PODCAST: DAVID GREEN AND THE FUTURE OF THE SFO
Trace International has a podcast featuring David Green, the Director of the SFO, who talks about the SFO’s priorities, changes he has made as Director and what’s next for him.
THINGS YOU MAY HAVE MISSED – NOVEMBER PART 3
20th November 2017
NUCLEAR ‘ACCIDENT’ SENDS RADIOACTIVE POLLUTION OVER EUROPE
On 20th November the Telegraph reported that French scientists had confirmed that a radioactive cloud had spread over Europe following a nuclear accident in Russia or Kazakhstan. It reported that France’s nuclear safety institute, IRSN, picked up faint traces of ruthenium 106, a radioactive nuclide that is produced when atoms are split in a nuclear reactor and which does not occur naturally, in three of its 40 monitoring stations late September. The French nuclear regulator if an accident of this magnitude had happened in France it would have required the evacuation or sheltering of people in a radius of “a few kilometres around the accident site”. The IRSN has been reporting the incident since October.
http://www.irsn.fr/EN/Pages/Home.aspx
ECJ REJECTS TUNSIAN SANCTIONS DELISTING APPLICATIONS
In the judgment of Cases T-149/15 ad T-175/15 the General Court of the ECJ rejected the application of Sirine Bent Zine El Abidine Ben Haj Hamda Ben Ali and Mohamed Marouen Ben Ali Ben Mohamed Mabrouk who had been listed for the purposes of the EU Tunisian sanctions regime.
SEC SEEKS ASSISTANCE FROM ISRAEL IN MOBILEYE INSIDER TRADING CASE
Haaretz reports that the SEC petitioned a US court in New York to ask the Israeli authorities to help it gather testimony and other evidence in the Mobileye insider-trading case. Lawrence Cluff Jr. and Roger Shaoul have been charged by the SEC with insider trading in Mobileye stock before the Israeli maker of driverless-vehicle technology agreed to a $15.3 billion takeover by Intel Corporation last year. https://www.haaretz.com/israel-news/business/1.823758?src=ilaw
POLITICAL MOBILISATION IN THE RUN-UP TO THE RUSSIAN PRESIDENTIAL ELECTIONS
On 17th November, ETH Zurich released its latest briefing paper containing 4 articles on the prospects for opposition players in the upcoming 2018 Russian Presidential elections; how Alexey Navalny’s strategy is confronting Russia’s political leadership with its first real challenge in years; how the Russian regime has used mass demonstrations to pacify the population; and how local activism in Moscow and St Petersburg has been politicized.
INDIAN TAX INVESTIGATIONS SHOWS HIGH PERCENTAGE INVOLVE SHELL COMPANIES
The Business Standard reports on a study of tax investigations in November 2016 to September 2017. It shows 3,758 cases involving money laundering etc; 83% related to financial institutions and property, but gold-related only 7% (despite the government’s gold import restrictions); the most cases (43%) involved shell companies; 31% corruption, 6.5% drugs and narcotics,4.5% arms and explosives. Banks were seen to be the most vulnerable, with real estate next.
IFS PAPER: THE IMPLICATIONS OF RECENT ADDITIONS TO HMRC POWERS AND THE SHIFTING BALANCE IN THE RELATIONSHIP WITH TAXPAYERS
Over the last 3 years, HMRC has been given additional powers which have generated significant comment and debate. This paper from the Institute for Fiscal Studies considers what safeguards are available and the extent to which the safeguards are adequate given the increased powers parliament is giving to HMRC. It also considers the implications of these measures for the relationship between HMRC and taxpayers.
https://www.ifs.org.uk/publications/10159
HOW TO SPOT A FAKE ROLEX
70% of Brits can’t tell the difference between a real and fake Rolex, according to a new survey by jeweller William May. The jeweller shared the 6 things to look out for when spotting a genuine timepiece.
THE 10,000 MISSING NORTHERN IRELAND CATTLE
Customs Today carries a report re the more than 10,000 Northern Irish cattle have been reported stolen or lost in just 3 years – with cross-border smuggling thought to be one of the main causes. Cattle smuggling is still endemic across many of the border areas, with one in three animals reported missing coming from Newry and Armagh, according to figures revealed by the Ulster Unionist Party (UUP). Ulster Unionist leader Robin Swann said that 10,000 cattle had been reported stolen or lost over the last 3 years; with the figures by far the highest in border areas.
legal privilege – human right or fraudster’s shield?
Law firm Gowling WLG paper reflecting on the recent decisions in Avonwick Holdings Ltd and others v Shlosberg and Leeds v Lemos have restricted the ability of trustees in bankruptcy to use privileged documents belonging to the bankrupt. What do these rulings mean for trustees?
CHARTERED INSTITUTE OF TAXATION AML UPDATE WEBINAR
Following the success of the AML seminars held in October, and as a result of member feedback, the CIOT presented a webinar at on 20th November. The Money Laundering Regulations 2017 came into force on the 26th June and brought in a number of new requirements for supervised members. The joint CIOT/ATT webinar provides an introduction to the changes, as well as discussing the new UK NRA and risk assessment in general. The webinar will also be available on the CIOT website for 12 months.
SYNTHETIC DIAMOND INSCRIBED WITH REPORT NUMBER OF A NATURAL DIAMOND
Specialist website Tacy reports that the Gemological Institute of America (GIA) has published a report in the latest issue of the organization’s periodical Gems & Gemology, which details the discovery of a synthetic diamond, inscribed with a GIA report number belonging to a natural diamond. The synthetic diamond was reportedly submitted as a natural diamond to the GIA lab in Carlsbad for re-evaluation, and subsequently found to be synthetic.
http://www.diamondintelligence.com/magazine/magazine.aspx?id=14505
SPANISH-MOROCCAN COCAINE BUSTS
News 24 reports on 20th November that Spanish and Moroccan police netted close to 4 tonnes of cocaine with a street value of over €100 million and arrested 40 people in a long-term anti-trafficking operation, Spain’s interior ministry said. Spain had seized 1.3 tones since launch of the operation last year, and Morocco 2.6 tonnes. 34 men and 6 women of Spanish, British and Moroccan nationalities were arrested as part of the operation. 1 Spanish national was detained in Germany “while trying to flee to Venezuela”. Spain is a main entry point for cocaine in Europe and the busts are some of the biggest in recent years.
NEW US CUSTOMS GUIDANCE RE SANCTIONS ENFORCEMENT: NORTH KOREA AND USE OF FORCED LABOUR
KPMG reports that US Customs and Border Protection (CBP) has issued a release about the US trade enforcement policy with respect to North Korea and forced labour. CBP is committed to making importers aware of the risks associated with forced labour, compliance responsibilities, and ways to validate that supply chains are free of forced labor. It appears that CBP has issued CBP Form 28 (Request for Information) to importers regarding their internal policies with regard to these issues. Also any significant merchandise mined, produced, or manufactured wholly or in part by North Korean nationals or citizens generally is prohibited from entry into the US (unless CBP finds, through clear and convincing evidence, that the merchandise was not produced with a form of prohibited labour).
UK SUPREME COURT FINDS DEBT CREATED UNDER LETTER OF CREDIT IS SITUATED WHERE DEBTOR RESIDENT
Law Firm Ince & Co briefing on Taurus Petroleum v. SOMO. The essential fact being that whereas there had been a longstanding exception to the general rule in English law (that a debt was created where the debtor was located) in the case of letters of credit, where the debt created by the letter of credit had been held to be located in the place where the debt is payable. The Supreme Court has now confirmed that letters of credit are not a special case and that the general rule as to the location of the debt is applicable.
