6 july 2022
ISLE OF MAN: BELARUS SANCTIONS CHANGES
On 6 July, the Isle of Man followed the UK in announcing a range of further sanctions and amendments concerning Belarus.
THE REAL SIGNIFICANCE OF THE HAGUE CONVENTION ON CHOICE OF COURT AGREEMENTS – AND US RATIFICATION
On 5 July, a post from the Transnational Litigation Blog argues that if the US were to ratify the Convention (COCA), relatively little would change with respect to US law as it relates to the enforcement of choice of court clauses or the recognition of judgments. US law, it says, in these areas is already broadly consistent with the rules set forth in the treaty. The real significance of COCA, it is argued, is that it will change longstanding rules relating to the interpretation of choice of court clauses by US courts. It concludes that ratifying COCA (which the US signed in 2009) is indisputably in the best interests of the US. The post briefly outlines the chief aims of COCA as courts having to enforce choice of court clauses selecting courts in other contracting states; and, courts in having to recognise and enforce judgments rendered by courts in other contracting states designated by exclusive choice of court agreements.
UK: GAMBLING COMMISSION’S ENFORCEMENT ACTIONS PUBLISHED IN MAY
On 4 July, an article from CMS Cameron McKenna Nabarro Olswang LLP summarised part of the contents of the report published in May, which detailed enforcement action against 2 operators who have been fined, a third operator which had its licence suspended pending a regulatory review. It explains that the Commission’s concerns about all 3 operators revolved around social responsibility and AML failings.
US AIMS TO EXPAND EXPORT BANS ON CHINA OVER SECURITY AND HUMAN RIGHTS
On 5 July, the New York Times carried an article claiming that the US Government is using the lessons it learned from those actions to expand restrictions on exports to China and other countries in cases where companies or groups might threaten US national security or violate human rights. It says that the effort involves broadening the circumstances under which so-called export controls would be imposed and getting partner nations on board. It also aims to redefine what technologies are considered sensitive or critical and of potential use to militaries and security agencies — to encompass things like AI.
SOUTH AFRICA: EXTRADITION DOCUMENTS FROM US FOR ALLEGED CYBERCRIME KINGPIN
On 5 July, News 24 reported that alleged cybercrime kingpin James Junior Aliyu was arrested on 29 June, and he is said to have conducted his criminal activities from South Africa and swindled dozens of US citizens out of millions of dollars through email and text messages. A court was told that the authorities had received extradition documents from the US.
PEOPLE SMUGGLING NETWORK: AROUND 40 PEOPLE ARRESTED IN A SERIES OF RAIDS ACROSS EUROPE
On 6 July, a news release from NCA announced that NCA officers have targeted members of a major criminal network suspected of involvement in the smuggling of up to 10,000 people into the UK – as the NCA joined the biggest-ever international operation targeting small boat people smugglers.
NEW DATA ADEQUACY AGREEMENT IN PRINCIPLE BETWEEN THE UK AND SOUTH KOREA
On 5 July, the Department for Digital, Culture, Media & Sport advised that the 2 countries had agreed a statement, marking the successful conclusion of data adequacy talks on the protection of personal data and free flow of personal data across borders.
REQUIREMENTS, CONTROLS AND SANCTIONS THAT BORDER FORCE APPLIES TO FIREARMS AND OFFENSIVE WEAPONS WHEN THEY ARE IMPORTED INTO THE UK
On 5 July, Border Force issued new guidance.
UN: NEW BUSINESS INTEGRITY PORTAL LAUNCHED TO BOLSTER ANTI-CORRUPTION EFFORTS IN THE PRIVATE SECTOR
On 30 June, the UN Office for Drugs and Crime said that the private sector has a vested interest in curbing corruption, and the new portal is intended to serve as an online one-stop shop, housing a wealth of resources, tools, and good practices, emerging from a range of anti-corruption projects. The portal provides users with an overview of how governments and other stakeholders such as civil society and academia have joined forces with the corporate world to develop practical solutions to prevent and counter corruption in specific countries and sectors.
