raytodd.blog

The Globe & Mail in Canada on 24^th September reported that the US Treasury has distributed a list of suspected shell companies that they believe senior Venezuelan officials have used across the globe to siphon off millions of dollars from food import contracts amid widespread starvation in the oil-rich nation.  It is said that Mexico, Panama and Colombia traced transactions by companies believed to be controlled by a government-connected businessman.  As long ago as 2016, a story published by revealed how senior Venezuelan officials and members of the military were enriching themselves by diverting money from food contracts.  The article claims that among those under scrutiny by the coalition of countries is an obscure Colombian businessman called Alex Saab who reportedly struck gold selling to Maduro’s government.  Investigators say Saab entered the food business through a Hong Kong-based company, Group Grand Ltd.  Saab’s Miami-based lawyer has rejected allegations of any wrongdoing.

https://www.theglobeandmail.com/world/article-us-targeting-corruption-in-venezuelas-food-supply

Out-Law published an article on 24^th September that says that foreign companies with a presence in Turkey have been advised to renegotiate the price of their contracts with local organisations into the Turkish Lira as soon as possible.  The move is to protect the vulnerable Turkish economy and currency. On 13^th September, Turkey tightened restrictions on local organisations making transactions using foreign currencies.  An “adaptation period” of 30 days began on 13^th September.  Businesses that do not comply with the new laws will be prohibited from continuing with their transactions and will face fines.

https://www.out-law.com/en/articles/2018/september/turkish-restricts-foreign-currency-transactions/

24^th September 2018

AUSTRALIA: WINE EXPORTS COPYRIGHT CONSULTATION PAPER LAUNCHED

The Shout in Australia on 24^th September reported that Australia’s wine industry is looking at a proposal to develop a new Wine Export Label Directory, after the Winemakers Federation of Australia (WFA) has worked with the Australian Government looking at options to strengthen the country’s wine export regulatory system to deal with potential intellectual property infringements.  This followed a notable case of counterfeit wine bearing a leading Australian label being found in China.

https://www.theshout.com.au/news/wine-exports-copyright-consultation-paper-launched/

PHILIPPINES: CRIMINAL CASES AGAINST IMPORTERS AND CUSTOMS BROKERS

GMA in the Philippines reported on 24^th September that the Bureau of Customs (BOC) had filed 5 criminal cases against importers and customs brokers who were supposedly involved in smuggled shipments, including officers of Malaya Multi-Purpose Cooperative for large-scale agricultural smuggling of 4 containers of onions, and others importing counterfeit cigarettes and assorted beauty products, smuggling plush toys, importing foodstuff, air fresheners, shampoo, and other commodities without the appropriate permits, and fireworks and firecrackers that were misdeclared as footwear.

http://www.gmanetwork.com/news/money/economy/668845/boc-sues-smugglers-customs-brokers/story/

SNIFFER DOG FINDS £450 MILLION WORTH OF DRUGS AT GATWICK AIRPORT IN A YEAR

On 24^th September, The Metro carried an article about Honey, a Labrador sniffer dog in use at Gatwick Airport which helped detect 4,500 kg of cocaine worth more than £450 million last year.

https://metro.co.uk/2018/09/23/sniffer-dog-finds-450million-worth-of-drugs-at-uk-airport-7971422/

AUSTRAC WARNS ABOUT NEW MONEY LAUNDERING THREATS

ABC News in Australia on 24^th September reported that superannuation, stored value travel cards and cryptocurrencies are increasingly being used for money laundering by sophisticated criminals, Australia’s financial intelligence agency has warned.  The Deputy Chief of AUSTRAC told the media that with both retail and industry superannuation funds potential targets of money launderers constantly seeking loopholes to exploit.  This comes as AUSTRAC hosts a summit of The Egmont Group, the multinational group comprising 350 financial intelligence experts from 150 FIU units meeting in Sydney.

http://www.abc.net.au/news/2018-09-24/austrac-warns-about-new-money-laundering-threats/10297562

MEXICO: MONEY LAUNDERING INVESTIGATED AFTER PEMEX EMPLOYEE ASSASSINATED

Mexico News Daily on 22^nd September reported that money laundering at the state oil company Pemex is being investigated in connection with the murder of a company engineer.  It says that Gabriel Alejandro Aguilar Mancera worked in the refinery’s department of public works and acquisitions, a position from which he allegedly could have facilitated the laundering of illicitly-gained funds from organised crime groups through the awarding of Pemex contracts.

https://mexiconewsdaily.com/news/money-laundering-investigated-after-pemex-employee-assassinated/

GROWING PILOT SHORTAGE COMPLICATES SALE OF PRIVATE JETS

Blue Sky has published an article saying that owners face growing risk of not being able to use their aircraft because they can’t secure crew.  It is said that this problem will get worse as airlines are retiring current pilots and recruiting from the private jet sector, and growing markets in Asia, the Middle East and elsewhere are attracting more European pilots.

https://blueskynews.aero/issue-479/Growing-pilot-shortage-complicates-sale-of-private-jets.html

https://www.ainonline.com/aviation-news/business-aviation/2018-09-19/european-pilot-shortage-harming-bizjet-ops-says-broker

