An excellent feature in the Irish Times on 14th November says that the Italian Mafia has turned its attention to the food industry – to the tune of around €22 billion a year – affecting the path of food to dinner tables around the world. It says that the Mafia has infiltrated the entire food chain, according to a Rome-based think-tank, the Observatory of Crime in Agriculture and the Food Chain. The Mafia has bought up cheap farmland, livestock, markets and restaurants, laundering its money through what is one of the country’s leading industries. The value of the so-called agromafia business has almost doubled from €12.5 billion in 2011 to more than €22 billion in 2018 (growing at an average of 10% a year), according to the Observatory, and now accounts for 15% of total estimated Mafia turnover. Police data indicate that all of Italy’s major crime syndicates – the Camorra, Cosa Nostra and the ‘Ndrangheta – invest in farming. Mafia syndicates in Italy have an estimated annual turnover of €150 billion, according to a report by the anti-Mafia parliamentary committee in 2017 – €40 billion more than Italy’s biggest holding company.
On 12th November, the Gibraltar Government reported that its OFT is issuing updated versions of its AML/CFT Guidance Notes. The revised guidance notes now answer FAQ and provide additional practical guidance and insights into money laundering issues specific to each industry – to real estate and high-value goods dealers.
Ropes & Gray on 12th November published an article saying that the Home Office has sent letters to more than 17,000 companies that it believes are required to publish an annual statement under the Modern Slavery Act. The letters request that companies register on the Modern Slavery Contact Database by November 18th, publish up-to-date modern slavery statements by March 31st and submit their statements to specified transparency databases. The article discusses the Home Office letter and other recent developments under the Act and share related compliance recommendations for multinationals with UK operations. It also reports that on September 24th, Australia, Canada, New Zealand, the UK and US announced a set of 4 principles intended to provide a framework on which countries can build a strategy to take effective action to prevent and eradicate human trafficking from public and private sector supply chains.
Krebs on Security on 8th November reported a warning that “Informed Delivery,” a new offering from the US Postal Service (USPS) that lets residents view scanned images of all incoming mail to carry out ID theft, and criminals are already using it to commit various identity theft and credit card fraud schemes. The article says that ID thieves have figured out ways to hijack identities and order new credit cards in victims’ names before the USPS can send their notification.
13th November 2018
IN 2017 BULGARIA EXPORTED 20% MORE ARMS AND MUNITIONS
Website Bulgaria Military reported on 12th November that a report of the Interministerial Commission for Export Control and Non-Proliferation of Weapons of Mass Destruction said that the Bulgarian military industry exported 20% more arms and munitions in 2017 than in 2016. About 30 000 workers are currently employed in the military-industrial complex, and in the last years this branch of the Bulgarian economy has stabilised, it says. Analysis is said to show that in the period 2006-2017 the export of Bulgarian arms and ammunition grew on average by almost 17% each year.
FRENCH AND SPANISH POLICE BREAK UP GANG THAT TRAFFICKED PALESTINIAN MIGRANTS INTO EUROPE
Illicit Trade on 12th November reported on a Europol-backed operation involving French and Spanish police has resulted in the disruption of a people smuggling ring that trafficked hundreds of Palestinians into Europe. The gang is said to have charged as many as 1,200 migrants up to €8,000 each to be smuggled via Spain, using smuggling routes that passed through Middle Eastern countries, East Africa and South America to get into Europe.
IBM AND SEAGATE JOIN FORCES TO USE BLOCKCHAIN TECHNOLOGY AGAINST HARD DRIVE COUNTERFEITERS
Illicit Trade on 12th November reported that data storage specialist Seagate has teamed up IBM in a bid to reduce the counterfeiting of hard drives using blockchain and security technologies. They quoted figures from the International Anti-Counterfeiting Coalition that revealed the global trade in counterfeit and pirated electronic products is worth more than $1.7 trillion. Seagate will update the IBM Blockchain Platform with product authentication information based on the Seagate Secure Electronic ID (eID) at the point of manufacture. The unique identifiers created by the system, which effectively serve as an electronic fingerprint.
BULGARIA: COMPANIES REQUIRED TO REGISTER THEIR BENEFICIAL OWNERS BY FEBRUARY
The Lawyer reported on 13th November that, in Bulgaria, companies have until 1st February to register their beneficial owners in the Bulgarian Commercial Register and Register for Non-profit Legal Persons (BULSTAT).
