OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 15

Panama Covid-19 update – good news (we hope) today, with only 6 new fatalities (obviously 6 too many, but better than for weeks) but 500 new cases, as more things reopen from today, and the nightly curfew moves back to 10 pm.

The Rt rate is actually slightly up, at 0.83 (it was reported as 0.8 on 9 February). There are 13,254 active cases, with 202 in ICU (still high in comparison to the average for the past year as a whole) and 1,259 in other wards, and 408 in hotel rooms. there have now been over 1.8 million tests.

15 February 2021

BROTHER OF POWERFUL CUBAN GENERAL IN EMBARGO-EVADING OFFSHORE WORLD

On 12 February, the Miami Herald reported that the recent OpenLux revelations revealed how Cuba has for decades used Luxembourg to register offshore companies and fly under theradar. It says that buried deep in the nearly 200 documents in the Luxembourg corporate registry dating back to 1973 about a generic-sounding company, Mid Atlantic,was one that showed an owner with a familiar, well-connected surname for Cubans.  Guillermo Faustino Rodríguez López-Calleja as the controlling owner of the company, the brother of General Luis Alberto Rodríguez López-Calleja, designated by the US in 2020 because he runs Cuba’s military-industrial conglomerate GAESA.  His shell companies appear to have helped Cuba evade US sanctions and survive the US trade embargo by operating in near secrecy in both Switzerland and Luxembourg.  Luxembourg authorities point out that EU states are under no obligation to treat Cuban firms differently because the last EU trade sanctions on Cuba were lifted in 2008.

https://www.miamiherald.com/article248950104.html

NORWAY: DNB BANK SAYS AUTHORITIES HAVE ENDED PROBE INTO MONEY LAUNDERING ALLEGATIONS

On 12 February, the Wall Street Journal reported that the bank has said that an investigation into its alleged involvement in handling payments from Icelandic fishing company Samherji, embroiled in a bribery probe has been dismissed.

https://www.wsj.com/articles/dnb-says-authorities-have-ended-probe-into-money-laundering-allegations-11613166226

A UKRAINIAN TANKER MYSTERY CONTINUES – UK LIMITED PARTNERSHIPS INVOLVED (AGAIN)

A report from Open Democracy on 12 February was concerned with a small tanker called the Delfi, which ran aground in Odesa, Ukraine in 2019.  Questions were posed at the time: why was it allowed to pollute a beach for 10 months? Who ought to pay the £365,000 bill for its eventual removal? Who owned it?  It turned out it was owned, on paper at least, by a UK limited partnership and was registered in (landlocked) Moldova.  In February 2021, the Ukrainian government took the UK limited partnership to court over the Delfi, now languishing in the nearby port of Chornomorsk.  The limited partnership is described as one of thousands of UK ‘shell firms’, which are often anonymously owned, operating across the former Soviet Union, and some 700 UK corporate entities have been blacklisted in Ukraine alone.  Local media in Ukraine have named the owner of the ship as being different from that mentioned in court – this being a member of the political party of Viktor Yanukovych, the Ukrainian president who was ousted in 2014 and is now living in exile in Russia.  Open democracy says that the Delfi had repeatedly changed names, owners and flags. Under one of its old identities, the ship, then called the Ekologiya, was allegedly used to smuggle oil products into Ukraine up until the 2014 fall of Viktor Yanukovych, passing foreign fuel off as having come from Odesa’s oil refinery.  At least 2 other “British” entities are said to have owned the vessel.

https://www.opendemocracy.net/en/odr/ukrainian-tanker-mystery-delfi-odesa/

NELSON MANDELA’S STATE FUNERAL ‘WAS HIJACKED TO LAUNDER CASH’

On 15 February, KYC 360 reported that prominent members of South Africa’s ruling party are among 15 people facing fraud charges over funds earmarked for Nelson Mandela’s state funeral in 2013.  Sindiswa Gomba, the health minister for Eastern Cape province, Pumlani Mkolo and Zukiswa Ncitha, the chairman and former mayor of Buffalo City, and other members of the African National Congress are accused of laundering up to £500,000 through transport and venues used at the funeral.

https://www.riskscreen.com/kyc360/news/nelson-mandelas-state-funeral-was-hijacked-to-launder-cash/

UK: WHO OWNS CHARITY LAND?

