Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery and corruption, fraud, and due diligence news bites, from around the world.

Oil trading houses caught in Brazil corruption sting | Argus Media Group

"Brazil's state-controlled Petrobras has temporarily suspended trading business with Switzerland-based Glencore, Vitol and Trafigura following allegations the firms engaged in widespread corruption."  (Click here for the article) - Brazil, Switzerland

Airbus hit by US probe into alleged corruption | The Scoop

"Shares in European aerospace group Airbus tumbled Thursday after a French report that US authorities are investigating the firm for suspected bribery and corruption, exposing it to billions of dollars in potential fines."  (Click here for the article) - France, Asia, European Union, USA, UK

Ex-Credit Suisse bankers arrested over $2bn fraud scheme | BBC News

"Three former Credit Suisse bankers have been arrested over their alleged role in a $2bn (£1.5bn) fraud scheme connected to firms in Mozambique, according to US authorities."  (Click here for the article) - USA, Switzerland, Mozambique

Iran approves anti-money laundering bill to ease foreign trade | Reuters

"A powerful Iranian council approved an anti-money laundering bill on Saturday, state media reported, a major step towards reforms that would bring Iran into line with global norms and could facilitate foreign trade in the face of U.S sanctions."  (Click here for the article) - Iran, USA

Chemicals Company Prosecuted for Export Control Violations | Mr. Watchlist

"HM Revenue & Customs has prosecuted a Leicestershire company for illegally shipping controlled chemicals and metal to foreign territories, despite being refused an export licence."  (Click here for the article) - UK

How Asian companies are navigating the trade war | Nikkei Asian Review

"Already, the prospect of further tariffs is prompting companies to move more factories from China to lower-cost countries in Asia. About 30% of American companies operating in China say they are looking to buy components or build products outside of both the U.S. and China to avoid tariffs, according to a recent survey by AmCham China and AmCham Shanghai."  (Click here for the article) - Asia, USA

Colin Steven avoids jail for bribery by helping investigators | Corporate Jet Investor

"Colin Steven, a former Embraer Executive Jet salesperson, has been spared jail after admitting to bribing a Saudi government official to win an aircraft sale. Steven pleaded guilty to various offenses in December 2017 and was given a “non-incarceratory” sentence on December 12, 2018."  (Click here for the article) - Saudi Arabia, South Africa, USA, UK

Iran Executes businessman convicted of fraud, bribery | AP News

"Iran has executed a businessman convicted of fraud, bribery and embezzlement. State TV reported that Hamid Reza Bagheri Dermani was hanged Saturday. The Supreme Court in November upheld his October death sentence and conviction on a charge of spreading corruption on Earth. He was also ordered to pay a more than $100 million cash fine."  (Click here for the article) - Iran

Vietnam tested by multinationals seeking trade war detour to avoid US tariffs on China  | South China Morning Post

"But the idea of shipping through a third country to avoid tariffs has flourished in recent months due to the trade war between the United States and China, and multiple companies producing products in China are exploring Vietnam to find out how they might do so."  (Click here for the article) - Vietnam, China, USA

Happy New Year from your GCSG Services Team!

The GCSG team wishes you and yours a Happy New Year! We extend our best wishes to you for a 2019 year that is full of promise and unmatched success.  

Beginning in December and going through January 25th, GCSG will make a special corporate donation on behalf of our clients and other business partners.  We'd like to invite you to choose one of the charities listed below to receive a donation. 

   Send a contact form with just the name of one of the three charities listed below in the subject or body of the form and we will make a donation to the charity you've chosen.  

• Freedom Network: Empowers human trafficking survivors with choices and support

• Samaritan's Purse: Provides aid to hurting people around the world

• The Nature Conservancy:  Helps to conserve lands and waters around the world

   We are grateful to you for partnering with GCSG, and we look forward to continuing our successful partnership in 2019! 

Happy New Year,

The GCSG Services Team

** *** **

About GCSG

We provide Advisory, Audit, and Due Diligence services for our clients across a range of industries in the areas of Import, Export and Customs compliance, Anti-Bribery and Corruption, Drug Precursor, and Distilled Spirits Plant compliance.  The GCSG service team delivers compliance program assessment, development and implementation support, audit, fraud investigation, and third-party and acquisition due diligence and risk management services.

Learn more about GCSG by following us online or contacting us directly:

• Facebook - http://www.facebook.com/globalcompliancesg.com

• Twitter - https://twitter/com/GCSGLLC

• LinkedIn - https://www.linkedin.com/company/global-compliance-solutions-group-llc

• Instagram - http://instagram.com/globalcompliancesg.com

Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery and corruption, fraud, and due diligence news bites, from around the world.