CREDIT SUISSE FACES GENEVA PROBE TIED TO FORMER BANKERS
Swissinfo on 12th November reported that prosecutors are investigating whether a Credit Suisse Group AG unit failed to stop money laundering in a widening fraud case tied to a defunct asset manager. The probe has been dragging on for years and focused initially on the 2 TG Investments partners, who had left Credit Suisse in 2008 to manage money for Turkish clients.
EU CHALLENGES ISLE OF MAN’S VAT REGIME FOR BIZJETS
AIN Online, an aviation and aerospace website, on 12th November reported that the EU has initiated legal action against the UK for failing to take adequate measures against what it described as “abusive VAT practices in the Isle of Man with regard to the supplies and leasing of aircraft”. The Commission’s action is in response to last year’s leak of the so-called “Paradise Papers” that revealed cases where an Isle of Man company acquired a business jet that it then leased out, with a private use in the end—often by the owner of said company. Under EU law, VAT can be deducted only on the acquisition or importation of the jet if the final use is for business. The Isle of Man last year invited HM Treasury to undertake a review to confirm the policies and procedures on the treatment of VAT on aircraft, which it said is a “particularly technical and complex area” of VAT legislation – publication of this review is still awaited.
CANNABIS BRANDS: THE NEW GOLD RUSH?
An article from Shepherd and Wedderburn LLP on 8th November says that following the legalisation of recreational cannabis in Canada last month and the limited legalisation of medical cannabis on prescription in the UK, the emerging cannabis industry seems welded to the news agenda. Mainstream businesses are examining the market potential and the “land grab” for commercial rights has already begun. It says that businesses are betting on a liberalised future and brand registrations are being secured now. Any business that sees this market as having potential, whether as a producer, an importer or a retailer, should be thinking about their brand coverage now as well, it argues.
LOWERING BAR FOR INDUCEMENT TEST IN CASES OF FRAUDULENT MISREPRESENTATION
RPC on 13th November published an article says that a recent High Court case in England (Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises) means that the test for inducement in cases of fraudulent misrepresentation is whether ‘but for’ the misrepresentation, the claimant ‘might’ have acted differently. The article says that this represents a departure from previous authorities, in which the test had been said to be whether but for the misrepresentation the claimant would have entered into the contract anyway. The firm says that this case provides helpful clarification on the test for inducement in relation to fraudulent misrepresentations and also goes further to achieve fair outcomes for claimants that have been subject to a fraudulent misrepresentation.
FORMER CEO OF FOREX COMPANY YUKOM LEE ELBAZ ON TRIAL FOR BINARY OPTIONS FRAUD
Boccadutri in Italy on 8th November published an article saying that Lee Elbaz (aka Lena Green), former CEO of the Israeli Forex company, Yukom Communications, faces trial in the US in February on charges of wire fraud linked to binary options. The indictment alleges that Yucom promoted and traded binary options fraudulently through 2 websites, “BinaryBook” and “BigOption”.
THE TRANS-PACIFIC PARTNERSHIP (TPP) TO BEGIN IN LATE DECEMBER
Australian law firm, Hunt & Hunt reported on 9th November that the TPP will start to come into operation soon. TPP is a comprehensive free trade agreement between Australia and 10 other countries: Japan, Canada, Mexico, New Zealand, Singapore, Peru, Chile, Vietnam, Malaysia and Brunei. It reduces customs tariffs on a range of goods, but also has comprehensive trade liberalisation provisions concerning trade in services, investment, the environment and labour laws. Initially, the benefits of the TPP will only extend to Australian trade with Japan, Canada, Mexico, New Zealand and Singapore, because the other TPP members are yet to pass domestic legislation ratifying the agreement. The article says that TPP is an agreement that businesses need to build into their long-term strategy. While the current benefits will work for some traders, the future potential cannot be ignored.
ZARA OWNER SHUTS IRISH SUBSIDIARY AFTER TAX AVOIDANCE CRITICISM
Yahoo News on 12th November reported that Spanish clothing giant Inditex, the owner of the Zara, Bershka, and Massimo Dutti brands, has moved to close the Irish-based unit that handled a large proportion of its online sales until earlier this year. A report had suggested that it had saved about €30 million in taxes between 2011 and 2014 by basing its ITX Fashion subsidiary in Ireland rather than in Spain, where the company has its headquarters. The report also suggested that the company has avoided more than €580 million in taxes by using entities based in Ireland, Switzerland and the Netherlands.
