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THINGS YOU MAY HAVE MISSED – JUNE 26

Still away…and being hot and clammy weather does not help!

 

26 June 2019

New leak reveals hundreds of millions of dollars in secret payments by an Odebrecht division created primarily to manage the company’s bribes 

On 25 June, ICIJ provided an update on the scandal involving the Brazilian based company.  This included news of a whole division created to handle its bribery activity; more than $39 million in hidden payments linked to the massive Punta Catalina coal power plant in the Dominican Republic, despite two official investigations finding no irregularities; and hidden payments connected to other major infrastructure projects including the subway systems in Quito, Panama City and Caracas.

https://www.icij.org/investigations/bribery-division/

OFAC:  Publication of Amended ​North Korea Sanctions Regulations 

On 26 June, OFAC announced an updated version of its North Korean sanctions regulations and which updates references to descriptive text that appear in certain entries.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190626_33.aspx

Russia has extended an embargo on food import sanctions from several states to 31 December 2020 

The EU Sanctions Blog on 26 June reported that the action was in response to the EU’s recently renewed economic sanctions targeting Russia’s finance, energy and defence sectors.  The ban affects the US, EU member states, Canada, Australia, Norway, Iceland, Albania, Montenegro, Liechtenstein and Ukraine.

https://www.europeansanctions.com/2019/06/russia-extends-food-embargo-against-eu-us-allies/

OFAC: Issuance of Amended Venezuela-related General License; Temporary Extension of Ukraine-related General Licenses 

On 26 June, OFAC announced the extension of the end dates for 3 General Licenses – for “Authorizing Certain Activities Involving Nynas AB”​ to extend its expiration date to October 25; and 2 General Licenses relating to the rundown of activity involving the GAZ Group (as well as adding a new authorisation for certain safety-related activity to one of the latter General Licenses).

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190626.aspx

SIPRI briefs Australia Group on proliferation risks of additive manufacturing

On 14 June, the Stockholm International Peace Research Institute reported that it had briefed the annual plenary meeting of the Australia Group — a major multilateral export control regime made up of 42 states and the EU — on the impact of additive manufacturing on  biological weapons proliferation and export controls.

https://www.sipri.org/news/2019/sipri-briefs-australia-group-proliferation-risks-additive-manufacturing 

See also the March 2019 SIPRI report: Arms Control and the Convergence of Biology and Emerging Technologies, which is said to provide a nuanced picture of the risks and challenges posed by this convergence.  It analyses the extent to which concerns arising from new technological developments can be dealt with through existing governance mechanisms. Based on the limitations identified, the authors recommend the action that needs to be taken by national governments, international organisations, academia, the private sector and the DIY community.

https://www.sipri.org/publications/2019/other-publications/bio-plus-x-arms-control-and-convergence-biology-and-emerging-technologies

And a March 2018 SIPRI report on controlling additive manufacturing and intangible transfers of technology

https://www.sipri.org/publications/2018/other-publications/challenge-emerging-technologies-non-proliferation-efforts-controlling-additive-manufacturing-and

UK-based TechnipFMC Agrees to Pay Around $300 Million to Resolve Foreign Bribery Probes in US and Brazil 

On 26 June, the Wall Street Journal reported that  TechnipFMC will pay about $82 million in the US, with the remainder of its penalties going to authorities in Brazil.  A former consultant to TechnipFMC also pleaded guilty to one count of conspiring to violate the FCPA for his role in the bribery scheme.  London-based TechnipFMC entered into a 3-year deferred prosecution agreement with the US DoJ to resolve allegations it bribed government officials in Iraq and Brazil.  TechnipFMC also said it was continuing to cooperate with an investigation by French authorities related to projects in Equatorial Guinea and Ghana.

https://www.wsj.com/articles/technipfmc-agrees-to-pay-around-300-million-to-resolve-foreign-bribery-probes-in-u-s-brazil-11561507288

https://www.traceinternational.org/TraceCompendium/Detail/944 

US TECH COMPANIES FIND WAYS AROUND HUAWEI BAN

On 25 June, the Wall Street Journal reported that a number of US tech companies had found ways to continue supplying Huawei without seemingly breaching US regulations.  For example, memory chip-maker Micron said it restarted some shipments to Huawei after determining they were in compliance with US law

https://www.wsj.com/articles/american-tech-companies-find-ways-around-huawei-ban-11561517591

BVI court finds share transfer to avoid US sanctions is not unjustified dissipation

On 26 June, the EU Sanctions Blog reported that the Eastern Caribbean Supreme Court sitting in the BVI considered whether a transfer of shares owned by US-designated Renova Group was an unjustifiable dissipation of assets providing grounds for a freezing order; and the Court held that the transfer of shares by the Renova Group in order to avoid the impact of US sanctions was not an unjustified dissipation of assets.

https://www.europeansanctions.com/2019/06/bvi-court-finds-share-transfer-to-avoid-us-sanctions-is-not-unjustified-dissipation/

Money Laundering in UK Professional Services Sectors Not Understood

An Occasional Paper published by RUSI on 25 June claimed that UK officials and professional services providers are failing to share sufficient information on the risks posed by money launderers seeking to exploit businesses in the UK.  This followed three workshops convened in February and March that included representatives of law enforcement agencies, the professional services sector and NGO and news outlets.  It notes that reporting obligations and guidance under the Proceeds of Crime Act 2002 rely on the identification of specific proceeds of crime, which may not be immediately possible where professional services, rather than banking and direct finance activities are involved.  It makes a series of recommendations to address the challenges identified, including: more innovative ways to share and analyse data; greater proactive use of third-sector information; and examination of the reporting requirements in relation to the Section 329 ‘arrangements’ offence under POCA, which is the one most likely to be identified by the professional services sector. 

https://rusi.org/publication/occasional-papers/examining-unknowns-money-laundering-risk-uk-professional-services

Tanzania issues new rules to tighten foreign currency exchange controls    

KYC 360 on 26 June reported that Tanzania has tightened its currency controls with new regulations on foreign exchange bureaus, in what authorities say is an ongoing fight against money laundering and currency speculation.  The action comes after the government revoked the licences of around 100 bureaux and temporarily shut a newspaper for using unofficial data on exchange rates.     

https://www.riskscreen.com/kyc360/news/tanzania-issues-new-rules-to-tighten-foreign-currency-exchange-controls/

What expenditure falls within ‘ordinary and proper course of business’ exception in freezing orders? 

On 25 June, RPC published an article saying that the cost of pursuing related arbitration proceedings and fighting extradition proceedings could be costs incurred in the ‘ordinary and proper course of business’ according to the Court of Appeal in England and Wales in a recent case.  It is said that the Court of Appeal summarised the authorities relating to the meaning of an ‘ordinary’ and ‘proper’ course of business (mostly in the context of freezing injunctions). RPC says that this This guidance provides a further, useful example of the application of a difficult test.

https://www.internationallawoffice.com/Newsletters/Litigation/United-Kingdom/RPC/What-expenditure-falls-within-ordinary-and-proper-course-of-business-exception-in-freezing-orders

2 Years Since Sapin II: Is France Now a Player in the Global Anti-Corruption Enforcement Arena?

Baker Hostetler posed this question in an article published on 24 June.  Sapi II is the law on Transparency, Fighting Corruption and Modernising Economic Life, which is said to have strengthened enforcement in French law.  The principal measures of the law are intended to place French regulators on an equal footing with their US and UK counterparts. The Law was enacted partly to reduce the risk of foreign authorities bringing enforcement actions against French companies.  The article examines the AFA and the resolution of five enforcement actions, and comments on the anticipated trajectory of French global anti-corruption enforcement. The article concludes that the law has established France as a player in the anti-corruption enforcement world and give the French enforcement regime flexibility without sacrificing justice.  It advises that companies should therefore allocate significant resources to enhance their compliance programmes and be prepared for the increased risk of scrutiny by French authorities.

https://www.bakerlaw.com/alerts/two-years-since-sapin-ii-is-france-now-a-player-in-the-global-anti-corruption-enforcement-arena

Turkey has used a ballistic missile, the Bora, for the first time in combat

On 26 June, Arms Control Wonk published a podcast following the first use of a ballistic missile in combat, in Syria.  It therefore joins Iran and others in using such missiles. The missile itself is a product of a joint development programme with China.  The missile is also available for export, and the use is also said to be the first combat use of the Chinese-based system.

https://www.armscontrolwonk.com/archive/1207641/first-combat-use-turkeys-bora-missile/

ISLE OF MAN FORMALLY REVOKES MALDIVES SANCTIONS LEGISLATION

A news release from the Isle of Man on 26 June announced the formal revocation of the Order and Regulations that had given effect to the EU sanctions regime in the Island.

https://www.gov.im/news/2019/jun/26/european-union-maldives-sanctions-revocation-order-2019-and-maldives-sanctions-revocation-regulations-2019/

Claim that one third of used cooking oil in Europe is fraudulent

EurActiv on 26 June reported industry claims that one-third of the used cooking oil (UCO) used in Europe’s biofuels market is more than likely fraudulent, and Brussels is being urged to “think again” about how the entire supply chain is monitored.  It is said that the approximately 70 countries that supply Europe with UCO do not have the capacity to collect, process, certify and export the nearly 3.5 billion litres that will be consumed in 2019. The UK and the Netherlands have recently launched official investigations into companies which have allegedly been selling unsustainable biodiesel containing palm oil.  Critics suggest that there is a hidden link between UCO and palm oil, which the EU has decided to phase out. The European Court of Auditors published a report in 2016 and warned about the hidden dangers of double-counted biofuels and particularly UCO.

https://www.euractiv.com/section/all/news/industry-source-one-third-of-used-cooking-oil-in-europe-is-fraudulent/

EU AMENDS NORTH KOREA SANCTIONS

EU Regulation 2019/1083/EU has amended Regulation 2017/1509 to replace Annex II of that Regulation.  Annex II includes all the dual-use items contained in Annex I to the EU Dual-Use Regulation, plus other items, materials, equipment, goods and technology which could contribute to DPRK’s nuclear-related, other WMD-related or ballistic missile-related programmes.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.171.01.0008.01.ENG&toc=OJ:L:2019:171:TOC

FATF PUBLISHED NEW GUIDANCE ON THE RISK-BASED APPROACH FOR LEGAL PROFESSIONALS, THE ACCOUNTING PROFESSION AND TCSP

On 26 June, FATF published 3 sets of guidance following the recent Plenary.  One each for legal professionals, the accounting profession and trust and corporate service professionals –  for a sound assessment of the money laundering and terrorist financing risks, and applying the necessary checks and controls.

http://www.fatf-gafi.org/media/fatf/documents/reports/Risk-Based-Approach-Legal-Professionals.pdf

http://www.fatf-gafi.org/media/fatf/documents/reports/RBA-Accounting-Profession.pdf

http://www.fatf-gafi.org/media/fatf/documents/reports/RBA-Trust-Company-Service-Providers.pdf

Export chemicals from the UK: licences and special rules 

On 26 June, the Home Office published a news release advising that, amongst other things, that export rules cover single substances as well as mixtures (also called preparations), e.g. paints, inks, glues or oils.  It also points out that, currently, there are no special rules for exports to within the EU, except for certain controlled chemicals (such as for military use or potential military use). The special rules apply to ozon-edepleting chemicals, those with a military use, drug precursors and radioactive substances.

https://www.gov.uk/guidance/export-chemicals-licences-and-special-rules

Malaysia Customs seizes 5,255 baby tortoises destined for India

On 26 June, The Star reported that the  Customs Department has seized 5,255 baby tortoises from two suspects on transit to India from China.

https://www.thestar.com.my/news/nation/2019/06/26/customs-seizes-5255-baby-tortoises-destined-for-india/

China bans all meat from Canada alleging forged customs certificates

CNN on 26 June reported that the Chinese government has announced a suspension on imported meat products from Canada over claims of forged customs documents, the latest sign of worsening relations between the two countries.

https://edition.cnn.com/2019/06/26/asia/canada-china-meat-intl-hnk/index.html

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FATF PUBLISHED NEW GUIDANCE ON THE RISK-BASED APPROACH FOR LEGAL PROFESSIONALS, THE ACCOUNTING PROFESSION AND TCSP

On 26 June, FATF published 3 sets of guidance following the recent Plenary.  One each for legal professionals, the accounting profession and trust and corporate service professionals –  for a sound assessment of the money laundering and terrorist financing risks, and applying the necessary checks and controls.

http://www.fatf-gafi.org/media/fatf/documents/reports/Risk-Based-Approach-Legal-Professionals.pdf

http://www.fatf-gafi.org/media/fatf/documents/reports/RBA-Accounting-Profession.pdf

http://www.fatf-gafi.org/media/fatf/documents/reports/RBA-Trust-Company-Service-Providers.pdf

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Money Laundering in UK Professional Services Sectors Not Understood

An Occasional Paper published by RUSI on 25 June claimed that UK officials and professional services providers are failing to share sufficient information on the risks posed by money launderers seeking to exploit businesses in the UK.  This followed three workshops convened in February and March that included representatives of law enforcement agencies, the professional services sector and NGO and news outlets.  It notes that reporting obligations and guidance under the Proceeds of Crime Act 2002 rely on the identification of specific proceeds of crime, which may not be immediately possible where professional services, rather than banking and direct finance activities are involved.  It makes a series of recommendations to address the challenges identified, including: more innovative ways to share and analyse data; greater proactive use of third-sector information; and examination of the reporting requirements in relation to the Section 329 ‘arrangements’ offence under POCA, which is the one most likely to be identified by the professional services sector. 

https://rusi.org/publication/occasional-papers/examining-unknowns-money-laundering-risk-uk-professional-services

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BVI court finds share transfer to avoid US sanctions is not unjustified dissipation

On 26 June, the EU Sanctions Blog reported that the Eastern Caribbean Supreme Court sitting in the BVI considered whether a transfer of shares owned by US-designated Renova Group was an unjustifiable dissipation of assets providing grounds for a freezing order; and the Court held that the transfer of shares by the Renova Group in order to avoid the impact of US sanctions was not an unjustified dissipation of assets.

https://www.europeansanctions.com/2019/06/bvi-court-finds-share-transfer-to-avoid-us-sanctions-is-not-unjustified-dissipation/

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THINGS YOU MAY HAVE MISSED – JUNE 24

Apologies, still unedited and a bit patchy, as still away…

25 June 2019

North Korea, Syria agree to fight sanctions with more economic co-operation 

NK News on 25 June reported on  an MoU signed in Pyongyang following a meeting agreeing to form consultative political committee and to boost economic co-operation in order to counter the effects of international sanctions on both of their countries, the Syrian Ministry of Foreign Affairs (MOFA) reported. 

https://www.nknews.org/2019/06/north-korea-syria-agree-to-fight-sanctions-with-more-economic-cooperation/

Chinese bank involved in violating North Korean sanctions risks losing access to US financial system

A Washington Post story, reported by Arirang on 25 June, claims that 3 Chinese banks have been found in contempt by a US court for refusing to comply with subpoenas in a probe into North Korean sanctions violations – and for the very first time, one of China’s largest banks could be prohibited from accessing the US financial system.  The Washington Post report said, the situation is most precarious for the latter of the 3 banks, though all of them are accused of laundering over $100 million for the North’s state-run Foreign Trade Bank, which is under international sanctions. 

http://www.arirang.com/News/News_View.asp?nseq=239518

https://www.riskscreen.com/kyc360/news/chinese-bank-risks-death-penalty-in-north-korea-money-laundering-case-report/ 

UK NOTICE TO EXPORTERS ABOUT COURT OF APPEAL DECISION ON EXPORTS TO SAUDI ARABIA

On 25 June, the UK Department for International Trade published Notice to Exporters 2019/09 saying that the judgment is not about whether the decisions themselves were right or wrong but whether the process used to reach these decisions was correct.  It says that the government disagrees with part of the judgment and is seeking permission to appeal – and is now carefully considering the implications of the judgment for decision-making.  However, the ECJU will not grant any new licences for exports to Saudi Arabia and its coalition partners (UAE, Kuwait, Bahrain and Egypt) which might be used in the conflict in Yemen. Extant licences – i.e. those granted before this judgment – are not immediately affected, and exporters may continue to export under extant licences, but the government is required by the Court to reconsider the decisions made about those licences.  The ECJU has also stopped new registrations for 6 open general export licences (OGEL) – though exporters which have already registered their use may continue to use them to export to Saudi Arabia and its coalition partners, subject to the terms and conditions of the licences. 