Anti-Corruption Risks: Global Enforcement Means Global Detection | Volkov Law

"Over the last year, we have seen the Justice Department and SEC’s international coordination efforts bear fruit. DOJ has expended time and efforts to train prosecutors and law enforcement on anti-corruption investigations and prosecutions strategy."  (Click here for the article) - Global

Iran Executes Businessman Convicted of Fraud, Bribery | AP News

"Iran has executed a businessman convicted of fraud, bribery and embezzlement."  (Click here for the article) - Iran

Vietnam Tested by Multinationals Seeking Trade War Detour to Avoid US Tariffs on China | South China Morning Post

"It looked like a one-off case in late 2016 when The European Anti-Fraud Office determined that certain organic coated steel products that originated in China had been shipped through Vietnam to avoid anti-dumping duties."  (Click here for the article) - Vietnam, China, USA

The Three Biggest Corporate Misconduct Stories of 2018 | GAN Integrity

"There was certainly no shortage of significant corruption and white collar crime stories this year."  (Click here for the article) - Denmark, Brazil, Malaysia, USA

Dealership Controller Embezzles $1.1 Million | Auto News

"When the controller of a Connecticut BMW store used embezzled funds to buy a car, she didn't opt for a 3 series or an M240i convertible."  (Click here for the article) - USA

China-US Trade War Providing a Business Bonus for SE Asian Exporters | BDP

"Shippers serving the US import market may have already begun voting with their feet and moving production out of China in response to the looming threat of a full-blown trade war between the world’s largest two economies."  (Click here for the article) - China, USA, Mexico, SE Asia, Vietnam

Empty Container Volumes Rise in US-China Trade War | BDP

"West Coast ports point to a strong holiday season and a rush to beat tariffs as reasons for near record-breaking import volumes in November 2018. "You’re seeing the opposite effect on the other side of the ocean," Port of Long Beach Executive Director Mario Cordero said in a press release."  (Click here for the article) - USA, China

Guatemala’s Uphill Battle Against Corruption | Fair Observer

"Guatemala’s history over the last century has been one of the most troubled, as well as most heavily influenced by foreign interventions, in all of Central America."  (Click here for the article) - Guatemala, Mexico, Colombia

ICC issues conflict of interest guidelines

The International Chamber of Commerce (ICC)(1) recently published enterprise guidelines for conflicts of interest.(2) The guidelines were prepared by the ICC’s Commission on Corporate Responsibility and Anti-Corruption.

The guidelines “provide recommendations to Enterprises on how to monitor and manage Conflicts of Interest facing their directors, officers, employees, agents and representatives.”(3)

Managing conflict of interest situations is important to the governance of any organization. If these situations are not properly managed they have the potential to result in instances of corruption and ultimately a loss of integrity for the organization. The ICC Rules on Combating Corruption say the following about Conflicts of Interest:

“Conflicts of interest may arise when the private interests of an individual or of his/her close relatives, friends or business contacts diverge from those of the Enterprise or organisation to which the individual belongs. These situations should be disclosed and, wherever possible, avoided because they can affect an individual’s judgment in the performance of his/her duties and responsibilities. Enterprises should closely monitor and regulate actual or potential conflicts of interest, or the appearance thereof, of their directors, officers, employees and agents and should not take advantage of conflicts of interest of others.”(4)

Conflicts of Interest, if left unresolved, can result in corrupt practices within an organization.

For more information on how to establish Conflict of Interest policies within your organization Contact GCSG’s Compliance and Ethics professionals.

References:

1. ICC - “International Chamber of Commerce - Home Page”

2. ICC - “Guidelines on Conflicts of Interest in Enterprises” - Web page

3. ICC - “Guidelines on Conflicts of Interest in Enterprises.pdf”

4. ICC - “Rules on Combating Corruption” - Web Page

EU - Japan trade agreement effective on Feb 1, 2019

On February 1, 2019 the European Union (EU) - Japan Economic Partnership Agreement (EPA) becomes effective. The EPA creates a trading area that covers 600 million people and close to a third of global gross domestic product.

“The EPA is the biggest trade agreement concluded to date by the EU. 99% of the tariffs applied on EU exports to Japan which currently amount to €1 billion, will be removed.”(1)

The EU exports more than €58 billion in goods and €28 billion in services to Japan each year.(2)

References

1. European Council Press Release - “EU-Japan trade agreement will enter into force on 1 February 2019” - 21/12/2018

2. European Commission - “EU-Japan Economic Partnership Agreement” - Official Page

3. European Commission - “Fact sheets about the agreement” - News archive

Merry Christmas from your GCSG Services Team!

The GCSG team wishes you and yours a happy and safe Christmas holiday season.  We extend our best wishes for a New Year full of promise and success.  

   From now till the end of the year, GCSG will make a special corporate donation on behalf of our clients and other business partners.  We'd like to invite you to choose one of the charities listed below to receive a donation. 

   Send a contact form with just the name of one of the three charities listed below in the subject or body of the form and we will make a donation to the charity you've chosen.   

• Freedom Network: Empowers human trafficking survivors with choices and support

• Samaritan's Purse: Provides aid to hurting people around the world

• The Nature Conservancy:  Helps to conserve lands and waters around the world

   This holiday season we are grateful to you for partnering with GCSG, and we look forward to continuing our successful partnership in 2019! 

Happy Holidays,

The GCSG Services Team

** *** **

About GCSG

We provide Advisory, Audit, and Due Diligence services for our clients across a range of industries in the areas of Import, Export and Customs compliance, Anti-Bribery and Corruption, Drug Precursor, and Distilled Spirits Plant compliance.  The GCSG service team delivers compliance program assessment, development and implementation support, audit, fraud investigation, and third-party and acquisition due diligence and risk management services.

Learn more about GCSG by following us online or contacting us directly:

• Facebook - http://www.facebook.com/globalcompliancesg.com

• Twitter - https://twitter/com/GCSGLLC

• LinkedIn - https://www.linkedin.com/company/global-compliance-solutions-group-llc

• Instagram - http://instagram.com/globalcompliancesg.com

Happy Thanksgiving from the GCSG Team!

