OTHER THINGS YOU MAY HAVE MISSED – MARCH 19

Panama Covid-19 update – active cases fall by only 25 to 2,474 active cases, with another 311 added today, with 3 new fatalities. 13 patients are in ICU and 99 in other wards. This as the President says that facemasks remain for now…

Back home and back to relative normal…

19 MARCH 2022

RUSSIAN SANCTIONS: WARNING THAT DE-CERTIFIED SUPER YACHTS MAY BE UNINSURED

As Lloyds Register and DNV have withdrawn their services to all Russian ships, this can mean that the superyachts affected will have their insurance having become invalid – creating difficulties when entering harbours around the world.

ISLE OF MAN DEREGISTERED 2 SUPERYACHTS BELONGING TO SANCTIONED RUSSIAN BILLIONAIRE ANDREY MELNICHENKO

On 16 March, Forbes reported that the Minister for Enterprise had said that deregistering a ship means it cannot legally take to the sea.  While Melnichenko could register his yacht in a new jurisdiction, this would also mean obtaining new insurance and ship classification, which ensures the yacht is following international standards of maintenance, equipment and servicing.  Without classification, yachts cannot be insured. 

https://www.forbes.com/sites/giacomotognini/2022/03/16/isle-of-man-takes-steps-to-stymie-movement-of-russian-billionaire-andrey-melnichenkos-two-superyachts#

On 19 March, it was also noted that a great many shipping-related companies on the Isle of Man companies register (of so-called “2006 companies”) had applied to be dissolved.

https://www.gov.im/media/1375949/applications-for-dissolution-2006-act-companies-18322.pdf

ISLE OF MAN SUSPENDS TAX CO-OPERATION WITH RUSSIA

On 18 March, the Isle of Man (like Jersey and Guernsey) announced that it had suspended all forms of tax co-operation with Russia in light of the exceptional and distressing events in Ukraine and following consultation with the UK Government.

https://www.gov.im/news/2022/mar/18/isle-of-man-suspends-tax-co-operation-with-russia/

UK: LETTERS OF REQUEST FROM FOREIGN COURTS – HIGH COURT ORDERS DISCLOSURE TO ASSIST CANADIAN CIVIL FRAUD ACTION

On 16 March, Herbert Smith Freehills published an article saying that the Court had agreed, in part, to a letter of request and says that the judgment is a useful illustration of how the English courts approach such foreign judicial requests for assistance, and reinforces the importance of parties obtaining English law advice when seeking a letter of request from a foreign court.  It warns that, even if a foreign court is prepared to issue a letter of request where such English law advice is missing or deficient, there is a high risk that it may result in an English court refusing to accede to the request and make the orders sought.

https://www.mondaq.com/uk/white-collar-crime-anti-corruption-fraud/1172382/letters-of-request-from-foreign-courts-high-court-orders-disclosure-to-assist-canadian-civil-fraud-action

https://i.pinimg.com/564x/67/3c/3a/673c3ae2b464cbe2a54189a08326ac6b.jpg

ROMAN ABRAMOVICH’S LUXURY JET AMONG 100 PLANES LISTED BY US

On 18 March, Bloomberg reported that the Biden Administration identified billionaire Roman Abramovich’s Gulfstream business jet among 100 for apparent violations of export controls imposed over Russia’s invasion of Ukraine.  The restrictions hit any US-made aircraft or any made in another country with more than 25% US-origin controlled content if destined for Russia, part of new controls imposed on 24 February.  Aircraft identified by the  Commerce Department include Boeing 777 and 737 operated by Nordwind Airlines, Boeing 767 and 737 flown by Utair, and Boeing 767, 757 777 and a 737 operated by Azur Air.

https://www.bloomberg.com/news/articles/2022-03-18/u-s-tags-abramovich-plane-among-100-for-export-control-breaches

https://www.straitstimes.com/world/united-states/us-says-flights-by-aeroflot-abramovich-violated-sanctions-on-russia

ITALIAN POLICE SEIZE SMUGGLED LUXURY CARS AND MOTORCYCLES FROM A MAN WHO ALLEGEDLY SMUGGLED THEM INTO THE EU

On 18 March, OCCRP reported that, at the request of the European Public Prosecutor’s Office (EPPO), Italian police seized 10 luxury cars and 45 luxury and vintage motorcycles from a man who allegedly smuggled them into the EU, evading the equivalent of $275,000 in customs duties and VAT.  It is reported that the man has been living permanently in Italy while having a fictitious residence in a South American country.

