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The IMB aware of the escalating level of this criminal activity, wanted to provide a free service to the seafarer and established the 24 hour IMB Piracy Reporting Centre (PRC) in Kuala Lumpur, Malaysia.
A newsletter about fraud and global asset recovery from the office of International Chamber of Commerce's FraudNet. To read about key asset recovery cases and global compliance with anti-fraud and money-laundering laws, please click in the link above for the Newsletter PDF.
CCS offers a flexible membership arrangement based on the selection of predetermined membership packages. A prospective member can elect to join one or more Bureaux according to their requirements.
Losses due to official misconduct account for a great many maritime trade incidents. Each incident can be complex and wide-ranging in nature. It is therefore unlikely that any one company will have the knowledge and resources to be able to investigate it thoroughly.
Counterfeiting and piracy are a drain on our businesses and on the global economy. It has resulted in the widespread loss of lawful employment and a massive reduction of tax revenues.
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caylorl@bennettjones.com www.bennett jones.com |
Address
3400 One First Canadian Place
P.O. Box 130 Toronto, Ontario M5X 1A4 Canada |
Telephone
+1 (416) 777 6121
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Languages
English
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To Canada from Transparency International: Unmask Anonymous Owners of Companies & Trusts Canada is one of the world's most opaque jurisdictions when it comes to ownership of private companies and trusts, according to a new report by Transparency International Canada (TI Canada). In fact, more rigorous identity checks are required of individuals getting library cards than of private companies setting themselves up with anonymous beneficial owners.
The report was produced by Adam Ross, TI Canada's lead researcher on beneficial ownership transparency. Its key recommendation is that the government of Canada require all companies and trusts in the country to identify their beneficial owners and that it publish this information in a central registry accessible to the public in an open data format. |
The report acknowledges that while beneficial ownership disclosure is not a silver bullet for the burgeoning problem of financial crime, it would be a major step forward in piercing the veil of secrecy that anonymously-owned shell companies and private trusts provide for a cornucopia of criminal activity. Under this highly instrumental “cover,” criminals hide the proceeds of fraud, corruption, and insider trading, while also evading government-imposed taxes and legal sanctions. For example, in Canada, nearly 70% of money laundering cases involve the use of beneficially-owned corporate structures, and the RCMP's success rate in pursuing money laundering is a fraction of what it is for other crimes. A suspect cannot even be identified in more than 80% of AML cases, and only a third of the cases that go to trial result in a conviction. Although governments around the world appear to be recognizing the threats posed by under-regulated legal entities and arrangements, Canada is lagging. In 2014, Canada and the other G20 nations adopted 10 High-Level Principles on Beneficial Ownership Transparency. However, in 2016, the Financial Action Task Force – the global anti-money laundering authority that helped develop the principles – published an evaluation of Canada that was highly critical of the secrecy it affords corporate owners and called on the government to make beneficial ownership information accessible "as a matter of priority". Meanwhile, several G20 countries – including the UK, France, Australia and South Africa – have committed to establishing public registries of beneficial owners or taken concrete steps toward doing so. Using specific case studies and original research into the luxury real estate property sector in Vancouver, TI Canada's report demonstrates how little is known about who truly owns Canadians companies, trusts, and the assets they control. TI Canada believes that an open, public registry will speed up investigations, save the government money, help the private sector meet its AML obligations, enable better investment and business decisions, and enhance public trust and confidence in the Canadian government. TI Canada's full report, "No Reason to Hide: Unmasking the Anonymous Owners of Canadian Companies and Trusts" is available here. Lincoln Caylor of Bennett Jones is recognized as a “leading counsel and commentator in the asset recovery field,” by Chambers Canada 2016, and is listed as a Most Highly Regarded Individual in North America by Who’s Who Legal: Asset Recovery 2016. The sole Toronto member of ICC FraudNet, he is internationally recognized for leading state-of-the-art asset tracing investigations and pursuing asset recovery litigation and enforcement actions in prominent, high-value international financial frauds and other economic crimes. The author appreciates Grace McKeown’s contribution to this piece. ICC FraudNet is an international network of independent lawyers who are leading civil asset recovery specialists in each country. Recognized by Chambers Global as the world’s leading asset recovery legal network, our membership extends to every continent and the world’s major economies, as well as leading offshore wealth havens that have complex bank secrecy laws and institutions where the proceeds of fraud often are hidden. Founded in 2004 by the Paris-based International Chamber of Commerce (ICC), the world’s business organization, FraudNet operates under the auspices of the ICC’s London-based Commercial Crime Services unit. |
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vanderplas@hocker.nl www.hocker.nl |
Address
Van Eeghenstraat 98
Amsterdam 1071 GL Netherlands |
Telephone
+31 20 577 7700
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Languages
English, Dutch, German, French
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Freezing Debtor Bank Accounts Across the Continent in a Single Fraud victims and their legal counsel have gained an important, new tool for reaching across the Continent with a single ex parte order that will freeze bank accounts in multiple EU countries: the new European Account Preservation Order. Under the EAPO, with a single freeze order, courts in any member state may, as part of any civil or commercial proceeding, freeze a debtors’ bank accounts up to a specified amount, EU-wide, with the exception of opt-outs Denmark and the UK.
