Author: raytodd2017

EU REMOVES FARC FROM TERRORISM SANCTIONS LISTS

From 15^th November, EU Council Decision 2017/2072/CFSP and 2017/2073/CFSP; and Regulations 2017/2061/EU and 2017/2064/EU refer.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2017.295.01.0038.01.ENG&toc=OJ:L:2017:295:TOC

EU AMENDS THE LIST OF “LUXURY GOODS” SUBJECT TO NORTH KOREA SANCTIONS

EU Regulation 2017/2062 amends Regulation2017/1509 following a review of the list of luxury goods subject to an import and export ban.

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2017.295.01.0004.01.ENG&toc=OJ:L:2017:295:TOC

EU SANCTIONS ON VENEZUELA

EU Regulation 2017/2063/EU gives effect to sanctions on Venezuela that impose an embargo on the supply of military equipment, and equipment that might be used for internal repression – with a parallel ban on the financing, brokering etc of the same.  The ban also applies to certain software and technology, including that used to intercept or monitor the Internet or telecommunications. Financial sanctions against individuals and entities are provided for, but no persons are designated to date.  The measures have effect from 14^th November.

See also EU Council Decision 2017/2074/CFSP.

http://eur-lex.europa.eu/legal-content/EN/TXT/?

uri=uriserv:OJ.L_.2017.295.01.0021.01.ENG&toc=OJ:L:2017:295:TOC

MONEYVAL PUBLISHES A REPORT ON AML/CFT IN ANDORRA

The Moneyval organisation, which reviews countries’ AML/CFT systems on behalf of the Council of Europe has published its mutual evaluation report on Andorra.  The report welcomed the reforms recently undertaken by the Andorran authorities to address the risks identified, but has called for a number of improvements, and calls for a clear political oversight to be put in place in order to monitor the implementation of the action plans adopted to mitigate those risks; also, as with other juridictions, the ratio between investigations and prosecutions, and subsequent convictions obtained appears to be modest.

https://www.coe.int/en/web/portal/-/moneyval-welcomes-reforms-in-andorra-to-combat-money-laundering-and-terrorist-financing-but-calls-for-some-improvements?src=ilaw

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On 13^th November it was reported that EU foreign ministers had approved an arms embargo against Venezuela, and the legal framework for travel bans and asset freezes against those involved in human rights violations and non-respect for democracy or the rule of law; but held off listing any individuals for economic sanctions.

http://www.consilium.europa.eu/en/press/press-releases/2017/11/13/venezuela-eu-adopts-conclusions-and-targeted-sanctions/

LSE PODCAST: MILITARISATION AND THE ‘WAR ON CRIME’

Recording of a presentation and discussion that took place at the London School of Economics on 7^th November, to launch a new (and expensive) book on the subject.  Speakers included the always excellent Misha Glenny.  Although over an hour long (if you include the Q&A session at the end), it is nevertheless fascinating and informative.

The LSE blurb includes the following – from the 70 year old “War on Drugs”, to the more recent “War on Human Smuggling”, politicians use militarised responses to look decisive on crime.  The deployment of armies, navies, military assets and militarised approaches can send a powerful message, but have produced mixed results. This debate will discuss 4 different areas of criminality – wildlife crime, piracy, human smuggling and drug trafficking – to see how effective a militarised response can really be, and what might be lost as collateral damage.

http://www.lse.ac.uk/website-archive/newsAndMedia/videoAndAudio/channels/publicLecturesAndEvents/player.aspx?id=3929

On 27^th October, the Center for Nonproliferation Studies at the Middlebury Institute of International Studies, Monterey USA published its Occasional Paper 33 which analyses a set of export-controlled items to understand the degree to which 3D printing might be used to produce — and thus represent a new pathway for proliferators to acquire — dual-use goods useful for the development of WMD. Additionally the study considers the degree to which communities using and promoting 3D printing may impact the risk of WMD proliferation.

Reassuringly perhaps, the study has found no evidence suggesting active pursuit or deployment of AM technology with a WMD proliferation aim in either relevant case study (North Korea and IS), but that claims to have produced 3D printers suggests North Korea’s intention is not merely to explore the use of 3D printing, but also to explore the production of AM equipment itself; and the widespread geographic distribution of AM technology etc has made the technology accessible by users in countries where the IS has been particularly active (and thus, if the IS leadership were to make the decision to vigorously explore AM as a potential pathway to WMD, the technology would be readily accessible, with little need to import from producer countries).