RUSSIA FIRST NEW-BUILD STRATEGIC BOMBER FOR 11 YEARS
Flight Global reported on 20th November that Tupolev on 16th November rolled out the first new-build Tu.160 strategic bomber from the Kazan Aviation plant, with first flight of the supersonic aircraft scheduled for February 2018. The swing-wing, supersonic Tu.160 was last produced in 2007. 50 more are planned.
https://en.wikipedia.org/wiki/Tupolev_Tu-160
BILLIONAIRE IN COURT IN “OPIOD CRISIS” CASE IN USA
AZ Central in Arizona reports that the New Jersey Attorney General has taken Arizona billionaire John Kapoor to court for endangering the public through an unlawful marketing campaign for a powerful pain-relief medication aimed at patients for whom it is not intended. Kapoor is the the founder and former CEO of Insys Therapeutics, and says he not guilty of charges including racketeering, mail fraud and wire fraud. Its opioid pain-relief drug, Subsys, was approved by the FDA only for treating breakthrough pain in cancer patients, but it is alleged it was inappropriately prescribed to other people through a campaign of fraudulent claims and unlawful payments to doctors and other medical practitioners.
IRISH HIGH COURT TO HEAR CHALLENGES TO CAB PLAN TO SELL SEIZED ASSETS
The Irish Examiner reports that the High Court will hear challenges in December to moves by the Criminal Assets Bureau to sell assets worth around €0.5 million, including cars, jewellery and motorbikes which CAB says are linked to the Kinahan-organised crime gang. CAB had previously secured court orders freezing the assets which were seized following raids at various locations in March of last year.
http://www.irishexaminer.com/breakingnews/ireland/–814996.html?src=ilaw
BUSINESSES URGED TO GET AEO STATUS TO SURVIVE POST-BREXIT
An article from Dechert states that after Brexit, customs declarations to UK Customs are expected to increase 5-fold to 255 million annually and the UK companies making declarations to double to over 270,000. But only 0.2% of those traders have Authorised Economic Operator (AEO) status – 10 times fewer than Germany. Without this, traders will not have access to key customs facilitations but will face the full weight of customs requirements. Acquiring AEO certification status can take at least 6 months but there are practical ways to ease the process and it promises to repay the effort in the years ahead.
https://www.jdsupra.com/legalnews/brexit-advanced-economic-operators-aeo-47607/
UN EXTENDS ARM EMBARGOES ON SOMALIA AND ERITREA
The UN Security Council Resolution 2385 (2017) extends the modified arms embargo on Somalia as well as the authorisation for maritime interdiction of illicit arms imports and charcoal exports until 15th November 2018. The arms ban on Eritrea has also been renewed until 15th November 2018.
https://www.un.org/press/en/2017/sc13065.doc.htm
US RE-DESIGNATES NORTH KOREA A STATE SPONSOR OF TERRORISM
On 20th November, President Trump has re-designated North Korea a state sponsor of terrorism. The announcement allows the US to treat the country with special considerations, opening the door to using sanctions and penalties to deter further nuclear proliferation.
FRENCH/BELGIAN RAIDS ON CEMENT COMPANY IN SYRIAN SANCTIONS CASE
On 20th November the European Sanctions Blog reported that French and Belgian authorities have raided cement-making company LafargeHolcim and its shareholder GBL as part of an investigation into payments allegedly made to terrorist groups in Syria (including sanctioned entities).
https://europeansanctions.com/
THE ABILITY TO SUE FOREIGN DEFENDANTS FOR ALLEGEDLY LAUNDERING PROCEEDS IN USA
An article from Ballard Spahr discusses recent US federal court cases, including one where the ability of private plaintiffs to sue foreign defendants who allegedly committed offences against the plaintiffs abroad, and then launder the proceeds of those offenses in the US – commenting that this issue is relevant to US government actions against foreign persons.
The case was City of Almaty v Ablyazov. Plaintiff City of Almaty alleged that its former mayor Viktor Khrapunov, along with his associates and family members, embezzled $300 million from the City by stealing various public assets for personal use. Plaintiff BTA Bank alleges that its former chairperson, Mukhtar Ablyazov, siphoned more than $6 billion from the bank, primarily through a series of fraudulent loans to shell companies owned or controlled by Ablyazov. Regardless of the actual outcome of the case itself, the article argues that there was one obvious lesson: in order to avoid being subject to US jurisdiction for alleged misconduct committed abroad, avoid turning to the US real estate market (or the US financial system in general) to invest the proceeds of that conduct.
INDONESIAN PARLIAMENT SPEAKER DETAINED
OCCRP reported on 20th November that Indonesia’s anti-corruption commission (KPK) arrested parliamentary speaker, Setya Novanto, over alleged involvement in a $170 million corruption case. Reuters reported that he is one of around 80 suspects in a 2011 to 2012 scheme to steal over a third of the $440 million in state funds gained from increasing the cost of cards for the national electronic identity system.
CALL FOR BETTER INTERNATIONAL CONTROL OF INCENDIARY WEAPONS
Jurist reports that NGO, Human Rights Watch (HRW), has called a UN disarmament meeting to strengthen international law surrounding incendiary weapons following the use of such weapons by the Syrian and Russian forces in 2017. It goes on to say that Protocol III of the Convention on Conventional Weapons (CCW) currently controls the use of incendiary weapons, and HRW hopes that the countries at the UN disarmament meeting will initiate a review of the law, which has failed to prevent their use and has endangered civilians. It wants the definitions to include white phosphorus and ban the use of all incendiary weapons in civilian areas. It says that there have been 80 documented attacks with incendiary weapons by Syria and Russia in the last 5 years, which have caused severe civilian harm. It points out that Syria is not a party to Protocol III, but that Russia is.
BRAZILIAN ART PARK MINING TYCOON CONVICTED OF MONEY LAUNDERING
Risk & Compliance Hub carries a Daily Mail story about a court convicting the Brazilian mining tycoon who founded a massive outdoor art park (said to be one of the most important art centers in Latin America) of money laundering and sentenced him to more than 9 years in prison. Prosecutors alleged that in 2007 and 2008, $98.5 million in donations and loans meant for the Inhotim art park were rerouted to pay expenses at mining and steel companies owned by Bernardo Paz. In 2010, Paz sold his Itaminas conglomerate, which included 29 companies.
TRACE PODCAST: UPDATE ON SOUTH AFRICA, GUPTA AND ZUMA
Including alleged corruption in 10 billion rand arms deal
https://www.traceinternational.org/bribe_swindle_or_steal
21st November 2017
EU ADDS SEVASTOPOL MAYOR TO UKRAINE SANCTIONS
EU Regulation 2017/2153 and Council Decision 2017/2163/CFSP add Dmitry Vladimirovich Ovsyannikov, mayor of Sevastopol, to its list of persons designated respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine with effect from 21st November.
GLENCORE FACES BRIBERY PROBE OVER CONGO UNIT
Market Watch reported 21st November that Glencore PLC is reshuffling the board of one of its giant African copper operations following an internal review that the company said found weaknesses in its controls over financial reporting. Canada’s Ontario Securities Commission (OSC) has launched an investigation into the governance practices of the Glencore copper subsidiary, Katanga Mining, which is based in the Democratic Republic of Congo. It is investigating financial statements and disclosures by Katanga related to international bribery and anti-corruption laws
NORTH KOREA POSTER: “There is no sanction that can break the single-minded unity of our people”
HONG KONG AND SENEGAL POLITICIANS ARRESTED IN BRIBERY CASE
The Japan Times reports that US authorities have arrested Hong Kong’s former home affairs secretary, Patrick Chi Ping Ho, and the ex-foreign minister of Senegal, Cheikh Gadio for involvement in bribery in Africa on behalf of a top Chinese energy company (believed to be CEFC China Energy), with some deals arranged in the UN offices. It is alleged that they sent bribes to high-level officials in Chad and Uganda. CEFC China Energy has taken major stakes in global projects, including 14% of Rosneft, and playing an important role in the Chinese One Belt One Road initiative.
CRIME AS JIHAD: DEVELOPMENTS IN THE CRIME-TERROR NEXUS IN EUROPE
ETH Zurich has published a new paper following analysis of radicalised jihadis and ‘foreign fighters’ showing a noteworthy trend: a high percentage of these individuals share a history of criminality. The paper looks at –
- the extremist recruitment campaigns explicitly targeting those with criminal backgrounds;
- the ‘crime for jihad’ paradigm encouraged by the so-called Islamic State; and
- the usefulness of criminal skills in terrorism related enterprises, and more.
