International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Wednesday, August 31, 2016

Russian Cyber-Criminal Convicted of 38 Counts Related to Hacking Businesses and Stealing More Than Two Million Credit Card Numbers

Hacking Scheme Defrauded Banks of More Than $169 Million

A federal jury convicted a Vladivostok, Russia, man of 38 counts related to his scheme to hack into point-of-sale computers to Justice logo steal and sell credit card numbers to the criminal underworld, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Annette L. Hayes of the Western District of Washington.  

Roman Valerevich Seleznev, aka Track2, 32, was convicted after an eight-day trial of 10 counts of wire fraud, eight counts of intentional damage to a protected computer, nine counts of obtaining information from a protected computer, nine counts of possession of 15 or more unauthorized access devices and two counts of aggravated identity theft.  U.S. District Judge Richard A. Jones of the Western District of Washington scheduled sentencing for Dec. 2, 2016.

According to testimony at trial and court documents, between October 2009 and October 2013, Seleznev hacked into retail point-of-sale systems and installed malicious software (malware) to steal credit card numbers from various businesses from a server he operated in Russia.  Many of the businesses were small businesses, some of which were restaurants in Western Washington, including the Broadway Grill in Seattle, which was forced into bankruptcy following the cyber assault.

Evidence presented at trial demonstrated that the malware would steal the credit card data from the point-of-sale systems and send it to other servers that Seleznev controlled in Russia, the Ukraine or in McLean, Virginia.  Seleznev then bundled the credit card information into groups called “bases” and sold the information on various “carding” websites to buyers who would then use the credit card numbers for fraudulent purchases, according to the trial evidence.  Testimony at trial revealed that Seleznev’s scheme caused 3,700 financial institutions more than $169 million in losses.

When Seleznev was taken into custody in July 2014 in the Maldives, his laptop contained more than 1.7 million stolen credit card numbers, some of which were stolen from businesses in Western Washington.  The laptop also contained additional evidence linking Seleznev to the servers, email accounts and financial transactions involved in the scheme.

Seleznev is charged in a separate indictment in the District of Nevada with participating in a racketeer influenced corrupt organization (RICO) and conspiracy to engage in a RICO, as well as two counts of possession of 15 or more counterfeit and unauthorized access devices.  Seleznev is also charged in the Northern District of Georgia with conspiracy to commit bank fraud, one count of bank fraud and four counts of wire fraud.  An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

August 31, 2016 | Permalink | Comments (0)

Tuesday, August 30, 2016

OECD publishes public comments on Chapter IX of the OECD Transfer Pricing Guidelines, "Transfer Pricing Aspects of Business Restructurings".

On 4 July 2016, interested parties were invited to review the conforming amendments to Chapter IX of the OECD Transfer OECDPricing Guidelines, "Transfer Pricing Aspects of Business Restructurings". The OECD is grateful to the commentators for their input and now publishes the comments received.

Download Comments-conforming-amendments-chapter-ix-transfer-pricing-guidelines

August 30, 2016 in BEPS | Permalink | Comments (0)

Monday, August 29, 2016

OECD publishes public comments on the design and operation of the group ratio rule under BEPS

On 11 July 2016, interested parties were invited to provide comments on a discussion draft which deals with elements of the OECDdesign and operation of the group ratio rule under Action 4 (Interest deductions and other financial payments) of the BEPS Action Plan. The OECD is grateful to the commentators for their input and now publishes the comments received.

Download Compilation-of-responses-discussion-draft-action-4-group-ratio-rule

August 29, 2016 in BEPS | Permalink | Comments (0)

Sunday, August 28, 2016

Liechtenstein strengthens international tax co-operation – ratifies the Convention on Mutual Administrative Assistance in Tax Matters

Liechtenstein today deposited its instrument of ratification for the Convention on Mutual Administrative Assistance in Tax Matters ("the Convention"). By doing so, Liechtenstein OECD_globe_10cm_HD_4cunderlines its commitment to fighting tax evasion and avoidance and takes another important step in implementing the Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries as well as automatic exchange of Country-by-Country Reports under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project.
 
Liechtenstein committed to implement automatic exchange of financial account information in time to commence exchanges in 2017 and was amongst the first signatories of the CRS Multilateral Competent Authority Agreement (the "CRS MCAA") and the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (the "CbC MCAA"), which are both based on Article 6 of the Convention.
 
The Convention will enter into force for Liechtenstein on 1 December 2016.

August 28, 2016 in GATCA, OECD | Permalink | Comments (0)

Friday, August 26, 2016

Government Throws in Towel, Admits FedEx is Not a Drug Dealer

FCPA blog reports that DOJ, during trial dropped its case against FedEX for drug dealing because it lacked the evidence.  The entire prosecution had been a bluff to see if the public company would blink and take a plea.  FedEx called the bluff.   High risk for FedEx and highly irresponsible of government.  Had FedEx lost - the repercussions would have been dramatic with the probable collapse of the company.  But what of the government prosecutors who signed off on this ill-fated venture to bring down FedEx?  Just another day at the office.

Was it a political prosecution?  The case was about the shipment of medicine by cheaper foreign pharmacies not licensed within a state.  The case was not about fake medicine being delivered.  The real medicine, just not price controlled within the US, so cheaper.  Elderly, chronic, and young patients,  uninsured or insurance not covering the medicine in question.  Strange case to prosecute by an administration seeking lower health care and pharma costs unless some group's lobbyists (maybe pharmacists who are big national chains now) encouraged it.  Feel free to respond and inform me what was really going on with this one.

"... prosecutors quickly raised the white flag on the second day of trial, when they conceded that evidence did not exist to sufficiently support the charges. This concession was not the product of a “new” revelation, like a witness gone south, but simply the product of an all too late admission that the evidence to indict the corporation was insufficient from the start." See more at FCPA blog

indictment story on 2014: FedEx corporation criminally indicted for drug trafficking

 

August 26, 2016 | Permalink | Comments (1)

Multilateral Convention for tax co-operation breaks through the 100 mark

In a ceremony at OECD Headquarters in Paris today, Burkina Faso, Malaysia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, and Samoa signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, bringing the number of participating jurisdictions to 103.