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The new regulation only applies in cross-border cases where the bank account(s) to be “preserved” are maintained in an EU member state other than: 1) the member state of the court receiving the application for the Preservation Order or 2) the member state in which the creditor is domiciled. The EAPO is available as an alternative to instruments already existing under the national laws of member states. To ensure a close link between the proceedings for the EAPO and proceedings on the underlying matter before the court, jurisdiction to issue this international freeze Order resides with the court exercising jurisdiction over the underlying dispute. This encompasses any proceedings aimed at obtaining an enforceable order on the underlying claim, including, for instance, summary proceedings to obtain restitution or payment. Ex Parte Balancing of Creditor & Debtor Rights Because the EAPO procedure is ex parte, debtors will not be informed of creditors’ applications, or be notified prior to the issue of the EAPO or its implementation. Obviously, the advantage of “surprise” is essential for the Order to be effective in freezing and preserving targeted bank accounts while adjudication is in process—or after a judgment has been obtained but is in the process of enforcement. At the same time, the ex parte nature of the EAPO comes with specific safeguards for debtors’ rights. For example, when the court is not satisfied that freezing the account(s) in question is justified based on the evidence and information supplied by the creditor, an EAPO will not be issued. Furthermore, the Regulation allows the court to require creditors to provide collateral sufficient to ensure that the debtor can be compensated at a later stage in the proceeding for any damage caused by the EAPO. Still another feature in the Regulation that strikes a balance between creditors’ and debtors’ interests is the provision for creditor liability in the case of any EAPO-related damage caused to the debtor by the creditor’s fault. EU member states additionally are permitted to maintain or introduce into their national laws grounds for creditor liability other than the ones specified in EAPO Regulation. (Conflict-of-laws provisions governing creditor liability favour the member state of enforcement, and when there are several states of enforcement, the state where the debtor is habitually resident). Pre-Judgment Freeze Orders One of the chief advantages of the EAPO, besides its simultaneous, ex parte reach across the continent, is the fact that it can be obtained long before the conclusion of proceedings on the underlying matter. In many EU member states, it is difficult or impossible under national laws to obtain an ex parte freezing order before the proceedings on the substance of the matter have been initiated--or during the proceedings but before final judgment has been rendered. Yet under the EAPO’s implementing regulations, such an order can be obtained either prior to judgment on the substance of the matter or after such judgement has been rendered. When the creditor applies for an EAPO prior to obtaining a judgment, the court must be satisfied, based on the evidence submitted, that the creditor is likely to succeed on the substance of its claim. Furthermore, the creditor must demonstrate, either pre- or post-judgment, that its claim requires urgent judicial protection because without an EAPO, enforcement of an existing or future judgment is at risk of the debtor dissipating, concealing or destroying its assets (including disposing of them under-value, to an unusual extent, or through unusual action). The mere non-payment or contesting of an underlying claim--or the mere fact that the debtor has more than one creditor--is not sufficient evidence of the degree of payment risk necessary to justify the issuing of an EAPO. The same goes for the mere fact that the financial circumstances of the debtor are poor or deteriorating. However, the court may take such factors into account in its overall assessment of risk to the creditor’s ability to be remunerated. Using the 'Home' Court to Access Foreign Bank Account Info Particularly worth mentioning is that the Regulation sets out a mechanism allowing creditors