GCSG wishes you and your family a happy and safe Thanksgiving holiday!

This Thanksgiving we are thankful for all our clients and vendors and for the many successes we have achieved together this past year!

We are always here to partner with our clients to solve challenging compliance issues with a strategic, comprehensive, and common sense approach.  We strive to exceed our clients expectations by providing high quality compliance products and services while staying true to our core values of integrity, service and accountability.

Kindest regards,

GCSG Services Team

** *** **

About GCSG

We provide Advisory, Audit, and Due Diligence services for our clients across a range of industries in the areas of Import, Export and Customs compliance, Anti-Bribery and Corruption, Drug Precursor, and Distilled Spirits Plant compliance.  The GCSG service team delivers compliance program assessment, development and implementation support, audit, fraud investigation, and third-party due diligence and risk management services.

Learn more about GCSG by following us online or contacting us directly:

• Facebook - http://www.facebook.com/globalcompliancesg.com

• Twitter - https://twitter/com/GCSGLLC

• LinkedIn - https://www.linkedin.com/company/global-compliance-solutions-group-llc

• Instagram - http://instagram.com/globalcompliancesg.com

Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery and corruption, fraud, and due diligence news bites, from around the world.

Global Executives Cooling on M&A Deals Amid Trade Uncertainty | Industrial Distribution

"Executives around the world are cooling to the idea of mergers and acquisitions in the face of rising trade tensions, notably between the U.S. and China, a leading adviser on international corporate deals said Monday." (Click here for the article) - Global

US Imposes Additional Sanctions on Russia | Thompson Hine

"The United States has announced additional financial sanctions on three individuals and nine entities supporting Russia’s attempt to integrate the Crimea region of Ukraine through private investment and privatization projects or engaging in serious human rights abuses in furtherance of Russia’s occupation or control over parts of Ukraine." (Click here for the article) - EU, US, Russia, Ukraine

Africa church leaders join fight against graft | The FCPA Blog

"Eliud Wabukala, a retired Anglican archbishop, became chairman of Kenya's Ethics and Anti-Corruption Commission in 2017. In September, he launched a bible-based anti-graft campaign that includes an anti-corruption bible study." (Click here for the article) - Kenya, Africa

The Growing Menace of Cyber Attacks in the Asia-Pacific region | Entrepreneur Asia Pacific

"Over the past few years, cyber attacks have emerged as one of the biggest global threats to businesses and governments. In September, the largest social networking platform, Facebook announced that data of at least 50 million accounts have been exposed to hackers through a breach." (Click here for the article) - Asia-Pacific region

Top Ten Things to Know About Expanded US Sanctions on Iran | Latham & Watkins

"As reported in the Latham Client Alert dated May 10, 2018, President Trump announced on May 8 that the United States was withdrawing from the Joint Comprehensive Plan of Action (JCPOA), the January 2016 nuclear non-proliferation agreement among China, France, Germany, Russia, the United Kingdom, the US and Iran..." (Click here for the article) - US, Iran

US DOJ Unveils New China Initiative | Thompson Hine

"On November 1, 2018, U.S. Attorney General Jeff Sessions announced the creation of a “China Initiative” aimed at identifying priority Chinese trade theft cases for investigation and enforcement." (Click here for the article) - US, China

Illicit Procurement Network Used Firms in China, Portugal, and Turkey to Supply Iran | Iran Watch

"A recently unsealed indictment provides detail on Iran’s use of deceptive practices to procure export controlled items with military applications from the United States and elsewhere. The indictment details an elaborate, multi-year conspiracy directed by an Iranian-born Canadian to procure such items for an Iranian firm, with help from co-conspirators in China, Portugal, and Turkey." (Click here for the article) - US, Iran, Canada, China, Portugal, Turkey

Romanian anti-corruption prosecutors targeted by new work requirements | Euractiv

"Romanian prosecutors said they feared for their jobs and the rule of law after a new government ordinance increasing the years of professional experience required of them was published...Prosecutors will now need at least 10 years experience to work in the country’s National Anti-corruption Directorate, the anti-mafia bureau or the Public Prosecutor’s office." (Click here for the article) - EU, Romania

Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery/corruption, fraud, and due diligence news bites, from around the world.

EU and Japan to Recognize the Other’s Persona Data Protection System | JDSupra - K&L Gates LLP

"On 17 July 2018, the EU and Japan reached an agreement to recognize each other’s data protections systems as “equivalent”, and each commits to complete internal procedures by fall 2018 (the “Data Agreement”). Once adopted, this will allow businesses to transfer personal data from the European Economic Area to Japan and vice versa without being required to provide further additional safeguards for each transfer." (Click here for the article) - EU, Japan

Chinese Intelligence Officer Charged with Economic Espionage | US DOJ

"A Chinese Ministry of State Security (MSS) operative, Yanjun Xu, aka Qu Hui, aka Zhang Hui, has been arrested and charged with conspiring and attempting to commit economic espionage and steal trade secrets from multiple U.S. aviation and aerospace companies.  Xu was extradited to the United States yesterday." (Click here for the article) - USA, China

Cyber Tests Showed ‘Nearly All’ New Pentagon Weapons Vulnerable to Attack | NPR

"Passwords that took seconds to guess, or were never changed from their factory settings. Cyber vulnerabilities that were known, but never fixed. Those are two common problems plaguing some of the Department of Defense's newest weapons systems, according to the Government Accountability Office." (Click here for the article) - USA, China