https://www.gov.uk/government/publications/notice-to-exporters-201909-court-of-appeal-judgment-about-military-exports-to-saudi-arabia/notice-to-exporters-201909-court-of-appeal-judgment-about-military-exports-to-saudi-arabia

Azeri Banker’s Wife Accused of Role in Crime Group That Stole $97 Million     

KYC 360 on 25 June reported that attorneys for the government of Azerbaijan on Monday accused the wife of an imprisoned Azeri banker of knowingly spending £16 million in illicit funds at Harrods and other luxury retailers, and they are seeking Zamira Hajiyeva’s extradition.  Her husband, Jahangir Hajiyev, is serving a 15-year prison sentence in Azerbaijan for purportedly overseeing fraudulent applications for credit cards during his time as the bank’s chairman. She had been the subject of the first Unexplained Wealth Order from the NCA.                  

https://www.riskscreen.com/kyc360/news/bankers-wife-accused-of-role-in-crime-group-that-stole-97-million/

France to try former IAAF boss Diack and his son for corruption

KYC 360 on 25 June reported that Lamine Diack, once one of the most influential men in Olympic sport, has been ordered to stand trial in France for his alleged role in a system of corruption, extortion and doping cover-ups during his reign at the top of athletics.  Diack was head of the IAAF for nearly 16 years. Also ordered to stand trial was one of Diack’s sons, Papa Massata Diack. He has emerged as a central figure in French judicial probes of suspected corruption involving the 2016 and 2020 Olympic Games and other sports events.

https://www.riskscreen.com/kyc360/news/france-to-try-former-iaaf-boss-diack-and-his-son/

Al-Qaeda Growing Stronger Under Taliban’s Umbrella

Homeland Security Today on 23 June reported that a a United Nations Security Council monitoring team has found that Al Qaeda “has grown stronger operating under the Taliban umbrella across Afghanistan and is more active than in recent years”.  It also says that Al Qaeda “members act as instructors and religious teachers for Taliban personnel and their family members.” And a “number of Al Qaeda activists have reportedly arrived in Afghanistan from Egypt”.

https://www.hstoday.us/subject-matter-areas/terrorism-study/al-qaeda-growing-stronger-under-talibans-umbrella-un-finds/

Germany to ban exports of side-arms to non-allies

On 25 June, EurActiv reported that Germany will ban exports of small side arms to most countries outside NATO and the European Union, government sources told Reuters.  A small number of traditional allies – Australia, New Zealand, Japan and Switzerland – will be exempt from the ban, the government’s latest attempt to implement the tightened arms export rules.

https://www.euractiv.com/section/global-europe/news/germany-to-ban-exports-of-side-arms-to-non-allies/

New report highlights greater diversity of cannabis products, increasing potency and the need for close monitoring of health effects 

On 25 June, a news release from the EU drugs agency, EMCDDA, advised that a new report was available saying that cannabis products have become increasingly diverse in Europe and close monitoring of their potency and potential health effects is essential.  The report provides an overview of emerging and established cannabis products in Europe. The creation of legal recreational cannabis markets outside the EU is also noted as driving innovation in the development of new cannabis products, some of which are now appearing on the European market.  New products include concentrates and edibles, as well as sythetics.

http://www.emcdda.europa.eu/news/2019/5/developments-in-the-european-cannabis-market_en

Owner of binary options firm Y Trading pleads guilty to fraud

Finance Feeds on 25 June reported that Yehuda Belsky, the owner of Brooklyn-based binary options firm Y Trading, LLC, has pleaded guilty to one count of securities fraud, one count of failure to register as a commodities trading advisor and one count of misappropriation of customer funds.  He faces up to 40 years in prison, restitution in the full amount of each victim’s losses, forfeiture of $800,000 and a fine of up to $5 million.

https://financefeeds.com/owner-binary-options-firm-y-trading-pleads-guilty-fraud

FEDEX SUES US GOVERNMENT OVER EXPORT RESTRICTIONS

On 25 June, Jurist reported that Fedex is suing the US US Department of Commerce for what it says is the Department’s efforts to use its regulations to “essentially deputise FedEx to police the contents of the millions of packages it ships daily even though doing so is a virtually impossible task, logistically, economically, and in many cases, legally”.  It also said that the regulations place an enormous burden on FedEx and other common carriers to know exactly what is in each package and from whom it originates. FedEx ships more than 15 million packages daily, and he said it would be impossible to police every package. This case stems from controversy regarding FedEx’s handling of a package from Huawei.

https://www.jurist.org/news/2019/06/fedex-sues-us-government-over-export-restrictions/

Colombia Flooded with Black Market Cigarettes

Insight Crime on 25 June reported that Philip Morris has shut down its two factories in Colombia partly because of illegal cigarette sales, highlighting a spike in contraband cigarettes.  Black market cigarettes have surged in Colombia recently. Last year, illegal cigarettes accounted for 25% of the market, nearly double the amount in 2016.  A recent increase in the tax on cigarettes has made it difficult for legal manufactures to compete on price.

https://www.insightcrime.org/news/brief/colombia-flooded-with-black-market-cigarettes/

Dmytro Firtash: Who Is The Ukrainian Tycoon Wanted By The US On Bribery Charges?

Rferl carried 2 reports on 25 June.  One seeks to explain who he is – saying that Dmytro Firtash is a Ukrainian power-broker that the United States is seeking to put on trial, and built his massive fortune on opaque gas trading with a Kremlin-controlled company.  With reported ties to mobsters, owns a wide range of key Ukrainian assets, including about 70% of the nation’s gas distribution. The second article says that Austria’s Supreme Court has upheld a decision allowing a request by the United States to extradite Dmytro Firtash.

https://www.rferl.org/a/dmytro-firtash-who-is-the-ukrainian-tycoon-wanted-by-the-u-s-on-bribery-charges-/30020239.html

UN AMENDS 1 ENTRY ON THE SOUTH SUDAN SANCTIONS LIST

A news release on 25 June advised amendment of the entry relating to PAUL MALONG AWAN – Former Chief of Staff of the Sudan People’s Liberation Army (SPLA), and Former Governor, Northern Bahr el-Ghazal State.

https://www.un.org/press/en/2019/sc13859.doc.htm

UN REMOVES 17 ENTRIES FROM IRAQ SANCTIONS LIST

On 24 June, the UN advised the removal of 17 entities and organisations from its Iraq sanctions list.

https://www.un.org/press/en/2019/sc13855.doc.htm

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FEDEX SUES US GOVERNMENT OVER EXPORT RESTRICTIONS

On 25 June, Jurist reported that Fedex is suing the US US Department of Commerce for what it says is the Department’s efforts to use its regulations to “essentially deputise FedEx to police the contents of the millions of packages it ships daily even though doing so is a virtually impossible task, logistically, economically, and in many cases, legally”.  It also said that the regulations place an enormous burden on FedEx and other common carriers to know exactly what is in each package and from whom it originates. FedEx ships more than 15 million packages daily, and he said it would be impossible to police every package. This case stems from controversy regarding FedEx’s handling of a package from Huawei.

https://www.jurist.org/news/2019/06/fedex-sues-us-government-over-export-restrictions/

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New report highlights greater diversity of cannabis products, increasing potency and the need for close monitoring of health effects

On 25 June, a news release from the EU drugs agency, EMCDDA, advised that a new report was available saying that cannabis products have become increasingly diverse in Europe and close monitoring of their potency and potential health effects is essential.  The report provides an overview of emerging and established cannabis products in Europe. The creation of legal recreational cannabis markets outside the EU is also noted as driving innovation in the development of new cannabis products, some of which are now appearing on the European market.  New products include concentrates and edibles, as well as sythetics.

http://www.emcdda.europa.eu/news/2019/5/developments-in-the-european-cannabis-market_en

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UK NOTICE TO EXPORTERS ABOUT COURT OF APPEAL DECISION ON EXPORTS TO SAUDI ARABIA

On 25 June, the UK Department for International Trade published Notice to Exporters 2019/09 saying that the judgment is not about whether the decisions themselves were right or wrong but whether the process used to reach these decisions was correct.  It says that the government disagrees with part of the judgment and is seeking permission to appeal – and is now carefully considering the implications of the judgment for decision-making.  However, the ECJU will not grant any new licences for exports to Saudi Arabia and its coalition partners (UAE, Kuwait, Bahrain and Egypt) which might be used in the conflict in Yemen. Extant licences – i.e. those granted before this judgment – are not immediately affected, and exporters may continue to export under extant licences, but the government is required by the Court to reconsider the decisions made about those licences.  The ECJU has also stopped new registrations for 6 open general export licences (OGEL) – though exporters which have already registered their use may continue to use them to export to Saudi Arabia and its coalition partners, subject to the terms and conditions of the licences. 

https://www.gov.uk/government/publications/notice-to-exporters-201909-court-of-appeal-judgment-about-military-exports-to-saudi-arabia/notice-to-exporters-201909-court-of-appeal-judgment-about-military-exports-to-saudi-arabia

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THINGS YOU MAY HAVE MISSED – JUNE 24

Still on travels, so blog may still be a bit patchy and hit and miss…

24 June 2019

OFAC DESIGNATES 9 NEW NAMES UNDER IRAN SANCTIONS, INCLUDING AYATOLLAH, AND AMENDS ENTRY FOR ISLAMIC REVOLUTIONARY GUARD CORPS

On 24 June, OFAC announced that it had designated  senior IRGC commanders said to be behind Iran’s “destructive and destabilising activities”.  These are 8 senior commanders of Navy, Aerospace, and Ground Forces of the Islamic Revolutionary Guards Corps (IRGC), who are said to sit atop a bureaucracy that supervises the IRGC’s regional activities.  Also designated is the country’s Supreme Leader. A new Executive Order  imposes asset freezes and blocking measures on Iran’s Supreme Leader Ali Khamenei and his office, anyone appointed by him or his office as state officials.  The US has said Iran’s Foreign Minister Zarif will be sanctioned shortly.

https://home.treasury.gov/news/press-releases/sm716

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190624.aspx

Privy Council confirms automatic right to appeal disclosure provisions within freezing orders

On 17 June, Harneys published a briefing about a BVI case before the UK Privy Council (the highest court of appeal for the BVI, as well as the Crown Dependencies and other British Commonwealth territories).  The Court held that leave is not required to appeal disclosure provisions within a freezing injunction.

https://www.harneys.com/our-blogs/offshore-litigation/2019/06/17/privy-council-confirms-automatic-right-to-appeal-disclosure-provisions-within-freezing-orders

Lloyds Bank Freezes Thousands of Jersey Accounts in Compliance Crackdown

KYC 360 on 24 June reported that the Lloyds Banking Group has frozen the Jersey-based accounts of approximately 8,000 offshore clients after they failed to submit identifying documents for 3 years.  The article says that the UK-based bank began to bolster its AML compliance controls at its Jersey-based international banking arm at the end of 2018.

https://www.riskscreen.com/kyc360/news/lloyds-freezes-thousands-of-jersey-accounts-in-compliance-crackdown-report/

US and Canada sanction Nicaraguan officials over human rights       

KYC 360 reported on 24 June that the US had designated 4 officials,  tying them to a tough crackdown on street demonstrations that began in Nicaragua country in April 2018.  Canada didn’t immediately identify who its sanctions were aimed at, saying only that they are “key members” of Nicaragua’s government.

https://www.riskscreen.com/kyc360/news/us-canada-sanction-nicaraguan-officials-over-human-rights/

Directors’ company obligations trump family interests 

In an article from Herbert Smith Freehills on 21 June, the firm considers a recent High Court case and says that directors must be loyal to and to act in the best interests of the company of which they are directors.  Whilst directors in a majority family owned business may “owe” moral duties to their family members which may conflict with their duties owed to the company, they must prioritise the interests of the company.  It says that the case discussed is a timely reminder of these rules. The firm says that the key takeaway of the case is that whenever a family business concerns a corporation, it is subject to the regime of corporate law and directors are bound by stringent directors’ duties, including fiduciary duties and statutory duties under the Companies Act 2006. 

https://hsfnotes.com/pwtd/2019/06/21/directors-company-obligations-trump-family-interests/#page=1

Combating corruption in Latin America – the Capacity to Combat Corruption (CCC) Index

On 24 June, Control Risks reported that corruption has been a critical hurdle for Latin American countries for a long time, denting growth, weakening democracy and governance, and undermining the human rights of millions of citizens. Now the Americas Society/Council of the Americas (AS/COA) and Control Risks have announced the launch of the Capacity to Combat Corruption (CCC) Index, a new tool assessing Latin American countries’ ability to uncover, punish and deter corruption.  The report and Index is available at –

https://www.americasquarterly.org/content/capacity-combat-corruption-index

Switzerland Says $133 Million Belonging To Gulnara Karimova To Be Sent To Uzbekistan 

On 24 June, Rferl reported that Switzerland said it would send $133 million in seized assets linked to Gulnara Karimova to Uzbekistan, amid a continuing international struggle over the fate of more than a billion dollars tied to the elder daughter of the late president of Uzbekistan.

https://www.rferl.org/a/swiss-authorities-seize-133-million-belonging-to-gulnara-karimova/30017188.html

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OFAC DESIGNATES 9 NEW NAMES UNDER IRAN SANCTIONS, INCLUDING AYATOLLAH, AND AMENDS ENTRY FOR ISLAMIC REVOLUTIONARY GUARD CORPS

On 24 June, OFAC announced that it had designated  senior IRGC commanders said to be behind Iran’s “destructive and destabilising activities”.  These are 8 senior commanders of Navy, Aerospace, and Ground Forces of the Islamic Revolutionary Guards Corps (IRGC), who are said to sit atop a bureaucracy that supervises the IRGC’s regional activities.  Also designated is the country’s Supreme Leader. A new Executive Order  imposes asset freezes and blocking measures on Iran’s Supreme Leader Ali Khamenei and his office, anyone appointed by him or his office as state officials.  The US has said Iran’s Foreign Minister Zarif will be sanctioned shortly.

https://home.treasury.gov/news/press-releases/sm716

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190624.aspx

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THINGS YOU MAY HAVE MISSED – JUNE 22/23

22 June 2019

OFAC Sanctions Members of Nicaraguan President Ortega’s Inner Circle

On 21 June, OFAC announced sanctions against 4 Nicaraguan government officials – Gustavo Eduardo Porras Cortes, Orlando Jose Castillo Castillo, Sonia Castro Gonzalez, and Oscar Salvador Mojica Obregonfour.  The sanctions are said to target Nicaraguan government officials who persecute Nicaraguan citizens exercising their fundamental freedoms, enact repressive laws, silence news media, and deny medical care to the Nicaraguan people.

https://home.treasury.gov/news/press-releases/sm715

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190621.aspx

No-deal Brexit could put UK at greater risk from falsified medicines

On 21 June, the Pharmaceutical Journal carried an article saying that the executive director of the Healthcare Distribution Association has told MPs on the Exiting the European Union Committee that a no-deal Brexit would make medicines in the UK “less safe” – being “unplugged” from the Falsified Medicines Directive (FMD).  

https://www.pharmaceutical-journal.com/20206697.article

Walmart to pay £282 million over foreign corruption allegations

The Wall Street Journal on 21 June reported that a deal requires Walmart to return $144 million in gains to the SEC and pay a $138 million penalty to theDoJ.  The SEC said the company’s actions violated the Foreign Corrupt Practices Act, which effectively forbids US-listed companies from paying bribes to win business abroad.