to petition the courts to secure debtor bank account information from the designated information authority of the member state(s) in which the creditor believes the debtor holds accounts. The creditor must substantiate why it believes that the debtor holds one or more accounts with a specified bank or banks in the specified member state(s), for instance, because the debtor works or conducts professional activities in the member state(s) or owns property there. The creditor also must provide the court all relevant information available to it about the debtor and the account or accounts to be preserved by the EAPO. This new legal mechanism is intended to overcome existing obstacles to obtaining information about the whereabouts of a debtor’s bank accounts within a cross-border context. (In the Netherlands, bailiffs are the designated information authorities competent to obtain from banks domiciled in the Netherlands the information necessary to allow debtor's bank accounts to be identified.) Balancing EAPO Effectiveness with Debtor Data Privacy When foreign information authorities contacted by the competent court obtain the bank account information being sought, notifying the debtor of such disclosure shall be deferred for 30 days, in order to prevent such notification from jeopardising the effectiveness of the EAPO. Yet personal data protection for the debtor is also built into the process, with disclosure of bank account information limited to the requesting court, not the creditor. Given the exceptional powers of this mechanism for accessing private and personal data across borders, it can only be employed when the creditor has already obtained an enforceable judgment. However, an exception to this exclusion can be requested if the amount to be located and protected is substantial, and if there is an urgent need for the account information due to a substantial risk of unenforceability of a pending judgment and a subsequent deterioration in the creditor’s financial situation. Expectations for the new EAPO procedure are high because it should reduce the complexity and cost of pursuing debtor bank accounts across the EU. In many cases, the new Regulation will also make it possible to use the power of the courts to reach across the continent and override bank secrecy and personal data protections to identify debtors’ bank accounts wherever they are located. Hopefully, this will be an important step towards levelling the playing field between victims of fraud and perpetrators who hide their ill-gotten assets in EU banks. Cathalijne van der Plas is an associate partner at Höcker Advocaten. Cathalijne’s practice is international in nature, consisting in large part of civil fraud and asset recovery matters.She also has extensive experience in international judgment enforcement matters.Furthermore, she is often called on by other lawyers to provide advice on complex private international law issues and represents parties in international commercial disputes, including in arbitration. ICC FraudNet is an international network of independent lawyers who are leading civil asset recovery specialists in each country. Recognized by Chambers Global as the world’s leading asset recovery legal network, our membership extends to every continent and the world’s major economies, as well as leading offshore wealth havens that have complex bank secrecy laws and institutions where the proceeds of fraud often are hidden. Founded in 2004 by the Paris-based International Chamber of Commerce (ICC), the world’s business organization, FraudNet operates under the auspices of the ICC’s London-based Commercial Crime Services unit. |
- Details
caylorl@bennettjones.com www.bennett jones.com |
Address
3400 One First Canadian Place
P.O. Box 130 Toronto, Ontario M5X 1A4 Canada |
Telephone
+1 (416) 777 6121
|
Languages
English
|
Canadian Court Finds Third-Party Funding Not Prima Facie Maintenance or Champerty A recent decision by an appellate court in Canada has endorsed an important principle that could be seen to support third-party financing of commercial litigation. Since litigation finance remains relatively novel in many jurisdictions and the case law governing it continues to evolve, appellate opinions such as this are considered bellwethers.
