OTHER THINGS YOU MAY HAVE MISSED – JULY 8

46 STOLEN VEHICLES SEIZED IN DUBAI ANTI-SMUGGLING OPERATION

The Khaleej Times on 8th July reported that Dubai Police have busted 4 gangs involved in stealing 46 luxury vehicles from across the UAE.  The Dubai police co-ordinated with Sharjah and Ajman police to form a joint task force, which succeeded in nabbing the gang members and seizing 17 luxury cars at a port as the cars were about to be smuggled out on a cargo ship.  13 more cars were found in some containers at a storehouse in Dubai and police recovered 12 more cars hidden in different parts of UAE.  4 cars that were used by the gangs in stealing the cars were also seized from the gangs.

https://www.khaleejtimes.com/news/crime/video-46-luxury-cars-worth-dh11m-seized-in-dubai-operation-4-gangs-arrested-1

CASINOS: “A PLATFORM FOR CLEANING DUBIOUS MONEY IN ZAMBIA”

News Diggers in Zambia on 7th July reported that gambling is legal in Zambia – including casinos, slot machines and the national lottery.  It says that about 10 years ago, Zambia had 3 casinos operating legally.  The latest figures indicating that over 35 casinos are operating; the majority of which being located in Lusaka and registered in the last 5 years.  The Financial Intelligence Centre (FIC) in a report is calling for the strengthening of regulations governing casino operations in Zambia because gambling is a vulnerable platform for illicit financial flows and that applications for casino licences should be properly vetted to prevent criminals or their associates from having any controlling interest in the business.

https://diggers.news/lifestyle/2018/07/07/casinos-a-platform-for-cleaning-dubious-money-in-zambia/

UK: DELAY IN REPORTING LOST PASSPORTS EXPOSING PEOPLE TO IDENTITY THEFT
Which on 8th July reported that people in Britain typically wait 73 days to report a lost or stolen passport.  The Home Office says 400,000 UK passports are reported lost or stolen each year.  In the article, Which? takes a look at how fraudsters can use your passport to commit identity fraud and what to do if you discover your passport has gone missing.

https://www.which.co.uk/news/2018/07/delay-in-reporting-lost-passports-exposing-people-to-identity-theft/?src=ilaw

ZIMBABAWE: SANCTIONS POSER FOR MEGA FUEL PROJECT

The Sunday Mail in Zimbabwe on 7th July reported that the $5,2 billion coal-to-fuel joint venture project between Government and a Canadian investor – Vectol Zimbabwe, a joint venture between Verify Engineering Private Limited and Nkosikhona Holdings – is facing inordinate delays after it emerged that economic sanctions imposed on Zimbabwe have become a major stumbling block.  At full capacity, the plant is envisaged to produce 8 million litres of liquid fuels daily against a national demand of 5 million litres.  It will also produce a vast array of industrial chemicals.

http://www.sundaymail.co.zw/sanctions-poser-for-mega-fuel-project/?src=ilaw

NEW TRADE RESTRICTIONS DOUBLE AND WTO CHIEF CALLS FOR RESTRAINT

Sandler Travis Rosenberg on 8th July reported that a recent WTO report finds that the imposition of new trade restrictions by G20 economies doubled during the most recent review period, a development that the WTO Director-General said “should be of real concern to the international community.  G20 economies applied 39 new trade-restrictive measures from mid-October 2017 to mid-May 2018 (up from the 16 registered from mid-May to mid-October 2017), including tariff increases, stricter customs procedures, and new taxes and export duties.

https://www.strtrade.com/news-publications-trade-restriction-facilitation-WTO-070918.html

ARMENIA CHARGES EX-PRESIDENT’S BROTHER IN FINANCIAL CRIME PROBE

Rferl on 7th July reports that Armenian authorities have formally brought financial crime charges against Levon Sarkisian, the brother of former President Serzh Sarkisian, as well as his son Narek, and his daughter Ani, part of a series of high profile actions by law enforcement agencies against the ex-leader’s close relatives.  Both Levon and Ani Sarkisian face forgery charges as well.  It says that Armenia’s State Revenue Committee opened a corruption-related criminal probe against Levon Sarkisian and his 2 children late last month after authorities said they discovered nearly $7 million they allegedly held in an Armenian bank and did not properly declare.

https://www.rferl.org/a/pashinian-says-armenian-law-enforcement-not-targeting-sarkisian-corruption-denies-political-prosecution/29348230.html

LA GANGS STOCKPILE UNTRACEABLE ‘GHOST GUNS’ THAT MEMBERS MAKE THEMSELVES

The Los Angeles Times on 7th July reported that starts with a seizure of AR-15-style semi-automatic rifles and pistols which are homemade, untraceable “ghost guns” without the traditional serial numbers, built from parts purchased over the Internet.   Authorities said they are seeing more gangs turn to homemade guns as it becomes more difficult to acquire real ones.  Investigators say ghost guns begin as partially-manufactured weapons and that a buyer can legally purchase a partial-built lower receiver (or “80% receiver”), which is not part of a firearm that is required to be stamped with a serial number when sold.  It can be completed easily by drilling a few remaining holes into the unfinished metal shell.  It is then ready for a barrel, trigger mechanism, stock and upper receiver to be attached.  The article also says that those forbidden from purchasing a gun, such as felons and those with documented mental health issues, can still buy the partial lower receiver and then buy the other parts of the weapons off the Internet.

https://flipboard.com/@flipboard/-la-gangs-stockpile-untraceable-ghost-gu/f-d19a8ba002%2Flatimes.com

