau received its first batch of Kimberley-certified diamonds in November.
NEW EU RULES ON SHORT-STAY VISAS APPLY WORLDWIDE FROM 2 FEBRUARY
A Q&A from the EU on 31 January provided advice on new rules which it says are designed to make it easier for legitimate travellers to apply for a visa to come to Europe, facilitating tourism, trade and business, while providing more resources for countering irregular migration risks and threats to internal security. The changes only apply to travellers from 105 countries which need visas to travel to the EU. The rules cover short-stay visas for the 22 EU countries that are part of the Schengen area (Austria, Belgium, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden), as well as for 4 associated countries: Iceland, Liechtenstein, Norway and Switzerland.
UK APPLICATION PROCESS FOR CRIMINAL RECORDS CHECKS OR ‘CERTIFICATES OF GOOD CHARACTER’ FOR SOMEONE FROM OVERSEAS
On 31 January, the Home Office issued guidance on who can apply, how to apply and contact details for criminal record checks overseas. The application process for criminal records checks or ‘Certificates of Good Character’ for someone from overseas varies from country to country and you will have to apply in the country or to the relevant embassy in the UK. In the UK, all Tier 2 (General) visa applicants who want to work in specified health, education or social care sectors must provide a criminal record certificate.
INSOLVENCY: RETURN OF HMRC PREFERENTIAL CREDITOR STATUS
On 31 January, a House of Commons Library briefing paper provides an overview of the background to, and the main provisions of, the government’s proposal to amend insolvency legislation to reinstate in part HMRC preferential creditor status after April 2020.
OECD COUNTRIES TO MEET AGAIN IN JULY IN EFFORT TO REVAMP TAX LAWS
On 31 January, the Irish Times reported that the threat of a new transatlantic trade war diminished after 137 countries agreed to continue negotiations aimed at creating rules for taxing multinational technology companies that receive foreign revenue. Officials meeting at the OECD in Paris agreed to convene again in July to continue talks aimed at clinching a global accord by the end of 2020, according to a statement.
TRUMP SIGNS EXECUTIVE ORDER AIMED AT PREVENTING SALES OF COUNTERFEIT GOODS FROM OVERSEAS
On 31 January, Reuters reported that President Trump has signed an Executive Order aimed at preventing counterfeit products from abroad from being sold to US citizens who shop online using Amazon.com, Walmart.com or other e-commerce websites. The Order asks the Department of Homeland Security to “consider appropriate measures” to ensure that companies that sell products from overseas do not ship counterfeits; to draw up rules to help identify companies that were suspended from importing into the US; and to draw up rules to identify companies that have a high rate of contraband among their shipments.
RECORD $4 BILLION AIRBUS FINE DRAWS LINE UNDER ‘PERVASIVE’ BRIBERY
Reuters, and many other media sites, on 31 January reported that Airbus bribed public officials and hid the payments as part of a pattern of worldwide corruption, prosecutors said as the European aircraft maker agreed a record $4 billion settlement with France, Britain and the US after a nearly 4-year investigation spanning sales to more than a dozen overseas markets.
VISITING THE UK FROM 1 JANUARY 2021
On 31 January, the Home Office published a web page providing what you need to know about crossing the UK border and visiting the UK from 1 January 2021.
UK CROWN DEPENDENCIES: JERSEY, GUERNSEY AND ISLE OF MAN
On 31 January, the Ministry of Justice published updated information about the UK’s relationship with the Crown Dependencies, with an updated factsheet.
UK: FURTHER ARRESTS MADE BY NCA IN MALTA BANK CYBER-HEIST MONEY LAUNDERING PROBE
On 31 January, the NCA issued an update advising that officers have made a further 3 arrests as part of their investigation into money laundering linked to a cyber-attack on a bank in Malta, including a man arrested at Heathrow Airport as he returned to the UK from China.
CYPRUS ACCOUNTANTS’ ORGANISATION WARNS THAT CBI PASSPORT APPLICANTS ARE TO BE CONSIDERED HIGH-RISK
Kenneth Rijock in his blog on 31 January reported that the Institute of Certified Public Accountants of Cypru, (ICPAC) has issued an Advisory to its members, warning them that applicants for CBI passports are to be considered high-risk clients, and specifically calling for an increased level of scrutiny upon such individuals. He says that its guidelines, while directed to accountants in Cyprus, provide a roadmap for any professional whose clients have applied for Citizenship by Investment passports in any jurisdiction.
LITHUANIA: DEALINGS OF COLLAPSED BANK EXPOSED IN PARADISE PAPERS LEAD TO INDICTMENT OF FORMER OWNER
On 31 January, OCCRP carried an article on the case involving Vladimir Romanov, the former owner of Lithuania‘s Ukio bank, suspected of looting it for millions of euros. It collapsed abruptly in 2013, and Romanov fled to Russia where he was given asylum and remains. Now Lithuanian authorities have announced they were finished investigating one of several cases related to Romanov and the bank, and Romanov and 12 others now stand accused of diverting bank funds into their own pockets.
HONG KONG CUSTOMS SEIZE 68,000 FAKE SURGICAL MASKS
On 31 January, ECNS in China reported that customs in Hong Kong had seized 68,000 surgical masks with a suspected false manufacturing date. The customs department had launched a citywide special operation to inspect retail spots in different districts that sell surgical masks. So far, more than 1,300 of those spots have been inspected. It reminded people to pay attention to the information on the mask packages, including the manufacturing and expiry dates, and check them for any dirt or signs of use before making purchases. Customers are also advised to purchase masks at reputable shops.
END OF PANAMA FIREARMS IMPORT BAN
On 31 January, Insight Crime published an article saying that officials in Panama have ended a nearly decade-long ban on the importation of firearms, describing it as a move that could end up benefiting traffickers and corrupt officials at a time when the nation’s murder rate is on the rise. A decision was announced on 21 January to let a 2011 law expire that limited the number of firearms importers could receive per shipment. It had restricted importers to 200 firearms per shipment and 400 annually, whereas previously importers were able to receive as many as 4,000 firearms in a single shipment. Panama has in the past been identified as an important hub in the regional arms trade, according to a 2012 threat assessment from the United Nations Office on Drugs and Crime (UNODC) – the guns originating in the US flowing through to Colombia and elsewhere.
SEC HAS CHARGED A PENNSYLVANIA MAN WITH DEFRAUDING AMISH AND MENNONITE COMMUNITY MEMBERS BY MAKING FALSE CLAIMS ABOUT THE USE OF THEIR FUNDS AND GUARANTEED RETURNS
A release on Mondo Visione on 31 January reported that the SEC alleges that Philip E. Riehl provided accounting services to Amish and Mennonite communities and developed his own investment programme, pooling money raised by selling promissory notes to community members. Riehl allegedly raised approximately $60 million over nearly a decade and promised to invest the funds in business and real estate loans to others in the religious community.