Trivago sued in US over business in Cuba

On 21 June, the EU Sanctions Blog and others reported that Trivago (an online booking platform), a subsidiary of Expedia, had been sued in the US under Title III of the Helms-Burton Act for “unlawful trafficking” of a hotel in Cienfugos, Cuba, which was formerly owned by a Cuban family and expropriated under the Castro regime.

https://www.europeansanctions.com/2019/06/expedias-trivago-latest-company-sued-under-helms-burton-act/

Why it’s time to rethink the looming ban on North Koreans working overseas

An opinion piece on NK News on 21 June puts forward this argument, saying that the measure, scheduled to take effect from December 22nd, will harm regular people and work against US interests.  

https://www.nknews.org/2019/06/why-its-time-to-rethink-the-looming-ban-on-north-koreans-working-overseas/

Court of Appeal – UK should not have granted export licences for the sale or transfer of arms or military equipment to Saudi Arabia that could be used in Yemen

The EU Sanctions Blog reported on 21 June that the Court had said that the Secretary of State’s own arms export policy precludes the grant of arms export licences where there is a “clear risk” that the arms might be used to commit a serious violation of international humanitarian law, but that the Government had not even attempted to analyse whether past violations had taken place or whether Saudi Arabian law prohibited violations and it remitted the case to the Government to reconsider.

https://www.europeansanctions.com/2019/06/court-says-uk-arms-export-licences-to-saudi-arabia-unlawful/

Cyber Adversaries Targeting Commercial Vessels, US Coast Guard Warns

On 17 June, Homeland Security Today reported that the USCG had warned the maritime industry in a late May Marine Safety Information Bulletins (MSIB) of recent email phishing and malware intrusion attempts that targeted commercial vessels.  It said that cyber adversaries are attempting to gain sensitive information including the content of an official Notice of Arrival (NOA) using email addresses that pose as an official Port State Control (PSC) authority, and received reports of malicious software designed to disrupt shipboard computer systems.

https://www.hstoday.us/federal-pages/dhs/uscg/cyber-adversaries-targeting-commercial-vessels-coast-guard-warns/

US Sanctions and the EU Blocking Regulation: Issues of Legal Uncertainty

The London-based  Financial Markets Law Committee has published a report on extension of Regulation (EC) No 2271/96 protecting against the effects of the extra-territorial application of legislation adopted by a Third Country to cover Iran post-JCPOA.  The role of the Committee is to identify issues of legal uncertainty or misunderstanding, present and future, in the framework of the wholesale financial markets which might give rise to material risks and to consider how such issues should be addressed.  This paper examines the issues of legal uncertainty which arise under English law as a result of the amendment to the Blocking Regulation to cover certain re-imposed US sanctions on Iran, and seeks to illustrate particular areas of risk that the Committee has identified as a result of these uncertainties.    

http://fmlc.org/wp-content/uploads/2019/06/Report-U.S.-Sanctions-and-the-E.U.-Blocking-Regulation.pdf

OUTCOMES OF FATF PLENARY

On 21 June, FATF issued a news release containing details of the outcome of a week-long Plenary meeting in Orlando, where they celebrated the 30th Anniversary of FATF.  Outcomes included –

  • a public statement and a risk-approach guidance on virtual assets and virtual asset service providers;
  • Launch of a Strategic Review to analyse the progress made on effective implementation of AML/CFT measures, review the FATF/FSRB assessment processes, and identify drivers of positive change;
  • Discussion of the mutual evaluation reports of Greece and Hong Kong, China;
  • Re jurisdictions with strategic AML/CFT deficiencies – Serbia no longer subject to ongoing monitoring, but Panama is, and monitoring of Iran continues; with reviews of Brazil and Iceland progress; and
  • Approval of risk-based guidance for lawyers, accountants and TCSP

http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-plenary-june-2019.html

Report: FATF Actions to Identify and Disrupt ISIL, Al-Qaeda and Affiliates’ Financing

The 10th update of this mechanism was approved.  

http://www.fatf-gafi.org/publications/methodsandtrends/documents/fatf-action-against-terrorist-financing-june-2019.html

Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/guidance-rba-virtual-assets.html

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/public-statement-virtual-assets.html

Statement on Brazil and actions to remedy shortcomings identified in mutual evaluation

http://www.fatf-gafi.org/publications/mutualevaluations/documents/brazil-statement-june-2019.html

HBOS fined £46 million over bank fraud which saw small firms deliberately wrecked and the proceeds spent on prostitutes and holidays

The Daily Mail reported on 21 June that Britain’s biggest ever bank fraud was covered up by bosses at Halifax Bank of Scotland (HBOS).  Senior managers at the lender failed to alert the authorities about their suspicions for 2 years.

https://www.dailymail.co.uk/money/news/article-7168207/HBOS-fined-46m-covering-Britains-worst-bank-fraud.html

INTERPOL and Red Notices- How long does it take for a Red Notice to be processed?

An article from Estlund Law on 21 June says that there is no single answer to the question of how long each part of the process will take.  The duration of all those steps depends in large part on the member states. What is more, Red Notices are rarely publicly published, which makes it more difficult to know the general average duration of the full process.

https://www.jdsupra.com/legalnews/interpol-and-red-notices-how-long-does-36249/

US securities regulator opens fraud case on UK bitcoin firm

On 21 June, Out-Law published an article saying that the CFTC has filed a civil enforcement case in the New York courts against Control-Finance Ltd and its sole director, Benjamin Reynolds. The company fraudulently solicited customers to purchase and transfer bitcoin to them, claiming that they employed expert virtual currency traders who would earn daily profits on the bitcoin, according to the complaint.  The business also operated a fraudulent ‘affiliate’ scheme, through which they fraudulently promised to pay bonuses in bitcoin to people who referred new customers to the company, according to the complaint.

https://www.pinsentmasons.com/out-law/news/us-securities-regulator-opens-fraud-case-on-uk-bitcoin-firm

23 June 2019

Saudi Arabia becomes FATF member

On 23 June, The News International and others reported that Saudi Arabia has become the first Arab country to be granted full membership of FATF following the group’s Plenary in Orlando.

https://www.thenews.com.pk/print/488567-saudi-arabia-becomes-fatf-member

https://www.arabianbusiness.com/banking-finance/422641-saudi-arabia-becomes-full-member-of-money-laundering-watchdog

Huawei files lawsuit against the US Department of Commerce

Digit and others on 23 June reported that Chinese telecoms company Huawei is suing the Department over seized telecommunications equipment.  In 2017, Huawei had sent the equipment in question to a lab in California, but officials seized the equipment in Alaska, as it was on the way back to China.  This was said to have been done to verify whether an export licence was needed, but Huawei alleges that at the time, no export licence was required and that Huawei had presented all requested information to the officials.

https://www.digit.in/news/mobile-phones/huawei-files-lawsuit-against-the-us-department-of-commerce-48733.html

Malta: MFSA and FIAU issue guidelines to allay banks’ fears over fintech customers and AML/CFT problems

On 23 June, the Times of Malta reported that a 28-page guidance document has been issued jointly by the MFSA and the FIAU in a bid to ease the bottlenecks for fintech companies who find it impossible to open bank accounts – as the government’s dream of Malta becoming the ‘Blockchain Island’ was said to be being held back by operators’ frustration.  It is said that the document is designed to assist institutions to acquire a better risk understanding of any such prospective customers. It is said that the guidelines should be seen as a way to explain the sector-specific risks and to complement banks’ own due diligence procedures. It stresses the importance of the jurisdictions involved, adding that if the jurisdiction was “a high risk or non-reputable one”, the operator might find that risk of their regulatory status might increase through the association.  The document is mainly aimed at blockchain, virtual currencies and artificial intelligence sectors. MFSA also published its ‘Guidance Notes on Cybersecurity’ as a minimum set of best practices and risk management procedures to effectively mitigate cyber risks.

https://timesofmalta.com/articles/view/mfsa-and-fiau-issue-guidelines-aimed-to-allay-banks-fears-over.716145

UAE rolls out AML platform developed by UN

On 23 June, The National reported on a new AML software system, making the UAE the first GCC country to use the platform developed by the United Nations Office on Drugs and Crime (UNODC).  The goAML system, which is used by 50 FIU around the world.  

https://www.thenational.ae/business/economy/uae-rolls-out-anti-money-laundering-platform-developed-by-un-1.878132

https://www.khaleejtimes.com/news/crime-and-courts/uae-first-to-launch-un-developed-anti-money-laundering-platform

Tunisia to be removed from the FATF blacklist in October

The Middle East Monitor on 22 June reported that Tunisia’s removal from the FATF blacklist also means removal from the EU blacklist, to which it was added in February 2018.

https://www.middleeastmonitor.com/20190622-tunisia-to-be-removed-from-money-laundering-blacklist-in-october/

More on PacNet: Man accused in US of flying money-laundered cash into Shannon Airport

The Irish Times on 22 June carried an article saying that a British man, Robert Paul Davis, is accused of flying large sums of cash into Shannon Airport on an aircraft in an alleged scheme to money-launder tens of millions of euro made from mass-mail fraud campaigns.  He, along with 3 other executives of Canadian-Irish payment-processing group PacNet Services has been charged by US prosecutors in Nevada in an alleged fraud. PacNet is alleged to have served as the middleman between banks and fraudulent mailers by collecting payments from the victims, depositing the cash into its bank accounts and then distributing the funds.  It says that the Criminal Assets Bureau (CAB) in Ireland has been investigating PacNet since 2016. Davis is accused of flying a PacNet aircraft on several occasions to pick up cash for a fraudulent PacNet mass-mail client from a caging service in the Netherlands and flying back to Ireland with the cash.  PacNet stopped processing payments in September 2016 when the US designated it a “significant transnational criminal organisation,” froze some of its assets and filed related criminal and civil charges against other defendants – but that designation was removed in October 2017.

https://www.irishtimes.com/business/man-accused-in-us-of-flying-money-laundered-cash-into-shannon-1.3933620

Statutory Instruments relating to Customs, Excise and VAT and the UK’s withdrawal from the EU

On 21 June, HMRC released updated information and links which it describes as necessary to ensure the UK’s Customs, VAT and Excise regimes will function in the event of leaving the EU without a deal.

https://www.gov.uk/government/publications/statutory-instruments-relating-to-eu-exit

“Inside job” is thieves chief tactic in cargo theft, says insurance study

On 21 June, BIFA reported that criminals are recruiting employees of targeted companies to gain data, cargo information, delivery routes and destinations and access to IT as security measures become more sophisticated, according to a cargo theft reports produced by marine insurer TT Club and the British Standards Institution (BSI) – saying that due diligence in recruiting and managing staff is paramount.  Theft from trucks once more accounts for the highest proportion at 84%. “Slash and grab” is the largest type of cargo theft at 26% globally, but with significant regional variations. Theft from trucks median value of the losses ranged from $19,000 in Asia, to $60,000 in Europe and North America to a high of $77,000 in South America.

The free report is available at –

https://www.ttclub.com/loss-prevention/publications/tt-club-bsi-cargo-theft-report-2018/

https://www.bifa.org/news/articles/2019/jun/inside-job-becomes-thieves-no-1-mo-in-cargo-theft-says-insurance-study?l=y

Ocean freight facing major ‘disruption’ this year

On 21 June, reporting a speech given at Multimodal 2019 in Birmingham, BIFA said that shipping lines face multiple changes and headwinds, while shippers will have to pay the ‘significant’ extra cost of new low-sulphur fuels.  The industry leader mentioned the escalating US-China trade war, global economic growth forecasts downgraded, and the challenge of introducing – and paying for – new low-sulphur fuels to meet the requirements of IMO 2020 regulations.  He also said that operations were being disrupted on the landside at ports around the world as ocean terminal utilisation levels had surged over the last decade – including higher peaks in demand and significant periods of under-utilisation   Global warming was a growing threat to global container operations due to the significant increase in the severity of weather, particularly in the rising number of hurricanes and typhoons which closed ports and halted supply chains.

https://www.bifa.org/news/articles/2019/jun/ocean-freight-facing-major-disruption-this-year?l=y

EU prepares ‘targeted’ sanctions on Turkey over gas drilling near Cyprus

The EU Observer on 21 June reported that the EU is preparing to punish Turkey for gas drilling off Cyprus as Turkey sent a second ship into a disputed zone.   EU leaders had earlier agreed a joint statement “strongly condemning Turkey’s continued illegal actions”. Sanctions options are said to include visa bans and asset freezes on Turkish individuals and companies doing the drilling, and/or freezing talks on an upgraded customs union or formally freezing talks on Turkey’s EU accession, which were suspended in practice in 2016 due to an authoritarian crackdown.

https://euobserver.com/foreign/145231

Updated EU list of non-cooperative jurisdictions for tax purposes

On 21 June, the EU Official Journal contained an update on the list.  It contains 11 states – American Samoa, Belize, Fiji, Guam, Marshall Islands, Oman, Samoa, Trinidad & Tobago, UAE, US Virgin Islands and Vanuatu.  An annex contains details of the state of play of the co-operation with the EU with respect to commitments taken to implement tax good governance principles of other jurisdictions.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2019.210.01.0008.01.ENG&toc=OJ:C:2019:210:TOC

CHINA: IMF DETAILED AML/CFT ASSESSMENT

On 21 June, the IMF published a report which provides a summary of the AML/CFT measures in place in the People’s Republic of China as at the date of the onsite visit in July 2018.  It analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of China’s AML/CFT system and provides recommendations on how the system could be strengthened.  It says that China has undertaken a number of initiatives since 2002 that have contributed positively to its understanding of risks, although some important gaps remain; and that its framework for domestic AML/CFT co-operation and coordination is well established.

https://www.imf.org/~/media/Files/Publications/CR/2019/1CHNEA2019001.ashx

Belgian Prince Henri de Croÿ and a “tax avoidance network”

The Brussel Times on 22 June carried a report saying that wealthy Belgians have managed to hide money from tax authorities and justice for years with the help of Prince Henri de Croÿ’s Belgian network, according to a survey published in Belgium.  40 individuals are said to have been identified by the journalists. These persons are said to have entrusted sums of up to €13 million to Henri de Croÿ, who enabled them to hide their money by way of secret accounts in the UAE, the Bahamas or Puerto Rico under the name of shell companies or by way of an international network of straw men.

https://www.brusselstimes.com/all-news/belgium-all-news/justice-belgium/59163/belgian-prince-henri-de-croy-tax-avoidance-network/

US ADDS 5 COMPANIES TO DENIED ENTITY LIST SUBJECT TO EXPORT CONTROL RESTRICTIONS

On 24 June, Sandler Travis Rosenberg reported that the Bureau of Industry & security had added 5 entities under the destination of China to the Entity List, which lists entities restricted from receiving US exports of goods controlled under the Export Administration Regulations. It also modified the listing for one entity under the destination of China.

https://www.strtrade.com/news-publications-BIS-entity-list-EAR-China-export-controls-062419.html

SWISS AGENCY RECOMMENDS REJECTION OF ‘FINANCING OF WAR MATERIELS’ BAN

The Journal of Export Control has reported that SECO, the Swiss government agency that is responsible for export control and sanctions implementation, published a statement recommending that a proposed ban on the financing of war materiel producers, should be rejected.  It says that were such a ban implemented, it would be ‘ineffective’ and ‘harmful’, particularly to Switzerland’s mechanical, electrical and metal industry. It had been proposed that the Swiss National Bank, charitable foundations, and state and occupational pension funds, should be prohibited from financing companies that generate more than 5% of their annual turnover from the production of war materiel.

https://www.worldecr.com/news/seco-recommends-rejection-of-financing-of-war-materiels-ban/

US SUPREME COURT RULES THAT NORTH CAROLINA CANNOT TAX OUT OF STATE TRUST

On 21 June, Jurist reported that North Carolina cannot tax a trust based only on a trust beneficiary’s residence in the state, in a case about whether a trust beneficiary resident in the state of North Carolina established sufficient connections with the state to make the out-of-state trust’s income taxable.

https://www.jurist.org/news/2019/06/us-supreme-court-prevents-north-carolina-from-taxing-out-of-state-trust/

Interpol: Expired and unsanitary foods taken out of circulation during Operation Opson VIII

