OTHER THINGS YOU MAY HAVE MISSED – JULY 3

Panama Covid-19 update – couldn’t help smiling that the 2 former Presidents who faced interrogation yesterday over alleged corruption have been told they cannot leave the country – when it is impossible to fly anyway, at least until 22 July, as all non-cargo, and non-humanitarian flights are banned…

Meanwhile, another 758 new cases (35,995 to date, of which 15,809 in the 20-39 age range and 11,375 in the 40-59 age range). While the number of new cases are down, the number of fatalities is at a new high of 31 (698 to date, giving a death-rate of 1.94% of infected, below the 4.79% world average). There are currently 18,352 active cases, though 500 more have recovered, with 146 in ICU and 823 in other wards and 705 in requisitioned hotels.  Of the total cases, the vast majority are in the relatively lower-risk age ranges of 20-39 (15,809) and 40-59 (11,375). I also noted that the highest number of new cases appeared to be in poorer areas, though our own area added 14 new cases.

3 July 2020

 5 CREW KIDNAPPED BY PIRATES FROM CARGO SHIP OFFSHORE BENIN

On 3 July, Seatrade Maritime News reported that 5 seafarers have been kidnapped by pirates from a Pacific International Lines (PIL) multipurpose vessel. 5 Chinese crew members, including the Master, had been taken and presumed kidnapped.

https://www.seatrade-maritime.com/piracy/five-crew-kidnapped-pirates-pil-cargoship-offshore-benin

9 KIDNAPPED BY NIGERIAN PIRATES FROM OFFSHORE VESSEL

Another article from Seatrade Maritime News on 3 July reported that 9 personnel have been kidnapped by pirates from the BW Offshore floating production storage and offloading (FPSO) Sendje Berge off Nigeria.

https://www.oedigital.com/news/479866-report-armed-group-attacks-fpso-kidnaps-crew-in-nigeria

https://www.defenceweb.co.za/security/maritime-security/pirates-kidnap-nine-in-attack-on-vessel-off-nigeria-says-ship-owner/

LUXEMBOURG TIGHTENS SCREWS ON TRUSTS WITH EU RULES

On 3 July, KYC 360 reported that the Luxembourg parliament has voted for trusts to provide information on the person who set up the trust, the trustee, and the beneficiaries the assets really belong too.

https://luxtimes.lu/luxembourg-tightens-screws-on-trusts-with-eu-rules-41101

COMPANY IN US INVESTIGATION ON DIRTY MONEY FROM VENEZUELAN POLITICIANS CHANNELLED $120 MILLION THROUGH MALTA-BASED PILATUS BANK

On 1 July, Malta Today reported that €120 million in financial transactions from the now-closed Portmann Capital Management, were funnelled through the private Malta-based Pilatus Bank. Portmann had channelled a total of €120 million in transactions, out of €520 million it handled in total, through Pilatus Bank. The firm was fined €370,000 by the FIAU over its scant due diligence on its politically exposed clients (PEP), and €63,000 by the Malta FSA.

https://www.maltatoday.com.mt/news/national/103293/portmann_channelled_120_million_through_pilatus_bank_inquiry_hears#.Xv8oTuWSmM_

EU TAKES AUSTRIA, BELGIUM, NETHERLANDS TO COURT OVER FAILURE TO IMPLEMENT AML RULES

On 2 July, Reuters reported that the European Commission said it was suing Austria, Belgium and the Netherlands because the countries had not fully integrated EU rules on AML into their national laws, i.e. for failing to fully implement the 4th AML Laundering Directive.

https://www.reuters.com/article/us-eu-infringement-moneylaundering/eu-sues-austria-belgium-netherlands-for-not-fully-implementing-anti-money-laundering-rules-idUSKBN2431LI

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1228

NEW EXPORT CONTROLS FOR SURVEILLANCE TECHNOLOGY IN EUROPE

A short (“coffee break”) podcast from Reed Smith on 24 June consists of partners from Reed Smith’s International Trade & National Security team discussing changes to the EU export controls on surveillance technology expected to enter into force soon. From their vantage points in London, Washington and Brussels, the lawyers address what these changes might mean to business, and how they might restrict the UK’s access to certain products following its imminent departure from the EU.

https://www.reedsmith.com/en/perspectives/2020/06/new-export-controls-for-surveillance-technology-in-europe#page=1

ANTI-BRIBERY AND CORRUPTION DURING COVID-19: KEY COMPLIANCE STEPS

An article from Travers Smith LLP on 25 June explores several new bribery and corruption challenges faced by organisations in light of COVID-19, and ways in which internal compliance policies and procedures should be updated to address such challenges. It proposes 5 best practice steps which should be considered to help redress the balance:

  • Make sure new suppliers go through proper on-boarding channels;
  • Communicate and re-highlight ABC policies, procedures training and other guidance to employees;
  • Revisit your risk assessments;
  • Re-start any ABC processes which may have been placed on pause; and
  • Deal diligence and other forms of customer/ payment diligence should continue to be prioritisedbut flexibility is key.

https://www.traverssmith.com/knowledge/knowledge-container/anti-bribery-and-corruption-during-covid-19-key-compliance-steps/

IRELAND: UNIT TRUST AND ICAV REGISTER OF BENEFICIAL OWNERSHIP

On 1 July, A&L Goodbody in Ireland published an article saying that the next step has been taken to establish a Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles (ICAV) and Unit Trusts. ICAV and Unit Trusts in existence before 25 June have until 25 December to file information on the central register. Unit Trusts authorised on or after 25 June and ICAV registered on or after 25 June will have a 6-month filing deadline.

https://www.algoodbody.com/insights-publications/unit-trust-and-icav-register-of-beneficial-ownership

EUROPEAN COURT OF HUMAN RIGHTS ASKED TO EXAMINE AN ORDER BY FRENCH HIGH COURT FOR THE RESTITUTION OF PAINTING LOOTED BY NAZIS