A PLAN TO JUMP START LEBANON’S ECONOMY: EXPORT CANNABIS TO THE WORLD

Haaretz in Israel on 8th July reported that Bloomberg claimed to have got hold of a copy of a report prepared by McKinsey & Co for the Lebanese government on how to reinvigorate the country’s economy.  Haaretz said that the report highlighted some “quick wins” Lebanon can implement to get back on track – including legalizing cannabis production for exporting globally.  Lebanon could legalise cultivation and export the drug for medicinal treatments, potentially creating a $1 billion industry based on the high quality of the country’s production.  The report is said to note that cannabis is already cultivated clandestinely in the eastern Bekaa Valley, which is dominated by Hezbollah.  Lebanon’s economy has been hit by the war in neighbouring Syria. Annual growth rates have fallen to between 1% and 2%, from between 8% and 10% in the 4 years before the Syrian war, and 2 former pillars of the economy, Gulf Arab tourism and high-end real estate, have suffered.

https://www.haaretz.com/middle-east-news/a-plan-to-jump-start-lebanon-s-economy-export-cannabis-to-the-world-1.6248600?src=ilaw

https://www.bloomberg.com/news/articles/2018-07-06/banking-to-cannabis-mckinsey-has-a-plan-for-lebanon-s-economy

INDIAN TYCOON MALLYA SHRUGS OFF THREAT OF BRITISH ASSET SEIZURES

Reuters reported on 8th July that Indian drinks tycoon Vijay Mallya has said that he will comply fully with court enforcement officers seeking to seize his British assets, but there was not much for them to take as his family’s lavish residences were not in his name.  A group of Indian banks seeking to recover more than $1 billion of loans granted to his defunct Kingfisher Airlines.  Mallya is also fighting extradition from the UK to India, where is facing fraud charges.

https://uk.reuters.com/article/uk-britain-india-mallya-exclusive/exclusive-indian-tycoon-mallya-shrugs-off-threat-of-british-asset-seizures-idUKKBN1JY0KC?src=ilaw

AUSTRALIA: BIG BANKS’ FRAUD DETECTION PROVIDER LINKED TO MAN WITH CRIMINAL PAST

In its 9th July edition, the Sydney Morning Herald reported that the director of a business that provides fraud detection services to Australia’s major banks runs at least 2 other companies with a man who has been jailed for financial crimes relating to international money transfers in 1995.  $4.8 million was declared as having been received, whereas less than $80,000 was actually received.

https://www.smh.com.au/politics/nsw/big-banks-fraud-detection-provider-linked-to-man-with-criminal-past-20180707-p4zq35.html?src=ilaw

CRIMINAL GANGS “USING FACEBOOK IN £6 BILLION PEOPLE SMUGGLING TRADE”

On 8th July, the Belfast Telegraph carried an article saying that  a senior NCA officer has said that people smugglers are exploiting Facebook to peddle their deadly £6 billion trade.  He said that increasingly sophisticated criminal gangs set up Facebook pages to ply their business by appearing “reliable and safe”.

https://www.belfasttelegraph.co.uk/news/uk/criminal-gangs-using-facebook-in-6bn-people-smuggling-trade-37092494.html?src=ilaw

MANDATORY REPORTING OF FOREIGN INVESTMENT IN INDIA

CMS Law on 6th July reported that the Government of India has introduced mandatory filing requirements for all Indian companies that have received foreign investment as a result of transactions with foreign investors.  The deadline for the first reports is 12th July, and those missing the deadline face losing their eligibility to receive foreign investments and could face prosecution.  The filing requirements apply to an Indian company, LLP or start-up that has received direct or indirect foreign investment.

http://www.cms-lawnow.com/ealerts/2018/07/mandatory-reporting-of-foreign-investment-in-india-deadline-of-july-12th-2018

The relevant Reserve Bank of India circular is available at –

https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NT194481067EB1B554402821A8C2AB7A52009.PDF

SEC SETTLES WITH BEAM SUNTORY FOR $8.2 MILLION REGARDING ALLEGED INDIA BRIBERY PAYMENTS

Buckley Sandler on 6th July reported that the SEC has settled FCPA bribery allegations with alcoholic beverage company Beam Suntory Inc in an administrative proceeding stemming from alleged FCPA violations from 2006 through 2012.  The company neither admitted nor denied any wrongdoing.  In the third case since 2011 involving drinks companies’ conduct in India, the SEC alleged that the company’s subsidiary in India made illegal payments to Indian government officials through third-party sales promoters and distributers, who then presented fabricated or inflated invoices to the subsidiary.

https://buckleysandler.com/blog/2018-07-06/sec-settles-beam-suntory-82-million-regarding-india-payments

KLM SAYS IT IS SUSPENDING FLIGHTS TO TEHRAN

Rferl on 8th July reported that Dutch airline KLM says it has decided to suspend its flights to Tehran for the time being “as a result of the negative results and financial outlook”.  KLM ceased flights to Tehran in 2013, resuming them in 2016 after the JCPOA nuclear deal was signed.  Air France, which is part of the same company as KLM, and which resumed flights to Tehran in 2016 after an 8-year absence, continues its flights.

https://www.rferl.org/a/dutch-carrier-klm-says-suspending-flights-to-tehran/29350377.html

THOUSANDS OF AMERICANS MAY BE DENIED A PASSPORT OVER FAILURE TO PAY TAX DEBT

The Daily Mail on 7th July reported about a 2015 law that requires the IRS and State Department deny passports to Americans who owe more than $51,000 in unpaid taxes.  A spokeswoman for the IRS said roughly 326,000 people are affected by the law, and officials said they will not be revoking passports but simply denying applications for a new passport or a passport renewal.  The IRS spokeswoman said that 220 people have paid more than $11.5 million in overdue taxes as of late June so they could either apply for a passport or renew it and some 1,400 others have set up payment plans to pay off what they owe.

http://www.dailymail.co.uk/news/article-5928953/Thousands-Americans-denied-passport-failure-pay-tax-debt.html

OTHER THINGS YOU MAY HAVE MISSED – JULY 7

IRISH CENTRAL BANK IMPOSES FIRST CYBER-FRAUD SANCTION

McCann Fitzgerald on 5th July published an article saying that the Central Bank of Ireland has for the first time imposed a sanction on a firm following a loss of client funds through cyber-fraud directly caused by significant regulatory breaches and failures by the firm.  This followed a case where, acting on the instructions of a fraudster impersonating a client, the firm facilitated a series of transactions resulting in the loss of €650,000 of the client’s funds.  The Central Bank imposed a fine of €443,000 for the regulatory breaches causing the loss of client funds – but it would have been €825,000 had it not been for the financial position of the firm.