Mr. Mamadou Sangaré, Ministre Conseiller Chargé d’affaires at the Burkina Faso Embassy to France, H.E. Timothy Harris, OECDPrime Minister of Saint Kitts and Nevis, H.E. Cenio E. Lewis, High Commissioner of Saint Vincent and the Grenadines to the United Kingdom, Ms. Theresa Penn, Counsellor at the Embassy of Samoa to Belgium, and H.E. Ibrahim Abdullah, Ambassador of Malaysia to France, signed the Convention on behalf of their countries in the presence of the OECD Deputy Secretary-General Mari Kiviniemi.

In addition, Andorra, Saint Kitts and Nevis, and Senegal deposited their instruments of ratification of the Convention today. As a result, the Convention will enter into force in each of these jurisdictions on 1 December 2016.

Grace Perez-Navarro, Deputy-Director of the OECD Centre for Tax Policy and Administration (CTPA) congratulated the countries. "With over 100 countries and jurisdictions now participating in this multilateral tax information sharing agreement, national efforts to combat international tax evasion and avoidance have been substantially strengthened." She urged those countries that have not yet done so to sign and deposit their instrument of ratification of the Convention so that they too can benefit from the different types of cross-border tax co-operation afforded by the Convention.

The Convention was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010 to respond to the call by the G20 to align it to the international standard on exchange of information and to open it to all countries, thus ensuring that developing countries could benefit from the new more transparent environment. Today it is the world's leading instrument for boosting transparency and combating offshore tax evasion and avoidance.

The Convention's impact grows with each new signatory; it now also serves as the premier instrument for implementing the new Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries. It can also be used to swiftly implement the transparency measures of theOECD/G20 Base Erosion and Profit Shifting (BEPS) Project such as the automatic exchange of Country-by-Country reports under Action 13 as well as the sharing of rulings under Action 5 of the BEPS Project.

August 26, 2016 in GATCA, OECD | Permalink | Comments (0)

Thursday, August 25, 2016

US Treasury Doubles Down, Issues White Paper Against EU Commission on State Aid Cases (Starbucks, Apple, Amazon & Fiat)

"The U.S. Treasury Department continues to consider potential responses should the Commission continue its present course."

I think that the U.S. Treasury follows Texas Hold ’em style and realizes it has a good hand.  Double down on the bet by languaging a bill for Section 891 and submitting it to the President and Congressional for comments!  Conduct a couple IRS “raids” of French companies to gather evidence for Section 482 intangibles audit.  (see Texas Hold’em Poker: Will U.S. Treasury Double Down? )(see Will the US Impose Double US Tax Rates on EU Companies from Countries that Retroactively Impose State Aid Claw Backs?)

Beginning in June 2014, the Commission announced that certain transfer pricing rulings given by Member States to particular taxpayers may have violated the EU’s restriction on State Starbucks_Coffee_Logo.svg aid. These investigations, if continued, have considerable implications for the United States— for the U.S. government directly and for U.S. companies—in the form of potential lost tax revenue and increased barriers to cross-border investment. Critically, these investigations also undermine the multilateral progress made towards reducing tax avoidance.  Download White-Paper-State-Aid (1)

  • The Commission’s Approach Is New and Departs from Prior EU Case Law and Commission Decisions. The Commission has advanced several previously unarticulated theories as to why its Member States’ generally available tax rulings may constitute impermissible State aid in particular cases. Such a change in course, which has required the Commission to second-guess Member State income tax determinations, was an unforeseeable departure from the status quo.
  • The Commission Should Not Seek Retroactive Recoveries Under Its New Approach. The Commission is seeking to recover amounts related to tax years prior to the announcement of this new approach—in effect seeking retroactive recoveries. Because the Commission’s approach departs from prior practice, it should not be applied retroactively. Moreover,  imposing retroactive recoveries would undermine the G20’s efforts to improve tax certainty and set an undesirable precedent for tax authorities in other countries.
  • The Commission’s New Approach Is Inconsistent with International Norms and Undermines the International Tax System. The OECD Transfer Pricing Guidelines (“OECD TP Guidelines”) are widely used by tax authorities to ensure consistent application of the “arm’s length principle,” which generally governs transfer pricing determinations. Rather than adhere to the OECD TP Guidelines, the Commission asserts it is employing a different arm’s length principle that is derived from EU treaty law.

The U.S. Congress has made similar assessments regarding the effect the Commission’s investigations may have on U.S. interests. In a January 15, 2016, letter to Secretary Lew, the Chairman, Ranking Member, and other members of the U.S. Senate Committee on Finance stated that the “United States has a stake in these cases and has serious concerns about their fairness and potential impact on the U.S. fisc,” and that “these investigations raise serious questions about our ability to rely on bilateral tax treaties negotiated with EU Member States.” In a subsequent letter on May 23, 2016, the Senators added that their “concerns are driven not only by the initial cases, but also by the precedent they will create and their long-term implications.”

The European Commission’s Recent State Aid Investigations Of Transfer Pricing Rulings U.S. Department Of The Treasury White Paper of Aug 24, 2016.  Available at https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/White-Paper-State-Aid.pdf (last visited Aug 24, 2016).

past posts on this subject 

US Treasury Speaks Out Against EU Commission Investigation of US Companies for Transfer Pricing

 

 

August 25, 2016 in BEPS | Permalink | Comments (0)

Tuesday, August 23, 2016

FTC Announces Agenda for “Putting Disclosures to the Test”

Workshop Will Feature Research on Disclosure Effectiveness

The Federal Trade Commission has announced the agenda for its Sept. 15 workshop, Putting Disclosures to The Test, which will include 22 presentations covering a wide variety of 1024px-US-FederalTradeCommission-Seal.svgtopics on how consumers think about, notice, understand, and act on disclosures made to them in advertising and other materials.

