raytodd.blog

18^th July 2019

KIDNAPPERS AND FAKE COPS PLAGUE PHILIPPINES GAMBLING SECTOR

On 17^th July, Calvin Ayre reported that police had arrested 8 Chinese nationals and 1 Filipino who the authorities claim were responsible for kidnapping a Chinese casino gambler who couldn’t repay the money they’d loaned him.  The gang then contacted the gambler’s wife in China, demanding that she pay US$39,000 in ransom to secure his safe return.  The article says that loan shark and kidnapping stories like these are legion in the Philippines.

https://calvinayre.com/2019/07/17/casino/kidnappers-fake-cops-plague-philippine-gambling-sector/

PAKISTAN: AUTHORITIES FREEZE ASSETS OF FORMER PUNJAB PRIME MINISTER SHEHBAZ SHARIF AND HIS FAMILY MEMBERS

Customs Today on 17^th July reported that the National Accountability Bureau (NAB) has ordered that all moveable and immoveable assets belonging to Shehbaz Sharif and his family members should be frozen with immediate effect.  It had arrested Shehbaz, also the Pakistan Muslim League-Nawaz (PML-N) president, in October 2018 in connection with alleged corruption. However, it also initiated another inquiry against Shehbaz for allegedly owning assets beyond his known sources of income.

http://www.customstoday.com.pk/nab-directs-to-freeze-shehbaz-sharif-familys-assets/

NUMEROUS WEAPONS CONFISCATED DURING THE EU-CO-ORDINATED JOINT OPERATION ORION IN MOLDOVA/UKRAINE

A news release from Europol on 17^th July announced that some 300 pieces small arms, almost 1,500 pieces of light weapons, more than 140,000 pieces ammunition and over 200 kg explosives were seized by the Moldovan and Ukrainian law enforcement agencies during a joint operation – in September 2018 to January 2019.  Public awareness campaigns on voluntarily handing over the illegally possessed firearms, without facing any criminal liability, were also organised – with 2,027 light weapons, 54 small arms and 2,025 ammunition with different calibres, as well as 67 pneumatic and gas pistols voluntary handed.

https://www.europol.europa.eu/newsroom/news/numerous-weapons-confiscated-during-eu-coordinated-joint-operation-orion

GRANT OF A LEASE TO A NON-EXISTENT TENANT HIGHLIGHTS IMPORTANCE OF CHECKING THAT COMPANIES IN A TRANSACTION ARE REGISTERED AT COMPANIES HOUSE

An article from Shoosmiths on 15^th July was concerned with a case where a lease of a restaurant in Cardiff was granted to a company called Seafood Shack UK Ltd.  The identity of the tenant had been set out in heads of terms but, crucially, nobody checked to ensure that the tenant company had been incorporated.  The lease was therefore ‘granted’ to a non-existent tenant.  The premises were actually occupied by a company called Seafood Shack (Cardiff) Ltd (SSCL).  When the error was found, and before a new lease could be completed, the occupier was wound up and liquidators appointed.  The liquidators disclaimed any interest in the premises and the owner therefore peaceably re-entered the premises and forfeited the lease.  A legal wrangle ensued, with Seafood Shack UK Ltd claiming that the owner had acted unlawfully in taking back possession of the premises, that it was the intended tenant of the lease and, therefore, still entitled to occupy the premises.  Shoosmiths says that the case demonstrates the importance of checking that the parties to a document legally exist.

https://www.shoosmiths.co.uk/client-resources/legal-updates/the-tenant-that-never-was.aspx

KEEP SMALL ARMS EXPORT APPROVAL WITH STATE DEPARTMENT, SAYS US HOUSE OF REPRESENTATIVES

Janes.com reported on 17^th July that the US Senate is considering an amendment to the National Defense Authorization Act (NDAA) that would retain State Department control over small-arms exports, following a vote in the House of Representatives.  The Trump Administration has floated the idea of relaxing small-arms export controls in 2017, arguing that it would make US gun manufacturers more competitive in the global marketplace.

https://www.janes.com/article/89923/keep-small-arms-export-approval-with-state-department-says-house

DAWN OF A NEW AGE FOR IRISH INVESTMENT LIMITED PARTNERSHIPS

On 17^th July, McCann Fitzgerald published an article about the Investment Limited Partnerships (Amendment) Bill 2019.  Once the revised limited partnership framework is in place, it says, Ireland will offer the full suite of preferred legal structures for real asset/private equity investment. The article contains a Q&A which provides a quick overview of the main changes proposed in the Bill.  The article explains that an Investment Limited Partnership is a regulated common law partnership structure and they are tailored specifically for investment in a collective investment fund.

https://www.mccannfitzgerald.com/knowledge/asset-management-and-investment-funds/Dawn_of_a_new_age_for_Irish_Investment_Limited_Partnerships

JERSEY’S ECONOMIC SUBSTANCE – IDENTIFYING HOLDING COMPANY BUSINESS AND ITS IMPLICATIONS

On 16^th July, Carey Olsen published a briefing which explains that a “holding company business” (HCB) is defined as “the business of being a holding company”, which suggests it applies to all companies holding assets.  However, it says, it actually refers to a specific type of holding company.  The article sets out questions to determine if a company is a HCB.

https://www.careyolsen.com/briefings/jerseys-economic-substance-requirements-identifying-holding-company-business-and-its

UAE – BRIBERY AND CORRUPTION

On 16^th July, DLA Piper published a briefing outlining how UAE has in recent times strengthened its anti-corruption commitments, legislation and institutions.  It looks at the law, offences etc, including the extra-territorial effect and application to foreign public officials.

https://www.dlapiper.com/en/global/insights/publications/2019/07/the-uaes-fight-against-bribery-and-corruption/

THE UK LAW COMMISSION REPORT ON SUSPICIOUS ACTIVITY REPORTS (SAR)

On 17^th July, 6KBW College Hill chambers published an article about the recent report from the Law Commission, which was asked in 2017 to conduct a review of the systemic problems in the SAR process.  It lists the main recommendations made in the report –

1. The creation of an Advisory Board to oversee drafting of guidance, to continue to measure the effectiveness of the reporting regime and to advise the Home Secretary on ways to improve it;
2. Rationalising the existing ‘fragmented and sometimes conflicting’ guidance across industries by imposing an obligation on the Home Secretary to issue guidance covering the operation of Part 7 of POCA. Guidance should be provided on a number of key statutory concepts including suspicion, ‘appropriate consent’, the reasonable excuse exemption and ringfencing criminal property; and
3. Using the Home Secretary’s existing power to prescribe the form of a SAR.

https://blog.6kbw.com/posts/suspicious-activity-reports-the-law-commission-report

VIJAY MALLYA’S UK HIGH COURT EXTRADITION APPEAL TO BE HEARD IN FEBRUARY 2020

The Indian Express on 18^th July reported that the Indian liquor tycoon, and former Kingfisher Airlines owner, Vijay Mallya’s appeal in the UK High Court against his extradition order to face fraud and money laundering charges has been listed for a 3-day hearing from February 11^th.

https://indianexpress.com/article/india/vijay-mallya-uk-high-court-extradition-appeal-to-be-heard-in-february-2020-5835634/

SENIOR BANKER WITH JP MORGAN PLEADS NOT GUILTY TO BRIBERY CHARGES IN HONG KONG

The Globe & Mail reported on 18^th July that JP Morgan’s former Asia investment banking vice-chair, Catherine Leung, has pleaded not guilty to charges of bribery in a Hong Kong court.  Leung is alleged to have offered employment to the son of the chairman of a logistics company as a reward for the chairman favouring JP Morgan.  Whilst not admitting the accusations, in 2016 JP Morgan agreed to pay US authorities $264-million to resolve allegations it hired the relatives of Chinese officials to win banking deals.

https://beta.theglobeandmail.com/business/international-business/asia-pacific-business/article-senior-banker-with-jpmorgan-pleads-not-guilty-to-bribery-charges-in/

SUSPICIOUS ACTIVITY REPORTS – WHAT CAN THE CHANNEL ISLANDS LEARN FROM THE UK?

An article in Bailiwick Express in Guernsey on 18^th July reflects on the June report from the UK Law Commission on SAR reporting in the UK.  In an interview with Bedell Cristin’s Managing Partner, David Cadin, says Guernsey could learn a number of things from the UK if it reflected on those similarities, including how financial services businesses must file SAR whenever they “think that there was a possibility, which was more than fanciful”, that a person is engaged in money laundering or have objective grounds for so suspecting.

https://gsy.bailiwickexpress.com/gsy/business/suspicious-activity-reports-what-can-channel-islands-learn-uk/

UN: ORGANISED CRIME OUTPACES AUTHORITIES IN SE ASIA

On 18^th May, Reuters reported that the UN Office of Drugs and Crime has said that transnational crime syndicates are growing more powerful in SE Asia and raking in profit by exploiting rampant corruption, weak law enforcement and lax border controls – citing the rising trade in drugs, counterfeit goods and medicines, people-smuggling, and trafficking of wildlife and timber.  It says that many of the cartels, based in Hong Kong, Macau, Taiwan and Thailand are outpacing the ability of law enforcement to match them – and are able to launder proceeds through poorly regulated casinos and the formal banking system in Singapore and Hong Kong, it added.  As evidence of the rise of organised crime, the UNODC report highlighted an explosion in production of the drug methamphetamine in Myanmar and its distribution across the Asia-Pacific, often concealed in tea packages.

https://uk.reuters.com/article/uk-southeastasia-crime/organised-crime-outpaces-authorities-in-southeast-asia-u-n-says-idUKKCN1UD0C2

UK – REGULATION OF PROPERTY AGENTS: WORKING GROUP FINAL REPORT

The Department of Housing, Community and Local Government has published the final report of a working group containing recommendations for government on a new regulatory framework for property agents. It recommends that a new proposed regulatory framework should cover estate agents across the UK and letting and managing agents in England – with all those carrying out property agency work be regulated (including auctioneers, rent-to-rent firms, property guardian providers, international property agents, and online agents).   Property portals (e.g. Rightmove) – which do not perform agent functions, the short-let sector (e.g. AirBnB), would be excluded (at least initially).  The Government, it says, should create a list of ‘reserved activities’ which can only be performed by a licensed property agent at a regulated firm.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/818244/Regulation_of_Property_Agents_final_report.pdf

POLICE DISRUPT ORGANISED CRIME GANG RESPONSIBLE FOR SUPPLYING THE CITY OF LONDON WITH COCAINE

A news release from the City of London Police (as opposed to the Metropolitan Police, which is responsible for Greater London) on 15^th July advised that City of London Police has disrupted a large-scale organised crime gang responsible for taking orders of cocaine from City workers and delivering the drugs in the Square Mile and central London.  Overall, a gang of 12 have been sentenced to over 30 years in prison.

http://news.cityoflondon.police.uk/r/1255/police_disrupt_organised_crime_gang_responsible_f

DISCUSSIONS ON SANCTIONS EXEMPTIONS UNDER WAY FOR FOOD AID FOR NORTH KOREA

The Yonhap News Agency in South Korea reported on 18^th July that discussions are currently under way with the US to get sanctions exemptions for South Korea’s plan to send food aid to North Korea.  South Korea and the UN World Food Programme (WFP) are trying to secure ships that will be used to transport 50,000 tons of rice to the impoverished state struggling with worsening food shortages.

https://en.yna.co.kr/view/AEN20190718002151325?section=nk/nk

SPACEPORTS OF THE WORLD

The Center for Strategic and International Studies has produced an interactive map for use to discover the history of ground-based space launches around the world, and to learn more about each spaceport.  Since 1957, 27 spaceports around the world have been used to launch satellites to orbit.  This data repository shows the cumulative launches from each spaceport from 1957 to 2018, as well as the destination orbital regime and inclination for each launch’s primary payload.

https://aerospace.csis.org/data/spaceports-of-the-world/

FCA TO BAN THE SALE TO RETAIL CLIENTS OF INVESTMENT PRODUCTS THAT REFERENCE CRYPTOASSETS

On 17^th July, Paul Hastings published an article saying that the FCA has published its proposals to ban the sale, marketing, and distribution to retail clients of derivatives (e.g. CFD, options, and futures) and exchange traded notes referencing “unregulated transferable cryptoassets” by firms in, or from, the UK.  It says that “Unregulated transferable cryptoassets” include well-known tokens such as Bitcoin, Ripple, and Ether, but exclude other types – which are detailed in the article, including e-money tokens.  The article looks at why the FCA has proposed the ban, and what are the implications.  It says that FCA is currently consulting on these proposals with the deadline for feedback being October 2019, and aims to publish a final policy statement and final FCA Handbook Rules in early 2020.

https://www.paulhastings.com/publications-items/details/?id=1752776d-2334-6428-811c-ff00004cbded

DR CONGO EBOLA OUTBREAK NOW A PUBLIC HEALTH EMERGENCY

On 17^th July, the UN advised that the second-worst Ebola outbreak of all time, in the Democratic Republic of the Congo (DRC), has been officially declared a Public Health Emergency of International Concern, with the head of the WHO calling for countries to ‘take notice and redouble our efforts”.  So far, there have been more than 2,500 cases of infection, and nearly 1,670 have died in the provinces of Ituri and North Kivu, where multiple armed groups and lack of local trust have hampered efforts to get the outbreak under control.

https://news.un.org/en/story/2019/07/1042681

ALGERIA’S UPRISING: A SURVEY OF PROTESTERS AND THE MILITARY

The Brookings Institute in the US has produced a briefing in the light of the resignation of President Abdelaziz Bouteflika in April, when he became the 5^th Arab president to fall to a mass uprising since the start of the Arab Spring in 2011.  It conducted an online survey of over 9,000 Algerians, gauging their attitudes towards the protests and their goals.  The survey also includes a large sample of 1,700 military personnel, allowing the Institute to compare and contrast their attitudes with the protesters.  It says that the majority of Algerians in the survey support the protest movement and want a complete change of the political system.  Protesters and non-protesters alike are fed up with corruption and would prefer a transition to democracy.  The lower ranks of the military — the soldiers and junior officers — largely agree with the protesters on these demands, but the senior officers are more resistant.  However, moving forward, protesters are likely to come into conflict with military personnel of all ranks over the military’s political and economic privileges post-Bouteflika.

https://www.brookings.edu/wp-content/uploads/2019/07/FP_20190711_algeria.pdf

HOW TO ATTACK A UK PATENT OR APPLICATION

On 15^th July, UDL published an article saying that attacking UK patents can be costly and time-consuming — but then provides what it says that you need to know about the process and how you can go about it.  It says that, in the UK, unless you convince the UK Intellectual Property Office (UKIPO) that an application shouldn’t be granted while it’s still pending, you must start revocation proceedings.

https://www.udl.co.uk/insights/how-to-attack-a-uk-patent-or-application

MAPPING THE IMPACT OF ILLICIT TRADE ON THE UN SUSTAINABLE DEVELOPMENT GOALS (SDG)