On 2 July, the Art Newspaper reported that a US collector will sue France in the European court arguing that the French judgement violates the ownership and defence rights of his client. The collector said he had purchased the work in good faith at Christie’s in 1995. but the High Court upheld the terms of a 1945 order annulling all acts of plunder that occurred under the German occupation.

https://www.theartnewspaper.com/news/pissarro-european-court

TURKEY PUTS 4 PILOTS AND 3 OTHERS ON TRIAL FOR HELPING GHOSN FLEE JAPAN

The Japan Times on 3 July reported that a private airline official, 4 pilots and 2 flight attendants (who face a 1-year prison term each if convicted of not reporting a crime) have gone on trial in Istanbul, accused of smuggling former Nissan Motor Chairman Carlos Ghosn out of Japan to Lebanon, via Turkey. Turkish airline company MNG Jet said in January that 2 of its aircraft were used illegally in Ghosn’s escape, first flying him from Osaka to Istanbul, and then to Beirut.

https://www.japantimes.co.jp/news/2020/07/03/national/crime-legal/turkey-puts-four-pilots-three-others-trial-helping-ghosn-flee-japan/#.Xv80YOWSmM8

VATICAN FIU ANNUAL REPORT

On 3 July, the Catholic News Agency reported on the release of the 2019 annual report by the Autorità di Informazione Finanziaria, or AIF.  It is said that it received 64 SAR in 2019, 15 of which it forwarded to the Promoter of Justice for possible prosecution. The release of the report comes ahead of a scheduled inspection by Moneyval, the Council of Europe’s AML watchdog.  However, the Catholic Culture website comments that the president of the AIF does not mention the October police raid on the AIF offices, nor the abrupt departure of the agency’s top 2 officials.

https://www.catholicnewsagency.com/news/vatican-financial-watchdog-hails-rising-trend-in-reports-to-promoter-of-justice-75188

https://www.catholicculture.org/news/headlines/index.cfm?src=ilaw&storyid=46975

ESTONIA HIRES US LAW FIRM TO INVESTIGATE MONEY LAUNDERING

On 3 July, ERR in Estonia reported that the Ministry of Finance has entered into an agreement with the USlaw firm Freeh Sporkin & Sullivan LLP to provide legal services to the Estonian state in international money laundering investigations.

https://news.err.ee/1108951/estonia-hires-us-law-firm-to-investigate-money-laundering

US: WELL-KNOWN RARE COIN BUSINESS AND $200 MILLION SILVER TRADING SCAM

On 2 July, KSL.com reported that Denise Gunderson Rust, 60, a member of a Utah family that ran a well-known rare coin business accused of running a $200 million silver trading scam has pleaded guilty to money laundering in federal court. The scam has been described as one of largest and most financially destructive frauds Utah has ever seen with nearly 700 victims.  Federal prosecutors say the company, Rust Rare Coin Inc, defrauded at least 700 investors nationwide of at least $200 million. Members of the Rust family are accused of tricking people into believing they were pooling their money to buy and sell silver bullion, but the funds were allegedly used to pay other investors.

https://www.ksl.com/article/46772723/rust-coin-family-member-admits-to-money-laundering-in-alleged-200m-silver-trading-scam

IRELAND: SUPREME COURT CLEARS BERNIE MADOFF PONZI LOSS CASE FOR HEARING

On 3 July, the Irish times reported that the Court has cleared the way for a full hearing of a claim concerning multimillion losses related to the Ponzi scheme run by jailed US fraudster Bernie Madoff. A BVI-registered investment fund had sued HSBC Institutional Trust Services (Ireland) Ltd for €141 million but the case will proceed against HSBC France on foot of a consent order made in May. The fund alleges negligence and breach of contract regarding the HSBC company’s alleged role as a custodian of funds.

https://www.irishtimes.com/business/financial-services/supreme-court-clears-bernie-madoff-ponzi-loss-case-for-hearing-1.4295593

US: BUSINESSES ADVISED TO INTENSIFY EFFORTS TO IDENTIFY FORCED LABOUR IN CHINA SUPPLY CHAINS

On 3 July, Sandler Travis Rosenberg reported that US businesses, investors, and others with potential exposure in their supply chains to China’s Xinjiang Uighur Autonomous Region or facilities outside Xinjiang that use labour or goods from Xinjiang are being warned of the economic, legal, and reputational risks of being involved with entities that engage in human rights abuses, including forced labour in the manufacture of goods intended for international distribution. This is contained in a joint advisory from the Departments of Homeland Security, Commerce and State, and the US Treasury.

https://www.strtrade.com/news-publications-forced-labor-China-Xinjiang-supply-chain-070320.html

GIBRALTAR: 10% IMPORT DUTY ON PERSONAL IMPORTS 

On 3 July, the Government of Gibraltar published a news release clarifying exemptions to the 10% import duty to be levied on personal imports and aimed to encourage the ‘BUY LOCAL’ campaign.

https://www.gibraltar.gov.gi/press-releases/clarification-of-10-import-duty-on-personal-imports-4372020-6005

FORMER US JUDGE PLEADS GUILTY TO OBSTRUCTING DRUG TRAFFICKING PROBE

On 3 July, OCCRP reported that Ryan Kamada, a former judge from Colorado’s 19th Judicial District, has pleaded guilty to obstructing a federal task force’s large-scale drug trafficking investigation. The judge had warned a personal friend who was acquainted with a known drug trafficker and this person passed on the warning to the drug trafficker, disrupting the investigation. The judge then deleted evidence of his conversation with his friend and in November pleaded guilty to destruction of records with the intent to obstruct a federal investigation.

https://www.occrp.org/en/daily/12690-former-us-judge-pleads-guilty-to-obstructing-drug-trafficking-probe