The conference, which will take place in Washington, will also include opening remarks from FTC Chairwoman Edith Ramirez, along with remarks by FTC Bureau of Consumer Protection Director Jessica Rich and FTC Chief Technologist Lorrie Cranor.

The FTC has a long commitment to understanding and testing the effectiveness of consumer disclosures, and is especially interested in learning about the costs and benefits of disclosure testing methods in the digital age. Disclosures to consumers take many forms, from advertising disclosures to privacy policies and industry-specific statements covering jewelry, environmental claims, and more.

The day-long event will begin with a presentation on the cognitive models that govern how consumers process disclosures. From there, the presentations will be divided into six major topic areas: methods and procedures to evaluate the effectiveness of disclosures; whether and when people notice or pay attention to various types of disclosures; how much people understand or comprehend the information presented in disclosures; disclosures’ impact on consumers’ decision making processes; case studies; and a look at the future of research on disclosures.

The research participants will present at the workshop covers disclosures in a wide variety of environments, from online games to mobile platforms to nutrition labels. The researchers represent a number of institutions, including universities from across the U.S., government agencies, think tanks, testing firms, and private industry.

The workshop will take place at the FTC’s Constitution Center auditorum, located at 400 7th St, SW, Washington, DC, and is free and open to the public. It will begin at 9 a.m. ET and conclude at 5:30 p.m. ET. A full version of the agenda is available online. The event will also be available via live webcast.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

August 23, 2016 in Financial Regulation | Permalink | Comments (0)

Monday, August 22, 2016

OECD releases discussion draft on branch mismatch structures under Action 2 of the BEPS Action Plan

Interested parties are invited to provide comments on a discussion draft which deals with branch mismatch structures under Action 2 (Neutralising the Effects of Hybrid Mismatch arrangements) of the BEPS Action Plan.   Download Discussion-draft-Action-2-Branch-mismatch-structures
 
The Report on Neutralising the Effects of Hybrids Mismatch Arrangements (Action 2 Report) sets out recommendations for domestic rules designed to neutralise mismatches in tax OECD outcomes that arise in respect of payments under a hybrid mismatch arrangement. The recommendations in Chapters 3 to 8 of that report set out rules targeting payments made by or to a hybrid entity that give rise to one of three types of mismatches: 

  1. deduction / no inclusion (D/NI) outcomes, where the payment is deductible under the rules of the payer jurisdiction but not included in the ordinary income of the payee;
  2. double deduction (DD) outcomes, where the payment triggers two deductions in respect of the same payment; and
  3. indirect deduction / no inclusion (indirect D/NI) outcomes, where the income from a deductible payment is set-off by the payee against a deduction under a hybrid mismatch arrangement.

The report includes specific recommendations for improvements to domestic law intended to reduce the frequency of such mismatches as well as targeted hybrid mismatch rules which adjust the tax consequences in either the payer or payee jurisdiction in order to neutralise the hybrid mismatch without disturbing any of the other tax, commercial or regulatory outcomes. This discussion draft applies the analysis and recommendations set out in the Action 2 Report to mismatches that can arise through the use of branch structures. The discussion draft identifies five basic types of branch mismatch arrangements and sets out preliminary recommendations for domestic rules, based on those in the Action 2 Report, which would neutralise the resulting mismatch in tax outcomes.
 
As part of the transparent and inclusive consultation process mandated by the Action Plan, the CFA invites interested parties to send comments on this discussion draft, including responses to the specific questions identified in the discussion draft where input is required to advance this work.
 
Comments should be submitted by 19 September 2016 at the latest (no extension will be granted) by email to aggressivetaxplanning@oecd.org in Word format. They should be addressed to the International Co-operation and Tax Administration Division, OECD/CTPA.
 

August 22, 2016 in BEPS, OECD | Permalink | Comments (0)

Kuwait takes key steps towards improving tax transparency

Kuwait joined the 83 current signatories to the CRS Multilateral Competent Authority Agreement ("CRS MCAA"), the key international framework agreement for putting in place the automatic exchange of information on offshore financial accounts foreseen by the OECD Common Reporting Standard (CRS). By doing so, Kuwait is re-confirming its commitment to implement automatic exchange of financial account information in time to commence exchanges in 2018.

His Excellency, Mr. Khalifa Hamada – Undersecretary of Ministry of Finance, signed the CRS MCAA in the presence of the OECD Deputy Secretary-General Rintaro Tamaki.

The Global Forum on Transparency and Exchange of Information for Tax Purposes is monitoring the implementation of tax transparency standards to ensure the effective and timely delivery of the commitments made, the confidentiality of information exchanged and to identify areas where support is needed. It is also assisting its developing country members to ensure that they can also receive the benefits of the ongoing global move to automatic exchange of financial account information.

August 22, 2016 in GATCA, OECD | Permalink | Comments (0)

Saturday, August 20, 2016

DOJ Will Eliminating / Close All Private Prisons Over Next Five Years

Between 1980 and 2013, the federal prison population increased by almost 800 percent, often at a far faster rate than the Federal Bureau of Prisons could accommodate. In an effort Justice logoto manage the rising prison population, about a decade ago, the Bureau began contracting with privately operated correctional institutions to confine some federal inmates. By 2013, as both the federal prison population and the proportion offederal prisoners in private facilities reached their peak, the Bureau was housing approximately 15 percent of its population, or nearly 30,000 inmates, in privately operated prisons. 

Since then, for the first time in decades, the federal prison population has begun to decline, from nearly 220,000 inmates in 2013 to fewer than 195,000 inmates today. In part, this is due to several significant efforts to recalibrate federal sentencing policy, including the retroactive application ofrevised drug sentencing guidelines, new charging policies for lowlevel, non-violent drug offenders, and the Administration's ongoing clemency initiative. Now, three years since the Department ofJustice announced its Smart on Crime initiative, our efforts to address the pressures facing the Bureau are seeing real and positive results.

