On 11 June, Accounting Web reported that a BBC Radio 4 programme exposing a tax and National Insurance fiddle involving workers being “employed” via umbrella companies, and which has targeted workers joining or re-joining the NHS. It is pointed out that, when HMRC catches up with the workers involved, it is they who will be targeted and forced to pay the missing tax/NI, with the promoters of the schemes having vanished or, if still in existence, refusing any compensation.
On 9 June, CSIS published an article saying that 2021 marks the 50th anniversary of the OECD and that it now plays a critical role in shaping the global economic agenda and informing economic policies. It has served as an important policy forum and a platform for best practices in issues such as taxes, education, the environment, governance and public integrity, and international development. In 2021, the OECD will consider the term expiration of certain top leadership positions, particularly the secretary-general. It argues that it is in the interest of the US (the chief funder of the organisation) to advocate for new leadership and to engage actively in identifying a successor SG who reflects US interests around the world in trade, tax policy, foreign aid, and global governance. It says that the end of the current secretary general’s term provides a crucial opportunity for the OECD to reassess its core mission for the next 10 years and evaluate how to most effectively project the organisation’s relevance and accomplish its goals and objectives. In doing so, the new one should prioritise the emerging disciplines of technology applications (including AI) and digital tax issues — topics that will be increasingly important in the coming decades. The status and position of China is also an issue.
On 11 June, Lawfare explained that Title III of the Act (only activated last year), allows US nationals to sue persons and entities that “traffic” in property confiscated by the Cuban government, with “traffic” being defined expansively to include not only engaging “in a commercial activity using or otherwise benefiting from confiscated property” but also profiting from any trafficking done by anyone else. In its first year since being activated 26 suits were filed against purported traffickers, a smaller number than many experts anticipated. The article now notes that a recent court decision held that plaintiffs may bring an action under Title III only if they acquired ownership of their claim to confiscated property in Cuba before 12 March 1996 (i.e. when the Act was passed). The court’s holding, if followed by other courts, could significantly reduce the number of Title III lawsuits.
On 8 June, an article from Carey Olsen was concerned with a high-level update on the proposed new Jersey register of beneficial owners, controllers and significant persons. It says that on 2 June the draft Financial Services (Disclosure and Provision of Information) (Jersey) Law was lodged for consideration by the States of Jersey (Jersey’s parliament).
A Commentary from RUSI on 11 June says that in the EU-UK discussions the usual areas of disagreement are raised: access to Britain’s fishing grounds, the requirements of a level playing field agreement, regulations over state aid etc. However, it notes that the EU’s lead negotiator – raises the question of AML/CFT in each update, and not with an air of optimism. It says that, at least as far as the EU is concerned, the UK’s ambition on AML is being brought into question. It notes that the UK can argue that it needs not fully commit to implementing current or future AML/CFT Directives, as such a commitment exists, in effect, in commitment to FATF standards, but then says FATF establishes baseline levels, which may be insufficient. Finally it raises 2 related questions – the future relationship on law enforcement and judicial cooperation and data exchange, an area where the approach in the UK and the EU is often divergent; and potential inefficiencies and difficulties for businesses should EU and UK requirements diverge.
On 11 June, the New York Times and others reported an Executive Order as the latest attack by the Trump Administration against international organisations, treaties and agreements. It has authorised economic sanctions and travel restrictions against court workers directly involved in investigating American troops and intelligence officials for possible war crimes in Afghanistan without US consent, for being “an attack on the rights of the American people and threaten to infringe upon our national sovereignty”.
On 9 June, Clyde & Co published Part 2 of a multi-part blog post says that any such divergence will add to sanctions compliance challenges across the supply chain as these restrictions target a number of systemically important entities. It concludes that, despite UK and EU officials stating that they intend to coordinate as much as possible on sanctions policy going forward, it is already apparent that there are various avenues for divergences to materialise over time.
A White Paper from Kharon says that screening names and identifiers on the sanctions list alone is no longer sufficient to satisfy regulatory expectations. This paper highlights immediate actions for financial crime risk management in the wake of new sanctions designations. It looks at the importance of going beyond the sanctions list for screening and due diligence in order to identify exposure to customers that present material risk considerations for the control framework. In particular, it addresses the following risk, data and relationship types that can be surfaced within the first few days following each new designation.
A news release from US immigration & Customs Enforcement on 9 June advised that Harry George Bock II, 47, from El Paso, Texas, pleaded guilty to mislabelled exports to his role in a scheme to illegally sell protected living rock cactus plants. In May 2018, 41 living rock cacti shipped by Bock were seized by authorities at the International Mail Facility in Chicago.
On 9 June, Deutsche Welle reported that the US is to begin rolling out a range of new sanctions later this month — dubbed the “Caesar Act” — aimed at President Bashar Assad’s regime and his international backers. Existing US and European sanctions are aimed at powerful Syrian individuals and the oil sector, but the new measures and secondary sanctions targeting anyone who partners with the Syrian government and close loopholes in existing sanctions regimes.