Security firm uncovers new cyber group targeting government and military sectors | The Hill

"A new cyber group appears to have been targeting government and military organizations this past year as part of an espionage campaign, a security firm said on Wednesday." (Click here for the article) - Eastern Europe, Middle East

Oil Industry snubs EU effort to defy US sanctions on Iran | Financial Times

"Big European oil companies are spurning the EU’s attempt to shield Iranian crude from US sanctions because of fears the effort would leave businesses exposed to harsh penalties from the Trump administration." (Click here for the article) - Europe, Iran, USA

Mitigating Compliance Pitfalls in Manufacturing | Manufacturing.net

"The U.S. Department of Justice and the Securities and Exchange Commission have stepped up efforts recently to enforce the Foreign Corrupt Practices Act (FCPA). For manufacturers, this involves regulations surrounding exports and international conduct, including those related to U.S. economic sanctions and export control laws." (Click here for the article) - USA

French ports planning for ‘No-Deal’ Brexit | freightweek

"Norlink Ports, an association of 25 ports and inland gateways in the northern Hauts-de-France region, is planning measures to reduce the commercial impact of Britain leaving the European Union without a trade agreement." (Click here for the article) - UK, France, EU

Three Audit Employees Investigated in Probe of Vehicle Certifications | WSJ

"German prosecutors have launched an investigation into three employees of Volkswagen AG’s luxury car unit Audi suspected of falsifying documents to obtain roadworthiness certifications needed for vehicles to be exported to South Korea…" (Click here for the article) - Germany, South Korea

Countries Face Rising Exposure to Money Laundering | WSJ

"More countries are showing heightened risks of exposure to money laundering, according to an annual ranking of countries assessing their money-laundering risk." (Click here for the article) - Global

Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery/corruption, fraud, and due diligence news bites, from around the world.

China Tariffs - List 3 Finalized and Taking Effect | Mitchell Silberberg & Knupp LLP

"At the end of the day on September 17, 2018, the U.S. Trade Representative issued notice that List 3 of the China tariffs has been finalized and takes effect with a 10% tariff on September 24, 2018." (Click here for the article) - USA, China

China eases up on winter smog fight as it battles American trade war headwinds  | SCMP

"China will be less severe with its smog curbs this winter as it grapples with slower economic growth and a trade war with the United States, according to a government plan released on Thursday." (Click here for the article) - USA, China

Ferraris, diamond rings: 3 men indicted in massive $364 million Ponzi scheme | USA Today

"Three men have been indicted in an alleged $364 million ponzi scheme that had more than 400 victims who funded their lavish lifestyle, featuring luxury cars, pricey homes and expensive jewelry, federal authorities said." (Click here for the article) - USA

Paris set to triumph as Europe’s post-Brexit trading hub | Financial Times

"Paris is emerging as the favored financial trading hub for continental Europe, as some of the world’s biggest banks and asset managers prepare for life after Brexit by steering their EU operations away from London to the French capital." (Click here for the article) - UK, France, European Union

US reaches trade deal with Canada and Mexico | Politico

"Trade ministers from the U.S., Mexico and Canada have reached a deal to revamp the North American Free Trade Agreement, the Trump administration announced late Sunday night." (Click here for the article) - USA, Mexico, Canada

Rules of Origin are too complicated | FOOD navigator

"Complex rules of origin labelling requirements inhibit trade and SMEs pay a particularly heavy price, trade bodies amfori and EuroCommerce warn. Speaking at a conference on rules of origin in Brussels, the heads of both associations argued that unless rules of origin requirements are reformed, they will continue to discourage European companies from taking advantage of ‘hard won concessions’ in free trade agreements." (Click here for the article) - European Union

North Korean hacking group tried to steal over $1Bn | FireEye

"This new FireEye report reveals a North Korean hacking group tried to steal over $1 billion from banks worldwide." (Click here for the article) - North Korea, Global

USMCA Provision Could Deter Trade Agreements with China | ST&R

"A provision in the updated NAFTA concluded this past weekend could make it more difficult for Canada and Mexico to pursue potential free trade agreements with China. Observers say the Trump administration could look to insert a similar provision in possible FTAs with the European Union and Japan as part of its effort to pressure Beijing to advance economic reforms." (Click here for the article) - USA, Mexico, Canada, China

Dubai enacts changes to anti-money laundering rules | The National

"The Dubai government has enacted changes to the Dubai International Financial Centre's anti-money laundering laws following a self-assessment of the free zone’s capacity to fight financial crime." (Click here for the article) - UAE

Hong Kong Freezes Chairman Assets, Alleges $1.3 Billion Con | Bloomberg

"Hong Kong’s securities regulator froze the assets of an unnamed chairman of a public company on suspicion of fraud totaling $1.3 billion. The person may have conducted two suspicious transactions to make significant profits, the Securities and Futures Commission said in a statement..." (Click here for the article) - Hong Kong, China

Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery/corruption, fraud, and due diligence news bites, from around the world.