US BELITTLES EU’S ‘SPECIAL PURPOSE VEHICLE’ AS COMPANIES FLEE IRAN
EurActiv on 13th November reported that the US is not too concerned by Europe’s idea for a special purpose vehicle (SPV) to get around US sanctions with Iran as companies are already withdrawing from the country in droves.
GOVERNOR OF LATVIA’S CENTRAL BANK REPORTEDLY SUBJECT TO ANOTHER BRIBERY PROBE
BNE Intellinews on 12th November reported that the governor of Latvijas Banka, Edgars Rimsevics, is subject to another investigation by Latvia’s anti-corruption bureau KNAB, focusing on bribery and submitting false information to the US authorities, local media reported. He is already facing bribery charges in a case linked to a failed bank and an alleged money launderer.
ETHIOPIA: DOZENS OF TOP SECURITY OFFICIALS ARRESTED ON CORRUPTION AND ABUSE CHARGES
Deutsche Welle on 13th November reported that high-profile arrests of intelligence officials, military personnel and business people for abuse and corruption come as Prime Minister Abiy Ahmed implements reforms. The attorney general also accused intelligence figures of an assassination attempt against the new prime minister.
UK PAYROLL COMPANY CEASES TRADING BLAMING VAT CHANGES
Construction Enquirer on 13th November reported that payroll specialist Sprite has ceased trading blaming planned changes in VAT collection for its demise. The change will not come into force until next October and is designed to stop “missing trader” fraud.
‘LEBANESE CONNECTION’ DRUG TRIAL OF HEZBOLLAH AGENT TO OPEN IN PARIS
The National on 13th November reported that a crime ring with alleged links to Lebanese Shiite militia Hezbollah accused of trafficking cocaine for a Colombian drug cartel and laundering the profits to buy weapons in Syria for the group is to go on trial in Paris. The chief accused is Mohamad Noureddine, a 44-year-old Lebanese businessman with interests in real estate and jewellery. The organisation is alleged to have raised funds for Iran-backed Hezbollah fighters in Syria. The investigation was known as the “Cedar Affair”. The group is said to have laundered drug money for South American cartels for years — above all in Germany.
IRELAND: LADBROKES BLAMES BETTING TAX HIKE FOR PLAN TO SHUT ON-COURSE BOOKIES
The Irish Independent on 13th November reported that UK betting group Ladbrokes is likely to terminate all its on-course bookmaking activity in Ireland after the betting tax was doubled to 2% in the latest Irish Budget. Race sponsorship at locations where it exits the on-course betting shops will also cease, and it will also slow investment in its high street estate.
IRELAND: REPORT CLAIMS LOTTERY BETTING NO THREAT TO NATIONAL LOTTERY
Calvin Ayre on 13th November reported that a new report by University College Dublin economist Jim Power, An Assessment of the Online Gambling Market in Ireland, argues that it is ‘factually incorrect” to claim that lottery betting operators are behind a decline in funding for good causes by Ireland’s National Lottery.
AMENDMENT OF GUERNSEY TRUST LAW
On 22nd October, Carey Olsen published a briefing on how a recent change refines and enhances trust law in the island.
POLICE AND CUSTOMS AUTHORITIES SEIZED AROUND 10 TONNES OF LOOSE TOBACCO AND 411,000 ILLICIT CIGARETTES IN NORTHERN IRELAND
TJI on 13th November reported that HMRC officers together with police made the seizure after searching the site of a suspected illicit tobacco factory close to Newry, located near the border with the Republic of Ireland. The cigarettes and tobacco is thought to be worth £5 million in lost taxes and duties.
BURMA GOLDEN TRIANGLE’S DRUG PRODUCTION EXPANDS, DIVERSIFIES AMID OPIOID CONCERNS
VN Express on 7th November carried an article saying that organised crime groups are expanding and diversifying drug production in SE Asia’s Golden Triangle, according to UNODC, and the region could emerge as a hub for synthetic opioids like fentanyl. Asia Pacific counter-narcotics police met in Myanmar’s capital to negotiate a new strategy to strangle the supply of chemicals used in synthetic drug production. It says that the flow of precursor chemicals to northern Myanmar has continued mostly unimpeded. Precursors come mostly from neighbouring China, although significant volumes of chemicals and cutting agents from India, Pakistan, Vietnam and Thailand have also been detected in Myanmar. Drug gangs are also starting to produce ketamine in Myanmar’s north.