A news release from Interpol on 21 June advised that more than $117 million worth of potentially dangerous fake food and drink was seized in the latest Operation Opson, which also saw 672 individuals arrested worldwide.  Tampered expiry dates on cheese and chicken, controlled medicines added to drink products and meat stored in unsanitary conditions were some of the offences discovered during the operation.  For example, in Zimbabwe nearly 14,000 litres of soft drinks was seized which contained high levels of the active ingredient in erectile dysfunction medication. In addition to the fake food and drink, other illicit products recovered included cosmetics, medicines and medical devices, footwear, clothing, handbags, wristwatches, sunglasses, soap and toothpaste worth and estimated $6.1 million.

https://www.interpol.int/News-and-Events/News/2019/Illicit-food-and-drink-seized-in-global-operation

https://www.europol.europa.eu/newsroom/news/over-%E2%82%AC100-million-worth-of-fake-food-and-drinks-seized-in-latest-europol-interpol-operation

15 arrested in France and Belgium for cigarette smuggling

On 21 June, a news release from Europol advised that members of a Russian-speaking organised crime group behind an illegal cigarette smuggling business had been arrested, with 15 individuals, including the ringleaders, arrested and 2 million cigarettes seized.  This follows a complex investigation looking into the activities of this criminal network, composed mainly of Armenian and Ukrainian nationals, which smuggled cigarettes and other prohibited goods from Belgian to the Paris region and Western France.

https://www.europol.europa.eu/newsroom/news/15-arrested-in-france-and-belgium-for-cigarette-smuggling

Bulgarian customs to auction illegal refrigerant

The Cooling Post website on 21 June reported that over 10 tonnes of seized refrigerant, imported outside of the EU quota system in illegal disposable cylinders, is to be auctioned to the general public by Bulgarian customs authorities.  It says that the news will shock the market at a time when the legitimate European air conditioning and refrigeration industry is struggling to stem the tide of illegal black market HFC refrigerants. The majority of this illegal trade uses disposable (non-refillable) cylinders, which have been banned in Europe since 2007.

https://www.coolingpost.com/world-news/bulgarian-customs-to-auction-illegal-refrigerant/

Former Interpol President Meng Hongwei Admits Taking $2 Million In Bribes

Baker McKenzie on 21 June reported that the Chinese former Interpol president has appeared in court in northern China, pleading guilty to taking over $2 million in bribes.  The court adjourned and said Meng would be sentenced at a later date.

http://www.riskandcompliancehub.com/former-interpol-president-meng-hongwei-admits-taking-us2-million-in-bribes/

Former CEO Of Alaska-Based Fibre Optic Cable Company Sentenced To 5 Years In Prison for fraud

Baker McKenzie on 21 June reported that the woman involved and who once headed a firm working on a project to link several north-west Alaska communities has entered a guilty plea, after federal prosecutors said she forged potential clients’ signatures on contracts as part of a $250 million scheme.

http://www.riskandcompliancehub.com/former-ceo-of-alaska-based-fiber-optic-cable-company-sentenced-to-5-years-in-prison/

Mexico crime groups are targeting Australia, where high methamphetamine prices are attracting traffickers

On 21 June, Insight Crime reported that Mexican crime groups are targeting Australia, where high methamphetamine prices are attracting traffickers willing to negotiate the long and difficult journey with other syndicates.  This follows the largest drug seizure in Australia’s history, with an estimated worth of $1.29 billion. Australia is home to a large and highly profitable drug market, particularly of synthetic drugs.

https://www.insightcrime.org/news/analysis/mexico-australia-meth-connection-reveals-fresh-crime-dynamics/

FACTSHEET: THE INTERNET OF THINGS

One of a series of new factsheets published by the Belfer Center for Science and International Affairs at Harvard Kennedy School.  It starts by saying that the Internet of Things (IoT) generally refers to a network of smart devices that can continuously sense or interact with their environment. These devices are able to communicate and respond to information that they gather, enabling the system to facilitate activities, streamline processes, and inform decision-making.  It examines the key features and applications and market developments. It also considers security and privacy concerns, governance and regulation, guidance and policy questions.

https://www.belfercenter.org/sites/default/files/2019-06/TechFactSheet/iot%20-%205.pdf

The Impact of the Qatar Crisis – and the Saudi, Bahrain, UAE embargo

On 30 May, Chatham House published a briefing saying that since 2017 Qatar has been subject to a boycott by Saudi Arabia, the UAE, Bahrain and Egypt (the Arab Quartet), creating a deep rift in a region already beset by civil wars and insurgencies.  This paper examines the causes and dynamics of this dispute in detail and identifies elements required to reach a solution.

https://www.chathamhouse.org/sites/default/files/publications/research/2019-05-30-Gulf%20Crisis_0.pdf

ANALYSIS OF UK COURT OF APPEAL DECISION THAT THE DECISION OF THEUK TO SELL ARMS TO SAUDI ARABIA WERE DONE IMPROPERLY AND INSTRUCTING THE GOVERNMENT TO REVIEW DECISIONS

The Forum on the Arms Trade has provided links to analysis from various organisations of the recent decision of the Court.  

https://www.forumarmstrade.org/

Strengthening Competitiveness of the Internal Market by Developing the EU Customs Union and its Governance

On 15 May, the EU published a report which  summarises the discussion that took place at the workshop of the same name.  

http://www.europarl.europa.eu/RegData/etudes/IDAN/2019/638400/IPOL_IDA(2019)638400_EN.pdf

Trade wars in the global value chain era

On 20 June, VOX, the CEPR Policy Portal, published an article saying that the nature of global commerce has changed dramatically over the past 40 years, with the meteoric rise of global value chain trade.  It builds on insights from recent research to identify 3 critical dimensions of global value chain trade that promise to make today’s trade wars more economically costly and more politically complex than previous trade wars.

https://voxeu.org/article/trade-wars-global-value-chain-era

Featured

Bulgarian customs to auction illegal refrigerant

The Cooling Post website on 21 June reported that over 10 tonnes of seized refrigerant, imported outside of the EU quota system in illegal disposable cylinders, is to be auctioned to the general public by Bulgarian customs authorities.  It says that the news will shock the market at a time when the legitimate European air conditioning and refrigeration industry is struggling to stem the tide of illegal black market HFC refrigerants. The majority of this illegal trade uses disposable (non-refillable) cylinders, which have been banned in Europe since 2007.

https://www.coolingpost.com/world-news/bulgarian-customs-to-auction-illegal-refrigerant/

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CHINA: IMF DETAILED AML/CFT ASSESSMENT

On 21 June, the IMF published a report which provides a summary of the AML/CFT measures in place in the People’s Republic of China as at the date of the onsite visit in July 2018.  It analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of China’s AML/CFT system and provides recommendations on how the system could be strengthened.  It says that China has undertaken a number of initiatives since 2002 that have contributed positively to its understanding of risks, although some important gaps remain; and that its framework for domestic AML/CFT co-operation and coordination is well established.

https://www.imf.org/~/media/Files/Publications/CR/2019/1CHNEA2019001.ashx


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Updated EU list of non-cooperative jurisdictions for tax purposes

On 21 June, the EU Official Journal contained an update on the list.  It contains 11 states – American Samoa, Belize, Fiji, Guam, Marshall Islands, Oman, Samoa, Trinidad & Tobago, UAE, US Virgin Islands and Vanuatu.  An annex contains details of the state of play of the co-operation with the EU with respect to commitments taken to implement tax good governance principles of other jurisdictions.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2019.210.01.0008.01.ENG&toc=OJ:C:2019:210:TOC

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EU prepares ‘targeted’ sanctions on Turkey over gas drilling near Cyprus

The EU Observer on 21 June reported that the EU is preparing to punish Turkey for gas drilling off Cyprus as Turkey sent a second ship into a disputed zone.   EU leaders had earlier agreed a joint statement “strongly condemning Turkey’s continued illegal actions”. Sanctions options are said to include visa bans and asset freezes on Turkish individuals and companies doing the drilling, and/or freezing talks on an upgraded customs union or formally freezing talks on Turkey’s EU accession, which were suspended in practice in 2016 due to an authoritarian crackdown.

https://euobserver.com/foreign/145231

Featured

More on PacNet: Man accused in US of flying money-laundered cash into Shannon Airport

The Irish Times on 22 June carried an article saying that a British man, Robert Paul Davis, is accused of flying large sums of cash into Shannon Airport on an aircraft in an alleged scheme to money-launder tens of millions of euro made from mass-mail fraud campaigns.  He, along with 3 other executives of Canadian-Irish payment-processing group PacNet Services has been charged by US prosecutors in Nevada in an alleged fraud. PacNet is alleged to have served as the middleman between banks and fraudulent mailers by collecting payments from the victims, depositing the cash into its bank accounts and then distributing the funds.  It says that the Criminal Assets Bureau (CAB) in Ireland has been investigating PacNet since 2016. Davis is accused of flying a PacNet aircraft on several occasions to pick up cash for a fraudulent PacNet mass-mail client from a caging service in the Netherlands and flying back to Ireland with the cash.  PacNet stopped processing payments in September 2016 when the US designated it a “significant transnational criminal organisation,” froze some of its assets and filed related criminal and civil charges against other defendants – but that designation was removed in October 2017.

https://www.irishtimes.com/business/man-accused-in-us-of-flying-money-laundered-cash-into-shannon-1.3933620

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Malta: MFSA and FIAU issue guidelines to allay banks’ fears over fintech customers and AML/CFT problems

On 23 June, the Times of Malta reported that a 28-page guidance document has been issued jointly by the MFSA and the FIAU in a bid to ease the bottlenecks for fintech companies who find it impossible to open bank accounts – as the government’s dream of Malta becoming the ‘Blockchain Island’ was said to be being held back by operators’ frustration.  It is said that the document is designed to assist institutions to acquire a better risk understanding of any such prospective customers. It is said that the guidelines should be seen as a way to explain the sector-specific risks and to complement banks’ own due diligence procedures. It stresses the importance of the jurisdictions involved, adding that if the jurisdiction was “a high risk or non-reputable one”, the operator might find that risk of their regulatory status might increase through the association.  The document is mainly aimed at blockchain, virtual currencies and artificial intelligence sectors. MFSA also published its ‘Guidance Notes on Cybersecurity’ as a minimum set of best practices and risk management procedures to effectively mitigate cyber risks.

https://timesofmalta.com/articles/view/mfsa-and-fiau-issue-guidelines-aimed-to-allay-banks-fears-over.716145

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OUTCOMES OF FATF PLENARY – including Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

On 21 June, FATF issued a news release containing details of the outcome of a week-long Plenary meeting in Orlando, where they celebrated the 30th Anniversary of FATF.  Outcomes included –

  • a public statement and a risk-approach guidance on virtual assets and virtual asset service providers;
  • Launch of a Strategic Review to analyse the progress made on effective implementation of AML/CFT measures, review the FATF/FSRB assessment processes, and identify drivers of positive change;
  • Discussion of the mutual evaluation reports of Greece and Hong Kong, China;
  • Re jurisdictions with strategic AML/CFT deficiencies – Serbia no longer subject to ongoing monitoring, but Panama is, and monitoring of Iran continues; with reviews of Brazil and Iceland progress; and
  • Approval of risk-based guidance for lawyers, accountants and TCSP

http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-plenary-june-2019.html

Report: FATF Actions to Identify and Disrupt ISIL, Al-Qaeda and Affiliates’ Financing

The 10th update of this mechanism was approved.  

http://www.fatf-gafi.org/publications/methodsandtrends/documents/fatf-action-against-terrorist-financing-june-2019.html

Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/guidance-rba-virtual-assets.html

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/public-statement-virtual-assets.html

Statement on Brazil and actions to remedy shortcomings identified in mutual evaluation

http://www.fatf-gafi.org/publications/mutualevaluations/documents/brazil-statement-june-2019.html

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US Sanctions and the EU Blocking Regulation: Issues of Legal Uncertainty

The London-based  Financial Markets Law Committee has published a report on extension of Regulation (EC) No 2271/96 protecting against the effects of the extra-territorial application of legislation adopted by a Third Country to cover Iran post-JCPOA.  The role of the Committee is to identify issues of legal uncertainty or misunderstanding, present and future, in the framework of the wholesale financial markets which might give rise to material risks and to consider how such issues should be addressed.  This paper examines the issues of legal uncertainty which arise under English law as a result of the amendment to the Blocking Regulation to cover certain re-imposed US sanctions on Iran, and seeks to illustrate particular areas of risk that the Committee has identified as a result of these uncertainties.    

http://fmlc.org/wp-content/uploads/2019/06/Report-U.S.-Sanctions-and-the-E.U.-Blocking-Regulation.pdf

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Court of Appeal – UK should not have granted export licences for the sale or transfer of arms or military equipment to Saudi Arabia that could be used in Yemen

The EU Sanctions Blog reported on 21 June that the Court had said that the Secretary of State’s own arms export policy precludes the grant of arms export licences where there is a “clear risk” that the arms might be used to commit a serious violation of international humanitarian law, but that the Government had not even attempted to analyse whether past violations had taken place or whether Saudi Arabian law prohibited violations and it remitted the case to the Government to reconsider.

https://www.europeansanctions.com/2019/06/court-says-uk-arms-export-licences-to-saudi-arabia-unlawful/

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OFAC Sanctions Members of Nicaraguan President Ortega’s Inner Circle

On 21 June, OFAC announced sanctions against 4 Nicaraguan government officials – Gustavo Eduardo Porras Cortes, Orlando Jose Castillo Castillo, Sonia Castro Gonzalez, and Oscar Salvador Mojica Obregonfour.  The sanctions are said to target Nicaraguan government officials who persecute Nicaraguan citizens exercising their fundamental freedoms, enact repressive laws, silence news media, and deny medical care to the Nicaraguan people.

https://home.treasury.gov/news/press-releases/sm715

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190621.aspx

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THINGS YOU MAY HAVE MISSED – JUNE 19/21

STILL AWAY AND RELYING ON (UNRELIABLE WI-FI AND A LAPTOP, SO A LOT OF CATCHING UP TO DO WHEN EVENTUALLY HOME…)

19 June 2019

JAPAN POST BANK TO RESTRICT REMITTANCES AHEAD OF FATF EVALUATION

KYC 360 on 19 June reported that Japan Post Bank will soon limit cross-border remittances in an effort to bolster its AML controls,  In its last report, FATF had highlighted remittance-related frauds perpetrated by Japanese organised crime groups and noted gaps in the country’s AML reporting requirements.  Criminal organisations are suspected of using foreign students to remit money overseas through licensed financial institutions.

https://www.riskscreen.com/kyc360/news/japan-post-bank-to-restrict-remittances-ahead-of-fatf-evaluation-reports/

16 TONS OF COCAINE WORTH $1 BILLION SEIZED IN PHILADELPHIA

On 18 June, CBS News and others reported that more than $1 billion worth of cocaine had been seized at the Philadelphia Port, involving approximately 16.5 tons from a cargo ship docked at the Packer Marine Terminal.  It is the third largest in US history. The ship began its journey in Chile.

https://www.cbsnews.com/news/philadelphia-drug-bust-feds-seize-over-1-billion-cocaine-today-port-live-updates-2019-06-18/

BENEFICIAL OWNERSHIP REGISTERS IN CROWN DEPENDENCIES TO BE MADE PUBLIC

On 18 June, it was reported that the beneficial ownership registers, currently only accessible by local authorities in the UK’s Crown Dependencies, and which show the ultimate owner of a company, are to be made available to the EU, businesses, and the general public by 2023.  In 2021 the Dependencies plan to merge their registers with their EU equivalents; in 2022: businesses will be given access in order to do their “due diligence”; and in 2023 the governments of Guernsey, Jersey and the Isle of Man will bring legislation before their parliaments to make their registers publicly available.

https://www.bbc.co.uk/news/world-europe-guernsey-48677083

https://www.manxradio.com/news/isle-of-man-news/crown-dependencies-to-improve-beneficial-ownership-transparency/

STATEMENTS FROM ISLE OF MAN, JERSEY AND GUERNSEY ON BENEFICIAL OWNERSHIP REGISTERS AND MEETING WITH UK PARLIAMENTARIANS

On 19 June, 2 news releases from the Isle of Man confirmed reports that the 3 jurisdictions are to implement a 3-stage process to work towards making their beneficial ownership registers open to the public.  One also mentioned a meeting with UK parliamentarians, and Prime Minister Theresa May saying that she was very pleased to see the announcement from Jersey, Guernsey and the Isle of Man and indeed that the UK would continue to work with the Overseas Territories to ensure that they do follow those standards and open those books, so that people can see who is actually owning those companies.