The Transnational Alliance to Combat Illicit Trade (TACIT) has produced a report about the UN Sustainable Development Goals (SDG), adopted in 2016 and which lay out an ambitious set of 17 goals to address the world’s most acute economic, social and environmental challenges.  They cover everything from poverty eradication and zero hunger to clean water, decent jobs and peace.  Among the portfolio of tools available to achieve the SDGs is the expansion of international trade – because trade has historically proven to be an engine for development, boosting income generating capacity and contributing to unprecedented reductions in poverty levels.  However, the expansion in legal trade has been accompanied by the alarming emergence of illicit trade, with estimates quantifying it and associated transnational criminal activities at between 8% and 15% percent of global GDP.  From smuggling, counterfeiting and tax evasion, to the illegal sale or possession of goods, services, humans and wildlife, illicit trade is compromising the attainment of the SDG in significant ways, crowding out legitimate economic activity, depriving governments of revenues for investment in vital public services, dislocating millions of legitimate jobs and causing irreversible damage to ecosystems and human lives.  The report argues that insufficient attention has been given to the substantial impact that illicit trade has on holding back progress.  Based on the research undertaken in this study, the socio-economic impacts of illicit trade are all quantifiably negative and present significant deterrence to achieving all 17 of the SDG.  It says that, while the findings show that illicit trade poses a threat to all 17 SDG, nowhere is the nexus as evident than in SDG 16 (Peace, Justice and Strong Institutions) and SDG 8 (Decent Work and Economic Growth). Across the board, these 2 goals are negatively impacted by all types of illicit trade examined in this study.  Chapters in the 130-page report those on the effect on SDG of illicit trade in the agri-food industry and illicit trade in agrochemicals and pesticides; illicit trade in alcohol; illicit trade in counterfeit and pirated goods; illicit trade in forestry products; illegal, unreported, and unregulated (IUU) fishing; illicit trade in petroleum products; illicit trade in pharmaceuticals; illicit trade in precious metals and gemstones; illicit trade in tobacco products; trafficking in persons; and illicit trade in wildlife.

https://unctad.org/meetings/en/Contribution/DITC2019_TRACIT_IllicitTradeandSDGs_fullreport_en.pdf

MEETING THE CHALLENGE OF SECONDARY SANCTIONS

The European Council on Foreign Relations has published this briefing on “secondary sanctions”.  It defines primary and secondary sanctions in the context of US sanctions as –

• Primary sanctions prohibit companies and individuals in the sanctioning country from engaging with their counterparts in the sanctioned country. Such sanctions apply to US persons, as well as US-origin goods and transactions that take place on US territory or in which the US can assert its jurisdiction; and
• Secondary sanctions are generally directed towards foreign persons. These measures threaten to cut off foreign individuals or companies from the US financial system if they engage in certain conduct with a sanctioned entity, even if none of that activity touches the US directly.

The paper assesses Europe’s main vulnerabilities to secondary sanctions and proposes policies that will restore its freedom of action – or, at least, minimise these measures’ impact.  It says that Europe’s exposure to US secondary sanctions is a major foreign policy challenge for which there is no easy solution, particularly in the light of re-imposed US sanctions following its withdrawal from the JCPOA on Iran.

https://www.ecfr.eu/page/-/4_Meeting_the_challenge_of_secondary_sanctions.pdf

See also this briefing from the Atlantic Council in February 2018 –

https://www.atlanticcouncil.org/blogs/econographics/ole-moehr-3

https://www.statista.com/chart/18712/share-of-the-us-public-believing-the-government-has-ufo-information/

https://www.statista.com/chart/17903/monthly-minimum-wage-in-the-global-garment-industry/

US TARGETS RUSSIA’S SOVEREIGN DEBT

An article from the Carnegie Moscow Center on 18^th July said that the US is close to banning US nationals from buying or dealing in Russian sovereign debt.  It also says that US sanctions on Russian sovereign debt will not have an immediate effect either: they are strategic measures whose impact will only be felt much later.  For now, the lack of an immediate effect from the measures will likely be presented as yet another victory for Russia.  It says that US sanctions fall into 3 categories: personal, financial, and sanctions against the companies of specific businessmen, and that, to date, only sanctions against the companies of 2 major businessmen, Viktor Vekselberg and Oleg Deripaska, had an impact that was noticed and felt at a national economy-wide level.  Financial sanctions that limit Russia’s borrowing are for now ineffective, and will only become truly effective when there is a deficit in the Russian federal budget.

https://carnegie.ru/commentary/79529

UKRAINE VOWS TO ENHANCE CUSTOMS COLLABORATION WITH EU TO TACKLE CIGARETTE SMUGGLING

EurActiv on 18^th July reported that the Ukrainian government has adopted new legislation to strengthen customs co-operation with the EU in order to better combat corruption and smuggling, including tobacco products.  It is reported that Ukraine has become a world hub for the supply of illegal cigarettes to Europe. From China, the UAE through Odesa, Belarus, Moldova, from uncontrolled territories [of Donbas] through Ukraine, as a kind of a ‘wild land’, illegal cigarettes go to Europe.

https://www.euractiv.com/section/economy-jobs/news/ukraine-vows-to-enhance-customs-collaboration-with-eu-to-tackle-smuggling/

FRAUDULENT PRACTICES ON EUROPE’S ENERGY REFURBISHMENT MARKET

An article on EurActiv on 18^th July from GEO PLC about a recent debate on the fight against fraudulent practices in the energy refurbishment sector in Europe.  It says that every year, in Europe, several billion euros are invested in energy refurbishment – such as energy transition tax credit, eco-loans, national housing agency subsidies, grants and bonuses for households, industries or local authorities to carry out various projects, such as the free insulation of roofs, the replacement of oil boilers, etc.  In Ireland, Italy and France, fraud, malfunctions and household mistrust have been reported by media organisations, politicians and energy suppliers, and these are real obstacles to achieving large-scale refurbishment.  The article says that the energy refurbishment sector should also be getting its own national authorities (as happened for the financial sector).  Such a body would impose processes for the setting up of financing files by ensuring the consent of households.  It would also have the power to supervise worksites, issue approvals and even withdraw them.

https://www.euractiv.com/section/energy/opinion/with-fraudulent-practices-on-europes-energy-refurbishment-market-national-market-authorities-are-needed/

UK TAX AVOIDANCE LITIGATION DECISIONS

On 18^th July, HMRC published details of litigation decisions where it considered tax avoidance was involved.  The yearly reports are from 2015/16 to 2018/19.

https://www.gov.uk/government/publications/tax-avoidance-litigation-decisions

IMPROVING WITNESS TESTIMONY

On 18^th July, the House of Commons Library published a briefing paper which says that witness testimonies are often seen as a strong form of evidence by police, judges and jurors. However, as with any evidence, the reliability of witness testimony decreases if it is not carefully obtained, managed and handled during investigations and prosecutions.  It refers to research which indicates that witness testimony that incorrectly implicated a defendant was a leading factor in wrongful convictions.  In a 2018 review of 365 wrongful conviction cases in the US where an individual was later exonerated by DNA evidence, 69% involved inaccurate witness identifications of the suspect.

http://researchbriefings.files.parliament.uk/documents/POST-PN-0607/POST-PN-0607.pdf

UKRAINE OPENS NEW CORRUPTION INQUIRY IN DEFENCE INDUSTRY

Interfax Ukraine on 18^th July reported that Ukrainian law enforcement agencies have been revealed another corruption scheme in the defence industry, whereby dubious contracts were used to remove $300 million to offshore companies.

https://en.interfax.com.ua/news/general/601269.html

ETHIOPIA SECURITY DILEMMAS

On 18^th July, RUSI published a Commentary which starts by saying that the recent murders of regional officials and top federal army officers raise serious questions about Ethiopia’s ability to manage and contain various regional militias and militant formations which could threaten the country’s territorial integrity.

https://rusi.org/commentary/ethiopias-security-dilemmas

ARGENTINA HAS DESIGNATED HEZBOLLAH A TERRORIST ORGANISATION

Kenneth Rijock in his blog on 18^th July reported that Argentina has designated Hezbollah a terrorist organisation – the first Latin American state to do so, and ordered that all its assets in the country be frozen.  The government has also created a Register of Persons & Entities Linked to Acts of Terrorism and Terrorist Financing, (RePET and Renapost).

http://rijock.blogspot.com/2019/07/argentina-designates-hezbollah-as.html

EUROPOL: 5G WILL MAKE INVESTIGATING ORGANISED CRIME HARDER

On 18^th July, OCCRP reported that Europol’s new director, Catherine De Bolle, has said in an interview that emerging 5G technology will disable Europol from tapping criminal communications and will therefore make it harder to investigate organised crime.  Unlike 4G, 5G will encrypt the unique identifiers that enable the identification and geo-location of mobile phone users, making intercepting and investigating communications between suspected criminals more challenging; and the sheer bulk of information that 5G would allow users to quickly download and transfer is also poised to easily overwhelm law enforcement.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/10245-europol-5g-will-make-investigating-organized-crime-harder

UK-WIDE COMPANIES SHOULD BEWARE SCOTTISH DEBT RECOVERY LIMITS

An article from Out-Law on 18^th July warns companies that the limitation period for recovery of debts in Scotland is 5 years, and not the 6 years that it is in England.

https://www.pinsentmasons.com/out-law/analysis/uk-wide-companies-should-beware-scottish-debt-recovery-limits

BERMUDA INSURANCE VEHICLE OVERHAUL WELCOMED – BUT WILL NEW VEHICLE TAKE OFF?

On 18^th July, an article from Appleby said that the insurance-linked securities (ILS) market has broadly welcomed moves by the Bermuda Monetary Authority to create a new collateralised insurance vehicle, but opinions vary on whether the new rules will prove to be onerous.

https://www.applebyglobal.com/publications/bermuda-ils-overhaul-welcomed-but-will-new-vehicles-take-off/

SEC ASSET FREEZE ON A PUMP AND DUMP SCHEME TARGETING ELDERLY RETAIL INVESTORS

A release on Mondo Visione on 18^th July reported that the SEC has announced an emergency action charging 2 individuals with running a pump and dump scheme targeting retail investors. The SEC also obtained an emergency court order freezing the defendants’ assets.  It is said that Florida resident Garrett M. O’Rourke and Maryland resident Michael J. Black worked together between 2016 and 2018 to fraudulently sell the stock of several microcap companies to investors, including elderly retail investors, using high pressure stock promotional campaigns.

The release also contained information saying how investors can find additional information about such pump and dump schemes, including the warning signs of fraud, on Investor.gov.  The Office of Investor Education and Advocacy and Division of Enforcement’s Retail Strategy Task Force has also issued Investor Alerts about these types of fraud, and links to relevant websites are included in the release.

http://www.mondovisione.com/media-and-resources/news/sec-obtains-asset-freeze-in-microcap-pump-and-dump-scheme-targeting-elderly-reta/

PUMP AND DUMP SCHEMES

In the US, the SEC has a website containing information about co-called pump and dump frauds.  In a pump and dump scheme, fraudsters typically spread false or misleading information to create a buying frenzy that will “pump” up the price of a stock and then “dump” shares of the stock by selling their own shares at the inflated price. Once the fraudsters dump their shares and stop hyping the stock, the stock price typically falls and investors lose money.

https://www.investor.gov/additional-resources/general-resources/glossary/pump-dump-schemes

 

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

On 18^th July, a news release from the NCA said that a businessman from the north of England with suspected links to serious organised criminals has been ordered to reveal the source of funds used to start and develop his £10 million property empire.  Officers believe the businessman’s property purchases were funded by a number of criminal associates involved in drug trafficking, armed robberies and supplying firearms.

https://nationalcrimeagency.gov.uk/news/nca-secures-first-serious-organised-crime-unexplained-wealth-order-for-property-worth-10-million

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

On 18^th July, OFAC announced it had designated a network of front companies and agents involved in the procurement of sensitive materials for sanctioned elements of Iran’s nuclear programme.   The individuals and entities targeted are based in Iran, China, and Belgium and have acted as a procurement network for Iran’s Centrifuge Technology Company (TESA), which plays a crucial role in Iran’s uranium enrichment nuclear programme through the production of centrifuges used in facilities belonging to the Atomic Energy Organization of Iran (AEOI).

• Bakhtar Raad Sepahan – an Iranian company, in co-ordination with its Belgium-based office, facilitated deals for the purchase of hundreds of thousands of dollars’ worth of Chinese-origin aluminium products and their shipment from China to Iran on behalf of TESA;
• TAWU BVBA – Bakhtaar Raad Sepahan’s Belgium-based office;
• Sohayl Talebi – managing director of TAWU BVBA, with an extensive background in metallurgical engineering.  He co-ordinated with Karimi to procure aluminium goods on behalf of TESA;
• Sanming Sino-Euro Import and Export Co Ltd – Chinese company established by Talebi facilitated the acquisition of, and payments for, Chinese-origin aluminium goods.  He used Sanming Sino-Euro to arrange shipments of aluminium goods to Iran;
• Afsaneh Karimi-Adegani – an employee of Baktaar Raad Sepahan with a background specializing in aspects associated with nuclear engineering;
• Henan Jiayuan Aluminum Industry Company Limited – a Chinese company contracted to sell aluminium goods to TAWU BVBA for use by TESA, and coordinated the shipment of the aluminium goods from China to Iran with TAWU BVBA and Bakhtar Raad Sepahan;
• Sabz Co (aka Tamin Kalaye Sabz Aras Company) – an Iranian company held a contract with TESA for alloy parts and contracted with a Chinese company to purchase metal materials that match a part used in Iranian gas centrifuges machines;
• Salim Borji – managing director of Sabz Co;
• Suzhou Zhongsheng Magnetic Company Limited – contracted to sell metallic products to Sabz Co. for shipment from China to Iran;
• Suzhou A-One Special Alloy Cc Ltd – contracted to sell metallic products to Sabz Co. for shipment from China to Iran;
• Mehdi Najafi – a representative of Sabz Co who has worked with Chinese suppliers to procure various metallic products for TESA; and
• Mohammad Fakhrzadeh – commercial director for TESA co-ordinated the purchase of various Chinese-origin aluminium goods that are associated with Iranian centrifuge components

https://home.treasury.gov/news/press-releases/sm736

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190718_33.aspx

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

EU Council decision 2019/1216/CFSP confirmed that 5 persons had been added to the travel ban list under the EU Mali sanctions.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.192.01.0026.01.ENG&toc=OJ:L:2019:192:TOC

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EurActiv on 18^th July reported that the Ukrainian government has adopted new legislation to strengthen customs co-operation with the EU in order to better combat corruption and smuggling, including tobacco products.  It is reported that Ukraine has become a world hub for the supply of illegal cigarettes to Europe. From China, the UAE through Odesa, Belarus, Moldova, from uncontrolled territories [of Donbas] through Ukraine, as a kind of a ‘wild land’, illegal cigarettes go to Europe.

https://www.euractiv.com/section/economy-jobs/news/ukraine-vows-to-enhance-customs-collaboration-with-eu-to-tackle-smuggling/

 

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https://www.statista.com/chart/17903/monthly-minimum-wage-in-the-global-garment-industry/

On 18^th July, OFAC added 4 Iraqi names to its sanctions “Global Magnitsky” (human rights abuses) lists – 2 militia figures, Rayan al-Kildani and Waad Qado, and 2 former Iraqi governors, Nawfal Hammadi al-Sultan and Ahmed al-Jubouri; said to be implicated in serious human rights abuse or corruption in Iraq.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190718.aspx

https://home.treasury.gov/news/press-releases/sm735

 

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On 18^th July, HM Treasury published 2 Notices –

• One amending details for Ri Pyong CHOL and the  MARITIME ADMINISTRATIVE BUREAU in the North Korea sanctions list; and
• One amending the details for Paul Malong AWAN in the South Sudan sanctions list.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/818753/Notice_DPRK_2019_1207.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/818749/Notice_South_Sudan_2019_1208.pdf

 

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The European Council on Foreign Relations has published this briefing on “secondary sanctions”.  It defines primary and secondary sanctions in the context of US sanctions as –

• Primary sanctions prohibit companies and individuals in the sanctioning country from engaging with their counterparts in the sanctioned country. Such sanctions apply to US persons, as well as US-origin goods and transactions that take place on US territory or in which the US can assert its jurisdiction; and
• Secondary sanctions are generally directed towards foreign persons. These measures threaten to cut off foreign individuals or companies from the US financial system if they engage in certain conduct with a sanctioned entity, even if none of that activity touches the US directly.

