On 26 August, Insurance Maritime News reported that Brazil has seized 70,000 tonnes of manganese that 4 companies were preparing to ship to China from Porto de Vila do Conde and said that the manganese had been mined illegally.
Day: August 26, 2020
OIL TANKERS STRIPPED OF ST KITTS & NEVIS FLAG AFTER BREACHING US SANCTIONS TO SECRETLY SHIP IRANIAN OIL
On 26 August, Hellenic Shipping News reported that the 4 ships – the Giessel, the Ekaterina, the Lerax, and the Amfitriti – all made covert visits to Iranian waters this year where they collectively picked up millions of barrels of oil. They were sailing under the flag of the Caribbean island state of St. Kitts & Nevis and the St. Kitts & Nevis Ship Registry has decided it would no longer allow the tankers to fly under its flag.
MALTA FIAU INTERPRETATIVE NOTE ON “RELEVANT ACTIVITY” FOR LAWYERS AND AML/CFT
The FIU in Malta (as a further MONEYVAL review looms) has released this Interpretative Note designed to assist independent legal professionals to meet their obligations under the law and FIAU Implementing Procedures by explaining when a legal professional is deemed to be a subject person, and by providing an interpretation of the term ‘relevant activity’, as applicable to lawyers. It says that although lawyers are included in the definition of relevant activity, lawyers provide a vast array of services, not all of which constitute relevant activity. Those services that fall outside the definition of relevant activity do not trigger AML/CFT obligations.
https://fiaumalta.org/wp-content/uploads/2020/08/Interpretative-Note-Relevant-Activity-Lawyers.pdf
CHILD LABOUR IN DRC: BIG TECH AND THE AUTOMOTIVE INDUSTRY’S COBALT SUPPLY CHAIN PROBLEM
On 25 August, a feature from Sayari saying that international mining conglomerates could be supplying cobalt mined by child laborers in the Democratic Republic of Congo (DRC) to leading technology companies and automotive manufacturers, according to public records and open-source information.
It concludes that cobalt mined by child laborers in the DRC can easily fall into the hands of leading consumer brands without their awareness or consent. Companies conducting business with leading cobalt suppliers like Glencore and Huayou Cobalt should be aware of this supply chain risk and conduct thorough due diligence on all parent companies, holdings, and associates with regularity.
In response, perhaps –
BUSINESSES LAUNCH JOINT BID TO IMPROVE CONDITIONS FOR THOSE IN COBALT SUPPLY CHAINS
On 26 August, EurActiv reported that a coalition of businesses including Signify, Glencore and Fairphone have launched a joint initiative to improve the economic, working and social conditions of those working in the cobalt supply chain. Despite existing high demand, research suggests that the global demand for cobalt could increase more than 47-fold by 2030, against a 2018 baseline. Almost two-thirds of the world’s cobalt is currently sourced from the Democratic Republic of Congo and, as such, is classed as a conflict material. Moreover, researchers estimate that more than 13,000 children are forced to work in the cobalt sector in the DRC, and have repeatedly pointed to unsafe working conditions and illegally low rates of pay.
COINBIT – SOUTH KOREA’S THIRD-LARGEST CRYPTOCURRENCY EXCHANGE – REPORTEDLY SEIZED BY POLICE OVER ALLEGATIONS IT FAKED MOST OF ITS TRADING VOLUME
On 26 August, Coindesk reported that local police raided and confiscated the company’s Gangnam headquarters and other premises. Accused of fraud, the company’s owner, Choi Mo, and other managers are said to have artificially inflated volumes on the exchange by using “ghost” accounts to make fake trades, a practice known as wash trading.
https://www.coindesk.com/south-korea-crypto-exchange-coinbit-seized-allegations-fraud-wash-trading
UK: PROPOSED NEW NOTICE WOULD REQUIRE FINANCIAL INSTITUTIONS TO PROVIDE INFORMATION ABOUT CUSTOMERS THAT IS REQUIRED FOR THE PURPOSES OF UK OR OVERSEAS TAX INVESTIGATIONS OR THE COLLECTION OF TAX DEBTS
An article from Out-Law on 26 August concerns proposals to be included in the next Finance Bill, to allow HMRC to issue a financial institution notice (FIN) requesting information about a financial institution’s customers for the purposes of domestic or overseas tax investigations, without having to obtain the approval of the first-tier tribunal or the taxpayer. The article points out that financial institutions are already required to annually report high-level information about financial accounts held by non-residents to HMRC under the CRS. HMRC then automatically passes that information onto the overseas tax authorities concerned. The proposed notice would seemingly make it easier and quicker to respond for requests for further information.
BILLIONAIRE’S MALTA ASSETS UNDER WORLDWIDE FREEZING ORDER AFTER TURKEY COUP ARREST
On 26 August, Malta Today carried a feature about shipping mogul Mübariz Mansimov, arrested in March over the Turkey coup and alleged Gulen links, and who has a shipping empire – the Palmali group – based in tax-friendly Malta. In May, the High Court in London issued a worldwide freezing order against Palmali Holding Company. The injunction was sought by Sberbank of Russia on all Malta companies, as well as some $261 million in assets that Mansimov holds in the UK. However, in 2017, leaks indicated that the group’s ultimate beneficial owner was President Erdogan’s family and Erdogan had used shell companies in Malta and the Isle of Man to own or control shipping.
CZECH REPUBLIC: MONEYVAL AML/CFT FOLLOW-UP REPORT
On 26 August, the Council of Europe’s MONEYVAL body published the June 2020 1st enhanced follow-up report which says that the country has improved measures to combat money laundering and terrorist financing, but still needs to make progress in certain areas. The original mutual evaluation took place in 2018. To date, the Czech Republic has reached a level of full compliance with 5 of the 40 FATF Recommendations, which constitute the international AML/CFT standard. The country still has minor deficiencies in the implementation of another 24 Recommendations, and larger-scale deficiencies for the remaining 11. The Czech Republic will remain in enhanced follow-up and will continue to report back to MONEYVAL on progress to strengthen its implementation of AML/CFT measures and is expected to report back in 1 year’s time.
https://rm.coe.int/moneyval-2020-8rev-sr-5th-round-fur-cz/16809ef776
CYPRUS PAPERS: SECRET MIGRATION OF CHINA’S RICH, LED BY ASIA’S RICHEST WOMAN
On 25 August, the South China Morning Post carried an article about data revealed in the so-called “Cyprus Papers” saying that more than 500 Chinese people obtained EU citizenship in Cyprus between 2017 and 2019, including Asia’s richest woman. It is explained that it is legal for Chinese citizens to apply for permanent residency or citizenship in foreign countries. However, once a Chinese national obtains foreign citizenship, it can result in the automatic loss of their Chinese citizenship, as China does not recognise dual nationality.
See also more information from Al Jazeera –
https://interactive.aljazeera.com/aje/2020/cyprus-papers/index.html
SHIPPING SANCTIONS – AVOIDING “FALSE POSITIVES”
Windward has produced Executive Brief 2/10 saying that overcoming false positives is a key challenge when screening for deceptive shipping practices. This brief sets out to review their root causes and introduce techniques and technologies to reduce them.
https://wnwd.com/wp-content/uploads/False-Positives-%E2%80%93-Windward-Executive-Brief-2.pdf
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