OTHER THINGS YOU MAY HAVE MISSED – JUNE 2

Panama Covid-19 update – second day of partial release from total lockdown, though tail end of tropical storm affecting countries to the north may have dampened spirits a tad.   News reports showed certain lack of social distancing on the streets in the city…and having to shelter from the torrential rain would not have helped.

Of course, one won’t see the possible effects of the relaxation, in new cases etc, for 7 to 14 days or more in the official figures.  Meanwhile, 258 new cases take us to over 14,000 in total, with 8 more fatalities (giving us 352 to date).  77 people are in ICU and 314 more in other hospital wards, though 9,514 marked as “recovered”.  Another statistic is that 100 people arrested overnight for breaking the 1900 to 0500 curfew…

2 June 2020

COMPANIES FACING TOUGHER ETHICAL REGULATION IN SWITZERLAND

On 1 June, the FT reported on a proposed change to the law brought by the Responsible Business Initiative (KVI), which makes businesses in Switzerland liable for abuses of human and environmental rights anywhere in their supply chain.  Critics say the proposed changes would makes businesses liable for abuses beyond their control, but supporters say it will make Switzerland leader of a global move towards greater corporate, social and ethical responsibility.

https://www.ft.com/content/ce25644f-20ed-4595-9785-96f8eea97d4e

US: DRUG CRIME EXPERT PLEADS GUILTY TO MONEY LAUNDERING

On 1 June, the Wall Street Journal reported that retired University of Miami professor Bruce Bagley laundered over $2 million in proceeds, according to prosecutors.   The professor, an expert on crime in Latin America, was alleged of laundering money from a bribery scheme in Venezuela.  The money came from overseas banks in Switzerland and UAE and flowed through a bank account in Florida, allegedly set up by Bagley using the name of a company he owned.

https://www.wsj.com/articles/drug-crime-expert-pleads-guilty-to-money-laundering-11591057077

https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article243177871.html

US SUPREME COURT EXTENDS HUNT FOR $3 BILLION IN OFFSHORE MADOFF CASH

On 1 June, the Wall Street Journal reported that the Court has refused to shield European banks and other foreign investors from having to return roughly $3 billion they collected before his 2008 arrest.  The Court declined to stop lawsuits against foreign institutions including HSBC Holdings PLC, Crédit Agricole SA and Société Générale SA over money stolen and that was transferred overseas. It says that this paves the way for years of additional litigation against these institutions, some of the last — and largest — targets in an international legal campaign to dig up money for Madoff victims.

https://www.wsj.com/articles/supreme-court-extends-hunt-for-3-billion-in-offshore-madoff-cash-11591025719

UK: WHAT DOES THE ELGIZOULI JUDGMENT MEAN FOR MUTUAL LEGAL ASSISTANCE?

On 1 June, 6KBW Hill posted an article posing this question.  The case mentioned involved the Supreme Court holding that the provision of material by way of mutual legal assistance to the US for the prosecution of Shafee El Sheikh and Alexanda Kotey, without obtaining an assurance that the evidence would not be used in a death penalty trial, was unlawful.  The article asks where does it leave the provision to the US of further material in relation to these 2 individuals; and in what circumstances could the UK government truly claim to be satisfied that the transfer would be lawful?

https://blog.6kbw.com/posts/after-elgizouli-what-does-the-judgment-mean-for-mutual-legal-assistance

SOUTH AFRICA: ALLEGED GUPTA KICKBACK CONTRACTS WORTH 9BN RAND

On 2 June, KYC 360 reported claims from South Africa about kickbacks allegedly paid by 2 locomotive manufacturers now merged to form CRRC Corporation, the Chinese conglomerate that boasts of being the world’s largest supplier of rail equipment.  The money is said to have come from Transnet, a state-owned company.  It is said that it followed a simple formula: whatever Transnet paid the CRRC companies, they paid the Guptas a cut of, usually 21%.

https://www.riskscreen.com/kyc360/news/locorruption-reloaded-we-reveal-gupta-kickback-contracts-worth-r9bn/

EU DAC 6 DIRECTIVE ON REPORTING CROSS-BORDER TAX ARRANGEMENTS – WILL IT WORK?