SWISS GAMING ACT SET TO COME INTO FORCE FROM JANUARY 2019
iGaming Business on 12th November reported that new laws that legalise online gambling in Switzerland but outlaw foreign operators will come into effect from January 1st, with unlicensed sites to be banned from July. The Federal Council will consider licences applications during the first half of next year in line with the new laws, with plans to issue licences to operators before July 1st when blocking measures come into effect.
WHAT’S BEHIND RUSSIA’S SANCTIONS ON UKRAINIAN POLITICIANS AND BUSINESSMEN?
The Carnegie Moscow Center on 12th November published an article which says that Russia’s recent imposition of sanctions on Ukrainian politicians and businessmen is all about Ukraine’s upcoming presidential election – an attempt to restore the pre-war status quo, consolidate the elites of Ukraine’s notorious southeast, and end the war that hinders the business community.
UK CUSTOMS INFORMATION PAPERS
On 13th November, HMRC published its latest Customs Information Paper (CIP). The latest in CIP 15 (2018), which confirms that the threshold below which simplified export declarations may be made, and for imports of goods under the Merchandise in Baggage (MIB) procedure, remains at £873 for 2019.
The other CIP for 2018 and previous years are also available online, including the most recent ones –
CIP 14 Show your CITES import permit at the first point of entry into the UK
CIP 13 Changes to customs tariff rules for imported aircraft parts
US: FORMER CHARITY CEO PLEADS GUILTY TO MULTI-MILLION-DOLLAR POLITICAL CORRUPTION SCHEME
A DoJ news release on 13th November reported that Marilyn Luann Nolan, 68, the former CEO of a charity headquartered in Springfield, Missouri has pleaded guilty to her role in a multi-million-dollar political corruption scheme that involved bribes and campaign contributions for elected public officials in Missouri and Arkansas.
BANKING CORRUPTION SCANDAL THROWS POLISH POLITICS INTO TURMOIL
Politico on 13th November reported that accusations of bribery involving the head of Poland’s financial markets regulator is perhaps understandable as the last 3 Polish governments were brought low by corruption scandals. Marek Chrzanowski, chairman of the Financial Supervision Authority (KNF), has resigned from his post. It had been reported that a banker had accused him of soliciting a bribe of as much as €9.3 million in return for lenient treatment for his bank, which was in trouble thanks to large numbers of non-performing loans.
ZIMBABWE: LAW ON ANTI-LAUNDERING AND ILLICIT DEALINGS TAKES EFFECT
ZBC on 13th November reported that a clampdown on ill-gotten and unexplained wealth obtained by individuals involved in money laundering, crime and other illicit dealings has come into effect.
UK: FACEBOOK CIGARETTE SELLERS JAILED AFTER 4-YEAR FRAUD
Talking Retail on 13th November reported that 3 members of the same Midlands household have been sentenced for selling illegal cigarettes through Facebook.The trio, all unemployed, sold cigarettes from the then family home in Wednesdbury. They used at least 6 different profiles on the social media site to advertise single packs and boxes of 200 non-duty paid cigarettes in a 4-year fraud.
UK STUDENT ‘MONEY MULES’ SENTENCED FOR MONEY LAUNDERING
The BBC on 13th November reported that 2 students thought to have been used as “mules” by criminals have been sentenced for money laundering. Abdi Mohamed and Nyanjura Biseko, both 22, pleaded guilty after more than £10,000 of fraudulently obtained money was transferred into their accounts.
IRELAND: CARS AND CASH SEIZED IN SERIES OF RAIDS BY CAB
The Irish Independent on 13th November reported that the Criminal Assets Bureau has seized 8 vehicles, plant machinery, drugs, cash and a gun in an operation targeting an organised crime gang in County Meath who are involved in drugs, theft and fraud.
CORRUPT UK BORDER OFFICIAL CAUGHT SMUGGLING DRUGS AND GUNS
On 13th November, an NCA news release reported that a corrupt UK border officer has been found guilty of attempting to smuggle firearms and drugs into the UK, following a joint investigation involving the NCA, Metropolitan Police and French police. Simon Pellett, 37, from Dover was on duty when he was arrested by officers from the French National Police in October 2017.
MALAYSIA BREAKS UP ANOTHER MAJOR CHINESE-LED ILLEGAL ONLINE GAMBLING OPERATION
Calvin Ayre on 13th November reported that the operation resulted in the arrest of 118 individuals suspected of running an illegal online gambling operation from a bungalow in Kuala Lumpur. Only one of the suspects was a local resident, with the rest hailing from China. The Chinese nationals had reportedly entered Malaysia on tourist visas and their operation primarily targeted gamblers in their home country.
