OTHER THINGS YOU MAY HAVE MISSED – SEPTEMBER 29

29 SEPTEMBER 2022

NEW ZEALAND: CRIMINAL PROCEEDS (RECOVERY) AMENDMENT BILL INTRODUCED

On 23 September, Wolter Kluwer New Zealand published an article saying that this Bill was introduced into Parliament on 6 September, and that it would enable the High Court to make a disclosure of source order, in relation to property to which a restraining order applies if the respondent is overseas – if satisfied that there are reasonable grounds to believe that the property concerned is “tainted” property.  It also closes an unintended loophole in the 2009 Act re the KiwiSaver scheme.

https://iknow.cch.co.nz/news/zntxtnewsUio3557443sl1383206744/criminal-proceeds-recovery-amendment-bill-introduced 

UK: IR35 RULES TO BE REVERSED FROM APRIL 2023

On 27 September, Browne Jacobson LLP reported that, hidden in the recent “mini-Budget”, was news that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 will be scrapped from April 2023.  From April 2023, the rules will be reversed and the contractor (and the business engaging the contractor) will be responsible for determining the tax status of an engagement. 

https://www.brownejacobson.com/training-and-resources/resources/blogs/2022/09/ir35-rules-to-be-scrapped-from-april-2023 

OPINION: WHY CRYPTO BUSINESSES NEED ANTI-MONEY LAUNDERING REGULATIONS

On 21 September, an Opinion piece from the World Economic Forum made this argument, saying that it would increase trust in crypto.

https://www.weforum.org/agenda/2022/09/why-crypto-businesses-need-anti-money-laundering-regulations 

RUSSIA IS WEAPONISING ITS DATA LAWS AGAINST FOREIGN OPPONENTS

On 27 September, Tech Stream carried an article saying that a move against the Jewish Agency for Israel is the latest example of the Kremlin using laws governing online life in Russia to cement power offline, and its deployment against a group with little to no meaningful technology operation illustrates how those laws are being weaponised against groups viewed as a threat to the governing regime.  Its growing frequency underscores that Moscow’s use of online laws to rein in civil society shows no sign of relenting, and, if anything, is only growing more creative.  

https://www.brookings.edu/techstream/russia-is-weaponizing-its-data-laws-against-foreign-organizations/ 

SOUTH KOREA TRIPLES ARMS EXPORTS IN 2 YEARS

On 29 September, Nikkei Asia reported that this rise is fuelled by the country’s ability to tailor its offering to the threat the customer country is facing.  Defence sales doubled to $7 billion in 2021 and are expected to exceed $10 billion this year.

https://asia.nikkei.com/Business/Aerospace-Defense/South-Korea-triples-arms-exports-in-2-years-on-tailored-sales-pitches 

WEBINAR: CROSS-BORDER FRAUD: DUBAI TO BVI VIA LONDON

On 27 September, HFW released this hour-long video in which a panel of litigation experts focus on the increase of cross-border fraud in Dubai, the BVI and London, the far-reaching impact of cross-border fraud, as well as the role each region plays. Taking aspects from real world case studies, the team considers the systemic nature of this type of fraud, how it is so easily conducted and the repercussion in relation to litigation proceedings.

https://www.mondaq.com/uk/criminal-law/1234474/webinar-cross-border-fraud-dubai-to-bvi-via-london

PANAMA: ODEBRECHT CORRUPTION HEARING ENDS – JUDGE HAS 30 DAYS TO RULE

On 29 September, Newsroom Panama reported that the huge corruption hearing, involving scores of defendants, including 2 ex-Presidents, has ended.  The judge will now have up to 30 days to decide if the 49 defendants are to be prosecuted.

https://www.newsroompanama.com/news/odebrecht-hearing-ends-judge-has-30-days-to-rule

FRANCE ORDERS JAIL TIME FOR 2 MEN CHARGED WITH FUNDING TERRORISM IN SYRIA WITH CRYPTO

On 19 September, Coindesk reported that French authorities had finalised prison sentences for 2 men who were arrested on charges of funding terrorism in Syria via cryptocurrencies.  Arrested in 2020, they were part of a network that was accused of having financed “jihadists” in Syria using crypto between 2018 and 2020, with the amount transferred via crypto estimated to be around €280,000.

https://www.coindesk.com/policy/2022/09/19/france-orders-jail-time-for-2-men-charged-with-funding-terrorism-in-syria-with-crypto-report/

