3 OCTOBER 2022
ARMS-PRODUCTION CAPABILITIES IN THE INDO-PACIFIC REGION AND SELF-RELIANCE
On 3 October, SIPRI released this report which develops 3 indicators to give a score and regional ranking of self-reliance in arms production to 12 jurisdictions in the Indo-Pacific region: Australia, China, India, Indonesia, Japan, South Korea, Malaysia, Pakistan, Singapore, Taiwan, Thailand and Vietnam. It sets out to contributes to transparency with regard to levels of self-reliance in domestic arms production, allowing for an independent assessment of the region’s respective arms industries.
OBTAINING EVIDENCE FROM NON-PARTIES IN INTERNATIONAL ARBITRATION: A COMPARATIVE ANALYSIS
On 26 September, Wilkie Farr & Gallagher LLP published this analysis which surveys the relevant rules in some of the key international arbitration jurisdictions: England and Wales, Germany, Hong Kong, Singapore and the US, and concludes with some practical takeaways and advice.
SEC CHARGES COMPASS MINERALS FOR MISLEADING INVESTORS ABOUT ITS OPERATIONS
On 23 September, a news release from the SEC advised that it had settled charges against Canada-based Compass Minerals International Inc for misleading investors about a technology upgrade that the company claimed would reduce costs at its most significant mine, but in reality, had increased costs, and for failing to properly assess whether to disclose the financial risks created by the company’s excessive discharge of mercury in Brazil. The company has been ordered to pay $12 million to settle the charges.
UK: SRA MONEY LAUNDERING AUDIT OF SOLICITORS
On 30 September, Jonathan Bray Ltd published an article saying that AML has been a priority issue for the Solicitors Regulation Authority in recent years. Proactive AML supervision is designed to tighten AML standards across the profession. It also gives the SRA the data it needs to feed back to OPBAS (Office for Professional Body Anti Money Laundering). It contains advice for firms when selected for an audit.
A NEW JURISDICTIONAL GATEWAY IN ENGLAND & WALES PERMITTING SERVICE OF THIRD-PARTY DISCLOSURE ORDERS OUT OF THE JURISDICTION
On 30 September, an article from the chambers at Twenty Essex discussed new disclosure gateway 25 and what this means for international fraud litigation. It says that fraudsters engaged in rapid cross-border cyber and money transfer frauds have been outpacing developments in the legal system, making the process of tracing, securing and enforcing against assets difficult and expensive, and sometimes impossible. A new gateway took effect from 1 October, allowing the serving of Norwich Pharmacal Orders outside the jurisdiction.
CHANGES TO AML AND THE TRUST REGISTER – WHAT DOES THIS MEAN FOR EXISTING TRUSTS?
On 23 August, Ridley & Hall Solicitors in England published an article about changes which have introduced further reporting requirements on trustees by expanding the scope of the Trusts Register. In particular, it extended reporting duties to trustees of all non-excluded UK express trusts. This is an enormous change to the scope of the register and provides that it will now stretch to cover a lot of previously excluded family trusts. The requirements include that the trustees must list all beneficial owners and their details. Beneficial owners include the settlor, the trustees, the beneficiaries, the class of beneficiaries where individuals have not been determined, and any individual who has control over the trust.
US: CONSUMER COMPLAINTS ABOUT CRYPTO ARE ON THE RISE
On 30 September, the Wall Street Journal reported that the Consumer Financial Protection Bureau received 2,734 confirmed crypto-related consumer complaints against digital-asset-centric companies in its public database between 1 January 2020, and 26 August 2022. Consumer complaints about cryptocurrency have surged during an increase in its market volatility over the past 2 years, hitting not only crypto-trading platforms but also traditional financial institutions. Consumer complaints fielded by the CFPB range from fraud and scams to an inability to withdraw funds. Transaction-related problems topped the list of complaints, including issues with applications not working or placing orders.
ISLE OF MAN: RUSSIA SANCTIONS – 1 NEW NAME AND 2 CORRECTIONS
On 3 October, the Isle of Man confirmed amendments to the Russia sanctions list, as previously advised by the UK, including the addition of Elvira Sakhipzadovna NABIULLINA, Governor of the Central Bank of the Russian Federation.
