OTHER THINGS YOU MAY HAVE MISSED – SEPTEMBER 5

Panama Covid-19 update – now, if you want to get away, or on an airliner, or arrive here, you need a Covid test within 96 hours (not 48 hours, as was formerly the case). In other news, from Monday, 7 September further businesses, including car washes) can open up (I would have thought a car wash, with all that soap and water flying around would have been safer anyway…).

Meanwhile, we have exceeding the 100,000 cases level at last, with 709 new cases taking the total on Day 181 to 100,305. 12 new fatalities take that total to 2,075. Of the 25,007 active cases, 150 are in ICU, 1,091 in other wards and 398 in requisitioned hotel rooms.

5 September 2020

FRENCH TOURIST GETS €1,000 FINE FOR SMUGGLING 2 KG OF SAND FROM SARDINIA BEACH

Modern Ghana carried a story on 5 September saying that a French tourist has been fined on the Italian island of Sardinia after authorities seized 2 kg of sand he had taken from the beach.  It said that authorities in Sardinia confiscated the plastic bottle of fine sand from the man’s luggage at Elmas airport.  Since 2017, the white grains of sand are considered a protected resource.

https://www.modernghana.com/news/1027613/french-tourist-gets-hefty-fine-for-smuggling-sand.html

US JUDGE DECLARES THAT EX-GREEN BERET CAN BE EXTRADITED TO JAPAN TO FACE CHARGES OVER CARLOS GHOSN ESCAPE

On 5 September, the Daily Mail reported that a judge in Boston has said that 2 American men accused of smuggling Nissan Motor Chairman Carlos Ghosn out of Japan by concealing him in a custom-made box and placing it onto a private jet can be sent back to Japan to face criminal charges. 

https://www.dailymail.co.uk/news/article-8698953/Judge-OKs-extradition-men-accused-aiding-Ghosn-escape.html

CAMEROON: CUSTOMS AGENTS SEIZE 800 KG OF SMUGGLED NON-BIODEGRADABLE PLASTIC BAGS

On 4 September, Business in Cameroon reported that customs officers found the plastic bags, smuggled from Nigeria, hidden inside a truck transporting other goods.  Since 2014, the production, importation, or sales of non-biodegradable plastic bags was officially prohibited in Cameroon. However, they are still sold in markets and stores countrywide.

https://www.businessincameroon.com/economy/0409-10775-cameroon-customs-agents-seize-800-kg-of-smuggled-non-biodegradable-plastic-bags-in

MAURITIUS FSC FLAGS FIRM OVER FORGED LICENCE ON WEBSITE

On 4 September, Finance Magnates reported that the Financial Services Commission has warned investors that the Conventus Group is falsely claiming to hold a local registration while not actually licensed by the FSC ‎or any other competent authority.  The FSC warned that it is posting on its website a certificate of incorporation carrying its name and purporting to be incorporated in Mauritius, yet this certificate is a complete forgery, the FSC says.

COLOMBIA: PROSECUTOR’S OFFICE FORMALLY ACCUSED NICOLÁS MADURO’S FRONT MAN, ALEX SAAB, OF MONEY LAUNDERING AND ILLICIT ENRICHMENT

On 5 September, Explica reported that Colombia had laid charges against Alex Saab, who is being held in Cape Verde at US request, and accused of bring the “front man” for Venezuela’s President Maduro.

FORMER BARBADOS GOVERNMENT MINISTER TO FORFEIT $36,000 IN US MONEY LAUNDERING CASE

On 4 September, Caribbean Life reported that former Barbados minister, Donville Inniss, will have to pay $36 536.73 under a forfeiture order after being found guilty of illegally receiving from an insurance company on the island and seeking to launder to New York accounts through wire transfers.

PONZI SCHEMES, FRAUD, BANK DISBURSEMENTS AND THE “QUINCECARE DUTY OF CARE”

On 4 September, Morton Fraser published an article about Stanford International Bank Ltd (in liquidation) v HSBC Bank plc, connected to Robert Stanford who was found guilty in the US in 2012 of fraud through his running of a $7 billion Ponzi scheme.  The liquidators of Stanford International Bank have brought an action against HSBC claiming, amongst other things, that HSBC was in breach of its “Quincecare duty of care” to SIB by disbursing several payments from those bank accounts totalling £118 million after HSBC ought to have been aware that SIB was engaged in fraudulent activity, and therefore seeking damages from HSBC in the total amount of those disbursements.  The article explains what the so-called “Quincecare duty of care” means.  It also notes that the judge left the door open for SIB to bring a further claim based on dishonest assistance if it can find evidence that there was knowledge within HSBC.

https://www.morton-fraser.com/knowledge-hub/ponzi-schemes-fraud-bank-disbursements-and-the-quincecare-duty-of-care

US: BIS REQUESTS COMMENTS ON “FOUNDATIONAL TECHNOLOGIES” WITH THE GOAL OF DEVELOPING NEW EXPORT AND CFIUS CONTROLS

On 4 September, an article from Dentons reported that the US Department of Commerce, Bureau of Industry and Security (BIS) issued an advance notice of proposed rulemaking (ANPROM) seeking comments from the public concerning the criteria for defining “foundational technologies”.  BIS has been charged with defining the terms “emerging technologies” and “foundational technologies” to then impose heightened export controls on these technologies to control and safeguard these technologies deemed under ECRA to be “essential to the national security of the United States”.

https://www.jdsupra.com/legalnews/bis-requests-comments-on-foundational-11691/

US: JOINT STATEMENT CDD EXPECTATIONS FOR PEP

 An article from Ballard Spahr LLP on 4 September reported that in August FinCEN and banking regulators had issued a joint statement that provides additional guidance in applying Bank Secrecy Act due diligence requirements to customers who may be “politically exposed persons” (PEPs).

https://www.jdsupra.com/legalnews/joint-statement-clarifies-due-diligence-76132/

ALL TAX ADVISERS SHOULD BE PROFESSIONALLY QUALIFIED, SAYS CHARTERED INSTITUTE OF TAXATION

On 27 August, CIOT published a release saying that it has given a cautious welcome to a government proposal for an ultimate legal requirement for anyone who wants to provide tax advice on a commercial basis to belong to a recognised professional body, and that an alternative proposal for a new government regulator of tax advisers would be costly and ineffective.

https://www.tax.org.uk/media-centre/press-releases/all-tax-advisers-should-be-professionally-qualified-says-ciot

UK: TACKLING CONSTRUCTION INDUSTRY SCHEME (CIS) ABUSE

On 27 August, the Chartered Institute of Taxation published its response to a HMRC consultation published on 19 March.  The consultation concerns ways HMRC might tackle abuse of the Construction Industry Scheme (CIS) and sets out various suggestions to prevent tax loss within construction supply chains, invite feedback, and  it is intended to build on the VAT reverse-charge for the construction industry, which is due to come into effect on 1 March 2021, and Off-Payroll Working rules for the private sector which take effect from 6 April 2021.

The consultation paper is at –

https://www.gov.uk/government/consultations/tackling-construction-industry-scheme-abuse

CMS EXPERT GUIDE TO CONCURRENT DELAY

CMS Law has produced this guide to the legal situation in a number of countries when there are delays in construction projects and for each jurisdiction the authors have answered the standard set of questions set out below and also considered how the law on their jurisdictions would treat the scenario referred to.

https://cms.law/en/int/expert-guides/cms-expert-guide-to-concurrent-delay

INJUNCTIONS AND CRYPTOCURRENCIES

On 4 September, CMS Law published an article saying that, in a recent decision an English court has refused to continue an interim injunction that restrained the defendant from dealing with bitcoin held in a coin depot account, over which the claimants had asserted a proprietary right.  The case is said to highlight the factors that the court will take into account when considering matters relating to injunctive relief for cryptoassets – and also reiterates the need to establish that damages is not an adequate remedy when seeking injunctive relief.

https://www.cms-lawnow.com/ealerts/2020/09/injunctions-and-cryptocurrencies?_ga=2.237252672.173381497.1599324294-327228311.1593277439

NEW RUSSIAN LAW ON DIGITAL FINANCIAL ASSETS AND DIGITAL CURRENCY

On 1 September, an article from Gowling WLG discussed a new law which comes into force in January.  Some important concepts are said to be included in the new law, and a separate Bill that will further regulate the issuance and operations of digital currency is expected later in this year.  The article says that, although the law legitimises the operations of digital financial assetsand locally issued digital currency, it poses a number of regulatory and tax issues that are yet to be clarified by the Central Bank and Tax Service.

https://gowlingwlg.com/en/insights-resources/articles/2020/a-new-russian-digital-assets-law/

FROM OCTOBER ONLY 2 PACKS OF CIGARETTES WILL BE ALLOWED TO BE BROUGHT INTO CROATIA FROM COUNTRIES OUTSIDE OF THE EU

On 3 September, TJI reported that, until now, Croatians living close to the Bosnian or Serbian border were able to cross over and import up to 10 packs (200 cigarettes) saving a large amount of money in the process.  It says that studies estimate around 7% of Croatian tobacco consumption is made up of non-taxable cigarettes hailing mainly from Bosnia and Herzegovina or Serbia, which may be worth up to $94.4 million.

http://www.tobaccojournal.com/Import_restricted_to_two_packs.56029.0.html

POSTPONEMENT OF THE 2021 COMPREHENSIVE REVIEW OF THE STATUS OF IMPLEMENTATION OF UN SCR 1540

On 27 August, IAEA reported the postponement of a comprehensive review of the UN Security Council Resolution concerned with countering the proliferation of WMD, due to delays caused by the coronavirus pandemic.

