On 24 January, the Wall Street Journal reported that the Trump administration is moving to curb the sale of imported counterfeit goods over the internet, warning electronic commerce platforms and warehouse operators of greater scrutiny and penalties if they don’t help ferret out fakes. A Department of Homeland Security report outlines its immediate actions and longer-term goals for enlisting e-commerce players to combat counterfeit products that officials say undermine US technology and manufacturing. It is said DHS will treat domestic U.S. warehouses and fulfilment centres, such as Amazon’s, as the ultimate consignee for goods that have not been sold to consumers, which will give officials the power to scrutinise shipments even after they have cleared the border and gone on to regional warehouses.
23 January 2020
HOW 237 MALTESE TAXPAYERS GOT OFF THE PANAMA PAPERS HOOK
On 22 January, the Times of Malta reported that a total of 237 Maltese taxpayers had featured in the Panama Papers leak, yet the police never carried out a comprehensive probe into all those individuals and companies named, with the bulk of the investigations were carried out by the Inland Revenue Department in an administrative process rather than a criminal probe and in 2019 €9.1 million recovered by the taxman after offshore dealings were exposed in the Panama Papers in 2016.
BELGIUM’S MAIN BANKS WILL START SHARING PERSONAL DATA USING BLOCKCHAIN
On 22 January, the Brussels Times reported that Belgium’s 4 major banks, Belfius, BNP Paribas Fortis, ING Belgium and KBC, will use a blockchain to simplify their customer services – to share businesses’ data between them and thus facilitate the verification and maintenance of the businesses’ identities. This is said to be a first in Europe, according to the main parties concerned.
8 KIDNAPPED CREW FROM GREEK-FLAGGED TANKER FREED BY PIRATES
On23 January, Seatrade Maritime News reported that it has been announced that 8 crew members of the Greek-flagged tanker Happy Lady abducted by pirates in an attack near the coast of Cameroon were released on 22 January after 3 weeks in captivity.
BREXIT: INTRODUCTION TO THE UK WITHDRAWAL AGREEMENT
Gowling WLG has produced a briefing explaining the UK/EU withdrawal agreement.
US REMOVES KAZAKHSTAN NATIONAL CONVICTED OF WEAPONS TRAFFICKING TO RUSSIA
A news release from US Immigration and Customs Enforcement on 23 January reported that the US authorities had removed Eldar Rezvanov to his home country of Kazakhstan via commercial aircraft. He had been convicted for international arms trafficking by exporting defence articles without obtaining a licence or authorisation. He and his accomplices smuggled the firearms and firearm parts onto overseas flights using false shipping inventories and concealed the disassembled firearm components by taping them to metal kitchen utensils before shipping them overseas.
TAIWANESE CARRIER WAN HAI JOINS MANY CARRIERS IN ANNOUNCING IT WILL FINE SHIPPERS THAT INTENTIONALLY MISDECLARE CARGO CONTENTS
On 23 January, Loadstar reported that the carrier has told customers that it would fine shippers, and/or notified parties and consignees, $30,000 per container for misdeclared hazardous cargo, and $20,000 per box for non-hazardous contents – regardless of whether any damage resulted. Under the terms of its bill of lading it also had the right to “immediately stop or suspend the delivery of the cargo or terminate the contract of delivery at any time during the carriage”.
LATIN AMERICA ANTI-CORRUPTION ENFORCEMENT REVIEW: Q4 2019
On 22 January, King & Spalding in the US published an article saying that, in the 4th quarter of 2019, US enforcement authorities sustained efforts to prosecute individuals violating US anti-corruption laws in matters related to Latin America, while authorities in Latin America, including in Brazil, Peru, and Mexico, pursued enforcement of their own, sometimes without coordinating with US authorities. The article highlights these recent trends and developments. The first case it mentions is actually a US one involving a scheme to bribe government officials in Indonesia, the case where the defendant challenged the conviction on the grounds that he never set foot in the US and was working in France while carrying a UK passport.