The paper assesses Europe’s main vulnerabilities to secondary sanctions and proposes policies that will restore its freedom of action – or, at least, minimise these measures’ impact.  It says that Europe’s exposure to US secondary sanctions is a major foreign policy challenge for which there is no easy solution, particularly in the light of re-imposed US sanctions following its withdrawal from the JCPOA on Iran.

https://www.ecfr.eu/page/-/4_Meeting_the_challenge_of_secondary_sanctions.pdf

See also this briefing from the Atlantic Council in February 2018 –

https://www.atlanticcouncil.org/blogs/econographics/ole-moehr-3

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The Transnational Alliance to Combat Illicit Trade (TACIT) has produced a report about the UN Sustainable Development Goals (SDG), adopted in 2016 and which lay out an ambitious set of 17 goals to address the world’s most acute economic, social and environmental challenges.  They cover everything from poverty eradication and zero hunger to clean water, decent jobs and peace.  Among the portfolio of tools available to achieve the SDGs is the expansion of international trade – because trade has historically proven to be an engine for development, boosting income generating capacity and contributing to unprecedented reductions in poverty levels.  However, the expansion in legal trade has been accompanied by the alarming emergence of illicit trade, with estimates quantifying it and associated transnational criminal activities at between 8% and 15% percent of global GDP.  From smuggling, counterfeiting and tax evasion, to the illegal sale or possession of goods, services, humans and wildlife, illicit trade is compromising the attainment of the SDG in significant ways, crowding out legitimate economic activity, depriving governments of revenues for investment in vital public services, dislocating millions of legitimate jobs and causing irreversible damage to ecosystems and human lives.  The report argues that insufficient attention has been given to the substantial impact that illicit trade has on holding back progress.  Based on the research undertaken in this study, the socio-economic impacts of illicit trade are all quantifiably negative and present significant deterrence to achieving all 17 of the SDG.  It says that, while the findings show that illicit trade poses a threat to all 17 SDG, nowhere is the nexus as evident than in SDG 16 (Peace, Justice and Strong Institutions) and SDG 8 (Decent Work and Economic Growth). Across the board, these 2 goals are negatively impacted by all types of illicit trade examined in this study.  Chapters in the 130-page report those on the effect on SDG of illicit trade in the agri-food industry and illicit trade in agrochemicals and pesticides; illicit trade in alcohol; illicit trade in counterfeit and pirated goods; illicit trade in forestry products; illegal, unreported, and unregulated (IUU) fishing; illicit trade in petroleum products; illicit trade in pharmaceuticals; illicit trade in precious metals and gemstones; illicit trade in tobacco products; trafficking in persons; and illicit trade in wildlife.

https://unctad.org/meetings/en/Contribution/DITC2019_TRACIT_IllicitTradeandSDGs_fullreport_en.pdf

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An article from the Washington Institute on 17^th July says that, despite apparent similarities, a deep-seated conflict between the 2 countries is currently playing out across the region, though they have consistently avoided direct confrontation or hostilities.  Tensions between them have been escalating since the Arab Spring, and are in turn impacting the political situations of Libya, Sudan, and the Eastern Mediterranean.  In addition to increasing the likelihood of more direct confrontation between the countries, Turkish-Egyptian conflict is also threatening the fragile stability of the Middle East, suggesting that an outside mediator is necessary to navigate this thorny issue.  In Libya, the countries are effectively fighting a proxy war: Egypt is supporting Field Marshal Khalifa Haftar, head of the Libyan National Army (LNA), while Turkey is aiding his opponent, the Government of National Accord, with Egypt in turn accused the Government of National Accord of supporting extremist Islamist militias and providing them with political and military support.  They are also said to be supporting opposing interests in Sudan. It also mentions that in November 2014, Egypt held a tripartite summit involving Egypt, Greece, and Cyprus (with the conspicuous absence of Turkey, which was also excluded from the subsequent Eastern Mediterranean Gas Forum) about the maritime borders in the eastern Mediterranean and to examine the optimal use of promising natural gas prospects between the coasts of Cyprus and Egypt.  The article says that the escalating pressure between the two regional players threatens to bring more turmoil to an already turbulent region.  The authors say that the core issue driving the enmity stems from Turkish support for the Muslim Brotherhood and remains a problem unlikely to be solved through mediation. Egypt sees Erdogan’s party and the Muslim Brotherhood as essentially two sides of the same coin, while Erdogan sees Sisi’s coup as potentially capable of being replicated in Turkey, especially after the failed coup attempt in 2016.

https://www.washingtoninstitute.org/fikraforum/view/tensions-between-egypt-and-turkey-are-on-the-rise

 

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The Globe & Mail reported on 18^th July that JPMorgan’s former Asia investment banking vice-chair, Catherine Leung, has pleaded not guilty to charges of bribery in a Hong Kong court.  Leung is alleged to have offered employment to the son of the chairman of a logistics company as a reward for the chairman favouring JPMorgan.  Whilst not admitting the accusations, in 2016 JPMorgan agreed to pay US authorities $264-million to resolve allegations it hired the relatives of Chinese officials to win banking deals.

https://beta.theglobeandmail.com/business/international-business/asia-pacific-business/article-senior-banker-with-jpmorgan-pleads-not-guilty-to-bribery-charges-in/

 

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Reuters on 18^th July reported that Italian oil company Eni has filed a fraud complaint against, Alessandro Des Dorides, its former head of oil trading over a suspect Iraqi crude oil shipment, and hiding the role of a small Italian oil trading firm, Napag.  The case involved the tanker White Moon, which attempted to unload in Sicily in May.  It is said that sources at Eni said the ship’s 1 million barrel cargo created panic within the company over fears the crude could be, at least partially, Iranian.  In due course it and the load returned to the Gulf.  The oil loaded onto the White Moon came via 2 ship-to-ship transfers that makes the origin harder to track, according to sources – the oil had come from the New Prosperity, but that vessel itself had been loaded with oil from a third tanker, the Abyss – makes regular voyages through the Gulf with its transponder switched off for days at a time.

https://www.reuters.com/article/us-eni-oil-trading-fraud/eni-files-fraud-complaint-rejigs-trading-arm-over-oil-tanker-fiasco-idUSKCN1UD0EK

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Australian law firm, Nyman Gibson & Miralis has produced a short briefing setting out the main details of the FCPA, saying that a ‘bribe’ may take the form of money, or anything of value given in an attempt to influence the person in their official capacity in a manner that may assist in obtaining or retaining business.

https://ngm.com.au/us-foreign-corrupt-practices-act/

 

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A post on FCPA Blog on 17^th July reported that a US technology company, Entrust Datacard Corporation (EDC) and its controlled affiliates, had been rendered ineligible to participate in World Bank-financed projects during a 12-month debarment.  This followed alleged “collusive practices” involving a national ID project in Bangladesh.

http://www.fcpablog.com/blog/2019/7/17/world-bank-debars-us-technology-company.html

The post also provided a link to a list of all debarred companies at –

http://www.worldbank.org/en/projects-operations/procurement/debarred-firms

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On 17^th July, Bird & Bird published an article identifying potential red flags and how to manage the risks involved and (for self-protection) understand and clearly document the business rationale for including the third party in the transaction.

https://www.twobirds.com/en/news/articles/2019/global/revisiting-abcs-in-the-aviation-industry-tips-for-spotting-bad-apples-in-third-party-relationships

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17^th July 2019

SWIFT’S BATTLE FOR INTERNATIONAL PAYMENTS

On 16^th July, Forbes reported on plans of the organisation for capturing/retaining more of the international payments sector, and 2 days after Facebook announced Libra, SWIFT announced that its “aim is simple: to make cross-border payments real-time, 24/7 and as seamless, convenient, cost-efficient and accessible as domestic payments”.  SWIFT sees as the real problem of international payments being the proliferation of self-contained currency systems such as Bitcoin, it also warns that banks must adapt to the changing demands of customers or die – SWIFT counts among its members (and owners) most of the world’s major banks.  The article says that SWIFT’s comments hint at the seismic shifts already happening in the payments world – which is undergoing perhaps the most radical change since the 1980s.  SWIFT’s proposal builds on the GPI initiative and underlying changes to domestic payments “plumbing” to create an instantaneous, unsleeping, ubiquitous international payments network – but not a blockchain approach, but moving to the open ISO 20022 standard by 2021 is a prerequisite for SWIFT’s plans.

https://www.forbes.com/sites/francescoppola/2019/07/16/swifts-battle-for-international-payments/#45740ec8758e

The SWIFT paper is available at –

https://www.swift.com/future-of-payments

US EXTRADITES CARBON FIBRE IRAN SMUGGLING PLOT SUSPECT FROM GERMANY

Urdu Point on 17^th July reported that the US has extradited Behzad Pourghannad, an Iranian citizen, from Germany on a charge of exporting carbon fibre from the US to Iran in defiance of sanctions.  He is charged with Ali Reza Shokri and Farzin Faridmanesh with exporting carbon fibre from the US to Iran.

https://www.urdupoint.com/en/world/us-extradites-carbon-fiber-iran-smuggling-plo-670947.html

VIDEO: SPANISH POLICE RAID ISLAND DRUG-SMUGGLING BASE ON CHAFARINAS ISLANDS JUST OFF THE COAST OF MOROCCO

Maritime Executive on 17^th July carried a video showing Spain’s Guardia Civil arresting 6 members of a hashish-smuggling gang in a massive sting operation on the Chafarinas Islands, a group of small outcroppings just 2 nautical miles off the coast of Ras Kebdana, Morocco.  These are Spanish possessions, but only one of the Chafarinas Islands has a constant population – a 19^th Century military outpost manned by a handful of soldiers.  The gang allegedly used a boat anchored just off one of the islands as a semi-permanent staging base for smuggling, with as many as 11 speedboats at a time stationed at the site. They would pick up hashish on the Moroccan mainland, ferrying as much as 3 tonnes of narcotics at a time for delivering to other trafficking vessels on the high seas.

https://www.maritime-executive.com/article/video-spanish-police-raid-island-drug-smuggling-base

INDONESIA URGES SINGAPORE TO STOP ILLEGAL SHIPMENTS OF LOBSTER LARVAE

Yahoo News on 16^th July reported that an Indonesian minister has called on Singapore authorities to reject illegal shipments of lobster larvae that do not have health certificates issued by Indonesia’s Quarantine Management System (QMS).  She said that lobster larvae are smuggled into Singapore and then they are exported to Vietnam.  Her comments came after Indonesian authorities thwarted a smuggling attempt of lobster larvae from Batam to Singapore – when authorities confiscated over 366,000 lobster larvae estimated to be worth S$5.5 million and stopped an attempt to illegally transport of 570,000 lobster larvae estimated to be worth S$8.5 million.

https://sg.news.yahoo.com/indonesia-urges-singapore-to-stop-illegal-shipments-of-lobster-larvae-report-104349366.html

NEW ZEALAND: VIRTUAL OFFICE PROVIDER REGUS WARNED OVER AML BREACH

The New Zealand Herald reported on 17^th July that the virtual office provider has been given a formal warning over its failure to meet obligations under AML/CFT law.  Regus New Zealand Management which provides office, co-working and meeting spaces in 24 locations around New Zealand including 13 virtual offices was issued with a formal warning on June 13^th about record-keeping and risk assessment failings.  Regus was the first non-financial sector company to be acted against for breaches of AML/CFT rules.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12250165

https://www.rnz.co.nz/news/business/394581/co-working-company-warned-over-anti-money-laundering-breach

CRIMINAL SILENCE: WHEN SHOULD YOU REPORT WHITE COLLAR CRIME IN IRELAND?

Law firm Arthur Cox has published a briefing which was concerned with the constitutionality of this type of offence was recently upheld by the Supreme Court in a case: Sweeney v Ireland, which concerned the obligation to report to the Garda information about certain serious crimes.  Mr Sweeney was interviewed multiple times by the Garda in relation to a murder.  He was charged with failure to disclose information in relation to the murder, something that the Supreme Court maintained though it clarified that there is no obligation to report a crime if it would compel a person to self-incriminate.  The article lists the types of white collar crime that need to be reported, what might be a reasonable excuse and what might happen if you do not report.

http://www.arthurcox.com/wp-content/uploads/2019/07/Financial-Crime-July-2019.pdf

SWITZERLAND: THE DARK SIDE OF ZUG’S CRYPTO VALLEY WITH ACCUSATIONS OF FRAUD

On 17^th July, KYC 360 reported that the Canton of Zug in Switzerland has been positioning itself as the global capital of cryptocurrencies, but accusations of fraud engulfing cryptocurrency markets could curb its ambitions; such as the legal proceedings in the US implicating cryptocurrency exchange platform Bitfinex in a $850 million fraud scandal.

https://www.riskscreen.com/kyc360/news/the-dark-side-of-zugs-crypto-valley/

UK: JURY ACQUITS 3 DESPITE EMPLOYER ENTERING INTO PLEA DEAL WITH SFO

On 17^th July, KYC 360 reported that 3 former employees of a company called Sarclad were acquitted of bribery charges, despite the company having accepted a deferred prosecution agreement with the SFO that it failed to prevent corrupt payments over an 8-year period.  Sarclad was a British technology business that supplies the metals industry.  The 3 were cleared of conspiracy to corrupt and conspiracy to bribe in relation to 27 overseas contracts.  The SFO was not able to show that various Sarclad agents actually paid bribes to named and unknown individuals.

https://www.riskscreen.com/kyc360/news/london-jury-acquits-three-sarclad-staff-despite-corporate-plea-deal/

VENEZUELA CONSIDERS USING RUSSIAN PAYMENT SYSTEM

On 17^th July, KYC 360 reported that Venezuela’s government is studying the possibility of switching to a Russian-operated international payment messaging system as an alternative to SWIFT.

https://www.riskscreen.com/kyc360/news/weary-of-sanctions-venezuela-mulls-using-russian-payment-system/

PERU EX-PRESIDENT TOLEDO ARRESTED IN US AS PROSECUTOR SEEKS EXTRADITION

KYC 360 reported on 17^th July that Alejandro Toledo has been arrested in the US under an extradition order.  Toledo was president from 2001 to 2006, and is a fugitive from Peruvian justice for allegedly receiving $20 million from the Brazilian construction company Odebrecht in exchange for aid to win public works.

https://www.riskscreen.com/kyc360/news/peru-ex-president-toledo-arrested-in-u-s-as-prosecutor-seeks-extradition/