LEGAL IMPLICATIONS OF LIFE AFTER BREXIT DISCUSSED IN PODCAST SERIES

On 2 September, CMS Law announced a podcast series to bring one up to date with the legal implications of Britain’s departure from the EU’s Single Market and customs union.  In the first 2 episodes a former UK trade advisor, discusses the state-of-play and key issues surrounding a future EU/UK free trade deal as well as the implications for Germany, Europe and the USA.

https://www.cms-lawnow.com/publications/2020/09/legal-implications-of-life-after-brexit-discussed-in-podcast-series

INDIAN NUCLEAR FORCES 2020

On 1 July, the Bulletin of the Atomic Scientists published an analysis of the state of Indian nuclear forces.

UAE OVERHAULS ECONOMIC SUBSTANCE REGULATIONS

On 3 September, DLA Piper reported that the UAE has published revised legislation overhauling its Economic Substance Regulations (ESR).  The overhaul addresses specific aspects of the ESR, and the article says that UAE-based entities which are covered by the ESR are taking note of these changes ahead of the first ESR Report filing deadline on 31 December.

https://www.dlapiper.com/en/us/insights/publications/2020/09/uae-overhauls-economic-substance-regulations/

UK: “STREAMLINING” JUDICIAL REVIEW – THE INDEPENDENT REVIEW OF ADMINISTRATIVE LAW

On 3 September, a post from the Faculty of Law at the University of Oxford looks at the independent review of UK administrative law, more specifically of judicial review, to be conducted by an expert panel of lawyers and academics.   

https://www.law.ox.ac.uk/ouulj/blog/2020/09/streamlining-judicial-review-independent-review-administrative-law

TURKEY’S BLACK SEA GAS DISCOVERY AND RELATIONS WITH EUROPE

On 3 September, the European Council on Foreign Relations published an article saying that Turkey’s discovery of a large gas reserve in the Black Sea could benefit its economy in 6 or 7 years, but it will not ease Turkish-European tensions in the Eastern Mediterranean.  In the Mediterranean, competing claims on maritime borders, exclusive economic zones (EEZ), and energy resources have put Turkey, Greece, and Cyprus at loggerheads with one another.

https://www.ecfr.eu/article/commentary_under_the_waves_turkeys_black_sea_gas_discovery_and_relations_wi

PROTRACTED, NEGLECTED, AND INEFFECTIVE: LESSONS FROM THE LEBANON TRIBUNAL

On 4 September, the European Council on Foreign Relations published an article about the eventual findings of the Special Tribunal for Lebanon (STL) investigating the killing of former Lebanese prime minister Rafik Hariri 15 years previously.  The article concludes that international courts are no substitute for politics – not least when the countries that set them up fail to back them.

https://www.ecfr.eu/article/commentary_protracted_neglected_and_ineffective_lessons_from_the_lebanon_tr

MEETING OF 18 COUNTRIES ON THE DJIBOUTI CODE OF CONDUCT – A KEY TOOL IN REPRESSING PIRACY AND ARMED ROBBERY AGAINST SHIPS IN THE WESTERN INDIAN OCEAN AND THE GULF OF ADEN

On 2 September, the IMO reported that the event saw many proposals presented, such as the development of a regional information-sharing network, based on the existing national maritime information-sharing centres in all the participating countries. Other propositions called for better coordination of capacity-building efforts, based on regional needs and priorities.

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

UNDERSTANDING THE WORLD OF ENCRYPTION USERS

The Center for Strategic and International Studies has produced this useful (essential) and easy to follow guide saying that, with the spread of encrypted communications, countries must balance privacy, security, and safety.  It says that encryption serves a variety of purposes for individuals, governments, and organisations in protecting their data and information, whether “at rest” when stored on computers, smartphones, and other devices or “in transit” in communications between users, devices, and applications. In the guide, CSIS sets out to present a dynamic, user-centric breakdown of these considerations, explaining the basics of encryption and its uses.

https://www.csis.org/features/understanding-world-encryption-users

TOWARD A MORE PROLIFERATED WORLD?

A report from the Center for Strategic and International Studies looks at the geopolitical forces that will shape the spread of nuclear weapons.  It says that while the US and the international community have been relatively successful at preventing the spread of nuclear weapons, but there are new reasons to question whether this track record will last into the future.

A GUIDE TO CHOLINESTERASE INHIBITORS IN WAKE OF SUSPECTED ALEXEI NAVALNY POISONING

On 28 August, Bellingcat published this guide looks at what is an “cholinesterase inhibitor”.  Frequently termed as “nerve agents,” this category of chemicals includes, among other things, some military chemical warfare agents, some drugs, and numerous pesticides. 

https://www.bellingcat.com/uncategorized/2020/08/28/cholinesterase-inhibitors-alexei-navalny/

WHITENESS, SCAPEGOATING, AND SCARCITY: MEDICALISING ‘THE US OPIOID CRISIS’

On 31 August, this paper was published by the Journal of Illicit Economies & Development characterises the successful civil lawsuits brought in the US against multinational pharmaceutical companies to recover the costs of public expenditures (goods and services) incurred as they attempt to manage the ‘opioid crisis,’ as a scapegoating strategy whose function is to deflect attention from governance failures.  Criminalising the pharmaceutical companies and executives for peddling prescription medicines to inadequately trained (in the treatment of pain) physicians, it argues, medicalises the white opioid crisis and identifies consumers as victims – and this distinguishes them from the Americans of colour whose ‘drug use’ has been criminalised.

https://jied.lse.ac.uk/articles/10.31389/jied.62/

ARGENTINA AS A SUCCESS CASE AGAINST DRUG TRAFFICKING 2016–2019

On 31 August, another paper published by the Journal of Illicit Economies & Development says that Argentina was for many years identified as an essential cocaine transhipment country especially bound to Europe.  This phenomenon gave place to the consolidation of an internal cocaine market that had a profound impact on crime levels in the country.  However, it says that in December 2015, a new strategy to counter drug trafficking was introduced – and this included policies aimed at reducing the supply of drugs, generating an environment hostile to organised crime, reducing demand, and improving control of money laundering by criminal organisations.

https://jied.lse.ac.uk/articles/10.31389/jied.61/

US: TEXAS AUTHORITIES ISSUES CEASE & DESIST ORDER AGAINST BITCOIN POPE

On 5 September, ATOZ Markets reported that the Texas Securities Commissioner has issued the cease and desist order to Bitcoin Pope for a crypto fraud scheme that promises large returns.  It is said that the alleged masterminds behind the scheme are Kumar Babu Bondesi and Darwin Eric Balusek – the latter calling himself “Bitcoin Pope” in advertisements and among investors.

UK: CHARITY BOSS WITH MBE ORDERED TO PAY BACK £286,000 DEFRAUDED FROM PENSION SCHEME

On 5 September, Plymouth Live reported that the head of Yateley Industries for the Disabled, who was awarded an MBE for his charity work, has been jailed for 5 years and ordered to pay back more than £286,000.

https://www.plymouthherald.co.uk/news/plymouth-news/charity-boss-ordered-pay-back-4487992

THE FAMILY OF A SANCTIONED UKRAINIAN POLITICIAN WITH CLOSE TIES TO RUSSIAN PRESIDENT VLADIMIR PUTIN SELLING REFINED OIL PRODUCTS TO US THROUGH AN INTERMEDIARY

On 5 September, Rferl reported this as another example of Russian-linked persons finding legal ways around Washington’s financial restrictions.  The article says that a refinery, which is owned by the wife of Viktor Medvedchuk, who heads a political council of a pro-Russia political party in Ukraine, has been selling some of its output this year to an arm of ExxonMobil via a Swiss-registered trader.  The products are shipped by tanker from the Black Sea to Houston. 

https://www.rferl.org/a/family-of-sanctioned-ukrainian-politician-and-putin-proxy-selling-refined-oil-to-u-s-/30822759.html

FACILITATING TAX EVASION — ENFORCEMENT OF THE UK’S CORPORATE CRIMINAL OFFENCE

On 1 September, Paul Hastings published an article saying that data published by the UK Government show that contraventions of the Criminal Finances Act 2017 are being actively investigated and that financial institutions are most at risk of prosecution.  This means that firms should ensure that policies addressing risks of facilitating tax evasion are up to date and have been implemented effectively.