Private prisons served an important role during a difficult period, but time has shown that they compare poorly to our own Bureau facilities. They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department' s Office oflnspector General, they do not maintain the same level of safety and security. The rehabilitative services that the Bureau provides, such as educational programs and job training, have proved difficult to replicate and outsource-and these services are essential to reducing recidivism and improving public safety.

For all these reasons, lam eager to enlist your help in beginning the process of reducing--and ultimately ending-our use of privately operated prisons. As you know, all of the Bureau's existing contracts with private prison companies are term-limited and subject to renewal or termination. I am directing that, as each contract reaches the end of its term, the Bureau should either decline to renew that contract or substantially reduce its scope in a manner consistent with law and the overall decline of the Bureau's inmate population.

Download DOJ Prison Memo

Results in Brief

We found that in a majority of the categories we examined, contract prisons incurred more safety and security incidents per capita than comparable BOP institutions. We analyzed data from the 14 contract prisons that were operational during the period of our review and from a select group of 14 BOP institutions with comparable inmate populations to evaluate how the contract prisons performed relative to the selected BOP institutions.

Our analysis included data from FYs 2011 through 2014 in eight key categories: (1) contraband, (2) reports of incidents, (3) lockdowns, (4) inmate discipline, (5) telephone monitoring, (6) selected grievances, (7) urinalysis drug testing, and (8) sexual misconduct. With the exception of fewer incidents of positive drug tests and sexual misconduct, the contract prisons had more incidents per capita than the BOP institutions in all of the other categories of data we examined.

For example, the contract prisons confiscated eight times as many contraband cell phones annually on average as the BOP institutions. Contract prisons also had higher rates of assaults, both by inmates on other inmates and by inmates on staff. We note that we were unable to evaluate all of the factors that contributed to the underlying data, including the effect of inmate demographics and facility locations, as the BOP noted in response to a working draft of this report. However, consistent with our recommendation, we believe that the BOP needs to examine the reasons behind our findings more thoroughly and identify corrective actions, if necessary.   Download Report on Prisons

 

August 20, 2016 in Economics | Permalink | Comments (0)

DFS Issues Final Anti-Terrorism Transaction Monitoring & Filtering Program Regulation

The risk-based banking rule takes effect January 1, 2017.

Financial Services Superintendent Maria T. Vullo today announced that the Department of Financial Services (DFS) has adopted a risk-based anti-terrorism and anti-money laundering New York Fin Ser Comm regulation that requires regulated institutions to maintain programs to monitor and filter transactions for potential Bank Secrecy Act (BSA) and anti-money laundering (AML) violations and prevent transactions with sanctioned entities. The final regulation requires regulated institutions annually to submit a board resolution or senior officer compliance finding confirming steps taken to ascertain compliance with the regulation.   Download New York 2017 AML regs new

“Financial institutions doing business in New York must do everything they can to help stem the tide of illegal financial transactions that fund terrorist activity,” said Financial Services Superintendent Maria T. Vullo.  “It is time to close the compliance gaps in our financial regulatory framework to shut down money laundering operations and eliminate potential channels that can be exploited by global terrorist networks and other criminal enterprises.”

The risk-based rule adopted by DFS today takes into consideration comments that were submitted by the financial services industry and others during the extended comment period for the previously-proposed regulation, which ended March 31, 2016.

Under the new rule, which will be effective January 1, 2017, relevant regulated institutions are required to review their transaction-monitoring and filtering programs and ensure that they are reasonably designed to comply with risk-based safeguards. The institutions also must adopt (at the institution’s option) an annual board resolution or senior officer compliance finding to certify compliance with the DFS regulation beginning April 15, 2018.  The resolution or finding must state that documents, reports, certifications and opinions of officers and other relevant parties have been reviewed by the board of directors or senior official to certify compliance with the regulation.

Institutions must maintain supporting data for the certification, for review by DFS, for five years.

The key requirements of the new DFS anti-terrorism and anti-money laundering regulation include the following:

Maintain a Transaction Monitoring Program

Each relevant regulated institution shall maintain a reasonably designed program for the purpose of monitoring transactions after their execution for potential BSA/AML violations and Suspicious Activity Reporting. The system, which may be manual or automated, shall, at a minimum, to the extent they are applicable:

  • Be based on the risk assessment of the institution;
  • Be reviewed and periodically updated at risk-based intervals to take into account and reflect changes to applicable BSA/AML laws, regulations and regulatory warnings, as well as any other information determined by the institution to be relevant from the institution’s related programs and initiatives;
  • Appropriately match BSA/AML risks to the institution’s businesses, products, services and customers/counterparties;
  • BSA/AML detection scenarios with threshold values and amounts designed to detect potential money laundering or other suspicious or illegal activities;
  • End-to-end, pre-and post-implementation testing of the Transaction Monitoring Program, including, as relevant, a review of governance, data mapping, transaction coding, detection scenario logic, model validation, data input and program output;
  • Documentation that articulates the institution’s current detection scenarios and the underlying assumptions, parameters and thresholds;
  • Protocols setting forth how alerts generated by the Transaction Monitoring Program will be investigated, the process for deciding which alerts will result in a filing or other action, the operating areas and individuals responsible for making such a decision, and how the investigative and decision-making process will be documented; and
  • Be subject to an on-going analysis to assess the continued relevance of the detection scenarios, the underlying rules, threshold values, parameters and assumptions.