An article from Boyes Turner LP says that many trustees of charities when asked who owns their charity’s land will reply by saying “the Charity”.  However this can be a misleadingly simple response as the means by which charities own property do vary – whether an unincorporated charity, an incorporated charity, there are problems with land ownership for unincorporated charities.  It poses the question: what does it mean for charities if land registry records are out of date?  The article says that the overall message is for trustees and others to whom the task of administration is delegated, whether it be a Clerk to the Trustees, Committee Secretary or a reluctant volunteer from the committee is to remain vigilant and ensure that the formalities of UK Land Registry processes are properly followed and dealt with promptly whenever a change of trustee occurs.

https://www.boyesturner.com/article/who-owns-your-charity-land

THE RESPONSIBLE OWNERSHIP COMPANY – THE ALTERNATIVE FORM OF OWNERSHIP

On 10 February, an article from Taylor Wessing said that the corporate social responsibility (CSR) philosophy is being internalised and practised by more and more start-ups, family-owned and medium-sized companies. They define themselves as purpose entrepreneurs and want to transform their companies into purpose companies (responsibly owned companies). A responsible ownership company does not primarily serve the capital market, but seeks to establish and maintain a healthy balance between profit, competitiveness, public welfare and sustainability in the long term.  The purpose of the responsible ownership company is not profit and its distribution to the shareholders, but the reinvestment of generated profits in sustainable goals of the enterprise.  The article looks at German models, and variants in Denmark, Netherlands and the UK.  Saying these are inadequate, the article reported that the creation of a new legal form, the GmbH-VE (GmbH in Responsible Ownership), has been proposed.

https://iot.taylorwessing.com/the-responsible-ownership-company-the-alternative-form-of-ownership/

THE CJEU FURTHER EXPANDS THE PARENTAL LIABILITY DOCTRINE — PRIVATE EQUITY BUSINESSES AND INVESTORS TREAD CAREFULLY

On 11 February, an article from Covington & Burling LLP sais that, in January, the Court of Justice of the European Union confirmed that financial investors can be liable where they hold 100% voting rights over an indirect entity that participated in a cartel, even though the investor does not own 100% of the share capital during the relevant infringement period. Crucially, it says, the judgment highlights the importance of conducting careful due diligence and ensuring competition law compliance for all investors, including financial investors, during the acquisition process.  The article says that the judgment is significant as it further extends the parental liability doctrine to an investment held through an investment fund structure. The CJEU has clarified that the presumption of decisive influence applies where the parent company holds all or virtually all of the voting rights associated with the subsidiary, and not only where the parent holds all or virtually all of the capital.

https://www.globalpolicywatch.com/2021/02/goldman-sachs-v-commission-the-cjeu-further-expands-the-parental-liability-doctrine-private-equity-businesses-and-investors-tread-carefully/#page=1

VIRTUAL CURRENCY SERVICE PROVIDERS TO FACE FURTHER OBSTACLES UNDER A PROPOSED NEW LEGISLATIVE ACT IN ESTONIA

On 11 February, Sorainen published an article saying that virtual currency service providers will have to go through another licensing renewal process with the introduction of a new draft legislative act in Estonia. Such businesses were getting ready for a regulation which ended up causing the revocation of over 1,800 licences, but there are 396 existing licence-holders who remain active.  It says that the most significant change is that, under the new act, supervision will move from the Financial Intelligence Unit (FIU) to the Financial Supervision Authority (EFSA), meaning that most of the requirements which now apply to other financial services, such as payment services, will also apply to virtual currency service providers.

https://www.sorainen.com/publications/virtual-currency-service-providers-to-face-further-obstacles-under-a-proposed-new-legislative-act-in-estonia/

NORTH KOREA TO DISPATCH UP TO 10,000 WORKERS TO RUSSIA FROM MARCH

On 15 February, Daily NK reported claims that North Korean authorities plan to dispatch up to 10,000 workers to Russia starting in early March, with authorities having completed the selection of the workers in late January, with the workers had been given visas to leave the country.  The workers will engage in woodcutting, construction, or other types of work. Those who applied to go abroad were given the choice of what kind of work they could engage in.  Construction work in Russia is considered the most difficult and the most poor-paying, which meant most people did not prefer it.