Europe, Russia and China join forces with a new mechanism to dodge Iran sanctions | CNBC

"In the latest sign of the growing divide between Washington and its allies, the European Union's foreign policy chief announced Monday that the bloc was creating a new payment mechanism to allow countries to transact with Iran while avoiding U.S. sanctions." (Click here for the article) - USA, Russia, China, European Union

China says US trying to force it to submit on trade as new tariffs kick in | Reuters

"The United States and China imposed fresh tariffs on each other’s goods on Monday as the world’s biggest economies showed no signs of backing down from an increasingly bitter trade dispute that is expected to hit global economic growth." (Click here for the article) - USA, China

Novartis links bonuses to ethics in bid to rebuild reputation | GAN Integrity Inc.

"Swiss drug maker Novartis has revealed its employees only get a bonus if they meet or exceed expectations for ethical behavior as it seeks to address past shortcomings that have damaged its reputation." (Click here for the article) - Switzerland, USA, South Korea, China

Japan mulls bilateral trade deal with U.S. | Reuters

"Japan is mulling a bilateral trade agreement with the United States that would lower tariffs on U.S. agriculture imports in exchange for avoiding higher tariffs on Japanese autos, the Nikkei newspaper said on Saturday." (Click here for the article) - Japan, USA

Potential NAFTA collapse poses major risk to Canada | Financial Post

"Canada’s economic growth could be pared by about a quarter next year if the North American Free Trade Agreement collapses, and the drag will be extended if an automobile trade war emerges, according to a new Conference Board forecast." (Click here for the article) - Canada, USA

British inquiry intensifies Danske Bank money laundering scandal | Reuters

"Danske Bank’s money laundering scandal spread on Friday to Britain where the National Crime Agency said it is investigating the use of UK-registered companies." (Click here for the article) - Finland, Denmark, Estonia, Russia, UK

BASF commits to complying with US sanctions on Iran | Politico

"German chemical giant BASF has made a firm commitment to comply with all U.S. sanctions against Iran, becoming the latest in a string of large European companies to back away from ambitious plans to invest in the Islamic Republic following Washington’s withdrawal from the Iran nuclear deal." (Click here for the article) - Germany, Iran, USA

US Sanctions Russia and China-based IT companies for connections to DPRK | WorldECR

"The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has sanctioned a Chinese IT company, its Russian counterpart and its North Korean CEO, targeting revenue repatriated to North Korea (‘DPRK’) through overseas IT workers." (Click here for the article) - Russia, China, North Korea, USA

Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery/corruption, fraud, and due diligence news bites, from around the world.

US President signs miscellaneous tariff bill - eliminates tariffs | crowell moring

"On September 13, 2018, President Trump signed the Miscellaneous Tariff Bill (MTB) Act of 2018, which temporarily reduces or eliminates import duties on specified raw materials and intermediate products used in manufacturing that are not produced or available domestically." (Click here for the article) - USA

Danske Bank CEO quits over $234 billion money laundering scandal | Reuters

"Danske Bank’s chief executive Thomas Borgen resigned on Wednesday after an investigation revealed payments totaling 200 billion euros ($234 billion) through its small Estonian branch, many of which the bank said were suspicious." (Click here for the article) - Estonia, Russia, Denmark, European Union

U.S.’s Ross says China must decide on trade talks | CNBC

"It is up to Beijing to take the next steps on trade talks, U.S. Commerce Secretary Wilbur Ross said on Tuesday as China vowed to retaliate after U.S. President Donald Trump imposed initial duties on $200 billion worth of Chinese goods." (Click here for the article) - China, USA

US Legislation Gives BIS Greater Powers | WorldECR

"The US Department of Commerce’s Bureau of Industry and Security (‘BIS’) has been given statutory authority under the Export Control Reform Act (‘ECRA’), to control certain exports. The act was signed into law by President Trump on 13 August." (Click here for the article) - USA

Europe Moves to Target Money Laundering in Response to Scandals | WSJ

"Europe threw a one-two punch to fight money laundering on Wednesday, with the European Commission proposing enhanced powers for a regulator and lawmakers passing a package of new rules." (Click here for the article) - European Union

Foreign Bribery Rages Unchecked in over half of Global Trade | Transparency International

"Transparency International’s new report, Exporting Corruption, finds that only 11 major exporting countries - accounting for about a third of world exports - have active or moderate law enforcement against companies bribing abroad in order to gain mining rights, contracts for major construction projects, purchases of planes and other deals." (Click here for the article) - Global

Canada returning to NAFTA talks earlier than expected | CBC

"NAFTA talks are resuming at the decision-maker level sooner than expected, with Canada's foreign affairs minister set to return to Washington on Tuesday." (Click here for the article) - Canada, USA, Mexico

US - South Korea Free Trade Agreement Changes Published

Details on the changes made to the US - Korea free trade agreement have now been published.(1)  The renegotiated agreement covers areas such as automobiles, customs processes, and investment, as well as the recent US steel and aluminum tariffs.  Some of the key new outcomes include(2):

• Korea will extend the phase out of the 25% US tariff on trucks until 2041
• Korea will double the number of US automobile exports, to 50,000 cars per manufacturer per year, that can meet US safety standards and enter the Korean market without further modification
• US gasoline engine vehicle exports will be able to show compliance with Korea's emission standards using the same tests they conduct to show compliance with US regulations
• Korea will recognize US standards for auto parts necessary to service US vehicles and reduce labeling burdens for parts
• Agreement was reached on conducting verification of origin of exports under KORUS

Click here for the document that provides the KORUS text change details.  

