OTHER THINGS YOU MAY HAVE MISSED – JULY 25

Panama Covid-19 update – glad to say that our district hasn’t made the table of areas with more than 10 new cases day.  That said, there were still 871 new cases reported – a little down on recent figures, with 25 additional fatalities – given a total of 1,275 to date. So far, 909 of that 1,275 were aged 60 or more – i.e. 71%.  There are currently 24.161 active cases, or 41% of the total infections to date.

 

25 July 2020

US: STATEMENT ON UNMANNED AERIAL SYSTEMS EXPORTS

On 24 July, a statement from the White House says that the US is taking action to improve the standards for exporting Unmanned Aerial Systems (UAS aka UAV).  While the Missile Technology Control Regime (MTCR) is critical in slowing proliferation and promoting peace and security, it says, it is in dire need of modernisation as it applies to UAS. Not only do these outdated standards give an unfair advantage to countries outside of the MTCR and hurt US industry, it says, they also hinder deterrence capability abroad by handicapping partners and allies with subpar technology.

https://www.whitehouse.gov/briefings-statements/statement-press-secretary-unmanned-aerial-systems-exports/

THE US HAS LIFTED ITS PROHIBITION ON FUNDING NUCLEAR ENERGY PROJECTS OVERSEAS

On 24 July, World Nuclear News reported that the US International Development Finance Corporation (DFC) changed its Environmental and Social Policy and Procedures following a 30-day public consultation period.More than 800 responses were received during the public comment period, 98% of which were in support of the proposed change.  The CEO of the DFC said the corporation’s decision – which also brings its definition of renewable energy into alignment with that used by the US Energy Information Administration – marks a “significant step forward” in US efforts to support the energy needs of its allies around the world, and also positions the DFC to accelerate growth in developing economies that have limited energy resources.

https://world-nuclear-news.org/Articles/USA-lifts-nuclear-finance-ban

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AFTER A COVID-19 LULL, NORTH KOREA GETS BACK TO SANCTIONS-BUSTING AS CHINA TURNS A BLIND EYE

On 25 July, NBC News reported that North Korea is carrying out large-scale smuggling operations off the coast of China, importing oil and selling coal and sand (sand is in high demand in China for construction, glass and silicon chips) to keep its economy afloat. It says that much of the sanctions-busting operations rely on front companies registered in China and take place within China’s heavily patrolled territorial waters. It is said that, in the first 5 months of 2020, North Korea imported more than 1.6 million barrels of refined petroleum in dozens of illicit deliveries, mainly through transfers at sea. However, according to recent UN reports, some foreign-flagged tankers have made direct deliveries of oil to the North Korean port of Nampo, instead of transferring the fuel with another vessel at sea under cover of darkness.

https://www.nbcnews.com/news/north-korea/after-covid-19-lull-north-korea-gets-back-sanctions-busting-n1234858

https://mainichi.jp/english/articles/20200725/p2g/00m/0in/045000c

https://www3.nhk.or.jp/nhkworld/en/news/20200725_14/

THE MAN WHO SMUGGLED NISSAN BOSS CARLOS GHOSN OUT OF JAPAN

On 25 July, Brinkwire reported that the former Green Beret who smuggled disgraced Nissan boss Carlos Ghosn out of Japan has revealed the details of the plot. Michael Taylor, 59, and his son Peter are currently being held in US federal custody pending an extradition request from Japan. He revealed the intricate details of the plot for a lengthy article published in Vanity Fair. He said that he and his team studied 5 airports near Tokyo, and found a key flaw at Kansai International—the terminal did not have scanners big enough to accommodate cargo the size of a box that could hold a human. Ghosn was hidden inside a custom-built sub-woofer box.  The airport security staff and baggage handlers had been working all day, and the wearied staff did not give the group or their cargo a second look.

https://en.brinkwire.com/us/man-who-smuggled-nissan-boss-carlos-ghosn-out-of-japan-talks/

DRAFT BEARER SHARES BAN IN PAKISTAN

On 25 July, the Business Recorder reported that the government has decided to amend the Companies Act 2017 and the Limited Liability Partnership Act 2017 to check misuse of bearer securities and prevent companies from money laundering or terrorist financing abuses in line with FATF  recommendations.  The article says that bearer securities are vulnerable to misuse because they can effectively obscure the ownership of a corporate entity, thereby providing maximum anonymity and making such corporate vehicles more susceptible to misuse for illicit purposes, including money laundering. Another amendment is concerned with a register of beneficial owners.