MALAYSIA SEIZES $240 MILLION FROM CHINESE COMPANY OVER DELAYED PROJECT

The Nikkei Asian Review on 17^th July reported that the Malaysian government has seized roughly $243 million in assets held by a state-backed Chinese company, citing a botched public works project for which the corporation was paid under the previous administration.

https://asia.nikkei.com/Politics/Malaysia-in-transition/Malaysia-seizes-240m-from-Chinese-company-over-delayed-project

HMRC ANNOUNCES NO MORE PRINTED EDITIONS OF THE TARIFF

On 17^th July, HMRC reported the end of production of the printed paper tariff in December 2019. The Tariff contains all the necessary information to complete import, export and other customs declarations – the Commodity Codes, Customs Procedure Codes, country identifiers and other information.  It is published annually, with monthly amendments.

https://www.gov.uk/guidance/end-of-production-of-the-printed-tariff-tariff-stop-press-notice-24

HMRC LAUNCHES RED DIESEL CONSULTATION

On 16^th July, the RYA published an item saying that HMRC is inviting views on, and seeking information about, proposed changes to the rules for red diesel used in private pleasure craft as a result of a judgment of the CJEU that UK rules for diesel used in private pleasure craft contravened the Fuel Marker Directive.  The consultation sets out the changes the government intends to make to bring the UK’s practice into line with the Directive and seeks evidence about the impact of the changes on users of diesel-powered craft and their fuel suppliers.  It closes on 9^th September.

https://www.rya.org.uk/newsevents/news/Pages/hmrc-consultation-diesel.aspx

BREXIT “NO DEAL” CHECKLIST

On 16^th July, HFW published an update of a briefing in which it provides a checklist of key items for businesses to consider when planning for a no-deal Brexit.

http://www.hfw.com/downloads/Brexit-Update-No-Deal-Checklist.pdf

10 TURKISH SAILORS KIDNAPPED OFF NIGERIAN COAST IN LATEST PIRATE ATTACK

On 17^th July, Defence Web reported that Nigerian pirates have taken hostage 10 Turkish sailors after attacking their cargo vessel, Paksoy-1, off the coast of Nigeria in the latest attack to hit the Gulf of Guinea.

https://www.defenceweb.co.za/featured/ten-turkish-sailors-kidnapped-off-nigerian-coast-in-latest-pirate-attack/

BELT AND ROAD INITIATIVE 2.0: ‘QUALITATIVELY’ DIFFERENT?

On 17^th July, ETH Zurich published an article saying that President Xi Jinping used the Belt and Road (BRI) Forum in April to set the agenda for the next 5 years of his hallmark project.  The article highlights some analytical pointers on how BRI 2.0 is likely to be different from version 1.0, especially keeping in mind what Chinese Minister of Foreign Affairs Wang Yi referred to as a “high-quality” shift from “big freehand” to “fine brushwork” in planning BRI’s future projects.  It says that the factors of BRI 2.0 combined could make it qualitatively different, which the world at large, and the US in particular, needs to be prepared for.

https://isnblog.ethz.ch/economy/belt-and-road-initiative-2-0-qualitatively-different

RUSSIAN SANCTIONS AGAINST GEORGIA: HOW DANGEROUS ARE THEY FOR COUNTRY’S ECONOMY?

Emerging Europe carried an article on 17^th July saying that in July, declaring Georgia as a dangerous country for Russian visitors, Vladimir Putin banned Russian airlines from flying to Georgia for an indefinite period, as relations between Georgia and Russia hit a new low point.  However, Putin has (so far) rejected calls from the Duma to ban imports of Georgian wine and mineral water, as well as restrict money transfers between the countries.  It says that the Georgian economy is increasingly dependent on Russia and vulnerable to the effects of any prospective sanctions, with Russia using access to its market as leverage to achieve political ends.  Russia imposed an embargo on Georgian wine and mineral waters in 2006 – and the article notes that Georgia now has a free trade agreement with the EU and China, which indicates that new Russian sanctions should not be as painful as in 2006.  However, the ban on flights from Russia to Georgia – and on Georgian airlines flying to Russia – while ostensibly introduced due to security concerns was in fact a way of pressuring the Georgian economy by means of reducing tourist inflows – though Russians can still visit Georgia, either travelling by car or flying through a third country.  The article looks at the possible effects of other restrictive measures, such as on money transfers and foreign direct investment by Russia in the country.  It concludes that new Russian sanctions pose a considerable danger to the Georgian economy as they target all channels through which Georgia receives over 95% of money from Russia – exports, tourism, and remittances – 10.3% of Georgia’s GDP.

https://emerging-europe.com/voices/russian-sanctions-against-georgia-how-dangerous-are-they-for-countrys-economy

HEADS OF 2 OF PAPUA NEW GUINEA’S STATE-OWNED COMPANIES ARRESTED

Radio New Zealand reported on 17^th July that the heads of 2 of PNG state-owned companies have been arrested on unrelated charges.  Augustine Mano, who is the managing director of the state entity in charge of managing landowner dividends, was arrested on allegations under the cybercrime Act, and the chief executive of the National Gaming Board, Imelda Agon, was arrested.

https://www.rnz.co.nz/international/pacific-news/394579/two-heads-of-state-owned-companies-in-png-arrested

CEO OF VANUATU HEALTHCARE PROVIDER ARRESTED IN US

On 17^th July, Radio New Zealand reported that a controversial US drug company, Phoenix Life Sciences International, contracted by Vanuatu’s government has replaced its CEO, Martin Tindall, after he was arrested at the US border.  As well as providing diabetes healthcare services in Vanuatu, the company plans to produce and export its cannabis products from there.

https://www.rnz.co.nz/international/pacific-news/394562/vanuatu-healthcare-provider-ceo-arrested-in-us

BULGARIA TAX AGENCY HACK EXPOSES PERSONAL DATA OF ‘ALMOST ALL’ CITIZENS

The Inquirer reported on 17^th July that, according to a local cybersecurity researcher, personal records belonging to every citizen in the country have been compromised following a cyber attack against the servers belonging to the country’s National Revenue Agency which, according to local media, lead to personal data of between 5 and 7 million Bulgarians being exposed.

https://www.theinquirer.net/inquirer/news/3079112/bulgaria-hack-five-million-compromised

SPAIN TO CREATE COMMISSION TO COMBAT SPORTS MATCH-FIXING

On 17^th July, Calvin Ayre reported that legislators have approved the creation of a commission whose sole responsibility will be to tackle match-fixing activity in the country.  It will develop action plans and recommendations or diagnoses to detect, prevent and combat illegal actions in the field of sports competitions and fraud in betting.  It has already been tasked with the development of a new early warning system as a type of communications platform to help in the prevention of sports fraud and match-fixing.

https://calvinayre.com/2019/07/17/business/spain-to-create-commission-to-combat-match-fixing/

“FIRST SALE” RULE CAN MITIGATE IMPACT IF US HITS EU WITH NEW IMPORT TARIFFS

An article from Sandler Travis Rosenberg on 17^th July, in the face on ongoing and growing trade disputes, the “first sale rule” is a proven tool that can be used to not only mitigate the impact of any such tariffs but also lower costs well into the future.  It explains that, using the rule, the dutiable value of a qualifying transaction may be based on the purchase price between the middleman/vendor and the manufacturer rather than the price paid by the importer to the middleman/vendor, resulting in a lower duty bill.

https://www.strtrade.com/news-publications-first-sale-EU-tariffs-trade-071719.html

MOROCCAN CUSTOMS TO CRACKDOWN ON ILLEGAL CURRENCY TRAFFICKING

Morocco World News on 16^th July reported that Moroccan Customs and Excise at the northern borders has seized several large sums of money from travellers attempting to illegally divert funds out of Morocco.  To control excess currency diversion, a specific annual allowance is allocated to each citizen – set in January 2019, at MAD 45,000 (nearly €4,200) per year.  Moroccan citizens can legally carry this sum outside Morocco after notifying the authorities – any additional or undeclared sums are considered illegal.  Now the Ministry of Finance has issued a circular urging the Customs and Indirect Tax Administration to strengthen control mechanisms to prevent foreign currency smuggling.

https://www.moroccoworldnews.com/2019/07/278321/moroccan-customs-illegal-currency-trafficking/

HONG KONG CUSTOMS SMASH 2 COUNTERFEIT COSMETICS RINGS

Inside Retail on 17^th July reported that Hong Kong Customs officers have smashed 2 counterfeit-cosmetics rings selling makeup and skincare products in a 5-day anti-counterfeiting operation.  12 people were arrested after 7 retail stores and 3 warehouses were raided across the territory, with some 6,400 items of suspected counterfeit cosmetics seized.

https://insideretail.hk/2019/07/17/hong-kong-customs-smash-two-counterfeit-cosmetics-rings/

UK: ONLINE LAWYER IMPERSONATION TO NATIONAL CYBER SECURITY CENTRE (NCSC) “HIT LIST”

On 17^th July, Legal Futures reported that the impersonation of lawyers to commit advance fee frauds has been added to the list of large-scale cyber-attacks from which the NCSC is trying to protect the public.

https://www.legalfutures.co.uk/latest-news/crime-agency-adds-online-lawyer-impersonation-to-hit-list

WHY WEST AFRICA IS BECOMING THE WORLD’S PIRACY HOTSPOT

On 17^th July, the Hellenic Shipping Report carried an article saying that West Africa is turning into the world’s piracy hotspot according to One Earth Future, which produces an annual State of Maritime Piracy report.  2018 statistics show a decline in the number of incidents of hijacking, kidnapping and robberies in East Africa – West Africa, on the other hand, recorded an alarmingly increase in pirate attacks from 54 incidents in 2015 to 112 in 2018.  In total, there were 60 failed attacks, 18 kidnapping cases, 15 arm robberies, 9 robberies, 5 hijackings, 5 hijackings and kidnapping.  Most of these incidents were recorded in Brass (Bayelsa, Nigeria), Bonny (Rivers, Nigeria), Lagos state (Nigeria), Benin, Ghana, Congo, and Cameroon.  The report cited several reasons for the increase in attacks on shipping on high seas.

https://www.hellenicshippingnews.com/heres-why-west-africa-is-becoming-the-worlds-piracy-hotspot/

DOCKWORKERS IN EUROPE ARE FIGHTING THE ARMS TRADE

An article in Hellenic Shipping News on 17^th July says that a series of actions by trade unions and community organisations in European ports has been blockading arms shipments on the ground.

https://www.hellenicshippingnews.com/how-dockworkers-are-fighting-the-arms-trade/

HOW WALMART “OUTGREW” ITS COMPLIANCE PROGRAMME

A post on FCPA Blog on 17^th July said that by 2015 Walmart International had become an empire unto itself, operating in 26 countries and accounting for over a quarter of the retail giant’s net sales.  However, it says, the recent conclusion of a multi-year investigation into its international operations underscores the risks of such a single-minded focus on growth. Walmart has agreed to pay $282 million in fines following a civil suit and criminal charges filed by the US DoJ alleging violations of the books and records provision of the FCPA by the company’s subsidiaries in Mexico, India, China, and Brazil.  The post says that criminal charges brought against Walmart’s Brazilian subsidiary provide a useful cautionary tale when thinking through the possible hazards of expansion into high-risk territories without clearly defined and adhered to anti-bribery policies and procedures.

http://www.fcpablog.com/blog/2019/7/17/how-walmart-outgrew-its-compliance-program.html

PRIVATE SECURITY GUARDS NOT ENCOURAGED FOR SHIPS IN PERSIAN GULF

Insurance Maritime News on 17^th July reported that shipping companies sailing through the Gulf were being urged to avoid having private armed security guards on board as the risk of escalation in the region rose.  An advisory issued by leading shipping associations warned against using private armed guards in the critical areas – pointing out that there were stringent restrictions on the use of armed guards in the Gulf.  UK security companies that were licensed to carry and move firearms in the region were restricted to counter-piracy activity, and to counter the forces of a state like Iran would be in breach of a licence and therefore breaking the law.

https://insurancemarinenews.com/insurance-marine-news/private-security-guards-not-encouraged-for-ships-in-persian-gulf/

GUATEMALA INVESTIGATES $7 MILLION CORRUPTION SCANDAL

On 17^th July, AP reported that prosecutors in Guatemala are investigating more than 100 people for their alleged involvement in a corruption ring that took kickbacks for rebuilding public hospitals and padded payrolls in the health sector.

https://www.apnews.com/6e7fb677218449ae9358e5a69213b75b

VIETNAM AND CHINA IN SOUTH CHINA SEA STANDOFF

On 17^th July, Reuters reported that Vietnamese and Chinese ships have been involved in a weeks-long standoff near an offshore oil block in disputed waters of the South China Sea, which fall within Vietnam’s exclusive economic zone.  Recently a ship operated by the China Geological Survey completed a 12-day survey of waters near the disputed Spratly Islands – was shadowed by Vietnamese vessels, and protected by Chinese Coast Guard ships.  One of the oil blocks it surveyed is licensed by Vietnam to Spanish energy firm Repsol, which was forced last year and in 2017 to cease operations in Vietnamese waters because of pressure from China.  In 2014, tension between Vietnam and China rose to its highest levels in decades when a Chinese oil rig started drilling in Vietnamese waters. The incident triggered boat ramming by both sides and anti-China riots in Vietnam.

https://www.reuters.com/article/us-vietnam-china-southchinasea/vietnam-china-embroiled-in-south-china-sea-standoff-idUSKCN1UC0MX

WHEN THE SOVIET UNION PAID PEPSI IN WARSHIPS

This fascinating, and hitherto little or unreported story appeared in Atlas Obscure on 12^th January 2018.  In 1972, Pepsi managed to negotiate a cola monopoly locking out Coca-Cola until 1985, with bottling in the Soviet Union.  But there was one issue: money.  Roubles were worthless and anyway Soviet law also prohibited taking the currency abroad – so the USSR and Pepsi resorted to barter.  Pepsi received Stolichnaya vodka in return.  However, a US boycott in response to the Soviet-Afghan war meant that Pepsi needed something else to trade.  In 1989, Pepsi and the Soviet Union signed a remarkable deal. Pepsi became the middleman for 17 old submarines and 3 warships – a frigate, a cruiser, and a destroyer – which the company sold for scrap.  Pepsi also bought new Soviet oil tankers and leased them out or sold them in partnership with a Norwegian company.  The value of the deal was estimated at $3 billion.  However, when the Soviet Union collapsed Pepsi’s partially-built ships were stranded in newly-independent Ukraine.  Even worse for Pepsi was the collapse also led to Coca Cola entering the market in strength.

https://www.atlasobscura.com/articles/soviet-union-pepsi-ships

PODCAST: MH17, EPISODE 1: THE PEOPLE WHO FELL FROM THE SKY

On 17^th July, Bellingcat published its first podcast, about the downing of a Malaysian airliner in Ukraine, the aftermath and reactions.

https://www.bellingcat.com/resources/podcasts/2019/07/17/mh17-episode-guide-1/

PRESIDENT OF INTERNATIONAL BOXING ASSOCIATION (AIBA) RESIGNS – TOO BUSY TO WORK DUE TO LEGAL PROBLEMS

OCCRP reported on 17^th July that Gafur Rakhimov says he doesn’t have time to do the job as he is overwhelmed with lawsuits, being accused of organized crime and drug trafficking.  The Uzbek former boxer and coach is the subject of US sanctions due to his alleged involvement in heroin production and drug trafficking.  He became president of AIBA at the end of 2018.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/10230-boxing-president-too-busy-to-work-due-to-legal-problems