https://www.mccannfitzgerald.com/knowledge/financial-services-regulation/central-bank-imposes-first-cyber-fraud-sanction

MONEYVAL PLENARY

The Council of Europe on 6th July reported on the outcome of the 56th Plenary of its AML/CFT body, MONEYVAL.  Amongst other issues, MONEYVAL completed the country assessments of Albania and Latvia and adopted follow-up reports of Armenia, Bulgaria, Croatia, Liechtenstein, Montenegro, Poland, Romania, the Slovak Republic, FYR Macedonia and the Isle of Man.

https://www.coe.int/en/web/moneyval/-/outcome-of-moneyval-s-56th-plenary-meeting

EU PARLIAMENT VOTES TO SUSPEND THE EU-US PRIVACY SHIELD: WHAT IS THE CONSEQUENCE?

On 5th July, Greenberg Traurig published an article on the non-binding vote by MEP, to suspend the EU-US Privacy Shield (Privacy Shield) if the US does not meet specific requirements by 1st September, which, it says, may not be supported by other parts of the EU framework  The EU-US Privacy Shield Framework was finalised in July 2016.  The vote sets the stage for the upcoming annual review of how and whether the US is implementing the Privacy Shield as promised.  The article says that over 3,000 companies having self-certified their compliance with the Privacy Shield Principles and more joining every day as part of their compliance with the EU GDPR, the Privacy Shield is an important tool for numerous US companies doing business with the EEA.  The article says it is an important tool for entities established in the EEA because it facilitates their exchange of data with their US counterparts and reduces the amount of paperwork when transferring data to the US.

https://www.gtlaw.com/en/insights/2018/7/eu-parliament-votes-to-suspend-the-eu-us-privacy-shield-what-does-it-mean

BRIEFING PAPER: TAXATION (CROSS-BORDER TRADE) BILL – THE “CUSTOMS BILL”

On 6th July, the House of Commons Library published an updated version of a briefing paper in anticipation of a Commons debate on 16th July.  The purpose of the Bill is to allow the Government to create a functioning customs, VAT and excise regime for the UK after Brexit.  The Bill also contains trade defence measures to protect UK industry from unfair competition from abroad and provisions on trade preferences which allow imports from developing countries to benefit from reduced customs duties.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8126

US: 2 CONVICTED IN $30 MILLION INSIDER TRADING SCHEME WITH LINKS TO UKRAINE

Rferl on 6th July reported that Vitaly Korchevsky, a former Morgan Stanley vice president, and his co-defendant, Vladislav Khalupsky, were each found guilty on securities fraud and conspiracy counts and face a maximum of 20 years in prison.  The $30 million insider trading case has been called one of the largest on record and involved sensitive business information stolen by computer hackers based in Ukraine.  Authorities said more than 150,000 corporate press releases were hacked before their scheduled release from February 2010 to August 2015, hacking into the computer networks of 3 business newswires that distribute corporate press releases.

https://www.rferl.org/a/two-convicted-korchevsky-khalupsky-30-million-dollar-insider-trading-scheme-ukraine-computer-hackers/29348233.html?src=ilaw

THE END OF BRAZIL’S PLAYBOY BILLIONAIRE

The BBC on 6th July carried a feature on the downfall of former billionaire, Eike Batista, described as a “maverick mining tycoon”.  In 2017, Operation Car Wash – a wide investigation that revealed corruption in all major Brazilian political parties – revealed that Eike Batista used his connections with officials in Rio de Janeiro state to obtain public contracts.  A judge has sentenced him to 30 years in jail for allegedly paying $16.5 million to former Rio de Janeiro governor Sergio Cabral.

https://www.bbc.co.uk/news/business-44742012?src=ilaw

‘GODFATHER OF PAYDAY LENDING’ SENTENCED TO 14 YEARS IN US

Reuters on 6th July reported that Charles Hallinan, 77, has been sentenced for conspiring to collect on hundreds of millions of dollars in illegal high-interest loans issued to thousands of people and found guilty on charges including racketeering conspiracy, mail fraud and wire fraud.  The charges were filed in 2016 in a crackdown by prosecutors during the Obama Administration crackdown on abusive practices by payday lenders.  From 1997 to 2013 he operated and financed numerous payday lending companies with names like Easy Cash and Apex 1 Processing that issued and collected debt from loans whose annual interest rates could exceed 780%.

https://www.reuters.com/article/us-usa-paydaylending-crime/godfather-of-payday-lending-sentenced-to-14-years-in-u-s-prison-idUSKBN1JW2XH

US COURT IMPOSES MAXIMUM FINE ON CHINESE WIND GROUP FOR THEFT OF TRADE SECRETS

On 6th July, the US DoJ issued a news release saying that a manufacturer and exporter of wind turbines based in China was sentenced for stealing trade secrets from AMSC, a US-based company formerly known as American Superconductor Inc.  AMSC’s losses from the theft exceeded $550 million and imposed the maximum statutory fine in the amount of $1.5 million on Sinovel Wind Group LLC.  Sinovel was convicted of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud on 24th January.

https://www.justice.gov/opa/pr/court-imposes-maximum-fine-sinovel-wind-group-theft-trade-secrets?src=ilaw

CIS COUNTRIES TO PROVIDE EACH OTHER LEGAL ASSISTANCE IN CORRUPTION INVESTIGATIONS
Belarus News on 7th July reported that the CIS countries (Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Uzbekistan) will provide each other legal assistance in the investigation of corruption cases
http://eng.belta.by/society/view/cis-countries-to-provide-each-other-legal-assistance-in-corruption-investigations-113175-2018/?src=ilaw

