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The Global Legal Monitor is an online publication from the Law Library of Congress covering legal news and developments worldwide. It is updated frequently and draws on information from official national legal publications and reliable press sources. You can find previous news by searching the Global Legal Monitor.

Kenya: Anti-Money Laundering Law Amended

(Mar. 24, 2017) On March 3, 2017, the Kenyan President, Uhuru Kenyatta, signed into law the Proceeds of Crime and Anti-Money Laundering (Amendment) Bill.  During the signing ceremony, he reportedly noted that “[t]his is a major tool in our sustained efforts to fight corruption.  It means that no proceeds of theft and corruption are beyond the reach of the State.”  (Maryanne Gicobi, Kenyan President Signs Anti-Money Laundering Bill to Law, EAST AFRICAN (Mar. 3, 2017).)  At present it appears that the latest available version of the amendment bill is one that was published in 2015; it is unclear whether the newly adopted law has further revisions.  Therefore, references to the changes in the law are to the 2015 Amendment Bill on the assumption that those changes were adopted.

Based on the 2015 amendment bill, the 2017 amendment would strengthen the authority of the Financial Reporting Centre (FRC) to issue instructions, directions, and rules.  (Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2015, KENYA GAZETTE SUPPLEMENT, No. 190 (Nov. 26, 2015), Institute of Certified Public Accountants of Kenya (ICPAK) website.)  The Proceeds of Crime and Anti-Money Laundering Act of 2009 established the FRC mainly to assist “in the identification of the proceeds of crime and the combating of money laundering and the financing of terrorism.”  (Proceeds of Crime and Anti-Money Laundering Act, No. 9 of 2009, § 23 (June 28, 2010), Laws of Kenya  website.)  A 2012 amendment to the Act accorded the FRC the authority to issue “such instructions, directions, guidelines or rules to reporting institutions as it may consider necessary for the better carrying out of its functions.”  (Proceeds of Crime and Anti-Money Laundering (Amendment) Act, No. 51 of 2012, § 9, KENYA GAZETTE SUPPLEMENT, No. 215 (Jan. 4, 2013), Laws of Kenya website.)

The Amendment Bill would strengthen this authority by affording the FRC the power to impose civil penalties against persons (both natural and juridical) who defy its authority.  Specifically, in addition to other forms of penalty envisaged under the 2009 Act, the Amendment Bill states that a natural person who “fails to comply with any instruction, direction or rules issued by the [FRC] … shall be liable on conviction to a fine not exceeding 5 million shillings (KES)” (about US$48,590).  (Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2015, § 4.)  A similar violation by a juridical person is, on conviction, subject to a fine not exceeding KES25 million (about US$242,955).  (Id.)  If the violation is not remedied, the person responsible is liable to pay KES10,000 (about US$97) per day for up to 180 days.  (Id.)

The  Amendment Bill also expands the category of persons that fall under the authority of the FRC.  It does this by clarifying the definition of the term “reporting institutions.”  The Proceeds of Crime and Anti-Money Laundering Act of 2009 defined the term “reporting institution” as “a financial institution and a designated non-financial business and profession.”  (Proceeds of Crime and Anti-Money Laundering Act No. 9 of 2009, § 2.)    The Amendment Bill further defines the term “designated non-financial businesses or professions” to include:

  • casinos (including online casinos);
  • real estate agencies;
  • those dealing in precious metals;
  • those dealing in precious stones;
  • accountants;
  • non-governmental organizations; and
  • any business or profession that the Minister of Finance, on the advice of the FRC, deems vulnerable to money laundering.  (Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2015, § 2.

The Amendment Bill also accords the FRC additional, significant powers.  It authorizes the institution to issue an order barring an individual from employment within a a particular reporting institution or employment in a specific capacity.  (Id. § 4.)  It also permits the FRC to issue an order “to a competent supervisory authority requesting the suspension or revocation of a licence or registration of a specified reporting institution whether entirely or in a specified capacity or of any employee of the reporting institution.” (Id.)