AUSTRALIA: NAVIGATING THE COMPLIANCE DILEMMA OF DEFENCE EXPORT CONTROLS
On 23 January, Australia Defence Magazine published an article saying that the spectre of Defence Export Control Regulations for Australian Defence businesses is ever-present, and there are emerging changes and challenges that will require a renewed focus, with a current and impending compliance dilemma for many businesses that will, it says, become clearer as 2020 progresses. It reminds one must take into account the US International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR), which Australian businesses must ensure they factor into any risk assessments linked to defence business associated with US technology. It says that a number of elements have been introduced or reviewed during the last 12 months. The article concludes that Australia should look to mirror the Canadian example and its Canadian Controlled Goods Program and it makes a number of recommendations, including requiring all businesses looking to export or handle US goods to be registered with the US and Australian Governments.
ESTONIAN FINANCIAL WATCHDOG RECEIVES POSITIVE ASSESSMENT BY IMF
ERR on 23 January reported that experts of the IMF provided a positive assessment of the AML activities of Estonia’s Financial Supervision Authority (FSA). It claims that money laundering risks in Estonia have decreased significantly in the last 5 years, and non-resident deposits have dropped to 10% at the end of 2019, down from 19% in 2014.
THE LATEST INSIGHT INTO THE IRANIAN SITUATION AND HOW COMPANIES SHOULD PREPARE
RANE, the Risk Assistance Network & Exchange, has produced a webinar looking at the situation following the US air strike in Baghdad that killed Iranian Quds Force leader Qassem Soleimani. A panel of experts consider what might be next in the Iran situation in both physical and cyber terms and what companies can do to mitigate the risk.
NEW EU RULES FOR IMPORTERS OF HIGH-RISK FOOD, FEED NOT OF ANIMAL ORIGIN AND LIVE ANIMALS
On 23 January, UK trade organisation BIFA published further information on the Smarter Rules for Safer Food (SRSF) affecting businesses which import live animals, products of animal origin (POAO), or high-risk food and feed not of animal origin (HRFNAO). It urges those affected to register now. Despite Brexit, the UK has provided some useful information on SRSF, with DEFRA describing it as a set of EU Regulations for the protection against animal disease and plant pests, and which will modernise, simplify and improve existing health and safety standards for the agri-food chain. It will take a risk-based approach to animal, plant and public health protection, introducing more efficient pest and disease control measures. The new Official Controls Regulation and Plant Health Regulation applied in EU Member States from 14 December and the new Animal Health Regulation will apply from 21 April.
TAX HAVENS ATTRACT A RECORD NUMBER OF SLOVAK FIRMS
An article in Slovak Reporter says that an increasing number of Slovak companies are attracted by tax havens, leading to a new record in 2019. It says that a total of 4,996 Slovak companies, worth an estimated €10.5 billion, currently have their base in tax havens. The US and Netherlands are said to be the top two countries involved.
MIAMI-BASED BUSINESSMAN PLEADS GUILTY TO FCPA AND MONEY LAUNDERING VIOLATIONS IN SCHEME INVOLVING PETROECUADOR OFFICIALS
A news release from the DoJ on 23 January announced that, Armengol Alfonso Cevallos Diaz (Cevallos), 57, an Ecuadorian businessman living in Miami has pleaded guilty in connection with a $4.4 million bribery and money laundering scheme that funnelled bribes to public officials of Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador), the state-owned and state-controlled oil company of Ecuador. It is said that, from 2012 through 2015, he conspired with others to pay bribes of $4.4 million to PetroEcuador officials by using the mails and means and instrumentalities of interstate commerce, including US-based companies and US-based bank accounts, in order to obtain and retain business. This latest plea follows 12 public charges and guilty pleas against other individuals in the DoJ ongoing investigation into bribery and money laundering involving PetroEcuador.
COLOMBIA SOCCER STAR EXTRADITED TO US ON DRUG TRAFFICKING CHARGES
On 23 January, ABC News reported that a former midfielder for Colombia’s national soccer team has been extradited to the US to face drug trafficking charges. Jhon Viafara, 41, is accused of conspiring with members of the Gulf Cartel to organise cocaine shipments that left Colombia on speedboats. The sides he played for included including Premier League sides Portsmouth and Southampton.
8 REASONS JAMAICA FELL IN THE LATEST CORRUPTION INDEX
On 23 January, the Gleaner in Jamaica carried an article in which the Head of the National Integrity Action, Professor Trevor Munroe listed a number of developments in 2019 that might have contributed to a deterioration of Jamaica’s position in both score and rank.