1MDB PROBE: MACC NOW FOCUS ON OBTAINING EVIDENCE FROM OVERSEAS

On 7th July, Bernama.com reported that the investigation into the 1MDB case involving local evidence has been completed and the focus is now on obtaining evidence from overseas, the Malaysian Anti-Corruption Commission (MACC) chief commissioner has said.

http://www.bernama.com/en/general/news.php?src=ilaw&id=1478318

FINANCE BILL 2019: LEVELLING THE PLAYING FIELD FOR OVERSEAS INVESTMENT IN UK REAL ESTATE

On 6th July, Bryan Cave Leighton Paisner published a briefing about provisions in the recently released draft Finance Bill which includes rules relating to the taxation of disposals of UK property by overseas investors and disposals of their property-rich entities.  The briefing says that, broadly speaking, the UK does not currently tax non-UK investors on their disposal of UK commercial investment property or disposals of interests in entities which own UK property but that this beneficial treatment will be lost for many from April 2019.  Hence, overseas investors to pay capital gains tax on disposals of UK property and property rich entities.  The briefing explains the rules that will apply, and also refers to the UK Government response to the public consultation on the matter.  Another change the briefing highlights is that, as expected, overseas corporate landlords will be subject to corporation tax on their UK property income from 6th April 2020, including where they invest via a tax transparent collective investment vehicle.

http://www.blplaw.com/expert-legal-insights/articles/finance-bill-2019-levelling-the-playing-field-for-overseas-investment-in-uk-real-estate

MALAYSIA CUSTOMS DEPARTMENT SEIZED 8 TONNES OF FIRECRACKERS

Customs Today on 6th July reported that a customs department in Malaysia has seized 8 tonnes of contraband firecrackers and fireworks worth $48,000, the contraband being seized from a variety of sources, including stores, premises and Ramadan bazaars.

http://www.customstoday.com.pk/malaysia-customs-department-seized-8-tonnes-of-firecrackers-worth-nearly-rm200000/

SCALE OF CYBER CRIME BEHIND NEW LONDON CYBER COURT PLANS, SAY LAWYERS

Out-Law on 6th July carried an article saying that plans to open a new court in London to specialise in resolving cases concerning cyber crime, fraud, and economic crime have been welcomed by legal experts, who believe the move reflects the scale of cyber-related crime businesses are dealing with.  It reports that the MoJ and HM Courts & Tribunals Service announced that a new 18-courtroom premises on the site of Fleetbank House in London with the court due to be completed in 2025.

https://www.out-law.com/en/articles/2018/july/cyber-crime-london-cyber-court-plans/

A SHORT GUIDE TO NEW PROTECTION FOR TRADE SECRETS AND PRACTICAL TIPS FOR UK BUSINESSES

On 8th June, Osborne Clarke published a short guide to the effect of the EU Trade Secrets Directive (Directive 2016/244/EU) which is implemented in the UK w.e.f.  9th June.  The aim of the Directive is to harmonise the protection of trade secrets in all Member States.  The article looks at how the Directive affects the protection of trade secrets in the UK.  Such confidential law was previously protected according to rules evolved through case law, but the Directive introduces a new harmonised definition of a trade secret, i.e. that it is –

  • a secret;
  • has commercial value because it is a secret; and
  • has been subject to reasonable steps (under the circumstances) to keep it secret by the person lawfully in control of the information.

The article also provides some practical tips on protecting trade secrets.

http://www.osborneclarke.com/insights/top-secret-new-protection-for-trade-secrets-in-the-uk/

REVISITING AUM SHINRIKYO: INSIGHTS INTO AN EXTENSIVE NON-STATE BIOLOGICAL WEAPONS PROGRAMME

As the terrorists themselves have just been executed in Japan, the blog at CNS suggests that perhaps it is time to revisit this NTI article from 2011 on the background to the attack on the Tokyo underground in the 1990s.  The article reminds one that Aum Shinrikyo began as a peaceful group before gradually morphing into an apocalyptic millenarian cult.  The group grew rapidly; by 1989, it comprised about 4,000 members, and by 1995, when the cult carried out the sarin gas attacks on the Tokyo subway, it had about 10,000 members in Japan – and even had foreign offices in the US, Germany, and Russia.  The cult’s pursuit of chemical and biological weapons was substantially grounded in science.  Chemical weapons were pursued in parallel with and ultimately as a substitute for failed biological weapons efforts.  The cult reportedly manufactured small quantities of phosgene, hydrogen cyanide, soman, GF and VX nerve agents, and attempted to employ some of these in targeted assassinations.  The article itself focuses on its biological weapons efforts, which had received relatively little attention.  It looks at the problems encountered by the cult (and hence why presumably it opted for using a chemical nerve agent in its Tokyo attack), including production and dispersal.

http://www.nti.org/analysis/articles/revisiting-aum-shinrikyo-new-insights-most-extensive-non-state-biological-weapons-program-date-1/

FRENCH SHIPPING COMPANY DROPS IRAN DUE TO US SANCTIONS THREAT

Rferl on 7th July reported that French shipping group CMA CGM says it has decided to pull out of Iran following the US decision to renew sanctions on companies operating in the country.  The company had a co-operation agreement with the Islamic Republic of Iran Shipping Lines (IRISL) allowing it to lease spaces for vessels, operate joint shipping lines, and co-operate on the use of port terminals.

https://www.rferl.org/a/french-shipping-company-drops-iran-due-to-u-s-sanctions-threat/29348789.html

FRENCH SHIPPING COMPANY DROPS IRAN DUE TO US SANCTIONS THREAT

Rferl on 7th July reported that French shipping group CMA CGM says it has decided to pull out of Iran following the US decision to renew sanctions on companies operating in the country.  The company had a co-operation agreement with the Islamic Republic of Iran Shipping Lines (IRISL) allowing it to lease spaces for vessels, operate joint shipping lines, and co-operate on the use of port terminals.

https://www.rferl.org/a/french-shipping-company-drops-iran-due-to-u-s-sanctions-threat/29348789.html

UN: GUIDANCE MANUAL FOR MEMBER STATES ON TERRORIST FINANCING RISK ASSESSMENTS

This is a document containing good practice methodologies intended for Member States, regional entities and supranational territories for use in the development of terrorist financing risk assessments.  It builds upon past guidance from FATF, the World Bank, the IMF and EU.