US WILL PERMANENTLY BAN COMMERCIAL TRUCK DRIVERS CONVICTED OF HUMAN TRAFFICKING OFFENCES

Baker McKenzie reported on 17^th July that the Federal Motor Carrier Safety Administration has announced a final rule that will permanently ban drivers convicted of human trafficking from operating a commercial motor vehicle.

http://www.riskandcompliancehub.com/u-s-department-of-transportation-will-permanently-ban-drivers-for-human-trafficking-offenses/

 

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On 17^th July, a group of organisations, including the National Association of Criminal Defense Lawyers and the American Civil Liberties Union, sent an open letter to Congress to oppose the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2019.   This Bill, it said, would contribute to the growing overcriminalization in federal criminal law, would criminalise actions that cause no social harm, carries harsh prison sentences that contribute to mass incarceration and coerced guilty pleas, and raises Fourth Amendment concerns by expanding the government’s ability to obtain sensitive information without a warrant or judicial process.  The letter details objections to various provisions in the Bill.

https://www.hrw.org/news/2019/07/17/human-and-civil-rights-groups-oppose-combating-money-laundering-terrorist-financing

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OCCRP reported on 17^th July that Gafur Rakhimov says he doesn’t have time to do the job as he is overwhelmed with lawsuits, being accused of organized crime and drug trafficking.  The Uzbek former boxer and coach is the subject of US sanctions due to his alleged involvement in heroin production and drug trafficking.  He became president of AIBA at the end of 2018.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/10230-boxing-president-too-busy-to-work-due-to-legal-problems

 

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On 17^th July, OCCRP published an article concerned with the listing in December by US authorities of Global CST, the defence, consulting, and contracting wing of the Global Group, which is owned and operated by Israel Ziv, the former head of the Israeli Defense Forces’ Operations Directorate.  In 2015, the South Sudanese government launched a multi-million dollar project meant to develop farms that would feed its people and even export the surplus, but this turned out to be a front, according to the US, to cover up the sale of approximately $150 million in weapons, including rifles, grenade launchers, and shoulder-fired rockets.  When the Israeli accompany and its owner were designated, the US Treasury mentioned — but didn’t name or blacklist — a “major multi-national oil firm” that was in “close collaboration”.  OCCRP now says that leaked documents show who that collaborator is likely to be: Trafigura Pte Ltd., an oil trading subsidiary of Trafigura Group Pte Ltd, one of the world’s largest commodity trading companies.

https://www.occrp.org/en/investigations/sprouting-weapons-of-war

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On 17^th July, Guernsey Press reported that a former company director is suing the Guernsey FSC chairman for a total of about £7.4 million claiming a breach of his human rights.  Alan Chick was fined £50,000 and banned from performing the functions of director, controller, partner or manager for 5 years, after an investigation by the GFSC.  He claims that he was not given a fair and public trial, heard by an independent and impartial decision-maker.

https://guernseypress.com/news/2019/07/17/headline/

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On 17^th July, Notice to Exporters 2019/11 notified 6 new Open General Export Licences for military-related goods reissued to exclude exports to Saudi Arabia and its coalition partners in the Yemen conflict.

https://www.gov.uk/government/publications/notice-to-exporters-201911-6-new-ogels-issued/notice-to-exporters-201911-6-new-ogels-issued

 

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Punch in Nigeria on 17^th July reported that Lutoyilex Construct Limited, a construction company registered in Nigeria, has joined the list of firms debarred for fraudulent practices by the African Development Bank Group and other international bodies.  The Bank barred the company and its Managing Director, Mr Bamidele Obiniyi (aka Mr Bamidele Abayomi) for a period of 36 months.  In January, the group announced the debarment of another Nigerian company, ALG Global Concept Nigeria Limited, a construction company registered in Nigeria and its Managing Director, Mr Abuharaira Gero, for a period of 36 months.  In February, the World Bank debarred 2 Nigerian waste management companies and their owner for 5 years for “engaging in fraudulent practices” involving a project in Nigeria – Rojoke CNE Services Ltd. (Rojoke) and CNE Environmental & Waste Services Ltd. (CNE), and their owner, Robinson Ekenedilichukwu Ojoko, are ineligible to participate in World Bank-financed projects during the debarment.

https://punchng.com/fraud-nigerian-firm-lutoyilex-barred-from-bidding-for-wbank-afdb-contracts/

 

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On 17^th July, the EU published a report from the Court of Auditors: E-commerce: many of the challenges of collecting VAT and customs duties remain to be resolved.  It found that found that despite recent positive developments the EU is not currently dealing adequately with these issues but have addressed some of the weaknesses identified with the “e-commerce package”.   It makes a number of recommendations as to how the European Commission and the Member States should better address the challenges identified and establish a sound regulatory and control framework.

https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=50415

 

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A news release from the EU’s European Monitoring Centre for Drugs and Drug Addiction on 17^th July reported on decisions of the courts in 2 Member States.

Italy’s highest court, the Court of Cassation, published a note of information on the legality of selling low-THC cannabis.  This followed attempts to prosecute entrepreneurs who were openly selling cannabis flower and other extracts.  The court held that the sale and marketing to the public of products derived from cannabis is an offence under the Italian drug control law ‘unless the products are in practice devoid of narcotic effects’.

The Supreme Court of Sweden ruled on a case involving possession of ‘CBD oil’ extracted from industrial hemp.  The court ruled that, while industrial hemp is exempted from coverage, preparations made from it that contain THC are not exempted, and are therefore included in narcotic control laws.

http://www.emcdda.europa.eu/news/2019/italy-and-sweden-court-decisions-low-thc-cannabis-products_en

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EU Regulation 2019/1208/EU has replaced the entry for Paul MALONG AWAN ANEI.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.191.01.0004.01.ENG&toc=OJ:L:2019:191:TOC

 

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EU Regulation 2019/12017/EU has had the effect of amending the listing of the Maritime Administration Bureau and removing the listing of RI Pyong Chol from one of the 2 Annexes to the original 2017 Regulation.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.191.01.0001.01.ENG&toc=OJ:L:2019:191:TOC

 

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On 16^th July, the Wall Street Journal reported that the Financial Reporting Council’s move follows findings of substandard audits of large companies.  The FRC has launched a consultation soliciting comment from the public on its proposed changes to the country’s ethical and auditing standards last reviewed in 2016, and which provide U.K. auditors with guidelines on how to conduct their work.

https://www.wsj.com/articles/u-k-regulator-proposes-stricter-standards-for-auditors-11563295509

The consultation itself is at –

https://www.frc.org.uk/news/july-2019/frc-consults-on-enhanced-ethical-and-auditing-stan

 

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On 12^th July, the Congressional Research Service produced a report which examined the current situation in respect of US sanctions imposed on Iran and their implementation (as well as other international sanctions).  Appendix A lists and compares US, EU, UN and other sanctions.

https://news.usni.org/2019/07/16/report-to-congress-on-iran-sanctions-2

 

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On 9^th July, White & Case published the chapter it had prepared for Europe, Middle East and Africa Investigations Review 2019.  It discusses the continued effects of Sapin II (the law on transparency, corruption and modernisation of the economy) on anti-corruption, the new enforcement climate after Sapin II and the upcoming ‘blocking statute’ reform, as well as the duty of vigilance law (an an obligation on companies to prevent social, environmental and governance risks related to their operations that may also extend to the activities of their subsidiaries and business partners, subcontractors and suppliers). and other developments – including creation and use of a deferred prosecution agreement (CJIP) equivalent, whistleblowing, extending “name and shame” provisions to tax fraud.

https://www.whitecase.com/publications/article/compliance-france-2019

 

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On 16^th July, the Daily Herald reported that St Maarten will have to give high priority in the coming months to securing the recommendations of FATF in legislation if it is to avoid a public warning which will have serious repercussions for international banking traffic, according to the Dutch State Secretary of Home Affairs and Kingdom Relations.  In 2012, CFATF determined in 2012 that St. Maarten did not comply with 14 of the 16 main FATF recommendations.  In 2017, the non-compliance still existed because St. Maarten did not comply with 11 recommendations. Therefore, St Maarten was placed in the first stage of more stringent follow-up in November 2017.  This means that St Maarten is subject to more frequent follow-up reports and the possibility of implementing phased countermeasures.  CFATF sent the St. Maarten government a warning letter in 2018 and a high-level mission to St. Maarten took place.  Also in 2018, CFATF made an agreement with St Maarten about the implementation and change of 6 crucial AML/CFT laws.  However, CFATF decided to maintain St. Maarten’s status quo late May 2019.  If real improvement is not made, the next stage would be a public declaration on St Maarten’s shortcomings, which could take place in November.

https://www.thedailyherald.sx/islands/89201-st-maarten-must-give-priority-to-anti-money-laundering-laws

 

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UPI and others on 17^th July reported that the US State Department had announced that it sanctioned 4 senior Myanmar military officials for “gross human rights violations” committed against the Rohingya people.  Sanctions were applied to Myanmar’s Commander-in-Chief Min Aung Hlaing, Deputy Commander-in-Chief Soe Win, Brigadier General Than Oo and Brigadier General Aung Aung and prohibits them and their family members from entering the United States.

https://www.upi.com/Top_News/US/2019/07/17/US-sanctions-top-Myanmar-military-leaders-over-gross-human-rights-violations/2231563337344/

https://www.state.gov/public-designation-due-to-gross-violations-of-human-rights-of-burmese-military-officials/

 

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MENA FN on 16^th July reported that corruption remains Panama’s biggest challenge, according to a US State Department report on the investment climate released on July 11^th.  The report notes that US investors claim that there is “rampant corruption” in both the private and public sectors and recalls that Panama ranked 93 out of 180 countries in Transparency International’s Corruption Perception Index in 2018.  The State Department points out in particular problems with land title, and the lack of transparency in public procurement.

https://menafn.com/1098764979/Panama-corruption-remains-biggest-challenge-US-State-Department

 

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A feature in The Drive on 16^th July is concerned with the late body armoured Mercedes-Maybach S600 said to have been smuggled into the country via a circuitous route that included stops in China, Japan, South Korea, and Russia.  The article says the case underlines the sanctions-busting arrangements of North Korea that has enabled the regime in Pyongyang to import more than 800 foreign cars and trucks, including luxury models, in total from several countries since 2016.  It cites a C4DS report, also published on 16^th July, and in which analysts used advanced software and systems, and focussed on the particular case of 2 Mercedes-Maybach S600.  A potential complication is that the cars may not actually be from-factory S600 Pullman Guards, but rather S600s that subsequently received an armour package from a third party company.  The cars were tracked from Rotterdam to China, to Osaka, Japan. And thence to Busan, South Korea.  From Busan, reportedly, dockworkers loaded the cars onto DN5505, a Togo-flagged cargo ship belonging to Do Young Shipping Company, which has its headquarters registered in the Marshall Islands.  The ship set sail with its stated destination being Nakhodka, Russia but appeared to turn off its transponder and the signal did not reappear until after an 18-day gap.  After arriving back in South Korea the ship’s crew informed customs officials that it had picked up a cargo of coal in Nakhodka.  Around the same time, North Korea sent cargo planes capable of carrying the cars to Vladivostok in Russia, which is around 3 hours driving distance to the east of Nakhodka.  The DN5505 owner appears to be Russian businessman, Danil Kazachuk.  In February, South Korea seized the ship as part of an investigation into exports of North Korean coal in violation of international sanctions, and the same month detained the Panama-flagged tanker Katrin, the only other ship Do Young owns, on suspicion of delivery petroleum products to North Korea, again in violation of international sanctions.  The article says that the journey of the S600 to North Korea between June and October 2018, a trip that involved at least 5 different companies across 5 separate countries, highlights just how difficult it is to truly isolate the regime in Pyongyang from an only increasingly interconnected global economy.

https://www.thedrive.com/the-war-zone/28999/heres-how-north-korea-got-kim-jong-un-his-new-armored-s600-mercedes-maybach-limos

The C4DS report is at –

https://www.c4reports.org/lux-and-loaded

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An article from The National in the UAE on 16^th July was concerned with the discovery of a functioning air-to-air guided missile in Italy.  An expert is quoted as saying that it probably ended on the black market where the group managed to get hold of it and it might have been that Qatar got rid of them when doing an upgrade.  Another expert speculated that the Qatari weapons could somehow have ended up in conflict zones in the former Yugoslavia or to Libya and then subsequently trafficked to Italy.  Almost as worrying is that there was no proof of its movements.  The French-built Matra Super 530F was a modernisation of the R530 missile that went into service in 1980 and was found to have previously been used by the Qatari army.

https://www.thenational.ae/world/europe/qatari-missile-found-with-italian-neo-nazi-slipped-through-the-net-1.887004

 

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16^th July 2019

LATVIA: BANKING WATCHDOG FINES RIGENSIS BANK €1.03 MILLION FOR MONEY LAUNDERING VIOLATIONS

On 15^th July, LETA 100 reported that the Financial and Capital Market Commission (FCMC) has imposed a fine of €1,028,850 on Rigensis Bank for violations of requirements of the laws and regulations on the prevention of money laundering and financing of terrorism and proliferation.  These included cases of not properly identifying beneficial owners, clarifying the origin of funds, or examining properly transactions with seemingly no legitimate or economic purpose.

http://www.leta.lv/eng/home/important/13415FB9-24B1-846C-D382-5B680C7E23E4/

EU AGREES SANCTIONS AGAINST TURKEY FOR DRILLING OFF CYPRUS

On 15^th July, France 24 reported that EU had agreed political and financial sanctions against Turkey after it went ahead with drilling operations off Cyprus despite repeated warnings.  The most serious measure is understood to be a cut of €145.8 million in the EU funds allocated to Turkey for 2020.  It was the discovery of huge gas reserves in the eastern Mediterranean that sparked the dispute between EU member Cyprus and Turkey.  Turkey sent 2 ships to carry out drilling off the Cypriot coast despite the warnings from the EU.

https://www.france24.com/en/20190715-eu-agrees-sanctions-against-turkey-drilling-off-cyprus

 SRI LANKA: GARBAGE SMUGGLING RACKET EXPOSED

Hiru News in Sri Lanka reported on 15^th July that Sri Lankan customs had uncovered a racket whereby waste s=was smuggled from developed countries such as the UK to Sri Lanka.

http://www.hirunews.lk/220365/massive-garbage-smuggling-racket-revealed

LATVIA: NON-RESIDENT DEPOSITS DOWN €10 BILLION SINCE MONEY LAUNDERING CRACKDOWN

LSM.LV reported on 15^th July that about €10 billion in non-resident deposits have been moved out of Latvia since the country stepped up its fight against money laundering.  Latvia has been seriously stepping up its AML efforts since ABLV Bank, once Latvia’s third largest lender, folded last spring after a damning report on the bank by FinCEN in the US.

https://eng.lsm.lv/article/economy/economy/fktk-non-resident-deposits-down-10b-since-tough-up-against-money-laundering.a325651/