THE ORIGINS OF AMERICA’S JIHADISTS
The RAND Corporation in the US has published a new, and free to download, e-book which identifies 86 plots to carry out terrorist attacks and 22 actual attacks since 9/11 involving 178 planners and perpetrators. 87% of those planners and perpetrators had long residencies in the US. It finds that homegrown terrorism accounts for most of the terrorist activity in the US since 9/11. A review of plots to and actual attacks indicates that vetting people coming to the US cannot identify those who will radicalize in the US. Only 4 of them had come to the US illegally, all as minors. It argues that nationality is a poor predictor of later terrorist activity, and vetting people coming to the US, no matter how rigorous, cannot identify those who later radicalize there.
https://www.rand.org/pubs/perspectives/PE251.html
IS THIS SUPPOSED TO MAKE THINGS SEEM EASIER?
In World ECR an article from Miller Canfield PLC seeks to explain how a business can analyse information it holds and determine if it is subject to control under the US Export Administration Regulations (EAR) so that it cannot or should not be released. Not as clear as you might like (but that seems inevitable where US bureaucracy is involved…) – and does point out that US exporters also need to bear in mind OFAC, State Department, Nuclear Regulatory Commission, Department of Defense and other requirements and restrictions.
JERSEY SEIZED £59 MILLION FROM CRIMINALS IN 10 YEARS
Assets totalling nearly £59m have been confiscated from criminals connected to Jersey over a 10-year period, figures obtained by the BBC show. However, a transparency campaigner said the return was “relatively modest” for an island “vulnerable” to money laundering. The information, obtained via a Freedom of Information request, shows in the 10 years to 2016, £58.8 million of criminal money connected to Jersey was confiscated by authorities.
http://www.bbc.co.uk/news/world-europe-jersey-42058595?src=ilaw
SUSPENDED SENTENCE FOR CORRUPT LEADER SENDS WRONG SIGNAL
IBT Times article maintains that the 3-year suspended jail sentence handed out recently to Equatorial Guinea’s vice president Teodorin Obiang, by a French court, for what is effectively a crime of grand corruption, sends out the wrong message to kleptomaniacs and those who help facilitate this crime. He officially earned approximately $100,000 annually in his post as Minister for Agriculture. French investigators revealed that he purchased a $196 million mansion, 18 luxury cars, plus a $24 million art collection, that could never be covered by his declared earnings. The US DoJ has also looked into the ruling Obiang family’s lifestyle, and related allegations of money laundering.
CEO OF MONGOLIAN COAL PRODUCER ARRESTED
BNE Intellinews reports that the CEO of Mongolian coal producer SouthGobi Resources has been detained in China as a suspect in a fraudulent loan case, the company said in a statement on November 20th. SouthGobi, also listed on the Toronto stock exchange, is the latest company linked to allegations of illicit conduct amid growing concerns over the regulation of Hong Kong-listed securities in China.
CZECH POLICE WANT TO PROSECUTE WOULD-BE PRIME MINISTER
Reuters carries a story saying that Czech police have requested parliament lift the immunity of prospective prime minister Andrej Babis to allow prosecution in a case involving alleged fraud in tapping EU subsidies, CTK news agency reported
TAXATION (CROSS-BORDER TRADE) BILL INTRODUCED INTO PARLIAMENT
HM Treasury and Department of International Trade announcement 21st November. The Bill will allow the UK to set and collect its own duty on goods coming into the country and will allow the government to implement different outcomes of the EU negotiations, including an implementation period.
https://www.gov.uk/government/news/taxation-cross-border-trade-bill-introduced-in-parliament
Explanatory Notes, Impact Assessment etc at
https://www.gov.uk/government/publications/taxation-cross-border-trade-bill
POTENTIAL MANIPULATION OF FORENSIC TOXICOLOGY TEST RESULTS AT 2 PRIVATE COMPANIES IN UK
The MoJ and HM Courts and Tribunals has issued Advice for those concerned about potentially unreliable forensic toxicology tests. Police are investigating potential manipulation of forensic toxicology test results at 2 private companies. The test results were used as expert evidence in England and Wales. Results from other forensic test providers are not believed to be affected. The information provided by MoJ and HM CTS gives examples of where toxicology tests may have been used as part of decision making.
https://www.gov.uk/guidance/forensic-toxicology-tests
NATIONAL OPERATION TO RETEST MANIPULATED FORENSIC SAMPLES IS PROGRESSING AT PACE
On 21st November the National Police Chiefs Council provided an update
EXPERTS FOR CRIME AND MONEY LAUNDERING FORUM IN PANAMA ARRESTED IN SPAIN
EIN News desk reports that 2 of the “experts” scheduled to speak at a Panama forum on money laundering and organized crime on 23rd November will be no-shows as they are behind bars in Spain under investigation for money laundering and organized crime. According to the publication, José Manuel Villarejo, and lawyer, Rafael Redondo were invited to Panama together with notable “authorities, detective agencies, forensic accountants and law firms”, from Switzerland, Italy, Spain, Colombia and Peru, to discuss “the prevention of corporate legal risks”, and “developments in judicial co-operation and tracking of assets in the world, corporate intelligence, trends in criminal liability of legal persons, disqualifications for bribery and transnational corruption, and news on automatic exchange of information between tax authorities in the US, Switzerland, Panama and Latin America “.
NEW IRISH CORPORATE BRIBERY OFFENCES BILL
McCann Fitzgerald has published a brief on the new Irish Criminal Justice (Corruption Offences) Bill 2017, saying that proposed measures will increase pressure on Irish corporates to draw up effective anti-bribery policies and procedures, if they have not already done so.
https://www.mccannfitzgerald.com/knowledge/disputes/next-up-a-new-corporate-bribery-offence
US FORCES BOMBING “FINANCIAL TARGETS”, INCLUDING TALIBAN OPIUM PRODUCTION
The Air Force Magazine on 21st November carried a report on US forces in Afghanistan using new authorities to target the Taliban’s finances, using airpower including B-52s, F-22 jet fighters, and A-29 attack aircraft targeting opium production in the mountains of the country. Afghan Air Force A-29 Super Tucanos hit 2 opium production facilities in northern Helmand Province as part of a plan to attack Taliban finances. The USAF B-52 bombers and F-22 coming from outside of Afghanistan hit 8 more opium production facilities in a series of airstrikes. The strikes are said to be part of the US government’s new South Asia strategy, which includes new authorities allowing the local commander to use airstrikes on financial targets in addition to military targets.
SECRET COMMISSION IN THE ART WORLD AND THE RISKS
Stephenson Harood has issued an article about a recent case from the US as a reminder of the risks of art dealers making secret commission. The case a dealer who in November 2011 found a buyer, another art dealer who was willing to purchase an artwork for $6.5 million. This artwork was being sold by the executor of an estate. The dealer told the executor that she had managed to get the buyer up to a price of $5.5 million. He accepted this. The dealer then suggested that the deal be structured in 2 stages, stating that the buyer wished to remain anonymous. The executor then sold the work to the dealer for $5.45 million. He believed that she would resell it immediately to the buyer for $5.5 million (with her retaining her agreed fee of $50,000). That was not the case. In fact she had agreed with the buyer to sell the artwork for $6.5 million meaning she pocketed a total of $1,050,000.
In the eventual court case, the dealer lost and was ordered to repay the executor the $1,050,000. The article cautions that where such secret commission is involved, legal proceedings could be commenced to repay the commission to the principal and there are questions over whether an undisclosed commission could constitute a bribe. The more transparent the deal, the better.
http://www.shlegal.com/news-insights/secret-commission
LARGEST-EVER PENALTY FOR BREACH OF US IMMIGRATION LAW
On 16th November Fox Rothschild reported on the largest-ever fine imposed by the US Immigration & Customs Enforcement (ICE). Asplundh Tree Expert Co., a long-established and one of the largest privately-owned corporations in the USA, having some 30,000 employees and a $3.5 billion turnover, has been ordered to pay $95 million for hiring thousands of immigrants who did not have permission to work in the US. Asplundh employs workers in the US, Canada, Australia, and New Zealand, and clears brush and vegetation from electric and gas lines and holds many municipal, state, and federal contacts. The penalty follows a 6-year ICE investigation, and comprised a $80 million forfeiture and $15 million as settlement of associated civil claims.