US: 2 SELF-DESCRIBED BOOGALOO BOIS CHARGED WITH CONSPIRING WITH HAMAS

On 5 September, Eurasia Review reported that the US DoJ has announced a federal criminal complaint charging Michael Robert Solomon, 30, and Benjamin Ryan Teeter, 22, with conspiring and attempting to provide material support to Hamas.  It is claimed that they shared the same desire to harm the US, and that they sought to join forces and provide support, including in the form of weapons accessories, to Hamas.  The 2 men are said to be members of the Boogaloo Bois, a group that espouses a violent ideology and an objective to overthrow the government. 

https://www.eurasiareview.com/05092020-two-self-described-boogaloo-bois-charged-for-conspiring-with-hamas-seeking-govt-overthrow/

OTHER THINGS YOU MAY HAVE MISSED – SEPTEMBER 4

Panama Covid-19 update – 682 new cases take us close to the 100,000 total (now at over 99,000 cases since March), with 17 new fatalities and 23,090 active cases, of whom 164 are in ICU and 1,092 in other wards.

4 September 2020

US: BIS EXPANDS HUAWEI FOREIGN DIRECT PRODUCT RULE TO CAPTURE WIDE SWATH OF COTS PRODUCTS

On 4 September, Arent Fox published an article about 2 rules published by the Department of Commerce, Bureau of Industry and Security amending matters concerned with the Entity List export controls, the so-called ‘Foreign Direct Product Rule’ (FDPR) and commercial off-the-shelf (COT) products.  The Entity List now includes 153 Huawei-linked entities.  The FDPR primarily targeted at the semiconductor industry but the amendments remove the requirement that the foreign product in question be either developed or produced by a designated Huawei entity or the direct product of Huawei software or technology.  The new requirements are wider.  In response, Arent Fox concludes that, ultimately, BIS and the government keep sending the same message: if a party is legally selling to Huawei, the government will revise its regulations to ensure that such party is no longer legally selling to Huawei.  To assist, a related podcast is also available.

https://www.jdsupra.com/legalnews/bis-expands-the-huawei-foreign-direct-94663/

ARAB LEAGUE BOYCOTT OF ISRAEL – UAE EXIT AND THE US ANTI-BOYCOTT OBLIGATIONS

On 2 September, Sidley Austin LLP published an article saying that on 29 August, the UAE reportedly formally ended its participation in the Arab League’s economic boycott of Israel.  It joins Egypt and Jordan in doing so.  The article says US companies should be cautious, and explains the US anti-boycott law, which makes it illegal for US companies to comply with a foreign boycott to which the US is not a party, and requires US companies to report certain types of boycott requests.  It notes the distinction in US law, which permits US companies to participate in the primary boycott of Israel (e.g., refusals to ship goods direct to/from Israel) but prohibits participation in secondary boycotts (e.g. refusals to do business with US persons that do business with Israel, usually in accordance with a blacklist) and tertiary boycotts (e.g. refusals to do business with persons that themselves do business with US persons on a blacklist).

https://www.sidley.com/en/insights/newsupdates/2020/09/how-to-understand-continuing-us-antiboycott-obligations

DEFERRED PROSECUTION AGREEMENT (DPA) FOR UK BUSINESS INCLUDES REQUIRED ‘CORPORATE RENEWAL’ AND REVIEWERS

On 31 August, Barnes & Thornburg LLP in the US published an article saying that a recent DPA with the SFO has yielded the first appointment of an external “reviewer”, which appears to be a role similar to that of “monitors” under such US DoJ agreements, and entails examination, analysis, review, and audits of rehabilitation efforts.  The article says that  it remains to be seen whether the appointment of a “reviewer” becomes more common in SFO DPA.

https://btlaw.com/en/insights/alerts/2020/deferred-prosecution-agreement-for-uk-business-includes-required-corporate-renewal-and-reviewers

AUSTRALIA: POLICE SEIZE MELBOURNE PROPERTY IN MALAYSIAN CORRUPTION CASE

On 3 September, the Sydney Morning Herald reported that federal police have seized properties and cash worth $1.6 million over an alleged scheme to use the Melbourne property market to funnel millions of dollars of funds from a Malaysian government entity to corrupt officials.  It says such actions are rare, but also mentioned that, in July, as part of another unrelated international bribery investigation, federal police asked the US to block sale of a New York apartment as part of a long-running and politically sensitive probe into Australian mining company called Getax, owned by the wealthy Gupta family and accused of bribing Nauruan officials to benefit its phosphate exporting business.

https://www.smh.com.au/national/police-seize-melbourne-property-in-international-corruption-case-20200901-p55rec.html

IN DEAL: MALAYSIA DROPS GOLDMAN SACHS CRIMINAL CHARGES OVER 1MDB

On 4 September, the Wall Street Journal reported that Malaysia has dropped criminal charges against units of Goldman Sachs Group Inc. over the bank’s role in the alleged theft of billions of dollars from the government investment fund, part of a $3.9 billion settlement with the company.

https://www.wsj.com/articles/malaysia-drops-goldman-sachs-criminal-charges-over-1mdb-11599192289

THE MULTINATIONAL MUTUAL ASSISTANCE AND COOPERATION FRAMEWORK FOR COMPETITION AUTHORITIES

On 3 September, the Mashable website carried an article saying that the US, Australia, Canada, New Zealand and UK had signed a non-legally binding agreement to share information about competition laws and policies, with a focus on coordinating cases and investigations spanning international borders.  It is said that it will strengthen existing cooperation arrangements, as well as provide a base framework for further collaboration.

https://mashable.com/article/antitrust-competitive-investigation-international-agreement-australia/

US SATELLITE COMMUNICATIONS COMPANY SANCTIONS PROBE OVER RUSSIA TIES

On 4 September, Global Investigations Review reported that the US Treasury is investigating Frequency Electronics over its past relationship with a company owned by sanctioned Russian financial institution Gazprombank.

https://globalinvestigationsreview.com/article/just-sanctions/1230546/us-satellite-communications-company-under-sanctions-probe-over-russia-ties

PODCAST: THE LOZOYA CASE SHAKING MEXICO: WHAT TO EXPECT

On 3 September, the Americas Quarterly produced a podcast arguing that the scandals involving the former Pemex chief may impact politics more than the rule of law.

SMALL CHINESE CITY EXPLODED INTO A MAJOR PORT FOR NORTH KOREAN TRADE – WHILE A CLOSED SEA ROUTE AFFECTS A NORTH KOREAN PORT

On 4 September, NK Pro reported how 150 companies in Dandong were behind around 25% of Chinese exports to North Korea in 2016 — worth roughly $750 million.  Dandong is the largest Chinese border city, facing North Korea across the Yalu River.  Meanwhile, another report on 3 September says that ship-tracking data supports NGO reports that the Dalian-Nampho sea route was closed in late July and North Korea’s formerly busiest port was quiet throughout August, averaging less than one ship voyage per day seemingly having been closed sometime in late July due to COVID-19 concerns.

https://www.nknews.org/pro/how-a-small-chinese-city-exploded-into-a-major-port-for-north-korean-trade/

https://www.nknews.org/pro/north-koreas-top-seaport-eerily-quiet-after-rumors-of-a-closed-trade-route/

THE BILLION-DOLLAR BORDER TOWN NORTH KOREA’S TRADE NETWORKS IN DANDONG (PART 1)

Available to download from RUSI, this article says that historically, a significant proportion of trade have been based in the Chinese border town of Dandong, which looks across the Yalu River into North Korea and acts as the primary cross-border trading hub between the two countries.  This report – which is the first of 2 on this topic – analyses North Korea’s trade networks in Dandong and the role these have played in the country’s ongoing attempts to evade multilateral and unilateral sanctions regimes.  The research involved highlights the scale of trade running through Chinese companies involved in various illicit activities and the striking importance of Dandong’s logistical, financial and corporate architecture to North Korea.  It says that its discoveries have implications for regulators, financial institutions and a range of other stakeholders committed to enforcing the multilateral sanctions regime on North Korea. They also raise questions regarding China’s implementation of sanctions it has itself supported at the UN.

https://rusi.org/publication/other-publications/project-sandstone-report-7-billion-dollar-border-town

AUSTRALIA: CUSTOMS OFFICIALS DESTROY $19,000 ALLIGATOR-SKIN HANDBAG

On 4 September, The Nation in Sri Lanka reported that the Saint Laurent bag was destroyed by customs officials in Australia because it entered the country without the correct import licence.  While alligator products are allowed into the country, their access is controlled under CITES to ensure they are not linked to the illegal wildlife trade and , although the buyer had secured an export licence from Europe, she did not have a CITES import permit for Australia.

https://www.nation.lk/online/customs-officials-destroy-19-000-handbag-810.html

SHARK FIN SMUGGLING OPERATION BASED IN CALIFORNIA AND FLORIDA WORTH MILLIONS OF DOLLARS BUSTED

Dive Magazine reported that 12 people and 2 businesses alleged to be fronts for an international smuggling ring have been charged with smuggling shark fins from Mexico to Hong Kong.  The defendants have also been accused of running an illegal marijuana shipping operation.  The scheme is thought to have been in operation since 2010.

http://divemagazine.co.uk/eco/9114-us-shark-fin-smuggling-ring-shut-down

SMUGGLERS STILL PLY TRADE ON NORTH KOREA’S CHINA BORDER DESPITE SHOOT-ON-SIGHT ORDERS

Radio Free Asia on 3 September reported that economic hardship is driving North Koreans who live near China to break strict quarantine rules to move goods across the border in spite of recent orders by authorities that anyone approaching the frontier will be shot.

https://www.rfa.org/english/news/korea/smugglers-09032020195542.html

DON’T EXPECT NEW EU-US DATA TRANSFER DEAL ANYTIME SOON

On 4 September, EurActiv reported that EU Justice Commissioner Didier Reynders has told MEPs that there will be “no quick fix” on a revised data transfer deal between the EU and the US following a July ruling by EU judges to strike down the Privacy Shield agreement.  He is quoted as saying that what was needed were sustainable solutions that deliver legal certainty, in full compliance with the judgment of the court.