COUNTERFEIT CURRENCIES WORTH MILLIONS OF EUROS PREVENTED FROM ENTERING THE EU ECONOMY IN ROMANIA AND SPAIN

On 3 July, a news release from Europol advised that 2 separate operations dismantled 2 illegal print shops for counterfeit currencies: one for high quality Romanian lei and one for euros.

https://www.europol.europa.eu/newsroom/news/counterfeit-currencies-worth-millions-of-euros-prevented-entering-eu-economy-in-romania-and-spain

THE ROLE OF DRUG ANALYSIS LABORATORIES IN EARLY WARNING SYSTEMS

A publication from the UN Office on Drugs & Crime says that drug analysis laboratories are key to a functioning national, regional or international early warning system due to the specific expertise, information and data they can generate. This publication focuses on information available from the laboratories analysing drug seizures and/or responsible for toxicological analysis. It aims to provide drug analysis laboratories and other stakeholders with practical information and examples on how to participate in an early warning system. The main functions of drug analysis laboratories in early warning systems are to –

  • Detect and identify new and known substances, as well as combinations of these, which pose a potential threat;
  • Cooperate in improving analytical characterisation of NPS and other drugs;
  • Systematise and validate the information collected in the system;
  • Provide drug analysis data and intelligence information (when relevant) for the preparation of reports and products to different recipients;
  • Support national, regional and international data collection Identify adulterants; and
  • Determine purity

https://www.unodc.org/documents/scientific/Drug-Analysis-Systems_EWS_EN.pdf

46 lb OF CHEMICALS USED TO CREATE ILLEGAL DRUGS SEIZED BY US CUSTOMS

A news release from US Customs & Border Protection on 2 July advised that officers had intercepted a shipment originating from China containing 46.5 lb of chemicals that are often referred to as ‘club drugs’ or ‘date rape drugs’.  2 bottles were found to contain 23.5 lb of Gamma-Butyrolactone (GBL), a DEA List I precursor chemical and 22.9 lb of 1,4-Butanediol, a precursor chemical for Gamma-Hydroxybutyric Acid (GHB).

https://www.cbp.gov/newsroom/local-media-release/46-pounds-chemicals-used-create-ghb-seized-cbp

US-BELIZE MEMORANDUM OF COOPERATION FOR COLLABORATION ON CARGO INFORMATION-SHARING PROGRAMME

On 2 July, Breaking Belize News reported that thе Веlіzе Сuѕtоmѕ аnd Ехсіѕе Dераrtmеnt аnd US Сuѕtоmѕ аnd Воrdеr Рrоtесtіоn (СВР) have ѕіgnеd а Меmоrаndum оf Соореrаtіоn thаt рrоvіdеѕ fоr соllаbоrаtіоn оn аnd іmрlеmеntаtіоn оf аn іnfоrmаtіоn-ѕhаrіng рrоgrаm utіlіsіng саrgо mаnіfеѕt аnd соnvеуаnсе іnfоrmаtіоn.

https://www.breakingbelizenews.com/2020/07/02/u-s-and-belize-sign-memorandum-of-cooperation-for-collaboration-on-information-sharing-program/

MEXICO OIL THIEVES GO UNDERGROUND TO AVOID DETECTION

On 3 July, Insight Crime reported that oil thieves in Mexico are sidestepping security forces by utilising hoses buried just out of sight underground to transport stolen fuel, with at least 5 underground hoses in 4 states.

https://www.insightcrime.org/news/brief/mexico-oil-thieves-go-underground/

UK GUIDANCE ON DAC 6 CROSS-BORDER TAX REPORTING PUBLISHED

On 2 July, Out-Law published an article saying that HMRC has published guidance on how it will apply the EU Directive known as DAC 6, designed to enable EU tax authorities to share information about cross-border tax schemes. The legislation applies from 1 July.

https://www.pinsentmasons.com/out-law/news/uk-guidance-cross-border-tax-reporting-published

THE EU TAXONOMY REGULATION

This article from Eversheds Sutherland on 3 July says that a key element of recent EU measures designed to encourage environmentally sustainable investment decision making is the Taxonomy Regulation – EU Regulation 2020/852/EU. The article explains that it is a technical framework that helps to assess how sustainable (or, in crude terms, how ‘green’) an economic activity is on a scientific, comparable basis. This in turn allows for the assessment of a particular company or portfolio. The article looks at the aims and uses of the Regulation. It also considers the impact on the UK post-Brexit. The article also explains that the transparency reporting requirements that flow from the Regulation take effect from 2022 and 2023, with the first company reports and investor disclosures due at the beginning of 2022.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Financial_services/EU-Taxonomy-Regulation_030720

FCA DECISION NOTICE RE CONOR FOLEY, FORMER CEO OF WORLDSPREADS, FINING HIM £658,900 FOR MARKET ABUSE AND BANNING HIM FROM PERFORMING ANY ROLES LINKED TO REGULATED ACTIVITY

A release on Mondo Visione on 3 July advised that the Decision Notice has been referred to the Upper Tribunal where Foley and the FCA will each present their cases.  Foley is the third and last executive of WSL against whom the FCA has taken action following its collapse in March 2012.

https://mondovisione.com/media-and-resources/news/uk-financial-conduct-authority-publishes-decision-notice-against-former-worldspr/

SUDANESE HUMAN SMUGGLING NETWORKS: FUELING INSTABILITY FROM NORTH AFRICA TO EUROPE

On 29 June, the International Centre for Counter-Terrorism in The Hague published an article describing Sudan as a country located at the crossroads of conflict, poverty, and criminality. It says that Sudan is the primary transit destination for irregular migrants from the Horn of Africa seeking to reach Europe via North Africa and the Central Mediterranean and feeding a booming irregular migrant trade that is now the cornerstone of a wider illicit industry estimated to be worth at least €6 billion a year.