UK: TRANSPOSITION OF THE FIFTH MONEY LAUNDERING DIRECTIVE – RESPONSES PUBLISHED
On 23 January, HM Treasury published the responses it received to the consultation launched in April 2019. The consultation closed on 10 June, with the government receiving over 200 responses from supervisors, industry, civil society, academia and government departments.
UK: NCA CIVIL RECOVERY ORDER FOR AROUND £120,000 ALLEGEDLY LINKED TO THE SOUTH EAST ANTRIM UDA UNDER THE PROCEEDS OF CRIME ACT
On 23 January, a news release advised that the NCA had obtained the order following an investigation which relates to residential properties owned by an alleged member of the paramilitary group, his partner and associates, with the properties allegedly purchased using the proceeds of illegal money lending, mortgage fraud, money laundering and tax evasion.
SHIPPING INSURANCE MUTUALS URGE CONTAINER SHIPPING INDUSTRY TO GIVE EVER MORE SERIOUS ATTENTION TO THE CAUSES AND CONSEQUENCES OF SHIP FIRES, JOINTLY ISSUING A GUIDE OUTLINING THE RESPONSIBILITIES OF ALL STAKEHOLDERS IN REDUCING RISK
On 23 January, Lloyds Loading List reported that the UK P&I and TT Club, have collaborated in publishing guidelines under the title, Book it Right and Pack it Tight. Free of charge, it provides key insights for all actors in the freight supply chain responsible for preparing unitised consignments for carriage by sea. It gives an overview of the practical duties and responsibilities under the IMDG Code for each stakeholder, according to a joint statement.
23 ARRESTS IN FRANCE AND NETHERLANDS AS IRAQI-KURDISH SMUGGLING NETWORK BUSTED
A news release from Eurojust on 23 January reported that the French Border Guard together with the French National Police and the Dutch Royal Marechaussee, supported by Europol and Eurojust, dismantled a large criminal network suspected of having facilitated the transportation of around 10,000 Afghan, Iranian, Iraqi-Kurdish and Syrian migrants from the French areas of Le Mans and Poitiers to the UK. The migrants were transported in life-threatening conditions, concealed in refrigerated – often-overcrowded – lorries.
BALKANS: OPERATION THESEUS BUSTS HUMAN TRAFFICKING AND MIGRANT SMUGGLING RINGS
A news release from Interpol on 23 January advised that authorities in the Balkans have dealt a blow to organised crime groups by arresting 72 suspected traffickers and 167 migrant smugglers in an INTERPOL-led operation codenamed Theseus. The operation saw 3,000 officers from immigration, justice and specialised units dispatched to hotspots including border points, train and bus stations and entertainment districts. Trafficking victims, who were from 14 different countries, were found working in precarious conditions of sexual exploitation, forced labour and forced begging. Authorities also confiscated nautical equipment including 30 smuggling vessels, 200 inflatable boats and buoys.
12 ARRESTS IN BIG BUST AGAINST DRUG TRAFFICKERS IN CANARY ISLANDS
On 23 January, a news release from Europol advised that a large-scale drug trafficking organisation linked to Colombian and Peruvian cartels was dismantled in Spain and Colombia in an international law enforcement operation. Europol supported the 2-year-long investigation, led by the Spanish Civil Guard in close collaboration with the National Police of Colombia and the DEA. In total, 11 Spanish nationals were arrested in Tenerife and a Colombian national in Colombia. €2 million in assets have been seized so far. The investigation was triggered by information on large cash movements in Tenerife, money laundering-related intelligence shared via international cooperation. The suspects concealed the drugs in caravans travelling between the Canary Islands.
SOUTH AFRICA: SARS TARGETS ILLICIT TRADERS INCLUDING IMPORTERS AND EXPORTERS
On 23 January, All Africa reported that SARS is said to have found that importers and exporters were using various ways to avoid paying the import/export duties. The traders are also employing tactics to avoid paying VAT that applies to the goods. Under-declaration of customs value in this sector is said to have increased from R5.2 billion in 2014 to R8.52 billion in 2018, with the under-declared customs value in 2017 and 2018 representing 34% and 35% of the declared customs value respectively.