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https://www.unodc.org/documents/terrorism/Publications/CFT%20Manual/Guidance_Manual_TF_Risk_Assessments.pdf

OTHER THINGS YOU MAY HAVE MISSED – JULY 6

6th July 2018

US FORCES SMARTPHONE GIANT ZTE TO FIRE ITS CEO AND LEADERSHIP TEAM

Ars Technica on 5th July reported that Chinese smartphone giant ZTE has completely replaced its corporate leadership, naming new people to be CEO, CTO, CFO, and several vice presidents.  The move comes a week after ZTE named a new board of directors. The US government demanded that ZTE make these changes as a condition of lifting a crippling export ban against the company over the company’s sale of US technology to Iran and North Korea in violation of US sanctions rules.

https://arstechnica.com/tech-policy/2018/07/us-forces-smartphone-giant-zte-to-fire-its-ceo-and-leadership-team/

AUSTRALIAN BANKING ASSOCIATION REJECTS ADDITIONAL CASH LIMIT REPORTING

Investor daily on 6th July reported that the ABA had accepted the federal government’s proposal to limit cash payments to $10,000, but is resisting increased compliance reporting.  The government launched a consultation on 23rd May on imposing the $10,000 limit – transactions exceeding $10,000 would have to be made electronically or in cheque, with the aim to “stamp out opportunities for criminals to launder the proceeds of crime into goods and services and will make it harder for businesses to hide transactions to reduce their tax liabilities”.  As well as saying that additional reporting by banks was not necessary, the ABA also said that the rule should not apply to cash withdrawals, and that local shop owners, manufacturers and others must be given enough time to adapt to the new policy.

https://www.investordaily.com.au/regulation/43246-aba-rejects-extra-cash-payment-compliance-reporting

FBI: ENTREPRENEUR AGREED TO LAUNDER COLOMBIAN DRUG MONEY THROUGH TEXAS RESIDENTIAL DEVELOPMENT PROJECT

A local CBS station in Texas reported on 5th July that a luxury residential community — marketed as a 5-star resort built to withstand a nuclear war — is now at the centre of an FBI money laundering investigation.  Trident Lakes owner and manager John Eckerd reportedly faces 2 counts of money laundering and 1 count of conspiracy to commit money laundering.  It is alleged that he and an unidentified co-conspirator accepted $200,000 in purported drug money from undercover FBI agents over the past year in a that saw Eckerd allegedly agreeing to launder $1 million from Colombian drug dealers through Trident Lake.

https://dfw.cbslocal.com/2018/07/05/entrepreneur-agreed-launder-colombian-drug-money-texas-residential-development-project/

PUERTO RICO MAYOR AND OTHER OFFICIALS INDICTED FOR CONVERSION OF FEDERAL FUNDS, FRAUD AND MONEY LAUNDERING

Caribbean Business on 5th July reported that the mayor of Sabana Grande, Puerto Rico, Miguel Ortiz, has been indicted and arrested for his participation in a conspiracy to “steal federal funds involving fraudulently obtained contracts” from the island’s Education Department.  Separetly, Víctor Cruz, former director of finance, and Ángel Santos-García, former interim director of finance of the municipality of Toa Baja were charged with theft, conversion, and misappropriation of funds from the US Departments of Housing and Urban Development (HUD) and Health and Human Services (HHS).

http://caribbeanbusiness.com/puerto-rico-mayor-indicted-for-conversion-of-federal-funds-fraud-and-money-laundering/

VIRTUAL CURRENCY AND CANADA’S AML FRAMEWORK

On 26th June, Dentons published what it said was the first of a 3-part summary of the proposed amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFA), announced by the Department of Finance on June 9th.  Part 1 discusses amendments relating to virtual currency, money services businesses (MSB) and foreign MSB.  Part 2 will consider the amendments made to the Regulations to address money laundering concerns regarding open-loop prepaid cards. Part 3 will consider other notable amendments.

https://www.dentons.com/en/insights/alerts/2018/june/26/virtual-currency-and-canadas-anti-money-laundering-framework

LONDON COURT ORDERS SEIZURE OF VIJAY MALLYA’S UK ASSETS
The Economic Times in India on 5th July reported that a UK High Court judge has issued an enforcement order in favour of a consortium of 13 Indian banks, seeking to recover funds owed to them by liquor baron Vijay Mallya.  Mallya separately fighting extradition to India on fraud and money laundering charges.

https://economictimes.indiatimes.com/news/politics-and-nation/uk-court-grants-enforcement-order-in-vijay-mallya-assets-case/articleshow/64871256.cms

INTRODUCTION TO THE BELT & ROAD INITIATIVE, AND THE NEW SILK ROAD

On 5th July, Bird & Bird published an introduction to the initiative and shares its insights how this initiative will impact the financing of energy and infrastructure projects and the legal market for M&A.  It says that the Silk Road Economic Belt and the 21st Century Maritime Silk Road is a cross-continental development strategy conceptualised by the Chinese government in 2013.  The initiative is first known as the One Belt and One Road Initiative (BRI), now repackaged to Belt and Road Initiative (BRI).  The BRI aims to achieve better connectivity and economic co-operation among countries in Eurasia.

https://www.twobirds.com/en/news/articles/2018/singapore/belt-and-road-initiative