FUGITIVE MAFIA BOSS EXTRADITED FROM BRAZIL TO ITALY
A news release from INTERPOL on 6 July advised that Rocco Morabito, a convicted Italian drug lord linked to the ‘Ndrangheta mafia, has been successfully extradited from Brazil to Italy. Morabito is considered a top international drug broker and one of the most wanted fugitives in the world, according to the Italian Ministry of Interior.
FRANCE: 35 CHILDREN AND 16 MOTHERS FROM SUSPECTED TERRORIST-ASSOCIATED CAMPS IN NORTH-EASTERN SYRIA HAVE BEEN REPATRIATED TO FRANCE
On 6 July, Jurist reported that the mothers now face judicial proceedings, while the children will remain in the custody of French child welfare services.
US: ANTI-BOYCOTT VIOLATIONS CAN STILL YIELD SUBSTANTIAL PENALTIES
On 6 July, Sandler Travis Rosenberg reported that US companies and their foreign affiliates are prohibited from participating in foreign boycotts that the US does not sanction, and such actions can result in substantial criminal and civil penalties. The Arab League boycott of Israel is the principal foreign economic boycott involved.
TRADE STRATEGY TO COMBAT FORCED LABOUR: THE OFFICE OF THE US TRADE REPRESENTATIVE IS INVITING PUBLIC COMMENTS
On 6 July, Sandler Travis Rosenberg advised that the USTR is seeking comments by 5 August on a strategy to identify priorities and establish an action plan for utilising existing and potential new trade tools to combat forced labour in traded goods and services.
PAPUA NEW GUINEA PRIME MINISTER DENIES CONNECTION TO SUITCASE FULL OF CASH FOUND AS VOTING STARTS
On 6 July, the Guardian reported that the Prime minister James Marape has denied any connection to a suitcase containing A$650,000 in cash that police found in the possession of a man said to be travelling with his son, just as voting in the country’s election was about to start.
WHY DID LATIN AMERICA’S DRUG TRADE THRIVE DURING COVID-19?
On 5 July, an article from Insight Crime asked this question, as a new reported highlighted the resilience of Latin America’s cocaine trade and the region’s expanding role in producing other types of drugs. Despite the pandemic, Latin America continues to dominate the global cocaine trade, with the US and Europe still driving consumption.
NEW LICENCE REQUIRED FOR VASP PROVIDERS IN HONG KONG FROM 1 MARCH 2023
On 6 July, an article from Eversheds Sutherland advised that, from 1 March 2023, operators carrying on a business of operating a virtual assets exchange will require a licence granted by the Securities and Futures Commission.
MACAU STILL ‘AT A STANDSTILL’
On 5 July, RFA reported that the streets of the tourism and gambling hub are mostly empty, except for long lines of people waiting for Covid tests; with a series of stringent restrictions and multiple rounds of citywide mass testing for COVID-19 amid a fresh outbreak in the city.
WHAT IS KLEPTOCRACY AND HOW DOES IT WORK?
On 4 July, Chatham House published a short article, described as an Explainer, in which it explores the definition of kleptocracy, the motivations behind it and why it flourishes in certain societies, and its global impact.
UAE IMPOSES $11 MILLION IN FINES FOR MONEY LAUNDERING OFFENCES IN THE FIRST HALF OF 2022
On 6 July, The National reported that the AML task force imposed fines of more than $11 million in the first 6 months of 2022.
TUNISIA: FORMER PARLIAMENT SPEAKER SUMMONED FOR INVESTIGATION INTO ‘MONEY LAUNDERING’ ACCUSATIONS
On 6 July, the Anadolu Agency reported that Rached Ghannouchi had been summoned for investigation into ‘money laundering’ accusations. Tunisia has been in the throes of a deep political crisis that aggravated the country’s economic conditions since President Kais Saied ousted the government, suspended parliament and assumed executive authority in July 2021.
