FATF is to hold a webinar on 1 September in which a panel of experts with a global and domestic will focus on enhancing beneficial ownership transparency. They will discuss FATF’s recent revision to Recommendation 24 on beneficial ownership of legal persons, which aims to help stop criminals from hiding their illicit activities and dirty money behind secret company structures.
On 31 August, HMRC announced that it has used new powers to publicly name directors of tax avoidance promoting companies, with customers being warned to leave the firms’ schemes or risk large tax bills. It says that Adam Fathers is the director of tax avoidance promoter Saxonside Ltd while Stuart John Brooke is behind tax avoidance promoter The Umbrella Agency Ltd.
The latest set of data, for the week to 27 August, shows the Covi-19 virus is still around. Many people here still wear masks some or all of the time, although they are only now mandatory on public transport (there is talk of that changing), in medical premies etc, and for those people handling/serving food. In the week to 27 August there were 5,321 new reported cases and 19 fatalities; and the week ended with 7,807 active cases – 22 in ICU (actually up 5 on last week) and 140 in other wards.
In linked news, a woman who was one of 2 people implicated in the supply of fake vaccinations and fake vaccination cards in June 2021 has been sentenced to 48 months in prison.
Meanwhile, the number of monkeypox cases are now up to 10, with the tenth man having been apparently in contact with one of the previous reported cases.
In other news, a former governor of Coclé Province is on trial facing charges of withholding of employers’ workers’ contributions to the Social Security Fund of more than $6 million in 2013-15.
30 AUGUST 2022
INTERPRETING “BEST EFFORTS” v “REASONABLE EFFORTS” IN CONTRACTS
On 18 August, Burnet Duckworth & Palmer LLP published an article says that the terms “best efforts”, “reasonable efforts”, and, most recently, “commercially reasonable best efforts”, have been subject to considerable judicial interpretation over the years. While the term “best efforts” has been interpreted fairly consistently, it says, there is considerable uncertainty when it comes to the application of the “reasonable efforts” and “commercially reasonable best efforts” standard. In the article are gathered the general principles with respect to the judicial interpretation of these terms, as well as some illustrative examples.
On 29 August, an article from Mayer Brown examined the review which followed the failings of the SFO investigation into Unaoil, one of the its highest-profile and most significant cases of recent times. These failings resulted in the overturning of the convictions of several individuals. It says that the review lays bare the culture at the SFO, and so contains lessons not just for the SFO and other prosecutors but also for any organisation focussed on promoting a healthy culture.
On 29 August, Bloomberg reported that Ecuador’s state oil company Petroecuador had told commodity trader Tarifgura Group, the top supplier of fuels in Ecuador, to avoid importing Russian fuels amid concerns the country may get entangled in sanctions. The warning came after Trafigura finished discharging a cargo of mostly Russian diesel at the port of Esmeraldas.
NORWAY UNVEILS LATEST SANCTIONS AGAINST RUSSIA – FISHING EXEMPTIONS REMAIN
On 29 August, Seafood News and Seafood Source reported on the development, the latter noting that Russian fishing vessels continued to be exempted from sanctions, Russian fishing vessels will continue to land their catches at ports in Northern Norway, and its vessels are still being serviced in Norwegian shipyards.
ABU DHABI: MONEY SERVICES FIRM FINED $360,000 FOR NOT FOLLOWING AML RULES
On 30 August, Gulf News reported that Wise Nuqud Ltd, a licenced money service provider in the UAE, has been fined $360,000 as it did not establish and maintain adequate AML systems, such as verifying the source of funds or wealth for customers identified as high-risk before undertaking transactions on their behalf.
AUSTRAC ORDERS AUDIT OF GOLD CORPORATION’S COMPLIANCE WITH FINANCIAL CRIME LAWS
On 30 August, The National Tribune reported that AUSTRAC has ordered the appointment of an external auditor to the Gold Corporation, which trades as The Perth Mint. The auditor will assess compliance with AML laws and must report to AUSTRAC within 180 days.
POLAND: AMENDMENT TO THE ACT ON THE LIABILITY OF COLLECTIVE ENTITIES FOR CRIMINAL OFFENCES
On 29 August, an article from Hogan Lovells says that the government recently presented details of planned amendment to the Act on the Liability of Collective Entities for Criminal Offences – an act that imposes liability on corporations for acts committed by persons acting on the corporation’s behalf.
BREXIT: WEBINARS FOR USING THE UKCA MARKING AND PLACING GOODS ON THE MARKET IN GREAT BRITAIN
On 30 August, the Department for Business, Energy and Industrial Strategy published details of free webinars about the new UK conformity assessment marking (UKCA), which replaced EU “CE” markings for placing goods on the market in Great Britain and Northern Ireland. There are different rules for Northern Ireland, and BEIS will be running dedicated events to cover the requirements for placing goods on the market in Northern Ireland.
