4 March 2020
HMRC INVESTIGATIONS INTO FOOTBALLER TAX AFFAIRS REACHES RECORD LEVEL
On 3 March, the BBC reported that HMRC is investigating the tax affairs of 330 footballers, 55 clubs and 80 agents, up from 173 players, 40 clubs and 38 agents in January 2019, and HMRC said it had recovered £396 million from the industry since 2015.
POTENTIAL TRADE DIVERGENCE BETWEEN UK AND EU ON CAMBODIA
On 26 February, Ropes & Gray LLP published an article highlighting potential differences between the EU and UK of the future treatment of trade with Cambodia. The EU has announced partial suspension of trade preferences for Cambodia due to the human rights situation – but the UK has yet to signal whether it will follow suit post-Brexit.
CANADA: HUMAN RIGHTS AND MINING COMPANIES – SUPREME COURT OPENS DOOR TO POTENTIAL NEW CHALLENGES
In its March Legal Bulletin, law firm McMillian reported that the Supreme Court of Canada has given Canadian courts the green light to develop new forms of civil liability based on alleged breaches of customary international law. In doing so, it is said, it has permitted torts that are unlike those in any other jurisdiction, except possibly the US. It says that Canadian-based resource companies with operations in developing countries that have poor human rights records, and now face vague and uncertain potential liabilities in Canada connected to the development of resource projects by their foreign subsidiaries. The article says that the decision is the latest in a series of cases brought against Canadian mining companies by non-resident plaintiffs alleging harm caused by the actions of these companies’ foreign subsidiaries, and it looks at the history of such claims, and attempts by the mining industry to stem them. In the latest case, plaintiffs were former Eritrean nationals who claimed they were conscripted through their military service into a forced labour regime to work at a mine in Eritrea, where they were subjected to violent, cruel and inhuman treatment. The article highlights the decision to allow a plaintiff to bring a private right of action for damages flowing from an alleged breach of customary international law by a corporate defendant. However, the article also highlights the questions left unanswered by the decision of the Supreme Court, but warns that companies which may be affected should nonetheless take precautions, with heightened due diligence and corporate social responsibility efforts.
A NEW ABBREVIATION – KYV – “KNOW YOUR VESSEL”
In a webcast from shipping specialist website Windward, “Know which vessels are safe for business”, a short presentation from C4ADS introduced an abbreviation new to me, and to be added to CDD, KYC, etc. KYV stands for “Know Your Vessel”, which tied in with the webinar theme of how to try to ensure that any vessel you have business connections with are not affected by, or suspected of, links to sanctions violations. The webcast recommended checks and controls as sanctions evaders and violators use deceptive shipping practices to conceal their true operations and to trade under the radar.
MAURITIUS ADDED TO FATF GREY LIST
On 4 March, International Investment reported the listing of Mauritius, described as a heavy blow to the Indian Ocean island nation, which has been trying to shed its image as a tax haven. It is the second-largest source of foreign portfolio investor (FPI) flows into India, after the US, and has remained so despite the amendment to the tax treaties between the 2 countries in 2017, and authorities in India have said that investors from Mauritius will continue to be eligible for registration with it even as the island country has been placed on the grey list. Despite this, its is said that experts fear Mauritius could lose its significance as a financial centre in the medium term.
INDIAN SEIZURE FROM PAKISTAN-BOUND SHIP: WHAT IS AN AUTOCLAVE?
On 4 March, The Print says that officials have said the seized item on a Hong Kong-flag vessel detained on 3 February was an autoclave, which can be used for both civilian and military purposes. It is said that the 18 x 4 metre vessel can be used in the manufacture of WMD platforms, according to officials from India’s Defence Research and Development Organisation (DRDO), and it can be used for the manufacture of the motor of very long-range missiles. The article goes on to explain what an autoclave is – essentially it provides method for disinfection and sterilisation using a combination of steam, pressure, high temperature and time are used to kill microorganisms and spores. It is dual-use — it is employed for civilian as well as military purposes. It can be used to sterilise waste products, and the term is synonymous with a steam steriliser that is most often found in hospitals or pharmaceutical settings.
US: BUSINESS-OWNER ADMITS SMUGGLING MACHINERY TO IRAN
On 3 March, the New Hampshire Union Leader reported that the owner of a New Hampshire-based export business pleaded guilty to smuggling machinery from the US to Iran in violation of export controls – Aiden Davidson, 32, (formerly Hamed Aliabadi before becoming a US citizen in 2016). Golden Gate International LLC shipped motors, displacement pumps, pumps, valves and other machinery items to Iran, though there are no allegations that the material was used by the Iranian military. The goods were sent to Turkish companies, one a freight forwarding company just 30 miles from the Iranian border.
INDIVIDUAL EMAILS SENT IN FURTHERANCE OF THE SAME FOREIGN BRIBERY SCHEME ARE SEPARATE FCPA VIOLATIONS
On 4 March, Wilmer Hale reported that on 14 February, a US District Court had issued a ruling that ruled that individual emails sent in furtherance of the same foreign bribery scheme are separate FCPA violations, with each email forming the basis for a separate “unit of prosecution”. The law firm says that, if the ruling is upheld on appeal it could raise the stakes for individuals and corporations accused of FCPA violations. Defendants charged with paying a bribe, effected through the sending and receipt of multiple emails, may now face multiple charges and increased exposure at sentencing.