WHO’S WHO IN YOUR EXPORT JOURNEY
Useful infographic from Shipping Solutions
https://www.shippingsolutions.com/whos-who-in-your-export-journey
US TREASURY FURTHER NORTH KOREAN SANCTIONS ON TRADING, ON LABOUR AND ON SHIPPING COMPANIES AND VESSELS
OFAC on 21st November sanctioned 1 individual, 13 entities, and 20 vessels as the US continues to take action multilaterally and unilaterally to disrupt North Korea’s illicit funding of its unlawful nuclear and ballistic missile programmes. The new sanctions target third-country persons with long-standing commercial ties to North Korea, as well as the transportation networks that facilitate North Korea’s revenue generation and operations. Designated are 4 Chinese companies and an individual, the Maritime Administration of the Democratic People’s Republic of Korea (DPRK) and the Ministry of Land and Maritime Transportation of the DPRK, 6 North Korean shipping and trading companies and 20 named vessels. OFAC remarks that North Korea is known to employ deceptive shipping practices, including ship-to-ship transfers, a practice prohibited by UN SCR 2375. Also designated is the Korea South-South Cooperation Corporation for having engaged in, facilitated, or been responsible for the exportation of workers from North Korea, including exportation to generate revenue for the Government of North Korea or the Workers’ Party of Korea.
https://www.treasury.gov/press-center/press-releases/Pages/sm0220.aspx https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20171121.aspx
GARDAÍ SEIZE CARS, JEWELLERY AND CASH IN 11 CAB RAIDS IN CO KERRY
The Irish Examiner reports on 11 raids by the Criminal Assets Bureau targeting members of the Traveller community. Large amounts of cash, high-value cars, as well as jewellery including expensive Rolex and Cartier watches were seized, as well as documents.
THINGS YOU MAY HAVE MISSED: US TRAFFICKING IN PERSONS REPORT
In June he US State Department released its Trafficking in Persons Report 2017. The report states that trafficking in persons, also known as modern slavery or human trafficking, includes both sex trafficking and compelled labour. The US has the Trafficking Victims Protection Act of 2000, as amended (TVPA), and there is also the UN Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the UN Convention against Transnational Organized Crime (the Palermo Protocol). The State Department has an Office to Monitor and Combat Trafficking in Persons (TIP Office), which partners with foreign governments, international organizations, other federal agencies, civil society, the private sector, and survivors of human trafficking to develop and implement effective strategies to confront modern slavery. The TIP Office is responsible for bilateral and multilateral diplomacy, targeted foreign assistance, and public engagement on trafficking in persons.
https://www.state.gov/j/tip/rls/tiprpt/2017/index.htm
AUSTRALIA: ASSETS OF ILLEGAL INVESTMENT BUSINESS FROZEN
Finance Feeds reports that Australia’s Supreme Court has frozen the assets of Da FX following an action brought by the regulator, ASIC, which alleged that Daniel Ali, through Dan FX (DanFX Trade Pty Ltd, Daniel Farook Ali and associated entities), operated an unregistered managed investment scheme that has raised approximately $13 million from more than 200 investors. ASIC has permanently banned Mr Ali from providing financial services or engaging in credit activity.
https://financefeeds.com/australias-supreme-court-freezes-assets-fraudulent-entity-danfx/
“AUSTRALIA’S BIGGEST PONZI SCHEME”
The Daily Mail in Australia reports on a scheme said to have defrauded A$209 million from hundreds of “mums and dad type” investors, whilst scammer lived a life of luxury. Sydney man, Toni Iervasi, alleged to have duped 780 creditors whilst posting photos of him and his partner enjoying around the world holidays.
“GAME OF THRONES” EXTORTION ATTEMPT ALLEGED
Law 360 reported that US federal prosecutors in New York charged Behzad Mesri, a still at-large ex-military contractor from Iran with hacking into HBO to steal secret files — including scripts and plot summaries from “Game of Thrones” episodes — before trying to extort the network out of $6 million in digital currency. A warrant has been issued for his arrest.
POLICING IN BRITAIN: VISION 2025 – ONE YEAR ON
In November 2016 the Policing Vision 2025 was launched setting out the plan for policing over the next 10 years. Police chiefs and Police and Crime Commissioners are now implementing a transformational programme of reform. The National Police Chiefs Council (formerly ACPO) provides an update.
https://news.npcc.police.uk/releases/vision-2025-one-year-on
CYBERSECURITY: CONTAINER SHIPS AT MASSIVE RISK
Hellenic Shipping News reports that a British cybersecurity specialist has published details which lay out how easy it is for container ships’ loading and cargo routing plans to be compromised. It is said that the issue arises from the complete lack of security in the BAPLIE EDIFACT, a messaging system used to exchange information between shipping lines, port authorities, and ships, to create plans used to load each ship: which locations will house which container. The messaging system was developed originally by the Shipping Message Development Group (SMDG), and because ship-board systems are often offline for months at a time, they rarely get much attention or updating.
The interference can be to destabilise or delay ships or to steal goods by rerouting containers, using messages that cover shipping-to-terminal messaging and have been compromised by operators at ports physically changing codes at the dockside for quick gains – rerouting or concealing drugs traffic or for simple theft of whole containers. Such interference could also be exploited by terrorists.
http://www.hellenicshippingnews.com/container-ships-at-massive-risk/
US OPIOD EPIDEMIC COST USA $500 BILLION IN 2015
A Flipboard article reports that the opiod epidemic in 2015 cost the US economy more than $500 billion, according to a new report by the White House Council of Economic Advisers (CEA). Overdose deaths spiked last year compared to 2015 — in large part due to the spread of the synthetic opioid fentanyl in the illicit market. The article explains some of the background to the epidemic, saying that the current overdose crisis has over time changed to involve all kinds of opioids — painkillers, heroin, and fentanyl. But it originally began with the overprescription of opioid painkillers, which caused the supply of the prescription drugs to explode. That led opioids to proliferate, landing in the hands of not just patients but also teens rummaging through their parents’ medicine cabinets, other family members, friends of patients, and the black market. As people got addicted, some moved on to heroin and fentanyl. Meanwhile, the expanding supply of heroin and fentanyl — which came into the US to meet demand by new opioid users — allowed more people to easily obtain the drugs, even if they didn’t start on painkillers.
https://flipboard.com/@flipboard/-white-house-one-year-of-the-opioid-epid/f-bb54c2a5df%2Fvox.com
MLADIC FOUND GUILTY OF GENOCIDE AND WAR CRIMES: LIFE IMPRISONMENT SENTENCE
On 22nd November, the International Criminal Tribunal for the former Yugoslavia (ICTY) found former Bosnian Serb commander Ratko Mladic guilty of genocide and war crimes for his role in the shelling of the Bosnian capital Sarajevo, and the murder of more than 8,000 men and boys around Srebrenica during the Bosnian war in the 1990s. He was sentenced to life imprisonment.
RUSSIAN INTELLIGENCE SHIP VISITED CAPE TOWN IN VOYAGE AROUND AFRICA
Fascinating piece in Defence Web about the Russian Project 22010 intelligence ship Yantar. Described as an oceanographic research vessel, but believed to be an espionage ship, it is said to be equipped with 2 self-propelled deep-sea vehicles. Yantar has been known to loiter near undersea communications cables, and said to be able to cut cables, tap undersea cables, remove other countries’ taps and investigate and recover objects of interest from the sea floor, such as crashed aircraft or test missiles. It is also able to assist with search and rescue work.