MALI SAYS IT WILL NOT RESPECT REGIONAL SANCTIONS ON GUINEA

On 29 September, Devdiscourse reported that ECOWAS has imposed sanctions on Guinea’s ruling junta for taking too long to organise elections and restore democracy after seizing power last year. The measures include freezing junta members’ financial assets and barring them from travelling to other countries in the region.  However, Mali does not respect and will not apply sanctions imposed on its neighbour – and would, if necessary, take measures to assist in order to counteract the effect of the sanctions. 

https://www.devdiscourse.com/article/politics/2195310-mali-says-it-will-not-respect-regional-sanctions-on-guinea

HONG KONG: COUPLE ARRESTED FOR SMUGGLING MARK SIX LOTTERY TICKETS TO CHINA AND MACAU

On 29 September, The Standard reported that Customs officers had arrested a couple on suspicion of smuggling HK$330,000 worth of Mark Six lottery tickets.  They seized 16,000 tickets suspected of being smuggled to China and Macau.

https://www.thestandard.com.hk/breaking-news/section/4/195262/Couple-arrested-for-smuggling-Mark-Six-lottery-tickets

INDIA: DOES THE ENFORCEMENT DIRECTORATE HAVE TOO MUCH POWER?

On 29 September, an article in the India Business Law Journal asked this question, saying that fears of raids and asset seizures have turned the Directorate of Enforcement into a veritable bogeyman for “India Inc”.

https://law.asia/indian-enforcement-directorate-power/

CZECH REPUBLIC: AMENDMENT TO THE ACT ON REGISTRATION OF ULTIMATE BENEFICIAL OWNERS (UBO)

On 28 September, an article from Bird & Bird said that, on 1 October, an amendment to the Act on Registration of UBO will come into force; and asks what does this mean and how can it affect your business?

https://www.twobirds.com/en/insights/2022/czech-republic/amendment-to-the-act-on-registration-of-ultimate-beneficial-owners

IRELAND MUST STEP UP ITS FIGHT AGAINST HUMAN TRAFFICKING

On 28 September, a news release from the Council of Europe advised that its Group of Experts on Action against Trafficking in Human Beings (GRETA), in its latest evaluation report, had urged authorities in Ireland to take further action against human trafficking, notably by improving prosecution of human traffickers and providing specialised shelters and compensation for victims.  On the other hand, the report shows that the total number of presumed trafficking victims in Ireland fell from 103 in 2017 to 44 in 2021. 

https://www.coe.int/en/web/portal/-/ireland-must-step-up-its-fight-against-human-trafficking

12 CHARGED AS PART OF NCA INVESTIGATION INTO CASH SMUGGLING FROM THE UK TO DUBAI

A news release from NCA on 28 September advised that 12 people have been charged as part of a major NCA investigation into the smuggling of millions of pounds in criminal cash out of the UK.  All 12 are suspected of being cash couriers, responsible for transporting large amounts of money in suitcases on flights from the UK to Dubai.

https://www.nationalcrimeagency.gov.uk/news/twelve-charged-as-part-of-nca-investigation-into-cash-smuggling-from-the-uk-to-dubai

AUSTRALIA: BILL INTRODUCED TO FORM A NATIONAL ANTI-CORRUPTION COMMISSION

On 29 September, Jurist reported that the commission will be able to investigate ministers, parliamentarians, parliamentary staff, statutory office holders and all government employees and contractors for criminal as well as non-criminal corruption offences.  The Bill will include protections for whistleblowers and journalists who refer cases to the commission.

https://www.jurist.org/news/2022/09/australia-parliament-introduces-bill-to-form-national-anti-corruption-commission/

EUROPOL: HUNGARIAN SEX TRAFFICKING GANG DISMANTLED IN BERLIN

On 29 September, an article from OCCRP reported that German and Hungarian authorities had arrested the alleged kingpins of a Hungarian gang of traffickers for sexual exploitation, dismantling the criminal network.  3 of the gang members were arrested in both cities, including a Hungarian couple in Berlin – the suspected heads of the criminal operation.  According to the EU police authority, the criminal gang had been active since 2017, recruiting young Hungarian women from vulnerable socioeconomic backgrounds to be exploited sexually in various streets of Berlin which were controlled by the criminal circle.

https://www.occrp.org/en/daily/16820-europol-hungarian-sex-trafficking-gang-dismantled-in-berlin