https://www.dailynk.com/english/north-korea-dispatch-10000-workers-russia-march/

BUSINESSMAN FROM LUKASHENKO’S CIRCLE IN BELARUS SAVED FROM EU SANCTIONS BY LATVIA

On 15 February, the Baltic News Network reported that businessman Alexey Olexin, who is close to the Belarusian President’s regime and whose family owns a business in Latvia, has managed to narrowly avoid EU sanctions, Olexin has business interests in Latvia.  The programme reports that some 10 years ago Latvian diplomats did their best to prevent EU sanctions against Belarus from impacting Latvia’s economy too much.  Latvia’s Foreign Affairs Ministry neither confirmed nor denied information that Olexin was excluded from the EU sanctions list specifically after Latvia’s request.

https://bnn-news.com/businessman-from-lukashenkos-circle-saved-from-eu-sanctions-by-latvia-221918

BULGARIAN CUSTOMS INSPECTORS CAPTURE 5.2 KG OF SMUGGLED GOLD BARS

On 15 February, MENA FN reported that Bulgarian customs inspectors captured over 5.2 kg of smuggled gold bars at the Kalotina checkpoint near the country’s border with Serbia, found in a car with Romanian registration driven by a Turkish-born German citizen.

https://menafn.com/1101603616/Bulgarian-customs-inspectors-capture-52-kg-of-smuggled-gold-bars&source=22

THE FIGHT AGAINST SMUGGLERS RAGES ON EU BORDER WITH BELARUS

On 15 February, the Daily Times from Pakistan carried an article saying that Latvian border guards are fighting a growing flow of contraband cigarettes reportedly benefitting organised crime.  The head of customs said that they had confiscated 21 million illegal cigarettes from Belarus last year in this border sector alone, which is double the amount for 2019.

https://dailytimes.com.pk/724043/fight-against-smugglers-rages-on-eu-border-with-belarus/

INDIA: RISE IN SEIZURES OF ‘LOW-QUALITY’ CHARAS CANNABIS SMUGGLED FROM NEPAL

On 15 February, the Indian Express reported that, in the past 2 years Nepal has emerged as a major source of the low-quality form of cannabis resin.

https://indianexpress.com/article/cities/mumbai/rise-in-seizures-of-low-quality-charas-smuggled-from-nepal-7188782/

INDIA: INVESTORS FROM BLACK-LISTED OR GREY-LISTED FATF JURISDICTIONS WILL NOT BE ALLOWED TO ACQUIRE ‘SIGNIFICANT INFLUENCE’ IN NONBANK FINANCIAL COMPANIES 

On 15 February, Regulation Asia reported the Reserve Bank of India has tightened its rules for investments in NBFC from jurisdictions that have been black-listed and grey-listed by the FATF.  The RBI has said that investments in NBFC from FATF non-compliant jurisdictions shall not be treated at par with that from the compliant jurisdictions.

https://www.regulationasia.com/rbi-limits-investment-in-nbfcs-from-fatf-non-compliant-jurisdictions/

UPDATE ON UK SANCTIONS AND EXPORT CONTROLS POST-BREXIT

In January, Baker McKenzie issued an Alert that summarises the key considerations for companies in respect of the framework of the UK’s autonomous sanctions and export control regime.

https://bakerxchange.com/cv/a3528e55c558113644e81ed5a5ecc4fce2180737

FATF-STYLE REGIONAL BODY WARNS SIERRA LEONE TO INTENSIFY FIGHT AGAINST MONEY LAUNDERING

Politico SL has reported on 15 February that the regional body for West Africa, GIABA, says that, despite progress, Sierra Leone need to do more to fight money laundering.  This was said at a seminar for religious leaders and institutions in Freetown. 

https://politicosl.com/articles/experts-warn-sierra-leone-intensity-fight-against-money-laundering

INDIA: ACTOR-PRODUCER SACHIIN JOSHI ARRESTED IN MONEY LAUNDERING CASE

On 15 February, the Times of India and others reported that the actor and businessman has recently arrested by the Enforcement Directorate in the case involving Omkar realtors that the central agency is probing. 