References: 

• (1) USTR: "Protocol between the Government of the United States of America and the Government of the Republic of Korea Amending the Free Trade Agreement between the United States of America and the Republic of Korea"
• (2) USTR Press Office: "New US Trade Policy and National Security Outcomes with the Republic of Korea" 
• Office of the United States Trade Representative (USTR)

Singapore Makes Changes to their Strategic Goods Control List

On September 4, 2018 Singapore Customs announced they have modified their Strategic Goods Control List.(1)  The changes, when they come into effect, will bring Singapore's strategic goods control list up to date with the 2017 Wassenaar Arrangement's Munitions List (2), and the 2017 European Union's List of Dual-Use Items.(3)  

The amendments include new controls, removal of controls, and other minor editorial changes.  Singapore Customs published a document with the changes noted in detail.(4)

The changes will become effective on November 1, 2018.

References:

• (1) Singapore Customs: "Circular No: 08/2018 - Changes to the Strategic Goods Control List" - September 4, 2018
• (2) The Wassenaar Arrangement: "Export Controls for Conventional Arms and Dual-Use Goods and Technologies" - December 2017
• (3) European Commission: "2017 Update of the EU Control List of Dual-Use Items"
• (4) Singapore Customs: "Amendments to the Strategic Goods Control List"
• Singapore Customs: Home page

Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery/corruption, fraud, and due diligence news bites, from around the world.

Retaliatory tariffs on US chem exports to China threaten $18Bn in economic harm | ICIS

"The $11Bn worth of tariffs on US chemical exports enacted by China put almost $18Bn in domestic activity at risk along with nearly 55,000 US jobs..." (Click here for the article) - USA, China

New Sanctions Against Russia Have Unfavorable Impact on Defense Sector | BakerHostetler

"the U.S. State Department published new sanctions against Russia based on the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 after determining that the government of Russia had used chemical weapons in violation of international law..." (Click here for the article) - USA, Russia

Trump Rejects EU Offer to Remove Tariffs on Industrial Goods | ST&R Trade Report

"President Trump said Aug. 30 that a European Union offer to remove all tariffs on two-way trade in automobiles and other industrial goods is "not good enough."  (Click here for the article) - USA, European Union

'Urgency' for Asia Pacific mega trade deal | CNBC

"While the administration of U.S. President Donald Trump is considering slapping another $200 billion in tariffs on Chinese goods, 16 economies in Asia Pacific are racing to conclude a mega trade deal that would become the largest trading bloc in the world." (Click here for the article) - 10 ASEAN nations plus China, Japan, South Korea, India, Australia, New Zealand, 

EU lifts five-year old restrictions on solar panels from China | South China Morning Post

"The European Union will end its five-year-old restrictions on solar panel imports from China, officials said on Monday, as Brussels and Beijing increase their own trade cooperation in the face of protectionist steps from the United States." (Click here for the article) - EU, China

Kim struggles to revive North Korean economy battered by sanctions | Nikkei Asian Review

"In the two and a half months since his historic summit with U.S. President Donald Trump, North Korean leader Kim Jong Un has temporarily shelved de-nuclearization talks in favor of inspecting farms and factories to underscore his focus on improving an economy hamstrung by years of sanctions." (Click here for the article) - USA, North Korea, South Korea

Trump reportedly wants to hit China with tariffs on $200Bn worth of goods | Business Insider

"Bloomberg reported Thursday that Trump had told aides that he wants to follow through on a threat to impose tariffs on another $200 billion worth of Chinese goods as early as next week. That would mean more than half of all Chinese imports would be subject to tariffs." (Click here for the article) - USA, China

China may soon regret slapping tariffs on US soybeans | CNN Money

"One of China's major moves in the trade war with the US is in danger of backfiring on its own farmers.  They're facing a potential shortage of soybeans, one of China's biggest imports from the United States, after Beijing slapped a 25% tariff on them last month in retaliation for US tariffs on a swath of Chinese goods." (Click here for the article) - USA, China

Former DP World Manager must pay Dh5 million fine over bribe plot | The National UAE

"A former DP World manager who sought bribes from two companies in exchange for helping them win lucrative construction projects has had her 18-month jail term upheld – and been told she must still pay a fine of nearly Dh5 million." (Click here for the article) - UAE

Wells Fargo bankers fired after falsifying dinner receipts | Fox Business

"Yet another scandal has reportedly broken out at Wells Fargo.  The bank has fired or suspended at least a dozen employees at its investment bank - Wells Fargo Securities - over allegations these individuals doctored after-hours dinner receipts..." (Click here for the article) - USA

An overview of the Danske Bank money laundering scandal | Berlingske Business

"Berlingske has spent more than a year investigating the extensive money laundering at Danske Bank. Here is an overview of the case – with links to the most important articles (some are in Danish)...For years, large and deeply suspicious money flows were channelled unhindered through Danske Bank’s branch in Estonia – in what experts say was in breach of anti-money laundering laws." (Click here for the article) - Denmark, Estonia, Russia

US Trade Representative Issues Trade Fact Sheet on US-MX Trade Agreement

The Office of the United States Trade Representative (USTR) recently published a fact sheet detailing the key components of the recently agreed upon US-Mexico Trade Agreement.  Some of the key changes proposed in the rule include:

• Auto sector: At least 75% of a vehicle must have been built in either the US or Mexico in order for the vehicle to sell in the US without tariffs.  The original NAFTA agreement only required 62.5%.
• Intellectual property: The agreement extends US copyright protection into Mexico and strengthens the patent protections in the pharmaceutical and agricultural sectors.  It also addresses digital trade, something that was not covered under NAFTA.
• Labor and Environmental: The agreement requires companies to "prohibit the importation of goods produced by forced labor, to address violence against workers exercising their labor rights, and to ensure that migrant workers are protected under labor laws.".  It also addresses air quality issues.
• Duty free limits: The agreement raises the "de minimis" level from $50 to $100 for duty free entry from the US into Mexico for Mexican citizens.  U.S. citizens are allowed to import up to $800 worth of goods duty free.
• Sunset Clause: The pact, if agreed upon would run for 16 years.  After 6 years both sides would met and decide if they wanted to renew for another 16 years.      