https://www.gov.im/news/2019/jun/19/meetings-with-uk-parliamentarians-on-beneficial-ownership-registers/

https://www.gov.im/news/2019/jun/19/joint-statement-by-governments-of-guernsey-jersey-and-isle-of-man-on-beneficial-ownership-registers/

OFAC DESIGNATES RUSSIAN FINANCIAL INSTITUTION SUPPORTING NORTH KOREAN SANCTIONS EVASION

On 19 June, OFAC announced the designation of a Russian entity that has assisted North Korea in evading sanctions to access the international financial system.  It has targeted Russian-registered Russian Financial Society for having provided, or attempted to provide, financial, material, technological, or other support for, or goods or services in support of, US-designated Dandong Zhongsheng Industry & Trade Co Ltd, an entity that is owned and controlled by, directly or indirectly, US- and UN-designated Foreign Trade Bank (FTB), North Korea’s primary foreign exchange bank.

https://home.treasury.gov/news/press-releases/sm712

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190619.aspx

OFAC WILL ONLY GIVE CREDIT TO FINES PAID TO OTHER AGENCIES FOR SANCTIONS VIOLATIONS WHICH WOULD ALSO GIVE RISE TO AN OFAC PENALTY WHEN “THE SAME PATTERN OF CONDUCT FOR THE SAME PERIOD OF TIME” OCCURS

On 19 June, the EU Sanctions Blog reported a change of policy from OFAC.

https://www.europeansanctions.com/2019/06/ofac-changes-approach-to-cross-agency-penalties/

HOW 7.4 TONS OF VENEZUELAN GOLD VANISHED FROM UGANDA

On 19 June, the Wall Street Journal carried an article saying that on 2 early-March flights, at least 7.4 tons of gold with a market value over $300 million moved from Venezuela to a refinery in Uganda, it appearing that the Maduro government exported the ingots.  It says that gold sales said to be one of the government’s final financial lifelines. The gold that arrived in Entebbe passed through African Gold Refinery Ltd. in a compound at an international airport before being exported to the Middle East, Ugandan police say.

https://www.wsj.com/articles/how-7-4-tons-of-venezuelas-gold-landed-in-africaand-vanished-11560867792

MARITIME ANTI-CORRUPTION NETWORK TO DEVELOP INTERNATIONAL PORT INTEGRITY INDEX

On 19th June, Maritime Executive reported that the Maritime Anti-Corruption Network (MACN – a global business network of over 110 companies) has announced a new partnership with the Ministry of Foreign Affairs of Denmark to develop the first ever Global Port Integrity Index and to scale up its collective action activities in West Africa. The Index will provide an overview and comparison of illicit demands in ports around the world and will be based on the unique first-hand data gathered from captains calling port around the world through MACN’s Anonymous Incident Reporting Mechanism.  

https://maritime-executive.com/article/maritime-anti-corruption-network-to-develop-port-integrity-index

21 JUNE 2019

US charges 4 ex-executives at Canadian payments firm PacNet with fraud              

On 21 June, KYC 360 reported that the DoJ had announced criminal charges accusing 4 former executives of the Canadian payment processor PacNet Services Ltd of running an international mail fraud scheme.  PacNet’s founder Rosanne Day, 51, and her colleagues Robert Paul Davis, 63; Genevieve Renee Frappier, 49; and Miles Kelly, 55, were accused in a 41-count indictment of helping make the Vancouver-based company the “payment processor of choice” for fraudulent mass mailers around the world.

https://www.riskscreen.com/kyc360/news/u-s-charges-four-ex-executives-at-canadian-payments-firm-pacnet-with-fraud/

https://www.justice.gov/opa/pr/four-executives-canadian-payment-processor-charged-fraud-and-money-laundering

Law Commission report on SAR regime – position on UK cannabis investments remains unclear                             

On 19 June, MacFarlanes published an article about the recent report by the UK Law Commission on the UK’s SAR regime and   partly in response to calls for reform that will help manage this flood of SAR.  Whilst saying that there are many interesting recommendations made by the Law Commission, it says it does not assist re how POCA places UK investors at risk of committing a money laundering offence when they invest in the (now very significant) legal cannabis industry abroad, for example, in Canada.  It says that the ambiguous legal framework observed by MacFarlanes in January and by UK Finance in relation to this issue therefore remains in place and the UK’s finance sector has not been given the clarity it appears to be seeking.

https://blog.macfarlanes.com/post/102fma8/the-law-commission-reports-on-the-sar-regime-but-the-position-on-cannabis-invest

Russia Removes Crimean Ownership Data from Public Register

KYC 360 reported on 21 June that the Russian Federation had removed identifying information for Crimean companies from its public corporate register, according to OCCRP, reversing a prior decision by the Russian government to publish corporate ownership data following the annexation.

https://www.riskscreen.com/kyc360/news/russia-removes-crimean-ownership-data-from-public-register-report/

Suspected Terrorists Exploit UN Loophole to Reclaim Frozen Funds

On 21 June, KYC 360 reported a Wall Street Journal story about alleged misuse of UN rules that permit blacklisted individuals can request to take back a portion of their frozen money in order to meet essential living expenses on the condition that their home countries advocate for, and oversee, the transfers.  The requests are submitted as itemised budgets for food, rent and other expenses.

https://www.riskscreen.com/kyc360/news/blacklisted-terrorists-exploiting-un-loophole-to-reclaim-frozen-funds-wsj/

Italian oil giant Eni rejected a cargo of crude that bore the hallmarks of Iranian oil

On 19 June, the Wall Street Journal reported that the  cargo, which was intended for the Milazzo refinery in Sicily, remains on board a Liberia-flagged vessel named White Moon, after Eni said the specifications didn’t match those of its contract for Iraqi oil.  The ship’s documents show that the cargo, which Eni bought from the trading arm of Nigeria’s Oando PLC, was Iraqi.

https://www.wsj.com/articles/suspected-iranian-oil-caught-in-sanctions-trap-11560966215

Blockchain in cases of fraud and corporate insolvency

An article from Carey Olsen on 18 June sets out to explore some of the less-publicised potential uses of blockchain technology in the financial services sector and, in particular, how the technology might assist when things go wrong, such as in cases of fraud and corporate insolvency.

https://www.careyolsen.com/articles/blockchain-cases-fraud-and-corporate-insolvency

Malta: MFSA & FIAU issue Guidelines on Account Opening for Fintechs

On 19 June, GTG Advocates published an article saying that, after consultation, the 2 agencies have published  ‘Guidance for Credit Institutions, Payment Institutions and Electronic Money Institutions opening accounts for FinTechs’ – intended to provide further clarity to institutions approached by operators in the Fintech sphere with the aim of making bank account opening a smoother process.

https://www.gtgadvocates.com/mfsa-fiau-issue-guidelines-on-account-opening-for-fintechs/

Vigilance Needed to Protect US from Swine Fever and Agroterrorism

Homeland Security Today on 19 June reported calls from officials in the US saying that border vigilance against Chinese pork imports — even a visitor bringing back a pack of infected jerky — is crucial to keep a pathogen from causing economic ruin.  The hemorrhagic virus, which one researcher at the conference dubbed “Ebola for pigs,” cannot be spread to humans but China, which has been battling a swine fever outbreak since August, has had to cull hundreds of thousands of pigs. The virus can survive up to 180 days in low-temperature-cured jerky.  The article also warns that 61% of diseases that affect humans have a zoonotic origin, and zoonotic diseases account for 70% of emerging diseases.

https://www.hstoday.us/subject-matter-areas/pandemic-biohazard/vigilance-needed-to-protect-u-s-from-swine-fever-and-agroterrorism-warns-usda-homeland-security/

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Italian oil giant Eni rejected a cargo of crude that bore the hallmarks of Iranian oil

On 19 June, the Wall Street Journal reported that the  cargo, which was intended for the Milazzo refinery in Sicily, remains on board a Liberia-flagged vessel named White Moon, after Eni said the specifications didn’t match those of its contract for Iraqi oil.  The ship’s documents show that the cargo, which Eni bought from the trading arm of Nigeria’s Oando PLC, was Iraqi.

https://www.wsj.com/articles/suspected-iranian-oil-caught-in-sanctions-trap-11560966215

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US charges 4 ex-executives at Canadian payments firm PacNet with fraud

On 21 June, KYC 360 reported that the DoJ had announced criminal charges accusing 4 former executives of the Canadian payment processor PacNet Services Ltd of running an international mail fraud scheme.  PacNet’s founder Rosanne Day, 51, and her colleagues Robert Paul Davis, 63; Genevieve Renee Frappier, 49; and Miles Kelly, 55, were accused in a 41-count indictment of helping make the Vancouver-based company the “payment processor of choice” for fraudulent mass mailers around the world.

https://www.riskscreen.com/kyc360/news/u-s-charges-four-ex-executives-at-canadian-payments-firm-pacnet-with-fraud/

https://www.justice.gov/opa/pr/four-executives-canadian-payment-processor-charged-fraud-and-money-laundering

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MARITIME ANTI-CORRUPTION NETWORK TO DEVELOP INTERNATIONAL PORT INTEGRITY INDEX

On 19th June, Maritime Executive reported that the Maritime Anti-Corruption Network (MACN – a global business network of over 110 companies) has announced a new partnership with the Ministry of Foreign Affairs of Denmark to develop the first ever Global Port Integrity Index and to scale up its collective action activities in West Africa. The Index will provide an overview and comparison of illicit demands in ports around the world and will be based on the unique first-hand data gathered from captains calling port around the world through MACN’s Anonymous Incident Reporting Mechanism.  

https://maritime-executive.com/article/maritime-anti-corruption-network-to-develop-port-integrity-index

 

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HOW 7.4 TONS OF VENEZUELAN GOLD VANISHED FROM UGANDA

On 19 June, the Wall Street Journal carried an article saying that on 2 early-March flights, at least 7.4 tons of gold with a market value over $300 million moved from Venezuela to a refinery in Uganda, it appearing that the Maduro government exported the ingots.  It says that gold sales said to be one of the government’s final financial lifelines. The gold that arrived in Entebbe passed through African Gold Refinery Ltd. in a compound at an international airport before being exported to the Middle East, Ugandan police say.

https://www.wsj.com/articles/how-7-4-tons-of-venezuelas-gold-landed-in-africaand-vanished-11560867792

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OFAC DESIGNATES RUSSIAN FINANCIAL INSTITUTION SUPPORTING NORTH KOREAN SANCTIONS EVASION

On 19 June, OFAC announced the designation of a Russian entity that has assisted North Korea in evading sanctions to access the international financial system.  It has targeted Russian-registered Russian Financial Society for having provided, or attempted to provide, financial, material, technological, or other support for, or goods or services in support of, US-designated Dandong Zhongsheng Industry & Trade Co Ltd, an entity that is owned and controlled by, directly or indirectly, US- and UN-designated Foreign Trade Bank (FTB), North Korea’s primary foreign exchange bank.

https://home.treasury.gov/news/press-releases/sm712

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190619.aspx

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STATEMENTS FROM ISLE OF MAN, JERSEY AND GUERNSEY ON BENEFICIAL OWNERSHIP REGISTERS AND MEETING WITH UK PARLIAMENTARIANS

On 19 June, 2 news releases from the Isle of Man confirmed reports that the 3 jurisdictions are to implement a 3-stage process to work towards making their beneficial ownership registers open to the public.  One also mentioned a meeting with UK parliamentarians, and Prime Minister Theresa May saying that she was very pleased to see the announcement from Jersey, Guernsey and the Isle of Man and indeed that the UK would continue to work with the Overseas Territories to ensure that they do follow those standards and open those books, so that people can see who is actually owning those companies.

https://www.gov.im/news/2019/jun/19/meetings-with-uk-parliamentarians-on-beneficial-ownership-registers/

https://www.gov.im/news/2019/jun/19/joint-statement-by-governments-of-guernsey-jersey-and-isle-of-man-on-beneficial-ownership-registers/

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BENEFICIAL OWNERSHIP REGISTERS IN CROWN DEPENDENCIES TO BE MADE PUBLIC

On 18 June, it was reported that the beneficial ownership registers, currently only accessible by local authorities in the UK’s Crown Dependencies, and which show the ultimate owner of a company, are to be made available to the EU, businesses, and the general public by 2023.  In 2021 the Dependencies plan to merge their registers with their EU equivalents; in 2022: businesses will be given access in order to do their “due diligence”; and in 2023 the governments of Guernsey, Jersey and the Isle of Man will bring legislation before their parliaments to make their registers publicly available.

https://www.bbc.co.uk/news/world-europe-guernsey-48677083

https://www.manxradio.com/news/isle-of-man-news/crown-dependencies-to-improve-beneficial-ownership-transparency/

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 18

One again, off on wanderings, so the blog postings might be a bit hit and miss over the next 2 weeks…

18th June 2019

FORGED TRANSFER ORDERS: TYPOLOGIES

On 14 June, Elvinger Hoss & Prussen published an article saying that the FIU of the Luxembourg Prosecutor’s office published a note in April on forged transfer orders which particularly addresses their typologies and indicators.  The note also advises on what steps should be taken when a forged transfer order has been executed or is about to be. The typologies described in the note are: CEO fraud; falsified invoices; “man in the middle attack”; and the use of hacked emails.

http://www.mondaq.com/article.asp?articleid=815146

[free registration]

The note itself, in French, is available at –

https://justice.public.lu/dam-assets/fr/legislation/circulaires/CRF-note-faux-virements.pdf

US: BATTLE LINES DRAWN OVER NAVAL REACTOR FUEL

On 17th June, an article from the Federation of American Scientists was concerned with the debate in the US over the future fuel type for its nuclear-powered submarines and aircraft carriers – highly-enriched uranium (HEU) or low-enriched uranium (LEU) – and to reduce or eliminate the use of highly enriched uranium (HEU) in nuclear reactors aboard US Navy vessels.  HEU can be used in nuclear explosives, reducing the production, use and inventory of this material is a primary objective of nonproliferation policy. But, it says, choices that are made in the next few years will determine, or foreclose, the possibility of phasing out the production of HEU reactor cores for decades to come. A House of Representatives Committee encouraged the pursuit of LEU fuel in the interests of nuclear non-proliferation, whilst a Republican-led Senate Committee cited increased costs for developing and converting to LEU fuel along with possible reductions in reactor performance.

https://fas.org/blogs/secrecy/2019/06/naval-reactors-leu/

ITALY: LEONARDO UNVEILS DRONE FREE OF US EXPORT CONTROL RESTRICTIONS

Defense World on 18th June reported that Leonardo’s Falco Xplorer drone unveiled at the Paris Air Show 2019 is free from US International Traffic in Arms Regulations (ITAR) regulations being entirely designed and manufactured in Europe.  It also says that its technical characteristics place it within the Missile Technology Control Regime (MTCR) Class II category which together with the ITAR-free status make the Falco Xplorer readily exportable around the world.

https://www.defenseworld.net/news/24974/Leonardo_Unveils_Drone_Free_of_US_Export_Control_Restrictions#.XQhsQ3dFx9A

TO BOOST DEFENCE EXPORTS, INDIA TO LAUNCH ‘OPEN GENERAL EXPORT LICENSE’ SCHEME

Defence Aviation Post and others on 18th June reported that the Indian Government is working to boost Indian defence exports and towards this it plans to launch a new ‘Open General Export License’ scheme.  Using the new licence, the industry will be able to access international market and make the products more competitive, a spokesman said.

https://defenceaviationpost.com/to-boost-defence-exports-modi-government-to-launch-open-general-export-license-scheme/

THE WORLD BANK IS WILLING TO ASSIST ST. MAARTEN WITH AML MEASURES

The Daily Herald in St Maarten reported on 17th June that the World Bank has agreed to provide assistance to St Maarten, a fact confirmed by a Dutch Government minister, with the Netherlands also providing support.  In May, the St. Maarten Parliament adopted a few laws to combat money laundering and financing of terrorism, but the regional FATF-style body, CFATF, has decided to maintain St. Maarten’s status quo in enhanced due diligence because of shortcomings.

