Key news in this bulletin:

  • Czech police recommend indictment of the country’s prime minister for EU subsidy fraud;
  • Ukraine establishes a court with the power to convict high-level corrupt officials; and
  • Telco executives receive fraud charges from Tanzanian government.

MIDDLE EAST & NORTH AFRICA

Algeria: Kouninef brothers arrested in corruption crackdown

According to Algerian state television, on 21 April, police arrested Reda, Abdel Kader, Karim and Noah-Tarek Kouninef, influential Algerian brothers with major business interests in the Algerian construction industry. The arrests were made in connection with a corruption investigation into the Kouninef business empire, and alleged violations of state contracts and abuse of political influence. A fifth prominent industrialist, Issad Rebrab, denied claims that he had also been arrested. The Kouninef family are close to Algeria’s former president, Abdelaziz Bouteflika, who stepped down in early April after 20 years in power, amid large-scale anti-government demonstrations in the capital, Algiers. Protests in Algeria have continued, and demand that those close to Bouteflika be removed from power. The Kouninef brothers have not yet given a statement to the press about their arrest.

 

ASIA PACIFIC

HONG KONG: GOVERNMENT SEEKS EXTRADITION TREATY WITH MAINLAND

The Hong Kong government has proposed to sign an extradition treaty with the People’s Republic of China (PRC) to allow the transfer of suspects to mainland China for trial. The new bill was presented to the Legislative Council, the city’s law-making body, in early April. The move came after a Hong Kong citizen suspected of murdering his girlfriend in Taiwan could not be tried in the absence of an extradition treaty between Hong Kong and Taiwan. In accordance with the One China policy, in order to negotiate an extradition treaty with Taiwan, Hong Kong should also negotiate with the PRC and Macau. Some fear that the PRC may use this to prosecute pro-democracy or pro-independence activists in Hong Kong, but the Hong Kong government has stated that the treaty will not apply to political crimes, nor to anyone at risk of the death penalty. The proposal has already been the subject of a legal challenge, and is currently under parliamentary review.

 

RUSSIA & CIS

RUSSIA: FORMER MINISTER ARRESTED ON EMBEZZLEMENT CHARGES

On 27 March, Mikhail Abyzov, Russia’s former minister for government transparency, and five others were arrested for allegedly embezzling USD 62 million from two Siberian energy companies between 2011 and 2014 and laundering the proceeds abroad. The investigation is reportedly unconnected to Abyzov’s work in the Russian government. Abyzov’s has been viewed as the latest in a series of potentially politically motivated arrests of liberal-leaning allies of Dmitry Medvedev, Russia’s incumbent prime minister and former President. Several prominent businessmen and former ministers have expressed support for Abyzov, who has thus far been refused bail. If convicted, he faces up to 20 years in prison.

UKRAINE: OUTGOING PRESIDENT POROSHENKO OFFICIALLY ESTABLISHES ANTI-CORRUPTION COURT

On 11 April, outgoing Ukrainian President Petro Poroshenko officially established the High Anti-Corruption Court, an independent court with the capacity to convict high-level officials on corruption charges. Thirty eight judges were appointed to the court after an extensive vetting process, and are expected to preside over cases currently being investigated by Ukraine’s two anti-corruption agencies. The establishment of the court was mandated by the IMF as one of the main conditions for its continued financial support of Ukraine, which ranks as the most corrupt country in Europe according to Transparency International, an anti-corruption watchdog. The new court is seen as key to reforming the country’s judiciary, which has so far failed to convict a single top official on corruption charges since the 2014 Euromaidan Revolution.

KYRGYZSTAN: INVESTIGATION OPENED INTO BIOMETRIC PASSPORT TENDER

In April, the Kyrgyz authorities opened a criminal investigation into an allegedly corrupt tender process that saw a USD 13.4 million contract to produce booklets for Kyrgyz biometric passports awarded to Garsu Pasaulis, a Lithuanian printing house. Officials from Kyrgyzstan’s State Registry Service, the government agency responsible for issuing passports, are alleged to have taken bribes from Garsu Pasaulis in the form of trips abroad paid for by the company. Garsu Pasaulis later reportedly received preferential treatment in the tender process, with bids by German, French and Kazakh printing companies to complete the work for a lower rate rejected or excluded on technical grounds. The head of the State Registry Service has been removed from her post, and three government officials have been detained as part of the investigation. The allegations have tainted Kyrgyzstan’s planned roll-out of biometric passports to citizens, which forms part of the country’s wider modernisation and digitalisation strategy under President Jeenbekov.