HONG KONG CUSTOMS BUSTS LARGEST CANNABIS TRAFFICKING IN 10 YEARS AT AIRPORT
ECNS in China on 23 January reported that Hong Kong customs seized about 70 kg of suspected cannabis buds at Hong Kong International Airport which arrived from Canada, the largest cannabis trafficking case detected by the customs at the airport in the past decade.
SEIZURE OF TONS OF STOLEN COPPER NEAR SANTIAGO SET TO BE SENT ILLEGALLY FROM CHILE TO CHINA
An article from Insight Crime on 23 January says that robberies may be fuelled by China’s thirst for the mineral. On 13 January, over 50 tons of copper cables were seized from a company with an estimated value of $250 million. The copper was to be smuggled to China as shown by falsified documentation found during the raid.
PUBLIC ACCESS IS CRITICAL FOR UBO REGISTER SUCCESS
A blog post on the FCPA Blog on 23 January is by the Director for Transparency and Accountability at The ONE Campaign, an international advocacy and campaigning organisation working to end extreme poverty in Africa. He says that, despite their current shortcomings, it’s abundantly clear that public UBO registers are a critical tool for combating increasingly complex crime and corruption, including ending the use of anonymous companies. Public information about company ownership offers a practical tool for investigation and creates grounds for optimism – bolstering people’s trust that the global financial system can operate fairly – and helps build a more level playing field for business.
FISHERMEN KIDNAPPED BETWEEN PHILIPPINES AND MALAYSIA
On 23 January, Insurance Marine News reported that 6 gunmen dressed in black suits with masks used a twin-engine grey speedboat to abduct 8 crew from a Malaysia-registered fishing trawler. The fishing trawler was found abandoned and with no crew on board.
An article in Forbes on 23 January reported on an operation which was part of a series of investigations into an international financial institution located in Central America, whose products and services may have been used in a money laundering and tax evasion scheme for customers across the globe. The “coordinated day of action” involved evidence, intelligence, and information collection activities such as search warrants, interviews, and subpoenas – said to be the first use by the so-called J5 (the Joint Chiefs of Global Tax Enforcement, established in 2018, with membership which includes the heads of tax crime and senior officials in tax agencies) of such powers on a global scale. The name of the targeted financial institution was not revealed, but it is said that some tax professionals believe that the investigation is linked to the Panama Papers (though this suggestion is disputed).
On 23 January, following the release of reports on several countries since the last update, FATF published an updated consolidated schedule of assessment ratings.
On 23 January, FATF published the follow-up report on Kyrgyzstan undertaken by the FATF-style regional body, EAG. A number of ratings for FATF Recommendations have been uprated since the mutual evaluation report was published in 2018 –
- The ratings for R.12, R.17 and R.28 are upgraded from Non-Compliant to Largely Compliant;
- The ratings for R.1, R.2, R.16, R.22, R.23, R.24, R.34 and R.38 are upgraded from Partly Compliant to Largely Compliant;
- The rating for R.7 is upgraded from Partly C to Compliant; and
- The rating for R.6 is upgraded from Largely Compliant to Compliant.
As usual with such follow-up reports, only technical compliance is examined – not effectiveness. Kyrgyzstan will remain in the enhanced follow-up process and will continue to report to the EAG on progress to strengthen its national AML/CFT system.
On 23 January, OFAC announced an Iranian and Chinese individual, and 3 Hong Kong, 1 UAE and 2 Chinese companies had been added to the Iran sanctions lists. They are said to be part of a network supporting Iran’s Petroleum and petrochemical industries. The OFAC action in part targets Triliance Petrochemical Co Ltd, a Hong Kong-based broker with branches in Iran, UAE, China, and Germany, and notes that its Iranian branch, Triliance Kish Petrochemical Company, recently changed its name and operates as Tiba Parsian Kish Petrochemical.
On 23 January, the 2019 Corruption Perceptions Index (CPI) was published by Transparency International, finding that 4 G7 nations — Canada, France, UK and US — are viewed as more susceptible to public-sector malfeasance than they were in the previous year. In addition, Australia, Canada and Nicaragua are among 21 nations that “significantly declined” in their CPI rankings from the previous year, but improvements for Estonia, Greece and Guyana. New Zealand has top spot.