The deal requires approval from the US Congress before it can become law.  The Administration intends to submit the paperwork to get the process started in Congress as early as Friday.  This timeline potentially gives Canada only a week to sign-on to the deal.  

Click here for the full Fact Sheet.  

Key Link(s):

• USTR
• USTR: US-Mexico Trade Fact Sheet

Weekly Compliance News - Around the World

GCSG's Weekly Compliance News feature is a compilation of some of the previous weeks interesting trade compliance, anti-bribery/corruption, fraud, and due diligence news bites, from around the world.

Cyber Crooks Hit British Law Firms, Steal Over 20 million pounds of client money | KYC360

"UK law firms are increasingly coming under attack from cyber criminals, with attacks costing law firms millions..." (Click here for the article) - UK

US State Department Imposes Sanctions on Russia for Use of Chemical Weapons | Baker McKenzie

"On August 24, 2018, the US State Department gave notice of new sanctions on Russia under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (the “CBW Act”) after determining that the Russian Government has used chemical weapons in violation of international law or chemical or biological weapons against its own nationals." (Click here for the article) - USA, Russia

Microsoft Hit With US Bribery Probe Over Deals in Hungary | WSJ

"Microsoft Corp. is being investigated by U.S. authorities over potential bribery and corruption related to software sales in Hungary, according to people familiar with the matter." (Click here for the article) - Hungary, USA

Company expelled from program for abuse, non-compliance | The Fiji Times

"A RENOWNED automotive company in Fiji has been stripped off from the Revenue and Customs’ Gold Card Services Program for abuse and non-compliance to Customs laws on numerous occasions." (Click here for the article) - Fiji

Nearly Half of Responding Organizations Plan to Modernize Compliance in Year Ahead | Corporate Compliance Insights

"Almost half (48.3 percent) of risk and compliance, internal audit, C-suite executive and board professionals plan to modernize their compliance functions by changing core compliance execution practices during the next 12 months, according to a recent Deloitte poll." (Click here for the article) - Global

Treasury blacklists firms, individuals accused of violating North Korean sanctions | WSJ

"Three South Koreans illegally imported North Korean coal and iron via Russia in violation of sanctions, South Korean customs officials said, exposing a crack in the US-led campaign to cut off trade with the Pyongyang regime." (Click here for the article) - North Korea, Russia, USA

SEC Charges Citigroup for Internal Controls Failure | CFO

"Citigroup agreed to an SEC enforcement action on Thursday that charged the bank with inadequate controls that failed to detect “fraudulently-induced” loans made by a Mexican subsidiary. The failure ultimately resulted in $475 million of losses reported by Citigroup.." (Click here for the article) - Mexico, USA

Oil giant Total has pulled out of Iran and giant gas project | CNBC

"French oil giant Total has officially left Iran and abandoned its deal to develop a giant natural gas field in the country, Iran's oil minister reportedly told state television Monday, leaving the isolated republic to look for a replacement." (Click here for the article) - France, Iran, USA

UK Government to publish no-deal Brexit advice | BBC News

"Three South Koreans illegally imported North Korean coal and iron via Russia in violation of sanctions, South Korean customs officials said, exposing a crack in the US-led campaign to cut off trade with the Pyongyang regime." (Click here for the article) - UK, EU

India passes amendments to 1988 Prevention of Corruption Act

On July 24, 2018 the Indian Parliament passed the Prevention of Corruption (Amendment) Bill 2018 (POCA).(1)  The POCA amends the 1988 Prevention of Corruption Act (PCA).  The POCA was necessary to align the existing law with the United Nations Convention against Corruption (UNCAC).(7)  A previous attempt to amend the PCA in 2013 failed.(2)  For the first time, the law now includes a bribery provision for commercial organizations.  

Background

The Criminal Law (Amendment) Ordinance, 1944(3) was the first law in India that dealt with corruption.  The Prevention of Corruption Act, 1947(4) was enacted to supplement the provisions of the Indian Penal Code of 1860.(5)  Eventually it was determined that the scope of the 1947 law was too narrow and as a result the PCA was enacted in 1988.(6)  The PCA replaced the 1947 Act, widened the scope of the definition of public servant and increased the potential penalty assessments.  An unsuccessful attempt was made in 2013 to amend the PCA in order to align it with the UNCAC(7), as a result of India's ratification of the UNCAC in May of 2011. 