https://icct.nl/publication/sudanese-human-smuggling-networks-fueling-instability-from-north-africa-to-europe/

UN REPORT ON IRAN ARMS EMBARGO

On 11 June, the UN Secretary General submitted to the Security Council the 9th report on implementation of the UN arms embargo on Iran under UN SCR 2231. In the report, proliferation of missile technology throughout the Middle East, including with non-State actors, is raised as a point of concern.

https://www.iranwatch.org/sites/default/files/ninth_report_of_the_secretary-general_on_the_implementation_of_security_council_resolution_2231_2015.pdf

EU: 2019 e-CUSTOMS ANNUAL PROGRESS REPORT

On 22 June, the EU published the 12th and latest annual report about progress on its e-Customs project.   EU Council Decision 70/2008/EC4 on a paperless environment for customs and trade, also referred to as the e-Customs Decision, is the key legislation related to the e-Customs initiative promoting a shift to an interoperable electronic customs environment with a unified data system to facilitate communication between economic operators and customs authorities and to enhance security at EU’s external borders.  The project, initiated by the European Commission, aims to replace paper-format customs procedures with EU-wide electronic procedures to create a more efficient and modern customs environment. The project has 2 broad objectives – enhancing security at the EU’s external borders, and facilitating trade.

The EU-wide Union Customs Code (UCC), and associated legislation, is largely built around electronic, non-paper-based, systems.  While the UCC provides a single EU framework for customs rules and procedures, the development and upgrade of IT systems required for the completion of customs formalities are a joint responsibility of the Member States and the EU Commission.  The report considers the developments during 2019 in various aspects in and surrounding the e-Customs project.  It concludes that during the course of 2019, the EU Commission achieved several fundamental milestones related to the successful implementation of the ongoing e-Customs reform. The transition to a paperless environment is a priority for the Member States and the EU Commission, a commitment reflected in the completion of several legislative, business, IT, and operational activities in the e-Customs domain.

https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_e-customs_progress_report_2019-v1.01.pdf

MOLDOVA: THE POWERS OF THE STATE TAX SERVICE WILL BE EXPANDED TO PREVENT AND COMBAT ECONOMIC CRIMES

On 3 July, InfoMarket reported that it is planned that for this the State Tax Service will be given the authority to conduct a criminal investigation in accordance with the Law on Special Investigation Activities. It refers to a range of tax crimes to be countered, including “pseudo-entrepreneurial activity”, tax evasion, excise duty evasion, the illegal production of state excise stamps, intentional or fictitious bankruptcy and falsification of accounting documents.

http://infomarket.md/en/analitics/In_Moldova_the_powers_of_the_STS_will_be_expanded_to_prevent_and_combat_economic_crimes

SRI LANKA: CENTRAL BANK (CB) DISMISSES CONCERNS OVER POTENTIAL MONEY LAUNDERING ACTIVITIES LINKED TO THE RECENTLY INTRODUCED SPECIAL DEPOSIT ACCOUNTS (SDA) 

In its 4 July edition, the Daily Mirror in Sri Lanka also reported that the government had said that rules relaxing certain foreign exchange controls to encourage foreign currency remittances into the country across foreign currency deposit accounts, would be revised to address the concerns over money laundering and terrorist financing.

http://www.dailymirror.lk/business-news/Central-Bank-dismisses-concerns-over-potential-money-laundering-activities-linked-to-Special-Deposit/273-191237

DEMAND FOR RAW MATERIALS FOR ELECTRIC CAR BATTERIES SET TO RISE FURTHER

On 25 June, the UN Conference on Trade and Development reported that the demand for raw materials used to manufacture rechargeable batteries will grow rapidly as the importance of oil as a source of energy recedes, as highlighted recently by the collapse of prices due to oversupply and weak demand resulting from COVID-19. A new report documents the growing importance of electric mobility and the main materials used to make rechargeable car batteries. It reminds one that reserves of the raw materials for car batteries are highly concentrated in a few countries. Nearly 50% of world cobalt reserves are in the DRC, 58% of lithium reserves are in Chile, 80% of natural graphite reserves are in China, Brazil and Turkey, while 75% of manganese reserves are in Australia, Brazil, South Africa and Ukraine. The highly concentrated production, susceptible to disruption by political instability and adverse environmental impacts, raises concerns about the security of the supply of the raw materials to battery manufacturers. The report warns that supply disruptions may lead to tighter markets, higher prices and increased costs of car batteries, affecting the global transition to low-carbon electric mobility. The report shines a light on the social and environmental impacts of the extraction of raw materials for car batteries and underlines the urgent need to address them, such as child labour in DRC mining and in Chile, lithium mining uses nearly 65% of the water in the country’s Salar de Atamaca region, one of the driest desert areas in the world.

https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2406

The report itself is at –

https://unctad.org/en/PublicationsLibrary/ditccom2019d5_en.pdf

 

 

 

 

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WHY HMRC’S RELUCTANCE TO PROSECUTE COMPANIES FOR THE FAILURE TO PREVENT THE FACILITATION OF TAX EVASION MAY BE ABOUT TO CHANGE

On 3 July, a blog post from Corker Bining explains why, despite the lack of prosecutions to date, it is likely that there will be more cases on the horizon. It says that it is difficult to know why enforcement has been slow. However, as the cost of the pandemic is counted and the government seeks to rebalance the books, HMRC may well be directed to redouble their efforts and not shy away from deploying the legislative weapons at its disposal. HMRC’s current reluctance to prosecute the offence of facilitation of tax evasion (aka Corporate Criminal Offence or CCO) may be about to change.

https://www.corkerbinning.com/hmrc-prosecute-companies-failure-facilitation-tax-evasion/

 

 

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US: WELL-KNOWN RARE COIN BUSINESS AND $200 MILLION SILVER TRADING SCAM

