20 February 2020
EU COURT DISMISSED 15 APPLICATIONS BY OFFICIALS OF DEMOCRATIC REPUBLIC OF CONGO TO ANNUL EU TARGETED SANCTIONS RE-LISTINGS
On 20 February, the EU Sanctions Blog reported that the EU General Court has rejected claims by 15 persons that that the 2017 renewal of their listings were not based on a sufficiently precise and concrete factual basis to justify the allegations of human rights violations.
FURTHER ACCUSED SOUGHT AFTER FIRST PANAMA PAPERS CONVICTION IN THE US
On 20 February, Newsroom Panama reported that, following the conviction in New York of Harald Joachim von der Goltz in a federal court, the next step would be prosecution of Dirk Brauer and Richard Gaffey, accused of having participated in the conspiracies with Von der Goltz, and Panamanian lawyer Ramses Owens. Under house arrest in Panama, it is argued that he has not been able to appear before the US courts to defend himself against the accusations because of this.
MYANMAR SET TO BE PUT ON FATF AML/CFT GREY LIST
On 20 February, KYC 360 reported that Myanmar is set to be placed on a watchlist by FATF, meeting for its Plenary in Paris, amid concerns of money-laundering by transnational drug traffickers and weak regulation of its financial system.
EU BLACKLIST: IMPACT ON CAYMAN ISLANDS
On 18 February, there appeared a number of articles about the effects of the Cayman Islands being placed on the EU list of non-cooperative tax jurisdictions as a result of a failure to introduce new laws relating to private funds within the necessary timescale. It is said that the Islands already contacted EU officials to begin the process of being removed from the EU list, which is expected to be October 2020.
A Ropes & Gray article focused on the effects for asset managers.
An article from Fried Frank contained a Q&A on the effect of the blacklist on the Islands.
ANTI-BRIBERY AUDITS ARE NOW KEY IN M&A TRANSACTIONS IN FRANCE
On 17 February, Hogan Lovells published an article saying that, following the Sapin II law, more and more businesses have implemented compliance programs. These include measures to prevent risks within their organisations, as well as in their supply chain and distribution channel relationships. It says that, over the past months, the focus in France has been increasingly put on corruption risks in mergers and acquisitions. On 17 January, the French Anti-Corruption Agency (AFA) issued a practical guide on anti-corruption audits in the context of mergers and acquisitions.
CANADA EXPANDS ECONOMIC SANCTIONS LIST AGAINST UKRAINE
On 18 February, Tereposky & DeRose LLP published an article saying that on 29 January Canada amended the list of designated persons under the Special Economic Measures (Ukraine) Regulations adding 6 individuals. As a result, Canada now imposes an asset freeze and dealings prohibition on 202 individuals under the updated Ukraine Regulations.
PANAMA DETAINS SUBMARINE WITH 5 TONS OF COCAINE
On 20 February, Salt Wire carried a Reuters report saying that police in Panama have seized 5 tons of drugs that were transported aboard a semi-submersible boat in the north-west of the country. They arrested 4 Colombians aboard the “homemade device”.
SWISS REGULATOR HITS JULIUS BAER WITH SANCTIONS
On 20 February, Finews reported that the private bank is prohibited from any major acquisitions, improve its internal controls and will get an monitor following a nearly 3-year investigation after Julius Baer was implicated in 2 major money laundering scandals, PDVSA and FIFA.
UK: PRESSURE ON ACCOUNTANTS INTENSIFIES AS MONEY LAUNDERING CRACKDOWN HEATS UP
On 20 February, Accountancy Age reported that fines for UK firms failing to comply with money laundering regulations totalled nearly £300 million in 2019, and that, combined with the introduction of new rules under the 5th AML Directive, which took effect in January, it’s clear that accountants must pay close to attention to AML – or face some serious repercussions. However, the article mentions a poll undertaken in the days leading up to implementation and found the majority (71% of 148 surveyed) did not know about the new rules.
SPAIN: FIRST FEMALE MAYOR OF MANILVA ARRESTED FOR MONEY LAUNDERING FOR ITALIAN MAFIA
On 19 February, the Olive Press reported that a former mayor of the town of Manilva has been arrested for her alleged role in helping launder money for an Italian mafia. Antonia Munoz was arrested together with 12 others following a lengthy investigation by Policia Nacional and Malaga’s Money Laundering Unit. She was the first female councillor in Manilva in 1987 before becoming the first female mayor in 1999, left the role between 2003 before being re-elected in 2007. However, it says, she came into trouble in 2013 after being accused of violation of labour laws, eventually resigning in 2014.
87% OF ALL CARGO THEFT IN THE SUPPLY CHAIN TAKES PLACE IN THE ROAD TRANSPORT SECTOR
On 20 February, Loadstar carried a piece about a report for TT Club, whose annual cargo theft report, compiled with supply chain intelligence firm BSI, says road freight – either in transit or parked – accounts for 87% of all cargo thefts in the supply chain – compared to 10% were from facilities, 1% from sea freight and 2% listed as “other”.