https://timesofindia.indiatimes.com/videos/entertainment/hindi/enforcement-directorate-arrests-actor-producer-sachiin-joshi-in-money-laundering-case/videoshow/80919788.cms

https://www.thehindu.com/news/national/pmla-case-sachin-joshi-remanded-in-ed-custody-till-feb-18/article33843967.ece

AUSTRALIA: CROWN RESORTS CASINO GROUP CEO STEPS DOWN AMID MONEY LAUNDERING SCANDAL

On 15 February, Deutsche Welle reported that the head of Australia’s Crown Resorts casino group has announced his resignation, following a scathing report into the company’s operations.  The company has been accused of facilitating money laundering and mafia ties.

https://www.dw.com/en/australia-casino-group-ceo-steps-down-amid-money-laundering-scandal/a-56569174

https://calvinayre.com/2021/02/15/casino/crown-boss-confirms-exit-but-wont-leave-empty-handed/

US CUSTOMS PUBLISHES FAQ RESPONSES TO XINJIANG UYGHUR AUTONOMOUS REGION WITHOLD RELEASE ORDER (WRO)

On 12 February, Crowell Moring published a post saying that, in light of increased US actions and rising global concerns over reports of forced labour in Xinjiang, US Customs and Border Protection (CBP) has issued a number of FAQ.

https://www.cmtradelaw.com/2021/02/cbp-publishes-faq-responses-to-xinjiang-uyghur-autonomous-region-wro

STRONGER EU TRADE ENFORCEMENT RULES ENTER INTO FORCE

On 15 February, the EU announced that robust new trade enforcement rules have entered into force with the update of the EU’s Trade Enforcement Regulation, the EU is able to act in a broader range of circumstances.  The changes empower the EU to act to protect its trade interests in the WTO and under bilateral agreements when a trade dispute is blocked despite the EU’s good faith effort to follow dispute settlement procedures, and expand the scope of the Regulation and of possible trade policy countermeasures to services and certain trade-related aspects of intellectual property rights.

https://ec.europa.eu/commission/presscorner/detail/en/IP_21_601

RESCUED SAILORS KIDNAPPED OFF NIGERIA DESCRIBE DEATH THREATS AND FOREST CAPTIVITY

On 15 February, Defence News reported that 15 Turkish sailors kidnapped by pirates last month in the Gulf of Guinea have arrived back in Turkey and the ship’s captain described how they faced death threats and were held in a forest during their 3-week ordeal.

https://www.defenceweb.co.za/security/maritime-security/sailors-kidnapped-off-nigeria-return-to-turkey-describe-death-threats-and-forest-captivity/

EU KICK-STARTS REVIEW OF FINANCIAL SERVICES VAT RULES

On 15 February, Tax News reported that, on 8 February, the European Commission launched a consultation on a review of the VAT rules for financial and insurance services, seeking comments from the industry and other stakeholders by 3 May.  It seeks comments on the current VAT rules on financial and insurance services and their functioning, as well as on possible changes to the rules.

https://www.tax-news.com/news/EU_Kickstarts_Review_Of_Financial_Services_VAT_Rules____97915.html

LIEGE AIRPORT CEO DISMISSED AMID CORRUPTION ALLEGATIONS

On 15 February, Air Cargo World reported that, following an internal investigation conducted by consultant, Deloitte, the CEO of Liege Airport has been dismissed by its board of directors.

https://www.aircargoweek.com/liege-airport-ceo-dismissed

PODCAST: THE ILLEGAL WILDLIFE TRADE: NOT JUST A TALKING POINT

On 15 February, a podcast from RUSI focuses on the illegal wildlife trade.  The host is joined by Atuweni Agbermodji, who headed Malawi’s Financial Intelligence Authority and was instrumental in driving change to tackle IWT crime in the country.