https://www.occrp.org/en/daily/16093-italian-police-seize-smuggled-luxury-cars-and-motorcycles

FATF EXPERTS TO VISIT MALTA IN APRIL

On 18 March, the Times of Malta reported that experts from FATF will visit Malta next month, with the expressing hope that the country could be off the FATF grey list by June.

https://timesofmalta.com/articles/view/fatf-experts-to-visit-malta-next-month.942348

MONEYVAL CARRIES OUT A FACE-TO-FACE MEETING WITH BULGARIA

On 18 March, the Council of Europe reported that, in the framework of the 5th round of mutual evaluation of Bulgaria, MONEYVAL organised a meeting between the assessment team and Bulgarian authorities in Strasbourg.  The meeting is organised approximately 2 months prior the Plenary meeting, during which the Mutual Evaluation Report (MER) will be discussed and adopted. 

https://www.coe.int/en/web/moneyval/-/moneyval-carries-out-a-face-to-face-meeting-with-bulgaria

US FOCUS ON OCEAN SHIPPING, PRICES AND SUPPLY CHAIN

A briefing from HFW on 16 March says that the Biden Administration continues to focus on the supply chain and related costs and has issued a Fact Sheet entitled summarising the Administration’s current view on the ocean freight transportation system.  It discussed the DoJ and the Federal Maritime Commission’s (FMC) joint initiative to promote competition in the ocean freight transportation system, as a mechanism to reduce consumer prices.  FMC also announced an Advance Notice of Proposed Rulemaking to potentially change regulations concerning detention and demurrage billing practices; and the FMC and DOJ have announced a joint initiative to examine antitrust and competition issues in the shipping industry.

https://www.hfw.com/downloads/003866-HFW-All-on-Board-The-Biden-Administration-FMC-and-DOJ-Focus-on-Ocean-Shipping-Prices-and-Supply-Chain.pdf

CHANGES TO THE UWO LAW DO NOT OVERCOME PROBLEMS UK HAS IN RECOVERING CLAIMED CRIMINAL PROPERTY

On 16 March, a briefing from HFW on the planned changes to the law governing unexplained wealth orders, and focuses on the measures contained in the Act which are aimed at strengthening UWO. 

https://www.hfw.com/downloads/003871-HFW-Unexplained-Wealth-Orders.pdf

UK GOVERNMENT INCLUDES LAW COMMISSION RECOMMENDATIONS IN ONLINE SAFETY BILL

On 18 March, the Law Commission reported on its recommendations that the Government has included in the Bill, including on cyberflashing.  It says that the reformed offences will refocus the criminal law on communications where the sender specifically intended to cause harm, and that pose a real and substantial risk of causing at least serious distress.

https://www.lawcom.gov.uk/government-includes-law-commission-recommendations-in-online-safety-bill/

CONFLICTS OF INTEREST AND CONTROVERSIAL CLIENTS: HENLEY & PARTNERS’ CARIBBEAN BUSINESS

On 18 March, an article from OCCRP says that “citizenship planning” company Henley & Partners helped a bevy of high-risk clients gain citizenship in the Caribbean nation of St Kitts and Nevis.  It routed donations to a public fund that stopped operating after it made bad investments in 2 ventures linked to Henley’s chairman.  It also says that several Henley clients in the Caribbean — revealed in internal Henley documents obtained by OCCRP — had suspect backgrounds. They included a sanctioned businessman, a disgraced banker and sanctions evader, a figure linked to money laundering, several alleged fraudsters, and powerful political figures.

https://www.occrp.org/en/investigations/conflicts-of-interest-and-controversial-clients-henley-and-partners-caribbean-business

GERMANY INVESTIGATES £1 BILLION TUI SHARE TRANSFER BY SANCTIONED RUSSIAN OLIGARCH

On 18 March, the Guardian reported that Germany is investigating deals under which most of the stake in Tui, the world’s biggest holiday company, held by the sanctioned Russian oligarch Alexei Mordashov was transferred to an entity controlled by his wife, Marina Mordashova.

https://www.theguardian.com/business/2022/mar/18/germany-share-tui-russia-alexei-mordashov

ERICSSON CHANGES CHIEF LEGAL OFFICER AFTER CORRUPTION SETTLEMENT BREACH

On 16 March, ICIJ reported that the news comes after US prosecutors revealed that the company had breached a 2019 criminal settlement and failed to fully disclose misconduct in Iraq, including possible payments to the Islamic State terrorist group.