FRENCH LAW ENFORCEMENT DISMANTLE AN ORGANISED CRIME GROUP AND SEIZE ILLEGAL MEDICINES AS WELL AS FAKE PRESCRIPTIONS

A news release from Europol on 29 September advised that the organised crime group had specialised in acquiring psychotropic drugs containing the Pregabalin agent by using stolen or faked prescriptions in various EU Member States. Authorities seized fake Belgian identity documents, illegal medicines, fake prescriptions and cash. 

https://www.europol.europa.eu/media-press/newsroom/news/medicine-traffickers-faced-undesirable-side-effects

FIGHTING ILLEGAL LOGGERS ON THE GUATEMALA-MEXICO BORDER

On 29 September, Insight Crime published a report from the jungles of Petén, a department in the extreme north of Guatemala.  InSight Crime joined the convoy of park rangers on both sides of the border, spending 2 weeks deep inside the Mayan jungle to document the incursions of criminal groups.  It explains that Granadillo, used for furniture and other luxury products despite being a protected species, is native to Mexico and Central America and can grow up 35 meters in height.

https://insightcrime.org/jungle-patrol-fighting-illegal-loggers-guatemala-mexico-border/

STRATEGIC LAWSUITS AGAINST PUBLIC PARTICIPATION (SLAPP)

On 29 September, a briefing from the EU Parliament Research Service explains that a SLAPP is an abusive or meritless lawsuit filed against someone for exercising their political rights or freedom of expression in relation to matters of public interest. The purpose of a SLAPP is not to seek justice but to intimidate, silence and drain the financial and physical resources of the targeted victims.  On 27 April, the European Commission put forward a proposal for a Directive aimed at protecting persons who engage in public participation against manifestly unfounded or abusive civil court proceedings with cross-border implications, which is now being analysed by the co legislators. The proposal is accompanied by a recommendation to the Member States setting out guidance to address purely domestic cases of SLAPPs.

https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/733668/EPRS_BRI(2022)733668_EN.pdf

US DoJ ANNOUNCES TOTAL DISTRIBUTION OF OVER $4 BILLION TO VICTIMS OF MADOFF PONZI SCHEME

A release on Mondo Visione on 28 September advised that the DoJ had announced that the Madoff Victim Fund (MVF) began its eighth distribution of approximately $372 million in funds forfeited to the US Government in connection with the Bernard L Madoff Investment Securities LLC (BLMIS) fraud scheme. 

https://mondovisione.com/media-and-resources/news/us-justice-department-announces-total-distribution-of-over-4-billion-to-victims/

JAPAN BANS CHEMICAL WEAPONS-RELATED GOODS TO RUSSIA

On 25 September, Yahoo Finance reported that Japan has decided to ban exports of chemical weapons-related goods to Russia in an additional sanction over its invasion of Ukraine.  It also added 21 Russian organisations such as science labs as the target of existing export bans.

https://finance.yahoo.com/news/japan-bans-chemical-weapons-related-025052149.html

TORNADO CASH SANCTIONS ARE UNDULY “CREATIVE” WITH THE FIRST AMENDMENT

On 29 September, a post on Lawfare made this argument, saying that OFAC sanctioning of autonomous code controlled by no legal person ran headlong into the established precedent that code is speech and protected by the First Amendment.  It is argued that OFAC is on firm ground when it sanctions people or property, including cryptocurrency, involved in criminal enterprises like the North Korean Lazarus Group – but that OFAC went too far in sanctioning code.

https://www.lawfareblog.com/tornado-cash-sanctions-are-unduly-creative-first-amendment

THERE ARE NOW 15 FCPA REPEAT OFFENDERS

On 29 September, a post on the always interesting FCPA Blog reported that, so far this year, 2 FCPA enforcement actions have involved companies that resolved previous FCPA violations, and that the number of FCPA recidivists rises to 15.  It calculates that, with 15 repeat offenders, the recidivism rate for all corporate FCPA defendants is now about 6.1%.

https://fcpablog.com/2022/09/29/there-are-now-15-fcpa-repeat-offenders/

ISLE OF MAN: YEMEN AND RUSSIA SANCTIONS UPDATES

On 29 September, the Isle of Man published 2 news releases advising of updates to the 2 sanctions regimes, following notification by the UK of such changes to its lists.

https://www.gov.im/news/2022/sep/29/financial-sanctions-yemen/

https://www.gov.im/news/2022/sep/29/financial-sanctions-russia/

ECOWAS HAS ANNOUNCED THE IMPOSITION OF DIPLOMATIC, ECONOMIC AND FINANCIAL SANCTIONS ON GUINEA

On 29 September, the EU Sanctions blog reported on sanctions imposed by the Economic Community of West African States (ECOWAS), and it has given the Guinean authorities 1 month to accept a reasonable transition period. If this is not met, more severe sanctions will be imposed.