The Manitoba Court of Appeal’s decision in Bjornsson v Smith provides Canada’s latest and most substantive appellate discussion of longstanding rules against maintenance and champerty in the litigation funding context. The Court’s reasoning that provision of financial support does not prima facie constitute an improper motive for participating in litigation may be influential in future adjudications involving claims of maintenance and champerty. |
The Bjornsson Ruling In Bjornsson, the Law Society of Manitoba paid damages to three innocent beneficiaries of a will as a result of the estate lawyer’s breach of professional duties, which included the misappropriation and conversion of trust property. The Law Society then obtained a release and assignment of the beneficiaries' interest in all causes of action arising from the misconduct, and assumed control of the ongoing litigation. The estate lawyer sought to strike the action, in part, on grounds that it was funded by the Law Society and was therefore barred by the rule against maintenance and champerty. The lower court dismissed the lawyer’s motion. The Manitoba Court of Appeal subsequently upheld the lower court’s decision and dismissed the estate lawyer’s appeal. It found that the Law Society had a legitimate interest in the litigation—namely, recovering its monies paid out as a result of the estate lawyer’s ethical breach. The court also found there was no evidence the Law Society had any improper motive. Motive, the Court of Appeals held, is determinative of the question of whether a certain arrangement constitutes maintenance or champerty. It is only where there is improper motive on the part of a third party with regard to a matter in litigation that maintenance or champerty may be found and the third party excluded from participating in the litigation. While determining exactly what constitutes improper motive may be some what ambiguous, the Court was clear that the provision of financial support to a lawsuit will not suffice. The Court of Appeal cited Professor McCamus' comments in The Law of Contracts (Toronto: Irwin Law, 2005 at pp 441-442) regarding what constitutes improper motive: In determining whether a particular arrangement amounts to maintenance or champerty, it is critical to find the presence of an improper motive... The mere fact that one is providing financial support to a lawsuit is thus not sufficient. It must be established that the party providing support does not have a legitimate interest in the outcome of the lawsuit. (at para 22)
The court’s adoption of Professor McCamus' comments may have significant implications for the provision of third-party litigation funding in Canada. In particular, the affirmation by an appellate court that providing financial support to a lawsuit does not prima facie demonstrate improper motive is a positive finding for both funders and litigants.Lincoln Caylor of Bennett Jones is recognized as a “leading counsel and commentator in the asset recovery field,” by Chambers Canada 2016, and is listed as a Most Highly Regarded Individual in North America by Who’s Who Legal: Asset Recovery 2016. The sole Toronto member of ICC FraudNet, he is internationally recognized for leading state-of-the-art asset tracing investigations and pursuing asset recovery litigation and enforcement actions in prominent, high-value international financial frauds and other economic crimes The author appreciates David A. Cassin’s contribution to this piece. ICC FraudNet is an international network of independent lawyers who are leading civil asset recovery specialists in each country. Recognized by Chambers Global as the world’s leading asset recovery legal network, our membership extends to every continent and the world’s major economies, as well as leading offshore wealth havens that have complex bank secrecy laws and institutions where the proceeds of fraud often are hidden. Founded in 2004 by the Paris-based International Chamber of Commerce (ICC), the world’s business organization, FraudNet operates under the auspices of the ICC’s London-based Commercial Crime Services unit. |
- Details
caylorl@bennettjones.com www.bennett jones.com |
Address
3400 One First Canadian Place
P.O. Box 130 Toronto, Ontario M5X 1A4 Canada |
Telephone
+1 (416) 777 6121
|
Languages
English
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Canada: Litigation Funding Report I recently had the opportunity to participate in a roundtable centered on how litigation finance could enhance Canada’s legal market. The discussion, hosted by Bentham IMF, also touched upon the legal and ethical considerations found in litigation-funding matters.
While the litigation-funding model is relatively new in Canada, funders are diligently assessing the market for valuable cases. It’s all about realizing whether litigation is an asset or a liability, depending on whether you’re making a claim or defending it. Once determined to be an asset, funding will be viewed by a greater number of larger corporations as a way to manage their litigation and get the risk off their balance sheets. This is what is happening in the U.S., Australia and the U.K. Undoubtedly, litigation finance will change things for the legal market and law firms, especially in Toronto. Here, case size has to be pretty substantial -- $10 million to $15 million -- before funders would become interested. The benefit, though, to otherwise dormant litigation is that third-party litigation funding will allow these substantial cases to go forward. |
Click here to review the white paper released by Bentham IMF including the roundtable’s findings. Lincoln Caylor of Bennett Jones is recognized as a “leading counsel and commentator in the asset recovery field,” by Chambers Canada 2016, and is listed as a Most Highly Regarded Individual in North America by Who’s Who Legal: Asset Recovery 2016. The sole Toronto member of ICC FraudNet, he is internationally recognized for leading state-of-the-art asset tracing investigations and pursuing asset recovery litigation and enforcement actions in prominent, high-value international financial frauds and other economic crimes. ICC FraudNet is an international network of independent lawyers who are leading civil asset recovery specialists in each country. Recognized by Chambers Global as the world’s leading asset recovery legal network, our membership extends to every continent and the world’s major economies, as well as leading offshore wealth havens that have complex bank secrecy laws and institutions where the proceeds of fraud often are hidden. Founded in 2004 by the Paris-based International Chamber of Commerce (ICC), the world’s business organization, FraudNet operates under the auspices of the ICC’s London-based Commercial Crime Services unit. |
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