Maintain a Watch List Filtering Program

Each relevant regulated institution shall maintain a reasonably designed filtering program for the purpose of interdicting transactions that are prohibited by federal economic and trade sanctions, and which shall include the following, to the extent they are applicable:

  • Be based on the risk assessment of the institution;
  • Be based on technology, processes or tools for matching names and accounts, in each case based on the institution’s particular risks, transaction and product profiles;
  • End-to-end, pre- and post-implementation testing of the Filtering Program, including, as relevant, a review of data matching, an evaluation of whether the  Office of Foreign Assets Control sanctions list and threshold settings map to the risks of the institution, the logic of matching technology or tools, model validation, and data input and program output;
  • Be subject to on-going analysis to assess the logic and performance of the technology or tools for matching names and accounts, as well as the OFAC sanctions list and the threshold settings to see if they continue to map to the risks of the institution; and
  • Documentation that articulates the intent and design of the Filtering Program tools, processes or technology.

Additional Requirements

Each Transaction Monitoring and Filtering Program shall require the following, to the extent they are applicable:

  • Identification of all data sources that contain relevant data;
  • Validation of the integrity, accuracy and quality of data to ensure that accurate and complete data flows through the Transaction Monitoring and Filtering Program;
  • Data extraction and loading processes to ensure a complete and accurate transfer of data from its source to automated monitoring and filtering systems, if automated systems are used;
  • Governance and management oversight, including policies and procedures governing changes to the Transaction Monitoring and Filtering Program to ensure that changes are defined, managed, controlled, reported and audited;
  • Vendor selection process if a third party vendor is used to acquire, install, implement or test the Transaction Monitoring and Filtering Program or any aspect of it;
  • Funding to design, implement and maintain a Transaction Monitoring and Filtering Program that complies with the requirements of the regulation;
  • Qualified personnel or outside consultant responsible for the design, planning, implementation, operation, testing, validation and on-going analysis  of the Transaction Monitoring and Filtering Program, including automated systems if applicable, as well as case management, review and decision making with respect to generated alerts and potential filings; and
  • Periodic training with respect to the Transaction Monitoring and Filtering Program.

Annual Board Resolution or Senior Officer Compliance Finding

To ensure compliance with the requirements, each regulated institution shall adopt and submit to the Superintendent a board resolution or senior officer compliance finding by April 15 of each year.  Each regulated institution shall maintain for examination by DFS all records, schedules and data supporting adoption of the board resolution or senior officer compliance finding for a period of five years.

To view a copy of the final Transaction Monitoring and Filtering Program regulation, please click here.

August 20, 2016 | Permalink | Comments (0)

Friday, August 19, 2016

Turkey AML Regulation Requires Suspension of "Suspicious Transactions"

Baker McKenzie reports that Turkey: "As part of its fight against money laundering and financing terrorist acts and organizations, the Ministry of Finance issued the Regulation on Suspension of Suspicious Transactions on July 29, 2016. The Regulation focuses on suspending suspicious fund transfers."  Read the Baker McKenzie analysis here.

The current news reports about Turkey's government alleged economic suppression of political rivals leads to my curiosity about how "suspicious" and "terrorism" are being defined by MASAK, and how this regulation is to be implemented by financial institutions. 

 

August 19, 2016 | Permalink | Comments (0)

Thursday, August 18, 2016

Seeking Legal Analysis, Research, and Writing Program Faculty Candidate

TEXAS A&M UNIVERSITY SCHOOL OF LAW seeks a full-time faculty candidate to fill a tenure-track or contract position in its Legal Analysis, Research, and Writing Program. From its tenure-track positions to its expanded writing center, Texas A&M University School of Law prioritizes legal analysis, research, and writing. Our program consists of eight required credit hours of first year and upper-level specialized drafting courses.

Candidates must have a minimum J.D. degree or its equivalent. Preference will be given to those with demonstrated outstanding scholarly achievement and strong classroom teaching skills. Additionally, while the law school primarily is interested in entry-level candidates, more experienced candidates may be considered to the extent that their qualifications respond to the law school’s needs and interests. Texas A&M Law School has a unified tenure track system that requires all tenure-track and tenured faculty to engage in scholarship in addition to teaching and service.

Texas A&M University is a tier one research institution and American Association of Universities member. The university consists of 16 colleges and schools that collectively rank among the top 20 higher education institutions nationwide in terms of research and development expenditures. As part of its commitment to continue building on its tradition of excellence in scholarship, teaching, and public service, Texas A&M acquired the law school from Texas Wesleyan University in August of 2013. Since that time, the law school has embarked on a program of investment that increased its entering class credentials and financial aid budgets, while shrinking the class size; hired nineteen new faculty members, including thirteen prominent lateral hires; improved its physical facility; and substantially increased its career services, admissions, and student services staff. 

Texas A&M School of Law is located in the heart of downtown Fort Worth, one of the largest and fastest growing cities in the country. The Fort Worth/Dallas area, with a total population in excess of six million people, offers a low cost of living, a strong economy, and access to world-class museums, restaurants, entertainment, and outdoor activities.

As an Equal Opportunity Employer, Texas A&M welcomes applications from a broad spectrum of qualified individuals who will enhance the rich diversity of the university’s academic community. Applicants should email a résumé and cover letter indicating research and teaching interests to Professor Gabriel Eckstein, Chair of the Faculty Appointments Committee, at appointments@law.tamu.edu. Alternatively, résumés can be mailed to Professor Eckstein at Texas A&M University School of Law, 1515 Commerce Street, Fort Worth, Texas 76102-6509.

August 18, 2016 in Education | Permalink | Comments (0)

Wednesday, August 17, 2016

Who Trains the Compliance Cops ?

In a field paying anywhere from $75,000 to $250,000 in annual salary for qualified compliance pros, staffing is one of the biggest challenges for firms today.  New York Post story here

see previous post: HSBC hired 4,500 new compliance professionals (why aren't law students preparing for AML careers?)

 Shortage of Financial Advisors For Increasing Client Pool - Are the Law Students Prepared For This Career?