HUNGARY: DISMANTLING OF A CRIMINAL NETWORK INVOLVED IN LARGE-SCALE TAX FRAUD INVOLVING CIGARETTE SMUGGLING
A news release from Europol on 29 August advised that an operation, led by Hungary and supported by Europol and Eurojust, and involving law enforcement authorities in Austria, the Czech Republic and Poland has led to the dismantling of a criminal network involved in large-scale tax fraud concerning cigarette smuggling. Law enforcement officers were able to seize €750 000 in various currencies, 7 luxury vehicles and 49 luxury watches from the Hungarian citizen who was arrested. The authorities are looking for 3 further suspects for whom European and international arrest warrants have been issued.
BELGIUM: THE SEIZURE OF OVER 57 MILLION CIGARETTES AND MORE THAN 48 TONS OF CUT TOBACCO
A Europol news release on 30 August advised that Belgian customs authorities carried out house searches in warehouses and at a private residence in Belgium, some of which were based on intelligence provided by the Lithuanian Criminal Police Bureau on suspicious deliveries to addresses in Belgium. Officers discovered 2 full production lines for cigarettes bearing a variety of well-known name brands.
SOUTH KOREA: CUSTOMS INSPECTION TURNS UP ILLEGAL CRYPTOCURRENCY TRANSACTIONS WORTH $2 BILLION
On 30 August, the Korea Times reported that eoul Regional Customs uncovered a total 2.7 trillion won worth of illegal foreign exchange transactions related to cryptocurrency trading during its special inspections. The special inspections focusing on cryptocurrency-related illegal foreign exchange transactions began in February. Most of the foreign exchange violations caught during the inspections were related to purchases of digital assets through overseas cryptocurrency exchanges.
MALAYSIA: CUSTOMS DEPARTMENT SEIZES OVER 40 LUXURY VEHICLES
On 29 August, The Star reported that the Customs Department has seized more than 41 luxury and exotic vehicles and 9 high-powered motorcycles which were brought into the country without valid import documents. The vehicles were brought in from countries including Japan, the United States and the United Kingdom.
SOUTH AFRICA: TREASURY TABLES BILL TO TACKLE MONEY LAUNDERING
On 30 August, All Africa reported that the Anti-Money Laundering and Combating Terrorism Financing Amendment Bill has been put before parliament. It seeks to strengthen the country’s AML/CFT laws, and makes significant changes to many relevant laws related to fighting against financial crimes, after South Africa received a poor ratings assessment in its FATF mutual evaluation.
LATVIAN EXTRADITED TO US OVER ALLEGED SECURITIES FRAUD AND WIRE FRAUD IN CRYPTOCURRENCY SCHEME
A news release from US DoJ on 26 August advised that Ivars Auzins, a citizen of Latvia, had been extradited to the US on a 6-count indictment charging him with wire fraud, securities fraud, and conspiracies to commit wire fraud and securities fraud in connection with the operation of 8 companies that purported to offer, invest in or mine digital assets.
UK: SUSPECTED CRYPTOCURRENCY SCAM COMPANY SHUT DOWN
On 26 August, the Insolvency Service issued a news release advising that Micasa WW Ltd, together with Remultex Ltd, have been wound up by the High Court in the public interest, and the Official Receiver has been appointed liquidator of the companies. The company had been identified as potentially involved in a cryptocurrency scam, although the lack of accounting records meant it was not possible to verify whether its business was legitimate trading activity. The company had been identified as potentially involved in a cryptocurrency scam, although the lack of accounting records meant it was not possible to verify whether its business was legitimate trading activity. It and associated Remultex Ltd both received UK Government Bounce Back Loans during the Covid crisis.
CORPORATE DUE DILIGENCE REVIEW: EU DIRECTIVE AND THE GERMAN SUPPLY CHAIN ACT (LKSG) COMPARED
On 24 August, a post from the CRI Group compared the current LkSG requirements in Germany and those of the EU proposed Directive on Corporate Sustainability Due Diligence. It says that the core elements of the German LkSG and EU Directive are similar in several ways, which demand businesses conduct due diligence obligations towards their activities and supply chains on an ongoing basis. It highlights and explains one difference between the two.
ISIS AND AL-QAEDA ON THE MOVE IN AFRICA, INTENT ON SPREADING THEIR INFLUENCE AND JIHADIST IDEOLOGY
On 29 August, an article from Homeland Security Today says that the 2 groups remain the most active terrorist groups in the world. ISIS-Core is still active in Iraq and Syria. ISIS-affiliated groups also are active in the Philippines, Afghanistan, and Pakistan and even more so in Africa. Groups affiliated with al-Qaeda are active primarily in the Middle East and Afghanistan but have made significant forays into Africa. It says that both groups are intent on spreading their influence and jihadist beliefs and have made Africa the new epicentre for jihadist violence.