https://www.brecorder.com/news/40007762/companies-act-limited-liability-partnership-act-govt-decides-to-promulgate-ord-to-amend-laws

ALIGNING FINANCIAL INCLUSION AND AML/CFT OUTCOMES 

The Alliance for Financial Inclusion has published a toolkit for policymakers which provides practical guidance on aligning financial inclusion and AML/CFT outcomes with respect to the formulation and implementation of related policy and regulation. It has been developed with reference to FATF Recommendations as well as risk-based approach guidance. The toolkit was developed by the AFI Global Standards and Proportionality Working Group (GSPWG) in partnership with the Centre for Financial Regulation and Inclusion (Cenfri). The toolkit is intended for policymakers, regulators, supervisors and other stakeholders involved in the formulation and implementation of policy and regulation that advance both financial inclusion and financial integrity. It provides practical steps to engage with the country frameworks and processes that support financial inclusion and financial integrity.

https://www.afi-global.org/sites/default/files/publications/2020-07/AFI_CENFRI_toolkit_AW_digital.pdf

UK: CHANGES TO VAT TREATMENT OF IMPORTS VALUED AT NOT EXCEEDING £135         

On 23 July, ICAEW published an article saying that, from 1 January, VAT on such low-value consignments it to be collected at point of sale rather than at import. In addition, online marketplaces involved in facilitating the sale of goods in the UK will be responsible for accounting for VAT on sales in the UK on a VAT return.

https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021

https://www.icaew.com/insights/tax-news/2020/july-2020/changes-to-vat-treatment-of-imported-goods

FEDERAL GRAND JURY INDICTS TRIO BEHIND PHONY CRYPTOCURRENCY PLEXCOIN

On 25 July, Finance Feeds reported that a federal grand jury in Cleveland has returned an indictment naming Dominic Lacroix, Yan Ouellet, and Sabrina Paradis-Royer, all of Quebec, Canada, with conspiracy to commit securities fraud and wire fraud, wire fraud, and conspiracy to commit money laundering. According to the indictment, from May 2017 to December 2017, the defendants conspired together to induce investors to purchase PlexCoin, a cryptocurrency offered through an entity known as PlexCorps.

https://financefeeds.com/federal-grand-jury-indicts-trio-behind-phony-cryptocurrency-plexcoin/

A CEO’S GUIDE TO FCPA COMPLIANCE

On 24 July, Oberheiden PC published an article saying that, among many other roles, within the context of FCPA compliance, a CEO is tasked with ensuring that their companies have developed strong compliance programmes that effectively guard against the risks of corruption and bribery.

https://www.jdsupra.com/legalnews/a-ceo-s-guide-to-fcpa-compliance-53070/

US AMENDS CENTRAL AFRICAN REPUBLIC ITAR RESTRICTIONS

On 23 July, World ECR reported that the US State Department has published a final rule which reflects changes made by the UN to the arms embargo on CAR.  UN resolutions are intended to support the CAR government as it works to implement the peace agreement and extend state control over the entire territory of the country.

https://www.worldecr.com/news/us-amends-central-african-republic-itar-restrictions/

THE UK AND THE LUGANO CONVENTION ON THE MUTUAL RECOGNITION AND ENFORCEMENT OF JUDGMENTS IN CIVIL AND COMMERCIAL MATTERS

On 23 July, a briefing from Irish law firm Matheson advised on the situation re the Lugano Convention on the mutual recognition and enforcement of judgments between EFTA and EU states in civil and commercial matters. It is said to provide a much more straight forward than the procedure which pertains under the common law, which effectively involves a new court action and only allows for the enforcement of money judgments. The UK indicated it wanted to accede to the Convention in its own right, but the EU is said to be uncertain as all current signatories are part of the EU single market or substantially participate in it, but the UK has said it intends to leave the single market once the transition period comes to an end and have repeatedly emphasised that they will not be seeking an extension. The article also considers the position on the Hague Convention, which is much more limited in scope than the Lugano Convention

https://www.matheson.com/news-and-insights/article/matheson-brexit-impact-series-recent-developments-for-cross-border-UK

FOREIGN INVESTMENT: FRANCE STRENGTHENS CONTROLS

On 24 July, an article from Simons & Simmons was concerned with a decree aimed at protecting French companies listed on a regulated market which has just been published.  It extends the scope of foreign investment control to any acquisition by a non-European investor of more than 10% of the voting rights of a French company listed on a regulated market. It also says that foreign investment (direct but also indirect) in sensitive sectors must, under certain conditions, be authorised by the Minister of Economy.

