OTHER THINGS YOU MAY HAVE MISSED – AUGUST 8

Panama Covid-19 update – the press appear to be making much of the fact that, for the second day in a row, the death toll is below 20 – with 18 more today.  However, 1,091 new infections were recorded and the number of active cases has risen to 24,558.  The number of people in hospital has only increased by 1 more in the ICU, with 157 in ICU and 1,483 in other wards.

 

8 August 2020

CHINA AND HONG KONG SANCTIONS & EXPORT CONTROL ROUND UP

On 7 August, an article from Kelley, Drye & Warren LLP explains that, over the previous month, the US has taken a variety steps to increase pressure on China in response to the imposition of China’s National Security Law in Hong Kong and alleged human rights abuses in Xinjiang. The article highlights some key risks that companies should keep in mind when doing business in the region against the backdrop of rising US-China tensions.

https://www.jdsupra.com/legalnews/china-and-hong-kong-sanctions-export-20807/

SENATORS MOVE TO BLOCK US SALE OF WEAPONISED DRONES

On 7 August, Deseret News reported that a group of US senators had introduced legislation that would amend the Arms Export Control Act to prohibit the export of certain weaponised unmanned aircraft systems (UAS).  The Trump Administration has moved to amend interpretation of the MTCR rules to allow more scope to export UAS – being faced with the international market being dominated by China and Israel. It is said that there are fears the drones might end up in the ongoing Saudi-led civil war in Yemen. The proposed Bill would prohibit the export, transfer or trade of covered unmanned aircraft systems while allowing exceptions for NATO members, Australia, Israel, Japan, New Zealand and South Korea, and drones that can carry more than 1,100 lb of weapons more than about 186 miles would once again be subject to the MTCR rules.

https://www.deseret.com/utah/2020/8/7/21358650/donald-trump-military-drones-mike-lee-bernie-sanders-saudi-arabia-yemen-war

https://www.middleeasteye.net/news/us-uae-saudi-arabia-senators-drone-sales

BELGIAN COURT SUSPENDS ARMS EXPORT TO SAUDI ARABIA

On 7 August, Al Jazeera reported that a complaint from human rights groups prompts Belgium to suspend arms export licences for some shipments to the National Guard.  In February, the region of Wallonia had halted weapons sales to Saudi Arabia’s defence ministry and air force over concerns about the conduct of its war in Yemen, but continued to supply the National Guard units, arguing then that they were more focused on legitimate internal security and bodyguard roles.

https://www.aljazeera.com/news/2020/08/belgium-suspends-arms-exports-saudi-national-guard-200807132334202.html

https://www.lesoir.be/317743/article/2020-08-07/le-conseil-detat-suspend-en-urgence-plusieurs-licences-dexportation-darmes

2 WELL-KNOWN IRISH FOOTBALLERS QUESTIONED AS GARDAI INVESTIGATE MULTI-MILLION HEROIN SMUGGLING ROUTE

On 8 August, Dublin Live reported that 2 well-known Irish soccer figures have been questioned night as gardai probed a multi-million heroin smuggling route, and after investigators seized €3 million worth of drugs

https://www.dublinlive.ie/news/dublin-news/two-well-known-irish-footballers-18737428

BARBADOS FIGHTING BLACKLISTING “TOOTH AND NAIL”

On 8 August, Barbados Advocate reported that the Attorney General and Minister of Legal Affairs has said that the Government is prepared to go the route of litigation, if needed, to get Barbados off the EU money laundering blacklist. The statement was made during a debate on a money resolution to approve $840,000 for his Ministry as payment to a Canadian firm to get Barbados fully compliant with the FATF requirements. He also said that, despite information to the contrary, the EU has had no discussion with the Government of Barbados or its agents. He said that the effect of any blacklisting has the ability to cripple the country’s financial system, but maintained that Barbados would fight because of the principle which says a man cannot be judged and convicted, unless he has an opportunity to be heard. Meanwhile, the Leader of the Opposition Bishop has lambasted the Government for paying out close to $47 million dollars in fees to consultants.

