Beijing police arrest 9 in one of the world's largest internet malware schemes
Beijing police have arrested nine suspects on charges of sabotaging computer systems, in a cross-border internet browser hijacking case. It is alleged that the suspects set up a company named Rafotech in Beijing's Haidian district and developed a malware dubbed "Fireball", with an extensive reach across the world. According to Mircosoft the malware emerged in 2015, and has been estimated to have infected 250 million computers worldwide — or about 20 percent of corporate networks. Malware has the ability of running any code on victim computers, such as downloading an arbitrary file and hijacking and manipulating infected user's web traffic in order to generate advertisement revenue. It installs plugins and additional configurations to boost its advertisements, and has potential to turn into a distributor for any additional malware. It has been alleged that Rafotech gained 80 million yuan ($12 million) last year from deploying the malware.
Apple opens China data centre to comply with new cyber-security rules
Earlier this month, Apple announced that it would open its first China data center in Guizhou, a province in southwest China, to store users' data within China. China's Cyber Security Law which came into force in June requires that personal data and other important data collected within China by certain entities be stored within the country. Despite the fact that the new law was vague in terms of data storage requirements, a number of foreign companies including Amazon and Microsoft have already formed partnership with Chinese local companies to offer cloud services within China.
Game developer's subsidiary and former chairman charged for offering bribes in China
Boyaa Interactive international, a Hong Kong-listed online game developer and operator in China, has made a disclosure that its indirect Chinese subsidiary in Shenzhen city and its former chairman Zhang Wei (who was also the former legal representative of the Shenzhen subsidiary) were charged by Chinese authorities for offering bribes. If convicted, the Shenzhen company could be fined and Zhang could be sentenced to up to five years' imprisonment.
US proposes to sanction Chinese bank for money laundering concerns linked to North Korea
The US has blacklisted a small Chinese bank accused of illicit dealings with North Korea. The Treasury department of the US has declared the Bank of Dandong a "primary money-laundering concern" proposing to sever it entirely from the US financial system, pending a 60-day review period. The sanctions have barred US customers from doing business with the Bank of Dandong which is based on the North Korean border and has been argued to have served as a gateway for trade with the isolated nation.
Multiple former senior government officials investigated for bribery
In the last month, a number of former senior Chinese officials were investigated by People's Procuratorates in China for suspicion of accepting bribes. These include:
CDM Smith investigated for bribing government officials
The State Chief Secretary, Dharmendra Sharma has taken over an investigation which was ordered by the Minister for the Public Works inquiry to investigate whether state officials accepted bribes from the US based company CDM Smith.Inc in exchange of a highway construction contract. It has been alleged that officials had accepted bribes of approximately $1.18 million from the US firm between 2011 and 2015 which resulted in an alleged $4 million profit for the firm.
Indonesian authorities invoke corporate liability provisions for the first time
Indonesia's Corruption Eradication Commission ("KPK") has named a corporate suspect, publicly listed PT Duta Graha Indah ("DGI"), concerning alleged corruption in the construction of a state university hospital in Bali in 2010. This is a first for the KPK, acting on broad powers conferred last year through a Supreme Court Regulation on Procedures for the Handling of Corporate Crime Cases (Regulation 13/2016).
In a jurisdiction where inbound investment and corruption risk are both high, this is a significant development which both domestic corporates and MNCs operating in Indonesia should take on board. Companies should ensure that they have the appropriate internal policies and procedures in place to prevent the carrying out of criminal acts such as bribery on their behalf. To read our full briefing please click here.
Tax official sentenced to 10 years' imprisonment for bribery
The Jakarta Corruption Court has sentenced senior tax officer Handang Soekarno to 10 years' imprisonment for accepting bribes from a sourcing firm PT EK Prima Ekspor Indonesia ("EKP"). Handang allegedly received $148,500 from EKP's country director Nair as a reward to accelerate the settlement of a tax evasion case. Handang was also required to pay $37,540 in fines or receive an additional four months imprisonment to his sentence. The case is known to have attracted public attention due to the fact it has implicated a relative of President Joko Widodo.
Singapore introduces draft Cybersecurity Bill
On 10 July 2017, a draft Cybersecurity Bill was released by the Cyber Security Agency of Singapore (“CSA”) and Singapore Ministry of Communications and Information (“MCI”) for public consultation, which will conclude on 3 August 2017. Among other matters, the proposed Cybersecurity Bill aims to provide a framework for the regulation of critical information infrastructure owners, and to introduce a lighter-touch licensing framework for the regulation of selected cybersecurity service providers. To read our full briefing please click here.
Singaporean police probe a collapsed suspected Ponzi scheme
Singaporean police are investigating a collapsed suspected Ponzi scheme. According to court documents the alleged Ponzi scheme raised almost $110 million from its 1,700-plus investors who were told their funds were being used for property developments with returns promised as high as 18 per cent. The scheme collapsed last year with creditors owed more than $159 million. MAS consults on regulations for the provision of digital advisory services In line with its recognition of the rapid expansion of, and new products within, the FinTech sphere, the Monetary Authority of Singapore ("MAS") issued a consultation paper on 7 June 2017 on the provision of digital advisory services (ie advice on investment products using automated, algorithm-based tools, also known as “robo-advisory services”). The consultation closed on 7 July 2017. To read our full briefing please click here.
King Power International accused of tax evasion
King Power International, the biggest duty-free retailer in Thailand, has been accused of tax evasion. A £420 million lawsuit has been filed against King Power as well as 14 Airports of Thailand ("AOT") officials, accused of paying the government only 3% of its annual revenue instead of the 15% required. It has been reported that further law suits will follow.
Philippines extends anti-money laundering laws to include casinos
Under a new law that was signed by President Rodrigo Duterte, casino operators in the Philippines are now covered by the Anti-Money Laundering Act ("AMLA") of 2001. The new law requires casinos to report transactions worth approximately $100,000 to the country's anti-money laundering agency. The new law will also apply to internet and ship-based casinos. The development in the law is said to follow the cyber heist of Bangladesh's Central Bank which saw $81 million illicitly transferred to fake accounts in the Philippines before disappearing into the country's casinos.
BIR investigates 40 cases of tax evasion this year
The Bureau of Internal Revenue ("BIR") has filed a case with the Department of Justice against a business man for failure to pay approximately $97,500 due in taxes. According to BIR this was the 40th case it had filed this year under the Philippine's Run After Tax Evaders ("RATE") program.
Anti-corruption in central province
The tax sector of a central province of Vietnam undertook 529 inspections at enterprises during the first half of 2017. The inspection revealed problems in asset disclosure, transparency and anti-corruption measures among the enterprises, which have led to fines and illegal gains which have been ordered to be returned to the state budget.
Heads of KAI and DAPA under investigation
The former President of Korea Aerospace Industries ("KAI") and the former chief of the Defence Acquisition Program Administration ("DAPA") have been placed under investigation following concerns of corruption in the acquisition of F-35 and KF-X military aircraft. The purchase of the aircraft was commission by former President Park Geun-hye, who is currently standing trial for large-scale corruption. It has been alleged that bonuses were paid to government officials in exchange for beneficial treatment in several defence acquisition contracts.