It is reported that dengue has so far this year caused the death of 1person, made 3,831 sick, and hospitalised 380 – with 10 having the disease in serious form. The health ministry says that the circulation of 2 of the 4 dengue serotypes that exist, together with the increase in hospitalised patients, creates the favourable environment for an “explosion of cases of severe dengue” in some health regions of the country.
24 AUGUST 2022
ISLE OF MAN: RUSSIA SANCTIONS – 1 ENTRY REMOVED, 42 OTHERS CORRECTED OR AMENDED
On 24 August, the Isle of Man followed the UK in announcing that Mikhail Vladimirovich RAZVOZHAYEV had been delisted, and that 1 other entry on the Russia sanctions list had been corrected, and 41 other entries amended.
CHINA’S NEW DATA SECURITY LAW IN US DISCOVERY DISPUTES
On 23 August, a post on the Transnational Law Blog was concerned with discovery litigation [disclosure to us Brits] regarding the impact of China’s Data Security Law (DSL), saying that it took effect less than a year ago in September 2021, and litigation has steadily increased in US courts, and is likely to continue to increase over the coming months and years. Part of the reason is uncertainty, and while it is anticipated that the Chinese government will promulgate further regulations to implement the DSL, the timeframe is unclear. The post focuses specifically on the DSL and its intersection with US discovery disputes.
NEWSLETTER: MONEY LAUNDERING TECHNIQUES 5
On 24 August, the latest edition of this newsletter looks at the Moldovan “Russian Launderette” and its UK connection, cryptocurrency mixing services, and the use of digital advertising to hide dirty money.
The latest infographic from the Information Fusion Centre showing the findings of its mid-year report.
CHINA HALVES THE MONETARY THRESHOLDS FOR PROSECUTING CRIMES OF OFFERING OR ACCEPTING BRIBES INVOLVING NON-STATE FUNCTIONARIES
On 23 August, DLA piper reported that China recently revised the filing standards for prosecuting an array of white-collar crimes, saying that this signals China’s determination to crack down on bribery and corruption.
CANADA RELEASES CONSULTATION PAPER TO STRENGTHEN THE TAX GENERAL ANTI-AVOIDANCE RULE
On 19 August, an article from Borden Ladner Gervais LLP says that Canada’s Department of Finance has released its highly anticipated consultation paper on the General Anti-Avoidance Rule (GAAR). Described as “a targeted and practical diagnostic on the GAAR”, it follows through on the government’s 2020 Fall Economic Statement commitment to improve tax fairness by consulting with Canadians on how to strengthen the GAAR. A number of significant options are discussed in the consultation paper, and the government intends to add an explicit economic substance rule to the GAAR. It is looking at various alternative ways to test whether a transaction lacks economic substance, and where a transaction is found to be lacking in economic substance, at various alternative consequences that could reasonably follow.
UK: REVIEW INTO HYBRID AND CROSS-BORDER WORKING
On 10 August, Baker McKenzie reported that the Office of Tax Simplification (OTS) has published a scoping document for an upcoming review by it into hybrid and distance working, including working across international borders and in multiple countries. The review is being set up against a backdrop of more employees working from home (or other residential accommodation) in different jurisdictions to their employer.
RUSSIA’S WAR LEAVES EUROPE WITH CHINA RAIL ROUTE DILEMMA
On 19 August, Nikkei Asia reported that moving goods through Russia used to comprise 60% of business for Rail Bridge Cargo, a European logistics company, until President Vladimir Putin launched his invasion of Ukraine. Rail Bridge Cargo announced it would stop using the trans-Russia routes, save for humanitarian supplies, food and medicine. Instead, it looked southward to the so-called Middle Corridor, a key part of China’s plans to build a new, iron silk road from Chongqing to Duisburg in Germany, but the underdeveloped route was not ready for a sudden influx of cargo.