https://www.barbadosadvocate.com/news/ag-barbados-fighting-tooth-and-nail

https://barbadostoday.bb/2020/08/08/ag-says-barbados-will-fight-blacklisting-tooth-and-nail/

https://barbadostoday.bb/2020/08/08/atherley-baulks-at-millions-paid-to-consultants/

NEW GAMBLING LAW IN THE NETHERLANDS EXPLAINED

On 6 August, an article from Gambling 911 says that the the law that would legalise online gambling in the Netherlands is finally enacted by the Dutch parliament.

http://www.gambling911.com/New-Gambling-Laws-in-Netherlands-Explained.html

FATF REVIEW HIGHLIGHTS CRYPTO EXCHANGES’ STRUGGLE TO MEET AML STANDARDS

The Coin Telegraph on 8 August carried an article about a June report on how both the FATF and industry participants evaluate today’s state of international AML standardisation as it relates to digital assets. The report states that 35 out of 54 surveyed nations have implemented the revised standards on virtual assets in their domestic legislation, while another 19 have yet to do so.  The article also refers to a webinar in which 4 former heads of the US delegation to FATF, whose accounts offered an informed perspective on how FATF approaches risk management for virtual assets and stablecoins. These referred to the number of professional money launderers turning to crypto, especially against the backdrop of the coronavirus pandemic, and P2P transactions, whose growth can render the group’s traditional focus on regulating intermediaries (such as VASP) obsolete.

https://cointelegraph.com/news/slow-but-steady-fatf-review-highlights-crypto-exchanges-struggle-to-meet-aml-standards

US CONGRESS TO COMBAT FRAUDULENT TRADEMARK APPLICATIONS

On 7 August, an article from Fenwick & West LLP was concerned with the Trademark Modernization Act which sets out to reform the trademark application process and the remedies for trademark infringement.  The Act is motivated by a dramatic increase in trademark applications from countries outside the US fraudulently claiming use in domestic commerce. In testimony, 2 experts said that in a random sample of apparel trademark applications from China, two-thirds contained fraudulent specimens. To combat such fraudulent applications, the Act allows third parties to participate in a mark’s registration.

https://www.jdsupra.com/legalnews/trademark-modernization-act-congress-to-92357/

BREXIT: NORTHERN IRELAND CUSTOMS TRADER SUPPORT SERVICE

On 7 August, VAT Live reported that the UK has launched the Trader Support Service for businesses moving goods from Northern Ireland to the rest of the UK (aka Great Britain). This will help produce much of the paperwork required after 31 December. However, the article points out that the UK information only covers one side of the border – EU controls are still to be clarified. The Trader Support Service (TSS) will be a complete custom import and safety and security declarations online portal. The article then goes on to provide the latest details of customs requirements on goods movements between GB and Northern Ireland, and vice versa.

https://www.avalara.com/vatlive/en/vat-news/uk-northern-ireland-brexit-customs-trader-support-service.html

IN CHILE, DRUG TRAFFICKING BECOMING MORE PROMINENT AND VIOLENT

On 7 August, an article in Insight Crime says that drug trafficking in Chile has become increasingly prominent, diversified, and violent over the past year — mirroring public opinion polling that suggests Chileans are increasingly more worried about the threat posed by organised crime. It refers to a report from Chile’s Drug Trafficking Observatory. The study also notes a substantial increase in the use of Chilean ports and maritime routes for drug trafficking. Chilean authorities have also discovered 15 clandestine drug production laboratories in 2019.

https://www.insightcrime.org/news/analysis/chile-drug-trafficking-boom/

SPENT NUCLEAR FUEL STORAGE AND DISPOSAL

The Stimson Center has produced what it calls an Explainer saying that 400,000 tonnes of spent fuel is stored at hundreds of sites across dozens of countries. As of 1 April, there are 442 operational nuclear power reactors in 30 countries and 220 research reactors operating across 53 countries. The most hazardous portion of the waste is spent nuclear fuel (SNF), or used nuclear fuel, which has accumulated to 400,000 tonnes of heavy metal (tHM) throughout the world as of 2017 and, on average, the global SNF stockpile increases by 11,300 tHM annually.  SNF contains fissile material such as plutonium and uranium which the IAEA considers as “direct use material” for the manufacture of nuclear explosives and the article warns that plutonium can be at risk for diversion, theft and sabotage. The article considers the current situation, saying that SNF is protected from misuse by the nuclear safeguards system – a web of international treaties, multilateral organisations, and state regulators which together create obligations on facilities for reporting, inspection, and use.

