Archives for August 2018

UN Investigators Call for Prosecution of Top Myanmar Officials for Genocide

August 30, 2018 by Zarine Kharazian Leave a Comment

On August 27, 2018, the United Nation’s Independent International Fact-Finding Mission on Myanmar released its report detailing the human rights abuses and war crimes of Myanmar government and military officials against the Rohingya people, a Muslim minority ethnic group who resided for centuries in the Buddhist-majority country of Myanmar’s Rakhine State.

Drawing from over nearly 900 interviews with victims, eyewitnesses, and experts, obtained satellite imagery and photographs, as well as open source material, the Mission highlights a pattern of systemic persecution of the Rohingya over decades, as well as war crimes and crimes against humanity perpetrated principally by the Tamadaw (military) forces. The report makes clear that the violence and persecution against the Rohingya did not begin with the 2012 “clearance operations” orchestrated by the Tamadaw. Rather, the lack of legal status afforded to the Rohingya, coupled with increasingly exclusionary citizenship and political rights have rendered members of the ethnic group “defacto stateless.”

Against the backdrop of the gradual systematic disenfranchisement of the Rohingya, the Mission also alleges that the Myanmar military perpetrated widespread and organized crimes against humanity and war crimes against the Rohingya people. In particular, the report notes:

Myanmar security forces were at least complicit. They often failed to intervene to stop the violence, or actively participated. They injured, killed and tortured Rohingya and destroyed their properties. Witnesses from Sittwe and Kyaukpyu described security forces preventing Rohingya or Kaman from extinguishing houses set on fire by Rakhine, including by gunfire. Witnesses from Maungdaw described security forces shooting indiscriminately at Rohingya and conducting mass arbitrary arrests, including of Rohingya NGO workers. Large groups were transferred to Buthidaung prison, where they faced inhuman conditions and torture. Prisoners were beaten by prison guards and fellow Rakhine detainees, some fatally.

The Mission culminates its report by calling for the “investigation and prosecution” of senior Tatmadaw officials to “determine their liability for genocide in relation to the situation in Rakhine State.” The report also notes that sufficient basis exists to find that the Tatmandaw committed war crimes and crime against humanity against the Royingya. Six senior officials are named as bearing principal responsibility for directing the operations:

Tatmadaw Commander-in-Chief, Senior-General Min Aung Hlaing;
Deputy Commander-in-Chief, Vice Senior-General Soe Win;
Commander, Bureau of Special Operations-3, Lieutenant-General Aung Kyaw Zaw;
Commander, Western Regional Military Command, Major-General Maung Maung Soe;
Commander, 33rd Light Infantry Division, Brigadier-General Aung Aung; and
Commander, 99th Light Infantry Division, Brigadier-General Than Oo.

In Myanmar state media, a spokesperson for the government, U Zaw Htay, denounced the U.N. mission for making “false allegations” of genocidal intent in its report.

You may access the full U.N. report below.

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INCREASING CRIMINAL RISKS OF INTERMEDIARIES FOR CROSS-BORDER FINANCIAL CRIMES: Sept. 10 Webinar, by Bruce Zagaris, 12 PM EST GRC Educators

August 27, 2018 by Zarine Kharazian Leave a Comment

For more information on this webinar, please visit see: https://www.grceducators.com/Increasing-Criminal-Risks-of-Intermediaries-for-Cross-Border-Financial-Crimes.

In the last couple of decades, the world has experienced growing prosecutions of intermediaries for cross-border financial crimes. A U.S. bank was convicted by a Spanish court for moving money in the Pinochet criminal investigation instead of freezing it. The U.S. and State of New York have brought criminal cases against banks for a variety of financial crimes, especially economic sanctions. The U.S. DOJ has had an Offshore Voluntary Disclosure Program for Swiss Banks. The UK Criminal Finance Act of 2017 makes foreign enablers liable for failing to prevent UK tax evasion. The OECD requires tax authorities enforcing the Common Reporting Standard to make intermediaries liable for circumventing the rules. An EU directive requires reporting of aggressive offshore cross-border tax schemes. Increasingly, law enforcement agencies, whether anti-trust, tax, and/or securities enforcement, are entering into new formal and informal enforcement cooperation agreements. Governments and courts increasingly make the liability of entities and executives dependent on prevention and post-conviction monitorships. International organizations and informal groups, such as FATF, the G20, the G7, and the FSF continue to promulgate new due diligence and enforcement requirements for governments.