https://www.rusi.org/multimedia/illegal-wildlife-trade-not-just-talking-point

DUTCH POLICE BUST MULTI-MILLION EURO CAROUSEL VAT FRAUD

On 15 February, OCCRP reported that authorities in The Netherlands have dismantled an alleged criminal syndicate suspected of a complex multi-year, multi-million euro ‘carousel’ VAT-fraud scheme involving the online sale of electronic devices.  It was made possible with collaboration from further agencies in Croatia, the Czech Republic, Hungary and Poland.  The alleged perpetrators are understood to have stolen €9 million in illicit tax claims pursuant to falsified online sales of SD memory cards between 2017 and 2019.

https://www.occrp.org/en/daily/13867-dutch-police-bust-multi-million-euro-carousel-fraud

FIGHTING MONEY LAUNDERING IN CRYPTO, EXPLAINED

On 15 February, a short article in the Coin Telegraph which sets out to answer 5 basic questions about money laundering and cryptocurrencies.

https://cointelegraph.com/explained/fighting-money-laundering-in-crypto-explained

ROMANIAN SCULPTOR MOCKED, CHARGED IN MULTIMILLION-EURO FRAUD

On 15 February, Rferl reported that a Romanian sculptor has been charged with fraud after his much-derided sculpture of the Emperor Trajan — and 10 other works — turned out to be made of brass and not bronze as originally claimed.

https://www.rferl.org/a/romanian-sculptor-charged-in-multimillion-euro-fraud/31104054.html

“FLASH LOAN” FRAUD: $37 MILLION DEFI HEIST COST ATTACKERS JUST $15,000 IN TRANSACTION FEES

On 15 February, Decrypt reported on hackers exploiting the CREAM decentralised financing protocol involving “flash loans”, instant crypto loans.

https://decrypt.co/57660/a-37-million-defi-heist-cost-attackers-just-15000-in-transaction-fees

MARS, NESTLÉ AND HERSHEY TO FACE CHILD SLAVERY LAWSUIT IN US

On 12 February, the Guardian reported that 8 children who claim they were used as slave labour on cocoa plantations in Ivory Coast have launched legal action against the world’s biggest chocolate companies.  They accuse the corporations of aiding and abetting the illegal enslavement of “thousands” of children on cocoa farms in their supply chains.  The plaintiffs, all of whom are originally from Mali and are now young adults, are seeking damages for forced labour and further compensation for unjust enrichment, negligent supervision and intentional infliction of emotional distress.  It is the first time that a class action of this kind has been filed against the cocoa industry in a US court. 

https://www.theguardian.com/global-development/2021/feb/12/mars-nestle-and-hershey-to-face-landmark-child-slavery-lawsuit-in-us

NAO REPORTS ON ENVIRONMENTAL TAX MEASURES IN UK

On 15 February, Accountancy daily reported that the National Audit Office (NAO) has published a report examining how HM Treasury and HMRC manage tax measures – Climate Change Levy; Carbon Price Support; Landfill Tax and Aggregates Levy.- that have an impact on the environment.  It finds that that HMRC has only limited insight into the environmental impact of taxes.  The taxes raised £3.1 billion in 2019 and the Government plans to introduce a fifth – the Plastic Packaging Tax – from April 2022.  The departments do not centrally oversee how the tax system impacts on government’s environmental goals. In addition to the four environmental taxes, there are other taxes that have an impact on the environment, such as fuel duty and Air Passenger Duty, which do not have an explicit environmental objective

https://www.accountancydaily.co/cch_uk/tat/news_013706_nao_environmental_tax_measures

the report is at –

https://www.nao.org.uk/press-release/environmental-tax-measures/

€7.2 BILLION FRAUDSTER AND FORMER ANGLO IRISH BANK CHIEF DAVID DRUMM RELEASED EARLY FROM OPEN PRISON

On 15 February, the Irish Independent reported that convicted fraudster and former Anglo Irish Bank chief David Drumm has been released from an open prison under a “community return scheme” after serving a 6-year sentence.  He was one of 4 men found guilty of an offence related to the conspiracy to make it appear Anglo Irish Bank’s deposits were €7.2 billion larger than they were in 2008.  He was convicted in 2018 (and the others in 2016).

https://www.independent.ie/news/72bn-fraudster-david-drumm-released-early-from-open-prison-40095354.html