On 29 May, Bird & Bird published an article saying that new EU rules come into force later this year which require intermediaries – e.g. financial institutions, lawyers and accountants, and in certain circumstances taxpayers themselves – to report certain cross-border arrangements to their local tax authorities.  The 6th Directive on Administrative Cooperation aims to discourage the use of aggressive cross-border tax planning arrangements by asking those intermediaries either advising on or implementing them to report the arrangements.  The article examines what it involves, and asks if it will achieve its aims.

https://www.twobirds.com/~/media/pdfs/news/articles/2020/dac6-flyer-may-2020.pdf?la=en&hash=1EE84A30CAE9BCF90B4AC6F51C7DB4FC7EE5C313

DIRECTORS’ DUTIES IN ENGLAND AND WALES AMID COVID-19

On 27 May, a Cooley Alert said that directors need to consider how to comply with their existing obligations and respond effectively to the challenges posed by COVID-19.  This update provides a high-level overview of the issues and some practical considerations for directors of companies incorporated in England and Wales.

https://www.cooley.com/news/insight/2020/2020-05-27-directors-duties-in-england-and-wales-amid-covid-19

SOMALIA WITHDRAWS LICENCES FOR 2 KENYAN AIRLINES OVER ALLEGED KHAT SMUGGLING

All Africa on 1 June reported that 2 airlines operating in Somalia have had their licences withdrawn over Khat smuggling. Buff Air Services and Silverstone Air Service are both accused of illegally importing and transporting khat.  Khat was banned in a bid to combat the spreading of Covid-19.

https://allafrica.com/stories/202006020300.html

https://www.garoweonline.com/en/news/somalia/somalia-revokes-licenses-for-kenyan-airlines-over-alleged-smuggling-of-khat

COVID-19: BEWARE OF HEIGHTENED AML RISKS

On 31 May, Freshfields Bruskhaus Deringer published an article about the recent FATF report on COVID-19-related money laundering and terrorist financing risks, and the possible policy responses.

https://riskandcompliance.freshfields.com/post/102g8jw/covid-19-beware-of-heightened-aml-risks

MSB: GUIDANCE FOR MONEY LAUNDERING SUPERVISION

On 2 June, HMRC issued updated guidance for money service businesses, designed to help money service businesses meet their requirements for money laundering supervision, including customer due diligence, record keeping and reporting suspicious activity.

https://www.gov.uk/government/publications/anti-money-laundering-guidance-for-money-service-businesses

UK LAND REGISTRY EXPLORES CRYPTO AND BIOMETRIC IDENTITY CHECKS

On 1 June, Law Society Gazette reported that the Land Registry says the pandemic has highlighted the immediate need for an easy-to-use, modestly priced, remote and digitally secure way for conveyancers to securely identify buyers and sellers, and is working with the Law Society and other property bodies on potential solutions.

https://www.lawgazette.co.uk/practice/land-registry-explores-crypto-and-biometric-identity-checks/5104465.article

3 ARRESTED IN HUNGARY IN €1.4 MILLION SOYA BEAN VAT FRAUD INVESTIGATION

On 2 June, a news release from Europol advised that the Hungarian National Tax and Customs Administration had unravelled a sophisticated tax evasion scheme with 3 individuals arrested.  The criminals would purchase soybeans from Slovenian companies managed by Slovakian frontmen. The goods were then sold on the domestic market in Hungary without paying VAT. To support their criminal activity, the organised crime group set up an accounting office which handled bank transactions, tax reporting and invoicing.

https://www.europol.europa.eu/newsroom/news/3-arrested-in-hungary-in-€14-million-vat-fraud-investigation

FRAUD ALLEGATIONS TAINT EFFORTS TO PROSECUTE WAR CRIMES IN SYRIA

On 2 June, the National in UAE reported that OLAF has recommended that the European Commission seek to recoup €1.9 million in funding from entities connected to the Syria Rule of Law project, an EU initiative that began around 2013.  Separately, a a Dutch newspaper linked the investigation to the Commission for International Justice and Accountability (Cija), formerly named the Syrian Commission for Justice and Accountability, but without explaining the link – Cija has denied any link, nor knowledge of any investigation.  Cija has supplied evidence in the ongoing trial in Germany of 2 Syrians accused of involvement in the torture and killing of thousands of civilians.  Cija was founded by a former Canadian army officer who worked in the Yugoslavia and Rwanda war crimes tribunals.

https://www.thenational.ae/world/mena/fraud-allegations-taint-efforts-to-prosecute-war-crimes-in-syria-1.1027891

TRADING STANDARDS AT HEATHROW AIRPORT HAVE STOPPED 6.5 MILLION SUB-STANDARD FACE MASKS AND 8,000 COUNTERFEIT HAND SANITISERS

The Mature Times website reported that trading standards teams at Heathrow Airport have stopped 6.5 million sub-standard face masks and 8,000 counterfeit hand sanitisers coming through the airport since the pandemic started, according to London Trading Standards (LTS).  The majority of masks seized had been labelled with false claims or fake safety certificates and around 4.25 million had to undergo label amendments before they were subsequently released.

https://www.maturetimes.co.uk/trading-standards-teams-at-heathrow-airport-have-stopped-6-5-million-sub-standard-face-masks-and-8000-counterfeit-hand-sanitisers-coming-through-the-airport-since-the-pandemic-started-according-to-l/