JAPAN: THE MYSTERY OF SOFTBANK’S ZERO TAX BILL
On 20 August, Nikkei Asia reported that, for years, Japanese tax regulators have been grappling with a mystery that has also become their biggest headache: why does SoftBank Group — which became Japan’s most profitable company last year — pay so little tax? It has stayed clear of accusations of wrongful tax evasion, but it has been a target for regulators who have sought to close, in their eyes, loopholes the company has been exploiting legally to lower its tax bill. In 2020, a new set of rules was introduced, known as the “SoftBank tax rule”, to block a specific type of transaction that experts say helped SoftBank create billions of dollars in tax savings.
US OFFICIAL: NO EVIDENCE OF INDIAN COMPANIES CIRCUMVENTING SANCTIONS ON RUSSIA
On 24 August, Asianet reported that US Deputy Secretary of Treasury Wally Adeyemo has said there is “no evidence” of Indian companies circumventing the sanctions imposed on Russia following its invasion in Ukraine. Speaking to reporters, he said, “I’ve seen no evidence of Indian companies circumventing sanctions that have been placed on Russia”.
RUSSIAN DIAMONDS ARE QUIETLY FLOWING AGAIN AFTER SANCTIONS CHAOS
On 23 August, Bloomberg reported that the panic that gripped the diamond world this year is starting to unwind as sanctioned Russian mining giant Alrosa PJSC has quietly revived exports to near pre-war levels. Alrosa accounts for about a third of global rough-diamond supply, and the industry was thrown into turmoil as cutters, polishers and traders hunted for ways to keep buying from Russia while their banks couldn’t or wouldn’t finance payments, and the sudden shortage of stones sent diamond prices surging.
PHILIPPINES: BANK SECRECY LAW AMENDMENTS TO EXIT FATF GREY LIST
On 24 August, Business World reported that proposed changes to the Philippines’ bank secrecy law and regulating financial accounts will improve our defences against money laundering and cybercrime incidents, a central bank official said, which could help the country to an early exit from the FATF grey list.
FATF: WEBINAR ON BENEFICIAL OWNERSHIP TRANSPARENCY OF LEGAL PERSONS
On 23 August, FATF announced a webinar on 1 September in which a panel of experts with a global and domestic focus on enhancing beneficial ownership transparency 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.
THE TOP 5 INDUSTRIES TARGETED BY RANSOMWARE
On 24 August, a release on Mondo Visione said that after identifying and analysing 106 highly publicised ransomware attacks over the past 12 months, researchers have found that the education (15%), municipality (12%), healthcare (12%), infrastructure (8%), and financial (6%) sectors are the 5 most targeted by adversaries. The analysis reveals that ransomware attacks on educational institutions more than doubled compared to the previous year, while attacks on the healthcare and financial verticals tripled, and infrastructure-related attacks quadrupled.
WHERE IS CANNABIS LEGISLATION GOING IN GERMANY?
On 23 August, an article from CMS Law reviewed the situation, saying that recreational cannabis and cannabis for medicinal purposes must be strictly separated under German Law. Since 2017, it has been permitted to grow, sell and import cannabis for medicinal purposes in Germany. In contrast, cultivating of or trading with recreational cannabis is currently strictly prohibited.
14,000 ONLINE WHISTLEBLOWERS PROMPT HMRC CRACK DOWN ON FURLOUGH FRAUD
On 24 August, an article from Out-Law says that UK businesses have been warned to expect a crackdown on furlough fraud. HMRC has revealed that almost 14,000 whistleblowers had come forward with information about misuse of the scheme.
SHIPPERS UNLIKELY TO SEE LOWER INSURANCE PREMIUMS DESPITE LESSER INDIAN OCEAN PIRACY RISK
On 24 August, Hellenic Shipping News reported that shipowners and charterers carrying commodities in the Indian Ocean are unlikely to see lower insurance premiums in the near term despite industry bodies’ decision to remove the region’s High Risk Area, or HRA, status.