EU POLICY OPTIONS TOWARDS POST-SOVIET DE FACTO STATES
ETH Zurich paper argues that it is time that the EU alters its approach to engagement with the post-soviet de facto states of Nagorno-Karabakh, Abkhazia, South Ossetia, and Transnistria and adopt a more active role in promoting conflict management in the area but, in order to preserve regional stability, stop short of de facto recognition. Conflicts in post-Soviet areas involving de facto states have remained unresolved since the ceasefires in the early 1990s. By heating up periodically, these conflicts threaten broader regional security, and remain unresolved. The article provides the following illuminating basic facts about the 4 de facto states –
Meanwhile, the Carnegie Institute has published an article on Transnistria, the breakaway region of Moldova. Recent changes within Moldova have brought the Transnistria issue back into the headlines. The election of Igor Dodon—who campaigned on a pro-Russian ticket—as the president of Moldova suggested progress may be made in settling the intractable conflict. The conflict in Transnistria is said to be far from both resolution and explosion.
RUSSIAN MILITARY PRODUCTS BANNED FROM FARNBOROUGH AIR SHOW 2018
Customs Today carries a report saying that Russian firms are prohibited to display military products in the international aerospace show Farnborough next year according to the show’s organizers, which have apparently told would-be exhibitors that products must comply with the EU-wide embargo on the import and export of military products, but that they were looking forward to Russian civilian equipment manufacturers participation in the airshow in 2018.
ARTIFICIAL INTELLIGENCE (AI), MONEY LAUNDERING AND BANKS
The International Chamber of Commerce on 22nd November published an article saying that there are further indications that banks and financial institutions are moving towards using artificial intelligence (AI) to tackle financial crime and boost their anti-money laundering operations.
https://icc-ccs.org/index.php/1239-ai-money-laundering-and-banks
EGYPT ARRESTS 29 “TURKISH SPIES”
Chinese-based Xinhua reported on 22nd November that Egypt had arrested 29 people over charges of spying for Turkey against the Egyptian national interests, and accused of espionage, joining a terrorist group, involved in money laundering and illegal currency trade and other charges. Egypt’s ties with Turkey have been tense since the Egyptian military removed former Islamist President Mohamed Morsi in July 2013 and later blacklisted the Muslim Brotherhood group as a terrorist organization. Turkey has hosted fleeing Brotherhood members and supporters. The 29 defendants and others allegedly passed international online calls through Turkey-hosted servers collecting information about negative and positive conditions inside Egypt to plot against the country from Turkey.
http://news.xinhuanet.com/english/2017-11/22/c_136772039.htm?src=ilaw
TAIWAN NAVY OFFICERS PUNISHED FOR LINKS TO LOAN SCANDAL
Focus Taiwan reported that the Taiwan Ministry of National Defense had punished 23 military officers, including 3 acting admirals and former a Navy Commander in connection with a contract awarded to a financially troubled local shipbuilder (Ching Fu Shipbuilding) embroiled in an alleged loan fraud scandal connected to a 2014 US$1.19 billion contract to build 6 minesweepers for the Navy in October 2014.
http://focustaiwan.tw/news/aipl/201711220026.aspx?src=ilaw
AUSTRALIAN BIKER GANG MONEY LAUNDERING CHARGES
Nine News reports that Michael Andrew Bankier, a senior associate of the Mongols outlaw motorcycle gang, and 2 others were charged with dealing in proceeds of crime and money worth over $1 million after their “lavish” lifestyle at a Gold Coast property raised suspicions of police.
UK CONSIDERING BRINGING VIRTUAL CURRENCY EXCHANGES UNDER AML CONTROLS
The UK Government has confirmed that it is considering law changes that will affect virtual currency exchange platforms. A Minister, Lord Bates, said on November 21st that the Government is currently negotiating amendments to the 4th AML Directive set to bring virtual currency exchange platforms and custodian wallet providers into the scope of AML/CFT regulation.
UK DELIBERATE TAX DEFAULTERS LIST
HMRC publishes details of people who deliberately get their tax affairs wrong, this is the current list of defaulters
https://www.gov.uk/government/publications/publishing-details-of-deliberate-tax-defaulters-pddd
GUIDES TO SCIENTIFIC EVIDENCE IN PLAIN ENGLISH
The Law Society Gazette on 22nd November reported that Royal Society and Royal Society of Edinburgh scientists are collaborating with judges to make scientific evidence easier to understand in court by producing “plain English” guides – on DNA fingerprinting and forensic gait analysis
https://royalsociety.org/about-us/programmes/science-and-law/
with planned guides to include the physics of vehicle collisions. The aim is to provide an authoritative account of a technique, as well as the technique’s limitations and challenges associated with its application.
https://royalsociety.org/news/2017/11/royal-society-launches-courtroom-science-primers/
JERSEY REPORTS ON USE OF CONFISCATED ASSETS
The Jersey Evening Post website carries a report saying that since 2010 more than £32.25 million has been used from the Criminal Offences Confiscation Fund on various projects to offset the cost to the taxpayer. The use included £14.7 million on the new £24 million police station, £117,849 on body-worn cameras for police officers; almost £300,000 on various drug support programmes such as needle bins, opiate-substitution programmes and parental advice booklets; about £720,000 on updating CCTV; about £10 million for legal costs; £117,000 on a portable building for Customs at the Harbour; and £1.2 million on Magistrate’s Court building and staff costs. It reports that about £8.1 million in the fund, which is available to use in the Island and a total of £6.5 million of that is earmarked in 2018’s Budget for a major project a new gatehouse and offices at the prison. https://jerseyeveningpost.com/news/2017/11/22/benefits-from-confiscated-proceeds-of-crime-revealed/#ZsAUJAOomxROV0IE.99
UN SECURITY COUNCIL CALLS FOR FIGHT AGAINST HUMAN TRAFICKING
The UN Security Council has unanimously adopted a resolution (UN SCR 2238) calling for a stronger crack down on human trafficking and modern slavery worldwide, and which particularly condemned the sale of people by the Islamic State in Iraq and the Levant, ISIS, and violations and abuses by Boko Haram, Al Shabaab, the Lord’s Resistance Army and similar groups for the purpose of sexual slavery, sexual exploitation and forced labour. Human trafficking is thought to generate about $150 billion per year. According to the International Labour Organization (ILO) and rights group Walk Free Foundation about 40 million people globally have been enslaved in 2016.
https://www.un.org/press/en/2017/sc13081.doc.htm
SWISS BANKER CLEARED OF AIDING TAX EVASION IN US CASE
International Adviser reports that a former Swiss private banker has been acquitted of helping US clients hide money offshore and avoid paying tax. Stefan Buck was head of private banking and a member of the executive committee at now-defunct Bank Frey & Co in Switzerland. In 2013, he and Edgar Paltzer (who pleaded guilty and agreed to co-operate with the US authorities), a former partner of Swiss law firm Niederer Kraft & Frey, were charged with conspiring with US taxpayer clients and others to hide millions of dollars in offshore accounts and evade US taxes on the income earned on those accounts.
IMPORTATION OF CHILD SEX DOLLS – A NEED FOR GUIDANCE?
Article from Drystone Chambers asking if UK customs law needs updating.
https://drystone.com/files/179a1bad1582d929d2e409d428f7f04c.pdf
THE NEW POCA FRONTIER: BITCOIN AND ELECTRONIC CURRENCY, SHAPING ASSET RECOVERY IN THE 21st CENTURY
Another article from Drystone Chambers. It argues that while POCA 2002 can be used it is not ideal where cryptocurrencies are involved. The author sets out 1 possible responses that the prosecution can take to address electronic currency and discuss issues this might raise for the defendant. At present, he says, he is unaware if these principles have been tested in court, and until they have been they will remain theories.
https://drystone.com/files/d7c6e04e82eff4106fe4e75478441769.pdf
IS ASSET RECOVERY THE ANSWER TO WILDLIFE CRIME?
And another from Drystone Chambers, stating that wildlife crime – such as ivory trafficking, pangolin smuggling are thought to be worth between $8 billion to $23 billion a year. The article uses various examples to determine if the use of POCA-style powers are the answer.
https://drystone.com/files/a759e89d8083426d4110f28ca664dfff.pdf
ISRAELI FORMER MINISTER JAILED
Risk and Compliance Hub reports that Stas Misezhnikov, 48, a former tourism minister 2009-2013 representing the Yisrael Beytenu party sentenced to 15 months in prison and will have to pay a fine of just under $20,000 after pleading guilty to breach of trust in a deal with the prosecution. He was accused of ensuring his ministry’s funding of a student festival in 2012 in the southern port city of Eilat and then asking organizers to employ his romantic partner, Julia Roth, in return.