Please join Bruce Zagaris, Esq., Berliner Corcoran & Rowe LLP, adjunct professor, Texas A&M Law Faculty, author of INTERNATIONAL WHITE COLLAR CRIME: CASES AND MATERIALS (Cambridge U. Press, 2d ed., 2015 ), and editor of the International Enforcement Law Reporter (www.ielr.com) for a discussion of the increasing criminal and enforcement risks of intermediaries, including financial institutions and lawyers, for cross-border crimes.

The program will discuss:

New tax transparency, entity transparency, reporting, and gatekeeper initiatives
Prioritization of corporate/entity liability
Increased prosecution of intermediaries for tax, anti-corruption, and money laundering violations
Increased use of asset forfeiture
Growing criminalization and convergence of tax, money laundering, anti-corruption, and other financial crimes
Increased importance of NGOs, whistleblowers, and the media
Due diligence against enhanced threats of liability

Learning Objective

Learn the international trends to hold intermediaries liable criminally and civilly
Learn what is the extraterritorial nature of many of the national laws
How are international organizations and informal transnational government networks making laws and requiring governments and the private sector to respond
Responses (e.g., improved due diligence by professional associations and firms) required by intermediaries

Topic Background

See the course summary above. In addition, examples of topic developments are: FinCEN Advisories on human rights abuses by corrupt senior political figures; joint settlements by the U.S. and other governments on convictions of Siemens, Odebrecht; joint enforcement cooperation agreements between Brazil and other countries on Odebrecht; the formation by the U.S. and 4 Tax Authorities of the Joint Chiefs of Tax Enforcement (J5); the issuance by the OECD of a document to prevent abuse of Residence and Citizenship by Investment Schemes to Circumvent the CRS; the indictment by the Special Counsel of Agents (Manafort and Gates) for misleading statements on Foreign Agent Registration Act; several Swiss banks and professionals have been convicted for conspiring to help U.S. taxpayers commit tax and related crimes; over 80 Swiss banks participated in the DOJ’s Offshore Voluntary Program for Swiss banks.

Who Should Attend

Compliance officials for financial institutions and related entities
Professionals involved in wealth planning and management
Regulatory and enforcement officials
Academicians involved in international white collar crime law; international law; criminal law; international relations; and criminal justice
Civil servants in international organizations
Lawyers, accountants and other professionals involved in cross-border business

UK Requirement to Correct (RTC) Deadline is Approaching, HMRC Notes

August 23, 2018 by Joseph Erwin Leave a Comment

The HM Revenue & Customs of the United Kingdom’s Requirement to Correct (RTC) deadline is approaching on September 30, 2018.

The new legal requirement was enacted in the Finance (No. 2) Act 2017, and obligates anyone with undeclared UK tax liabilities involving offshore income or assets to disclose the relevant information about this non-compliance to HMRC by the deadline.

The Sept. 30 date is also the date by which more than 100 countries are scheduled to exchange data on financial accounts under the Common Reporting Standard.

The rule relates to liabilities for the UK Income Tax, Capital Gains Tax, and Inheritance Tax. It only applies to tax non-compliance committed before April 6, 2017.

According to the HMRC’s guidance note: “Failure to disclose the relevant information to HMRC by September 30, 2018, will result in liability for a new penalty which is likely to be much higher than the existing penalties. In all cases where a penalty applies, there will be a standard penalty equivalent to 200% of the tax liability which should have been disclosed to HMRC under the RTC but was not. This penalty can be reduced depending on the level of cooperation and timeliness of the disclosure.”