ALL EYES ON SUDAN’S PEACE DEAL WITH ARMED GROUPS

An article on Defence Web on 4 September asked if the recent peace deal between Khartoum and Sudan’s armed rebel groups can stick?  The agreement covers the war-torn areas of Darfur, the ‘Two Areas’ (South Kordofan and Blue Nile) as well as central, eastern and northern Sudan. On the rebels’ side, the accord was initialled by the Sudan Revolutionary Front alliance, its two constituent movements – Gibril Ibrahim for the Justice and Equality Movement (JEM) and Malik Agar for the Sudan People’s Liberation Movement-North (SPLM-N) – and by Minni Minnawi for SPLM-MM.  But it was not endorsed by 2 other groups – the SPLM-N faction under the leadership of Abdelaziz al-Hilu, or the mainstream Sudan Liberation Movement in Darfur, led by Abdel Wahid al-Nur (SLM-AW). 

http://www.ekklesia.co.uk/node/29933

MURKY GHANA GOLD DEAL RAISES QUESTIONS ABOUT JERSEY

On 4 September, the Tax Justice Network published an article saying that a company based in Jersey – Agyapa Royalties – has inserted itself into the middle of what looks like a highly unwise financing arrangement for the country.  In exchange for an up-front payment from ‘investors’, variously forecast between $500 million and $1 billion, Ghana will be signing away over three-quarters of its future gold royalties to Agyapa — forever. The article claims that this is an example of an apparently large injection of up-front money to Ghana’s budget, in exchange for likely vastly larger sums flowing out at a later date.  It also criticises the tax carve-outs involved and looks at what (little) can be found about the Jersey company involved.

UK: FRAUDULENT FOREIGN EXCHANGE TRADER PLEADS GUILTY TO A £20.5 MILLION INVESTMENT SCAM

A news release from the CPS on 4 September said that, after emailing his clients and telling them he had not been trading with their investments since 2009, Joseph Lewis, 65, went to a police station, told them what he had done, and was arrested.  Based in Turkey, Lewis attracted clients across the globe to invest in Foreign Exchange Trading. 

https://www.cps.gov.uk/cps/news/fraudulent-foreign-exchange-trader-pleads-guilty-ps205million-investment-scam

BREXIT: TRADE WITH THE UK FROM JANUARY 2021: PREPARATIONS FOR EU BUSINESSES

On 4 September, the Department for International Trade published the latest in a series of news releases containing information for the end of the Brexit transition period.  This one contains information in various languages for EU businesses.

https://www.gov.uk/government/publications/trade-with-the-uk-from-january-2021-prepare-your-eu-business

US: EXPORT CONTROL HR PITFALLS TO AVOID WHEN HIRING

On 3 September, Sheppard Mullin published an article which said that hiring employees does not usually involve international trade compliance obligations.  However, US export controls and anti-discrimination laws create a web that is overlooked or misunderstood by many types of employers of all sizes across many industries.  Anti-discrimination laws prohibit unlawful citizenship status restrictions when hiring, and US export controls prohibit disclosing controlled information to foreign nationals without authorisation.  Together, these laws limit acceptable job descriptions and hiring practices.

https://www.jdsupra.com/legalnews/export-control-hr-pitfalls-to-avoid-42357/

PHILIPPINES LOOKS TO PROSECUTE 19 IMMIGRATION OFFICIALS FOR POGO WORKER SMUGGLING

On 4 September, Calvin Ayre reported on alleged smuggling of foreign workers into the Philippines for the purpose of working at Philippine Offshore Gambling Operators (POGO).  This has led to arrests and requests for prosecution of 19 immigration officers. 

https://calvinayre.com/2020/09/04/business/legalized-regulated-gambling-is-helping-colombia-grow/

LEGALISED, REGULATED GAMBLING IN COLOMBIA

An article on the Calvin Ayre website on 4 September says that, in a few years, gambling has become a small but important part of the country’s economy, bringing in new revenue and new jobs that are vital to any country’s autonomy and longevity. 

https://calvinayre.com/2020/09/04/business/legalized-regulated-gambling-is-helping-colombia-grow/

ICAO AND UPU CALL ON STATES TO SUPPORT POST AND CARGO CARRIERS

On 4 September, Lloyds Loading List reported that the organisations – the International Civil Aviation Organization (ICAO) and the Universal Postal Union (UPU) – are also stepping up analysis of each other’s e-commerce and traffic big data, so as to identify and report on the logistical constraints to growth.  They have also started to exchange data on e-commerce flows to underline the importance of this sector for economic recovery and growth.

https://www.lloydsloadinglist.com/freight-directory/news/ICAO-and-UPU-call-on-states-to-support-posts-and-cargo-carriers/77328.htm#.X1JQOueSmM8

BREXIT: FREIGHT INDUSTRY – ‘SIGNIFICANT GAPS’ IN UK BORDER PLANS

On 4 September, Lloyds Loading List reported that the freight industry has called for ‘urgent roundtable’ with government and warns that if issues are not addressed UK business and the supply chain will be severely disrupted.  The signatories to a letter to the UK Government include Logistics UK, the British International Freight Association (BIFA) the Road Haulage Association (RHA) and the UK Warehousing Association (UKWA) – saying that concern is growing from the logistics sector as to the Government’s and nations’ preparedness for transition.

https://www.lloydsloadinglist.com/freight-directory/news/Brexit-Significant-gaps-in-UK-border-plans/77330.htm#.X1JQNueSmM8

CHINESE CUSTOMS SENDS BACK 110 TONNES OF SOLID WASTE

On 3 September, Xinhua reported that Customs in east China’s Shandong Province, said it has refused entry of 110 tonnes of solid waste into the country, misdescribed but identified as solid waste, which is prohibited from entering the country.

http://www.xinhuanet.com/english/2020-09/03/c_139340148.htm

CHINA: CUSTOMS AUTHORITIES CRACK SMUGGLED FURNITURE CASE

On 2 September, Shine in China reported that over 15,000 pieces of smuggled antique furniture, worth $5.86 million have been seized late last month, Shanghai Customs announced. 

https://www.shine.cn/news/metro/2009025338/

MALI: THE COUP AND ITS CONSEQUENCES

A briefing paper from the EU Parliament Research Service on 4 September is concerned with the background to the recent coup in Mali.   

US: BIS REQUESTS COMMENTS ON “FOUNDATIONAL TECHNOLOGIES,” WITH THE GOAL OF DEVELOPING NEW EXPORT AND CFIUS CONTROLS

An article from Dentons on 4 September was concerned with an advance notice of proposed rulemaking (ANPROM) seeking comments from the public concerning the criteria for defining “foundational technologies”.  BIS had been charged with defining the terms “emerging technologies” and “foundational technologies”, to then impose heightened export controls on these technologies to control and safeguard these technologies deemed under ECRA to be “essential to the national security of the US.  BIS is asking interested parties to submit comments by 26 October. 

https://www.dentons.com/en/insights/articles/2020/september/4/bis-requests-comments-on-foundational-technologies

DESIGN CHOICES FOR CENTRAL BANK DIGITAL CURRENCY (CBDC)

On 4 September, a post on VOX, the website of the Centre for Economic Policy Research in Europe, said that many central banks are considering, and some are even piloting, central bank digital currency (CBDC).  The article provides an overview of important considerations for central bank digital currency design.  While central banks already provide wholesale digital currency to financial institutions, a retail central bank digital currency would expand access to more users and provide opportunities for innovative central banking.  The design must balance these benefits with the potential risks created by retail central bank digital currency deployment.

https://voxeu.org/article/design-choices-central-bank-digital-currency

RESOURCE CURSES ARE MORE LIKELY IN FRAGMENTED AUTHORITARIAN REGIMES

A post on the LSE Business review blog argues that authoritarianism and fragmented elites create uncertainty; capital tends to flee the country to avoid expropriation.  It says that abundant natural resources like oil and gas rarely turn out to be a real blessing for a country.  More frequently they distort economic policies, discourage entrepreneurial activity and ultimately suppress economic growth.  Yet not all countries suffer from this resource curse, it says, to the same extent: some manage to escape it or even turn natural resources into a blessing.  It poses the question whether some authoritarian regimes are better able to turn natural resources into a curse or a blessing than others.