US-SOUTH KOREA FORCES PRACTICE SEIZING SHIPS IN SIGN OF TOUGHER STANCE ON NORTH KOREA
On 6 July, NK Pro reported that US and South Korean special forces recently practiced boarding and seizing foreign vessels as part of an international naval exercise, a move that one expert said signals Seoul’s stronger stance against North Korea sanctions evasion. However, the article also notes that commandeering foreign vessels on the high seas is politically and militarily risky. For that reason, the US and South Korea have never searched any vessels connected to North Korea sanctions-busting in international waters, as such interdictions are typically considered illegal under maritime conventions.
US DEPARTMENT OF COMMERCE’S BUREAU OF INDUSTRY AND SECURITY (BIS) HAS ISSUED EXPORT DENIAL ORDERS TO 3 AIRLINES
On 6 July, EU Sanctions blog reported that the Bureau of Industry and Security has issued export denial orders to Pobeda Airlines, Nordwind Airlines and Siberian Airlines, which are said to have operated international flights from various destinations to Russia using aircraft subject to the Export Administration Regulations (EAR) and without the necessary licences.
OFAC AMENDS SANCTIONS ENTRY FOR THE BELARUSIAN OIL TRADE HOUSE
On 6 July, OFAC advised that the existing entry relating to the BELARUSIAN OIL TRADE HOUSE had been amended.
PODCAST: JIM WASSERSTROM ON WHISTLEBLOWERS AND THE INTEGRITY SANCTUARY
In the latest TRACE podcast, Jim Wasserstrom, who spoke at the TRACE Prize for Investigative Reporting in Vancouver last month, describes his own experience as a whistleblower and his commitment to building an Integrity Sanctuary where whistleblowers can recover and flourish in safety.
US: DoJ CHARGES INDIVIDUALS WITH CRYPTOCURRENCY-RELATED FRAUD IN 4 SEPARATE CASES
On 6 July, an article from Fried Frank Regulatory Intelligence said that the DoJ has indicted 6 individuals in 4 separate cases for their alleged roles in crypto-related fraud. The cases involve defrauding investors in a Non-Fungible Token (NFT) investment project, orchestrating a global Ponzi scheme involving the sale of unregistered cryptocurrency securities, fraudulently initiating a new coin offering and making misrepresentations to investors in a crypto-related unregistered commodity pool.
ISLE OF MAN: RUSSIA AND CYBER SANCTIONS AMENDMENTS
On 6 July, the Isle of Man released 2 news releases announcing changes to follow up the previous announcements by HM Treasury advising of changes to the 2 sanctions regimes.
FinCEN: JOINT STATEMENT ON THE RISK-BASED APPROACH TO ASSESSING CUSTOMER RELATIONSHIPS AND CONDUCTING CUSTOMER DUE DILIGENCE
On 6 July, a news release from FinCEN advised that the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), FinCEN, the National Credit Union Administration, and the Office of the Comptroller of the Currency (OCC) have issued the release as a joint statement to remind banks of the risk-based approach to assessing customer relationships and conducting customer due diligence (CDD). It says that the statement does not alter existing Bank Secrecy Act/ Anti-Money Laundering (BSA/AML) legal or regulatory requirements, nor does it establish new supervisory expectations. It goes on to say that the agencies are reinforcing a longstanding position that no customer type presents a single level of uniform risk or a particular risk profile related to money laundering, terrorist financing, or other illicit financial activity; and that the banks must apply a risk-based approach to CDD, including when developing the risk profiles of their customers.
ABOUT $88.6 BILLION ILLEGALLY LEAKS OUT OF AFRICA ANNUALLY THROUGH ILLICIT FINANCIAL FLOWS
On 6 July, Ghana Web reported on the UN Committee on Trade & Development (UNCTAD) Economic Development in Africa 2021 report which says that around 3.7% of Africa’s GDP is lost through IFF.
HOW CAN HMRC ESTIMATE THE OVERALL TAX GAP AT 5.1% BUT PROFESS NO IDEA ABOUT THE OFFSHORE ELEMENT?