https://thedailyherald.sx/islands/88382-world-bank-assistance-st-maarten-with-anti-money-laundering-actions

EX-BHS OWNER DOMINIC CHAPPELL FACES COURT OVER TAX EVASION CHARGES

ITV News reported that former BHS owner Dominic Chappell is to appear in court accused of tax evasion and buying 2 yachts to launder money.  It says that the money laundering allegations relate to funds from the company being used to buy a vessel called Maverick 5 for £182,500 in April 2015, just a month after the acquisition of BHS.  Another £230,000 was allegedly used to buy a second yacht called Maverick 6, 5 months later.

https://www.itv.com/news/2019-06-18/ex-bhs-owner-dominic-chappell-faces-court-over-tax-evasion-charges/

CAYMAN ISLANDS: ENHANCED AML SUPERVISORY POWERS GIVEN TO CIMA UNDER MONEY LAUNDERING LEGISLATION

A Legal Update from Harneys reports that the powers of the Cayman Islands Monetary Authority (CIMA), as the supervisory authority for AMLg in the Cayman Islands, have been enhanced to allow CIMA to obtain information in relation to any relevant financial business from a broader category of persons than was previously the case.

http://resources.harneys.com/acton/rif/6183/s-03d5-1906/-/l-03e5:872/q-0427/showPreparedMessage?sid=TV2:3SQEo6Dlq

UK HAS SETTLED A CLAIM BROUGHT BY IRAN’S BANK MELLAT FOR DAMAGES FROM SANCTIONS

The EU Sanctions Blog on 18th June reported that the UK government has settled a claim brought by Iran’s Bank Mellat for £1.25 billion in damages arising from the UK’s imposition of nuclear-related sanctions in 2009, which were declared unlawful by the UK Supreme Court in 2013.

https://www.europeansanctions.com/2019/06/bank-mellat-settles-uk-sanctions-damages-claim/

SANCTIONED NORTH KOREAN OIL TANKER SPOTTED CONDUCTING RELAY SHIP-TO-SHIP TRANSFERS

NK News on 18th June reported that a sanctioned North Korean oil tanker has been photographed in the process of conducting suspected illegal ship-to-ship (STS) transfers at sea in relay fashion with 2 unidentified ships, the Japanese Ministry of Foreign Affairs (MOFA) said.  t is the third such instance the North Korean-flagged An San 1 has been observed conducting STS transfers by Japanese Maritime Self-Defense Forces since the ship was designated in March 2018 by the UN.

https://www.nknews.org/2019/06/sanctioned-north-korean-oil-tanker-spotted-conducting-relay-ship-to-ship-transfers/

ALBANIA APPROVES LAWS AGAINST MONEY LAUNDERING           

KYC 360 on 18 June reported that Albania’s parliament approved a series of laws aimed at plugging holes in legislation against money laundering as part of efforts to persuade the EU to launch accession talks. Under the new laws, businesses must declare new partners, transactions by politicians will be monitored for 5 years, and an agency will be set up to administer properties seized by the state in the fight against money laundering.  

https://www.riskscreen.com/kyc360/news/albania-eyeing-eu-approves-laws-against-money-laundering/

BRAZIL’S ODEBRECHT FILES FOR BANKRUPTCY PROTECTION AFTER YEARS OF GRAFT PROBES

KYC 360 on 18 June reported that Brazilian conglomerate Odebrecht SA filed for bankruptcy protection, aiming to restructure $13 billion of debt.  Odebrecht, the biggest of the Brazilian engineering groups, has been caught in a sweeping political corruption investigation that has rippled across Latin America.                            

https://www.riskscreen.com/kyc360/news/brazils-odebrecht-files-for-bankruptcy-protection-after-years-of-graft-probes/

 

EU REGULATION CONFIRMING LIFTING OF MALDIVES SANCTIONS

EU Regulation 2019/985/EU has been published, confirming that the EU has removed the sanctions regime that would have targeted persons in the Maldives.  See also Council Decision 2019/993/CFSP.

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2019.160.01.0001.01.ENG&toc=OJ:L:2019:160:TOC

PERSONAL SERVICE COMPANIES & IR35

On 18 June, the House of Commons Library published a briefing paper which looks at debates as to the effectiveness of these rules and wider concerns about the use of employment intermediaries to avoid tax, before discussing recent developments as to their application in the public and private sector.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN05976

US REGULATOR ACCUSES HEAD OF DEFUNCT BRITISH BITCOIN COMPANY OF $147 MILLION FRAUD

Reuters on 18 June reported that the CFTC accuses Control-Finance Ltd and Benjamin Reynolds, head of the defunct British bitcoin company, of $147 million fraud – saying that their “expert” traders could generate profits of 1.5% a day, or 45% a month, from it.

https://uk.reuters.com/article/uk-usa-cftc-control-finance-bitcoin/u-s-regulator-accuses-head-of-defunct-british-bitcoin-company-of-147-million-fraud-idUKKCN1TJ2HX

http://www.mondovisione.com/media-and-resources/news/cftc-charges-company-and-its-principal-in-147-million-fraudulent-bitcoin-tradin/

ADDRESSING THE RISK OF DISSIPATION IN FREEZING INJUNCTIONS

A briefing from Mishcon de Reya on 18 June about a recent decision of the High Court in England which re-emphasises the importance of fully and properly addressing the issue of the risk of dissipation when seeking a freezing injunction.   It says that the Court will be slow to conclude that a respondent is likely to dissipate their assets without well-supported and credible evidence. Dishonesty alone is not sufficient.

https://www.mishcon.com/news/fraud-insights-addressing-the-risk-of-dissipation-in-freezing-injunctions

‘LOW QUALITY’ SUSPICIOUS ACTIVITY REPORTS SWAMPING SYSTEM, SAYS UK LAW COMMISSION

The Law Society Gazette on 18 June reported that, in a report ‘Anti-money Laundering: the SARs regime’, the Commission reveals that a record 470,000 SAR were sent in 2018-2019, 10% more than in 2016-2017.  But it says that businesses are sending thousands of low quality SAR that contain little or no useful intelligence and enforcement agencies are struggling with a significant number of low-quality reports and criminals could be slipping through the net.

https://www.lawgazette.co.uk/news/low-quality-suspicious-activity-reports-swamping-system-law-commission/5070644.article

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Litigation_Support/SRA-reform-report

EUROPOL OPERATION SEES OVER 550 TONNES OF ILLEGAL PESTICIDES SEIZED

A news release from Europol reported that Operation Silver Axe began in 2012 to target the illegal trade of pesticides.  Since its launch, 1,222 tonnes of illegal and fake counterfeit products have been seized. In 2019, 550 tonnes of goods have been confiscated in Europe and 3 individuals arrested.  Production and repackaging facilities were also checked in the 29 participating countries.

https://www.europol.europa.eu/newsroom/news/operation-silver-axe-strikes-for-fourth-time-seizing-over-550-tonnes-of-illegal-pesticides

MAN SENTENCED TO 22 MONTHS FOR MONEY LAUNDERING SCHEME WITH SLOT MACHINES IN CALIFORNIA

Baker McKenzie on 18 June reported that Atir Dadon, 34, conspired to launder the cash revenue of an illegal gambling business run by 2men in the Bay Area, according to a news release from the DoJ.

http://www.riskandcompliancehub.com/man-sentenced-to-22-months-for-money-laundering-scheme-with-slot-machines-in-sacramento/

SANCTIONS WITH CHINESE CHARACTERISTICS

A briefing from Clifford Chance on 18 June about the announcement of its new “Unreliable Entity List” (UEL) by the Ministry of Commerce.  The UEL will include foreign enterprises, organizations or individuals that fail to abide by market rules and discriminate against Chinese companies for non-commercial purposes.   Examples given include boycotts, cutting off supplies, or restricting or blocking trade transactions in ways that cause serious damage to Chinese enterprises.

https://www.cliffordchance.com/briefings/2019/06/sanctions_with_chinesecharacteristicspr.html

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EUROPOL OPERATION SEES OVER 550 TONNES OF ILLEGAL PESTICIDES SEIZED

A news release from Europol reported that Operation Silver Axe began in 2012 to target the illegal trade of pesticides.  Since its launch, 1,222 tonnes of illegal and fake counterfeit products have been seized. In 2019, 550 tonnes of goods have been confiscated in Europe and 3 individuals arrested.  Production and repackaging facilities were also checked in the 29 participating countries.

https://www.europol.europa.eu/newsroom/news/operation-silver-axe-strikes-for-fourth-time-seizing-over-550-tonnes-of-illegal-pesticides

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EU REGULATION CONFIRMING LIFTING OF MALDIVES SANCTIONS

EU Regulation 2019/985/EU has been published, confirming that the EU has removed the sanctions regime that would have targeted persons in the Maldives.  See also Council Decision 2019/993/CFSP.

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2019.160.01.0001.01.ENG&toc=OJ:L:2019:160:TOC

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 17

17th June 2019

HIGH COURT PROVIDES GUIDANCE ON REGISTRATION REQUIREMENTS FOR ENFORCING EUROPEAN JUDGMENTS IN ENGLAND

On 14th June, CMS Law published an article about a recent case which considered the requirements for registering a foreign judgment for enforcement in England under the Brussels Regulation providing a detailed interpretation of the operation of the registration process and helpful guidance to parties seeking to enforce judgments under the Regulation or its updated version, the Recast Brussels Regulation (which replaced it in 2015).  The article says that the decision provides some helpful clarity on the English courts’ interpretation of the requirements of the Brussels Regulation, including its willingness to consider additional grounds of appeal beyond those expressly listed in the Regulation itself.

http://www.cms-lawnow.com/ealerts/2019/06/high-court-provides-guidance-on-registration-requirements-for-enforcing?cc_lang=en

Q&A ON CAYMAN AML REGIME: SERVICE PROVIDERS, DELEGATION AND RISK-BASED APPROACH

On 4th April, Ogier published this article concerned with amendments made to the Islands’ AML regime in 2018.

https://www.ogier.com/publications/qa-the-cayman-aml-regime-service-providers-delegation-and-the-risk-based-approach

GREEK PM SAYS MAY SEEK SANCTIONS AGAINST TURKEY IN GAS ROW

The Tasnim News Agency in Iran on 17th June reported that Greece and Cyprus will push ask EU states to penalise Turkey, including the possible option of sanctions, if Ankara is verified to have started drilling for gas west of Cyprus, the Greek Prime Minister said.  The article says that a Turkish ship has been anchored west of Cyprus since May and Cyprus and Greece say the vessel is encroaching into Cyprus’s exclusive economic zone (EEZ) – but Turkey says the area is on its continental shelf.  However, EurActiv reported that Turkish President Recep Tayyip Erdoğan  said Turkey would not back down from gas exploration in Cyprus after southern European leaders urged Ankara to stop.

https://www.tasnimnews.com/en/news/2019/06/17/2033951/greek-pm-says-may-seek-sanctions-against-turkey-in-gas-row

IRAQ SECURES NEW US SANCTIONS WAIVER FOR IRANIAN POWER IMPORTS

S&P Global from Platts on 16th June reported that the US State Department has granted Iraq a 120-day sanctions waiver allowing it to keep importing Iranian electricity and natural gas to ease power shortages.  The exemptions have gotten progressively longer, from a 45-day waiver granted when US sanctions on Iran’s energy customers snapped back in November. Iraq then secured two2in-a-row 90-day waivers.  Iraq is heavily reliant on Iran to maintain its power supply.

https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/061619-iraq-secures-new-us-sanctions-waiver-for-iranian-power-imports

6 ARRESTED ON SUSPICION OF SMUGGLING GEORGIANS INTO ISRAEL

The Jerusalem Post on 17th June reported that Israeli police have arrested 6 people and detained 8 others on suspicion of smuggling Georgian migrants through Ben Gurion Airport.

https://www.jpost.com/Israel-News/Six-arrested-under-suspicion-of-smuggling-Georgian-citizens-into-Israel-592773

HONG KONG SETS OUT AML/CFT BEST PRACTICES FOR SME ONBOARDING

Regulation Asia on 17th June reported on Hong Kong Monetary Authority has offered guidance on the application of AML/CFT measures to its regulated bodies when onboarding SME customers.  This followed a review which found that improvements in the risk-based approach adopted by institutions was necessary.   It noted that in some cases there is insufficient guidance for frontline staff to support the use of discretion and judgement in the application of the risk-based approach.

https://www.regulationasia.com/hkma-sets-out-aml-cft-best-practices-for-sme-onboarding/

The Circular containing the advice is at –

https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2019/20190614e2.pdf

DAUGHTER OF ENRC FOUNDER CHARGED IN CONNECTION WITH GRAFT PROBE

The Kazakh Telegraph Agency on 17th June reported that the daughter of one of the founding oligarchs of ENRC, the miner that delisted from the FTSE 100 amid corruption allegations, has apparently been charged by the SFO.  Anna Machkevitch was charged in connection with the long-running corruption investigation into ENRC by the SFO – for failing to produce documents demanded by the SFO under a section 2 notice.

https://kaztag.kz/en/news/daughter-of-enrc-founder-charged-in-connection-with-graft-probe

BRIEFING: MAKING TAX DIGITAL

On 14th June, the House of Commons Library published a briefing paper on the HMRC strategy to implement a new system of digital tax accounts to be used by businesses, the self-employed and landlords.  The briefing paper discusses the background to this reform.

http://researchbriefings.files.parliament.uk/documents/CBP-7949/CBP-7949.pdf

US CUSTOMS SUPERVISOR HAD ‘HIGHLY SUSPICIOUS’ CONTACT WITH CHINESE OFFICIALS, PROSECUTORS SAY

Customs Today on 17th June reported on the case of US Customs and Border Protection supervisor Wei “George” Xu.  Xu, 56, was arrested in February and charged with dealing firearms without a licence.  But guns he has been held without bond since his arrest months ago amid concerns about his secret-level security clearance and what prosecutors described as “highly suspicious” contacts with Chinese consular officials in Los Angeles.

http://www.customstoday.com.pk/us-customs-supervisor-had-highly-suspicious-contact-with-chinese-officials-prosecutors-say/

NETHERLANDS: MASSIVE INCREASE IN ILLEGAL KETAMINE SEIZURES BY CUSTOMS

The NL Times on 14th June reported that last year customs officers seized 800 kg of ketamine, compared to only 2.6 kg in 2016.  Ketamine was developed as an anaesthetic and first used during the Vietnam War, and it is still used legitimately today.  However, it appeared as a “party” drug in the 90s, though it is said not to be as popular in the Netherlands as cocaine and ecstasy.

https://nltimes.nl/2019/06/14/massive-increase-illegal-ketamine-seized-customs

IRELAND: ANTELOPE HEAD AMONG UNUSUAL SEIZURES BY CUSTOMS OFFICIALS

The Irish Times on 17th June carried an article about unusual seizures by customs officials targeting smugglers at the country’s ports and airports this year.  These included the head of an oryx antelope from Turkmenistan, an ivory tusk of a walrus from Namibia, the teeth of a wild cat from Malaysia, as well as coral from the Maldives and Myanmar.   There were also weapons – including guns, tasers, machetes and samurai swords – ammunition, food and even car parts taken from travelling passengers.  Weapons seized included rifles, guns, stun guns, air guns, pistols, component parts for firearms, lasers, tasers, throwing stars, machetes, samurai and katana swords and many varieties of illegal knives, such as flick, stiletto and butterfly knives.

https://www.irishtimes.com/news/ireland/irish-news/antelope-head-among-unusual-seizures-by-customs-officials-1.3927630

IS A ‘SEIZE AND SIFT’ NOTICE REQUIRED FOR MOBILE PHONES?