https://www.europeansanctions.com/2022/09/ecowas-imposes-guinea-sanctions/

https://www.visualcapitalist.com/top-20-countries-with-the-most-ultra-wealthy-individuals/

https://www.statista.com/chart/11857/the-global-pyramid-of-wealth/

MONTENEGRO INVESTIGATES RUSSIANS AND MONTENEGRINS ON SUSPICION OF SPYING

On 29 September, EurActiv reported that authorities in Montenegro have launched an investigation against an unspecified number of people on charges of espionage.  They have detained 6 Russian diplomats, 30 Russian nationals with temporary residence permits, and 2 Montenegrins on suspicion of espionage.

https://www.euractiv.com/section/global-europe/news/montenegro-investigates-russians-montenegrins-on-suspicion-of-spying/

SEC CHARGES MAN FOR DEFRAUDING INVESTORS OUT OF MILLIONS OF DOLLARS BY POSING AS HEDGE FUND BILLIONAIRE

On 29 September, a release on Mondo Visione advised that the SEC had charged Justin Costello for using a false persona, as a Harvard-educated military veteran and hedge fund billionaire, to defraud investors out of millions of dollars. The SEC also charged Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.

https://mondovisione.com/media-and-resources/news/sec-charges-man-for-defrauding-investors-out-of-millions-of-dollars-by-posing-as/

SEC: DELOITTE’S CHINESE AFFILIATE TO PAY $20 MILLION PENALTY FOR ASKING AUDIT CLIENTS TO CONDUCT THEIR OWN AUDIT WORK

On 29 September, a release on Mondo Visione advised that the SEC has charged Deloitte Touche Tohmatsu Certified Public Accountants, the Chinese affiliate of the Deloitte global network of accounting firms, with failing to comply with fundamental US auditing requirements in its component audits of US issuers and its audits of foreign companies listed on US exchanges. Deloitte-China agreed to settle the charges by paying a $20 million penalty and agreeing to extensive remedial measures.  The SEC order finds that, in the course of numerous audits over multiple years, Deloitte-China personnel asked clients to select their own samples for testing and to prepare audit documentation purporting to show that Deloitte-China had obtained and assessed the supporting evidence for certain clients’ accounting entries. This created the appearance that Deloitte-China had conducted the required testing of clients’ financial statements and internal controls when there was no evidence in the audit file that it had in fact done so.

https://mondovisione.com/media-and-resources/news/sec-deloittes-chinese-affiliate-to-pay-20-million-penalty-for-asking-audit-cl/

US: FINRA SPELLS OUT PENALTIES FOR AML VIOLATIONS

On 29 September, the Wall Street Journal reported that the Financial Industry Regulatory Authority, Wall Street’s self-regulator, has for the first time provided guidance to its member broker-dealers on the potential penalties it could impose for violating rules intended to prevent money laundering.

https://www.wsj.com/articles/finra-spells-out-penalties-for-anti-money-laundering-violations-11664488272

https://www.finra.org/sites/default/files/Sanctions_Guidelines.pdf

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US CHARGES RUSSIAN BILLIONAIRE OLEG DERIPASKA WITH VIOLATING SANCTIONS

On 29 September, the Guardian reported that Oleg Deripaska, 54, one of Russia’s most powerful oligarchs, who previously had deep links to British establishment figures, has been indicted by the US DoJ for criminal sanctions violations.  The allegations include an elaborate and failed attempt by Deripaska and his associates to shuttle his pregnant girlfriend to the US so that she could give birth there and secure American citizenship for their second child.  It is alleged that Deripaska evaded sanctions in a variety of ways, using corporate shell companies to hide his activities. 

https://www.theguardian.com/world/2022/sep/29/us-charges-russian-billionaire-oleg-deripaska-sanctions

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EU TAKES MALTA TO COURT OVER ‘GOLDEN PASSPORTS’

On 29 September, EurActiv reported that the European Commission has formally taken Malta to the EU’s highest court for its cash-for-passports scheme that endows Maltese citizenship on wealthy third-country citizens in return for money and investments.The Commission said it considers the scheme a violation of EU law and has long called on Malta to withdraw the scheme over fears of money laundering and citizenship being granted to high-risk individuals.  It notes that, in March, the Commission issued a recommendation saying that EU Member States “still operating investor citizenship schemes need to terminate them immediately”.