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Azerbaijan: President Appointed His Wife as First Vice-President

(Mar. 24, 2017) On February 21, 2017, the President of Azerbaijan, Ilham Aliyev, appointed his wife, Mehriban Aliyeva, as the First Vice-President of the Republic, in accordance with newly added article 1031 of Azerbaijan’s Constitution.  (Appointment by the President of the Republic of Azerbaijan of M. A. Aliyeva as the First Vice-President of the Republic of Azerbaijan, Presidential Order of Feb. 21, 2017, President of Azerbaijan website; Constitution of the Republic of Azerbaijan, Constitutional Court website (last visited Mar. 15, 2017) (both in Azerbaijani).)  Aliyeva also chairs Azerbaijan’s ruling political party, Yeni Azerbaijan. (Amanda Erickson, Azerbaijan’s President Has Chosen a New VP – His Wife, WASHINGTON POST (Feb. 22, 2017).)

The new offices of first vice-president and two additional vice-presidents were introduced by the constitutional amendments of September 2016.  Vice-Presidents are appointed and dismissed by the President.  (Referendum Act on Amendments to the Constitution of the Republic of Azerbaijan, approved by Presidential Order of July 18, 2016 (in Azerbaijani); Constitution of the Republic of Azerbaijan, art. 1031.)  The First Vice-President, not the Prime Minister as the Constitution had formerly prescribed, will serve as the acting president if the President resigns or is unable to serve due to incapacity or illness.  Only if the First Vice-President becomes incapacitated as well will the head of state’s functions be transferred to the Prime Minister.  (Constitution of the Republic of Azerbaijan, art. 105.)  Newly added article 1061 of the Constitution guarantees the immunity of the Vice-Presidents.  It is expected that the First Vice-President’s duties will include overseeing the Cabinet of Ministers, including the Prime Minister.  (Azerbaijan Leader Names His Wife as Country’s First Vice President, BLOOMBERG (Feb. 21, 2017).)

The amendments of September 2016 also extended the presidential term from five years to seven. (Constitution of the Republic of Azerbaijan, art. 101) and removed the requirement that the president be at least 35 years of age (id. art. 100), a change that, in the opinion of observers, makes Aliyev’s 19-year-old son eligible for the office.  (Erickson, supra.)  Presidential term limits were abolished by a previous constitutional referendum held in 2009.  (Id.; Peter Roudik, Azerbaijan: Court Removes Limits on Number of Presidential Terms, GLOBAL LEGAL MONITOR (Jan. 26, 2009).)  The minimum age for election to the legislature was also lowered, from 25 years of age to 18.  (Constitution of the Republic of Azerbaijan, art. 34.)  Other amendments allow the President to schedule an early presidential election and dissolve Parliament if it votes no-confidence in the government or rejects presidential nominees to key government posts twice in one year.  (Constitution of the Republic of Azerbaijan, art. 981.)

The European Commission for Democracy Through Law (the Venice Commission) concluded that these constitutional changes “would severely upset the balance of power and give ‘unprecedented’ control to the president.” (Azerbaijan Holds Controversial Constitutional Referendum, Radio Free Europe Radio Liberty website (last updated Sept. 26, 2016.)

Prepared by Nerses Isajanyan, Foreign Law Consultant, under the supervision of Peter Roudik, Director of Legal Research.

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Indonesia: Proposed Legislation on Tobacco Could Increase Domestic Production

(Mar. 24, 2017) The House of Representatives of Indonesia is considering a proposed law that could increase the country’s tobacco output. (Eveline Danubrata & Agustinus Beo Da Costa, Indonesia Tobacco Bill Would Fire up Output Despite Health Fears, REUTERS (Mar. 15, 2017).) The bill is listed among “priority legislation” on the legislative website. (RRU Tentang Pertembakauan [Bill on Tobacco], PROLEGNAS PRIORITAS (2017) [PRIORITY NATIONAL LEGISLATION PROGRAM (2017)], No. 20, House of Representatives website (last visited Mar. 16, 2017).)

The draft legislation covers the production and distribution of and excise taxes on tobacco. It would require domestic makers of tobacco products to use locally sourced tobacco for a minimum of 80% of their products.  In addition, it would set an excise tax of 200% of the price of imported cigarettes. (Danubrata & Da Costa, supra.) The current excise tax is 43% of the retail price, on domestically produced and imported tobacco products. (World Lung Foundation, Indonesia, TOBACCO ATLAS (2015); Indonesia – Corporate Taxation – Country Surveys – 9. Miscellaneous Taxes (Jan. 1, 2017), International Bureau of Fiscal Documentation online subscription database.)