https://www.stimson.org/2020/spent-nuclear-fuel-storage-and-disposal/

Meanwhile –

MOSCOW FINALLY ADDRESSING NUCLEAR DUMPING IN ARCTIC

On 8 August, Eurasia Review carried an opinion piece saying that, during the last 30 years of Soviet power, the USSR dumped some 18,000 radioactive items in the Arctic Ocean. When retired Soviet naval captain Aleksandr Nikitin revealed that in a report for the Bellona environmental organization in 1996, he was charged with treason, although he was eventually acquitted by the Russian Supreme Court.  Now Rosatom is removing some of what it says are the more hazardous items (such as old nuclear submarines) and which it says account for 90% of the radioactive threat posed by the dumping in Soviet times.

https://www.eurasiareview.com/08082020-moscow-finally-addressing-nuclear-dumping-in-arctic-that-it-charged-nikitin-with-treason-for-revealing-oped/

THE EU CHEMICAL WEAPONS SANCTIONS REGIME

On 31 July, the EU Institute for Security Studies published a brief saying that in October 2018, the EU adopted a sanctions regime against the proliferation and use of chemical weapons, with this regime against chemical weapons is not based on a UN Security Council mandate. It notes that when the sanctions regime was first adopted, it was accompanied by a blacklist addressing 2 different uses of chemical weapons – 3 individuals and an entity involved in chemical attacks on civilians in the Syrian war; and 2 suspects in the assassination attempt in Salisbury, UK.  A second round of designations in January 2019 followed a similar pattern. The brief poses the questions – what accounts for this unusual combination of targets?; what compelled the EU to agree on this novel form of sanctions regime?; and what objectives is the EU pursuing with it?

https://www.iss.europa.eu/sites/default/files/EUISSFiles/Brief%2017%20Chemical%20weapons.pdf

UK: ANTI-CORRUPTION GROUP REPORT WARNS ON RISKS TO LOCAL GOVERNMENT PLANNING PROCESS

On 4 August, Local Government Lawyer reported that Transparency International has said research into what could undermine openness in the planning process – and what local authorities were doing to stop this – had revealed some examples of good practice, but that “generally the results make for a worrying read”. Among other things, it warns that when councillors behave badly, there are no clear or meaningful sanctions available to councils that could act as an effective deterrent against serious misconduct by them or others in the future. The report sets out what Transparency International UK believes to be 10 practical solutions to resolve potential problems with the current planning process.

https://www.localgovernmentlawyer.co.uk/planning/401-planning-news/44544-anti-corruption-group-report-warns-on-risks-to-local-government-planning-process

The report is at –

https://www.transparency.org.uk/sites/default/files/pdf/publications/Permission%20Accomplished%20-%20TIUK.pdf

TAIWAN IN TALKS TO MAKE FIRST PURCHASE OF SOPHISTICATED US DRONES

On 6 August, Reuters reported claims that the US is negotiating the sale of at least 4 sophisticated aerial SeaGuardian surveillance drones to Taiwan for the first time.

https://www.reuters.com/article/us-usa-taiwan-drones-exclusive/exclusive-taiwan-in-talks-to-make-first-purchase-of-sophisticated-u-s-drones-sources-idUSKCN25221C

CHINESE FISHING NEAR NORTH KOREA IS A SYMPTOM OF A BIGGER PROBLEM FROM IUU FISHING

On 31 July, an article in The Diplomat says that the Chinese government has been both lenient on North Korea sanctions and reluctant to tackle illegal fishing by its distant water fleet. The article argues that reports are indicative of a larger problem of illegal, unreported, and unregulated (IUU) fishing and other illicit activities, especially by distant water fishing (DWF) fleets, which threaten the long-term sustainability of fisheries resources and the economic, food, and environmental security of coastal countries. China will need to take additional steps to curtail sanctions violations, IUU, and harmful DWF activities by Chinese fishing fleets, but China’s DWF fleet operations remain opaque, rendering enforcement difficult.