RUSSIA SMUGGLING UKRAINIAN GRAIN TO HELP PAY FOR WAR
On 2 October, KTVZ reported that an investigation by The Associated Press and the PBS series “Frontline” has documented a sophisticated Russian-run smuggling operation that has used falsified manifests and seaborne subterfuge to steal Ukrainian grain worth at least $530 million. This involved tracking ships making more than 50 voyages carrying grain from Russian-occupied areas of Ukraine to ports in the Middle East.
UK: NOTICE TO EXPORTERS 2022/25 – OPEN GENERAL LICENCES UPDATED
On 30 September, the Department for International Trade advised that this notice advises of changes to open general licences including planned revocations of further open general export licences (OGEL). The ability to register for the 26 open general licences has been reinstated and these licences are now available for all exporters to register and use.
BURKINA FASO MILITARY STAGES COUP
On 2 October, Jurist reported that soldiers had appeared on state TV channel Radio Television Du Burkina to announce the removal of Lieutenant-Colonel Paul-Henri Sandaogo Damiba after he allegedly failed to stem a jihadist insurgency. The Economic Community of West African States (ECOWAS) “condemned in the strongest possible terms” the seizure of power by military officers.
BURKINA FASO COUP FUELS FEARS OF GROWING RUSSIAN MERCENARY PRESENCE IN SAHEL
On 3 October, the Guardian warned that Russian mercenaries may be poised for further expansion in Africa’s strategically important Sahel region after the latest coup d’etat in the region, western officials and analysts fear. The coup comes amid a new push by Russia to win influence and gain access to valuable raw materials in sub-Saharan Africa in recent months, after years of careful if opportunistic efforts across the continent.
US FEDERAL JUDGE HAS DISMISSED THE MEXICAN GOVERNMENT’S $10 BILLION LAWSUIT AGAINST MAJOR US GUN MANUFACTURERS TO HOLD THEM RESPONSIBLE FOR ILLEGAL TRAFFICKING OF GUNS INTO MEXICO
On 1 October, Jurist reported that the judge held that the claims of Mexico did overcome the broad protection offered by the Protection of Lawful Commerce in Arms Act to the firearm industry. The law shields gun manufacturers from civil liability arising as a result of criminal or unlawful misuse of their products.
UK LAW FIRMS BANNED FROM HANDLING TRANSACTIONAL WORK FOR RUSSIANS
On 3 October, Legal Futures reported that UK law firms will be unable to provide “transactional legal advisory services” to Russians after the Government ratcheted up the sanctions regime yet further. Foreign Secretary James Cleverly said Russia would also lose access to IT consultancy, architectural, engineering, advertising and auditing services.
BANGLADESH: NEW POLICE CHIEF IS SANCTIONED BY THE US
On 3 October, Eurasia Review reported that Bangladesh’s new police chief – Inspector General of Police Chowdhury Abdullah Al-Mamun – is a US-sanctioned former head of the elite security unit Rapid Action Battalion, which the US also sanctioned last December saying it was responsible for serious human rights abuses.
CAMPAIGNERS QUERY UK GOVERNMENT’S ABILITY TO IDENTIFY OLIGARCHS’ ASSETS
On 3 October, the Guardian reported that the UK Government’s ability to investigate the true ownership of properties has come into question after researchers found £700 million of luxury homes previously linked to sanctioned oligarchs are not flagged for asset freezes.
CHINA FOREX REGULATOR WARNS AGAINST ILLEGAL MONEY OUTFLOWS
On 29 September, Yahoo Life reported that China’s foreign exchange regulator had named and shamed 10 banks that had assisted illegal capital outflows, vowing to crack down on fake forex transactions in authorities’ latest effort to stabilise the sliding yuan. It referred to money flowing overseas illegally through bank businesses such as offshore loans, trade finance, and outbound investment. It is said that publishing the 10 cases is aimed at sending a warning to market players.
$18 BILLION DEPOSITED IN LEBANESE BANKS BY IRAQI POLITICIANS AND GOVERNMENT AGENCIES HAS ‘EVAPORATED’
On 28 September, the Jerusalem Post reported claims that more than $18 billion belonging to Iraqi politicians, the Iraqi government, and the Kurdistan Regional Government of Iraq have “evaporated” due to the banking crisis in Lebanon.