On 2 July, KSL.com reported that Denise Gunderson Rust, 60, a member of a Utah family that ran a well-known rare coin business accused of running a $200 million silver trading scam has pleaded guilty to money laundering in federal court. The scam has been described as one of largest and most financially destructive frauds Utah has ever seen with nearly 700 victims.  Federal prosecutors say the company, Rust Rare Coin Inc, defrauded at least 700 investors nationwide of at least $200 million. Members of the Rust family are accused of tricking people into believing they were pooling their money to buy and sell silver bullion, but the funds were allegedly used to pay other investors.

https://www.ksl.com/article/46772723/rust-coin-family-member-admits-to-money-laundering-in-alleged-200m-silver-trading-scam

 

 

 

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INTERNATIONAL TRIBUNAL SAYS INDIA CANNOT PROSECUTE ITALIAN MARINES WHO KILLED INDIAN FISERMEN IN ANTI-PIRACY OPERATIONS

On 2 July, The Wire reported that the Permanent Court of Arbitration in The Hague published an extract of the final award of the tribunal constituted to settle disputes related to the UN Convention for the Law of the Sea (UNCLOS). It rejected India’s contention that 2 Italian marines, who were accused of killing Indian fishermen in 2012, could be tried in Indian courts and ordered India to cease all criminal proceedings against them. The tribunal said that India is precluded from exercising its jurisdiction over the Marines. It is said that 2 Italian marines posted on an oil tanker shot at 2 Indian fishermen on an Indian vessel, apparently mistaking them for pirates operating near the Kerala Coast. The tribunal accepted Italy’s argument that the marines have immunity as “state officials”. Italy had also disputed that the matter didn’t come under jurisdiction of India as the incident did not take place in territorial waters of India.

https://thewire.in/external-affairs/enrica-lexie-arbitral-tribunal-italian-marines

 

 

 

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DO EMAILS CREATE LEGALLY BINDING CONTRACTS?

A briefing from Morgan Lewis on 1 July posed this question, saying that while contract parties may treat emails in the same way they treat oral conversations, a fundamental question is whether the legal system views such communications as mere informal conversations or legally binding. When email communications meet the essential terms of contract formation in English law, the next hurdle is to determine when such communications satisfy the “statute of frauds” – which requires certain types of agreements to be signed and in writing.

https://www.morganlewis.com/pubs/do-emails-create-legally-binding-contracts

 

 

 

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CLANDESTINE HELICOPTER MANUFACTURING PLANT CLOSED DOWN IN MOLDOVA

On 2 July, Aviation Week reported that authorities in Moldova had closed down an illegal helicopter works producing copies of the Russian Kamov Ka.26.  The secretly-built helicopters were about to be exported illegally to former Soviet countries. During the search on production lines more than 10 helicopters are found that are at different stages of readiness.

https://aviationweek.com/defense-space/z/aerospace-defense-roundup-jul-02

https://balkaninsight.com/2020/06/30/moldova-shuts-down-bootleg-helicopter-factory/

https://www.defenseworld.net/news/27318/Fake_Russian_Ka_26_Helicopter_Factory_Unearthed_in_Moldova#.Xv8lzeWSmM8

 

 

 

 

 

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OTHER THINGS YOU MAY HAVE MISSED – JULY 2

Panama Covid-19 update – had to wander out a bit further today, to visit the immigration office, which busy (though not as hectic as previously) and traffic on one of the main roads (Tumba Muerta – “Tomb of the Dead“, don’t know why) seemed almost as busy as normal (i.e. pre Covid-19).  Still better off than the 1,000 or so Nicaraguans trying to get home by road, via Costa Rica, but only allowed (by the Costa Rican authorities I understand) to transit 69 at a time – so it’s going to take some time.

“Only” 774 new cases reported today (although I notice the number of new tests was also down), giving us 35,237 to date, but fatalities remain higher than they were a few weeks ago – 22 today (667 to date). 149 people remain in ICU and 795 in other hospital wards, but 500 more people are said to have recovered.

 

2 July 2020

US: GERMAN BUSINESSMAN ARRESTED ON CHARGES LINKED TO ALLEGED SCHEME TO TRICK BANKS INTO PROCESSING MORE THAN $100 MILLION IN MARIJUANA SALES

On 2 July, the Wall Street Journal reported that a German businessman named Ruben Weigand was arrested in Los Angeles in March, while en route to Costa Rica.  An indictment alleges that Weigand was involved in conspiracy to commit bank fraud, linked to an alleged scheme to trick banks into processing more than $100 million in marijuana sales. The newspaper says that the case doesn’t appear to be focused on the drugs themselves—the underlying sales seem to have been legal under state laws. Prosecutors referred to a multinational “criminal network” at work in the international financial system.

https://www.wsj.com/articles/bank-fraud-allegations-test-marijuana-business-11593605701

https://www.riskscreen.com/kyc360/news/bank-fraud-allegations-test-marijuana-business

WIRECARD: MAURITIUS INVESTIGATION

On 2 July, the Wall Street Journal reported that the central bank of Mauritius and its financial regulator said they were jointly investigating a 2015 deal between Wirecard and a Mauritius-based fund. The probe was launched as a result of allegations that Wirecard could have been linked to a probable case of round-tripping, they said in a statement, where the money Wirecard paid the fund in the deal is alleged to have been paid back into Wirecard as revenue.

https://www.wsj.com/articles/wirecard-administrators-to-sell-assets-as-investigators-search-offices-11593615042

BITCOIN AND HEZBOLLAH IN LEBANON

On 17 June, Coindesk published an article which examined how US sanctions could be pushing Hezbollah to use cryptocurrencies, although it also says that one study estimates most campaigns by terror groups like ISIS have raised “less than $10,000” worth of cryptocurrency – but says that Hezbollah in southern Lebanon is arguably the most likely to benefit from using crypto. This is while the Lebanese banking system is said to be on the verge of collapse.