Joeseph Erwin is an attorney based in Dallas, Texas. He may be reached at Joe@ErwinTaxLaw.com, or: Law Office of Joseph M. Erwin, 100 Crescent Court, Suite 700 Dallas, Texas 75201-2112 USA | Tel.214.969.6890 | Fax.214.969.5707 | www.erwintaxlaw.com | www.itsgnetwork.com.

Newly-elected Imran Khan Vows to Retrieve Pakistan’s Looted Money

August 17, 2018 by Yasmin Chaudhary 1 Comment

In talks with British ambassador to Pakistan Thomas Drew, Imran Khan stated that his party intends to retrieve money that had been looted from public institutions and brought to Britain by corrupt Pakistani politicians.

Mr. Khan, who turned to politics after a successful cricketing career, was elected Prime Minister on July 26. He had run on a platform of battling the corruption that has plagued Pakistani politics for decades. His predecessor, Nawaz Sharif, had been sentenced to ten years in prison when he could not provide adequate explanations for how he acquired the wealth to purchase London flats worth nearly ten million in U.S. dollars.

New anti-corruption legislation had been introduced in the UK earlier this year, which may be of use to Mr. Khan’s aims. It affects those with property in the UK worth over fifty thousand pounds, or seventy thousand dollars, and who have potential links to organized crime or are capable of using their political position to unscrupulously gather wealth. These individuals are now obliged to explain their monetary sources.

The British High Commission in Pakistan’s capital city of Islamabad stated that “Tackling corruption is a UK government priority and we will continue to work constructively with Pakistan on this issue, as with other countries.”

Mr. Khan’s PTI (Pakistan Tehreek-e-Insaf) had already begun its anti-corruption investigations before the elections, which had helped uncover the hidden wealth of Nawaz Sharif’s family.

U.S. Announces Sanctions on Russia for Violation of Chemical and Biological Weapons Treaty

August 10, 2018 by Bruce Zagaris Leave a Comment

On August 8, 2018, Secretary of State Mike Pompeo announced the U.S. is imposing sanctions against Russia under the Chemical and Biological Weapons Act.

The sanctions are based on the findings of the British government that Russia is to blame for the attempted poisoning of Sergei V. Skripal, a British citizen, and his daughter Yulia, mainly because of the strain of nerve agents known as Novichok that is allegedly kept under tight control in Russia.

In particular, Pompeo said the U.S. government has determined the Russian government has used chemical or biological weapons against international law or against their nationals, which is a triggering fact under the CBW Act for the imposition of mandatory sanctions. The State Department notified Congress that the Executive Branch intends to impose sanctions against Russia in a number of respects. There will be a presumption of denial for all national security sensitive goods or technologies that the Department of Commerce controls pursuant to the Export Administration Regulations. These goods are currently subject to a license – a case-by-case license determination. In the future Commerce will presumptively deny all such goods or technologies.

State anticipates there will be a Federal Register notice on approximately August 22, 2018.

Pompeo announced several carve outs: a waiver for the provision of foreign assistance to Russia and to the Russian people; one with respect to space flight activities in which the U.S. is engaged with Russia; one for safety of commercial passenger aviation; and a couple of more for things like purely commercial end users for civilian end uses on a case-by-case base.

Rather than under that presumption of denial, an export license will also be issued with respect to Russian nationals that work with these sorts of goods while employed by firms in the U.S. as opposed to elsewhere, as well as exports to wholly-owned subsidiaries of U.S. companies and other foreign companies in Russia.