US AIR FORCE TESTS POSSIBLE REPLACEMENT FOR CLUSTER MUNITIONS

On 3 September, Real Clear Defense reported that the USAF recently tested a new next-generation fragmentation bomb on the F-16 meant to be an alternative to cluster munitions that diminishes the risk of unexploded ordnance, according to a news release.  Typically, cluster munitions involve a bomb that ejects explosive bomblets that are designed to kill personnel and destroy vehicles. There is an international convention that prohibits the use, transfer, and stockpiling of this type of weapon, with 108 states having ratified it (but not the US).  In the UK, the Cluster Munitions (Prohibitions) Act 2010 bans the sale, transfer, export etc of cluster munitions.

https://www.military.com/daily-news/2020/09/02/air-force-tests-new-bomb-could-replace-controversial-cluster-munitions.html

HOW THE ART INDUSTRY CAN ADAPT TO THE CHALLENGES OF 5MLD

On 2 September, the International Compliance Association in the UK published an article saying that the most recent changes to the art market are significant. January 2020 saw the transposition of the EU 5th Money Laundering Directive (5MLD) into UK law.  After extensive consultation, and with HMRC as the regulator, art market participants face considerably more onerous AML requirements.  The article outlines the 5MLD obligations, its nuances and details and how to adjust to the necessary CDD.

https://www.int-comp.org/insight/2020/september/02/art-industry-5mld-challenges/

GUIDANCE RELATING TO THIRD PARTIES ACCIDENTALLY IN RECEIPT OF PERSONAL DATA RELATING TO OTHER INDIVIDUALS

The Irish data protection authority has produced this guidance, in 3 forms, for individuals, organisations and data controllers.

https://www.dataprotection.ie/en/guidance-landing/guidance-relating-third-parties-accidentally-receipt-personal-data-relating-other

THE DIRECT CORRELATION BETWEEN COMPLEX FINANCIAL CRIME AND THE EVOLVING CRIMINAL MIND

On 3 September, this research paper, published by Compliance and Financial Intelligence Principles, sets out to critically examine the direct correlation between complex financial crime and the evolving criminal mind.  Within a highly competitive and dollar-driven global economy, it is paramount to understand the criminological, societal, institutional and psychological factors that contribute to the increasing intricacy of financial crime. In recent years, studies have shown the rising complexity of money laundering, terrorist financing, fraud and other financial crime related predicate offences.  In light of these findings, the evolving criminal mind prompted by a series of factors was deemed to be a main cause.  This paper concisely focuses on 4 core components –

  • the modern-day societal triggers that propel individuals and businesses to engage in financial crime;
  • the psychological factors which influence the increasing complexity of financial crime;
  • the institutional factors which encourage criminality; and
  • the criminological factors that explain the growing criminal network.

Notably, the paper concludes that among the factors driving financial crime is the impact of poor institutional or lax cultural norms within political, financial, legal, judicial and prosecutorial systems were observed as stimulants of criminality.

https://osf.io/srv8u/

UK: PROPOSED LEGISLATION COULD SEE GOVERNMENT ‘BROADEN’ USE OF DATA COLLECTED THROUGH THE FALSIFIED MEDICINES DIRECTIVE

On 3 September, the Pharmaceutical Journal reported that proposals set out in the Medicines and Medical Devices Bill for a UK version of the EU Falsified Medicines Directive (FMD) – and address any regulatory gaps that could occur after Brexit – is said to considerably broaden how medicines data collected through the system would be used.  It explains that the FMD is an EU Directive that came into effect on 9 February, requiring UK pharmacies to register with SecurMed and have hardware in place to scan 2D barcodes that must feature on all new packs of prescription medicine sold in Europe as a safety measure.

https://www.pharmaceutical-journal.com/20208330.article

US AUTHORITIES REMOVES FRENCH MAN CONVICTED OF ORGANISED FRAUD AND WANTED IN FRANCE

A news release from US Immigration and Customs Enforcement on 4 September advised that officers had removed an unlawfully present French man wanted by French law enforcement authorities for organised fraud.  Stany N’Goma Mavambu, 24, was removed to France and handed over to French authorities.

https://www.ice.gov/news/releases/ice-removes-french-man-convicted-organized-fraud-wanted-france

HMRC’S CROWN PREFERENCE SCARES AWAY RESCUE FINANCE LENDERS

On 4 September, Accountancy Age published a report claiming that companies will have more trouble raising funds with floating charges as HMRC’s creditor preferential status puts off lenders.  It is due to take effect on 1 December, and will make HMRC a secondary preferential creditor in respect to certain taxes, and this will make it more difficult to raise capital for business restructuring according to insolvency practitioners.  HMRC had previously held such a preferential status until 2003, when it was abolished.

AS IT PLANS FOR £4.5 BILLION LISTING, IT IS REVEALED THAT THE HUT GROUP CANCELLED A 2011 FLOTATION AFTER A MULTIMILLION-POUND FRAUD WAS UNCOVERED

On 4 September, the Guardian carried an article saying that the Manchester-based e-commerce company preparing a £4.5 billion stock exchange listing, cancelled a previous flotation following the discovery of a multimillion-pound fraud at the company.  Details have come to light in a 2014 court judgment which explored how THG’s aggressive business culture during that time contributed to the fraud and stated how attitudes within its finance department had “allowed the fraud to flourish”.

https://www.theguardian.com/technology/2020/sep/04/hut-group-cancelled-2011-flotation-after-multimillion-pound-was-uncovered

CYPRUS TO STRIP 7 PEOPLE OF ‘GOLDEN PASSPORTS’

On 4 September, Al Jazeera reported that Cyprus has said it will strip 7 people of their “golden passports” that were bought in the country’s citizenship-by-investment scheme.  However, it is said that there are questions over whether this is genuinely fresh action by the Cypriot authorities or a repeat of what has already been announced.

https://www.aljazeera.com/news/2020/09/cyprus-strip-people-golden-passports-200904173612322.html

AFTER SEIZING SUPERYACHT, US MOVES TO CONFISCATE NIGERIAN OIL MOGUL’S MANSION AND OTHER LUXURY PROPERTIES

On 4 September, Sahara Reporters reported that the US has initiated proceedings in Texas to seize a $25 million mansion in Los Angeles owned by Kola Aluko, an ally of Diezani Alison-Madueke, former Minister of Petroleum Resources in Nigeria.  He has been named in proceedings relating to alleged bribery in order to win oil production contracts worth $1.5 billion, according to a civil forfeiture complaint. 

http://saharareporters.com/2020/09/04/after-seizing-super-yacht-united-states-moves-confiscate-nigerian-oil-mogul-kola-aluko%E2%80%99s

RUSSIA INTRODUCES SANCTIONS AGAINST FORMER UKRAINIAN PRESIDENT POROSHENKO

On 4 September, TASS, the Russian news agency reported that Pyotr Poroshenko is listed, along with former Ukrainian MP Svyatoslav Vakarchuk and several other officials on a list of 41 persons.

https://tass.com/politics/1197601

BREXIT: BORDER INFRASTRUCTURE PLANNING EASEMENTS WELCOME BUT TIMESCALES REMAIN TIGHT

On 4 September, Hellenic Shipping News reported that the British Ports Association has welcomed the new UK legislation introduced to fast track the planning processes for Brexit-related border infrastructure, at and around ports, but is warning that there is still a lot to be done in a short period of time.

ZIMBABWE’S TAX AUTHORITIES HAVE ACCUSED SWITZERLAND’S ABB OF AVOIDING $13.4 MILLION IN TAXES,

On 3 September, ICIJ reported that Zimbabwe’s tax authorities have accused ABB, one of Switzerland’s most profitable companies, of avoiding $13.4 million in taxes, according to court filings and other documents obtained by ICIJ.  It seems that, in 2010, ABB Zimbabwe Private Ltd, the Swiss multinational’s local arm, won government tenders to provide power generators to one of the country’s largest power stations.

MALAYSIAN AUTHORITIES ARREST CRYPTO MINERS FOR $600,000 POWER THEFT

On 1 September, Coin Telegraph reported that officials in the Malaysian state of Johor shut down 2 crypto operations which had stolen more than $600,000 worth of electricity over 3 years.

https://cointelegraph.com/news/malaysian-authorities-arrest-crypto-miners-for-600k-power-theft

CAN ITALY DEFEAT ITS MOST POWERFUL CRIME SYNDICATE? THE ’NDRANGHETA—THE RICHEST, MOST POWERFUL, AND MOST SECRETIVE CRIMINAL GROUP IN ITALY

An article in the October issue of The Atlantic poses this question, saying that its ’Ndrangheta’s tentacles extend to Italy’s wealthy north, where the organisation thrives on skimming off state contracts, especially in construction, and to 31 other countries worldwide — to much of Europe, to the US and Canada, to Colombia, to Australia.  Outside Italy, the city with the most ’Ndrangheta outposts is Toronto.  The ’Ndrangheta is on excellent terms with criminal affiliates in Latin America, from which it imports vast amounts of cocaine. The group is said to control more than half the cocaine market in Europe.  It has also cashed in on the coronavirus pandemic.  The article looks at Nicola Gratteri, the chief prosecutor for Catanzaro, a small city high in the hills of central Calabria and who dedicated the past 3 decades of his life to fighting the Calabria-based organisation.

https://www.theatlantic.com/magazine/archive/2020/10/italian-mafia-ndrangheta/615466/

OTHER THINGS YOU MAY HAVE MISSED – SEPTEMBER 4

Panama Covid-19 update – “only” 682 new cases today, taking us closer to the 100,000 total (the total now stands at over 99,000), with 17 more fatalities, taking that sad total to 2,063. Of the current 23.090 active cases, 164 are in ICU and 1,092 in other wards.