https://thediplomat.com/2020/07/chinese-fishing-near-north-korea-is-a-symptom-of-a-bigger-problem/

LATEST PHASE IN PROJECT TO ENHANCE SAFE AND ENVIRONMENTALLY-SOUND SHIP RECYCLING IN BANGLADESH HAS BEEN GIVEN THE GO-AHEAD

On 31 July, a briefing from the IMO said that the third phase of an IMO-implemented project to enhance safe and environmentally-sound ship recycling in Bangladesh has been given the go-ahead, with Norway committing approximately $1.5 million to support improved ship recycling in Bangladesh.  This will pave the way for Bangladesh to move forward on its path towards becoming a party to the IMO Hong Kong Convention, the treaty that will set global standards for safe and environmentally-sound ship recycling.  The previous phases were also mainly financed by Norway. Phase III will focus on improving ship recycling standards in compliance with the Convention and enhancing capacity building for the Government on legislation and knowledge management. Specific technical assistance will be provided to the Government of Bangladesh to establish a facility for treatment, storage and disposal of hazardous wastes, and there will also be a focus on evaluating the impact of Covid-19 on the ship recycling industry in Bangladesh.

http://www.imo.org/en/MediaCentre/PressBriefings/Pages/23-SENSREC-Phase-III.aspx

8 IMO MEMBER STATES COME TOGETHER ON AUTONOMOUS SHIPS/PORTS INTERFACE

On 5 August, IMO reported that trials of Maritime Autonomous Surface Ships (MASS) will be key towards developing an appropriate regulatory regime that addresses the specific challenges of autonomous ships, and 8 states have come together to form the MASSPorts, an initiative promoted by Singapore to address the challenges and achieve alignment of standards for the trials and operation of MASS in ports.

http://www.imo.org/en/MediaCentre/WhatsNew/Pages/default.aspx

LAWS AND PRACTICES GOVERNING PUBLIC PROCUREMENT AND PROCUREMENT OUTCOMES IN 187 COUNTRIES

Working Paper from the Petersen Institute for International Economics in the US examines a new dataset of laws and practices governing public procurement, as well as procurement outcomes, in 187 countries.  The authors measure regulation as restrictions on the discretion of the procuring agents. The paper finds evidence broadly consistent with this prediction -regulation of procurement improves outcomes but only in countries with low public sector capacity. It notes that the world spent $11 trillion on public procurement in 2018, amounting to 12% of global GDP, and that it represents more than 10% of national output for all rich countries, including 24% in Switzerland, 21% in the Netherlands, and 18% in Hong Kong and Singapore. It involves vast amounts of goods, services, and public works from private businesses, even in state-run sectors such as health care and defence.

https://www.piie.com/system/files/documents/wp20-14.pdf

PAPER: LEGALISING MARIJUANA FOR MEDICAL PURPOSES EXPANDS THE AVAILABILITY, REDUCES THE PERCEIVED RISKS, AND INCREASES THE LOCAL CONSUMPTION OF MARIJUANA

On 6 August, the Brookings Institute published a paper which finds overall that analysis of the situation in the US supports economic theory on substance use, which suggests that legalising marijuana for medical purposes expands the availability, reduces the perceived risks, and increases the local consumption of marijuana. Although marijuana use remains illegal under federal laws, marijuana legalization at the state level has grown in popularity. Since 1996, 33 states and the District of Columbia have legalised the use of medical marijuana. It is reported that medical marijuana laws have facilitated the emergence of a visible and active marijuana industry and led to greater marijuana use for both medical and non-medical purposes. From 2002 to 2018, it is reported, total marijuana consumption increased by 45% and intensive users more than doubled.

https://www.brookings.edu/wp-content/uploads/2020/08/WP66-Cheng-et-al.pdf

NEW RUSSIAN PORT CONNECTS ASIA TO EUROPE

On 6 August, Port Strategy reported that a seaport with a capacity of 12.5 million tonnes will be constructed in Russia’s Kalmykia region, near the city of Lagan on the Caspian Sea, and  will connect the operating ports of Iran, India, and Kazakhstan with Russia.  It is said that it will significantly reducing the time it takes to deliver goods from China and other Asian countries to Europe.