The goal of the bill, as first considered last year, was to increase domestic cigarette production three-fold by 2020. That original bill was rejected due to objections from the Ministry of Health; the bill was reintroduced in the legislative program for 2017. (Marguerite Afra Sapiie, Indonesia to Decide Stance on Tobacco Bill, JAKARTA POST (Mar. 10, 2017).)

Although on March 14, 2017, the Cabinet Secretary, Pramono Anung, had stated that the proposed legislation was unnecessary, four days later, on the March 18 deadline for a government response to the legislature on the bill, Indonesia’s President Joko Widodo sent a letter to the House of Representatives agreeing that his administration would discuss the proposal with legislators. The letter gave responsibility for the discussions to the Trade, Health, Industry, and Finance Ministers. (Haeril Halim & Margareth S. Aritonang, Indonesia Gives Tobacco Bill a Shot, JAKARTA POST (Mar. 22, 2017).)

Background

Indonesia is the fourth largest cigarette-producing nation in the world. In addition to providing employment for millions of Indonesians, the industry is a significant contributor to the national tax revenue. Nearly two-thirds of Indonesian men smoke. (Danubrata & Da Costa, supra.) As of 2015, more than 217,400 Indonesians had died of tobacco-related causes annually. (World Lung Foundation, supra.)

According to the Minister of Health, Nila Moeloek, her Ministry opposes the bill due to the need to “safeguard the health of the people.” (Danubrata & Da Costa, supra.) An opposite view was expressed by legislator Firman Subagyo, who considers tobacco a “strategic” product that could be beneficial to both farmers and the national budget. He said, “[h]ealth should not be used as an excuse to destroy people’s livelihood.” (Id.)

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Taiwan: Amendment of Long-Term Care Act

(Mar. 23, 2017) Taiwan’s Long-Term Care Services Act, which was promulgated on June 3, 2015, but is not slated to become law until June 2017, was amended effective January 28, 2017. (Long-Term Care Services Law: Amendment of Long-term Care Services Law Revises Articles 15, 22, 62 and 66, THE GAZETTE OF THE OFFICE OF THE PRESIDENT, No. 7288 (Jan. 26, 2017, effective Jan. 28, 2017), Global Legal Information Network, Legislative Yuan, R.O.C., website (click on pdf icon to view Chinese text of the Presidential Order amending the Act); Wendy Zeldin, Taiwan: Long-Term Care Legislation Adopted, GLOBAL LEGAL MONITOR (May 22, 2015).)

The amendment law adds additional goals to the ones stated in the provision on the establishment of a special fund for long-term care services, namely, to provide for long-term care services, to expand on and spread out the capacity for long-term care services, and to enrich and balance the services with human resources and subsidize various outlays. (Long-Term Care Services Law…, supra; Long-Term Care Service Act (adopted on May 15, 2015, published by Presidential Order of June 3, 2015), art. 15 ¶ 1, Ministry of Health and Welfare website (in Chinese); Long-Term Care Services Act (June 3, 2015), Ministry of Health and Welfare website (English translation).)

The amendment law also adds two possible new sources of funding to the list set forth in article 15: additional tax revenue from (1) an increase of the estate and gift tax rates from 10% to up to 20%, and (2) an increase in the tax levied on tobacco from NT$590 per thousand cigarettes (or kilogram of other tobacco products) to NT$1,590. (Long-Term Care Services Law…, supra, art. 15 ¶ 2(1)&(2).) In addition, the amendment specifies that the measures set forth under the Act Governing the Allocation of Government Revenues and Expenditures will not apply to these additional tax revenues. (Id. art. 15 ¶ 3; Act Governing the Allocation of Government Revenues and Expenditures (June 13, 1951, as last amended Jan. 25, 1999), Laws & Regulations Database of the Republic of China (toggle for Chinese text); Wendy Zeldin, Taiwan: Proposed Amendments to Tobacco and Alcohol Tax, GLOBAL LEGAL MONITOR (Mar. 20, 2017).)

A new (third) paragraph added to article 22 of the Act states that private institutions engaged in institutional residential long-term care services referred to in the Act that were established in accordance with the Senior Citizens Welfare Act, the Nursing Staff Act, and the Act on Protection of the Rights and Interests of Persons with Disabilities prior to the implementation of the amendment law, will be exempted, except if they expand or relocate, from the restriction that long-term care institutions that provide institutional lodging services must be established by financial organization legal persons and civic organization judicial persons (as stipulated in ¶ 1 of art. 22). (Long-Term Care Services Law…, supra, art. 22 ¶ 3; Long-Term Care Services Act, art. 22.)