PNB FRAUD: MUMBAI COURT ISSUES NON-BAILABLE WARRANTS AGAINST GITANJALI GEMS BOSS MEHUL CHOKSI AND 5 OTHERS

First Post in India on 6th July reported an arrest warrant against Gitanjali Gems owner Mehul Choksi, accused of perpetrating the $2 billion Punjab National Bank (PNB) scam with nephew Nirav Modi.  This comes after an application for the court to confiscate Choksi’s assets.  Choksi and his firms – Gitanjali Gems Ltd, Gili India Ltd and Nakshatra Brand Ltd – have been charged with obtaining “fraudulently issued letters of undertaking (LoU) and fraud involving foreign letters of credit.

https://www.firstpost.com/business/pnb-fraud-mumbai-court-issues-non-bailable-warrants-against-gitanjali-gems-boss-mehul-choksi-five-others-4677211.html?src=ilaw

NORTH KOREA WANTS JAPAN TO LIFT SANCTIONS

Japan Today on 6th July reported that North Korea has said it will not comply with Tokyo’s demand for a resolution of the issue of Japanese citizens abducted by the DPRK decades ago unless Japan lifts unilateral economic sanctions.  The demand to Japan is said to have been made during behind-the-scene talks regarding the abductions of Japanese nationals in the 1970s and 1980s.  Japan officially lists 17 citizens as abduction victims and suspects the DPRK is involved in many more disappearances.  5 of the 17 were repatriated in 2002, but the DPRK maintains that 8 have died and 4 others never entered the country.

https://japantoday.com/category/politics/n.-korea-wants-japan-to-lift-sanctions-dangling-abductees’-probe?

DUBAI CONTAINER OF 100 KG OF SHARK FIN SEIZED IN HONG KONG

The Standard in Hong Kong reported on 6th July that Customs said they seized 100 kg of dried shark fin belonging to endangered species and 220 kg of undeclared dried sea cucumber from a container at the Kwai Chung Customhouse Cargo Examination Compound.  The container had been shipped from the UAE.

http://www.thestandard.com.hk/breaking-news.php?id=109999&sid=4

URANIUM: FROM EXPLORATION TO REMEDIATION

In June 2018, the International Atomic Energy Agency published a bulletin on ensuring the safe, secure and sustainable supply of uranium.  If countries opt for nuclear power or decide to explore the possibility of producing uranium, the IAEA’s job is to help them do so safely, securely and sustainably.  Through its advisory services, missions and expert advice, the IAEA helps national authorities to ensure that uranium, throughout its entire life cycle, is handled safely and securely.  This edition of the IAEA Bulletin discusses the status of the industry and its possible future.  It outlines the assistance provided by the Agency to countries in uranium mining, milling and mine remediation.  For example, uranium mining and production is explained, along with safeguards.

https://www.iaea.org/publications/magazines/bulletin/59-2

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https://enactafrica.org/interactive/videos-and-infographics/africas-east-coast-heroin-route

EU PARLIAMENT VOTES TO SUSPEND EU-US PRIVACY SHIELD

Paul Hastings reported on 5th July that on July 5th MEP passed a non-binding resolution to suspend the Privacy Shield Framework “unless the US is fully compliant” by September 1st.  The Privacy Shield Framework was designed by the US Department of Commerce and the European Commission to provide companies on both sides of the Atlantic with a mechanism to comply with data protection requirements when transferring personal data from the EU to the US and came into force in 2016 replacing the Safe Harbor similar but less restrictive agreement.  However, the Privacy Shield has drawn controversy as not providing an “adequate level of protection” under applicable EU data protection laws.

https://www.paulhastings.com/publications-items/blog/ph-privacy/ph-privacy/2018/07/05/european-parliament-votes-to-suspend-eu-u.s.-privacy-shield

https://www.privacyandsecuritymatters.com/2018/07/european-parliament-sets-a-deadline-for-reforming-privacy-shield-but-dont-panic-yet/

PORT OF DJIBOUTI OPENS FREE TRADE ZONE

Port Technology on 6th July reported that Africa’s newest free trade zone, the Djibouti International Free Trade Zones (DIFTZ), has launched with the aim of making the Horn of Africa a global trading hub.  The article says that this marks the next phase of a project that seeks to utilise the Djibouti’s place on many of the world’s biggest shipping routes.

https://www.porttechnology.org/news/port_of_djibouti_opens_to_global_trade

WHEN DO CRIMINAL STATUTES BIND THE CROWN?

An interesting article from the chambers at 6 King’s Bench walk on 17th April posed this question and explores the general principles to be applied when considering whether a criminal statute binds the Crown; it compares and contrasts the position in the Bribery Act 2010 and the Terrorism Act 2000, on the one hand, and the Offences Against the Person Act 1861 on the other.  The starting point is the general rule is that a statute does not bind the Crown (ministers, Crown servants, or, to use the modern terminology, individuals in the public service of the Crown) unless there is express provision to that effect or it arises by necessary implication.

http://blog.6kbw.com/posts/legally-binding-when-do-criminal-statutes-bind-the-crown

BRITISH COLUMBIA TO CRACK DOWN ON HIDDEN OWNERSHIP OF REAL ESTATE WITH NEW REPORTING OBLIGATIONS

Blakes Cassels and Graydon published an article on 4th July about the British Columbia Ministry of Finance releasing a white paper on draft legislation that will require reporting on beneficial ownership of land.  This follows the government’s announcement in the 2018 budget that it intends to collect and make available information about beneficial ownership of land in a public registry, with the intention behind the registry to end hidden ownership of real estate to prevent tax evasion, fraud and money laundering.  The consultation extends to 19th August.

http://www.blakesbusinessclass.com/b-c-crack-hidden-ownership-real-estate-new-reporting-obligations/

STATUS OF HMRC TAX POLICY CONSULTATIONS

On 6th July, HMRC published a schedule of current and past tax policy consultations and of any resulting legislation.

https://www.gov.uk/government/publications/check-the-status-of-tax-policy-consultations