UK: SURVEILLANCE REPORTS MAY NOT BE PRIVILEGED IN LEGAL ACTIONS

On 15 February, an article from law firm Allen & Overy discusses a High Court case saying that a dispute about the use of private investigators highlights some attendant risks, in particular the possibility that the report generated may not be privileged.  The defendants had claimed the instructions provided to the private investigators and the ensuing documents produced were for the dominant purpose of litigation and so subject to litigation privilege.  Despite the application and counter-applications fell away, the court did make some interesting, non-binding, observations on whether the arguments made by the claimants had no prospect of success.  The observations made, the article says, are a warning to proceed with caution when (thinking about) conducting or instructing others to conduct covert surveillance in the context of civil litigation.

https://www.jdsupra.com/legalnews/surveillance-reports-may-not-be-2812825/

SHIPPING: BIMCO ADOPTS NEW CLAUSES AND CONTRACTS – COVERS SANCTIONS MATTERS, CREW CHANGES ETC

On 15 February, an article from Blank Rome LLP examines several new standard clauses and contracts adopted by the Baltic and International Maritime Council’s (BIMCO) Documentary Committee.  A new clause obliges both owners and charterers to warrant that they are not a sanctioned party, but also obliges the charterer to give a narrower warranty to refrain from knowingly carrying any sanctioned cargo and to indemnify owners from any damages that result from doing so.   Another new clause refers to the crew-change crisis affecting shipping as a humanitarian issue caused by national travel restrictions imposed as a result of the COVID-19 pandemic.  BIMCO has emphasised the importance of opening the lines of communication between charterers and owners for both sides to attempt to find the best solution for necessary crew changes.

https://www.jdsupra.com/legalnews/bimco-adopts-new-clauses-and-contracts-4965925/

ASSERTING WHAT YOU DID NOT DISCUSS WITH YOUR SOLICITOR MAY WAIVE PRIVILEGE OVER WHAT YOU DID DISCUSS

An article from law firm Allen & Overy on 15 February issued this warning following a recent High Court case in London.  It says that a party may waive privilege not just by making positive assertions about its privileged communications but also negative assertions (i.e. what was not said in privileged communications).  For there to be a waiver, the party has to have made sufficient reference to those negative assertions and to be voluntarily relying on them to put forward a positive case on an issue the court has to decide.  The law firm asserts that, if a party is seeking to advance its case by making assertions as to privileged communications (including negative propositions) that party does so at the risk that privilege is likely to be waived.

https://www.jdsupra.com/legalnews/asserting-what-you-did-not-discuss-with-9746243/

SOUTH AFRICA’S JACOB ZUMA IN ‘CONTEMPT OF COURT’, SAYS JUDGE

On 15 February, BBC reported that that a judge says he wants ex-President Jacob Zuma to be given a jail sentence for failing to appear before him to answer corruption allegations.  He ignored a summons to appear before a commission of inquiry being chaired by Justice Ray Zondo.

https://www.bbc.com/news/world-africa-56073199

FRENCH CYBERAGENCY REVEALS SUSPECTED RUSSIAN HACKING CAMPAIGN

On 15 February, Rferl reported that the France’s cybersecurity watchdog says it has discovered a hack of French organisations that bore similarities to other attacks by a group linked to Russian intelligence.  ANSSI said the hackers had taken advantage of a vulnerability in monitoring software sold by the Paris-based company Centreon.  ANSSI said it discovered intrusions dating back to late 2017 and stretching into 2020.

https://www.rferl.org/a/france-russian-hacking-campaign/31104497.html

UK: UP TO 9 MILLION JOBS AND ALMOST 600,000 UK EMPLOYERS AT RISK WITHOUT COVID SUPPORT

On 15 February, Ekklesia reported that almost 600,000 UK employers are at risk of business collapse in the spring without an urgent extension of government support, according to new analysis by the Institute for Public Policy Research (IPPR).  They employ some 9 million people, whose jobs could be lost if the cash crisis for businesses of all sizes is not quickly addressed. 

https://www.ekklesia.co.uk/2021/02/15/up-to-9-million-jobs-at-risk-says-ippr/

I would be grateful for any modest contribution for my time and ongoing costs of computer, relocation, and (still ongoing) removal costs, I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y

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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