FORMER US NAVY OFFICIAL CONVICTED ON BRIBERY CHARGES TIED TO STEERING CONTRACTS FOR CASH AND BOOZE
On 22 August, Military.com reported that a former US Navy official responsible for logistics and transportation operations was convicted on charges of bribery and lying to investigators. Xavier Fernando Monroy, 64, was the former director of operations for the Navy’s Military Sealift Command in South Korea, was accused of soliciting and accepting bribes to direct Navy contracts to a private logistics company in exchange for money, meals, alcohol, and “the services of prostitutes”.
HUNDREDS OF TAIWANESE TRAFFICKED TO CAMBODIA AND HELD CAPTIVE BY TELECOM SCAM GANGS
On 23 August, the Guardian reported that police forces in Taiwan, China, Hong Kong, Macau, and Vietnam have launched major operations to rescue their citizens and shut down trafficking syndicates.
US AGREEMENT WITH NIGERIA TO REPATRIATE OVER $23 MILLION IN ASSETS STOLEN BY FORMER NIGERIAN DICTATOR GENERAL SANI ABACHA
On 23 August, a DoJ news release advised that approximately $23 million traceable to the corruption and money laundering of former Nigerian dictator Sani Abacha and his co-conspirators was seized by the US. It also says that the repatriation of $23 million reflects the Justice Department’s unwavering commitment to recover and return corruption proceeds laundered through the US financial system.
FOREIGN FIGHTERS IN UKRAINE: WHAT CONCERNS SHOULD REALLY BE ON THE AGENDA?
On 18 August, an article in Russia Matters says that the current picture of foreign fighters in Ukraine differs both from the Middle East and from the fighting in the country’s east during the “grey-zone” phase of the conflict with Russia that began in 2014. The article attempts to unpack some key points concerning foreign fighters in Ukraine.
PHILIPPINES: NUNS AMONG 16 CHARGED WITH TERRORISM FINANCING
On 15 August, ABS-CBN reported that 16 individuals, including nuns from the Rural Missionaries of the Philippines (RMP), have been charged with terrorism financing for allegedly providing funds to the Communist Party of the Philippines (CPP) and the New People’s Army (NPA). The charges were based on testimonies of 2 allegedly former CPP-NPA rebels.
PODCAST: THE CONGO’S COBALT RUSH
In the latest TRACE podcast, freelance journalist Nicolas Niarchos joins to discuss his excellent piece in the New Yorker: The Dark Side of Congo’s Cobalt Rush. He also describes his recent incarceration and that of his Congolese colleague, Jeef Kazadi, during their ongoing investigation in the DRC.
UK: OFFICE FOR NATIONAL STATISTICS (ONS) REPORT ON THE IMPACT OF SANCTIONS IN RESPONSE TO RUSSIA’S AGGRESSION AGAINST UKRAINE ON UK TRADE WITH RUSSIA
On 24 August, the EU Sanctions blog reported that the ONS had released this report for June 2022. Among the points made is that, while exports in general have fallen, export of chemicals to Russia increased slightly in June 2022, driven by an increase in exports of medicinal and pharmaceutical products, which are exempt from sanctions for humanitarian reasons. It also reported that there were no imports of fuels from Russia in June 2022 for the first time since records began.
WHAT THE UK’S UPDATED AML RULES MEAN FOR THE ART MARKET
On 24 August, an article in Apollo says that, arguably, the scope of those participants in the art market who are regulated for AML is not as wide as once thought, and the statutory obligations to conduct CDD are potentially not as onerous as anticipated. It refers to the HM Treasury-approved British Art Market Federation Guidance on Anti-Money Laundering (BAMF Guidance) and on 30 June, an updated version of the BAMF Guidance was published.
GOVERNMENT OF MEXICO CREATES STATE COMPANY TO EXPLOIT LITHIUM
On 24 August, La Estrella de Panama reported that the state company Lithium for Mexico follows reforms approved by the Mexican Congress by which lithium is ‘declared of public utility’.
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