August 17, 2016 in Education | Permalink | Comments (0)

Tuesday, August 16, 2016

U.S. Treasury or Taxpayers Won't Foot Bill for State Aid Recoveries

Prof. Jeffery Kadet's letter to the editor of Tax Notes International corrects the seemingly commonly made mistake that any taxes collected against MNCs like Apple in connection with Jeffrey-M-Kadet-244x300EU State Aid investigations will be borne by US taxpayers. Instead, as this letter makes clear, such taxes will be economically borne by the corporations (e.g. Apple) that pay them.

Tax Notes International, July 20, 2016, available at http://ssrn.com/abstract=2815051

August 16, 2016 in BEPS | Permalink | Comments (0)

Monday, August 15, 2016

CFTC Orders Barclays Capital, Inc. to Pay $800,000 for Supervision Failure

 

The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Barclays Capital, Inc. (Barclays), a Connecticut 720px-US-CFTC-Seal.svg corporation headquartered in New York City, for failing to diligently supervise its officers’, employees’, and agents’ processing of exchange and clearing fees it charged customers for trading and clearing Chicago Mercantile Exchange, Inc. products from January 2011 to April 2015. Barclays is registered with the CFTC as a Futures Commission Merchant.Firm’s Supervisory Failures over Exchange and Clearing Fee Processing Led to Customer Overcharges at Times

The CFTC Order requires Barclays to pay an $800,000 civil monetary penalty and cease and desist from violating the CFTC regulation governing diligent supervision.

The CFTC Order explains that customer transactions executed on exchanges are subject to payment of exchange and clearing fees that are applied to each transaction in the normal course of business. Clearing firms such as Barclays receive invoices for these fees from the exchange clearinghouses, which the firms pass on to their customers, the CFTC Order states.

Here, the CFTC Order finds that Barclays failed to implement and maintain adequate systems for reconciling invoices from exchange clearinghouses with the amounts of fees actually charged to its customers through its back-office accounting software.  Barclays also failed to implement and maintain adequate policies and procedures regarding reconciliation of exchange and clearing fees, including failing to draft procedures and adequately train staff on how to complete the reconciliations. According to the CFTC Order, this led to instances in which Barclays overcharged some customers in an aggregate amount of approximately $1.1 million. The CFTC Order finds that Barclays discovered the problem in 2012 and thereafter took remedial steps, including refunding adversely affected customers.

The Order recognizes Barclays’ cooperation and corrective action it undertook after its deficiencies were discovered.

This is the second action that the CFTC has brought over a clearing firm’s supervisory failures over fee processing. In August 2014, the CFTC ordered Merrill Lynch, Pierce, Fenner & Smith Incorporated to pay a $1.2 million penalty relating to its processing of futures exchange and clearing fees charged to customers (see CFTC Press Release 6984-14, August 26, 2014).

August 15, 2016 in Financial Regulation | Permalink | Comments (0)

20 New Scholars Join Texas A&M Law in Two Years

1. Lisa Alexander

Lisa Alexander is an expert in community development law, specializing in urban real estate, low-income housing law and policy, economic development, and urban reform. She has experience at the Chicago Lawyers’ Committee for Civil Rights Under Law, Inc. and was awarded an Equal Justice Works Fellowship. She is also a former Associate Editor of the ABAJournal of Affordable Housing & Community Development Law. She was named an “Emerging Leader” by the National Congress for Community and Economic Development. Coming to us from the University of Wisconsin Law School, Professor Alexander was recently appointed to the Wisconsin State Advisory Committee for the U.S. Commission on Civil Rights.

2. William Byrnes

William Byrnes is a leading tax and financial crimes published author and co-author of eight Lexis treatises, a 10-volume Kluwer set, three Tax Facts books, and an 8-volume National Underwriter Wealth Planning treatise.   His weekly financial law and planning article is syndicated by American Legal Media (ALM).  Professor Byrnes pioneered online legal education in the early nineties and created the first online LL.M. offered by an ABA accredited law school.  He served a senior position of international tax for Coopers and Lybrand, specializing in transfer pricing.  He is a J. William Fulbright Foreign Scholarship Board (FFSB) and U.S. Department of State’s Bureau of Education and Cultural Affairs (ECA) appointed specialist for tax law and legal pedagogy. 

3. Irene Calboli

Irene Calboli specializes in intellectual property, European Union law, and international trade law. She has published numerous articles in journals such as the Illinois Law Review and Florida Law Review. She is the Co-Chair of the Professor Membership Team of the Academic Committee of the International Trademark Association and a member of the Executive Committee of the Art Law Section of the Association of American Law Schools. Professor Calboli formerly taught at Marquette University Law School.

4. Vanessa Casado Pérez

Vanessa Casado Pérez is a leading scholar on property and natural resources law. In several publications, she explores the role of property rights in water scarcity mitigation. She is affiliated with the Bill Lane Center for the American West, collaborating with the Water in the West program, a joint venture between the Center and the Woods Institute for the Environment. She has served as a research assistant at Universitat Pompeu Fabra, Barcelona, Spain, and the University of Chicago and New York University law schools. Professor Casado Perez joins us from Stanford University Law School where she was a Teaching Fellow of the LL.M. Program in Environmental Law & Policy and Lecturer in Law and coordinator of the Stanford Law Fellows’ research workshop.

5. Susan Fortney

Susan Fortney is one of the country’s foremost legal ethics and attorney malpractice scholars. She has authored many books and law review articles on these and other topics. She also serves on the editorial board for two American Bar Association journals. During her impressive career, Professor Fortney has also received many awards for outstanding teaching. She comes to Texas A&M from Hofstra University Law School. She also formerly served as Interim Dean of Texas Tech University School of Law.

6. Nuno Garoupa

Nuno Garoupa is a top scholar in comparative law and law & economics. He has published dozens of articles in journals such as the Illinois Law Review and the American Law and Economics Review. He received his Ph.D. in Economics from the University of York and also holds an LL.M. from the University of London. He has a long-established research interest in the economics of law and legal institutions. Professor Garoupa currently serves as President of the Fundação Francisco Manuel dos Santos in Portugal. He formerly taught at the University of Illinois College of Law.