On 5 July, IFA Magazine reported that a Tax Investigations Partner at Andersen in the UK has claimed that HMRC’s ignorance of the scale of offshore tax avoidance demonstrates how limited the level of HMRC’s investigation work has become in recent years. He also highlighted how few random investigations HMRC is conducting into people holding wealth overseas.
UK: A WAY TO SPOT DODGY UMBRELLA COMPANIES
On 4 July, Simply Business said that it is important for contractors to spot the signs of tax avoidance for themselves – but how? This is as the Government is starting to clamp down on umbrella companies that promise higher take-home pay by using tax avoidance schemes. The article suggests how “dodgy” umbrella companies can be detected.
FATF WEBINAR ON MONEY LAUNDERING AND TERRORIST FINANCING RISKS ARISING FROM MIGRANT SMUGGLING
On 6 July, FATF advised that it was hosting a webinar on 13 July which will bring together civil society, public and private sector, and academia to discuss key findings from a recent FATF report, and possible solutions to detect and prevent migrant smuggling. The panel will discuss how migrant smugglers have changed their modi operandi in recent years, how to better detect smugglers’ illegal money, and what state authorities, private sector and NPO can do in order to fight this illegal business.
STABLECOINS – WHAT ARE THEY AND WHAT IS THE LAW IN IRELAND?
On 4 July, law firm Mathesons published this article explaining that a stablecoin is a form of cryptocurrency which has its value ‘pegged’ to the value of another currency, commodity, asset or group of same. The purpose of a stablecoin is to provide an exchangeable virtual asset that maintains a relatively stable value commensurate to the value of the underlying currency, commodity or asset.
FDI SCREENING – SCREENING OF THIRD COUNTRY TRANSACTION BILL AND LATEST IRISH DEVELOPMENTS
On 1 July, Irish law firm Matehson published an article about the Bill, priority legislation in Ireland’s Summer 2022 Legislation Programme. It will cover “third country investments in technologies identified in law as ‘sensitive’ or ‘critical’ infrastructure such as our health services, our electricity grid, military infrastructure, ports and airports”. It was also stated that companies will be exposed to fines of up to €4 million or imprisonment if company is non-compliant with the regime.
50 CHINESE STUDENTS LEAVE UK IN 3 YEARS AFTER SPY CHIEFS’ WARNING ON THE THEFT OF SENSITIVE ACADEMIC RESEARCH
On 6 July, the Guardian reported that 50 Chinese students have left the UK in the past 3 years after Britain tightened its procedures to prevent the theft of sensitive academic research, the head of MI5 said in a speech about the espionage threat posed by China.
TURKEY: IOSCO – MATERIAL GAPS REMAIN FOR THE IMPLEMENTATION MEASURES FOR CENTRAL SECURITIES DEPOSITORIES (CSD) AND TRADE REPOSITORIES (TR)
A release on Mondo Visione on 6 July was concerned with a report by the International Organization of Securities Commissions (IOSCO) and the Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI). The report assessed the completeness and consistency of the legal, regulatory and oversight framework in place as of 5 December.
KENYA: SEIZURE OF $56.7 MILLION FROM FLUTTERWAVE AS CORRUPTION AND MONEY LAUNDERING TRIAL BEGINS
On 6 July, the People’s Gazette reported that Flutterwave was one of about 7 firms named in an indictment, but it alone had its accounts frozen by the country’s Asset Recovery Agency. It is said in the indictment that investigations established that the bank accounts operations had suspicious activities where funds could be received from specific foreign entities which raised suspicion. The funds were then transferred to related accounts as opposed to settlement to merchants.
INDIA: VIVO DIRECTORS HAVE REPORTEDLY FLED THE COUNTRY AS THE ENFORCEMENT DIRECTORATE INTENSIFIED INQUIRY INTO THE MONEY LAUNDERING CASE AGAINST THE CHINESE COMPANY
On 6 July, Livemint reported that the Enforcement Directorate had conducted searches at 40 places across the country in an investigation against the Chinese smartphone manufacturing company and related businesses.
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