Under a revised article 62, institutions that offered long-term care services pursuant to other laws prior to the enforcement of the amendment law “may continue to provide such services according to the original regulations.” (Long-Term Care Services Law…, supra, art. 62.) The amendment removes the other provisions in article 62 related to the requirement that long-term care related institutions reorganize within five years after the Act takes effect, leaving just the abovementioned provision. (Id.; Long-Term Care Services Act, art. 62.)

Finally, the amended articles will be implemented on the date of the enforcement of the Long-Term Care Services Act. (Long-Term Care Services Law…, supra, art. 66.)

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Israel: Amendment Authorizing Revocation of Israeli Nationality Passed

(Mar. 23, 2017) On March 6, 2017, the Knesset (Israel’s parliament) passed the Nationality (Amendment No. 13) Law 5777 (Amendment Law). (Ministry of Justice website (scroll down to issue No. 2611 (Mar. 16, 2017) (in Hebrew).) The Amendment Law amends the Nationality Law, 5712-1952 (the Law). (SEFER HAHUKIM [BOOK OF LAWS, official gazette, SH] 5712 No. 95, p. 146, as amended.)

The Law authorizes the Minister of Interior to revoke the nationality of any person who has obtained Israeli nationality based on false information within three years after that person became an Israeli national. (Id. § 11(a).) The Law also authorizes the Administrative Court, in response to a request by the Minister of Interior, to cancel the Israeli nationality of any person if:

  1. the nationality has been acquired more than three years earlier based on false information; or
  2. the person has committed a breach of loyalty towards the state, as long as he/she will not become stateless as a consequence of the cancellation; and if he/she becomes stateless, the person will be granted a permit of permanent residence as authorized by the Minister of Interior. (Id. § 11(b).)

The Law provides that for the purpose of cancellation of nationality, it is presumed that persons who permanently reside in a country or an area listed in the supplement to the Law will not remain stateless. (Id.) The countries and areas listed are: Afghanistan, the Gaza Strip, Iraq, Iran, Lebanon, Libya, Pakistan, Sudan, Syria, and Yemen. (Supplement to the Law.)

The Law generally defines breach of loyalty as engaging in, assisting, or soliciting the perpetration of a terrorist act or actively taking part in a terrorist organization; engaging in treason; and acquiring citizenship or permanent residence in any of the countries or areas listed in the above-cited supplement. (Law, § 11(b)(2).)

According to the Amendment Law, a person has a right to be present in a judicial hearing where revocation of his/her citizenship is considered. The Court may, however, conduct the hearing in his/her absence if an invitation to attend has been delivered to the person in accordance with instructions determined by the Minister of Justice as provided by the Law, and the Court has determined that the absence does not constitute an injustice. (Amendment Law, adding § 11(2)(d)(1) to the Law.)

The Court is similarly authorized, in response to a request by the Minister of Interior and subject to compliance with alternative methods of delivery as determined by the Minister of Justice, to order that the hearing be conducted in absentia. Such a decision may be made when the person concerned cannot be located or it is not possible to deliver to him/her an invitation to attend the hearing. (Id. adding § 11(2)(d)(2) to the Law.) Based on a request by the person involved, the Court may authorize participation by audiovisual conferencing conducted in an Israeli consulate abroad. (Id. adding § 11(2(d(3) to the Law.) The decision to conduct a hearing in the absence of the person concerned does not affect the right of that person to be represented by an attorney privately hired or appointed by the Court. (Id. adding § 11(2)(d)(4) to the Law.)

The Court may, upon a request made by the Minister of Interior, prohibit the entry into Israel of a person who permanently resides outside of Israel. Such a prohibition can be made if the Court is convinced that the person’s entry into Israel constitutes an unpreventable real danger to state security or to public welfare. (Id. adding § 11(2)(d1)(1) to the Law.)

The Amendment Law provides that the Court will not prohibit the entry “if considerations of carrying out justice exceed the danger reflected from the person’s entry into Israel.” (Id.) An order to prevent the entry of a person based on the danger that entry would pose does not impact the person’s right to legal representation at the hearing. (Id.) A person whose nationality was revoked in his absence and in the absence of legal representation may request that the revocation decision be quashed within 45 days after learning of the decision. (Id. adding § 11(2)(d)(3) to the Law.)

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