NORTH KOREA (UNITED NATIONS SANCTIONS) (AMENDMENT) (No. 2) ORDER 2017
SI 2017/1110 in the UK amends prohibitions in the North Korea (United Nations Sanctions) Order 2009(provides for the enforcement in the UK of certain aspects of the trade restrictions against North Korea, including prohibitions on the use of certain ships, aircraft and vehicles to carry specified goods to and from North Korea) in line with UN SCR 2371. UN SCR 2371 includes restrictions on the import from North Korea of seafood and lead and lead ore, which require domestic implementation, hence the inclusion of relevant measures in this Order.
VERMONT SKI RESORT OWNER REACHES TENTATIVE DEAL WITH SEC IN $200 MILLION FRAUD CASE
The owner of the Jay Peak ski resort in Vermont is reported to have reached a tentative settlement with the USEC in a $200 million fraud case involving people from across the world who hoped their investments in the resort and other projects would lead to permanent US residency. The tentative settlement between Florida businessman Ariel Quiros and the SEC was mentioned in federal court documents filed in Miami,
Read more at: http://www.mcclatchydc.com/news/politics-government/national-politics/article186054193.html#storylink=cpy
OIL COMPANY ENI SAYS REFINERIES RISK SHUTDOWN
Reuters reports that Italy’s Eni has said that its refineries in Italy were at risk of shutdown after Italian tax police seized assets as part of a probe into alleged tax evasion. The state-controlled oil major said in a statement a judge had ordered the seizure of devices used to measure oil products at its refineries and storage facilities across the country. Eni denies any wrongdoing.
FIFA BANS 3 INTERNATIONAL OFFICIALS
OCCRP reports on 22nd November that FIFA’s independent Ethics Committee has banned 3 former football officials for life from all national and international activities related to the sport. The former presidents of the Guam, Nicaraguan and Venezuelan FA—Richard Lai, Rafael Esquivel and Julio Rocha respectively—were found guilty of corruption on the terms of FIFA’s Code of Ethics. In addition to the ban, the FIFA ethics watchdogs fined each of them amounts appropriate to their scale of bribery. The banned officials each previously pleaded guilty in the US to charges including wire fraud and money laundering.
23rd November 2017
$3 MILLION CRYPTOCURRENCY FRAUD
A “gold wallet” scheme run by mybtgwallet.com prompted users to submit private keys or recovery seeds in order to generate bitcoin gold wallets. Coindesk reports that at least $30,000 Ethereum, $72,000 Litecoin, $107,000 Bitcoin Gold and $3 million Bitcoin were lost.
https://www.coindesk.com/bitcoin-gold-wallet-scam-nets-3-million-illicit-earnings/
£4.8 MILLION VAT FRAUD CASE IN NEWCASTLE
Chronicle Live reports that 5 people have appeared in court in Newcastle accused of taking part in a £4.8 million VAT fraud. The 4 men (Daniel MacDonald, Stanley Miller, William Moody, Paul Nichol) and 1 woman (Carol Miller) were in the dock to face varying charges relating to 3 companies; MGM Precision Limited, in Newburn, Newcastle, SLM Engineering Ltd, in Batley, West Yorkshire, and T-Tec (Precision Engineers) Limited, in Newburn.
http://www.chroniclelive.co.uk/news/north-east-news/five-court-accused-taking-part-13940727
UK AND CZECH REPUBLIC: ANTI-BRIBERY LAWS COMPARED
Prague-based law firm Kinstellar provides an interesting comparison which compare the UK and the Czech Republic’s anti-corruption regimes. The article says that after an era of post-communist “wild privatisation”, represented by high levels of corruption and strong ties between public prosecutors and the political leadership, judges and prosecutors are no longer afraid to open high-profile cases targeting top political representatives. Notable Czech bribery-related cases include the Pandur case, whose key player is influential lobbyist Marek Dalík, as well as former Minister of Health David Rath and his CZK 7 million bribe, which was stashed in a wine crate.
http://www.kinstellar.com/insights/detail/644/uk-and-czech-republic-anti-bribery-laws-compared
SWISS BILL TO ENFORCE HUMAN RIGHTS REQUIREMENTS ON PARENT COMPANIES
Herbert Smith Freehills reports that Switzerland is the latest in a series of countries to consider whether to compel its companies to respect human rights throughout their business activities (thus adopting the UN’s “Ruggie Principles”). The Legal Affairs Committee of the Swiss Parliament’s Council of States has acknowledged that human rights violations by Swiss based companies are of great concern. To combat that, they have announced that a new Bill should be drafted based on 3 cornerstones: human rights due diligence for all large companies and SME operating in high-risk areas; effective sanctions for non-compliance; and parent companies should be liable for serious human rights abuses committed by their subsidiaries.
DIRECTORSHIPS – A HANDY GUIDE TO DUTIES AND RESPONSIBILITIES
Law firm Brodies LLP has provided a useful overview of directors’ fundamental duties under the UK’s Companies Act 2006.
http://www.brodies.com/sites/default/files/directors_duties_handy_guide_2017.pdf
COMPLIANCE AFTER THE EVENT IN BRIBERY AND CORRUPTION CASES
Rahman Ravelli has published an article focusing on what a company can do to recover itself and its reputation, mentioning how UK oilfield services firm Petrofac’s announcement that it was establishing a compliance and ethics board while it continued to be investigated for fraud in the Unaoil case.
https://www.rahmanravelli.co.uk/articles/compliance-after-the-event-in-bribery-and-corruption-cases/
NEW EU LIST OF VESSELS INVOLVED IN ILLEGAL FISHING
EU Regulation 2017/2178/EU amends Regulation 468/2010 that established the EU list of vessels engaged in illegal, unreported and unregulated (IIU) fishing; substituting a new list of vessels.
INTERNATIONAL CIGARETTE SMUGGLING AND TAX EVASION CASE
Eurojust on 23rd November reported an international co-operation case involving judicial and law enforcement authorities in Latvia and the Netherlands who, upon request of the German authorities, and co-ordinated by Eurojust. 2 arrests in Latvia have been made, searches and seizures at several premises were carried out, and interviews were conducted. The seizure of 9.3 million undeclared cigarettes at the port of Lübeck-Travemünde in Germany at the end of 2015 was the starting point of the investigation.
http://eurojust.europa.eu/press/PressReleases/Pages/2017/2017-11-22.aspx
ISRAELI BANK SETS ASIDE ANOTHER $80 MILLION TO SETTLE US TAX CASE
Reuters reported on 23rd November that Bank Hapoalim, Israel’s largest bank, said it will provision an additional $80 million in the third quarter to cover a possible future settlement in a US tax evasion investigation. This would bring the total amount Hapoalim has provisioned for the tax investigation to $268.5 million.
SEC ENFORCEMENT DIVISION ANNUAL REPORT
The US SEC Division of Enforcement has released its annual report, providing a recap of the SEC’s enforcement results over the past 12 months, as well as some insight into its direction for the coming year. Overall, the report suggests that the SEC will increase its focus on addressing harm to “Main Street” investors and that pursuing individuals will continue to be the rule, not the exception.
https://www.sec.gov/files/enforcement-annual-report-2017.pdf
GAMBLING 12.1% OF MALTA ECONOMY
Calvin Ayre reports that, the Malta Gaming Authority (MGA) released its interim report covering the 6 months to June 30th, during which Malta-based gaming operators contributed €556m of gross value to the local economy, 10.4% higher than in the same period last year. The total sum accounted for 12.1% of Malta’s overall economy, up from 11.8% in H1 2016.
US RANKS LOW IN TAX TO GDP
Law 360 reported 23rd November that the US has ranked 31st among 35 countries in terms of its tax-to-GDP ratio, which measures a nation’s tax revenue as a percentage of its GDP, according to an analysis released by the OECD.
JERSEY CONSULTING ON CREATING LLC
Ogier reports that a consultation is underway in Jersey on a law allowing for Limited Liability Companies (LLC) – the consultation runs to 12th January.