https://www.simmons-simmons.com/en/publications/ckd06b7ccbfn40a796gqtoizd/foreign-investment-france-strengthens-controls-

https://www.paulhastings.com/publications-items/details/?id=21a5b96f-2334-6428-811c-ff00004cbded

5 SOUTH KOREANS KIDNAPPED IN WATERS OFF BENIN HAVE BEEN RELEASED

On 25 July, the Yonhap News reported that the South Koreans were released from southern Nigeria, around a month after being abducted in waters about 111 km south from Cotonou Port of Benin, according to the Ministry of Foreign Affairs. On 24 June, the armed group attacked a 994-ton fishing vessel and a total of 30 crewmen were aboard the Ghanaian-flagged Panofi Frontier, but only 6 of them were kidnapped.

https://en.yna.co.kr/view/AEN20200725001151320?section=national/diplomacy

OPEN SHIPPING REGISTRIES AS AN ENABLER OF MARITIME SANCTIONS EVASION

A paper for the September edition of Science Direct says that vessels engaged in the evasion of maritime sanctions are predominantly flagged by open registries: registries that impose little to no nationality requirements on vessel owners and operators. This paper investigates the causes of this phenomenon, arguing that open registries generally lack adequate measures for detecting sanctions evasion in their fleets and that they are targeted for flagging services by sanctions evaders. At the root of this vulnerability to flagging sanctions evaders is the for-profit nature of the open registry system which encourages registries to jettison regulation and oversight to increase their marketability in the competitive industry of international flagging.

https://www.sciencedirect.com/science/article/pii/S0308597X20300385?dgcid=author

US SAYS RUSSIAN MILITARY SUPPLYING MORE WEAPONS AND VAGNER GROUP FIGHTERS TO LIBYA

On 25 July, Rferl reported that the US military has accused Russia of supplying more offensive weapons and fighters to Libya in an attempt gain a foothold in the North African country. This comes as Libya’s rival camps face off in a potentially bloody battle over the strategic central coastal city of Sirte. It is said that Russian military cargo aircraft are supplying Vagner fighters and their proxies with air-defence equipment, trucks, armoured vehicles, and fighter jets.

https://www.rferl.org/a/us-accuses-russia-weapons-vagner-libya/30746298.html

THE EU CAUTIONARY STANCE ON FREEPORTS “HAS NO BEARING ON THE UK’S DEVELOPMENT OF FREEPORTS”

An article in Port Strategy on 20 July quoted the head of policy & external affairs at the British Ports Association (BPA) who said that while the EU has around 80 freeports and therefore it is reasonable to examine their impact, he doesn’t “anticipate the EU having any influence over how UK freeports will operate”. It is said that the EU maintains a watchful eye on freeports in Europe as part of new rules governing seaports and following a European Parliament study into “Money laundering and tax evasion risks in free ports” in October 2018.

https://www.portstrategy.com/news101/world/europe/eu-freeports-caution-doesnt-impact-uk

AUSTRALIAN MARITIME SAFETY AUTHORITY (AMSA) LAUNCHING A FOCUSED INSPECTION CAMPAIGN TARGETING CARGO SECURING ARRANGEMENTS ON CONTAINER SHIPS VISITING AUSTRALIAN PORTS

On 23 July, Port Technology reported that the inspection campaign is being initiated in response to several serious incidents involving shipping containers lost overboard recently. It is said that Incident investigations by AMSA have discovered that the improper stacking and securing of cargo and poor maintenance of equipment are likely to have been contributing factors to these incidents. A focused inspection campaign will run from the beginning of August until the end of October and will involve both extended port State control (PSC) inspections and standalone inspections on vessels which are not currently eligible for PSC inspection.

https://www.porttechnology.org/news/container-ships-visiting-australian-ports-subject-to-new-inspection-campaign/

TRANSNATIONAL TENTACLES – GLOBAL HOTSPOTS OF BALKAN ORGANISED CRIME

On 24 July, the Global Initiative Against Transnational Organised Crime published a report which shows why and how groups from the Western Balkans have become engaged in organised crime abroad, particularly in South Africa, Turkey, Australia as well as in some countries of Latin America and Western Europe, and are described as are modern, dynamic and entrepreneurial. The report suggests that there is not a ‘Balkan Cartel’ per se, although groups from the region sometimes work with each other, and there are also instances of multi-ethnic groups.

https://globalinitiative.net/wp-content/uploads/2020/07/Transnational-Tentacles-Global-Hotspots-of-Balkan-Organized-Crime-ENGLISH_MRES.pdf