ITALY ARRESTS 63 MAFIA SUSPECTS, INCLUDING PUBLIC OFFICIALS

On 2 June, OCCRP reported that Italian authorities have arrested 63 suspected members of the infamous ‘Ndrangheta, including 11 public officials who allegedly have, among other crimes, rigged public tenders worth some €150 million, including money coming from EU funds.  The suspects were charged with abuse of public funds, bribery, corruption and abuse of office, as well as for their role in a scheme aimed to hand over control of the region’s state tender contracts to the syndicate.

https://www.occrp.org/en/daily/12455-italy-arrests-63-mafia-suspects-including-public-officials

EU DRUG MARKETS — IMPACT OF COVID-19

On 2 June, the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) has made available this joint publication from the EMCDDA and Europol which analyses the impact of the pandemic on the market for the main drug types (cannabis, heroin, cocaine, amphetamines, NPS), including demand, production, trafficking and availability. It reports higher prices, local shortages and reduced purity for some drugs, while noting continued violence among suppliers and distributors.  It also shows how organised crime groups remain active and resilient, by adapting transportation models, trafficking routes and concealment methods, even during the pandemic.

https://www.emcdda.europa.eu/system/files/publications/13097/EU-Drug-Markets_Covid19-impact_final.pdf

UK COURT MUST DECIDE WHICH LEADER TO RECOGNISE IN VENEZUELA GOLD CASE

On 28 May, the Guardian reported that a court in London has said that it will need to decide which of Venezuela’s duelling political factions to recognise before ruling on president Nicolas Maduro’s request for the Bank of England to hand over gold the country has in its vaults. The Venezuela central bank is seeking access to the gold.  However, the court said it would begin hearings no earlier than 22 June to determine which party could represent Venezuela in the case.

https://www.theguardian.com/world/2020/may/28/uk-court-must-decide-which-faction-to-recognise-in-venezuela-gold-case

Meanwhile, on 1 June, Insight Crime reported that in the wake of Venezuela’s hyperinflation and economic woes, the country has come to rely on dwindling oil exports, remittances and the smuggling of fuel, drugs and gold to prop up its increasingly dollarised economy.  However, it says, global lockdowns, coupled with increasing international pressure on the Maduro government, have left only one gold.

https://www.insightcrime.org/news/analysis/venezuela-depends-gold-industry/

FAA CAUTIONS PILOTS ON ILLEGAL CHARTER IN US

On 2 June, AIN Online reported that the FAA had issued an information letter reminding that private pilots may not fly for compensation or hire and warning against the use of “sham” dry leases and certain unauthorized flight-sharing schemes.  Among common pitfalls mentioned are the use of what the agency termed as sham dry leases or “wet lease[s] in disguise”.

https://www.ainonline.com/aviation-news/business-aviation/2020-06-02/faa-cautions-pilots-illegal-charter-pitfalls

DIGITAL CONTAINER SHIPPING ASSOCIATION PROVIDES EDUCATION ON ‘SMART CONTAINERS’

On 2 June, American Shipper reported that the DCSA has published what it says are the first internet of things (IoT) connectivity interface standards for shipping containers, which the DCSA describes as an important step in enabling mass deployment of smart containers.  It is said that, of the 41 million containers in circulation today, only a tiny percentage are considered “smart”.  9 members of the DCSA — CMA CGM, Evergreen Marine, Hapag-Lloyd, HMM, Maersk, MSC, ONE, Yang Ming and ZIM — make up about 70% of global container ship capacity.

https://www.freightwaves.com/news/dcsa-provides-education-on-smart-containers

REMEMBER THE US: CHINA TRADE WAR? IT’S BACK AND AT RISK OF ESCALATING

On 1 June, American Shipper carried an article saying that deteriorating relations in the wake of a Chinese security law covering Hong Kong has implications for container, tanker, dry bulk and gas shipping demand, as well as shipping stocks.

https://www.freightwaves.com/news/remember-the-trade-war-its-back-and-at-risk-of-heating-up

ISLE OF MAN ADVISES AMENDMENT OF CENTRAL AFRICAN REPUBLIC AND SYRIA SANCTIONS LISTS

On 2 June, the Isle of Man issued 2 news releases advising that for the CAR sanctions, 1 entry had been amended.  For the Syria sanctions, 4 entries have been removed from the relevant lists and are no longer subject to an asset freeze and 1 existing entry has been amended and is still subject to restrictive measures.  The changes follow changes made to the underlying EU sanctions and follow adoption of the changes by the UK.