Pompeo explained that under the CBW Act the U.S. executive branch must certify that Russia has met a series of criteria are met within 90 days from the initial sanctions, including that Russia is no longer using chemical or biological weapons in violation of international law, or using lethal chemical or biological weapons against its own nationals , that Russia has provided reliable assurances that it will not in the future engage in such activities, and that Russia is willing to permit on-site inspections by UN observers or other internationally recognized impartial observers, or other reliable means exist to ensure that the government is not using chemical or biological weapons in violation of international law, etc. If the U.S. cannot certify the fulfillment of these criteria, it will impose a second tranche of sanctions.

If those conditions are not met, the President, after consultation with the Congress, shall impose on Russia at least three of the following sanctions: oppose he extension of any loan or financial or technical assistance to that country by international financial institutions; prohibit any U.S. bank from making any loan or providing any credit to the government of that country, except for loans or credits for the purpose of purchasing food or other agricultural commodities or products; prohibit exports to that country of all other goods and technology (excluding food and other agricultural commodities and products); restrict the importation into the U.S. of articles (which may include petroleum or any petroleum product) that are the growth, product, or manufacture of that country; downgrade or suspend diplomatic relations between the U.S. and Russia; and suspend the authority of foreign air carriers owned or controlled by the government of that country to engage in foreign air transportation to or from the U.S.

On August 8, Russia’s currency fell on news of the sanctions, which Russia characterized as “illegal” and “draconian.”

Russia is unlikely to comply with the U.S. criteria that would forestall the second tranche of sanctions, especially since the Russian government has vehemently denied responsibility for the attacks.

Meanwhile, the White House is preparing an 8-page executive order that would authorize President Trump to sanction foreigners who interfere in U.S. elections. The draft order appears to be an effort to avoid aggressive legislation, including a bill introduced in Congress to overcome criticism that Trump believes Russian President Vladimir Putin’s denials of interference with the U.S. election.

On August 8, 2018, the Russian newspaper Kommersant published a full draft of the proposed “Defending American Security from Kremlin Aggression Act.” The bill would impose a ban on U.S. citizens buying Russian sovereign debt, require a U.S. investigation into and report on Vladimir Putin’s personal wealth, would sanction transactions related to investment in energy projects supported by Russian state-owned or parastatal entities, and require disclosure of high-end U.S. real estate deals.

Since Congress is not in session, the bill will be debated in September when Congress returns. It seems likely that the bill will become law, although in some modified form. The prospects for U.S.-Russian relations do not look propitious in the near term.

The current issue of the IELR will carry a more comprehensive article on the developments.

ACLU Challenges Trump Administration’s New Asylum Rules

August 9, 2018 by Madeline Henshaw-Greene Leave a Comment

The American Civil Liberties Union, coming fresh off a victory over the Trump administration’s family separation policy, is once again filing a lawsuit against the government for deliberately preventing thousands of immigrants from seeking asylum. The complaint, filed on behalf of 12 immigrants from Central American countries, seeks to put a stop to the government’s new screening policies and hopes to persuade the judge that the administration is committing asylum fraud. According to the ACLU, the Department of Homeland Security is manipulating the fast-track removal system, created under President Clinton in 1996, in order to block worthy asylum seekers from getting a full hearing in immigration court. They claim that this change in policy violates numerous laws and statutes, not to mention the separation-of-powers principles outlined in the Constitution.

In order to successfully apply for asylum, migrants have to demonstrate a fear of persecution in their home country based on their inclusion in a certain social category such as race, nationality, or political opinion. Up until recently, victims of domestic violence and related abuse could also claim persecution related to membership “in a particular social group”, meaning their marriage or relationship to their abuser. But in June of this year, Attorney General Jeff Sessions overturned a Board of Immigration Appeals court cause that had granted asylum to a Salvadoran woman under this criterion. Attorney General Sessions stated in his opinion that most cases featuring victims of gang and/or domestic violence would no longer be grounds for asylum.