The report calls for further awareness-raising and, of course, more research.  In addition, export controls and nonproliferation efforts need to recognise the likely or potential risks involved with 3D printing, including in respect of professional 3D printing services and providers.

http://www.nonproliferation.org/op33-wmd-proliferation-risks-at-the-nexus-of-3d-printing-and-diy-communities/

A Transparency International report has identified 52 global corruption and money laundering cases involving 766 UK companies.  It found that the UK is home to a thriving company formation industry which gives money launderers access to UK firms and that the UK’s system to defend against this is failing to prevent the abuse of UK companies.   It found 766 companies registered in the UK that have been directly involved in laundering stolen money out of at least 13 countries.  These companies are used as layers to hide money that would otherwise appear suspicious, and have the added advantage of providing a respectability uniquely associated with being registered in the UK.  It also reports that trust and corporate service providers (TCSP) that form and administer companies have a poor track record of identifying and reporting money laundering with only 77 of the 400,000 SAR filed in the UK last year coming from this sector.

Key statistics:

• 766 UK companies involved in 52 corruption and money laundering cases worth up to £80 billion

o   those 766 companies could have cost a total of just £15,000 to set up

o   one quarter of these are still active today

o   half of these registered to just 8 different addresses

• Just 6 staff in Companies House police the integrity of some 4 million UK companies
• TCSP filed just 77 of the 400,000 SAR last year, which are designed to flag possible money laundering.

Key recommendations:

• prohibit non-UK registered agents from setting up companies to avoid TCSPs with no presence in the UK, and circumventing UK AML checks
• use financial incentives to encourage UK companies to hold a UK bank account, discouraging the use of offshore bank accounts
• provide Companies House with sufficient resources to identify suspicious activity
• the UK Government should seek to apply a “failure to prevent” approach to money-laundering, meaning TCSP are held more accountable for forming companies that are used to launder money
• overhaul the UK’s AML system

http://www.transparency.org.uk/press-releases/revealed-britains-own-applebys/#.WgVCkbp2tZU

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OECD FORUM ON TAX AND CRIME HELD IN LONDON

NEW OECD PUBLICATION (1) – FIGHTING TAX CRIME: THE TEN GLOBAL PRINCIPLES

NEW OECD PUBLICATION (2) – EFFECTIVE INTER-AGENCY CO-OPERATION IN FIGHTING TAX CRIMES AND OTHER FINANCIAL CRIMES – 3^rd EDITION

More than 200 tax crime and economic crime experts attended the 5^th OECD Forum on Tax and Crime on 7^th and 8^th November, where they discussed ways to tackle these tax and economic crimes more effectively.

The Forum identified 5 priorities for action –

• Ensure that professional enablers play their part in tackling tax crime;
• Step-up the level of international and cross government co-operation to build a comprehensive and global response to tax crime, drawing on a report launched at the Forum

http://www.oecd.org/tax/crime/effective-inter-agency-co-operation-in-fighting-tax-crimes-and-other-financial-crimes.htm

• Learn the lessons from around the world about how best to respond to tax crime by implementing the OECD 10 Global Principles, which were also launched at the Forum (see below)

http://www.oecd.org/tax/crime/fighting-tax-crime-the-ten-global-principles.htm

• Strengthen the ability to collaborate globally and by building capacity to share intelligence and data quickly and securely
• Build capacity in all countries – including developing countries – to combat financial crimes so that there can be no hiding place for tax criminals. Refers to the OECD International Academy for Tax Crime Investigation, which is intended to improve the ability of developing countries to detect and investigate financial crimes, and recover the proceeds of those crimes, by developing the skills of tax and financial crime investigators through intensive training courses.

http://www.oecd.org/ctp/crime/tax-crime-academy.htm

Closing statement from HMRC and OEC

http://www.oecd.org/tax/crime/closing-statement-oecd-forum-on-tax-and-crime-november-2017.pdf

OECD news release

http://www.oecd.org/tax/strengthening-the-global-response-to-tax-crime.htm

The OECD 10 Global Principles

Principle 1.        Ensure Tax Offences are Criminalised

Principle 2.        Devise an Effective Strategy for Addressing Tax Crimes

Principle 3.        Have Adequate Investigative Powers

Principle 4.        Have Effective Powers to Freeze, Seize and Confiscate Assets

Principle 5.        Put in Place an Organisational Structure with Defined                    Responsibilities