HOW A FAILING US LAW ALLOWED A BRAZILIAN FLOORING GIANT TO FLOOD THE US WITH MILLIONS OF DOLLARS WORTH OF SUSPECT WOOD
A report from Earthsight claimed about a year-long investigation into Brazil’s largest flooring exporter, Indusparquet. Indusparquet is charged with using fixers to illegally grease the wheels of its timber supply chains. We also discovered it has sourced wood from suppliers fined millions for illegal practices to make its products. The flooring is found all over the US. It is charged in bribery lawsuits in 2 different parts of Brazil, relating to its use of public officials to gain access to timber supplies. The company is Brazil’s largest flooring exporter and the US accounts for 90% of its exports, while 4% is destined for Europe. The article says that, being slapped with record fines in 2016 for importing illegal wood under the Lacey Act (which bans it) and being closely watched by the US Government since, big-box store LL Flooring (formerly known as Lumber Liquidators) has been one of Indusparquet’s biggest US clients in recent years; and another major US retail chain, Floor & Decor, was Indusparquet’s single largest US customer during the period that court cases cover.
US FAILS IN BID TO EXTRADITE BRIT FOR HELPING NORTH KOREA EVADE SANCTIONS WITH CRYPTOCURRENCY
On 30 September, The Record reported on the US having failed in a bid to extradite a British citizen who it accused of helping North Korea evade sanctions through cryptocurrency. Christopher Emms, who sought to fight his case in the UK, had been detained in Saudi Arabia since February after the FBI issued an Interpol Red Notice for his arrest. He has since fled to Russia.
THE QUAD ISLAND FORUM OF FIU SIGNS MoU WITH THE UK NCA
On 3 October, a news release from the Government of Gibraltar advised that the Financial Intelligence Units from Gibraltar, Guernsey, Isle of Man and Jersey have recently signed a MoU with the NCA. The aim of this MoU is to set out the arrangements that govern cooperation to share information and intelligence in accordance with the NCA’s core functions of crime reduction and criminal intelligence. It will also further provide collective knowledge and experience to best protect the public and make the ‘Quad Islands’ and the UK a hostile environment for money launderers, involved in serious and organised crime. The MoU will also underpin the identification of terrorist and proliferation financing.
RUSSIAN TIMBER EVADES US SANCTIONS VIA VIETNAM AND CHINA, SAYS ENVIRONMENTAL GROUP
On 3 October, the Washington Post and others reported that Russian birch wood continues to be imported into the US disguised as Asian products, despite US economic sanctions against Russia over its invasion of Ukraine, a new report from the Environmental Investigation Agency (EIA), a non-profit watchdog group based in the UK.
REVISITING COUNTER-NARCOTICS POLICY IN THE WESTERN HEMISPHERE
On 27 September, this article from CSIS says that the global consensus on illicit drugs is weakening, and argues that the US, alongside allies and partners, needs to push back against this trend. It cites President Petro, who began a conversation on the legalization of drugs in Colombia — most recently marijuana and cocaine decriminalisation — while calling for a regional conference to discuss an even broader revamp of drug policy in the Americas.
HYPERSONIC WEAPONS AND ARMS CONTROL
In the fall edition of the Texas National Security Review, an article argues, amongst other things, that arms control solutions proposed to date have not paid enough attention to the specifics of hypersonic weapons and their implications for strategic stability. It concludes that conclude that US policy on the acquisition of hypersonic missile technology overstates the immediate need for these missiles, falls short on offering strategies that would discourage adversaries from developing such weapons, and under-emphasises the importance of non-proliferation efforts.
US SANCTIONS IN RESPONSE TO RUSSIAN ANNEXATION OF UKRAINIAN REGIONS
On 3 October, the EU Sanctions blog provided a useful summary of the US sanctions imposed on 30 September, including the addition of 57 entities located in Russia and Crimea to the Entity List for licensing purposes.
KPMG E-INVOICING AND DIGITAL REPORTING GLOBAL UPDATES
On 3 October, KPMG released the latest of its updates.
A VISUAL GUIDE TO STAGFLATION, INFLATION, AND DEFLATION
On 30 September, the Visual Capitalist website provided an infographic to show the key differences between stagflation, inflation, and deflation along with the broader economic implications of each.
SEC CHARGES KIM KARDASHIAN FOR UNLAWFULLY TOUTING CRYPTO SECURITY
On 3 October, a release on Mondo Visione advised that the SEC has announced charges against Kim Kardashian for touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion. Kardashian agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation.
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