BOILER ROOM INVESTMENT FRAUD IN SPAIN AND NETHERLANDS HALTED
A news release from Eurojust on 4 March advised that Dutch and Spanish authorities have arrested 6 suspects for defrauding at least 40 victims for around €6 million. The suspects contacted mainly Dutch investors, promising considerable profits. The suspects set up so-called boiler rooms, alleged investment companies which had a very professional outlook and online presence. Their representatives called victims, using professional sales techniques, and offered investments in shares without any real value.
UK: FORCED MARRIAGE UNIT STATISTICS 2018
On 4 March, the Home Office issued a news release containing information on the number of cases reported to the government’s Forced Marriage Unit via its public helpline and email inbox from 1 January to 31 December 2018. The FMU is a joint FCO and Home Office unit working on the government’s forced marriage policy, outreach and casework. It operates both inside the UK, where support is provided to any individual, and overseas, where consular assistance is provided to British nationals, including dual nationals.
FinCEN PENALISES US BANK OFFICIAL FOR CORPORATE AML FAILURES
On 4 March, a news release from FinCEN advised that a $450,000 civil penalty had been imposed against Michael LaFontaine, former Chief Operational Risk Officer at US Bank National Association, for his failure to prevent violations of the Bank Secrecy Act during his tenure. The Bank used automated transaction monitoring software to spot potentially suspicious activity, but it improperly capped the number of alerts generated, limiting the ability of law enforcement to target criminal activity. In addition, the bank failed to staff the BSA compliance function with enough people to review even the reduced number of alerts enabling criminals to escape detection.
ISRAEL: A LAWYER ESCAPED THE LAW FOR 15 YEARS, SENTENCED TO 6 YEARS FOR THEFT, FRAUD AND OBSTRUCTION
On 4 March, the Jerusalem Post reported that a Tel Aviv district court has sentenced Michael Caprov, 66, to 6 years in prison for theft, fraud, and obstruction. He was originally found guilty in 2004 for theft and fraud, and the court sentenced him for another charge of obstruction due to his avoidance of justice.
CAYMAN ISLANDS BLACKLISTING TO HAVE NO EFFECT ON THE SHIPPING REGISTRY
On 4 March, the Superyacht News reported that the EU blacklisting of the Cayman Islands relates to the regulation of collective investment vehicles (CIV) and has no impact on either the Maritime Authority or its dealings with clients based in the EU or otherwise.
US ALLEGES HONDURAS DRUG LAB OPERATED WITH PRESIDENTIAL PROTECTION
On 4 March, Insight Crime reported that US authorities allege that a recently arrested drug trafficker, Geovanny Daniel Fuentes Ramírez, relied on protection from Honduras President Juan Orlando Hernández and his brother Tony to manufacture hundreds of kilograms of cocaine per month.
MOLDOVA’S MOST NOTORIOUS OLIGARCH HAS BEEN IN THE US DESPITE SANCTIONS
On 4 March, Rferl reported that Vladimir Plahotniuc fled Moldova in June 2019 after being pushed out of parliament as part of a government shakeup brokered by Russia, the US, and other European partners. He has dropped out of the public view since then, reportedly travelling under one or more assumed names and alternate passports. In January, the US imposed him and his family with visa restrictions. However, sources told the media site that Plahotniuc had been in the US on several occasions in recent months, including at least once since the US State Department imposed the visa restrictions.
AUTHORITIES IN DUBAI SEIZE MORE THAN 29,000 FAKE WATCHES WORTH MORE THAN $327 MILLION
On 3 March, Illicit Trade reported that the 29,000 fake watches would have been worth more than $327 million had they been genuine.
SPANISH TRANSLATION OF DoJ GUIDANCE FOR EVALUATING COMPLIANCE PROGRAMMES
On 4 March, the FCPA Blog reported that law firm Ritch Mueller has produced an unofficial translation (with English and Spanish side-by-side) of the DoJ April 2019 Guidance Document for the Evaluation of Corporate Compliance Programs into Spanish.
RUSSIA HAS UPDATED ITS ANTI-BRIBERY AND AML LAWS TO DEAL WITH CORRUPTION RISKS ASSOCIATED WITH CRYPTOCURRENCY AND NEW TECHNOLOGY
A post on the FCPA Blog on 4 March advised that this has happened as Russia has plans to introduce its own cryptocurrency later in 2020.
INDIA: JET AIRWAYS FOUNDER NARESH GOYAL FACING MONEY LAUNDERING INVESTIGATION
On 4 March, the Hindustan Times reported that the Enforcement Directorate (ED) has registered a case under the Prevention of Money Laundering Act (PMLA). He had already been under investigation for alleged violations of foreign direct investment (FDI) regulations.
PRESIDENT TRUMP SIGNS BILL TO ADD CUSTOMS AGRICULTURE SPECIALISTS TO PORTS
On 4 March, American Shipper reported that the Protecting America’s Food and Agriculture Act provides funding to help US Customs and Border Protection close a shortfall among its agriculture specialist ranks over the next 3 years – with specialists and technicians to step up protection for America’s farming and forestry industries against the introduction of destructive pests and diseases.
US PUSHBACK AGAINST UN ‘BLACKLIST’ OF COMPANIES INVOLVED WITH WEST BANK JEWISH SETTLEMENTS
On 4 March, American Shipper reported that the UN Human Rights Council has developed a database identifying companies that conduct business with Jewish settlements in the West Bank. The Trump Administration called the UN database a “blacklist” which could effectively facilitate international boycotts against the listed enterprises.
If you’d like to help me buy that (badly needed) new laptop or, even better, a new desktop to replace the one now 5,000 miles away – https://www.buymeacoffee.com/KoIvM842y