On 12th June, a Q&A advice from the Police National Legal Database advised that it did not appear that a “section 52” notice under the “seize and sift” rules, which allow law enforcement to uplift bulk material seized under a warrant and sift through it at another place, where it is not reasonably practicable for it to be sifted through in the place where it was found.  A section 52 notice deals with the requirement to give a notice specifying what has been seized and why.

https://www.pnld.co.uk/your-legal-questions-answered/is-a-seize-and-sift-notice-required-for-mobile-phones/

CANADA MUST END COMPLICITY IN CHINA’S BRUTAL ORGAN-TRAFFICKING REGIME

An opinion piece in The Epoch times on 16th June accused Canada, among other developed countries, of involvement in the purchase and sale of human parts which has become an industry, and it has been supporting it.  It says that organ trafficking is a global phenomenon.  However, forced organ harvesting deserves special attention in the context of the Chinese, where it said to be driven by the state.  The article claims that the Falun Gong, Uyghurs, Tibetans, and some Christian sects are also being targeted.  A Bill in the Canadian parliamentary system seeks to put a stop to Canadian complicity by criminalising organ tourism – as generally, the Canadian Criminal Code only criminalises acts committed in Canada, and thus it is currently legal for Canadians to travel abroad and obtain organs from illicit sources, because such acts do not take place on Canadian soil.  Other important organ importers are named as the US, Australia, Israel, Japan, Oman, and Saudi Arabia.

https://www.theepochtimes.com/canada-must-end-complicity-in-chinas-brutal-organ-trafficking-regime_2965642.html

CANADA: POLICE LAUNCH RAIDS AIMED AT COUNTERFEIT DRUG RING

On 4th June, the Montreal Gazette reported on an investigation opened in 2018, after Canadian Border Services Agency seized about 200,000 counterfeit Xanax tablets.  A series of were aimed at breaking a network alleged to have specialised in the production and export of counterfeit prescription drugs.

https://montrealgazette.com/news/local-news/laval-police-launch-raids-aimed-at-counterfeit-drug-ring

US PUSH FOR BLOCKCHAIN SOLUTION TO CONTROL PHARMACEUTICAL SUPPLY CHAIN

On 17th June, Loadstar reported that IBM and Walmart have been selected for a US government programme to develop a track and trace system for domestic pharmaceutical shipments using blockchain.  With KPMG and Merck, they were chosen by the FDA to participate in the pilot, scheduled for completion in Q4 of 2019.  However, it also notes a report from Gartner Research suggests blockchain has fallen short of its potential so far, with some 90% of supply chain blockchain projects remaining proof-of-concept.

https://theloadstar.com/us-pushes-for-blockchain-solution-to-better-control-pharma-supply-chain/

ISLE OF MAN PUBLISHES RESULT OF CONSULTATION ON MEDICINAL CANNABIS AND GROWING INDUSTRIAL HEMP

On 17th June, a news release advising of reports on these 2 issues after a 6-week consultation period which closed on 20th March.  It says that the number of responses to both was extremely high, with many respondents leaving additional comments and opinions as well answering the tick-box part of the online form.  The consultation into the medicinal use of cannabis garnered the largest number of responses.  By far the clearest result was where a majority of respondents (97%) supported the introduction of a regulatory framework within which industrial hemp production could be permitted in the Isle of Man.  There also appeared to be broad support on the issue of making quality-assured medicinal cannabis available.

https://www.gov.im/news/2019/jun/17/medicinal-cannabis/

GERMAN PROSECUTORS FILE CHARGES AGAINST 2 BRITISH BANKERS OVER SHAM TRADES

On 17th June, Reuters reported that German prosecutors have filed criminal charges against 2 British bankers, accusing the pair of involvement in a fraud that cost the state €440 million.  They had been accused of involvement in fraudulent reclaims between 2006 and 2011 in the so-called “cum-ex” fraud case, which involved trading company shares rapidly around a syndicate of banks, investors and hedge funds to create the impression of numerous owners, each of whom was entitled to a tax rebate.

https://www.reuters.com/article/us-germany-dividendstripping-charges/german-prosecutors-file-charges-over-sham-trades-idUSKCN1TI1J2

BAHAMAS: 24 ARRESTED IN DRUG, ARMS TRAFFICKING RAID

On 17th June, OCCRP reported that police in the Bahamas have announced the arrest of 24 drug and arms traffickers as part of a joint operation with US law enforcement.  They also seized a few pounds of cocaine, cartons of ammunition, and other evidence they believe might be related to organised crime on the island of Bimini.  6 of the 24 suspects were charged with firearm-related crimes.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9978-the-bahamas-24-arrested-in-drug-arms-trafficking-raid

SEC FINES KPMG IN THE US FOR ALTERING INFORMATION AND TRAINING CHEATING

The SEC had charged KPMG LLP with altering past audit work after receiving stolen information about inspections of the firm that would be conducted by the Public Company Accounting Oversight Board (PCAOB).   The SEC’s order also finds that numerous KPMG audit professionals cheated on internal training exams by improperly sharing answers and manipulating test results.  KPMG agreed to settle the charges by paying a $50 million penalty and complying with a detailed set of undertakings, including retaining an independent consultant to review and assess the firm’s ethics and integrity controls and its compliance with various undertakings.

http://www.mondovisione.com/media-and-resources/news/sec-kpmg-paying-50-million-penalty-for-illicit-use-of-pcaob-data-and-cheating/

ONLY A TOTAL BAN ON SECONDARY SALES CAN STAMP OUT MUSIC AND SPORTS TICKET FRAUD

On 16th June, an article on Illicit Trade reported a fraud awareness campaign launched in the UK by Action Fraud designed to encourage members of the public to only buy event tickets from authorised sellers.  It revealed that it had received 4,755 reports of ticket fraud in the 13 months to the end of April this year, noting that victims across the UK lost £1,654,888 to scammers over that period.  Meanwhile, last September a report said that around 12% of Americans said they had bought a concert ticket online that later turned out to be fake.

https://www.illicit-trade.com/2019/06/only-a-total-ban-on-secondary-sales-can-stamp-out-music-and-sports-ticket-fraud/

WHAT ROLE DOES THE WTO HAVE TO PLAY IN FIGHTING CORRUPTION?

A blog post on 17th June from the FCPA Blog asking what has been done to fight corruption, particularly by international organisations like the World Trade Organization (WTO), whose role is regulating international trade.  It refers to an article by the author of the post published by the Journal of World Trade, in which she says she shows that the WTO has increasingly adopted a more clear-cut approach to this problem and finally took an open stand regarding the relationship of anti-corruption measures and trade in its dispute settlement system – tracing this back to 2012.  In 2013, she says, member state members signed the multilateral Trade Facilitation Agreement (TFA) with the purpose of reducing bureaucratic border red tape that increase opportunities for corruption.  A decision of its Appellate Body in 2016 admitted that combating money laundering (as one of the many manifestations of corruption) is a vital interest for society and may run contrary to trade liberalisation – in other words, anti-corruption measures may be justified under WTO law if they restrict trade.  However, she says that the WTO must take additional measures to fight corruption in international trade.

http://www.fcpablog.com/blog/2019/6/17/what-role-does-the-wto-have-in-global-anti-corruption-enforc.html

THE HEAD OF ALGERIAN PARTNER OF VW HELD OVER GRAFT ALLEGATIONS

Middle East Monitor on 17th June reported that an Algerian court has ordered the detention of Mourad Eulmi, head of family-owned firm SOVAC that is a partner of Germany’s Volkswagen AG, on suspicion of corruption – part of a series of anti-graft investigations undertaken since mass protests erupted early this year.  A former head of state bank Credit Populaire d’Algerie (CPA)and 4 officials from the industry ministry were also ordered taken into custody by the same court in connection with the case, it reported.

https://www.middleeastmonitor.com/20190617-algerian-partner-of-germanys-vw-held-over-graft-allegations

DANISH POLICE RAID LOCAL NORDEA HEADQUARTERS AS MONEY LAUNDERING PROBE EXPANDS

Zero Hedge on 17th June reported on the recent police raid on Nordea’s Danish headquarters as part of an ongoing money laundering investigation.  The raid appears to be tied to the Danske Bank investigation.

https://www.zerohedge.com/news/2019-06-17/danish-police-raid-local-nordea-headquarters-money-laundering-probe-expands

THE UK INVESTIGATORY POWERS ACT, SAFEGUARDS AND BULK INFORMATION POWERS

On 17th June, the Home Office blog posted an article which gives more information on the Act, the safeguards it created and the way investigatory powers are used – in particular in relation to “bulk powers”, where the Act provides for the use of interception, communications data and equipment interference in bulk.  These can be used to obtain large volumes of data that are likely to include communications relating to terrorists or serious criminals.

https://homeofficemedia.blog.gov.uk/2019/06/17/fact-sheet-what-are-investigatory-powers/

SWEDEN REVOKES ONLINE GAMBLING LICENCE FOR AML AND SOCIAL RESPONSIBILITY FAILINGS

On 17th June, Calvin Ayre reported that Spelinspektionen has announced that it had ordered the immediate revocation of the online casino and sports betting licences of SafeEnt Ltd, a subsidiary of Sweden-based Global Gaming, after the regulator found the company’s social responsibility and AML measures to be inadequate.

https://calvinayre.com/2019/06/17/business/ninja-casino-swedish-license-yanked-aml-social-failures/

GERMANY HAS LAUNCHED NEW CAMPAIGN AGAINST ONLINE CASINO PAYMENT PROCESSORS

Calvin Ayre on 17th June reported that Germany has launched a new campaign against online casino payment processors following the approval of a new temporary federal gambling treaty.  The Lower Saxony state government had informed an unidentified international payment processor to immediately suspend its relationships with internationally-licensed online casino operators targeting German customers, saying that it expected payment service providers to observe the federal gambling treaty’s requirement to refrain from payments in connection with unauthorised gambling.  While Lower Saxony is only one of Germany’s 16 states, its responsibility for online gambling payment processing extends across the country.  The new treaty extended its ‘toleration’ of online sports betting while confirming the current ban on online casino, poker and ‘secondary lottery’ betting – despite Schleswig-Holstein recently renewing its online gambling licences.

https://calvinayre.com/2019/06/17/business/germany-targets-online-casino-payment-processing/

COLOMBIAN AUTHORITIES SEIZE OVER 19 TONNES OF COCAINE DESTINED FOR THE EU

On 17th June, a news release from Europol reported that Colombia and Europol co-led operation Tayrona, a transnational operation targeting the trafficking of cocaine and firearms between the Americas and the EU in March to June.  As well as 140 shipments of cocaine, more than 3 000 firearms were traced, 133 firearms seized, over 14 600 cartridges of ammunition, parts and components of weapons, several rocket launchers and hand grenades were seized.

https://www.europol.europa.eu/newsroom/news/colombian-authorities-seize-over-19-tons-of-cocaine-in-operation-tayrona

US PRIVACY SHIELD AND THE UK FAQ

The US Department of Commerce has updated its guidance on the EU-US Privacy Shield. It outlined whether a participant can rely on the Privacy Shield to receive personal data from the UK in light of the UK’s planned withdrawal from the EU.

https://www.privacyshield.gov/article?id=Privacy-Shield-and-the-UK-FAQs

NCAUAE’S SECRET HACKING TEAM OF US MERCENARIES

On 30th January, Reuters published a special report on Project Raven – a clandestine team that included more than a dozen former U.S. intelligence operatives recruited to help the United Arab Emirates engage in surveillance of other governments, militants and human rights activists critical of the monarchy.  It says that the story of Project Raven reveals how former US government hackers have employed state-of-the-art cyber-espionage tools on behalf of a foreign intelligence service that spies on human rights activists, journalists and political rivals.

https://www.reuters.com/investigates/special-report/usa-spying-raven/

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JERSEY: PRIVY COUNCIL UPHOLDS ATTORNEY GENERAL’S POWERS TO OBTAIN DOCUMENTS BY COMPULSION IN CIRCUMSTANCES WHERE SERIOUS OR COMPLEX FRAUD IS SUSPECTED

A news release from Jersey on 17th June advised that the Judicial Committee of the Privy Council which has upheld the Attorney General’s powers to obtain documents by compulsion in circumstances where serious or complex fraud is suspected, and dismissed the appeal by Volaw Trust and Corporate Services Limited who had claimed that producing such documents violated its privilege against self-incrimination protected by Article 6 of the European Court on Human Rights.  It had refused to provide documents in relation to the group of companies and trusts administered by Volaw and connected with Mr Berge Gerdt Larsen (a Norwegian businessman involved in the oil and gas industry) which the Attorney General required be produced pursuant to a notice served in 2015.

https://www.gov.je/News/2019/Pages/PrivyCouncilruling.aspx

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UN SECURITY COUNCIL RESOLUTION 2462 ON COUNTER TERRORIST FINANCING

On 4th April, the Charity & Security Network published an article about UN SCR 2462, which was adopted on 28th March.  It is binding on all member states and can be enforced by UN sanctions.  The article says that it is the first comprehensive UN Resolution on CFT, incorporating a patchwork of previous resolutions and broadening CFT efforts to address new threats and improve investigation and enforcement activities.   Notably, UN SCR 2462 requires member states to take international humanitarian, human rights law and refugee law into account and make CFT efforts consistent with these existing legal obligations.  Binding provisions address issues include information-sharing and international co-operation, the need for robust enforcement bodies and the need for many countries to adopt legal measures in line with the Resolution.  It calls on all states to implement the comprehensive international standards embodied in the revised 40 FATF Recommendations on Combating Money Laundering, and the Financing of Terrorism and Proliferation and the interpretive notes.  It requires the UN’s Counter Terrorism Executive Directorate (CTED) to produce a report “on actions taken by Member States to disrupt terrorist financing” prior to a “joint special meeting on terrorist financing threats and trends as well as on the implementation” of the resolution within 12 months of adoption.  Member states are invited to submit information for the report by the end of 2019.

https://www.charityandsecurity.org/summary_UNSCR_2462

http://unscr.com/en/resolutions/2462

https://www.un.org/press/en/2019/sc13754.doc.htm

http://unscr.com/files/2019/02462.pdf

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EU REVOKES MALDIVES SANCTIONS

A news release from the EU on 17th June advised that the framework adopted in July 2018 imposing a travel ban and an asset freeze on persons and entities responsible for undermining the rule of law or obstructing an inclusive political solution in the Maldives has been revoked.  No persons or entities were listed under the sanctions regime.

https://www.consilium.europa.eu/en/press/press-releases/2019/06/17/maldives-council-revokes-sanctions-framework

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2019 SET TO BE RECORD YEAR FOR AML FINES

FS Tech on 28th May reported that, to April, $7.7 billion had already been imposed in fines, compared to $1.16 billion worth of fines in the same period last year; and combined value of penalties given out so far in 2019 is over 70% of the total handed out in the whole of the previous record year of 2014.

http://www.fstech.co.uk/fst/AML_Fines_Rising_Record_2019_Encompass.php

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UNDERSTANDING THE MONEY LAUNDERING RISKS IN THE CAPITAL MARKETS

The FCA in the UK has published this thematic review which highlighted a number of significant weaknesses in AML controls applied across the industry.  A review of 19 firms was involved, and the FCA concluded that there is a general lack of deep understanding of money laundering risk to the capital markets.  Complex cross border deals made up of multiple parties to a transaction provide numerous loopholes and weaknesses for money launderers to exploit.  The FCA recommends that all market players start taking a full risk-based approach to money laundering in the context of the wider exposure they are liable to.  It appears that the FCA is considering a supervisory response.  The Annex to the review contains examples of typologies based on risks found in the sector, and which include helpful and simplified diagrams.  The Annex also identifies a number of features that could serve as red flags, or at least prompt further questions – remote booking of trades between group entities; pre-arranged trading; instructions or involvement from third parties; ‘free of payment’ asset transfers; non-standard settlement arrangements uneconomic or irrational trading strategies of a customer; unusual trading patterns, such as: counterparty concentration, unusual win/loss rates or flat/neutralising activity, and no trading on an account.