 

SUB-SAHARAN AFRICA

ZAMBIA: COURT RULES THAT LAWSUIT AGAINST MULTINATIONAL MINER CAN BE HEARD IN THE UK

On 10 April, the UK’s supreme court ruled that a lawsuit filed by Zambian villagers against a subsidiary of Vedanta Resources Limited, a UK-headquartered mining company, could proceed in the UK instead of in Zambia. The lawsuit concerns the alleged pollution caused by Vedanta’s Zambia-based mine. The UK supreme court made its decision on the basis that the claimants would struggle to access justice in Zambia. The ruling is expected to encourage further environmental claims against multinationals with global operations to be brought in the UK, particularly from countries where it is difficult to access legal funding.

TANZANIA: VODACOM TANZANIA EXECTIVES CHARGED BY GOVERNMENT

In early April, the managing director and four other executives of the Tanzania-incorporated subsidiary of Vodacom Group Limited, a South Africa-headquartered telecoms company, were arrested and charged with financial crimes by Tanzanian authorities. The executives have been accused of the alleged fraudulent use of network facilities, which resulted in a loss of more than TZS 11 billion (USD 4.8 million) to the Tanzanian government. On 11 April, Vodacom reportedly pled guilty to the charges and paid TZS 5.3 billion (USD 2.3 million) to settle them. This follows similar charges by Tanzanian authorities against the chief executives of two other mobile telecommunications operators in June 2018, which also agreed to settlements with the government.

 

EUROPE 

CZECH REPUBLIC: POLICE RECOMMEND PRIME MINISTER’S INDICTMENT FOR SUBSIDY FRAUD

On 17 April, Czech police announced the conclusion of a long-running investigation into Andrej Babiš, the country’s prime minister, and his involvement in suspected EU subsidy fraud. The police submitted its findings to the Prague public prosecutor, alongside a recommendation to indict Babiš, who has been under investigation since January 2018, when he was stripped of his immunity by the Czech parliament. Babiš, one of the country’s wealthiest business figures, is suspected of fraudulently acquiring a EUR 2 million EU subsidy intended for small businesses, for the “Stork’s Nest” eco-farm south of Prague. Since 2017, Babiš and his government have been subject to widespread public protests and an unsuccessful vote of no-confidence, following allegations that the prime minister had his son forcefully removed from the country to prevent him from testifying in the investigation. Prosecutors must now decide whether to begin court proceedings against Babiš, who could face a maximum ten-year prison sentence.

 

NORTH AMERICA

UNITED STATES: TRUMP ALLOWS US CITIZENS TO SUE FOREIGN FIRMS USING PROPERTY CONFISCATED BY CUBAN GOVERNMENT

On 17 April, the Trump administration announced that it would effectively allow Cuban-Americans and other US citizens to file lawsuits in US courts against foreign companies engaged in commercial activity involving property nationalised during the 1959 Cuban Revolution. The White House is ending the six-month rolling suspension of Title III of the Helms-Burton Act, part of the US trade embargo against Cuba, which has been ruled by a communist government for the last six decades. The Title III provision has been suspended by every president since the Act was adopted in 1996, as it might make European and Canadian firms vulnerable to billions of dollars in legal claims. The decision to enforce the law comes at a time of heightening trade tensions between the US and the EU. Following the Trump administration’s announcement, the EU stated that it would consider launching a case against the US with the World Trade Organisation.

UNITED STATES: ITALIAN BANK PAYS USD 1.3 BILLION TO SETTLE CLAIMS OF SANCTIONS BREACHES

On 15 April, UniCredit, an Italian bank, and its German and Austrian subsidiaries, reached a USD 1.3 billion settlement with US regulators following a seven-year investigation into multiple suspected sanctions violations. The banks were accused of violating US sanctions targeting a number of countries, including Iran and Syria, between 2002 and 2012. As a part of the settlement, the bank’s German subsidiary, UniCredit Bank AG, pled guilty to disguising transactions in violation of sanctions by removing information, and routing illegal payments on behalf of companies such as the Islamic Republic of Iran Shipping Lines, an Iranian state-owned company formerly sanctioned by the US for proliferating weapons of mass destruction.