STATE AID: EU COMMISSION OPENS IN-DEPTH INVESTIGATION INTO TAX EXEMPTIONS FOR COMPANIES IN THE MADEIRA FREE ZONE

On 6th July, the EU Commission announced an investigation to examine whether Portugal has applied the Madeira Free Zone regional aid scheme in conformity with Commission Decisions of 2007 and 20013 approving it.  It was created by Portugal in 1987 to support economic development in its outermost region Madeira, to attract investment to and create jobs in Madeira.  In this context, Portugal put in place a regional aid scheme providing support to companies establishing themselves in the zone through certain corporate income tax reductions on profits resulting from activities performed in Madeira; and other tax reductions, such as an exemption from municipal and local taxes.  The Commission has concerns that the Portuguese authorities may have failed to respect some of the basic conditions under the Decisions and in particular that tax exemptions granted by Portugal to companies established in the zone are not in line with the Commission Decisions and EU State aid rules.

http://europa.eu/rapid/press-release_IP-18-4384_en.htm

FORMER PAKISTAN PM NAWAZ SHARIF SENTENCED TO 10 YEARS IN PRISON

Deutsche Welle on 6th July reported that a court in Pakistan has handed a jail term to the former PM in a Panama Papers corruption case.  Sharif’s daughter, Maryam Nawaz, was given a 7-year jail term.  The case, which relates to the purchase of 4 flats in London, was filed against Sharif and his family by the National Accountability Bureau (NAB).  Sharif is currently in London to attend to his ailing wife. It is unclear whether Sharif would return to Pakistan.

https://www.dw.com/en/former-pakistan-pm-nawaz-sharif-sentenced-to-10-years-in-prison/a-44554176?src=ilaw

FORMER BILLIONAIRE BATISTA SENTENCED TO 30 YEARS IN JAIL FOR BRIBERY IN BRAZIL

Baker McKenzie on 6th July reported that Eike Batista, the former oil and mining billionaire who lost his fortune and spent time in jail last year for alleged corruption, has now been sentenced to 30 years after being found guilty of bribing former Rio de Janeiro governor Sergio Cabral.

http://www.riskandcompliancehub.com/brazilian-ex-billionaire-batista-sentenced-to-30-years-in-jail-for-bribery/

HOW FRENCH JOURNALISTS USED AN ICIJ DATABASE TO FIND LOCAL STORIES

On 6th July, ICIJ published an article on how a French local investigative website and a European collective of journalists based in Lyon, used ICIJ’s Offshore Leaks Database (into which information from the Panama Papers, Paradise papers etc are fed) to expose what they describe as “the banality” of tax evasion costing France millions of euros each year.  They compiled the names of less well-known individuals and companies in the Lyon region whose financial dealings appeared in the database to document tax minimization SME, family businesses and individuals – and not the usual high-profile names that normally get the headlines.

https://www.icij.org/blog/2018/07/how-french-journalists-used-the-offshore-leaks-database-to-find-local-stories/

INVESTIGATING AND PROSECUTING CASES OF THE NEXUS BETWEEN ORGANISED CRIME AND TERRORISM IN THE MIDDLE EAST AND NORTH AFRICA

On 4th July, the International Centre for Counter-Terrorism (ICCT) in The Hague published a report outlining the main themes raised in a workshop held in Qatar in April held to facilitate discussion between practitioners from Middle East & North African (MENA) and non-MENA countries on the nexus between organised crime and terrorism.  The themes explored included –

  • The stark imbalance between resources dedicated to terrorism over organised crime; with the latter suffering due to the focus on the former;
  • Dissolution of the Caliphate and the return of foreign fighters could stress the system and will present a host of new challenges;
  • Technology will continue to play an important role in the future of the nexus;
  • The nexus has both local and transnational dimensions, which makes it difficult to combat; and
  • A tactical focus hampers longer-term strategic planning in combating the nexus

The report outlined a number of recommendations and best practices, and lessons that had been learned.

https://icct.nl/wp-content/uploads/2018/07/ICCT-Clarke-Organised-Crime-Terrorism-Nexus-Report-July2018.pdf

A THIEF IS NOT NECESSARILY A FRAUDSTER. A FRAUDSTER IS NOT NECESSARILY A THIEF

A blog post from Corker Bining on 6th July starts off by saying that fraud and theft have the obvious common element of dishonesty.  Whilst the UK Supreme Court last year in Ivey v Genting ruled that the test for dishonesty in criminal cases should be an objective one, proof of dishonesty alone, whether for theft or fraud, is not enough to secure a criminal conviction.  A recent decision (R v Darroux) illustrates why it pays prosecutors to have long memories and signals a warning to those who fail to select the correct charge. It also demonstrates that the Court of Appeal will not necessarily come to the rescue of an errant prosecutor even where a jury has found a defendant to have acted dishonestly.  In that case, an employee filed false records so as to receive extra overtime and other payment.  She was charged with theft, alleging that she stole money from her employer.  The blog article says that those with long memories stretching would recall the problems that arose with prosecuting mortgage fraud cases under the Theft Act in the 90s.  After successful arguments that no property was obtained when funds were debited from the victim’s bank account and credited to a defendant’s bank account, the law was changed to cover such deception cases.  The Fraud Act 2006 was to replace such deception offences but were not charged in the Darroux case and on appeal it was argued that there had been no “appropriation” of property – which is an essential ingredient of the actus reus of theft.  It is not an ingredient of the actus reus of the offence of fraud by false representation under the Fraud Act.

https://www.corkerbinning.com/a-thief-is-not-necessarily-a-fraudster-a-fraudster-is-not-necessarily-a-thief/

IS HUNGARY THE NEW TAX HAVEN FOR INTERNATIONAL COMPANIES?