https://www.portstrategy.com/news101/world/asia/new-russian-port-connects-asia-to-europe

THE EU F-GAS REGULATION AND WHAT IT MEANS FOR THE MARITIME INDUSTRY

On 8 August, Hellenic Shipping News published an article concerned with Fluorinated gases (F-Gases) – a range of synthetic refrigerants that trap heat within the atmosphere and contribute to global warming. The most common of these gasses are hydrofluorocarbons (HFC), which are typically found on board ships in air-conditioning, refrigeration and inert gas drying systems. They may also be found in the production of insulation foam and firefighting equipment. It refers to EU Regulation 517/2014/EU, the F-Gas Regulation.  It applies to all EU-flag vessels, although non-EU flag ships have some exemptions since the 1 January 2020 deadline January 2020 deadline. However, it is envisaged that such gas will become both prohibitively expensive and difficult to source as time goes on.  The article also warns that, due to the Regulation causing shortages and increased costs of certain popular refrigerants in the EU, many countries have reported an influx of illegal or counterfeit refrigerants.

https://www.hellenicshippingnews.com/the-eu-f-gas-regulation-and-what-it-means-for-the-maritime-industry/

FINRA SETTLEMENT HIGHLIGHTS IMPORTANCE OF AML DUE DILIGENCE AND MONITORING

An article from Sheppard Mullin on 7 August said that a recent enforcement action offers a glimpse of the expectations of Financial Industry Regulatory Authority (FINRA) for firms conducting AML due diligence and transaction monitoring in a case settled with broker-dealer JKR & Company.  This involved allegations that the firm failed to detect, investigate, and report suspicious activity in 4 customer accounts in violation of FINRA Rules.  It serves as a reminder that FINRA expects member firms to not only establish written AML policies and procedures, but also to put their AML programs into practice in order to meet their regulatory obligations.

https://www.jdsupra.com/legalnews/finra-settlement-highlights-importance-16094/

UK CUSTOMS ACADEMY REPORTS BUMPER JULY FOR BOOKINGS AFTER GOVERNMENT TRAINING GRANT BOOST

On 6 August, the UK Customs Academy reported that the Academy, the online school for customs skills supported by HM Government, has reported a 3-fold increase in bookings month-on-month in July.  It says that there was a total of 328 courses booked in July, up from 89 in June. The Academy was set up in September 2019 at the behest of HMRC to prepare businesses for new customs rules after the UK’s exit from the EU.

https://www.export.org.uk/news/520499/UK-Customs-Academy-reports-bumper-July-for-bookings-after-government-training-grant-boost.htm

US POSTAL SERVICE BEGINS REORGANISATION

On 7 August, American Shipper reported that the US Postal Service (USPS) has announced an organisational realignment to refocus its business, setting the stage for a long-anticipated overhaul to save the agency from financial collapse.  The new structure is focused on 3 business operating units – Retail and Delivery Operations; Logistics and Processing Operations; and Commerce and Business Solutions.  USPS has experienced over a decade of financial losses, with FY 2019 approaching $9 billion and 2020 closing in on $11 billion in losses.

https://www.freightwaves.com/news/us-postal-service-begins-agency-overhaul

UPTICK IN FRAUD LEADS TO INCREASED WHISTLEBLOWER COMPLAINTS IN US

On 8 August, an article from the Society of Corporate Compliance and Ethics said that the SEC reported a 35% increase in complaints from mid-March to mid-May compared with last year.  The increase is said to be due to 2 distinct factors: the widespread fraud due to COVID-19 and the willingness of now-unemployed workers to come forward with complaints. The complaints are said to cover a wide range of activities, from loan fraud and price gouging to substandard medical goods and COVID-19-related scams.

https://compliancecosmos.org/uptick-fraud-leads-increased-whistleblower-complaints-us?authkey=74568d8006cc6523f78981240391fdcab6c4f0006545fe6dea0fbb2d30203691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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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