VENEZUELA DEFIES SANCTIONS TO SELL $40 MILLION IN GOLD RESERVES

On 16^th July, KYC 360 reported that the central bank sold nearly 1 ton of gold July 12^th, lowering Venezuela’s dollar reserves to a near 3-decade low of $8.1 billion.  Maduro has been selling gold to firms in places such as UAE and Turkey, reaching approximately 24 tons in sales since the beginning of April.

https://www.riskscreen.com/kyc360/news/venezuela-defies-sanctions-to-sell-40-million-in-gold-reserves/

ITALY: “BRIBE DESTROYER” LAW VERSUS THE STADIO DELLA ROMA SCANDAL

Squire Patton Boggs, in its Anticorruption Blog, published on 11^th July a post contrasting a recently approved Bill known as the Spazzacorrotti, or “Bribe Destroyer” with a high-profile bribery scandal related to the construction of AS Roma’s new football stadium.  The article says that estimates are that the Italian economy loses up to €236 billion a year to corruption – and if accurate, that figure equates to approximately 13% of GDP and 150% of the annual public health budget.   Promotion of the Bill by the ruling Five Star Movement is set against one of its top officials becoming embroiled in a highly charged scandal regarding the alleged bribery.

https://www.anticorruptionblog.com/anti-corruption/italy-scores-anticorruption-own-goal/#page=1

COMPARING THE ANTI-BRIBERY AND CORRUPTION LEGISLATION OF RUSSIA AND FORMER SOVIET REPUBLICS

On 15^th Article, Noerr produced a briefing comparing the anti-bribery and corruption legislation of Russia, Azerbaijan, Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan.  Its review of these countries’ legislation revealed significant differences, which I says show that the local liability risks for companies operating in these countries and their employees must be assessed for each jurisdiction individually.

https://www.noerr.com/en/newsroom/news/comparing-the-anti-bribery-and-corruption-legislation-of-russia-and-other-former-soviet-republics

CZECH REPUBLIC DENIES CHINA’S REQUEST FOR TAIWANESE TELECOM FRAUD SUSPECTS

On 16^th July, the Taiwan Times reported that the Czech Republic has rebuffed Beijing’s request to extradite 8 Taiwanese telecom fraud suspects on the grounds that they could face inhumane treatment.  The Chinese government alleges that the suspects have posed as Chinese public security officers and dialled overseas phone numbers to defraud Chinese nationals living in Australia.

https://www.taiwannews.com.tw/en/news/3745547

AUSTRALIA: THE BOOKSHELF DISGUISING A SECRET DOOR THAT LED TO A SOPHISTICATED DRUG OPERATION RUN BY A COLOMBIAN GANG

The Mail Online on 16^th July reported that Australian Federal Police are trying to seize a property in Sydney under the Proceeds of Crime Act alleging the house was constructed with hidden rooms as a front for the drug operation.  A raid was conducted at the house in 2017 where AFP officers found the rooms in a cellar behind an entrance disguised as a bookshelf.

https://www.dailymail.co.uk/news/article-7251419/The-innocent-looking-bookshelf-led-sophisticated-drugs-operation-Colombian-gang.html

IRANIAN CRANE VESSEL RELEASED FROM KUWAITI PORT AFTER 10 MONTHS

Customs Today reported on 16^th July that Tidewater Middle East Co., the largest Iranian port operator, said that the vessel, Arvand Tide 1000, had been released from Kuwait’s Port of Shuaiba before sailing toward Iran.  Tidewater said the ship had been seized in Kuwait for “baseless allegations” last year right after the discharge of a 180-day chartering contract with a Kuwaiti company.

http://www.customstoday.com.pk/iranian-crane-vessel-released-from-kuwaiti-port-after-10-months-operator/

CANADIAN OFFICIALS FLAGGED 900 FOOD ITEMS FROM CHINA WITH ‘PROBLEMS’ OVER 2 YEARS

Customs Today on 16^th July reported that Canadian inspectors intercepted nearly 900 food products from China over concerns about faulty labels, unmentioned allergens and harmful contaminants that included glass and metal between 2017 and early 2019.  The scrutiny of agricultural goods has been central to a diplomatic dispute between Canada and China.  Bilateral frictions have intensified since the December arrest of a Huawei executive in Vancouver and China’s subsequent detention of 2 Canadians on espionage allegations.

http://www.customstoday.com.pk/canadian-officials-flagged-900-food-items-from-china-with-problems-over-2-years/

FOUNDER OF A WASHINGTON PRIVATE INTELLIGENCE COMPANY TOOK ON A RISKY NEW CLIENT: A MEXICAN DRUG CARTEL

The Daily Beast reported on 12^th July that federal law enforcement raided the house and seized the electronics of executive Michael Bagley in connection with a money laundering investigation.  Federal prosecutors charged Bagley with money laundering after he allegedly helped confidential FBI sources posing as narcotics cartel representatives hide what he thought was more than $250,000 in illicit proceeds.  Bagley is the founder of the Washington, DC, private intelligence firm Jellyfish Partners.

https://www.thedailybeast.com/jellyfish-partners-michael-bagley-charged-with-money-laundering-for-mexican-cartel

JAPAN DID NOT TAKE ACTION AGAINST SHIPS SUSPECTED OF CARRYING NORTH KOREAN COAL, SAYS SOUTH KOREA

Amid an increasing trade row between Japan and South Korea which sees the states exchanging allegations, South Korea’s intelligence agency is reported as saying that foreign-flagged ships suspected of carrying North Korean coal docked at and departed from Japanese ports and Tokyo did not take action against them, in potential violation of UN sanctions.  Yonhap News carried an article about this on 16^th July.  Cargo ships, such as the Togo-flagged Shinning Rich and the Belize-flagged Jin Long, made port calls in Japan, lawmakers told reporters.  In placing export curbs on South Korea, Japan has recently raised suspicion that hydrogen fluoride shipped to South Korea from Tokyo was funnelled to North Korea in violation of UN sanctions.  The material can be used to produce chemical weapons.  South Korea rejects the suggestion.

https://en.yna.co.kr/view/AEN20190716009051315

EU COURT ORDERS COMPENSATION OVER ANNULLED IRANIAN SANCTIONS

On 16^th July, the EU Sanctions Blog reported that the EU General Court had ordered compensation payments in respect of Fereydoun Mahmoudian and Fulmen (an Iranian company).  The General Court had ordered annulment of their listing in 2012, and this decision was upheld by the ECJ in 2013, with the listings finally being revoked in 2013.  The compensation was for listing of the two between 2010- and 2013, with the failure of the EU Council to substantiate the reasons for the applicants’ designations with evidence for over 3 years being seen as a serious breach of EU law.  Mahmoudian received a total of €92,000 (including €500 for each month in which his assets were frozen), and Fulman received €50,000 for damage to reputation.

https://www.europeansanctions.com/2019/07/eu-general-court-orders-damages-in-mahmoudian-and-fulmen-sanctions-cases/

UK NATIONAL LOTTERY AND SOCIETY LOTTERY CHANGES

On 16^th July, a news release from the Department for Digital, Culture, Media and Sport reported that consultation will be undertaken on increasing the minimum age to take part in the National Lottery (including scratchcards and online) is to be increased from 16 to 18.  It also advised that there would be an increase in society lotteries’ maximum draw prize from £400,000 to £500,000, and raise the society lotteries’ annual sales limit to £50 million.  The consultation on the change for the National Lottery will last 12 weeks from 16^th July to 8^th October.

https://www.gov.uk/government/news/national-lottery-scratchcard-minimum-age-could-be-increased-to-18

TAIWAN ASKS HONG KONG AND CHINA TO HELP FIGHT ONLINE LOVE SCAMS
Channel News Asia on 16^th July reported that Taiwan has urged China and Hong Kong to work together to investigate a spate of financial love scams that have caused over $30 million in losses to Taiwanese targets.  According to the Criminal Investigation Bureau, suspects based in China and Hong Kong used social media to start romantic relationships with victims in Taiwan, and then coaxed them to invest in fake financial companies.  Over 500 local people have been swindled since January last year.

https://www.channelnewsasia.com/news/asia/taiwan-asks-hk-china-to-help-fight-online-love-scams-11725752

SLOVAK HAULIERS COULD RECOVER UP TO €340 MILLION DUE TO A PRICE-FIXING TRUCK CARTEL

The Slovak Spectator reported on 16^th July that the case involved the sale and leasing of trucks at elevated prices, concerns about 400 transport companies in Slovakia and more than 10,000 registered vehicles lasting for several years.  Commercial fleet operators in Slovakia who overpaid for trucks from firms that colluded in a price-fixing cartel could recover damages of up to €340 million, according to a recent report.  Truck manufacturers Daimler, Volvo/Renault, Iveco, MAN, DAF and Scania are affected.

https://spectator.sme.sk/c/22168582/slovak-hauliers-could-recover-up-to-340-million-due-to-a-price-fixing-truck-cartel.html

AUSTRIAN JUSTICE MINISTER ALLOWS EXTRADITION OF UKRAINIAN OLIGARCH FIRTASH TO US

The Kyiv Post on 16^th July reported that the Austrian Justice Minister has approved the extradition of Ukrainian oligarch Dmytro Firtash to the US.  Firtash faces trial in Chicago on bribery charges, and has been living in Austria since 2014, fighting extradition.  The tycoon was once an ally of ousted Ukrainian president Viktor Yanukovych, and had links to Paul Manafort.  He still owns the Group DF, a conglomerate that includes regional gas distribution companies, titanium and fertiliser plants in Ukraine. The group also controls several Ukrainian TV channels.

https://www.kyivpost.com/ukraine-politics/austrian-justice-minister-allows-extradition-of-ukrainian-oligarch-firtash-to-us.html

BINARY OPTIONS BOSS GOES ON TRIAL FOR $150 MILLION FRAUD

On 16^th July, the Bureau of Investigative Journalists published an article about Lee Elbaz, aka Lena Green, was the CEO of Yukom, a company that operated binary options trading platforms under trade names such as BigOption and BinaryBook.

https://www.thebureauinvestigates.com/stories/2019-07-16/binary-options-boss-lee-elbaz-goes-on-trial-for-fraud

CHALLENGES OF THE OFFICE OF THE SPECIAL PROSECUTOR IN FIGHTING CORRUPTION IN GHANA

Graphic Online on 16^th July carried an article saying that the greatest problem facing the Office are the the heads of institutions who simply refuse to comply with laws designed to ensure good governance and to protect the national purse by fighting corruption.

https://www.graphic.com.gh/features/features/challenges-of-the-office-of-the-special-prosecutor-in-fighting-corruption-in-ghana-martin-amidu-writes-2.html

US SUPREME COURT SAYS FOREIGN PROSECUTIONS FOR SAME OFFENCE NOT DOUBLE JEOPARDY

On 16^th July, an article from Baker Hostetler reported that, in Gamble v. United States, the Supreme Court held that the Double Jeopardy Clause of the 5^th Amendment to the US Constitution does not prohibit a successive US federal prosecution of an individual for the same conduct that was at issue in the defendant’s prior conviction in another country – thus affirming the long-standing “dual-sovereignty” doctrine (i.e. a crime under one sovereign’s laws is not “the same offence” for double jeopardy purposes as a crime under the laws of another sovereign).  However, the article also mentions that in 2018 the DoJ adopted a non-binding policy that promotes co-ordination between US and foreign law enforcement in an effort to limit duplicate penalties on corporate entities for the same conduct.  The article says that recent enforcement actions show that it appears to be following this “anti-piling on” policy.

https://www.jdsupra.com/legalnews/supreme-court-gives-green-light-to-68489/

LAWFUL SALE OF CANNABIS LIGHT IN ITALY: IS IT GOING UP IN SMOKE?

A briefing from Clifford Chance on 16^th July saying that Italy’s cannabis market has been booming since December 2016 – but the law that allowed this governs the cultivation of the hemp plants, but it does not address other implications of hemp cultivation such as the sale of hemp derivatives containing tetrahydrocannabinol (THC), the active ingredient that led to cannabis becoming an illegal drug.  This regulatory gap has created a grey area that a number of entrepreneurs, but a recent ruling by the Italian Supreme Court, however, is likely to reduce enthusiasm in this new sale stream

https://www.cliffordchance.com/briefings/2019/07/lawful_sale_of_cannabislightinitalyisi.html

UK: COUNTERFEIT CURRENCY – WHAT TO DO IF YOU RECEIVE COUNTERFEIT NOTES OR COINS AND WHERE TO REPORT

Information published by Action Fraud on 7^th July says that, with an estimated 3.7 billion genuine bank notes currently in circulation in the UK, counterfeiting is viewed as big business by organised crime syndicates.  In 2018, around 461,000 counterfeit Bank of England banknotes with a face value of £10 million were taken out of circulation.

https://www.actionfraud.police.uk/blog/counterfeit-currency-what-to-do-if-you-receive-counterfeit-notes-or-coins-and-where-to-report

UKRAINIAN FAR-RIGHT EXTREMISTS CONTINUE TO RECEIVE STATE FUNDS TO TEACH “PATRIOTISM”

An article from Bellingcat on 16^th July says that Ukraine’s far-right groups and their ideas enjoy little popular support among its citizens.  Despite this, Ukraine’s government continues to provide funds to notorious far-right extremist groups and their affiliates — including 2 organisations led by extremists currently on trial for a 2015 murder — to carry out “national-patriotic education” (NPE) programs aimed at young Ukrainians.

https://www.bellingcat.com/news/uk-and-europe/2019/07/16/ukrainian-far-right-extremists-receive-state-funds-to-teach-patriotism/

US RELEASES CONTAINER SHIP FOUND WITH 20 TONS OF COCAINE – BUT STILL PLANS FORFEITURE

Hellenic Shipping News on 16^th July reported that authorities have released the container ship that was seized with 20 tons of cocaine in Philadelphia after the operator posted a $50 million bond, including $10 million in cash, but said they still plan to consider seeking forfeiture of the vessel.

https://www.hellenicshippingnews.com/u-s-releases-container-ship-found-with-20-tons-of-cocaine/

UN EXPERTS WARN OF THE INCREASING THREAT FROM PETTY CRIMINALS WHO TURN TO TERRORISM

Homeland Security Today reported on 10^th July the remarks of Tamara Makarenko, an international consultant who works with the UN Interregional Crime and Justice Research Institute, that less predictable threats represented by small-time criminals who have opportunistically embraced terrorism, are a source of growing concern – based primarily on transactions and tactics, at the point where terrorists and criminals occupy “the same space at the same time”.  Terrorist groups use illicit crimes to fund their operations.  Yuri Fedetov, Executive Director of the UN Office on Drugs and Crime, added that criminals and terrorists shared a need to operate in the shadows, exploiting gaps in criminal justice responses in and between countries and regions.

https://www.hstoday.us/channels/global/un-experts-warn-of-the-increasing-threat-from-petty-criminals-who-turn-to-terrorism/

NEW UN AND INTERPOL COUNTER-TERRORISM HANDBOOK HELPS INVESTIGATORS USE ONLINE DATA

On 16^th July, Homeland Security Today carried an article saying that the UN Counter-Terrorism Centre (UNCCT) and INTERPOL have jointly produced a handbook to help investigators collect, analyse and share information found online, particularly on social media platforms.

https://www.hstoday.us/subject-matter-areas/law-enforcement-and-public-safety/new-un-and-interpol-counterterrorism-handbook-helps-investigators-use-online-data/

2 BROTHERS INDIANA ACCUSED OF MAKING GUNS FOR ISIS

An article in Homeland Security Today on 15^th July reported that a federal grand jury has charged brothers Moyad Dannon, 21, and Mahde Dannon, 20, with multiple firearms charges and attempting to provide material support and resources, including firearms, to ISIS.  One brother hatched a scheme to deliver firearms, including stolen firearms, to a convicted felon who was co-operating with the FBI.  Between July 2018 and December 2018, the Dannon brothers sold a number of illegally-obtained firearms to the cooperating individual, and began to manufacture untraceable “ghost guns” by purchasing firearms parts without serials online and assembling those parts into fully-functioning semi-automatic rifles.

https://www.hstoday.us/federal-pages/doj/indiana-brothers-accused-of-making-guns-to-sell-to-isis/

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An article in Foreign Policy on 15^th July says that wood smuggling has become big business for ISIS.  A stronghold in Kunar’s deep forests, formerly a booming wood industry previously controlled by the Taliban is now generating a growing income for Islamic State militants.  The provincial government banned the sale of wood in 2016, fearing increasing deforestation and desertification.  Kunar used to be covered in oak, pine, and walnut forests, but over the last 3 decades it has lost 40% of its trees.  The article quotes a local saying that each tree costs between about $20 to $30.  When cut, each tree makes about 15 planks, each 8 feet by 1 foot, which go for about $75.

https://foreignpolicy.com/2019/07/15/afghanistans-forests-are-turning-a-profit-for-the-islamic-state/

 

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On 16^th July, OFAC announced that a Moroccan and a Mali national had been added to its sanctions lists.  Bah Ag Moussa, from Mali, is a leader of Jama’at Nusrat al-Islam wal-Muslimin (JNIM), which is affiliated to Al-Qaida.  OFAC says he directly contributes to the violence and instability fuelled by Al-Qaida’s terrorism.  Both JNIM and its leader, Iyad ag Ghali were already designated.