MILLIONS OF CIGARETTES DISGUISED AS CHICKEN FILLETS SMUGGLED INTO HARWICH
The East Anglian Daily Times reports on trailer – which was on board a freight vessel from the Hook of Holland and said to contain chicken fillets. Instead 8.5 million cigarettes were found.
http://www.eadt.co.uk/news/cigarettes-disguised-as-chicken-smuggled-into-harwich-1-5291874
KIDNAP-FOR-RANSOM IN MOZAMBIQUE, A THREAT THAT’S EXPECTED TO RISE
Control Risks reported on 23rd November that Mozambique has one of the most active criminal kidnap-for-ransom environments in Sub-Saharan Africa, although it also has a history of insurgency ad politically-related kidnapping. A podcast examines the current kidnap environment; tactics used and who is the most targeted; which regions have the highest rate of incidents; and how organisations can mitigate the risk.
https://www.controlrisks.com/our-thinking/insights/podcasts/kidnap-for-ransom-in-mozambique
HOW WILL POLICING AND JUSTICE BE AFFECTED BY THE DATA PROTECTION BILL?
Presentations from Tech UK of a panel event on 21st November. The event was concerned with the EU General Data Protection Regulation (GDPR) that comes into effect in the UK and across Europe on 25th May 2018. Its sister legislation, the Law Enforcement Directive, comes into effect slightly earlier, on the 6th May 2018. Both are currently working their way through Parliament in the Data Protection Bill, and together they represent the most significant reform of data protection laws for 20 years. The Bill will have profound implications for organisations across all sectors that collect and process personal data.
HONG KONG TOY TRADING CORRUPTION CASE
The Standard reports that 2 former senior staff members of a toy trading company and 4 directors-cum-shareholders of 3 toy manufacturers have been charged with conspiracy to accept and soliciting illegal commissions totaling over HK$5.6 million in relation to placing of toy orders, the Independent Commission Against Corruption said.
GREECE RELEASES LIST OF BLATANT TAX EVASION AND SMUGGLING CASES
Greek Reporter reports that the Greek finance ministry has tabled in parliament a list of blatant tax evasion and smuggling cases, as an addition to the state budget. The list of major tax evasion cases included countless fake invoices, businesses that were shut down for dodging taxes, and also lists of smuggling cases, mainly in the tobacco and fuel sectors.
UK TO EXTEND ASSESSMENT TIME LIMIT FOR OFFSHORE AVOIDED TAX
The government has outlined plans in the Budget to increase the time limits for assessing all offshore case of potential tax avoidance to at least 12 years where non-compliant behaviour is involved, with a consultation on this in Spring 2018. The current time limits for both onshore and offshore tax investigations are usually 4 years if there has been reasonable care by the taxpayer, 6 years if the non-compliance is as a result of careless behaviour and 20 years if the behaviour is deliberate.
OECD REPORT: PERSONAL INCOME TAXES ARE PLAYING AN INCREASINGLY SIGNIFICANT ROLE IN THE TAX MIX
Personal income taxes are playing an increasingly significant role in the tax mix as revenues from social security contributions and consumption taxes fall, and corporate tax collections remain low, according to a new OECD report, Revenue Streams 2017.
WILL INDIAN DRUG EXPORTS TO OTHER COUNTRIES GET STUCK IN EU PORTS?
The Times of India on 23rd November carried a story saying that Indian drug exporters fear that their exports to the world could be held up when in transit in Europe, as often happened in 2008 when the EU and India were involved in a dispute: 17 shipments (16 from India and 1 from China) were detained in the EU on grounds of infringement of intellectual property. But a recent WHO discussion document for a meeting in November/December on medicines in transit has triggered fears that it could become a problem again. The document outlines criteria that could justify a country’s customs authorities intervening to check medicines passing through their ports on grounds of public health concerns. Exporters fear it could be used to justify detentions. A settlement to the EU-India dispute was reached in 2011 and the EU agreed not to seize generic drugs transiting through its customs territory.
NON-PROFITS IN 8 ASIA/PACIFIC NATIONS AT ‘MEDIUM RISK’ OF TERRORISM FINANCING
The New Straits Times in Malaysia reports that the first regional risk assessment of non-profit organisations (NPO) in 8 Asia-Pacific nations has identified a ‘medium risk’ of terrorism financing. The risk assessment, launched at the meeting of FIU etc at the Counter-Terrorism Financing Summit and has prompted regional authorities to improve data collection and sharing to identify, monitor and disrupt high-risk NPO while making it harder for terrorists to infiltrate NPO finances. The 8 nations are – Australia, Indonesia, Malaysia, Philippines, Thailand, Singapore, Brunei and New Zealand.
INDIA TO COMMISSION MISSILE-TRACKING SHIP IN 2018
India is set to commission its indigenously designed, missile-tracking ocean surveillance ship (OSS) in 2018 to support the country’s classified strategic weapon and ballistic missile defence (BMD) programmes, official sources have told Jane’s.
http://www.janes.com/article/75908/india-to-commission-ocean-surveillance-ship-in-2018
GUIDANCE ON CYBERSECURITY
The Belfer Centre for Science & International Affairs has published online its Cybersecurity Campaign Playbook was written by a bipartisan team of experts in cybersecurity, politics, and law to provide simple, actionable ways of countering the growing cyber threat. Said to contain “baseline recommendations, not a comprehensive reference to achieve the highest level of security possible”, the publication is intended as a starter and basic guide to procedures and dos and don’ts.
https://www.belfercenter.org/cyberplaybook#approach
ITALY DISSOLVES 5 LOCAL COUNCILS OVER ALLEGED MAFIA LINKS
The Local reports that the Italian government has dissolved 5 local town councils in Calabria over ties to the mafia, including that of the region’s third biggest city. Councillors Lamezia Terme, Cassano all’Ionio, Isola di Capo Rizzuto, Marina di Gioiosa Ionica and Petronà are suspended due to suspected links to organized crime
https://www.thelocal.it/20171123/italy-dissolves-five-town-councils-mafia-infiltration
CANADA MOVES QUICKLY ON CORRUPTION AND HUMAN RIGHTS SANCTIONS
Baker McKenzie reported that, on October 18th, the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) entered into force. The Act gives Canada the ability to impose unilateral sanctions against “foreign nationals” who are involved in corruption or gross violations of human rights. The Act broadens the ability of the Government to impose sanctions. “Foreign national” is defined broadly to mean an individual who is not (a) a Canadian citizen; or (b) a permanent resident under the Immigration and Refugee Protection Act. Just over two weeks after the Act came into force, on November 3rd, the Government issued the first set of sanctions under the Act, listing 52 foreign nationals from Russia, Venezuela and South Sudan.
NEW SANCTIONS REGULATIONS TIGHTEN CONTROLS ON LAWYERS IN UK
Corker Binning has published a useful article following the coming into force on 8th August of the European Union Financial Sanctions (Amendment of Information Provisions) Regulations 2017. These extended a reporting requirement that previously only applied to financial institutions to ‘independent legal professionals’, as well as to accountants, auditors, tax advisors, estate agents, trust or company service providers and others such as casinos and dealers in precious metals or rare stones. The article states that the Solicitors Regulation Authority (SRA) has warned solicitors that they would now face enforcement action if they failed to report a known or suspected financial sanctions breach.
It also states that OFSI’s latest guidance states that both EU Regulations and the UK domestic regimes make it clear that the reporting requirements do not apply to information to which legal professional privilege (LPP) is attached. However, the guidance also states that OFSI expects legal professionals to approach their disclosure obligations with rigour and to carefully ascertain whether legal privilege applies, as well as which information it applies to. It warns that OFSI may challenge a blanket assertion of LPP where it is not satisfied that such careful consideration has been made. Corker Binning also cautions that solicitors and other professionals must also continue to be careful not to commit any of the substantive offences that may be contained in the legislation.