7. Bill Henning

Bill Henning is a preeminent scholar in commercial law. Professor Henning has served as Executive Director of the Uniform Law Commission. He is a member of the Permanent Editorial Board for the Uniform Commercial Code, the American Law Institute, and the State Department’s Advisory Council on Private International Law. He currently serves as a member of the U.S. Delegation to the United Nations Commission on International Trade Law, Working Group VI.  Professor Henning formerly taught at the University of Alabama School of Law.

8. Luz Herrera

Luz Herrera will join us from the University of California, Los Angeles School of Law. She will serve as Associate Dean for Experiential Education. A leader in clinical programs, she also specializes in civil justice and wills and trusts. A former Senior Clinical Fellow at Harvard Law School, she has been recognized by the Daily Journal as among the 100 Top Attorneys in California and by the Mexican American Bar Association with the Cruz Reynoso Community Service Award.

9. Charlotte Ku

Dr. Charlotte Ku is an expert in international law and has published numerous books and articles in the field. She has also served as acting director at the Lauterpacht Centre for International Law at the University of Cambridge, as executive director and executive vice president of the American Society of International Law, and as a chair of the Board of Directors of the Academic Council on the United Nations System. Dr. Ku is a member of the Council on Foreign Relations and is a member of the Board of Advisors, Strategic Studies Quarterly. Dr. Ku joins us from the University of Illinois College of Law, where she was a professor of law and assistant dean of graduate and international legal studies.

10. Glynn Lunney

Glynn Lunney is an expert in intellectual property law and also has a Ph.D. in economics. He specializes in patent, copyright and trademark law, unfair competition, and contracts. He has published in prestigious journals such as the Virginia Law Review and the Michigan Law Review. Professor Lunney has a special connection to Texas A&M as he attended the University as an undergraduate and received a degree in engineering. Professor Lunney formerly taught at Tulane University Law School.

11. William Magnuson

William Magnuson is a practicing attorney who focuses on mergers and acquisitions, corporate governance, and private equity. He joins us from the law firm of Graves Dougherty Hearon & Moody in Austin, Texas, and he previously worked in the mergers and acquisitions group at Sullivan and Cromwell. He has represented public and private companies in various industries involving both U.S. and cross-border transactions. He served as a Climenko Fellow and Lecturer on Law at Harvard Law School, and as a clerk to the Honorable Priscilla R. Owen of the U.S. Court of Appeals for the Fifth Circuit. While he was a student at Harvard Law School, he served as Editor-in-Chief of the Harvard International Law Journal and continues to present at the Harvard Law School Forum on Corporate Governance and Financial Regulation.

12. Jack Manhire

Dr. John T. (“Jack”) Manhire, Jr., former Chief of Legal Analysis for the IRS Office of Professional Responsibility and National Program Chair, Executive Education for the U.S. Treasury Executive Institute, is the Director of Program Development at Texas A&M University School of Law.  His prior positions include Director of Technical Analysis & Guidance (Policy and Procedure) for the IRS Taxpayer Advocate Service, Attorney-Advisor (Tax) to the IRS National Taxpayer Advocate and Division Chief, Tax Law for the U.S. Coast Guard Auxiliary National Office.  Jack’s scholarly interests primarily involve issues relating to tax compliance. His articles and essays appear in journals such as the University of Pennsylvania Law Review, Virginia Tax Review, the Iowa Law Review, and the Florida Tax Review, Journal on Policy and Complex Systems. Jack was a University Fellow (Ph.D. candidate) at Yale University where he was Editor of the Yale Journal of Law & the Humanities.

13. Fatma Marouf

Fatma Marouf, a top scholar in immigration law, refugee law and international human rights law, will create and direct our new Immigration Clinic. Her scholarship has examined issues such as the rights of mentally incompetent noncitizens, the use of restraints in removal proceedings, and the exclusion of DREAMers from the Affordable Care Act. She was also named a Bellow Scholar for her empirical research on the adjudication of immigration appeals in the federal courts. She has extensive experience representing immigrants at all levels of adjudication and has served as a consultant to the United Nations High Commissioner for Refugees. Professor Marouf joins us from University of Nevada, Las Vegas William S. Boyd School of Law, where she was co-director of the Immigration Clinic.

14. Thomas W. Mitchell

Thomas W. Mitchell is widely recognized as an expert in property law, land use, remedies and rural community development. He founded and directed the Program in Real Estate, Land Use, and Community Development, a multi-disciplinary program at the University of Wisconsin Law School where he was the Frederick W. and Vi Miller Chair in Law. He served as the primary drafter of the Uniform Partition of Heirs Property Act, which was promulgated by the National Conference of Commissioners on Uniform State Laws (commonly known as the Uniform Law Commission), endorsed by the ABA and enacted into law thus far in eight states. The Act was also selected by the Council on State Governments for its 2013 Selected State Legislation publication which characterized it as comprehensive, innovative and a model statute.

15. Angela Morrison

Angela Morrison is an expert in employment and immigration law. She was previously the Legal Director of the Nevada Immigrant Resource Project, where she conducted outreach on immigration-related issues to community partners, governmental organizations, and immigrant communities. She also worked for the U.S. Equal Employment Opportunity Commission as a trial attorney. Professor Morrison formerly taught at UNLV School of Law.

16. Srividhya Ragavan

Srividhya Ragavan is an intellectual property expert, who has published numerous books and articles in the field. Her scholarship focuses on the relationship between international trade law and intellectual property. Professor Ragavan’s work is internationally recognized, particularly in India. Professor Ragavan has been associated with the various departments of the Indian government such as the Ministry of Human Resource Development. Professor Ragavan formerly taught at the University of Oklahoma College of Law.