Ali Maychou, a Moroccan national active in Mali, is the other person added to the sanctions list.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190716.aspx

 

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

A news release from FinCEN on 16^th July announced new efforts to curtail and impede business email compromise (BEC) scammers and other criminals who profit from their schemes.  Based on data from FinCEN’s Suspicious Activity Reports (SAR), hackers and other illicit actors’ BEC scams generated more than $300 million a month in 2018.

Separately, it issued an updated Advisory to Financial Institutions on E-mail Compromise Fraud Schemes (see below).

It also published Financial Trend Analysis of Bank Secrecy Act (BSA) Data, which examined methodologies used – saying use of fraudulent vendor or client invoices is the most common ruse, impersonation of an outside entity accounted for 20% and that manufacturing and construction businesses were the top targets for BEC fraud in 2017 and 2018.

The news release also mentioned that the Egmont Group of FIU had published a Public Bulletin to alert competent authorities and reporting entities of key typologies and money laundering risks associated with BEC fraud schemes.

https://www.fincen.gov/news/news-releases/fincen-exchange-forum-counters-business-email-compromise-scams

The FinCEN Advisory is at –

https://www.fincen.gov/resources/advisories/fincen-advisory-fin-2016-a003

This explains how BEC schemes work, and provides various “red flags” that might alert one.

The Egmont Group Public Bulletin is at –

https://egmontgroup.org/en/content/new-publication-egmont-group-bulletin-business-email-compromise-fraud

 

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Amid an increasing trade row between Japan and South Korea which sees the states exchanging allegations, South Korea’s intelligence agency is reported as saying that foreign-flagged ships suspected of carrying North Korean coal docked at and departed from Japanese ports and Tokyo did not take action against them, in potential violation of UN sanctions.  Yonhap News carried an article about this on 16^th July.  Cargo ships, such as the Togo-flagged Shinning Rich and the Belize-flagged Jin Long, made port calls in Japan, lawmakers told reporters.  In placing export curbs on South Korea, Japan has recently raised suspicion that hydrogen fluoride shipped to South Korea from Tokyo was funnelled to North Korea in violation of UN sanctions.  The material can be used to produce chemical weapons.  South Korea rejects the suggestion.

https://en.yna.co.kr/view/AEN20190716009051315

 

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Swissinfo on 15^th July reported that one of the world’s biggest commodity traders, is to stop using intermediaries – the well-connected individuals who help set up contracts in resource-rich countries.  The move by Trafigura follows a series of corruption investigations and allegations involving intermediaries and middlemen that have caused alarm at the highest levels of the commodity trading industry.

https://www.swissinfo.ch/eng/commodities-cleanup_trafigura-ends-use-of-middlemen-after-corruption-probes/45096874

 

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On 15^th July, ICIJ published an update, saying that more than $1.28 billion has been clawed back by governments around the world after the Panama Papers investigation in 2016. In addition, the article says, often ICIJ is told off the record (which means it can’t report it) that tax authorities have indeed recouped money due to our investigations – but, for whatever reason, they don’t want to make that announcement public and this limits the ability to count it.

https://www.icij.org/blog/2019/07/counting-the-panama-papers-money-how-we-reached-1-28-billion/

 

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On 15^th July, the Cayman Compass reported that the Government is presenting a total of 11 Bills for debate in the Legislative Assembly on 24^th July, to address the fallout from the negative assessment by CFATF of how Cayman’s AML/CFT regime works in practice.

https://www.caymancompass.com/2019/07/15/legislation-proposed-to-strengthen-anti-money-laundering-framework/

 

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Malta Today on 15^th July reported that Malta’s attempt at getting UN sanctions on suspected fuel smugglers Darren and Gordon Debono thwarted by last-minute veto from Russian government.  Malta wanted the designations of the suspects who were at the centre of a €30 million fuel smuggling ring with Libya and Italian Mafia associates at its heart.  The Maltese nationals are facing prosecution in Sicily, but are out on bail in Malta.  The article refers to the  ‘Wild West’ of oil smuggling that takes place on the territorial edge of Malta’s Hurd’s Bank, where Libyan oil is transferred onto fishing boats with large storage tanks, and is then transferred onto larger tankers.  The €30 million fuel smuggling operation used false invoices intended to cover the origin of the Libyan oil, and used Maltese ships and Italian connections to place the fuel on the market.

https://www.maltatoday.com.mt/news/national/96268/russia_blocks_malta_smuggling_sanctions_on_darren_debono#.XS1WaHdFx9A

 

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15^th July 2019

INDONESIA: SUSPECTED SMUGGLERS ARRESTED FOR ATTEMPTING TO SMUGGLE LOBSTER LARVAE FROM INDONESIA TO VIETNAM THROUGH SINGAPORE.
The Star reported on 15^th July that 4 suspected smugglers, including a 29-year-old Singaporean, were arrested by Indonesian police for attempting to smuggle 113,412 lobster larvae from Indonesia to Vietnam through Singapore.
https://www.thestar.com.my/news/regional/2019/07/15/sporean-held-for-smuggling-lobster-larvae/

SMUGGLERS OF NORTH KOREA COAL GIVEN SUSPENDED SENTENCES IN SOUTH KOREA

UPI reported on 14^th July that a court in South Korea has given suspended prison terms for 3 unnamed defendants who were convicted of smuggling North Korean anthracite coal into the country. They imported more than $1.35 million of coal into the South, in violation of UN sanctions.  They falsely declared the coal as being from China and Vietnam.

https://www.upi.com/Top_News/World-News/2019/07/14/Smugglers-of-North-Korea-coal-given-suspended-sentences-in-the-South/9921563113014/

FROM FUEL TO AMPHETAMINES: THE WORRISOME EVOLUTION OF MOROCCO’S BLACK MARKETS

Morocco World News carried an article on 14^th July saying that the existence of informal and illicit trade networks among North African countries is not unheard of, nor is it a new phenomenon.  Despite decades of war, failed diplomatic efforts, and a closed border, smugglers in Algeria and Morocco have retained close ties. It reports a article in the Washington Post in June, based on over 200 interviews with smugglers, state representatives, and civil society groups, and which found that much of the region’s smuggling occurs in conjunction with local and state authorities.  It says that for years, the most lucrative goods being smuggled in North Africa was gasoline, with Morocco one of the main destinations for smuggled Algerian petrol.  Other cheap consumer goods such as medicines, scrap metal, household appliances, tobacco, agricultural goods, and vehicle parts are routinely smuggled into Morocco from Algeria, and the north of Morocco is full of well-organised contraband networks that have long-standing family and trade connections with smugglers in Algeria.  The revenue generated from smuggling also offers political influence.  Smugglers of fuel, cigarettes, and cannabis had been using donkeys and mules to transport jerry cans of contraband and, as a result, Moroccan authorities began tagging donkeys for traceability, while Algeria shot at unaccompanied animals near the border.  Now the cross-border smuggling of consumer goods such as fuel, dates, milk, cigarettes, and Turkish-made clothes has been significantly curbed by new border control measures, but smugglers are turning to drugs instead.  Morocco has always been one of the world’s top cannabis producers, but now smugglers exporting cannabis to Algeria are bringing back amphetamines (locally known as karkoubi).

https://www.moroccoworldnews.com/2019/07/278132/morocco-black-markets-drug-trafficking-algeria/

CAMBODIA: 1,000 SMUGGLED DUCKS FREED

The Phnom Penh Post reported on 15^th July that provincial police questioned 3 men suspected of attempting to smuggle more than 1,000 lesser whistling ducks into Phnom Penh from the Cambodia-Thai border area.  After the suspects were detained and their truck confiscated, the Forestry Administration released the ducks.  It said that lesser whistling ducks are categorised by the International Union for Conservation of Nature (IUCN) as a species of “Least Concern” – that is, they are evaluated as not being a focus of species conservation.

https://www.phnompenhpost.com/national/huge-haul-smuggled-ducks-freed-kampong-thom-three-men-questioned

HOUSTON OIL EXECUTIVE GETS 18 YEARS IN PRISON FOR DEFRAUDING INVESTORS

On 14^th July, the Houston Chronicle reported that Daniel Walsh, the CEO of Houston-based Western Capital Inc, was sentenced to 18 years in state prison for defrauding investors who thought they were paying for the drilling and testing of wells – but instead paid the executive’s mortgage.  He had claimed to be raising money for the drilling and testing of oil wells in Galveston between 2007 and 2009.  It is not the first time Walsh has been accused of fraudulent business practices: in 2005, the Pennsylvania Securities Commission issued a cease and desist action against his company for selling unregistered investments in 2 oil wells in Texas.

https://www.houstonchronicle.com/business/energy/article/Houston-oil-executive-gets-18-years-in-prison-for-14092267.php

ISLE OF MAN COMPANY TAKES AIR ZIMBABWE TO COURT OVER “DONATED” AIRLINERS

CH Aviation on 15^th July reported the story of a court case in Zimbabwe brought by a special purpose vehicle company in the Isle of Man against the state airline.  It concerns 2 that were part of a 2012 deal between China Sonagol of Hong Kong and the Mugabe regime to help revive the debt-ridden state-owned airline. The deal was structured via a pair of IOM-based SPV.  However, only one of the aircraft ever entered sustained operations while the other has not operated since January 2014, given a lack of funds needed to effect major repairs to its airframe and landing gear.  It is said that, in May 2016, the then Minister of Transport explicitly stated that the aircraft had been dry-leased from the Chinese petroleum firm.  The Zimbabwean state now claims that the 2 airliners were “donated” to it in 2013, a claim the SPV has explicitly rejected.  It is reported that loss of the aircraft and the imposition of a hefty backdated lease account would add to Air Zimbabwe’s already mountainous debt pile, said to exceed $350 million.  It also reports on a 2019 report to the Zimbabwe parliament on the airline, which revealed accountability problems, “missing” funds, unsupported expenses and unexplained differences between costs quoted and what suppliers confirmed.

https://www.ch-aviation.com/portal/news/79813-iom-based-spv-takes-air-zimbabwe-to-court-over-a320s

ING BELGIAN UNIT FINED FOR MONEY LAUNDERING VIOLATIONS

KYC 360 on 15^th July reported that ING Groep NV in Belgium was fined €350,000 by the central bank for violating legislation against money laundering.

https://www.riskscreen.com/kyc360/news/ings-belgian-unit-fined-for-money-laundering-violations/

CHINA SANCTIONS US COMPANIES OVER TAIWAN ARMS SALES

On 15^th July, KYC 360 reported that China has announced sanctions against US companies involved in a recent arms deal with Taiwan.  The deal includes 108 General Dynamics Abrams tanks and 250 Raytheon Stinger missiles.  The deal is worth $2.2 billion, and, if approved by the US Congress, constitutes the largest arms sale to Taiwan since a $5.8 billion deal in 2011.

https://www.riskscreen.com/kyc360/news/china-sanctions-us-companies-over-taiwan-arms-sales/

CANADA: LAW AMENDED TO IMPROVE MONEY LAUNDERING PROSECUTIONS

On 15^th July, KYC 360 reported that Criminal Code amendments to make it easier to prove money laundering, adding recklessness, are now in force in Canada.  It lowers the threshold from having to prove that the offence was connected to an illegal activity, such as drug trafficking.

https://www.riskscreen.com/kyc360/news/ottawa-amends-law-to-improve-money-laundering-prosecutions-more-recommendations-await-implementation/

TRADE COMPLIANCE AND A CHINA CUSTOMS AUDIT

A briefing from the Global Law Office is concerned with China customs audits aims at identifying non-compliance.  It explains the scope of customs audits and how they might be triggered – being either routine or in cases of suspected non-compliance, or when special audit campaigns are launched.  It also covers procedures and legal obligations, and provides some tips to cope with the audit process.  It concludes that trade compliance is the best way to avoid legal risks of, or in, a customs audit. If there is a customs audit, the best approach is for the company to keep a balance between co-operating with the customs and being defensive.

http://www.glo.com.cn/en/content/details_13_769.html

ZIMBABWE CORRUPTION ON THE RISE

Pindula on 15^th July reported that a recent survey by the Afrobarometer and Transparency International has suggested that corruption has been on the rise over the past 12 months.  The survey disclosed that 60% of Zimbabweans think that corruption levels have increased in the past 12 months.  The article claims that Zimbabwe ranked better than the Democratic Republic of Congo, Liberia and Sierra Leone.  Recently, the ZANU PF youth league released a list of individuals alleged to be corrupt. Senior Zanu PF officials including secretary for administration Obert Mpofu and other politburo members featured on the list.

https://news.pindula.co.zw/2019/07/15/zimbabwe-corruption-on-the-rise-afrobarometer-transparency-int/

FORMER FOX & FRIENDS HOST CLAYTON MORRIS LEAVES US AMID REAL ESTATE FRAUD ALLEGATIONS
Newshounds in the US on 14^th July reported claims that Clayton Morris has reportedly moved with his family to a resort town in Portugal while he fights dozens of lawsuits from investors who have accused him of defrauding them in real estate deals.
http://www.newshounds.us/ex_fox_friends_host_clayton_morris_leaves_u_s_real_estate_fraud_allegations_071419