4 September 2020

US: BIS EXPANDS HUAWEI FOREIGN DIRECT PRODUCT RULE TO CAPTURE WIDE SWATH OF COTS PRODUCTS

On 4 September, Arent Fox published an article about 2 rules published by the Department of Commerce, Bureau of Industry and Security amending matters concerned with the Entity List export controls, the so-called ‘Foreign Direct Product Rule’ (FDPR) and commercial off-the-shelf (COT) products.  The Entity List now includes 153 Huawei-linked entities.  The FDPR primarily targeted at the semiconductor industry but the amendments remove the requirement that the foreign product in question be either developed or produced by a designated Huawei entity or the direct product of Huawei software or technology.  The new requirements are wider.  In response, Arent Fox concludes that, ultimately, BIS and the government keep sending the same message: if a party is legally selling to Huawei, the government will revise its regulations to ensure that such party is no longer legally selling to Huawei.  To assist, a related podcast is also available.

https://www.jdsupra.com/legalnews/bis-expands-the-huawei-foreign-direct-94663/

ARAB LEAGUE BOYCOTT OF ISRAEL – UAE EXIT AND THE US ANTI-BOYCOTT OBLIGATIONS

On 2 September, Sidley Austin LLP published an article saying that on 29 August, the UAE reportedly formally ended its participation in the Arab League’s economic boycott of Israel.  It joins Egypt and Jordan in doing so.  The article says US companies should be cautious, and explains the US anti-boycott law, which makes it illegal for US companies to comply with a foreign boycott to which the US is not a party, and requires US companies to report certain types of boycott requests.  It notes the distinction in US law, which permits US companies to participate in the primary boycott of Israel (e.g., refusals to ship goods direct to/from Israel) but prohibits participation in secondary boycotts (e.g. refusals to do business with US persons that do business with Israel, usually in accordance with a blacklist) and tertiary boycotts (e.g. refusals to do business with persons that themselves do business with US persons on a blacklist).

https://www.sidley.com/en/insights/newsupdates/2020/09/how-to-understand-continuing-us-antiboycott-obligations

DEFERRED PROSECUTION AGREEMENT (DPA) FOR UK BUSINESS INCLUDES REQUIRED ‘CORPORATE RENEWAL’ AND REVIEWERS

On 31 August, Barnes & Thornburg LLP in the US published an article saying that a recent DPA with the SFO has yielded the first appointment of an external “reviewer”, which appears to be a role similar to that of “monitors” under such US DoJ agreements, and entails examination, analysis, review, and audits of rehabilitation efforts.  The article says that  it remains to be seen whether the appointment of a “reviewer” becomes more common in SFO DPA.

https://btlaw.com/en/insights/alerts/2020/deferred-prosecution-agreement-for-uk-business-includes-required-corporate-renewal-and-reviewers

AUSTRALIA: POLICE SEIZE MELBOURNE PROPERTY IN MALAYSIAN CORRUPTION CASE

On 3 September, the Sydney Morning Herald reported that federal police have seized properties and cash worth $1.6 million over an alleged scheme to use the Melbourne property market to funnel millions of dollars of funds from a Malaysian government entity to corrupt officials.  It says such actions are rare, but also mentioned that, in July, as part of another unrelated international bribery investigation, federal police asked the US to block sale of a New York apartment as part of a long-running and politically sensitive probe into Australian mining company called Getax, owned by the wealthy Gupta family and accused of bribing Nauruan officials to benefit its phosphate exporting business.

https://www.smh.com.au/national/police-seize-melbourne-property-in-international-corruption-case-20200901-p55rec.html

IN DEAL: MALAYSIA DROPS GOLDMAN SACHS CRIMINAL CHARGES OVER 1MDB

On 4 September, the Wall Street Journal reported that Malaysia has dropped criminal charges against units of Goldman Sachs Group Inc. over the bank’s role in the alleged theft of billions of dollars from the government investment fund, part of a $3.9 billion settlement with the company.

https://www.wsj.com/articles/malaysia-drops-goldman-sachs-criminal-charges-over-1mdb-11599192289

THE MULTINATIONAL MUTUAL ASSISTANCE AND COOPERATION FRAMEWORK FOR COMPETITION AUTHORITIES

On 3 September, the Mashable website carried an article saying that the US, Australia, Canada, New Zealand and UK had signed a non-legally binding agreement to share information about competition laws and policies, with a focus on coordinating cases and investigations spanning international borders.  It is said that it will strengthen existing cooperation arrangements, as well as provide a base framework for further collaboration.

https://mashable.com/article/antitrust-competitive-investigation-international-agreement-australia/

US SATELLITE COMMUNICATIONS COMPANY SANCTIONS PROBE OVER RUSSIA TIES

On 4 September, Global Investigations Review reported that the US Treasury is investigating Frequency Electronics over its past relationship with a company owned by sanctioned Russian financial institution Gazprombank.

https://globalinvestigationsreview.com/article/just-sanctions/1230546/us-satellite-communications-company-under-sanctions-probe-over-russia-ties

PODCAST: THE LOZOYA CASE SHAKING MEXICO: WHAT TO EXPECT

On 3 September, the Americas Quarterly produced a podcast arguing that the scandals involving the former Pemex chief may impact politics more than the rule of law.

SMALL CHINESE CITY EXPLODED INTO A MAJOR PORT FOR NORTH KOREAN TRADE – WHILE A CLOSED SEA ROUTE AFFECTS A NORTH KOREAN PORT

On 4 September, NK Pro reported how 150 companies in Dandong were behind around 25% of Chinese exports to North Korea in 2016 — worth roughly $750 million.  Dandong is the largest Chinese border city, facing North Korea across the Yalu River.  Meanwhile, another report on 3 September says that ship-tracking data supports NGO reports that the Dalian-Nampho sea route was closed in late July and North Korea’s formerly busiest port was quiet throughout August, averaging less than one ship voyage per day seemingly having been closed sometime in late July due to COVID-19 concerns.

https://www.nknews.org/pro/how-a-small-chinese-city-exploded-into-a-major-port-for-north-korean-trade/

https://www.nknews.org/pro/north-koreas-top-seaport-eerily-quiet-after-rumors-of-a-closed-trade-route/

THE BILLION-DOLLAR BORDER TOWN NORTH KOREA’S TRADE NETWORKS IN DANDONG (PART 1)

Available to download from RUSI, this article says that historically, a significant proportion of trade have been based in the Chinese border town of Dandong, which looks across the Yalu River into North Korea and acts as the primary cross-border trading hub between the two countries.  This report – which is the first of 2 on this topic – analyses North Korea’s trade networks in Dandong and the role these have played in the country’s ongoing attempts to evade multilateral and unilateral sanctions regimes.  The research involved highlights the scale of trade running through Chinese companies involved in various illicit activities and the striking importance of Dandong’s logistical, financial and corporate architecture to North Korea.  It says that its discoveries have implications for regulators, financial institutions and a range of other stakeholders committed to enforcing the multilateral sanctions regime on North Korea. They also raise questions regarding China’s implementation of sanctions it has itself supported at the UN.

https://rusi.org/publication/other-publications/project-sandstone-report-7-billion-dollar-border-town

AUSTRALIA: CUSTOMS OFFICIALS DESTROY $19,000 ALLIGATOR-SKIN HANDBAG

On 4 September, The Nation in Sri Lanka reported that the Saint Laurent bag was destroyed by customs officials in Australia because it entered the country without the correct import licence.  While alligator products are allowed into the country, their access is controlled under CITES to ensure they are not linked to the illegal wildlife trade and , although the buyer had secured an export licence from Europe, she did not have a CITES import permit for Australia.

https://www.nation.lk/online/customs-officials-destroy-19-000-handbag-810.html

SHARK FIN SMUGGLING OPERATION BASED IN CALIFORNIA AND FLORIDA WORTH MILLIONS OF DOLLARS BUSTED

Dive Magazine reported that 12 people and 2 businesses alleged to be fronts for an international smuggling ring have been charged with smuggling shark fins from Mexico to Hong Kong.  The defendants have also been accused of running an illegal marijuana shipping operation.  The scheme is thought to have been in operation since 2010.

http://divemagazine.co.uk/eco/9114-us-shark-fin-smuggling-ring-shut-down

SMUGGLERS STILL PLY TRADE ON NORTH KOREA’S CHINA BORDER DESPITE SHOOT-ON-SIGHT ORDERS

Radio Free Asia on 3 September reported that economic hardship is driving North Koreans who live near China to break strict quarantine rules to move goods across the border in spite of recent orders by authorities that anyone approaching the frontier will be shot.

https://www.rfa.org/english/news/korea/smugglers-09032020195542.html

DON’T EXPECT NEW EU-US DATA TRANSFER DEAL ANYTIME SOON

On 4 September, EurActiv reported that EU Justice Commissioner Didier Reynders has told MEPs that there will be “no quick fix” on a revised data transfer deal between the EU and the US following a July ruling by EU judges to strike down the Privacy Shield agreement.  He is quoted as saying that what was needed were sustainable solutions that deliver legal certainty, in full compliance with the judgment of the court.