https://www.euractiv.com/section/justice-home-affairs/news/eu-takes-malta-to-court-over-golden-passports/

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OFAC TARGETS FINANCIAL AND SHIPPING FACILITATORS OF IRANIAN PETROCHEMICALS AND PETROLEUM SALES

On 29 September, OFAC announced that it has sanctioned an international network of companies involved in the sale of hundreds of millions of dollars’ worth of Iranian petrochemicals and petroleum products to end-users in South and East Asia.  This action targets Iranian brokers and several front companies in the UAE, Hong Kong, and India that have facilitated financial transfers and shipping of Iranian petroleum and petrochemical products.  The listing includes one vessel, the Gas Allure.

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220929

https://home.treasury.gov/news/press-releases/jy0980

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DETAILS OF AN EIGHTH PACKAGE OF EU SANCTIONS ON RUSSIA

On 29 September, the EU Sanctions blog reported on the announced details of a further sanctions package following the “sham referenda” organised in occupied territories of Ukraine and movement toward annexation of occupied regions.  It includes additional import and export bans; a ban on EU nationals sitting on governing bodies of Russian state-owned enterprises; a “legal basis” for the price cap on Russian oil; provision to list people who have circumvented EU sanctions; the extension of current restrictions on Crimea, Donetsk and Luhansk to all non-government-controlled areas of Ukraine; and further targeted sanctions on persons and entities.

https://www.europeansanctions.com/2022/09/eu-to-adopt-8th-package-of-russia-sanctions/

https://ec.europa.eu/commission/presscorner/detail/en/statement_22_5856

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UK LIBYA SANCTION GUIDANCE UPDATED

On 29 September, HM Treasury issued an updated version of its sanctions guidance.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1108117/Libya_guidance_September_2022.pdf

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FINCEN ISSUES FINAL RULE FOR BENEFICIAL OWNERSHIP REPORTING

On 29 September, FinCEN has published a Final Rule establishing a beneficial ownership information reporting requirement, pursuant to the bipartisan Corporate Transparency Act (CTA).  The Rule will require most corporations, limited liability companies, and other entities created in or registered to do business in the US to report information about their beneficial owners to FinCEN.  Designed to protect US national security and strengthen the integrity and transparency of the US financial system, the Rule is designed to help to stop criminal actors, including oligarchs, kleptocrats, drug traffickers, human traffickers, and those who would use anonymous shell companies to hide their illicit proceeds.  The Rule is effective from 1 January 2024.  Reporting companies created or registered before that date, will have 1 year (until 1 January 2025) to file their initial reports, while reporting companies created or registered after 1 January 2024, will have 30 days after creation or registration to file their initial reports.  Once the initial report has been filed, both existing and new reporting companies will have to file updates within 30 days of a change in their beneficial ownership information.  FinCEN says that it is committed to implementing these statutory obligations in a robust manner while minimising burdens on reporting companies.

https://www.fincen.gov/news/news-releases/fincen-issues-final-rule-beneficial-ownership-reporting-support-law-enforcement

https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet

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JOINT BANKING INDUSTRY LETTER TO EU PARLIAMENT ON PROPOSED LOWERING OF BENEFICIAL OWNERSHIP THRESHOLDS

On 27 September, the European Banking Federation advised that the European Banking Federation (EBF), the European Savings and Retail Banking Group, the European Association of Co-operative Banks, the European Association of Public Banks, and the European Fund and Asset Management Association sign a joint letter on the EU Parliament’s proposal to lower the threshold for determining beneficial ownership to 5%.  They welcome the European Commission’s proposal to introduce a new harmonised Anti-Money Laundering Regulation – but do not agree that reducing the percentage threshold that serves as an indication of ownership of a legal entity from 25% to 5% would reduce opportunities for transparency rules to be circumvented.

https://www.ebf.eu/ebf-media-centre/joint-letter-lowering-beneficial-ownership-thresholds/

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JERSEY PUBLISHES NATIONAL STRATEGY FOR COMBATTING FINANCIAL CRIME

On 28 September, Jersey advised that 2 key documents have been published which set out Jersey’s approach to combatting financial crime – the National Strategy for Combatting Money Laundering, the Financing of Terrorism and the Financing of Proliferation of Weapons of Mass Destruction and the National Statement on Financial Services and Financial Crime: Activities, Risk Appetite and Mitigation.

https://www.gov.je/News/2022/Pages/JerseyStrategyOnMoneyLaundering.aspx

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