Hungary Today on 6th July carried an article saying that the Hungarian state doesn’t just provide financial aid (at a much higher level than neighbours, such as Poland) but also offers tax benefits.  Officially the tax rate is 9% – which is already the lowest rate in the EU – but according to the calculation of mfor.hu, the effective tax rate (the most important number for investors) is around 5%.  The newspaper asserts that with this level of taxation Hungary could make it a tax haven.

https://hungarytoday.hu/is-hungary-the-new-tax-haven-for-international-companies/

UK: THE IMPORT OF SALAMANDERS AND NEWTS

On 6th July, a UK Government news release told you what you need to do to import live members of the order Caudata (salamanders and newts): the appropriate establishments and the health certificates needed.  EU law requires that, to import salamanders and newts from outside the EU, or to export them to another EU country you need access to a registered appropriate establishment.  Imports also require the requisite health certificate from the country of origin.

https://www.gov.uk/government/publications/the-import-of-salamanders-and-newts

INDIAN LAW COMMISSION RECOMMENDS REGULATED GAMBLING AND BETTING IN SPORTS TO CURB FRAUD

Live Mint on 6th July reported that the Law Commission of India has recommended regulated gambling and betting in sports to check fraud and money laundering.  Regulation would not only empower the government to identify and prevent instances of gambling by minors and “problem-gamblers” but also enable it to “effectively curb the menace of black-money generation through illegal gambling,” the commission said in its report.

https://www.livemint.com/Politics/347GdwsMY2a0fScdJpuHPK/Law-Commission-recommends-regulated-gambling-and-betting-in.html?src=ilaw

ESTONIA “DID NOTHING TO INVESTIGATE DANSKE BANK MONEY LAUNDERING ALLEGATIONS”

Postimees in Estonia on 6th July reported that a major money laundering scandal that concerned the Estonian banking sector and especially the Estonian branch of Danske Bank is growing.  Revelations included €1.8 billion from Moldov and over €2.1 million from Azerbaijan. Then the Central Criminal Police’s Money Laundering Data Bureau confirmed in late May that the Estonian financial system had a total of €13 billion in dirty money pass through it.  Suspicions include that Russian president’s nephew Igor Putin and Russia’s special services were involved, and that others included several eastern weapons manufacturers, including Rosoboronexport that is responsible for Russia’s arm exports.  Inquiries have collected piles of information and investigations have been launched but with no results.

https://news.postimees.ee/4567739/estonia-did-nothing-to-investigate-the-matter?src=ilaw

LIVERPOOL PROPERTY DEVELOPER NIGEL RUSSELL CLEARED OF ALLEGED INVESTMENT FRAUD

The Liverpool Echo on 6th July reported that property developer Nigel Russell, 56, was cleared of an alleged £3.6 million investment fraud after prosecutors offered no evidence.  The alleged frauds related to city centre developments including student accommodation.

https://www.liverpoolecho.co.uk/news/liverpool-news/property-developer-nigel-russell-cleared-14877407

JCPOA JOINT COMMISSION ON CONTINUATION OF AGREEMENT AFTER US ANNOUNCEMENT

The European Sanctions Blog on 6th July reported on the meeting of the commission responsible for overseeing the implementation of the JCPOA agreement with Iran.   Representatives from China, France, Germany, Russia, UK and Iran all reconfirmed their commitment to the full and effective implementation of the nuclear deal (and despite President Trump’s announcement).  Amongst other things, the participants agreed to continue Iran’s export of oil and gas condensate, petroleum products and petrochemicals; preserve and maintain financial channels with Iran; promote export credit cover; practical support for trade with and investment in Iran; and protect companies from the extraterritorial effects of US sanctions.

https://europeansanctions.com/

SAUDI-BACKED YEMENI FORCES RECEIVED NEWLY-PURCHASED SERBIAN ASSAULT RIFLES

Defence Blog on 5th July reported that Saudi-backed Yemeni government forces had received the batch of new 7.62mm Serbian assault rifles M05 as military aid by Saudi Arabia.  The M05 E1 is a new modular automatic assault rifle developed by Serbian Company, Zastava.  The modular platform, based on Kalashnikov system, ensures perfect function in all climate and terrains conditions.

https://defence-blog.com/army/saudi-backed-yemeni-forces-received-newly-purchased-serbian-assault-rifles.html

Meanwhile on 6th July, Balkan Insight reports that –

SAUDI ARABIA REMAINS KEY BUYER OF BALKAN ARMS

Afghanistan, Iraq and Algeria are emerging as new key destinations.  A recently-released report on yearly arms exports in 2016 for Serbia, Montenegro, Bosnia, Albania and Macedonia says those countries sold Saudi Arabia more than €118 million worth of weapons and ammunition that year.

http://www.balkaninsight.com/en/article/balkan-countries-continue-selling-arms-to-saudi-arabia-07-05-2018

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SHIFTING TRAFFICKING ROUTES FOR ILLICIT NARCOTICS AND THE IMPORTANCE OF SPAIN-US COUNTER-NARCOTICS CO-OPERATION

The Real Instituto Elcano in Spain on 25th June produced a report looking at drug trafficking routes from South America.  It looks at the mechanisms used to combat such trafficking, law enforcement successes and challenges.  It says that Spain’s geographically strategic location and its large consumer market make it one of the principal gateways for illicit drugs entering Europe and originating in South America, transiting via the Caribbean and West Africa.  This puts Spain in a unique position of having to confront the transatlantic drug trade coming from multiple directions and using a variety of trafficking techniques.

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ARI79-2018-fig-2

http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari79-2018-olson-gordon-shifting-trafficking-illicit-narcotics-spain-us-cooperation

FATF: PUBLIC CONSULTATION ON THE DRAFT RISK-BASED APPROACH GUIDANCE FOR THE SECURITIES SECTOR

On 6th July, FATF also released draft guidance for public consultation which contains a section on specific guidance for securities providers and intermediaries.  Specific comments on whether this section provides sufficient clarity for the design and implementation of risk-based AML/CFT measures by the securities sector, and any additional suggestions, are welcomed.  The draft guidance also includes an Annex, setting out suspicious activity indicators in relation to the securities sector and comments on this would also be welcomed.  Responses are required by 17th August, and FATF intends to adopt the final Guidance at its October 2018 Plenary meeting.

http://www.fatf-gafi.org/publications/fatfgeneral/documents/public-consultation-guidance-securities.html