NEW US CLOUD-BASED DEFENCE EXPORT CONTROL AND COMPLIANCE SYSTEM FOR EXPORT AND OTHER APPLICATIONS
The Directorate of Defense Trade Controls (DDTC) has introduced a new online system, the Defense Export Control and Compliance System (DECCS). DECCS will replace DETRA, DTRADE, EFS, ELLIE, and MARY, providing users access to a number of DDTC business applications through a single, Cloud-based portal. As a result, users will have access to all registration, licensing, advisory and disclosure applications through the portal.
OFAC ISSUES FAQ ON THE REPORTING, PROCEDURES AND PENALTIES REGULATIONS (RPPR)
On 20 June 2019, OFAC had announced amendment of the RPPR, which deal with standard reporting and recordkeeping requirements and licence application and other procedures relevant to the economic sanctions programmes administered by OFAC. It has now issued new FAQ 819 and 820 about the effect of the changes made by the amendment.
US CUSTOMS FINDS HUMAN BRAIN WITHOUT PAPERS IN SHIPMENT FROM CANADA
On 19 February, Homeland Security Today reported that US Customs and Border Protection (CBP) officers seized a human brain in international mail at Blue Water Bridge in Port Huron. In a routine mail operation, a shipment manifested as an “Antique Teaching Specimen” was targeted for inspection and officers found the package to contain a human brain specimen inside of a clear glass mason jar without any paperwork or documentation in support of its lawful entry into the US.
ILLEGAL SALE OF DANGEROUS STEROIDS IN FRANCE HALTED WITH 24 ARRESTS
A news release from Eurojust on 20 February announced that, with the support of Eurojust, authorities in France, Slovakia, Poland and Ukraine have dismantled a criminal network, which sold large quantities of illegal and dangerous anabolic steroids, mainly on the French market. During an action day, 24 suspects have been arrested in Slovakia, including the leader of the criminal network.
MALTA TOLD TO AMEND VAT RULES FOR YACHT LEASING
On 20 February, Tax News reported that the European Commission has sent an additional letter of formal notice to Malta, following an initial request in 2018, again asking Malta to amend its method for calculating VAT on yacht leasing. The Commission says that Maltese legislation uses a distance-based method when calculating the effective use and enjoyment of a yacht outside the EU. However, EU rules do not allow such a method to be used, instead requiring the use of a time-based method.
ON-THE-RUN BRIT HELD AFTER RAID ON UNDERGROUND FACTORY TURNING OUT 3,500 CIGARETTES AN HOUR IN SPAIN
On 20 February, Birmingham Live reported that escaped British convict Daniel Dobbs, 31, from Yorkshire, was allegedly involved in operation which was generating profits of half a million pounds a week. He had been sentenced to 13½ years in prison in January 2014, after he was convicted of trafficking heroin and amphetamines, but escaped from an open prison in 2018.
PHILIPPINE LEADER FIRES OFFICIALS OVER IMMIGRATION SCANDAL INVOLVING CHINESE NATIONALS
Radio Free Asia on 20 February reported that President Duterte has fired a group of immigration officials linked to a bribery scheme where border control officers allegedly allowed Chinese nationals working in the booming online gaming industry to enter the Philippines illegally, taking bribes of up to 10,000 pesos (US $185) rolled up in bond paper to allow the Chinese in.
AIRCRAFT ENGINE LEASING, THE FUNDAMENTALS – LEGAL RISKS AND THE CAPE TOWN CONVENTION
On 20 February, Bryan Cave Leighton Paisner published a briefing continuing its 4-part series of articles that set out to explain a large and important, but probably little understood, industry sector. The second part considers the legal risks associated with engine leasing and the mitigating impact that the Cape Town Convention has had on those risks 9by creating a recognised register for the engines, separate from the aircraft they are fitted to). It explains that spare aircraft engines are highly mobile assets, leased for the sole purpose of coming off and going on aircraft, both within the immediate operator’s fleet and (if permitted) to certain affiliates within their group (via pooling arrangements or subleasing) and/or other airlines via permitted subleasing arrangements.
The first article, which considers the appeal of engine leasing to investors (as lessor owners and financiers) and the economic considerations which influence decisions made by investors in this asset class, is available at –
FRENCH COURT RULES ON CORPORATE LIABILITY FOR CRIMINAL ACTS COMMITTED BY EXECUTIVE
On 20 February, Jones Day published an article about a case in which a CEO was convicted of misusing corporate assets, and required to pay damages plus interest to the victim of his offence, and he sued to force the company to reimburse him for this amount, on the grounds that, in committing the offence, he was acting within the scope of his official duties. However, the court held that his intentional criminal acts were separate from his official corporate duties and that the company therefore was not liable for the criminal penalties attributable to those acts. The article argues that companies and their executives will need to be mindful of established and emerging legal principles in this area.