https://www.fca.org.uk/publication/thematic-reviews/tr19-004.pdf

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MONEY LAUNDERING AND THE ILLEGAL WILDLIFE TRADE

On 28th May, the Asean Post published an article saying that, while it has all the hallmarks of transnational organised crime, the illegal wildlife trade continues to be viewed as being outside ‘mainstream crime’.  However, it says that the illegal wildlife trade generates an estimated $20 billion annually and is the fourth most profitable criminal trafficking enterprise behind drugs, arms and human trafficking according to UNOD, though cutting edge investigative techniques often employed in tackling other criminal investigations are rarely employed when it comes to the illegal wildlife trade.  Its cites the case of one of the region’s most notorious wildlife smugglers, Kampanart Chaiyamart, after being caught in December 2017, the Thai Anti-Money Laundering Office (AMLO) found that he had laundered $35 million in 2014, and that between 2011 and 2014 using as many as 28 separate accounts and connections in Thailand, Vietnam, Lao and Malaysia to move money through numerous cash transactions.

https://theaseanpost.com/article/money-laundering-and-illegal-wildlife-trade

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CORRUPTION AND FRAUD IN THE UK

An Occasional paper from RUSI on 17th June discusses the forms that corruption and fraud take in 4 UK sectors: the financial sector; construction; the National Health Service; and local government.  At present, it argues, there are knowledge gaps on this subject that stakeholders would do well to address.  As the UK’s Anti-Corruption Strategy 2017–2022 demonstrates, addressing corruption is an essential part of the UK government’s efforts against economic crime.  However, relatively little is known about the scale and types of corruption in the UK.

https://rusi.org/publication/occasional-papers/whats-name-corruption-and-fraud-uk

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FUNDS SENT HOME BY MIGRANT WORKERS SUPPORT 1 IN 9 PEOPLE GLOBALLY

An article on Ekklesia on 17th June reported that remittances from international migrant workers to their families are expected to rise to over $550 billion in 2019, up some $20 billion from $529 billion last year, according to the President of the International Fund for Agricultural Development (IFAD) on the occasion of the UN International Day of Family Remittances (IDFR).  He also said that money sent home by the world’s 200 million migrant workers adds up to more than three times the level of official development assistance (ODA) and surpasses foreign direct investment (FDI), even though 85% of earning still remain in host countries.

http://www.ekklesia.co.uk/node/28450

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HOW THOUSANDS OF BRITISH PATIENTS MAY HAVE TAKEN TAINTED NHS DRUGS SOLD BY THE MAFIA

The Daily Mail made this claim in an article on 15th June, saying that commonly prescribed drugs were stolen in Italy and then sold to British pharmacists and hospitals, exposing patients to potentially lethal consequences.  Stockpiles of medications deemed unsafe, as they may have been handled or stored improperly, are now known to have landed in Britain 5 years ago, and health chiefs admit they have no record of who they were prescribed to.  Among them is the prostate cancer treatment bicalutamide, also known by the brand name Casodex, and the statin rosuvastatin, or Crestor.  The article ties in with a Channel 4 TV investigation.

https://www.dailymail.co.uk/health/article-7145159/How-thousands-British-patients-taken-tainted-NHS-drugs-sold-mafia.html

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 16

16th June 2019

FATHER OF PAKISTAN BOMB AQ KHAN APPLIES TO HIGH COURT FOR RELEASE FROM HOUSE ARREST

The Times of India on 16th June reported on AQ Khan, the founder of Pakistan’s enrichment programme (and associated with other programmes, including that of North Korea), who made a televised confession of his guilt in 2004 and was placed in house arrest for 5 years, released from it in 2009 and then restricted again after that US warned Pakistan that he still posed a serious proliferation risk.  He has applied to the High Court to be released from the restrictions.

https://timesofindia.indiatimes.com/world/pakistan/father-of-pak-bomb-moves-hc-seeks-freedom-of-movement/articleshow/69808278.cms

UK: HUGE CANNABIS FACTORY FOUND IN OLD BINGO HALL AFTER POLICE NOTICE STRONG SMELL

The Mirror on 15th June reported that a cannabis farm found at The Gala Bingo building in Kettering is thought to be worth £2.8 million.  Northamptonshire Police first became suspicious about the building when it started letting off a strong smell of marijuana.

https://www.msn.com/en-gb/news/uknews/huge-£28m-cannabis-factory-found-in-old-bingo-hall-after-police-notice-strong-smell

NSO SPYWARE GROUP TO ADOPT IMPROVED HUMAN RIGHTS POLICY

The Times of Israel reported on 16th June that controversial NSO Group, whose spyware has reportedly been used by repressive regimes ad implicated in the murder of Jamal Khashoggi, will align itself with UN Guiding Principles on Business and Human Rights, and to improve the transparency of its operations and client base.

https://www.timesofisrael.com/controversial-nso-group-to-adopt-policy-of-closer-respect-for-human-rights/

UK: ILLEGAL EEL EXPORTERS EXPOSED BY BBC COUNTRYFILE

On 16th June, the BBC reported that a reporter posing as a UK fisherman who had legally caught the eels on the River Severn was approached by Chinese and Russian buyers and a UK exporter.  They were prepared to pay up to 7 times the normal catch price if the eels could be sent out of the EU. An export ban on the endangered species has been in place since 2010.  The illegal trade has previously been focused on stocks in France and Spain but now smugglers have turned their attention to the UK, where glass eels can only be caught by licensed fishermen.

https://www.bbc.co.uk/news/uk-england-gloucestershire-48647168

THE COST OF COMPLIANCE: CAN ANOTHER 1MDB HAPPEN AGAIN?

On 15th June, the Asean Post posed this question, saying that screening processes in ASEAN have risen due to the corruption scandal surrounding Malaysia’s collapsed sovereign wealth fund.  The scandal has led to an 8% to 9% increase in the cost of AML compliance for companies over the past 2 years – and the amount is expected to rise by a similar percentage this year.  It reports that a new survey by LexisNexis Risk Solutions: ‘True Cost of AML Compliance’, estimated the true cost of compliance in Indonesia, Malaysia, the Philippines and Singapore to be US$6.09 billion annually – with Singapore representing just over half of this amount.

https://theaseanpost.com/article/can-another-1mdb-happen-again

BRIBERY PROBE INTO THE US INVESTOR BEHIND THE LARGEST PRIVATELY-OWNED REHAB CENTRE IN UK SPARKS TALK OF A SALE

The Daily Mail on 15th June reported that one of Britain’s largest privately-owned treatment centres for drug addicts (UK Addiction Treatment Centres, aka UKAT) could be about to change hands after its US investor became embroiled in an FBI investigation into the alleged bribery of public officials.  It reports that the US company, Eli Global, and its CEO, Greg Lindberg, were being investigated by the FBI and the US Attorney’s office and that reports claim Lindberg has been indicted by a federal grand jury.

https://www.dailymail.co.uk/money/markets/article-7144927/Bribery-probe-U-S-investor-UK-Addiction-Treatment-Centres-sparks-talk-sale.html

LAW SOCIETY CALLS FOR TASKFORCE TO SAVE AILING CRIMINAL JUSTICE SYSTEM

The Law Society Gazette on 14th June reported that the Law Society has called for a legal aid taskforce made up of solicitors, barristers, prosecutors and judges – this being one of 11 recommendations outlined in the Society’s report, Justice on Trial 2019: Fixing our criminal justice system.

https://www.lawgazette.co.uk/news/society-calls-for-taskforce-to-save-ailing-criminal-justice-system/5070621.article

The report is available at –

https://www.lawsociety.org.uk/support-services/research-trends/justice-on-trial-2019/

 

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OECD: MONEY LAUNDERING AND TERRORIST FINANCING AWARENESS HANDBOOK FOR TAX EXAMINERS AND TAX AUDITOR

This Handbook is intended to raise the awareness level of tax examiners and tax auditors regarding money laundering and terrorist financing, and who may come across indicators of unusual or suspicious transactions or activities in the normal course of tax reviews or audits and report to an appropriate authority.  An update of the 2009 edition, it describes the nature and context of money laundering and terrorist financing activities, so that tax examiners and tax auditors, and by extension tax administrations, are able to better understand how their contributions can assist in the fight against serious crimes. It covers a wide gamut of methods and frauds, including smurfing, trade-based money laundering, bitcoin and loan-back money laundering.

http://www.oecd.org/tax/crime/money-laundering-and-terrorist-financing-awareness-handbook-for-tax-examiners-and-tax-auditors.pdf

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BREXIT AND YOUR BUSINESS: DODGING THE PITFALLS – Q&A IN HONG KONG

On 12th June, HKTDC published a Q&A article saying that 3 years after the UK voted to leave the EU, the date and the manner of its departure remain “frustratingly unclear”, and uncertainty over the UK’s departure is escalating and the risk of a damaging no-deal Brexit is now higher than ever.  The Q&A is designed to help Hong Kong traders take precautionary arrangements, whether there is an orderly Brexit or a disorderly one.

http://economists-pick-research.hktdc.com/business-news/article/Economists-Pick-Research-Articles/Brexit-and-Your-Business-Dodging-the-Pitfalls/rp/en/1/1X32LK39/1X0AHN8V.htm

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BERMUDA MONETARY AUTHORITY CIVIL PENALTIES TOTALLING $500,000 ON ESTERA SERVICES [BERMUDA] LIMITED FOR AML FAILINGS

On 15th June, Bernews and the Royal Gazette reported that the authority imposed the penalties pursuant to provisions of sthe Trusts [Regulation of Trust Business] Act 2001.  The penalties were for failure to adequately comply within a specified time frame with certain requirements of the Proceeds of Crime [Anti-Money Laundering & Anti-Terrorist Financing] Regulations 2008 [the Regulations], and specifically the regulations relating to the application of Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD), internal controls, and risk assessment.  It is said that the failing predated the acquisition of the company by its current owner, but the authority says that the penalties the importance of licensees having up-to-date AML/ATF policies and procedures in place which are appropriate, effective, and fully implemented.

http://bernews.com/2019/06/monetary-authority-fines-estera-500000/

http://www.royalgazette.com/business/article/20190615/bma-fines-estera-500000&template=mobileart

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OTHER THINGS YOU MAY HAVE MISSED – JUNE 15

15th June 2019

SWEDISH GAMBLING REGULATOR’S NEW AML EFFORTS

On 14th June, Calvin Ayre reported that Spelinspektionen has announced that it is joining forces with other agencies in the country to create a new strategy designed to combat money laundering and terrorism financing, and it will work with other groups to develop the strategy, which will be deployed across the gambling industry, as well as others.  Exchanging information creating a repository of data that can be used to identify, map and analyse risks tied to illicit activities.  Measures will include in-depth checks to uncover the identity of the person or persons requesting a licence, not just a cursory review of the operator’s business name, and companies approved for licences will also be forced to include KYC procedures.

https://calvinayre.com/2019/06/14/business/spelinspektionen-takes-on-money-laundering-with-new-efforts/

SEIZURE OF 563 ANTI-PERSONNEL LANDMINES IN COLOMBIA

On 14th June, Insight Crime reported the seizure of 563 anti-personnel landmines suspected of belonging to the Urabeños drug trafficking group.  Authorities said the devices were set to be deployed in the territory where the group is fighting guerrillas from the Ejército de Liberación Nacional – ELN for control. There are also said to be strong suspicions that the ELN has deployed landmines as part of this same conflict.  From 1990 until March 31, 2019, Colombia tallied 11,375 victims of landmines, 2,293 of whom died.

https://www.insightcrime.org/news/brief/urabenos-landmines-guerrilla-tactic-colombia-dark-past/

LAW SOCIETY AGREES TO REVIEW NDA GUIDANCE

Legal Futures on 14th June reported that the Law Society has performed a rapid u-turn and agreed to review its controversial practice note on non-disclosure agreements (NDA).  It also said that it will take into account the recent recommendations of a Parliamentary Committee and its crucial function of acting in the public interest.

https://www.legalfutures.co.uk/latest-news/quick-u-turn-as-law-society-agrees-to-review-nda-guidance

BELGIUM CANCELS EXPORT LICENCES FOR ARMS SUPPLIES TO SAUDI ARABIA

On 14th June, VRT News in Belgium reported that the Council of State had cancelled export licences issued by the Walloon Government in 2017 for weapons and military equipment produced by FN and CMI Defence.

https://www.vrt.be/vrtnws/nl/2019/06/14/raad-van-state-vernietigt-waalse-licenties-voor-wapenexport-ho/

IRELAND: REVIEW OF LARGE CASES – HIGH WEALTH INDIVIDUALS DIVISION (LC-HWID)

On 14th June, the Irish Revenue Commissioners published a report on a review of the case base of LC-HWID and includes recommendations for revised criteria to be applied to determine what cases will come within the remit of the Division – implementation of which will expand the size of the Division’s case base.  The LC-HWID  was established as part of the realignment of the Revenue during 2018, and following a 2009 review that found that High Net Worth Individuals posed significant challenges to tax administrations due to the complexity of their affairs, their revenue contribution, the opportunity for aggressive tax planning, and the impact of their compliance behaviour on the integrity of the tax system.  There are currently 200 HWI (primary cases) and 278 associated parties (secondary cases) in the HWI case base, and  the resources available to manage the HWI case base have been increased..  The core recommendation is to confirm the proposed increase in the case base of LC-HWID to include taxpayers with net assets ≥ €20 MILLION.

https://www.revenue.ie/en/corporate/documents/research/case-base-review.pdf

CANADA: FEDERAL, PROVINCIAL AND TERRITORIAL GOVERNMENTS WORKING TOGETHER TO COMBAT MONEY LAUNDERING AND TERRORIST FINANCING IN CANADA

On 14th June, the Government of Canada issued a news release saying that several of Canada’s federal, provincial, and territorial Ministers of Finance and ministers responsible for AML and beneficial ownership transparency came together in Vancouver to advance a national response to combat money laundering and terrorist financing in Canada.  They resolved to work collaboratively and to each do our part, using the appropriate tools at their disposal to detect, stop and prosecute financial criminals in their jurisdictions.

https://www.canada.ca/en/department-finance/news/2019/06/joint-statement–federal-provincial-and-territorial-governments-working-together-to-combat-money-laundering-and-terrorist-financing-in-canada.html

CAN THE SFO REALLY USE “PARTICIPATING INFORMANTS” TO PROSECUTE?

A post on the FCPA Blog on 14th June poses this question, and posed by Martin Kenney, Managing Partner of Martin Kenney & Co, Solicitors.  This follows remarks by Lisa Osofsky, head of the SFO and a former FBI lawyer, and points out that the law in the UK is somewhat different to that in the US, and the UK approach to the subject of covert investigation is likely much more rigid than Ms Osofsky is used to.  He refers to the Regulation of Investigative Powers Act 2000 (RIPA) and its comprehensives rules and guidance, complicated further, he says, by the unyielding manner in which it is overseen and administered – and the hurdles to the police using a Participating Informant (PI) are many.

http://www.fcpablog.com/blog/2019/6/14/can-the-sfo-really-use-participating-informants-to-prosecute.html

ESTONIA QUESTIONED 3 ARIPANK STAFF IN NEW MONEY LAUNDERING PROBE

Reuters on 15th June reported that Estonian police have said that they held 3 employees of a local bank, Tallinna Aripank, for questioning for 48 hours as part of an investigation into suspected money laundering and bribery.  The 3 were detained on 11th June and released after 2 days in a case not linked to the Danske Bank probe.  Tallinna Aripank is one of the region’s smaller lenders.

https://www.reuters.com/article/us-europe-moneylaundering-estonia-aripan/estonia-questioned-three-aripank-staff-in-new-money-laundering-probe-idUSKCN1TG0BF

UK INTRODUCES VAT REVERSE CHARGE ON RENEWABLE ENERGY GUARANTEES OF ORIGIN

On 13th June, Out-Law published an article about the introduction of a reverse-charge VAT arrangement for supplies of renewable energy certificates with effect from 14th June.  Renewable energy guarantees of origin (REGO), in the UK can be traded separately from the electricity they relate to, and if purchased from suppliers in another EU Member State they are zero-rated for VAT.  They could then be sold on in the UK charging VAT at the standard rate.  Fraudsters were able to defraud HMRC by buying the certificates VAT-free, selling to UK purchasers charging VAT, but then failing to pay that VAT (a form of “MTIC” fraud).

https://www.pinsentmasons.com/out-law/news/uk-introduces-vat-reverse-charge-on-renewable-energy-guarantees-of-origin