https://www.icij.org/investigations/ericsson-list/ericsson-changes-chief-legal-officer-after-corruption-settlement-breach/

INDIA BUYS RUSSIAN OIL DESPITE PRESSURE FOR SANCTIONS

On 19 March, Hellenic Shipping News reported that the state-run Indian Oil Corporation bought 3 million barrels of crude oil from Russia earlier to secure its energy needs, resisting Western pressure to avoid such purchases.  An official said India has not imposed sanctions against buying oil and will be looking to purchase more from Russia.

https://www.hellenicshippingnews.com/india-buys-russian-oil-despite-pressure-for-sanctions/

UK:  COURT DECISION RELATING TO 2018 SANCTIONS ON RUSSIAN ENTITIES AND FORCE MAJEURE WILL BE EQUALLY RELEVANT IN RELATION TO THE CURRENT SANCTIONS ON RUSSIA

On 19 March, an article in Hellenic Shipping News is concerned with an English High Court related to an owner’s purported exercise of a force majeure provision in a contract of affreightment in response to the charterer’s difficulties paying freight in US dollars (the contractual currency of payment) due to the impact of US sanctions on Russia. 

https://www.hellenicshippingnews.com/a-force-majeure-to-be-reckoned-with/

SOUTH AFRICA: KRUGERRAND SALES POSE MONEY LAUNDERING AND TERRORIST FINANCE RISKS

On 17 March, Business Day reported that the  Financial Intelligence Centre (FIC) has warned Krugerrand traders that the sector is vulnerable to financial crime and is an attractive vehicle for money laundering.

https://www.businesslive.co.za/bd/national/2022-03-17-krugerrand-sales-pose-money-laundering-and-terrorist-finance-risks-warns-fic/

IRS SAYS IT NEEDS 1,300 MORE WORKERS TO FIGHT ‘COMPLICATED TAX FRAUD AND MONEY LAUNDERING SCHEMES’

On 17 March, Yahoo News reported that the underfunded and understaffed agency said it needs more workers to meet investigative needs, and that over the last decade, the IRS’s budget and staff have shrunk dramatically.

https://news.yahoo.com/irs-helping-sanction-russian-oligarchs-161401517.html

ABS WITHDRAWS ALL CLASS SERVICES INVOLVING RUSSIAN VESSELS, ASSETS AND COMPANIES

On 18 March, Ship Management reported that US-based ABS said that it is in the process of communicating with all affected clients and stakeholders to ensure a safe and orderly transition out of ABS Class.  The American Bureau of Shipping is a US maritime classification society.

https://shipmanagementinternational.com/ukraine-news-abs-withdraws-class-services-to-russian-vessels-assets-and-companies/

RUSSIAN-OWNED SUPERYACHT MAROONED IN NORWAY AFTER REFUSED FUEL

On 16 March, Superyacht News reported that M/Y Ragnar has been denied fuel by providers in Norway and the yacht is currently moored up in Narvik.  The yacht is reportedly owned by Russian oligarch Vladimir Strzhalkovsky, a former KGB agent who made his fortune in mining – he also served as deputy minister under Vladimir Putin. It should be noted that Strzhalkovsky is not on the EU sanction list at the time of writing despite protests from some politicians in Norway. Norwegian law currently prevents the government from being able to inflict such sanctions without having an EU Directive. 

https://www.superyachtnews.com/owner/68m-my-ragnar-denied-fuel-in-norway

EU REGULATION 2022/328/EU: AN END TO RUSSIAN NEW-BUILD YACHTS?

On 16 March, Superyacht News reported that an amendment to Council Regulation (EU)2022/ 328 could have a more serious impact on the superyacht market than sanctions.  The amendment puts a near-total halt to the creation and exportation of certain types of machinery and technologies to Russian entities that could feasibly be co-opted to support the Russian war effort in Ukraine.

https://www.superyachtnews.com/business/an-end-to-russian-new-builds

UK – THE ECONOMIC CRIME (TRANSPARENCY AND ENFORCEMENT) BILL: WHAT DOES IT MEAN FOR COMMERCIAL REAL ESTATE?