ALL EYES ON SUDAN’S PEACE DEAL WITH ARMED GROUPS

An article on Defence Web on 4 September asked if the recent peace deal between Khartoum and Sudan’s armed rebel groups can stick?  The agreement covers the war-torn areas of Darfur, the ‘Two Areas’ (South Kordofan and Blue Nile) as well as central, eastern and northern Sudan. On the rebels’ side, the accord was initialled by the Sudan Revolutionary Front alliance, its two constituent movements – Gibril Ibrahim for the Justice and Equality Movement (JEM) and Malik Agar for the Sudan People’s Liberation Movement-North (SPLM-N) – and by Minni Minnawi for SPLM-MM.  But it was not endorsed by 2 other groups – the SPLM-N faction under the leadership of Abdelaziz al-Hilu, or the mainstream Sudan Liberation Movement in Darfur, led by Abdel Wahid al-Nur (SLM-AW). 

http://www.ekklesia.co.uk/node/29933

MURKY GHANA GOLD DEAL RAISES QUESTIONS ABOUT JERSEY

On 4 September, the Tax Justice Network published an article saying that a company based in Jersey – Agyapa Royalties – has inserted itself into the middle of what looks like a highly unwise financing arrangement for the country.  In exchange for an up-front payment from ‘investors’, variously forecast between $500 million and $1 billion, Ghana will be signing away over three-quarters of its future gold royalties to Agyapa — forever. The article claims that this is an example of an apparently large injection of up-front money to Ghana’s budget, in exchange for likely vastly larger sums flowing out at a later date.  It also criticises the tax carve-outs involved and looks at what (little) can be found about the Jersey company involved.

UK: FRAUDULENT FOREIGN EXCHANGE TRADER PLEADS GUILTY TO A £20.5 MILLION INVESTMENT SCAM

A news release from the CPS on 4 September said that, after emailing his clients and telling them he had not been trading with their investments since 2009, Joseph Lewis, 65, went to a police station, told them what he had done, and was arrested.  Based in Turkey, Lewis attracted clients across the globe to invest in Foreign Exchange Trading. 

https://www.cps.gov.uk/cps/news/fraudulent-foreign-exchange-trader-pleads-guilty-ps205million-investment-scam

BREXIT: TRADE WITH THE UK FROM JANUARY 2021: PREPARATIONS FOR EU BUSINESSES

On 4 September, the Department for International Trade published the latest in a series of news releases containing information for the end of the Brexit transition period.  This one contains information in various languages for EU businesses.

https://www.gov.uk/government/publications/trade-with-the-uk-from-january-2021-prepare-your-eu-business

US: EXPORT CONTROL HR PITFALLS TO AVOID WHEN HIRING

On 3 September, Sheppard Mullin published an article which said that hiring employees does not usually involve international trade compliance obligations.  However, US export controls and anti-discrimination laws create a web that is overlooked or misunderstood by many types of employers of all sizes across many industries.  Anti-discrimination laws prohibit unlawful citizenship status restrictions when hiring, and US export controls prohibit disclosing controlled information to foreign nationals without authorisation.  Together, these laws limit acceptable job descriptions and hiring practices.

https://www.jdsupra.com/legalnews/export-control-hr-pitfalls-to-avoid-42357/

PHILIPPINES LOOKS TO PROSECUTE 19 IMMIGRATION OFFICIALS FOR POGO WORKER SMUGGLING

On 4 September, Calvin Ayre reported on alleged smuggling of foreign workers into the Philippines for the purpose of working at Philippine Offshore Gambling Operators (POGO).  This has led to arrests and requests for prosecution of 19 immigration officers. 

https://calvinayre.com/2020/09/04/business/legalized-regulated-gambling-is-helping-colombia-grow/

LEGALISED, REGULATED GAMBLING IN COLOMBIA

An article on the Calvin Ayre website on 4 September says that, in a few years, gambling has become a small but important part of the country’s economy, bringing in new revenue and new jobs that are vital to any country’s autonomy and longevity. 

https://calvinayre.com/2020/09/04/business/legalized-regulated-gambling-is-helping-colombia-grow/

ICAO AND UPU CALL ON STATES TO SUPPORT POSTS AND CARGO CARRIERS

On 4 September, Lloyds Loading List reported that the organisations – the International Civil Aviation Organization (ICAO) and the Universal Postal Union (UPU) – are also stepping up analysis of each other’s e-commerce and traffic big data, so as to identify and report on the logistical constraints to growth.  They have also started to exchange data on e-commerce flows to underline the importance of this sector for economic recovery and growth.

https://www.lloydsloadinglist.com/freight-directory/news/ICAO-and-UPU-call-on-states-to-support-posts-and-cargo-carriers/77328.htm#.X1JQOueSmM8

BREXIT: FREIGHT INDUSTRY – ‘SIGNIFICANT GAPS’ IN UK BORDER PLANS

On 4 September, Lloyds Loading List reported that the freight industry has called for ‘urgent roundtable’ with government and warns that if issues are not addressed UK business and the supply chain will be severely disrupted.  The signatories to a letter to the UK Government include Logistics UK, the British International Freight Association (BIFA) the Road Haulage Association (RHA) and the UK Warehousing Association (UKWA) – saying that concern is growing from the logistics sector as to the Government’s and nations’ preparedness for transition.

https://www.lloydsloadinglist.com/freight-directory/news/Brexit-Significant-gaps-in-UK-border-plans/77330.htm#.X1JQNueSmM8

CHINESE CUSTOMS SENDS BACK 110 TONNES OF SOLID WASTE

On 3 September, Xinhua reported that Customs in east China’s Shandong Province, said it has refused entry of 110 tonnes of solid waste into the country, misdescribed but identified as solid waste, which is prohibited from entering the country.

http://www.xinhuanet.com/english/2020-09/03/c_139340148.htm

CHINA: CUSTOMS AUTHORITIES CRACK SMUGGLED FURNITURE CASE

On 2 September, Shine in China reported that over 15,000 pieces of smuggled antique furniture, worth $5.86 million have been seized late last month, Shanghai Customs announced. 

https://www.shine.cn/news/metro/2009025338/

MALI: THE COUP AND ITS CONSEQUENCES

A briefing paper from the EU Parliament Research Service on 4 September is concerned with the background to the recent coup in Mali.   

US: BIS REQUESTS COMMENTS ON “FOUNDATIONAL TECHNOLOGIES,” WITH THE GOAL OF DEVELOPING NEW EXPORT AND CFIUS CONTROLS

An article from Dentons on 4 September was concerned with an advance notice of proposed rulemaking (ANPROM) seeking comments from the public concerning the criteria for defining “foundational technologies”.  BIS had been charged with defining the terms “emerging technologies” and “foundational technologies”, to then impose heightened export controls on these technologies to control and safeguard these technologies deemed under ECRA to be “essential to the national security of the US.  BIS is asking interested parties to submit comments by 26 October. 

https://www.dentons.com/en/insights/articles/2020/september/4/bis-requests-comments-on-foundational-technologies

DESIGN CHOICES FOR CENTRAL BANK DIGITAL CURRENCY (CBDC)

On 4 September, a post on VOX, the website of the Centre for Economic Policy Research in Europe, said that many central banks are considering, and some are even piloting, central bank digital currency (CBDC).  The article provides an overview of important considerations for central bank digital currency design.  While central banks already provide wholesale digital currency to financial institutions, a retail central bank digital currency would expand access to more users and provide opportunities for innovative central banking.  The design must balance these benefits with the potential risks created by retail central bank digital currency deployment.

https://voxeu.org/article/design-choices-central-bank-digital-currency

RESOURCE CURSES ARE MORE LIKELY IN FRAGMENTED AUTHORITARIAN REGIMES

A post on the LSE Business review blog argues that authoritarianism and fragmented elites create uncertainty; capital tends to flee the country to avoid expropriation.  It says that abundant natural resources like oil and gas rarely turn out to be a real blessing for a country.  More frequently they distort economic policies, discourage entrepreneurial activity and ultimately suppress economic growth.  Yet not all countries suffer from this resource curse, it says, to the same extent: some manage to escape it or even turn natural resources into a blessing.  It poses the question whether some authoritarian regimes are better able to turn natural resources into a curse or a blessing than others.