https://www.coindesk.com/the-truth-about-bitcoin-and-hezbollah-in-lebanon

UK – INSOLVENCY: HOW SUPPLY CONTRACTS HAVE BECOME A LOT HARDER TO TERMINATE

On 2 July, Gowling WLG produced a briefing paper after the Corporate Insolvency and Governance Act has come into force. It says that the Act has significant implications for supply contracts as it will prevent many suppliers ending existing contracts once a business is insolvent. The Act will make a big impact on existing supply contracts and will also affect the drafting and negotiation of new contracts. The briefing paper on how the new protection of supplies of goods and services provisions work examines the measures in the Act dealing with the new provisions to protect supplies of goods and services and provide more information on how they work. It also provides some practical considerations in relation to new and existing supply contracts.

https://gowlingwlg.com/getmedia/955bdf09-b473-4d91-a31d-58f8a4ecfcdf/briefing-note-corporate-insolvency-and-governance-act-2020-gowling-wlg-july-2020.pdf.xml

CREW KIDNAP WARNING FOR SHIPS IN SOUTHERN PHILIPPINES/EAST MALAYSIA

On 2 July, Seatrade Maritime News reported a repeated warning that members of the Abu Sayyaf group looking to kidnap crew from ships in waters in the southern Philippines and East Malaysia has been repeated.

https://www.seatrade-maritime.com/ship-operations/crew-kidnap-warning-ships-southern-philippineseast-malaysia

SANCTIONED BILLIONAIRE FINDS A HAVEN IN TINY CONGOLESE BANK

On 1 July, Bloomberg carried a report about Israeli billionaire, Dan Gertler, from Paris-based anti-corruption group Platform to Protect Whistleblowers in Africa (Pplaaf), and shared with Bloomberg News. It also involved a bank that was the Congolese subsidiary of Cameroon’s Afriland First Bank Group.

https://www.bloomberg.com/news/features/2020-07-02/sanctioned-billionaire-dan-gertler-s-haven-a-tiny-congolese-bank

https://www.globalwitness.org/en/press-releases/controversial-billionaire-dan-gertler-appears-have-used-suspected-international-money-laundering-network-dodge-us-sanctions-and-acquire-new-mining-assets-drc/

NORTH KOREA NAMED 39th MOST DANGEROUS COUNTRY IN WORLD

On 2 July, the Korea Herald reported that North Korea has been named the 39th most dangerous country in the world, according to a risk management report published by the European Commission – the Index for Risk Management 2020 report.

http://www.koreaherald.com/view.php?ud=20200702000611

US: 11,000 ASSAULT WEAPONS PARTS SMUGGLED IN FROM CHINA

On 1 July, the Desert Review reported that US Border authorities seized nearly 11,000 assault weapons’ parts smuggled into the US from China in Kentucky. The $130,000 shipment originated from Shenzen, China and was intended for a residence in Florida.

https://www.thedesertreview.com/news/11-000-assault-weapons-parts-smuggled-in-from-china-says-u-s-border-agency/article_58b24c2a-bbe0-11ea-aaa3-e754ea5c27af.html

MALTA: WHY MONEYVAL’S VERDICT MATTERS

An editorial in the Times of Malta on 2 July says that Moneyval is expected to decide on whether to place Malta on its grey list and the government has until October to address AML shortcomings if it is to avoid becoming the first EU country to be placed on the list. This would be the most severe blow to the country’s reputation and economic model.

https://timesofmalta.com/articles/view/why-moneyvals-verdict-matters.802167

MONEYVAL HOLDS VIRTUAL WORKING MEETINGS

On 2 July, the Council of Europe reported that from 30 June to 3 July MONEYVAL is holding working meetings on strategic, procedural issues, as well as matters related to typologies and risk monitoring.

https://www.coe.int/en/web/moneyval/-/moneyval-holds-virtual-working-meetings-30-june-3-july-2020-

MAURITIUS GOVERNMENT FURTHER STRENGTHENS AML/CFT LAWS

On 30 June, an article from Appleby says that the Mauritius government is continuing its efforts to further strengthen its AML/CFT laws by tabling the Anti-Money Laundering and Combatting the Financing of Terrorism (Miscellaneous Provisions) Bill 2020 before the National Assembly. The Bill amends many pieces of existing legislation. Changes are also proposed in order to reinforce the concept of beneficial ownership, including identification and record keeping. Changes are also being proposed to the Financial Services Act, one of which concerns the factors on which the Financial Services Commission of Mauritius will rely in order to carry out onsite inspections. The government is also suggesting amendments to the Financial Intelligence and Anti-Money Laundering Act to include new provisions on the obligations and manner in which STR are filed.

https://www.applebyglobal.com/news/mauritius-government-further-strengthens-laws-on-money-laundering-and-financing-of-terrorism/

SWEDISH GAMBLING AUTHORITY GUIDELINES FOR LICENCE-HOLDERS ON ‘COMMON RISKS’ AND SUGGESTIONS HOW SOME ONLINE GAMES CAN BE USED FOR MONEY LAUNDERING AND TERRORIST FUNDING

An article on Inkedin reported that Spelinspektionen also provided some of its own comments on the measures previously taken by operators to counter money laundering, stressing that when they first open an account, operators must allocate a risk level to customers. The guidance and articles are in a report was developed and drawn up by Spelinspektionen in cooperation with the Swedish FIU and the Anti-Money Laundering and Countering Financing of Terrorism Coordinating Body.

https://inkedin.com/spelinspektionen-release-common-risk-guidelines-for-operators/13262/

SOLICITOR JAILED OVER MONEY LAUNDERING LINKS IS NOW STRUCK OFF

On 2 July, the Law Society Gazette reported that a solicitor jailed last year for 3 money laundering offences has been struck off. Ross Ian McKay accepted he should be banned after he was jailed for 7 years for helping fraudsters develop a multi-million-pound property portfolio.