HOW TECHNOLOGY INITIATIVES HAVE BEEN DEVELOPED TO COMBAT HUMAN TRAFFICKING

On 23 July, the Global Initiative Against Transnational Organised Crime published an article about a new report from the OSCE and Tech Against Trafficking, a coalition of global tech companies and experts – “Leveraging innovation to fight trafficking in human beings: A comprehensive analysis of technology tools”.  It is said that the report finds that while technology can be an effective tool in the drive to prevent human trafficking, it has simultaneously enabled traffickers to achieve greater efficiencies.  However, traffickers also deploy technology to scale up their market reach, deliver new types of illicit services, such as livestreaming of sexual abuse and exploitation, to innovate their operations, to target more victims and to launder criminal proceeds anonymously. OSCE also hosted an online event to launch ground-breaking research on how technology is being used to prevent and combat trafficking in human beings.

https://globalinitiative.net/leveraging-innovation-to-fight-trafficking-in-human-beings-a-comprehensive-analysis-of-technology-tools/

https://www.osce.org/secretariat/455458

SAYING NO TO EXTORTION IN CENTRAL AMERICA: LESSONS LEARNED FROM ITALY

On 16 July, the Global Initiative Against Transnational Organised Crime published an article asking can the innovative measures adopted by an Italian NGO to help businesses and consumers combat mafia extortion be replicated in the Northern Triangle? The article says that there are distinct parallels between the way the Sicilian Cosa Nostra and the gangs, or maras, of Central America operate. Extortion, which is effectively a form of taxation, is a means by which the mafia or the maras exert territorial control and at the same time seek to legitimize their power; and in both cases, the cash from extortion is used to pay gang members. The article says that the holistic approach pioneered by the Italian initiative to help combat extortion has proven to be a useful tool in generating resilient businesses and communities. Its methods and approach could inspire civil-society organizations in Central America to replicate some of its activities.

https://globalinitiative.net/saying-no-to-extortion/

THOUSANDS OF INDIAN EXPORTERS HAVE BEEN HIT HARD BY NEW TAX REGULATIONS

On 25 July, Reuters reported that the Indian government said in June it had identified thousands of exporters that had claimed tax rebates based on bogus invoices and would require them to submit receipts before issuing refunds. However, this is said to have affected legitimate businesses, already struggling with a fall in orders since March amid a nationwide lockdown to slow the spread of the novel coronavirus. Some businesses had been harassed by tax officials and asked to submit up to 1,500 documents to prove they were complying with the new regulations. However, the government have responded that only 3.5% of India’s 142,000 exporters had been identified as “risky” and after verification tax benefits for genuine exporters would be released within a month.

https://uk.reuters.com/article/uk-india-exporters/indias-exporters-rue-new-red-tape-requirements-from-government-idUKKCN24P0VY

ITALY’S LOMBARDY REGION DENIES ALLEGATIONS OF FRAUD OVER COVID MEDICAL GEAR

On 25 July, Reuters reported that the governor of Lombardy, the Italian region hardest hit by the coronavirus, denied wrongdoing after he was placed under investigation for suspected fraud over a supply of medical equipment from a company owned by his brother-in-law.

https://uk.reuters.com/article/uk-health-coronavirus-italy-governor/italys-lombardy-region-denies-allegations-of-fraud-over-covid-medical-gear-idUKKCN24Q0QY

BUSINESSMAN’S FROZEN £190 MILLION UK ASSETS RETURNED TO PAKISTAN

On 25 July, the Hindustan Times reported that, according to its annual report, the NCA international corruption unit restrained or detained £32 million; and £146 million more was been confiscated or forfeited, of which £139 million were returned to developing countries. It says officials have returned £190 million to Pakistan following an investigation into a Pakistani businessman whose assets in the UK were the subject of freezing orders.

https://www.hindustantimes.com/world-news/businessman-s-frozen-190-million-uk-assets-returned-to-pakistan/story-VrlgCMCVYx1rulTyCwtWeJ.html

GOVERNMENT HAS PREPARED 8 BILLS TO MOVE PAKISTAN INTO FATF ‘WHITE LIST’

On 25 July, Pakistan Today reported that, according to the Foreign Minister, the government has prepared 8 Bills for legislation on money laundering and terror financing to take Pakistan onto the FATF “white list” again.

https://www.pakistantoday.com.pk/2020/07/25/govt-has-prepared-8-bills-to-move-pakistan-into-fatf-white-list-says-qureshi

 

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

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