https://www.gov.im/news/2020/jun/02/financial-sanctions-central-african-republic/

https://www.gov.im/news/2020/jun/02/financial-sanctions-syria/

IRELAND: CANDLEMAKER FACES €400,000 VAT BILL AFTER LOSING LEGAL BATTLE OVER SHAPE OF CANDLES

On 2 June, The Journal reported a bizarre Tax Appeals Commission case the result of which means the company involved faces the tax bill after losing a legal challenge over the shape of candles its supplies to churches.  Under Irish law, candles and night-lights are only zero-rated for VAT purposes if they are white and cylindrical; and excludes a zero rate for candles and night-lights that are “decorated, spiralled, tapered or perfumed”.  The legislation made no express reference to church candles or the use to which candles were put, but did specifically state that candles that were tapered attracted the standard VAT rate – with wording which was described as being “clear and unambiguous”.

https://www.thejournal.ie/candle-church-vat-bill-5113270-Jun2020/

HOW COMPANIES WITHOUT US OPERATIONS CAN STILL FIND THEMSELVES FACING US LAW AND REGULATORY ENFORCEMENT

On 2 June, Foley & Lardner LLP published an article saying that if you think this lack of apparent connection to the US will protect you from the long arm of US enforcement authorities, think again.  This article presents 6 scenarios under which companies with no operations (or even business) in the US can still find themselves on the wrong end of an investigation by US enforcement agencies. These scenarios cover bribery, corruption, and fraud, as well as export violations and offshore transactions involving countries and entities “blacklisted” under US sanctions programs. And, in each instance, foreign companies may swiftly – and often unknowingly – subject themselves to US jurisdiction.

https://www.jdsupra.com/legalnews/the-long-arm-of-american-enforcement-40062

DOZENS OF CORRUPT OFFICIALS AND POLITICIANS IN LATIN AMERICA ARE LOSING THEIR JOBS OVER HEALTH CARE DEALINGS DURING THE CORONAVIRUS PANDEMIC

On 2 June, Deutsche Welle published an article saying that the COVID-19 pandemic has been shamelessly exploited by politicians and their cronies.  It recounts stories from across Latin America, such as in Panama, where a vice-president and a presidential adviser stepped down after ventilators were bought at the exorbitant price of $50,000 each.  The article says that the health care sector is particularly susceptible to corrupt practices at the best of times, with a claim that up to 25% of global health care spending is lost to corruption.  What is new, it is said, is that the pandemic has brought civil society and the media onto the scene, watching over their governments and investigating abuses almost in real time.  However, the article also reports attempts to stifle any transparency or investigation.

https://www.dw.com/en/coronavirus-latin-americas-corruption-fighters-gain-new-ground/a-53661216

SCOTLAND: WOMAN WHO CLAIMED SHE COULD BARELY WALK YET WAS WORKING FULL-TIME FACES £60,000 PROCEEDS OF CRIME ACTION

On 2 June, the Dundee Courier reported that Diane Halko, 55, told the Department for Work and Pensions she had a severe disability and could only walk a short distance with the aid of sticks.  Prosecutors have lodged a proceeds of crime action to get back money they claim she was not entitled to receive in benefits.

https://www.thecourier.co.uk/fp/news/local/angus-mearns/1346999/arbroath-woman-who-claimed-she-could-barely-walk-yet-was-working-full-time-faces-60k-proceeds-of-crime-action

FORMER TEL AVIV DEPUTY MAYOR AND EX-SOCCER STAR TO FACE CORRUPTION CHARGES

The Times of Israel on 2 June reported that indictments have been announced against Likud Tel Aviv councilman Arnon Giladi and Haim Revivo, who played on Israel’s national team; case linked to probe of top Likud MK David Bitan and in connection with alleged bribery involving real estate projects in the city.

https://www.timesofisrael.com/former-tel-aviv-deputy-mayor-ex-soccer-star-to-face-corruption-charges

US TRADE REPRESENTATIVE LAUNCHES INVESTIGATIONS INTO DIGITAL SERVICES TAXES ADOPTED OR UNDER CONSIDERATION IN AUSTRIA, BRAZIL, THE CZECH REPUBLIC, EU, INDIA, INDONESIA, ITALY, SPAIN, TURKEY, AND UK

A Client Alert from Wilmer Hale on 2 June advised that the USTR had announced the initiation of investigations under Section 301 of the Trade Act of 1974 into Digital Services Taxes (DST).

https://www.wilmerhale.com/en/insights/client-alerts/20200602-ustr-launches-section-301-investigations-of-digital-services-taxes-in-10-jurisdictions

 

 

If you would like to say thanks by making a small contribution, in case I need to upgrade or replace my computers and other paraphernalia, I have a page at https://www.buymeacoffee.com/KoIvM842y

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s