MEXICO’S 2020 SET TO BE A CHALLENGING YEAR FOR COMPANIES AND INVESTORS
On 20 February, Control Risks published an article saying that 2020 is likely to be another challenging year for companies and investors in Latin America’s second-largest economy as President Andrés Manuel López Obrador (AMLO) continues his ‘Fourth Transformation’. It says that the security situation is bad and getting worse, and the article examines why and the misconceptions involved, with organised crime involved in a wide range of illegal activities, not only drugs. The there is what the article describes as economic malaise. The article concludes that the perception of Mexico will likely take a hit (again), but this does not presage some sort of ‘AMLOgeddon’ scenario whereby the economic (and political) situation in Mexico deteriorates to the extent that the country becomes ‘the next Venezuela’ and/or regarded as a pariah among international investors. However, it then highlights things that companies and investors can do to prepare.
PROPOSED UK IMMIGRATION POINTS-BASED SYSTEM
On 20 February, Eversheds Sutherland published an article explaining how the proposed post-Brexit UK immigration system would work.
THE NEW CFIUS REGULATIONS: HOW WILL THIS ACTUALLY WORK? FAQ WE WISH THE US TREASURY WOULD ANSWER
In 2 articles on its website, Paul Hastings poses a number of questions about the new Committee on Foreign Investment in the United States rules, which came into effect on 13 February. In one the firm sets out a number of FAQ it would like answered in the hope of clarifying how the new provisions actually work.
The other article is: How Investment Funds Can React and Take Advantage –
TOURISM RISES IN RUSSIA
US CUSTOMS WORKERS FIND COUNTERFEIT LED SCREENS WORTH MORE THAN $1.5 MILLION IN RAIL FREIGHT
On 20 February, Illicit Trade reported that they were discovered during an inspection of rail containers at the International Falls port of entry, where goods pass into the US from Canada. They were in 2 40-foot containers and were destined for delivery in Minnesota, and were said to have originated from China.
SPANISH JUDGE SUMMONS VENEZUELAN GLOBOVISION TV OWNER IN PDVSA PROBE
KSL.com on 20 February reported that a Spanish judge has named Raúl Gorrín, the owner of a Venezuelan TV network, in an investigation of alleged corruption and money laundering by Venezuela’s state-owned oil company PDVSA. Gorrín is also said to be wanted in the US for corruption and money laundering.
INDIA SEIZES COSCO VESSEL CARRYING PARTS FOR NUCLEAR MISSILE
On 18 February, Port Strategy reported on the seizure by Indian authorities of a Hong Kong flag vessel, Da Cui Yun, a specialised cargo vessel, said to be carrying materials of use in production of strategic missiles powered by solid fuel.
HISTORIC MOMENT CLAIMED AS CARGOX BECOMES FIRST PROVIDER TO USE PUBLIC BLOCKCHAIN ETHEREUM NETWORK FOR ITS PLATFORM AFTER GAINING APPROVAL FROM THE INTERNATIONAL GROUP OF P&I CLUBS
On 19 February, Port Strategy reported that CargoX, the provider of the CargoX blockchain document transfer (BDT) platform, has described the approval as a “historic milestone”. The article also explains that the International Group of P&I Clubs is an unincorporated association of the 13 principal underwriting Protection & Indemnity (P&I) Associations and their Affiliated Associations and Reinsured Entity and provide liability cover (protection and indemnity) for approximately 90% of the world’s ocean-going tonnage.
DEA TARGETS NATION’S METH ‘TRANSPORTATION HUBS’
On 20 February, American Shipper reported a DoJ claim that 8 US cities account for 75% of the methamphetamine seized by the DEA; and the DEA will dedicate resources to target “transportation hubs” throughout the country which are known hotspots for trafficking in methamphetamine. The project is named Operation Crystal Shield.
US STATE DEPARTMENT BANS EXPORTS TO 13 WEAPONS PROLIFERATORS
On 20 February, American Shipper reported on the revocation of export licences (and other restrictions) linked to violators of the Iran, North Korea and Syria Nonproliferation Act. Most of the enterprises and individuals are located in China, including Baoding Shimaotong Enterprises Services Co. Ltd., Dandong Zhensheng Trade Co. Ltd., Gaobeidian Kaituo Precise Instrument Co. Ltd., Luo Dingwen, Shenzhen Tojoin Communications Technology Co. Ltd., Shenzhen Xiangu High-Tech Co. Ltd., Wong Myong Son, and Wuhan Snajiang Import and Export Co. Ltd. Russian companies Kumertau Aviation Production Enterprise, Instrument Building Design Bureau, and Scientific Production Association Mashinostroyeniya, in addition to Kata’ib Sayyid al-Shuhada of Iraq and Eren Carbon Graphite Industrial Trading Co. Ltd. of Turkey, were also added to the export ban.
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