On 18 March, an article from DLA Piper says that the new Act will have a significant impact on commercial real estate.  The main operative provisions of the Act have not yet come into force.  However, it is clear the UK Government is motivated to see it take effect quickly and it is vital that you start planning now – as far as possible, given we do not yet have precise details of how the new regime will work – to deal with its effects.  Although the article focuses on the position in, and uses terminology applicable to, England and Wales, the new Act applies throughout the UK.

https://www.dlapiper.com/en/us/insights/publications/2022/03/the-economic-crime-transparency-and-enforcement-bill-what-does-it-mean-for-commercial-real-estate/

UK: COURT OF APPEAL RESTORES £1.4 BILLION CUM-EX CLAIM IN AN IMPORTANT JUDGMENT ON JURISDICTION

On 1 March, Monckton Chambers published an article about a decision in a case in which the Danish tax and customs administration (SKAT) alleges that it was the victim of a tax fraud by various businesses, investors and individuals in the period between 2012 and 2015. The claims in London against these individuals total around £1.4 billion.  The Court of Appeal found that SKAT’s claims (as alleged) were admissible before the English court, on the basis that the claims were not for unpaid tax but to recover monies which had been abstracted from SKAT’s general funds by fraud; but it did hold that a common law rule meant that the case against one set of defendants was inadmissible.

https://www.monckton.com/court-of-appeal-restores-1-4-billion-claim-in-an-important-judgment-on-jurisdiction/

NORTH KOREA’S PROCUREMENT OF 86 HUGHES HELICOPTERS IN THE 1980S

On 4 March, an article from Daniel Salisbury, available on Taylor & Francis Online, considers the relationship between intelligence and the arms trade. Using recently declassified documents, the article contextualises the case using US intelligence assessments of North Korea’s procurement, and considers the role of the DPRK’s diplomats in Berlin, and the Western powers’ response. This history provides insights into the use of intelligence operatives for arms procurement, the role of intelligence agencies in monitoring the illicit arms trade, and the challenges in collection, analysis and acting on the intelligence surrounding arms trafficking.

https://www.tandfonline.com/doi/full/10.1080/02684527.2022.2039350

NEW EGMONT GROUP WEBSITE

https://egmontgroup.org/

JERSEY: GUIDANCE NOTE – DEALING WITH CUSTOMERS WHO PRESENT A HIGHER RISK OF MONEY LAUNDERING, FINANCING OF TERRORISM, AND THE FINANCING OF PROLIFERATION

On 18 March, the Jersey FSC published new Guidance Note note to remind relevant persons of its expectations from Industry when dealing with customer relationships that present higher financial crime risks, and to prompt relevant persons to consider and assess the adequacy of their own individual arrangements for identifying and mitigating existing, or increased, risks arising within their customer bases.

https://www.jerseyfsc.org/industry/guidance-and-policy/dealing-with-customers-who-present-a-higher-risk-of-money-laundering-the-financing-of-terrorism-and-the-financing-of-proliferation-together-financial-crime/

THE ASCENT OF CRYPTO ASSETS

This article on 19 March from VOX at the Centre for European Policy Research says that transaction volumes across countries appear to be driven by globally relevant factors such as US longer-term inflation expectations, US real Treasury yields, and gold and crypto-asset prices, rather than recent country-level macroeconomic developments. Volumes also tend to be higher in countries with higher information and communications technology penetration and greater reliance on remittances.  It documents the rise in on-chain crypto-asset activity around the world at the country level – transactions that are directly recorded on the distributed ledger that underpins a crypto-asset – and empirically investigate the association of crypto-asset volumes across countries with key global and domestic macroeconomic drivers.

https://voxeu.org/article/ascent-crypto-assets-evolution-and-macro-financial-drivers

IS COLLECTIVE ACTION AGAINST CORRUPTION A COMPETITION RISK FOR COMPANIES?

On 16 March, a paper from the Bael Institute on Governance addresses the question: are there anti-trust risks in engaging with other industry players in anti-corruption efforts through Collective Action?  It is argued that corruption distorts fair competition – through bribery, collusion, bid-rigging or other forms of manipulation and foul play.  Companies with high ethical standards may struggle to compete in high-risk countries or sectors if others are willing and able to operate in the shadows.  In contrast, it argues, anti-corruption Collective Action can help to level the playing field between competitors and increase standards of transparency and integrity across an industry or region.

https://baselgovernance.org/blog/collective-action-against-corruption-competition-risk-companies

 

Any modest contributions for my time and ongoing expenses are welcomed!  I have a page where you can do so, and where one-off contributions start as low as $3, at https://www.buymea3coffee.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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