Only a month after Sessions’ ruling, the Justice Department issued new screening policies that placed migrants in fast-track deportation proceedings called “expedited removal”. As a result, a record number of asylum applicants are failing their initial “credible fear” interviews, despite having clear evidence of danger and potential death if they return to their home countries. According to statistics released by Syracuse University, only 14.7 percent of asylum seekers have passed their initial review in 2018 so far. This is a marked drop from approval levels in the second half of 2017, which were nearly twice what they are now. The ACLU, as well as other immigration attorneys and advocates, see this shift as evidence that the Trump administration is trying to reduce the number of people granted asylum by limiting the conditions by which it is granted.

The ACLU has called the Trump administration’s new screening policies “an assault against longstanding elements of U.S. asylum law”, in direct violation of the separation of powers principles in the Constitution. The government is doing so in order to overturn decades of settled asylum law, so that they can set up worthy asylum seekers to fail their credible fear interviews and be deported back to their home countries, where many of them face the all too real prospect of violent harm or even death.

OECD and Argentina Establish Latin America Academy for Tax and Financial Crime Investigation

August 7, 2018 by Bruce Zagaris Leave a Comment

On July 22, 2018, OECD Secretary-General Angel Gurria and Argentina’s Minister of Treasury Nicolás Dujovne presided over a Memorandum of Understanding (MOU) to establish a center of the OECD Academy for Tax and Financial Crime Investigation in Buenos Aires, Argentina.

The signing occurred in the margins of the meeting of the G20 Finance Ministers and Central Bank Governments. The center will be housed in the facilities of Argentina’s Federal Administration of Public Revenues. Argentina’s Commissioner of Public Revenues Leandro Cuccioli and the OECD’s Director of the Centre for Tax Policy and Administration Pascal Saint-Amans signed the MOU.

The Academy will provide intensive capacity-building courses targeting tax crime investigators and other related law enforcement officials, including prosecutors, anti-money laundering and anti-corruption officials, especially from Latin America countries. The courses will aim to support tax crime investigators. It will feature broad-based courses on conducting and managing financial investigations as well as giving courses on specific types of tax and financial crimes, such as those associated with crypto-currencies, money laundering and VAT fraud.

The creation of the OECD Latin America Academy builds on the success of the original centre hosted by the Guardia de Finanza in Ostia, Italy, and a pilot Africa Academy for Tax and Financial Crime Investigation started by the OECD, Kenya, Italy and Germany at the G20 Africa Partnership conference in June 2017. Together, the centers have trained more than 550 financial investigators from over 80 countries.

The first program of the OECD Latin America Academy will occur in late 2018 and will focus on VAT/GST Fraud.

The 2019 Academy schedule for Latin America will include a program, concentrating on Conducting and Managing Financial Investigations. The program will include subject areas such as: bribery and corruption; beneficial ownership and offshore structures; money laundering; investigative techniques; international cooperation; and asset recovery.

With globalization the ways for individuals and entities to evade and avoid tax have expanded significantly. Just as importantly, the international mechanisms to prevent and combat tax evasion and avoidance, such as BEPS and its components, such as Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, Country-by-Country reporting, the different types of exchange of information, the interplay between anti-money laundering, transnational corruption, and tax issues all require initial and ongoing training. The OECD Academies will help train tax officials at different levels. The nature of the training illustrates the increasing convergence between international tax enforcement and other international white collar enforcement. For more discussion of this development, stay tuned for the August issue of the International Enforcement Law Reporter.

In Latest Escalation in U.S.-Turkey Row, Erdogan Orders Sanctions on “America’s Justice and Interior Ministers”

August 6, 2018 by Zarine Kharazian Leave a Comment

On Saturday, President Recep Tayipp Erdogan of Turkey announced sanctions against two American officials in retaliation to sanctions imposed by U.S. against two Turkish government ministers, the AP reports.

The U.S. Department of the Treasury’s Office of Foreign Assets Control originally froze the assets of Turkey’s Minister of Justice Abdulhamit Gul and Minister of Interior Suleyman Soylu because both officials were determined to have played “leading roles” on the arrest and detention of Andrew Brunson, an evangelical pastor working in the city of Izmir, Turkey. Brunson, 50, leads the Resurrection Church in Izmir, a small congregation of less than 30 people. Erdogan’s authorities arrested him in October 2016, in the aftermath of the 2016 failed coup attempt.