https://www.lawgazette.co.uk/news/solicitor-jailed-over-money-laundering-links-is-now-struck-off/5104840.article

REPORT: EUROPE’S IMPORTED USED COOKING OIL MAINLY COMES FROM CHINA AND PALM OIL PRODUCER COUNTRIES

On 2 July, EurActiv reported that a new report has found that more than half the Used Cooking Oil (UCO) used in Europe for biodiesel in 2019 was imported and the biggest share comes from China (34%) and about 20% comes from Malaysia and Indonesia, the world’s biggest producers of palm oil. It also says that the use of UCO for biodiesel in the EU27 and the UK grew again in 2019, from 2.6 million tonnes in 2018 to 2.8 last year. An NGO has reported that it seems suspicious to see large supplies of UCO coming from Malaysia (12%) and Indonesia (7%), the world’s biggest palm oil producers, and from China (34%).

https://www.euractiv.com/section/agriculture-food/news/report-europes-imported-uco-mainly-comes-from-china-and-palm-oil-producer-countries/

OECD SAYS $11.3 TRILLION IN OFFSHORE ACCOUNTS

On 2 July, OCCRP said that, due to an increase in the exchange of banking information throughout 2019, nearly 100 cooperating countries have found $11.3 trillion kept by its residents in 84 million offshore accounts.

https://www.occrp.org/en/daily/12676-oecd-says-11-3-trillion-uncovered-in-offshore-accounts

UK LAW COMMISSION SETS OUT ITS PRIORITIES FOR 2020-21

On 30 June, the Law Commission, which reviews and advises on changes (or new) legislation in the UK, set out its plans for the current financial year in a new business plan.  It lists upcoming publications including consultation on confiscation of the proceeds of crime; and reports on misconduct in public office, search warrants, confiscation of the proceeds of crime, review of the communications offences, leasehold and commonhold property

https://s3-eu-west-2.amazonaws.com/lawcom-prod-storage-11jsxou24uy7q/uploads/2020/07/202021-Business-plan-FINAL.pdf

46 MEMBERS OF THE SICILIAN MAFIA COSA NOSTRA ARRESTED

A news release from Europol on 2 July advised that Europol coordinated the international police operation which resulted in the dismantlement of the Sicilian Mafia Cosa Nostra crime syndicate of Barrafranca.  Suspects were involved in drug trafficking, the use of firearms, as well as extortion and corruption in public tenders. Operations Ultra is the second phase of an operation involving connections of the Mafia crime family of Barrafranca (Sicily) with Germany.

https://www.europol.europa.eu/newsroom/news/46-members-of-sicilian-mafia-cosa-nostra-arrested

JERSEY TO IMPLEMENT DAC 6 CROSS-BORDER TAX DISCLOSURE REGIME THROUGH ITS OWN SYSTEM

An article from Appleby on 2 July (previously published in the STEP Journal) is concerned with a new regime being established in Jersey targeting any structure designed to circumvent the Common Reporting Standard, that does not have economic substance or that conceals beneficial ownership. This is to be reported to the tax authorities within 30 days of implementation. It says that some intermediaries will be required to report retrospectively as from October 2014 and both civil and criminal penalties will apply for failing to comply. The regime mirrors EU Council Directive 2018/822 (aka DAC6) imposing mandatory disclosure requirements for certain arrangements with an EU cross-border element to detect potentially aggressive tax arrangements.  DAC6 incorporates the model rules published by the OECD.

https://www.applebyglobal.com/publications/a-mandatory-update/

UZBEKISTAN ESTABLISHES NEW ANTI-CORRUPTION AGENCY

On 2 July, Dentons published an article saying that the Uzbek President has approved the Decree No. UP-6013 “On Additional Measures to Improve the Anti-Corruption System in the Republic of Uzbekistan”. It establishes the Anti-Corruption Agency of the Republic of Uzbekistan, responsible for the formation and implementation of state policy to prevent and combat corruption within the country. It reports to the President and is accountable to the Chambers of the Oliy Majlis (the parliament). The article explains what the agency is required to do, but notes that, according to the Corruption Perception Index for 2019, Uzbekistan ranks 153rd (out of 180) – 5 positions higher than in 2018.

https://www.dentons.com/en/insights/articles/2020/july/2/uzbekistan-establishes-new-anti-corruption-agency

SEC CHARGES ALEXION PHARMACEUTICALS INC WITH FCPA OFFENCES

On 2 July, a release on Mondo Visione advised that the SEC has announced that Boston-based pharmaceutical company Alexion Pharmaceuticals Inc has agreed to pay more than $21 million to resolve charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA). Involved were subsidiaries in Turkey and Russia.

https://mondovisione.com/media-and-resources/news/sec-charges-alexion-pharmaceuticals-with-fcpa-violations/

IRISH REVENUE COMMISSIONERS PUBLISH 2019 ANNUAL REPORT

On 25 June, the tax and customs authority in Ireland published its annual report. While the main focus of the Annual Report is on Revenue’s key achievements and performance for last year, it also provides an overview of the challenges that have dominated the first half of 2020. Amongst the things mentioned are –

  • Continued extensive and detailed Brexit preparedness and contingency planning, actively engaging across all relevant Government Departments and Agencies, and with more than 100,000 businesses;
  • Completing over 566,000 compliance interventions, yielding €548 million in tax interest and penalties;
  • Settling 127 tax avoidance cases with a yield of €129 million in tax, interest and penalties; and
  • Continued action against fiscal fraud and smuggling evidenced by the seizure of illegal drugs valued at over €23.5 million and illicit tobacco products valued at over €10.6 million.