UK: IMPORTANCE OF PROHIBITION ON THE COLLATERAL USE OF DISCLOSED DOCUMENTS
The Lawyer on 13th November carried an article from One Essex Court saying that the Civil Procedure Rules provide that disclosed documents may be used only for the purpose of the proceedings in which they were disclosed without the consent of the disclosing party or the Court’s permission, saying that it is well established that this rule, known as the collateral use prohibition, applies both to the disclosed documents themselves and to information derived from the documents. The article discusses the recent decision in the High Court case of The ECU Group PLC v HSBC Bank PLC.
MARINE POLLUTION CRIME: FIRST GLOBAL MULTI-AGENCY OPERATION
An Interpol news release on 13th November reported on international law enforcement operation against maritime pollution has revealed hundreds of violations and exposed serious cases of contamination worldwide. Codenamed “30 Days at Sea”, the month-long operation during October saw some 276 law enforcement and environmental agencies across 58 countries detect more than 500 offences, including illegal discharges of oil and garbage from vessels, shipbreaking, breaches of ship emissions regulations, and pollution on rivers and land-based runoff to the sea.
UK: THE RETURN OF CROWN PREFERENCE
An article from Out-Law on 13th November says that a Budget measure concerning tax and insolvency effectively puts HMRC back among preferential creditors in an insolvency. Is this a failure to learn from history?
IRANIAN CUSTOMS SEIZE 15 TONNES OF IRAQ-BOUND SMUGGLED TOMATOES LABELLED AS LETTUCE
Post Online Media on 11th November reported that in mid-October, the Iranian government had banned tomato exports following panic buying of tomato paste, a staple ingredient used in many local dishes.
FORMER EGYPT GOVERNOR SENTENCED TO 10 YEARS IN PRISON FOR BRIBERY
Baker McKenzie on 13th November reported that a criminal court sentenced former Menoufiya governor Hisham Abdel-Basset to 10 years in prison over accepting a bribe.
SHANGHAI’S JAILED TOP PROSECUTOR ‘IMPLICATES 100 OTHER OFFICIALS IN CORRUPTION CASE’
Baker McKenzie on 13th November reported that the former chief prosecutor of Shanghai who is serving a life sentence for bribery is said to have implicated about 100 officials linked to his conviction.
ORGANISED CRIME AND A GLOBAL LEGAL BATTLE: THE $220 MILLION-PLUS MANUKA HONEY INDUSTRY
The Fashion Law website on 13th November published an article which says that the high concentration of antimicrobial molecule, methylglyoxal, found in this specific type of New Zealand honey – which is said to be able to repair infection-damaged tissue, quickly ease pain and inflammation, boost the immune system, and even treat acne and other skin issues – has seen it catapulted from a local, pricey staple to a bona fide superfood with legions of international fans. Global sales of Manuka honey are currently worth hundreds of millions of dollars each year. One producer reported $83 million in revenue for a 6-month period ending early this year, with about half of those sales coming from Chinese consumers. A 1 kg jar can cost $150.
FUGITIVE FORMER ROMANIAN OFFICIALS APPEAL TO COSTA RICA CONSTITUTIONAL TRIBUNAL
Mediafax on 13th November reported that former Romanian Tourism Minister Elena Udrea and former top anti-organised crime prosecutor Alina Bica, both currently detained in Costa Rica, have launched an appeal at the country’s constitutional authority in hopes to end their detention. Bica and Udrea also applied for political asylum in Costa Rica, while the former minister also gave birth to a child in the country in September. Both are wanted, and have been convicted of corruption offences in Romania.
On 7th November, Homeland Security Today reported that ISIS is maintaining a small and damaging presence in the Philippines, according to the quarterly report to Congress from the US State Department’s lead inspector general on Operation Pacific Eagle-Philippines. It estimated there are 500 ISIS terrorists in the country. ISIS-Philippines is said to remain fragmented and degraded but still posed a security threat, carrying out several bombings against civilians, and ISIS-P lacked a formal command and control structure and was unable to carry out large-scale attacks.
The report itself can be found at –
Illicit Trade on 13th November reported that a new report from Britain’s Chief Inspector of Borders and Immigration has warned that illegal migrants and people trafficking gangs may be exploiting staff shortages at sea ports in the south of England. In some cases, ferries travelling to the UK from Europe are able to land at ports that are not even staffed with Border Force officials.