Principle 6.        Provide Adequate Resources for Tax Crime Investigation

Principle 7.        Make Tax Crimes a Predicate Offence for Money Laundering

Principle 8.        Have an Effective Framework for Domestic Inter-Agency Co-operation

Principle 9.        Ensure International Co-operation Mechanisms are Available

Principle 10.      Protect Suspects’ Rights

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On 9^th November, Politico reports that MEPs on the Panama Papers inquiry committee released a 121-page report on 8th November summarising findings and recommendations, to be voted on in the EU Parliament later in November.  The findings start on page 13 (and continue to page 43…).

https://www.politico.eu/wp-content/uploads/2017/11/2017-11-08-PANA-Final-Report-002.pdf?utm_source=POLITICO.EU&utm_campaign=5ecda84209-EMAIL_CAMPAIGN_2017_11_09&utm_medium=email&utm_term=0_10959edeb5-5ecda84209-190081609

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Global momentum has waned in efforts to prevent terrorists from obtaining nuclear and radiological materials, according to a new report released by the Stimson Center (a non-partisan organisation described as working to solve the world’s greatest threats to security and prosperity). The report, Re-energizing Nuclear Security: Trends and Potential Collaborations Post Security Summits, finds that momentum to combat nuclear security threats has slowed after a series of high-level global summits concluded in 2016. Industry, governments, and civil society can re-capture momentum through a series of pragmatic actions, the report concludes.

The author of the report says, “power plants can be vulnerable to evolving cyber threats. ISIL and Boko Haram are operating near nuclear facilities. The spread of weapons-grade material from North Korea is a very real concern. Industry, governments, and civil society can do more to address these challenges given this security landscape”.

The report proposes several recommendations for stakeholders to adopt to better confront nuclear security challenges.  Amongst the recommendations is the suggestion that streamlined reporting of compliance with the Convention on the Physical Protection of Nuclear Materials fundamental principles could be introduced as part of UN Security Council Resolution 1540 reporting.  UN SCR 1540, of course, requires all member states to refrain from providing any form of support to non-State actors that attempt to develop, acquire, manufacture, possess, transport, transfer or use nuclear, chemical or biological weapons and their means of delivery, in particular for terrorist purposes.

https://www.stimson.org/content/amid-evolving-risks-momentum-prevent-nuclear-terrorism-has-waned

Report at – https://www.stimson.org/sites/default/files/file-attachments/Nuclear-Energy-R7-WEB.pdf

GLOBAL GCN SURVEY: COMMERCIAL BRIBERY PROHIBITIONS AND ENFORCEMENT

Baker McKenzie survey analyzed where commercial bribery is a criminal offense, who may be prosecuted and how active the local authorities are.  The results, published on 6^th November, analysed responses from 74 countries to 6 questions –

1. Is commercial bribery a criminal offense in your country?
2. If commercial bribery is a criminal offense, may the bribe giver and the recipient be punished?
3. Does the prohibition apply to (i) individuals, (ii) companies or (iii) both?
4. If commercial bribery is not a criminal offense in your country, is it prohibited by any other laws (e.g. unfair competition etc.)?
5. How active are your local law enforcement agencies to enforce commercial bribery in your jurisdiction?
6. To the best of your knowledge, how many commercial bribery proceedings took place in your jurisdiction over the past three years?

https://globalcompliancenews.com/survey-commercial-bribery-20171106/

Clifford Chance law firm paper of 6^th November says trade finance is one of the areas likely to benefit from blockchain technology first by becoming cheaper, faster and more accessible. However, it also says developers and market participants should be mindful to consider the sanctions implications given the extraordinary reach of sanctions and the magnitude of the penalties for breach. Any US-owned blockchain technology would remain subject to OFAC regulation, and may be subject to export controls. Similarly, if the technology is owned or licensed by a US person and supplied to, or used by, someone or somewhere subject to sanctions this could be prohibited.  There could be similar problems under EU or other sanctions regimes. The paper summarises what developers need to bear in mind from a sanctions perspective.

https://www.cliffordchance.com/briefings/2017/11/blockchain_tradefinanceandsanctionsissues.html

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