https://www.revenue.ie/en/corporate/press-office/press-releases/2020/pr-250620-revenue-publishes-2019-annual-report.aspx

SOUTH AFRICA: 2 SUSPECTS ARRESTED OVER $14 MILLION MONEY LAUNDERING ALLEGATIONS

On 2 July, the South African reported that the National Head of the Directorate for Priority Crime Investigations (the “Hawks”), has welcomed the arrest of 2 suspects for corruption, fraud and money laundering of over $14 million during an operation on 2 July. The allegations relate to the company known as Superior Quality Trading which also trades as Rekgonne Community Projects. In 2014, Rekgonne Community Projects entered into an agreement with the Free State Department of Agriculture and Rural Development to implement all projects on behalf of the department for a period of 2 years.

https://www.thesouthafrican.com/news/money-laundering-corruption-hawks/

MANAGING EMERGING TRADE-BASED MONEY LAUNDERING (TBML) RISKS

On 2 July, Compliance Week published an article which said that TBML is no longer solely a concern for banks and its scale and scope is massively underestimated. The typical country-to-country movement of products is no longer the norm, it is said, and it is far from unusual for trade within borders to be abused for money laundering purposes. Measures taken to combat the coronavirus are likely to boost the movement of goods and products within borders. It says that if we know the risks, we need to understand how to spot and combat them, and we can start with the list of key considerations provided by the article.

https://www.complianceweek.com/aml/managing-emerging-trade-based-money-laundering-risks/29144.article

SLOVENIA REPRIMANDED BY EU OVER MONEY LAUNDERING LEGISLATION

On 2 July, STA reported that the EU Commission issued several reprimands to Slovenia for its failure to transpose EU legislation, including for delays in the implementation of rules on the prevention of money laundering.

https://english.sta.si/2782096/slovenia-reprimanded-from-brussels-over-money-laundering-legislation

CREW CRISIS IS TRIGGERING SHIP DETENTIONS AND DIVERSIONS

On 2 July, American Shipper reported that around 200,000 seafarers still cannot return home due to Covid-19 restrictions.  Expired and extended crew contracts are piling up. Now, some port inspectors are beginning to detain arriving vessels. The article says that more port detentions — and voyage diversions to facilitate crew changes and avoid detentions — reduce effective ship capacity. Lower capacity curtails shippers’ ability to move cargo across the globe. It asks which countries’ port-state control (PSC) authorities will strictly enforce minimum manning standards and detain ships? It seems that PSC inspectors in Australia are now taking the lead.

https://www.freightwaves.com/news/crew-crisis-to-trigger-ship-detentions-and-diversions

CANADIAN AUTHORITIES CHARGE TEENAGER WITH TERRORISM OVER INCEL-BASED VIOLENCE

On 30 June, Lawfare reported that Canadian authorities have charged a 17-year-old teenager with terrorist activity in what could prove to be a landmark case. He is said to have been inspired by the Ideologically Motivated Violent Extremist (IMVE) movement commonly known as INCEL (involuntarily celibate) – and this is only the second time in Canada that terrorist activity charges have been brought for activities not connected to al-Qaeda or inspired by the Islamic State.

https://www.lawfareblog.com/canadian-authorities-charge-teenager-terrorism-over-incel-based-violence

GUIDE TO TRADE FINANCE AND CREDIT INSURANCE

The Institute of Chartered Accountants in England & Wales has produced this guide on trade finance, which includes such common elements of trade finance as letters of credit, forfaiting and project finance. It also covers credit insurance, saying that whereas the majority of international trade is conducted on ‘open account’ (whereby the exporter accepts payment after the goods or services have been received by the buyer), exporters face greater risks than sellers, because they may have no previous experience of dealing with their buyers or because of political or economic uncertainties – or disasters – in the buyer’s country. It is therefore usual to have insurance to cover against non-payment or other unforeseen events outside the exporter’s control.

https://www.icaew.com/~/media/corporate/files/technical/business%20and%20financial%20management/smes/export%20advice%202.ashx

PORTUGAL TO TAKE THEN SELL ISABEL DOS SANTOS MAJORITY STAKE IN EFACEC COMPANY OF ANGOLA

On 2 July, Reuters reported that Portugal will nationalise and then sell the majority stake in engineering company Efacec Power Solutions that had been controlled by Angolan businesswoman and ex-first daughter Isabel dos Santos.

https://uk.reuters.com/article/uk-angola-dossantos-efacec/portugal-to-take-then-sell-majority-stake-in-efacec-firm-of-angolas-dos-santos-idUKKBN243322

IRAN, TURKEY, AND VENEZUELA’S SUPER FACILITATOR: WHO IS ALEX SAAB?

On 30 June, the Center for a Secure Free Society published a feature on Alex Nain Saab Morán, a Colombian businessman of Lebanese descent, recently arrested in Cape Verde and facing extradition to face charges in the US.

https://www.securefreesociety.org/research/who-is-alex-saab/

US: MAN SENTENCED TO MORE THAN 21 YEARS IN PRISON FOR RUNNING $3.3 MILLION SCHEME THAT USED STOLEN IDENTITIES OF CHILDREN

A news release from US Immigration & Customs Enforcement on 2 July advised that a Los Angeles area man, Turhan Lemont Armstrong, 50, has been sentenced today to 259 months in federal prison for overseeing a long-running $3.3 million credit card, loan and real estate fraud scheme using stolen identities — primarily those of children. He was also ordered him to pay $3,305,609 in restitution. He used stolen identities and Social Security numbers to obtain credit cards, open bank accounts, set up shell companies, apply for loans, and purchase homes and cars. Armstrong and his co-defendants favoured using the Social Security numbers of children and people who had left the US because they would be less likely to monitor their credit.

https://www.ice.gov/news/releases/los-angeles-area-man-sentenced-more-21-years-federal-prison-running-33-million-scheme

 

 

 

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