On 14^th July, in his blog, Kenneth Rijock reported on Turkey’s Citizenship Through Investment (CBI) programme and the substantial reduction in the amount of capital required to acquire Turkish citizenship and passport, from the original $2,000,000 to a $500,00 deposit, or $250,00 to be invested in real estate.  The overwhelming majority of applicants are from high-risk countries in the Middle East.  An infographic shows that the most recent group of applications, according to statistics provided by the Interior Ministry were made by nationals from a number of neighbouring countries, which the majority from Iran.

http://rijock.blogspot.com/2019/07/is-your-new-wealthy-turkish-bank-client.html

UK POLICE LAUNCH NATIONAL FORCED MARRIAGE CRACKDOWN AT AIRPORTS

On 15^th July, Police Professional reported that officers from across England and Wales and the Border Force will join together in a national week of intensification (15^th – 19^th July) called Operation Limelight.  Partners like social services, the health service and charities are also involved and will be assisting police.  It will focus on flights connecting the UK to destinations where there is a high prevalence of forced marriage.

https://news.npcc.police.uk/releases/police-launch-national-forced-marriage-crackdown-at-airports

UNODC ASSISTS MOZAMBIQUE TO ADDRESS GROWING THREAT OF ILLICIT TRAFFICKING AND TERRORISM

On 12^th July, the UN Office on Drugs & Crime reported that Mozambique is increasingly becoming a centre of attention of UNODC efforts to combat the growing threat of illicit trade on the East African coast.  From heroin from West Asia arriving and transiting through the region, to ivory and timber leaving its ports to reach Asian markets, the region is a growing hub with dire consequences to fragile economies.  In the north, so-called terrorist groups have since January 2019 increased their intensity of attacks, which left more than a dozen dead in June alone.

https://www.unodc.org/unodc/en/frontpage/2019/July/unodc-assists-mozambique-to-address-growing-threat-of-illicit-trafficking-and-terrorism.html?ref=fs1

ARREST WARRANT ISSUED FOR FORMER SECRETARY OF KYRGYZ DEFENSE COUNCIL

On 15^th July, Rferl reported that Kyrgyz authorities have issued an arrest warrant in absentia for the former secretary of Kyrgyzstan’s Defense Council, Busurmankul Tabaldiev – whose current whereabouts are unknown – on corruption charges.  Since May, several former top Kyrgyz officials – including a deputy prime minister, a health minister, and a prosecutor-general – have been arrested on similar charges.

https://www.rferl.org/a/arrest-warrant-issued-for-former-kyrgyz-defense-council-s-secretary/30056003.html

ITALY: SEIZED ARSENAL OF RIGHT-WING EXTREMIST FIGHTERS FROM UKRAINE

Corriere Della Sera in Italy on 15^th July reported that weapons, including the latest generation of automatic assault rifles were seized by the police in several cities in Northern Italy in a round of counter-terrorism raids on a number of right-wing extremist groups including Italian fighters who participated in the war in the Donbass, in Ukraine.  It reports that last year authorities in Kiev sent to Italian judiciary a list of 25 Italian citizens who fought in the Russian Donbass in 2014.  Italian fighters on both sides of the Russian-Ukrainian conflict often have a similar origin. Are right-wing extremists, ultra-nationalists.

https://www.corriere.it/cronache/19_luglio_15/sequestrato-arsenale-estremisti-destra-combattenti-ucraina-ee149b8c-a6c0-11e9-8722-90fee69fd06f.shtml

https://www.lastampa.it/torino/2019/07/15/news/armi-da-guerra-e-un-missile-sequestrati-a-militanti-di-estrema-destra-arrestato-ex-candidato-di-forza-nuova-1.37025505?refresh_ce

FRANCE TO RETURN MONEY FROM GULNARA KARIMOVA’S PROPERTY TO UZBEKISTAN

Eurasia Diary on 10^th July reported a court ruling on the confiscation of French property of daughter of the late first President of Uzbekistan Gulnara Karimova.  The money from sale of an apartment in Paris, a villa in Saint-Tropez area and a château in Paris suburbs, “which were obtained illegally,” will be returned to the national budget of Uzbekistan, Radio France Internationale reports.  The decision of the French authorities on confiscation of Karimova’s property is said to be connected to an investigation in Switzerland.

https://ednews.net/en/news/society/375514-france-to-return-money-from-gulnara-karimovas-property-to-uzbekistan

UK: CALL FOR EVIDENCE ON INSOLVENCY PRACTITIONER REGULATION

On 12^th July, the Insolvency Service issued a news release saying that stakeholders are being asked to give views on the current regulatory framework for insolvency practitioners in the UK following changes introduced in 2015.

https://www.gov.uk/government/news/call-for-evidence-on-insolvency-practitioner-regulation

GERMAN ARMS EXPORT APPROVALS SPIKE IN FIRST HALF OF 2019

Deutsche Welle on 11^th July reported that permits for German arms exports soared in the first half of 2019 – with €5.3 billion worth of government approvals for arms sales between January and June – defying dips and restraint over the past 3 years, government data has shown. Hungary is the top destination for new weapons exports.  It was followed by Egypt and South Korea €278 million, sixth on the list was UAE.  Egypt and the UAE are members of a Saudi Arabia-led alliance of Arab states that since 2015 has fought Iranian-backed Houthi rebels in Yemen.

https://www.dw.com/en/german-arms-export-approvals-spike/a-49544465-0

UK: CONSULTATION ON IMPLEMENTATION OF CJEU JUDGMENT ON DIESEL FUEL USED IN PRIVATE PLEASURE CRAFT

On 15^th July, a news release from HMRC sought views on, and seeking information about, proposed changes to the rules for red diesel used in private pleasure craft as a result of a judgment of the Court of Justice of the EU.  The consultation ends on 9^th September.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/817231/Implementation_of_CJEU_judgment_on_diesel_fuel.pdf

PODCAST: CYBERWARFARE – WHAT ATTACKS HAVE THERE BEEN IN 2019?  MANY, IT SEEMS

This podcast from Defense One in the first of a planned series of 3 that look at the contemporary risks of cyber warfare – from ransomware and extortion to online banking and culture wars.  This episode details some of the (many) cyber attacks reported in the US this year, and talks to several experts about them.  The examples include a malware attack on a US Coast Guard ship that triggered a service-wide alert.

https://www.defenseone.com/ideas/2019/07/ep-48-cyberwarfare-today/158387

UK SUPREME COURT CONSIDERS THE LAW RELATING TO RESTRICTIVE COVENANTS

A brief from Morton Fraser on 15^th July reports on a Supreme Court case that has effectively overrules a case from 99 years previously.  The Court considered when it is appropriate to omit words from within a restrictive covenant in circumstances where, if the words were to remain, the covenant would be void as an unreasonable restraint of trade.  The Court preferred 3 criteria set out in a 2007 case, particularly the third criteria: the removal of the unenforceable provision does not so change the character of the contract that it becomes not the sort of contract the parties entered into at all.  The original restriction said that the man concerned could not “directly or indirectly engage or be concerned or interested in any business carried on in competition with any of the businesses of the Company…….”, the change the Court agreed upon was to remove the words “or interested”.

https://www.morton-fraser.com/knowledge-hub/supreme-court-considers-relating-restrictive-covenants

SWISS AIRCRAFT MAKER PILATUS FLIES INTO CORRUPTION ALLEGATIONS

An article from OCCRP on 15^th July is concerned with the Indian Air Force decision to cancel for trainer aircraft from Pilatus after reports of corruption and irregularities emerged in a previous, linked contract.  The article also says that the Swiss federal prosecutor has confirmed he has opened a criminal investigation against Pilatus for selling its training aircraft to Saudi Arabia and UAE, both involved in the war in Yemen.

https://www.occrp.org/en/daily/10208-swiss-pilatus-flies-into-corruption-allegations

IMF PAPER: THE RISE OF DIGITAL MONEY

On 15^th July, the IMF published a paper which marks the launch of a new IMF series, “Fintech Notes”.  Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically.  This first paper analyses how technology companies are stepping up competition to large banks and credit card companies.  It identifies the benefits and risks and highlights regulatory issues that are likely to emerge with a broader adoption of stablecoins.  The paper also highlights the risks associated with e-money: potential creation of new monopolies; threats to weaker currencies; concerns about consumer protection and financial stability; and the risk of fostering illegal activities, among others.

https://www.imf.org/en/Publications/fintech-notes/Issues/2019/07/12/The-Rise-of-Digital-Money-47097

FEATURES WHICH MAKE ISLE OF MAN FOUNDATIONS ATTRACTIVE ASSET PROTECTION VEHICLES

Dixcart has issued a briefing on foundations available under Isle of Man law.

https://dixcart.com/in596-features-which-make-isle-of-man-foundations-attractive-asset-protection-vehicles

COURT TO HEAR CASE INVOLVING ALLEGED €4 MILLION BINARY OPTIONS SCAM BY IRISH FIRM AGAINST 35 INVESTORS

Breaking News on 15^th July reported that 35 investors who claim they were defrauded and lost more than €4 million in an electronic-trading scam have had their case against an Irish registered firm – Greymountain Management Ltd (in liquidation), and 4 businessmen has been admitted to the Commercial Court.  The investors claim they believed they were investing in a complex trade known as binary options, when in fact the software system their trades were conducted on was rigged to ensure they lost their money.

https://www.breakingnews.ie/ireland/court-to-hear-case-involving-alleged-4m-scam-by-irish-firm-against-35-investors-937064.html

RUSSIA: 10 PEOPLE TO STAND TRIAL FOR ALLEGEDLY $64 MILLION OF ILLEGAL BANKING ACTIVITIES IN THE RUSSIAN CHUVASH REPUBLIC

OCCRP reported on 15^th July that the defendants stand accused of creating 30 fake companies over 6 years, each existing for only a day, profiting about $800,000 off of the over 3,500 “investors”.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/10207-russia-30-fake-firms-and-4-billion-rubles-later-10-will-stand-trial

US CUSTOMS AIRCRAFT SEARCH TEAMS

In the latest edition of US Customs and Border Protection’s “Frontline” magazine, an article sets out to look behind the scenes at 2 of the busiest international airports in the US, where a unique team of CBP officers uncovers internal conspiracies involving airline and airport employees.

https://www.cbp.gov/frontline/stopping-smugglers-how-cbps-aircraft-search-team-uncovers-internal-conspiracies-airlines

AUSTRALIA: $144 MILLION OF COCAINE FOUND HIDDEN IN AN EXCAVATOR

10 Daily on 15^th July reported that a 348 kg shipment of cocaine from South Africa arrived in Australia in June, hidden in parcels inside a huge excavator machine, packed into the hydraulic lifting arm of the excavator.  The excavator was sent to its intended destination in a controlled delivery.

https://10daily.com.au/news/a190715osqui/144-million-of-cocaine-found-hidden-in-an-excavator-20190715

CHINESE CUSTOMS RETURNS IMPORTED SOLID WASTE

On 14^th July, Xinhua reported that Yantai customs in east China’s Shandong Province has shipped back a batch 156.4 tonnes of of solid waste imported from overseas to where it originated.  It consisted of lead sludge from recycled lead-acid batteries and slags produced in metal smelting, which are banned from import in China.

http://www.xinhuanet.com/english/2019-07/14/c_138225605.htm

THE UNCERTAIN FUTURE OF ALGERIA’S ANTI-CORRUPTION BATTLES

An article from the Washington Institute on 15^th July says that a recent crackdown by Algeria’s transitional government has caused a number of prominent senior officials from the Bouteflika era to face charges from the Sidi M’hamed central court in Algiers, mostly related to corruption.  However, questions regarding the motivation behind these cases have weakened the public’s trust in an already uncertain political and economic system. Concerns over the politicization of anti-corruption efforts have the potential to feed the worst elements of Algeria’s shadow economy while sacrificing long term investment and sustained growth; and if a new government does not materialize, Algerians will remain unconvinced that a democratic transition will end the long era of corruption in Algerian politics.

https://www.washingtoninstitute.org/fikraforum/view/the-uncertain-future-of-algerias-anti-corruption-battles

FINRA ISSUES NEW GUIDANCE ON CREDIT FOR EXTRAORDINARY CO-OPERATION

On 15^th July, Wilmer Hale published a Client Alert saying that the US Financial Industry Regulatory Authority (FINRA) restated and supplemented prior guidance regarding the circumstances under which FINRA will award credit for “extraordinary cooperation” in investigations and the nature of credit available.  It clarifies the difference between required co-operation and extraordinary co-operation.  In particular, FINRA noted the importance of broad and prompt corrective measures, customer restitution, and substantial assistance to FINRA.

https://www.wilmerhale.com/en/insights/client-alerts/20190715-finra-issues-new-guidance-on-credit-for-extraordinary-cooperation

MEXICAN AUTHORITIES FREEZE BANK ACCOUNTS WHERE THE COUNTRY’S MOST POWERFUL DRUG CARTEL HAVE HIDDEN $280 MILLION IN ASSETS

The Mail Online on 15^th July reported that the Office for the Treasury and Public Credit announced that it had identified accounts across several financial institutions where the Jalisco New Generation Cartel had hidden a chunk of the $20 billion in assets it owns.  The finance system identified at least 550 accounts linked to the Jalisco New Generation Cartel.

https://www.dailymail.co.uk/news/article-7248861/Mexican-authorities-froze-bank-accounts-280m-linked-countrys-powerful-cartel.html

 

This blog is primarily for my own use, to keep informed and up to date.  However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

A post on FCPA Blog on 15^th July is concerned with a DPA is between the SFO and Serco Geografix Limited (SGL), a subsidiary of Serco Group PLC, and relates to fraud and false accounting offences.  It points out that this is the first DPA containing substantial undertakings by a parent company in relation to one of its subsidiaries.  Undertakings include reinforcing the compliance programs of Serco Group PLC’s subsidiaries in relation to fraud and bribery as well as reporting of future material issues – hence the undertakings go beyond the offences to which the DPA relates.

http://www.fcpablog.com/blog/2019/7/15/uk-court-approves-first-of-its-kind-group-dpa.html

 

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

Export Compliance Daily on 15^th July reported that a group of US venture capital funds is suing the OFAC, alleging that its 50% rule is unconstitutional, court records show.  A brief from Kharon.com provides further information.  The latter says that the lawsuit could test a key element of U.S. policy just as the Treasury uses sanctions to pursue higher-profile designees with wide-ranging interests.

https://brief.kharon.com/updates/lawsuit-questions-constitutionality-of-us-treasury-s-50-percent-sanctions-rule/

 

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

On 125^th July, the IMF Blog carried a post saying that over the past 30 years, corporate tax rates in all countries have fallen to very low levels, as is shown in the chart.  The post says a new approach to international taxation is required, because of –

• the ease with which multinationals seem able to avoid tax, combined with the 3-decade long decline in corporate tax rates, undermines both tax revenue and faith in the fairness of the overall tax system; and
• the current situation is especially harmful to low-income countries – non-OECD countries lose about $200 billion in revenue per year, or about 1.3% of GDP, due to companies shifting profits to low-tax locations.

A new research paper from the IMF analyses various options in the context of three key criteria: better addressing profit-shifting and tax competition; overcoming the legal and administrative obstacles to reform; and ensuring full recognition of the interests of emerging and developing countries.

https://blogs.imf.org/2019/07/15/corporate-tax-rates-how-low-can-you-go/

https://www.imf.org/en/Publications/Policy-Papers/Issues/2019/03/08/Corporate-Taxation-in-the-Global-Economy-46650

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y