Key Changes within the 2018 POCA   

The 2018 POCA amends various provisions of the 1988 PCA:

• The giving of a bribe is now a direct offence - however, if you are compelled to give a bribe you will not be charged with the crime if you report it to the authorities within seven (7) days;
• Includes provisions for both bribing a public servant and the offering of a bribe by a commercial organization (including commercial organizations is NEW);
• Allows for the prosecution of former public officials - previously only currently serving public officials could be prosecuted;
• Removes the provision that protected a person offering a bribe from prosecution based on statements they make during a corruption trial;
• Provides more stringent punishments for bribery - for both the giver and taker (including up to seven years of imprisonment or a fine or both for the person offering a bribe); and
• Redefines criminal misconduct to only cover misappropriation of property and possession of disproportionate assets.

Key New Text from the 2018 POCA

• "8. (1) Any person who gives or promises to give an undue advantage to another person or persons, with intention - (i) to induce a public servant to perform improperly a public duty; or (ii) to reward such public servant for the improper performance of public duty; shall be punishable with imprisonment for a term which may extend to seven years or with a fine or with both..."
• "9. (1) Where an offence under this Act has been committed by a commercial organisation, such organisation shall be punishable with fine, if any person associated with such commercial organisation gives or promises to give any undue advantage to a public servant intending - (a) to obtain or retain business for such commercial organisation; or (b) to obtain or retain an advantage in the conduct of business for such commercial organisation: Provided that it shall be a defence for the commercial organisation to prove that it had in place adequate procedures in compliance of such guidelines as may be prescribed to prevent persons associated with it from undertaking such conduct."
• "Commercial organisation - means (i) a body which is incorporated in India and which carries on a business, whether in India or outside India; (ii) any other body which is incorporated outside India and which carries on a business, or part of a business, in any part of India; (iii) a partnership firm or any association of persons formed in India and which carries on a business whether in India or outside India; or (iv) any other partnership or association of persons which is formed outside India and which carries on a business, or part of a business, in any part of India..."
• "(c) a person is said to be associated with the commercial organisation, if such person performs services for or on behalf of the commercial organisation irrespective of any promise to give or giving of any undue advantage which constitutes an offence..."

For more information Contact GCSG's anti-bribery and corruption professionals.

References:

• (1) The Gazette of India: "The Prevention of Corruption (Amendment) Act, 2018" - 07/26/2018
• (2) Law Commission of India: "Report No.254 - The Prevention of Corruption (Amendment) Bill, 2013" - Feb 2015
• (3) Maharashtra Judicial Academy: "The Criminal Law Amendment Ordinance, 1944"
• (4) Government of Madhya Pradesh: "The Prevention of Corruption Act, 1947" - 03/11/1947
• (5) OECD: "Indian Penal Code, 1860" - 10/06/1860
• (6) OECD: "The Prevention of Corruption Act, 1988"
• (7) United Nations: "United Nations Convention Against Corruption" - 2004

Freight forwarding and logistics firms to withdraw from business with Iran

According to Lloyd's Loading List, some logistics service providers have decided to halt business in Iran as a result of the re-imposition of US sanctions.  Others are taking a wait and see approach.  In addition, several major container lines such as CMA, CGM, Maersk, and MSC have withdrawn from Iran.(2)  

"Thomas Cullen, a senior analyst at logistics consulting firm Transport Intelligence, said the re-imposition of US sanctions “seems likely to be at least as brutal as the sanctions pursued for the decade prior to the JCPOA, with the US now pressing for Iran to be excluded from the SWIFT banking transaction system”."(1)

Cullen noted: “With the announcement last week that Renault was ceasing operations, something that Peugeot-Citroen decided last month, the CKD related container traffic will fall heavily. Possibly the Chinese VMs may increase inputs to compensate, but they are much weaker in this market.”(1)

Cullen added: “The leading western container lines have effectively withdrawn from services into Iran, presumably leaving shippers to arrange their own feeder services from Dubai. Once again, the Chinese carriers may be the only option.”(1)

References:

• (1) Lloyd's Loading List: "US sanctions squeeze freight firms from Iran" - 08/10/2018
• (2) Lloyd's Loading List: "CMA CGM confirms Iran exit over fears of US sanctions" - 07/11/2018     

Changes to U.S. In-Bond Process - Now in Effect

On September, 28, 2017 the U.S. Customs and Border Protection (CBP) published a final rule(1) implementing changes to the In-Bond Process.  The final rule adopts, with changes, proposed amendments originally published on February 22, 2012.  

The in-bond process allows imported merchandise to be entered into the U.S. at one port of entry without payment of duties and then transported by a bonded carrier to another U.S. port of entry.  The merchandise is then either entered or exported.  

The changes to the rule will enhance CBP's ability to track in-bond merchandise and ensure it is properly entered or exported.  The rule became effective on November 27, 2017 but several key changes did not become effective until 2018.  Key changes include:

July 2, 2018

• All in-bond move requests, by a carrier, must be filed electronically.  The paper 7512 form for truck shipments traveling through the US from Canada is eliminated. 

August 6, 2018

• Carriers are required to electronically report the arrival and location of the in-bond merchandise within 48 hours of arrival at the port of destination or port of exportation;
• Carriers are required to electronically report the export of the in-bond merchandise within 48 hours of export; and
• Carriers are required to electronically request and receive permission from CBP before diverting in-bond merchandise from its intended destination port to another port.

Definitions:

• Bonded Carrier - a carrier of merchandise whose bond under 113.63 of this title is obligated for the transportation and delivery of merchandise.(1)

References:

• (1) US CBP - Changes to the In-Bond Process - 82 FR 45366-45408
• US CBP
• US CBP - In-Bond Regulatory Changes Frequently Asked Questions