The Turkish government has charged Brunson with espionage, as well as providing assistance to organizations such as the Gulen movement and Kurdistan Worker’s Party, both of which Turkey designates as terrorist groups. United States government officials have denounced the charges.

On July 25, after nearly two years in detention, Brunson was moved to house arrest because of health concerns, the New York Times reported.

“Pastor Brunson’s unjust detention and continued prosecution by Turkish officials is simply unacceptable,” Treasury Secretary Steven Mnuchin said in a statement. “President Trump has made it abundantly clear that the United States expects Turkey to release him immediately.”

Similarly, Vice President Mike Pence invoked Brunson’s case during his remarks at the Ministerial to Advance Religious Freedom in Washington, D.C. on July 26. “Pastor Andrew Brunson is an innocent man,” Vice President Pence stated. “There is no credible evidence against him. Our entire administration has worked tirelessly to secure Pastor Brunson’s release. Yesterday, Turkey released Pastor Brunson from prison, only to place him under house arrest. This is a welcome first step, but it is not good enough.”

Amid the friction, the Turkish lira has hit record lows. The Wall Street Journal reported that the lira was down 3.8% against the U.S. dollar as of August 6, and that the lira has fallen almost 30% this year.

Meanwhile, Erdogan’s proposed sanctions are vague and primarily symbolic. In a statement delivered in Ankara, he stopped short of targeting any particular U.S. officials by name. He instead ordered Turkish authorities to “freeze the assets of America’s justice and interior ministers in Turkey, if there are any.” As AP points out, the United States government has no such titles, so it is unclear who Erdogan is aiming to target.

Amnesty Calls for War Crimes Investigation in Yemen

August 1, 2018 by Yasmin Chaudhary Leave a Comment

International human rights group Amnesty International is calling for an investigation on potential war crimes in Yemen committed by the UAE and its militias. The Associated Press originally reported on torture taking place in a secret network of prisons outside the control of the Yemeni government.

Yemen is in the midst of a civil war, where Shiite Houthi rebels backed by Iran are battling both the government and a Saudi-led coalition, of which the UAE is a part. There is disconnect and discontent between the UAE and government forces, as the former has built up militias that do not answer to the Yemeni government.

Amnesty released a report (“God only knows if he’s alive”) detailing the cases of fifty-one men detained by UAE-controlled militias, nineteen of whom are still missing. Most of these cases involve enforced disappearance, with families not knowing if their loved ones are dead or alive unless they were released. Many have been held for an extended period of time without charges. Former prisoners recounted beatings, electric shocks, waterboarding, hanging, and sexual violence. They suffered from broken bones, malnourishment, and disease.

This is a violation of the UN’s Convention Against Torture, which prohibits its use in the extraction of confessions—in this case, prisoners are tortured into confessing their allegiance to terrorist groups such as Al Qaeda and ISIS. The use of torture also violates the Yemeni Constitution, as well as the International Covenant on Civil and Political Rights, which Yemen is a party to. Article 7 of the ICCPR states that “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment”. Since these violations are taking place during armed conflict, Amnesty has expressed that they should be investigated as war crimes.

While the UAE has called this a political move and denies control of the prisons, Yemeni Interior Minister Ahmed Al-Maysari has publicly demanded that the UAE close or relinquish these secret detention centers. Amnesty is also calling on the UAE’s counterterrorism allies – a significant member of which is the United States—to “take a stand against allegations of torture, including by investigating the role of U.S. personnel in detention-related abuses in Yemen.” AP’s investigation had revealed that U.S. forces were involved in the interrogation of certain detainees in the name of counterterrorism, since Al Qaeda in the Arabian Peninsula (AQAP) and ISIS are active in the area.