US AIR FORCE TESTS POSSIBLE REPLACEMENT FOR CLUSTER MUNITIONS

On 3 September, Real Clear Defense reported that the USAF recently tested a new next-generation fragmentation bomb on the F-16 meant to be an alternative to cluster munitions that diminishes the risk of unexploded ordnance, according to a news release.  Typically, cluster munitions involve a bomb that ejects explosive bomblets that are designed to kill personnel and destroy vehicles. There is an international convention that prohibits the use, transfer, and stockpiling of this type of weapon, with 108 states having ratified it (but not the US).  In the UK, the Cluster Munitions (Prohibitions) Act 2010 bans the sale, transfer, export etc of cluster munitions.

https://www.military.com/daily-news/2020/09/02/air-force-tests-new-bomb-could-replace-controversial-cluster-munitions.html

HOW THE ART INDUSTRY CAN ADAPT TO THE CHALLENGES OF 5MLD

On 2 September, the International Compliance Association in the UK published an article saying that the most recent changes to the art market are significant. January 2020 saw the transposition of the EU 5th Money Laundering Directive (5MLD) into UK law.  After extensive consultation, and with HMRC as the regulator, art market participants face considerably more onerous AML requirements.  The article outlines the 5MLD obligations, its nuances and details and how to adjust to the necessary CDD.

https://www.int-comp.org/insight/2020/september/02/art-industry-5mld-challenges/

GUIDANCE RELATING TO THIRD PARTIES ACCIDENTALLY IN RECEIPT OF PERSONAL DATA RELATING TO OTHER INDIVIDUALS

The Irish data protection authority has produced this guidance, in 3 forms, for individuals, organisations and data controllers.

https://www.dataprotection.ie/en/guidance-landing/guidance-relating-third-parties-accidentally-receipt-personal-data-relating-other

THE DIRECT CORRELATION BETWEEN COMPLEX FINANCIAL CRIME AND THE EVOLVING CRIMINAL MIND

On 3 September, this research paper, published by Compliance and Financial Intelligence Principles, sets out to critically examine the direct correlation between complex financial crime and the evolving criminal mind.  Within a highly competitive and dollar-driven global economy, it is paramount to understand the criminological, societal, institutional and psychological factors that contribute to the increasing intricacy of financial crime. In recent years, studies have shown the rising complexity of money laundering, terrorist financing, fraud and other financial crime related predicate offences.  In light of these findings, the evolving criminal mind prompted by a series of factors was deemed to be a main cause.  This paper concisely focuses on 4 core components –

  • the modern-day societal triggers that propel individuals and businesses to engage in financial crime;
  • the psychological factors which influence the increasing complexity of financial crime;
  • the institutional factors which encourage criminality; and
  • the criminological factors that explain the growing criminal network.

Notably, the paper concludes that among the factors driving financial crime is the impact of poor institutional or lax cultural norms within political, financial, legal, judicial and prosecutorial systems were observed as stimulants of criminality.

https://osf.io/srv8u/

UK: PROPOSED LEGISLATION COULD SEE GOVERNMENT ‘BROADEN’ USE OF DATA COLLECTED THROUGH THE FALSIFIED MEDICINES DIRECTIVE

On 3 September, the Pharmaceutical Journal reported that proposals set out in the Medicines and Medical Devices Bill for a UK version of the EU Falsified Medicines Directive (FMD) – and address any regulatory gaps that could occur after Brexit – is said to considerably broaden how medicines data collected through the system would be used.  It explains that the FMD is an EU Directive that came into effect on 9 February, requiring UK pharmacies to register with SecurMed and have hardware in place to scan 2D barcodes that must feature on all new packs of prescription medicine sold in Europe as a safety measure.

https://www.pharmaceutical-journal.com/20208330.article

US AUTHORITIES REMOVES FRENCH MAN CONVICTED OF ORGANISED FRAUD AND WANTED IN FRANCE

A news release from US Immigration and Customs Enforcement on 4 September advised that officers had removed an unlawfully present French man wanted by French law enforcement authorities for organised fraud.  Stany N’Goma Mavambu, 24, was removed to France and handed over to French authorities.

https://www.ice.gov/news/releases/ice-removes-french-man-convicted-organized-fraud-wanted-france

HMRC’S CROWN PREFERENCE SCARES AWAY RESCUE FINANCE LENDERS

On 4 September, Accountancy Age published a report claiming that companies will have more trouble raising funds with floating charges as HMRC’s creditor preferential status puts off lenders.  It is due to take effect on 1 December, and will make HMRC a secondary preferential creditor in respect to certain taxes, and this will make it more difficult to raise capital for business restructuring according to insolvency practitioners.  HMRC had previously held such a preferential status until 2003, when it was abolished.

AS IT PLANS FOR £4.5 BILLION LISTING, IT IS REVEALED THAT THE HUT GROUP CANCELLED A 2011 FLOTATION AFTER A MULTIMILLION-POUND FRAUD WAS UNCOVERED

On 4 September, the Guardian carried an article saying that the Manchester-based e-commerce company preparing a £4.5 billion stock exchange listing, cancelled a previous flotation following the discovery of a multimillion-pound fraud at the company.  Details have come to light in a 2014 court judgment which explored how THG’s aggressive business culture during that time contributed to the fraud and stated how attitudes within its finance department had “allowed the fraud to flourish”.

https://www.theguardian.com/technology/2020/sep/04/hut-group-cancelled-2011-flotation-after-multimillion-pound-was-uncovered

CYPRUS TO STRIP 7 PEOPLE OF ‘GOLDEN PASSPORTS’

On 4 September, Al Jazeera reported that Cyprus has said it will strip 7 people of their “golden passports” that were bought in the country’s citizenship-by-investment scheme.  However, it is said that there are questions over whether this is genuinely fresh action by the Cypriot authorities or a repeat of what has already been announced.

https://www.aljazeera.com/news/2020/09/cyprus-strip-people-golden-passports-200904173612322.html

AFTER SEIZING SUPERYACHT, US MOVES TO CONFISCATE NIGERIAN OIL MOGUL’S MANSION AND OTHER LUXURY PROPERTIES

On 4 September, Sahara Reporters reported that the US has initiated proceedings in Texas to seize a $25 million mansion in Los Angeles owned by Kola Aluko, an ally of Diezani Alison-Madueke, former Minister of Petroleum Resources in Nigeria.  He has been named in proceedings relating to alleged bribery in order to win oil production contracts worth $1.5 billion, according to a civil forfeiture complaint. 

http://saharareporters.com/2020/09/04/after-seizing-super-yacht-united-states-moves-confiscate-nigerian-oil-mogul-kola-aluko%E2%80%99s

RUSSIA INTRODUCES SANCTIONS AGAINST FORMER UKRAINIAN PRESIDENT POROSHENKO

On 4 September, TASS, the Russian news agency reported that Pyotr Poroshenko is listed, along with former Ukrainian MP Svyatoslav Vakarchuk and several other officials on a list of 41 persons.

https://tass.com/politics/1197601

BREXIT: BORDER INFRASTRUCTURE PLANNING EASEMENTS WELCOME BUT TIMESCALES REMAIN TIGHT

On 4 September, Hellenic Shipping News reported that the British Ports Association has welcomed the new UK legislation introduced to fast track the planning processes for Brexit-related border infrastructure, at and around ports, but is warning that there is still a lot to be done in a short period of time.

ZIMBABWE’S TAX AUTHORITIES HAVE ACCUSED SWITZERLAND’S ABB OF AVOIDING $13.4 MILLION IN TAXES,

On 3 September, ICIJ reported that Zimbabwe’s tax authorities have accused ABB, one of Switzerland’s most profitable companies, of avoiding $13.4 million in taxes, according to court filings and other documents obtained by ICIJ.  It seems that, in 2010, ABB Zimbabwe Private Ltd, the Swiss multinational’s local arm, won government tenders to provide power generators to one of the country’s largest power stations.

MALAYSIAN AUTHORITIES ARREST CRYPTO MINERS FOR $600,000 POWER THEFT

On 1 September, Coin Telegraph reported that officials in the Malaysian state of Johor shut down 2 crypto operations which had stolen more than $600,000 worth of electricity over 3 years.

https://cointelegraph.com/news/malaysian-authorities-arrest-crypto-miners-for-600k-power-theft

CAN ITALY DEFEAT ITS MOST POWERFUL CRIME SYNDICATE? THE ’NDRANGHETA—THE RICHEST, MOST POWERFUL, AND MOST SECRETIVE CRIMINAL GROUP IN ITALY

An article in the October issue of The Atlantic poses this question, saying that its ’Ndrangheta’s tentacles extend to Italy’s wealthy north, where the organisation thrives on skimming off state contracts, especially in construction, and to 31 other countries worldwide — to much of Europe, to the US and Canada, to Colombia, to Australia.  Outside Italy, the city with the most ’Ndrangheta outposts is Toronto.  The ’Ndrangheta is on excellent terms with criminal affiliates in Latin America, from which it imports vast amounts of cocaine. The group is said to control more than half the cocaine market in Europe.  It has also cashed in on the coronavirus pandemic.  The article looks at Nicola Gratteri, the chief prosecutor for Catanzaro, a small city high in the hills of central Calabria and who dedicated the past 3 decades of his life to fighting the Calabria-based organisation.

https://www.theatlantic.com/magazine/archive/2020/10/italian-mafia-ndrangheta/615466/