3 REASONS WHY THE AGREEMENT ALLOWING INSPECTION OF CHINESE COMPANIES RECORDS IN HONG KONG MAY NOT HAVE CHANGED THINGS
On 30 August, a Client Alert from WilmerHale follows the announcement from the US Public Company Accounting Oversight Board (PCAOB) that it has entered into a Statement of Protocol with the China Securities Regulatory Commission (CSRC) and the Ministry of Finance of the People’s Republic of China (PRC). The Statement of Protocol establishes a framework for the PCAOB to inspect and investigate registered public accounting firms in the PRC and Hong Kong, including all work papers related to audits of US-listed Chinese companies.
RUSSIAN E-COMMERCE STORE OPENS TURKISH OFFICE TO HELP GOODS FLOW TO HOME MARKET
On 30 August, EurActiv reported that Russian e-commerce company Ozon has said that it would open a local office in Turkey and make it easier for consumers to make cross-border orders, helping Russian shoppers to buy goods directly from Turkish sellers on its platform.
CROATIAN OIL COMPANY HIT BY RECORD FINANCIAL EMBEZZLEMENT
On 30 August, OCCRP reported that 5 people have been accused of defrauding Croatia’s main oil and gas company INA of more than a billion Croatian kunas ($133 million) by reselling the company’s gas abroad for 10 times the purchase price and keeping the difference for themselves.
CYBERATTACKS HIT MONTENEGRO’S STATE INFRASTRUCTURE
On 30 August, OCCRP reported that Montenegrin officials have announced their plan to establish a specialised Cyber Security Agency following a series of cyberattacks which targeted nation’s government digital infrastructure, and it will be drafting a new law on information security.
SEC CHARGES ADVISORY FIRM AND EXECUTIVES WITH DEVISING AN ELABORATE SCHEME TO DEFRAUD CLIENTS OUT OF MORE THAN $75 MILLION
On 30 August, a release on Mondo Visione said that the SEC has charged 2 North Carolina-based executives and their Malta-based registered investment adviser, Standard Advisory Services Limited, for defrauding clients out of more than $75 million through undisclosed transactions that benefited themselves and their companies.
CAYMAN ISLANDS RESTRUCTURING OFFICER (RO) REGIME COMES INTO FORCE ON 31 AUGUST
On 30 August, Appleby reported that the new regime will allow debtors to file in the Cayman Islands court to request the appointment of an RO, and obtain an immediate stay on unsecured creditor action, without the need to file a winding up petition. The article provides a brief overview of the key features of the regime as we all as a short video.
US: COURT LIMITS REACH OF FCPA ANTI-BRIBERY PROVISIONS CHARGED UNDER AGENCY PRINCIPLES
On 30 August, a Client Alert from WilmerHale reported on a long-running criminal action that holds significant implications for the reach of the FCPA over foreign individuals and companies.The court held that Lawrence Hoskins, a foreign national who previously worked for a UK subsidiary of Alstom SA, a global corporation headquartered in France, was not acting as an “agent” of a separate US subsidiary of Alstom SA that hired consultants to bribe Indonesian government officials. It is said that the decision will place renewed focus on gathering and assessing evidence associated with the fact-intensive inquiry required to establish agency in applicable cases.
On 30 August, OFSI posted on its blog a piece on what companies’ sanctions reporting obligations are and how they can be met. At the same time, HM Treasury reported that OFSI has updated Chapter 5 (‘Your reporting obligations to OFSI’) of its general guidance to reflect a change following new regulations which, from 30 August, extend the definition of ‘relevant firms’ that have financial sanctions reporting obligations to cryptoasset exchange providers and custodian wallet providers. Chapter 2 of the general guidance (‘Who is subject to financial sanctions’) has been updated.
The Australian Payments Network has produced this report, which included data showing that fraud on lost and stolen cards increased by 9.3% to $28.9 million; counterfeit/skimming fraud fell by more than 50% to $5.5 million; and card-not-present (CNP) fraud increased by 7.6% to $452 million. However, in 2021, while card payments grew by 8.0% to $865 billion and online spending by 8.2% to $53 billion, the incidence of all card fraud grew at a slower pace, by 5.7% to $495 million for the year. The rate of fraud on Australian card payments in 2021 was steady at 57.3 cents per $1,000 of spending, compared to 58.6 cents in 2020. The payment fraud statistics for 2021 are detailed on a separate paper.
On 30 August, Swissinfo reported that a report from the Swiss Federal Audit Office (SFAO) says that Swiss legislation is lagging behind in the fight against money laundering, and “seldom anticipates developments at international level”, and that its audits have “revealed weaknesses and, hence, financial and reputational risks for the Swiss authorities”. It points particularly to the slowness of courts dealing with economic crimes cases and “the low dissuasive effect of criminal sanctions and legal costs”. The Office of the Attorney General (OAG) said it shared the SFAO’s concerns.