OFSI’s Financial Sanctions Guidance confirms that generally lawyers are not prohibited from providing legal advice under an asset freeze. However, the payment for legal services and the provision of legal services on credit do require a licence from OFSI. Furthermore, where sanctions prohibit specific actions (such as restructuring of finance), solicitors must be careful that they do not facilitate or participate in a breach. An example the guidance provides is that of raising capital on EU markets. If this is prohibited, then providing advice on how this effects a business will be permitted. However, preparing the documents required to raise such capital may amount to attempted circumvention of sanctions.
https://www.corkerbinning.com/new-regulations-tighten-financial-sanctions-grip/
HUMAN INTELLIGENCE AND POLICE INFORMERS – SEPARATING LAW FROM OPERATIONAL STRATEGY
Another article in the Corker Binning blog about the aftermath of Operation Sanctuary, following which 17 men and 1 woman were convicted of offences related to the abuse of vulnerable girls in Newcastle. After the trial it emerged that one informer used by the police was a man with 53 convictions (including rape of a child) and that he had been paid over £10,000 for information during the investigation, although no evidence from him had been relied upon at trial.
Corker Binning in the article stresses that whilst there are operational questions to be asked as to whether it was appropriate or even safe to pay a convicted sex offender to infiltrate a child abuse ring, this needs to be separated from questions of law as to whether the informant’s deployment was legal and whether the evidence arising from his involvement was admissible. The article considers the relevant legislation for use of such informants (RIPA 2000). It also touches on another difficult matter, use of undercover officers who might form relationships with their targets. The question of entrapment is also discussed.
The article concludes that it is for the police, with the oversight of the Investigatory Powers Commissioner, to strive to get it right first time, and for the courts only to intervene where the interests of justice demand so.
HOW WILL POLICING AND JUSTICE BE AFFECTED BY THE DATA PROTECTION BILL?
Presentations from Tech UK of a panel event on 21st November. The event was concerned with the EU General Data Protection Regulation (GDPR) that comes into effect in the UK and across Europe on 25th May 2018. Its sister legislation, the Law Enforcement Directive, comes into effect slightly earlier, on the 6th May 2018. Both are currently working their way through Parliament in the Data Protection Bill, and together they represent the most significant reform of data protection laws for 20 years. The Bill will have profound implications for organisations across all sectors that collect and process personal data.
https://services.parliament.uk/bills/2017-19/dataprotection.html
GUIDES TO SCIENTIFIC EVIDENCE IN PLAIN ENGLISH
The Law Society Gazette on 22nd November reported that Royal Society and Royal Society of Edinburgh scientists are collaborating with judges to make scientific evidence easier to understand in court by producing “plain English” guides – on DNA fingerprinting and forensic gait analysis
https://royalsociety.org/about-us/programmes/science-and-law/
with planned guides to include the physics of vehicle collisions. The aim is to provide an authoritative account of a technique, as well as the technique’s limitations and challenges associated with its application.
https://royalsociety.org/news/2017/11/royal-society-launches-courtroom-science-primers/
US TREASURY FURTHER NORTH KOREA SANCTIONS ON TRADING, LABOUR, AND SHIPPING COMPANIES AND VESSELS
OFAC on 21st November sanctioned 1 individual, 13 entities, and 20 vessels as the US continues to take action multilaterally and unilaterally to disrupt North Korea’s illicit funding of its unlawful nuclear and ballistic missile programmes. The new sanctions target third-country persons with long-standing commercial ties to North Korea, as well as the transportation networks that facilitate North Korea’s revenue generation and operations. Designated are 4 Chinese companies and an individual, the Maritime Administration of the Democratic People’s Republic of Korea (DPRK) and the Ministry of Land and Maritime Transportation of the DPRK, 6 North Korean shipping and trading companies and 20 named vessels. OFAC remarks that North Korea is known to employ deceptive shipping practices, including ship-to-ship transfers, a practice prohibited by UN SCR 2375. Also designated is the Korea South-South Cooperation Corporation for having engaged in, facilitated, or been responsible for the exportation of workers from North Korea, including exportation to generate revenue for the Government of North Korea or the Workers’ Party of Korea.
https://www.treasury.gov/press-center/press-releases/Pages/sm0220.aspx
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20171121.aspx
3 TYPES OF MERCHANT FRAUD: A GUIDE FOR MERCHANT ACQUIRERS
On 21st November Finextra published a useful guide to “merchant fraud”. It identifies 3 types used to acquire or launder funds –
- “Bust out fraud” – a merchant applies for a merchant account without any intention of actually operating a legitimate business. These merchant accounts are then used to process fraudulent transactions or to acquire lines of credit before abandoning the account altogether;
- “Identity swap” – merchants who use a fake or stolen identity or set up a bogus online storefront in order to secure a merchant account, because they are on sanctions or other watch lists; and
- “Transaction Laundering (a.k.a. Factoring)” – occurs when an unknown business uses an approved merchant’s payment credentials to process payments for products and services that the acquirer is not aware of, and the article reports that $352 billion is estimated as being laundered this way every year in the US alone.
CAN YOU COMMIT A MONEY LAUNDERING OFFENCE IF THE PREDICATE OFFENCE WAS NOT CRIMINAL AT THE TIME OF ITS COMMISSION?
Bright Line Law reports on the recent case of Serra & Another v Republic of Paraguay [2017] EWHC 2300 (Admin) in which, although principally concerned with extradition, the Queen’s Bench Division of the High Court also addresses the question head-on. The Paraguayan offence of money laundering did not exist when the appellant’s companies obtained, allegedly fraudulently, $35 million from another company, Cajubi. The appellants submitted that although they may have been engaged in a money laundering offence post-July 2009 (when money laundering became an offence in Paraguay), but their conduct did not constitute an offence in the UK and thus, they should not be extradited to face that charge. The lower court had disagreed, finding that the conduct would have amounted to offences contrary to sections 327 and/or 329 of POCA 2002 in the UK. The appellants’ argument was that “a person cannot possess criminal property within section 329 of the 2002 Act if all that occurs is that he retains property which it was not unlawful for him to possess in the requesting state until a change in the law.” In response to the proposition, the High Court’s decision included that: “[W]e see no difficultly with the concept that the possession of property which was not unlawful at a particular point in time may become unlawful by virtue of a prospective change in the law with the consequence that as from the date of the law change a person who retains such property or continues to possess it commits a criminal offence.”
https://www.brightlinelaw.co.uk/BLL-Portal/Money-laundering-retrospective-application.html#_ftn6
TAXATION (CROSS-BORDER TRADE) BILL INTRODUCED IN PARLIAMENT
HM Treasury and Department of International Trade announcement 21st November. The Bill will allow the UK to set and collect its own duty on goods coming into the country and will allow the government to implement different outcomes of the EU negotiations, including an implementation period.
https://www.gov.uk/government/news/taxation-cross-border-trade-bill-introduced-in-parliament
Explanatory Notes, Impact Assessment etc at
https://www.gov.uk/government/publications/taxation-cross-border-trade-bill
EU ADDS SEVASTOPOL MAYOR TO UKRAINE SANCTIONS
EU Regulation 2017/2153 and Council Decision 2017/2163/CFSP add Dmitry Vladimirovich Ovsyannikov, mayor of Sevastopol, to its list of persons designated respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine with effect from 21st November.
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2017.304.01.0003.01.ENG&toc=OJ:L:2017:304:TOC
UN EXTENDS SOMALIA AND ERITREA SANCTIONS, AND US RE-DESIGNATES DPRK AS STATE SPONSOR OF TERRORISM
UN EXTENDS ARM EMBARGOES ON SOMALIA AND ERITREA
The UN Security Council Resolution 2385 (2017) extends the modified arms embargo on Somalia as well as the authorisation for maritime interdiction of illicit arms imports and charcoal exports until 15th November 2018. The arms ban on Eritrea has also been renewed until 15th November 2018.
https://www.un.org/press/en/2017/sc13065.doc.htm
US RE-DESIGNATES NORTH KOREA A STATE SPONSOR OF TERRORISM
On 20th November, President Trump has re-designated North Korea a state sponsor of terrorism. The announcement allows the US to treat the country with special considerations, opening the door to using sanctions and penalties to deter further nuclear proliferation.
raytodd.blog 