17. Elizabeth Trujillo

Elizabeth Trujillo is a leading scholar in international economic law, specializing in the North American Free Trade Agreement, contracts, international trade, investment, and development. Her publications, which have appeared in law reviews, books, and peer-reviewed journals such as the Journal of International Economic Law, examine the relationship between international trade and investment with domestic regulatory structures. She is currently writing a book on international trade and sustainable development with Cambridge University Press. At the University of Detroit Mercy School of Law, she founded a J.D., LLB, L.E.D. tri-lateral degree program with universities in Mexico and Canada. Trujillo was a Visiting Scholar at Harvard Law School and at the Max Planck Institute for Comparative Public Law and International Law in Germany and is an Alexander von Humboldt Foundation Research Fellow. She comes to us from Suffolk University Law School in Boston where she previously served as the director of the international law concentration and was named “Latina Trailblazer in the Law” by the Massachusetts Association of Hispanic Attorneys.

18. Saurabh Vishnubhakat

Saurabh Vishnubhakat is an expert in intellectual property and patent law. He has published articles in journals such as the Florida Law Review and the Yale Journal of Law and Technology. He previously served in the United States Patent and Trademark Office, advising the agency’s chief economist and other leadership on patent policy. Profesor Vishnubhakat was also a faculty fellow at Duke Law School, where he taught patent law and researched bioinformatics innovation as well as economic and tort-theory aspects of patent litigation.

19. Michael K. Young

Michael K. Young, President of Texas A&M University, previously served as President and tenured Professor of Law at the University of Washington and President and Distinguished Professor of Law at the University of Utah. He served as Dean and Lobingier Professor of Comparative Law and Jurisprudence at the George Washington University Law School, and he was a professor at Columbia University for more than 20 years. He also has been a visiting professor and scholar at three universities in Japan. A graduate of Harvard Law School, President Young served as a law clerk to the late Chief Justice William H. Rehnquist of the U.S. Supreme Court, and he has held a number of government positions, including Deputy Under Secretary for Economic and Agricultural Affairs and Ambassador for Trade and Environmental Affairs in the Department of State during the administration of President George H.W. Bush.

20. Peter Yu

Peter Yu is a prolific scholar and an award-winning teacher. He is the author or editor of six books and more than 100 law review articles and book chapters. He has lectured and presented in more than 25 countries on six continents. He serves as the general editor ofThe WIPO Journal published by the World Intellectual Property Organization and chairs the Committee on International Intellectual Property of the American Branch of the International Law Association. Professor Yu formerly taught at Drake University Law School.

August 15, 2016 in Academia | Permalink | Comments (0)

Reporting Unauthorized Disclosure or Misuse of Tax Information Exchanged Under an International Agreement

The United States has a number of agreements relating to the exchange of information for tax purposes. The most common FATCA_rollforms of such agreements are bilateral double tax conventions, tax information exchange agreements, intergovernmental agreements to implement the Foreign Account Tax Compliance Act (FATCA), and multilateral agreements. Depending on the agreement’s terms, the United States may exchange information as specifically requested, automatically, or spontaneously. Information is exchanged automatically under the provisions of agreements to implement FATCA and pursuant to country by country reporting requirements under Treas. Reg. §1.6038-4.

The United States takes its obligation to respect the Taxpayer’s Right to Confidentiality very seriously and has implemented safeguards to protect the confidentiality and prevent the unauthorized disclosure or misuse of taxpayer information.  The United States encourages anyone who is aware of a suspected unauthorized disclosure or misuse of information exchanged under an international agreement to which the United States is a party to file a report with the Internal Revenue Service (IRS).

Any person who discovers a possible unauthorized disclosure or misuse of taxpayer information should notify the office of Treaty Administration within the IRS Large Business and International Division. Send a description of the incident to the Exchange of Information Disclosure mailbox. Use the term "Report of Suspected Unauthorized Disclosure of Exchanged Information” in the subject line of the email.

The email description should include all relevant information:

  • Name and contact information (including telephone number and email address) of individual submitting the information, so that the IRS may contact you to clarify details or make further inquiries
  • Details about the incident, to the extent known
  • Do not include any taxpayer identification number (e.g., social security number, individual taxpayer identification number).

All alleged unauthorized disclosures or misuse of information will be investigated and appropriate actions will be taken.

Page Last Reviewed or Updated: 27-Jul-2016

August 15, 2016 | Permalink | Comments (0)

Sunday, August 14, 2016

Combatting Corruption and Enhancing Integrity: A Contemporary Challenge for the Quality and Credibility of Higher Education

Absenteeism, Appropriation, Bribery, Cheating, Corruption, Deceit, Embezzlement, Extortion, Favouritism, Fraud, Graft, Harassment, Impersonation ... An ABC of dishonest practices – UNESCO usually referred to more coyly as misconduct or misrepresentation – is undermining the quality and credibility of higher education around the world. We shall use ‘corruption’ as a general term to designate such malpractice and make the academic operations of higher education institutions (HEIs) our primary focus.

Titled Advisory Statement for Effective International Practice: Combatting Corruption and Enhancing Integrity, the publication is a call to action that highlights the problems posed by academic corruption in higher education and suggests ways that quality assurance bodies, government and higher education institutions around the world can combat corruption.

The term “academic corruption” as used in the advisory statement refers to any prescribed action in connection with, for example, admissions, examinations or degree awarding that attempts to gain unfair advantage, including cheating, plagiarism, falsification of research, degree mills and accreditation mills.

The advisory statement grew out of an expert meeting held 30-31 March, 2016, in Washington D.C., that addressed quality assurance, accreditation and the role they play in combatting academic corruption. The two-day meeting brought together representatives from accrediting and quality assurance bodies, colleges and universities and higher education associations in Asia, Africa, Europe and North America.

Download Advisory-statement-unesco-iiep

August 14, 2016 in Education | Permalink | Comments (0)