THE CASE AGAINST PRODUCT EXCLUSIONS IN TRADE AGREEMENTS

ECIPE has published an article saying that there have been calls to exclude certain products from trade agreements because they cause damages to public health or the environment.  The paper argues that product exclusions are neither legally feasible nor desirable. Measures to exclude products would run foul of the rules and market-access commitments that countries have agreed in the WTO, and that serve as a basis also for other trade deals, like bilateral Free Trade Agreements.  Trade policy concerns trade, and the instruments and agreements that exist for the pursuit of better and less-discriminatory trade conditions simply cannot be used for sundry regulatory proposals, however relevant they may be.

http://ecipe.org/publications/the-swiss-cheese-of-trade-policy/

EU THREATENS SWITZERLAND ON STOCK TRADING

EU Observer on 24^th September reported that the EU will end cross-border stock trading with Switzerland at the end of this year unless there is progress on a new bilateral treaty covering a broad swathe of relations.

https://euobserver.com/tickers/142934

ZIMBABWE “TALKING WITH TRUMP ON SANCTIONS”              

On 24^th September, the Zimbabwe Mail and others reported that Zimbabwe is engaging the Trump administration over economic sanctions Washington imposed on the country nearly 2 decades ago.

https://www.thezimbabwemail.com/zimbabwe/we-are-talking-with-trump-on-sanctions/

MARSHALL ISLANDS AUDITOR’S OFFICE SWAMPED WITH FRAUD REPORTS

Radio New Zealand on 24^th September reported that the Auditor General in the Marshall Islands says his office is being swamped with reports of government fraud, with a significant increase at local and national levels as well as at the country’s overseas missions.  However, it is said that the office did not have enough staff to investigate the rise in reported criminal activity and has asked for funding to create 4 new positions in its Investigation Division.

https://www.radionz.co.nz/international/pacific-news/367138/marshall-islands-auditor-s-office-swamped-with-fraud-reports

SRI LANKA HANDS OVER HAMBANTOTA PORT TO CHINA TO PAY OFF LOANS

Customs Today on 22^nd September reported claims that Hambantota port was signed over to Beijing on a 99-year lease because Sri Lanka cannot repay Chinese loans it took out to build the port.  Chinese businesses now hold a 70% stake in Hambantota port.  The $1.3 billion port was built with loans from a Chinese state-owned bank and opened in 2010.

http://www.customstoday.com.pk/sri-lanka-hands-over-hambantota-port-to-china-to-pay-off-loans/

BLOCKCHAIN IS ‘NOT READY YET’ TO FULLY SUPPORT THE GLOBAL SUPPLY CHAIN

CNBC on 19^th September reported that blockchain technology is not yet mature enough to fully support the global supply chain, according to Christian Lanng, CEO and co-founder of Tradeshift, digital invoicing start-up.  Blockchain is a great technology to manage that kind of flow and be sure of the integrity, he is quoted as saying, the problem is just it’s not a high-performance technology”, adding that it is also expensive.

https://www.cnbc.com/2018/09/19/wef-tianjin-tradeshift-ceo-talked-about-blockchain-in-the-supply-chain.html

IRELAND: THE INTERNATIONAL COMPARATIVE LEGAL GUIDE TO BUSINESS CRIME 2019

Law firm Matheson has published the Irish chapter from this guide – the 9^th edition of The International Comparative Legal Guide to: Business Crime 2019; published by Global Legal Group Ltd, London.

https://www.matheson.com/news-and-insights/article/the-international-comparative-legal-guide-to-business-crime-2019

COUNTRY SPOTLIGHT: LITHUANIA, BLOCKCHAIN NATION

On 24^th September, Banking Tech published an article saying that the small Baltic nation of Lithuania set out its ambitions to be the region’s fintech hub and gateway to Europe at this year’s #Switch event “dedicated to the blockchain technology revolution”.

https://www.bankingtech.com/2018/09/country-spotlight-lithuania-blockchain-nation/

GROSS HUMAN RIGHTS ABUSES: THE LEGAL AND ILLEGAL GUN TRADE TO MEXICO

The Mexican Commission for the Defense of Human Rights and the Stop US Arms to Mexico Project of Global Exchange have produced a report which presents new data and analysis as well as policy recommendations for US policy-makers and the incoming government in Mexico.  In 2017 and the first half of 2018 gun homicide rates were the highest in Mexico’s modern history.  Based on an analysis of responses to public document requests by the Mexican military and other agencies, as well as other official reports, this report provides further evidence of the linkage between the increased firearms trade from the US to Mexico and the dramatic increase in gun homicides and violence in Mexico.

https://stopusarmstomexico.org/gross-human-rights-abuses-the-legal-and-illegal-gun-trade-to-mexico/

RCMP’S ABILITY TO POLICE DIGITAL REALM ‘RAPIDLY DECLINING,’ COMMISSIONER WARNED

CBC in Canada on 24^th September reported that organised crime is moving online and the Royal Canadian Mounted Police is struggling to keep up, according to a briefing note prepared for RCMP Commissioner Brenda Lucki when she took over the top job earlier this year.  The article says that in 2016 nearly 24,000 cybercrime-related cases were reported to Canadian police, up 58% over 2014.  The report’s authors note that cybercrime tends to be under-reported.

https://www.cbc.ca/news/politics/lucki-briefing-binde-cybercrime-1.4831340?cmp=rss

UKRAINIAN, BOSNIAN AMONG CREW MEMBERS KIDNAPPED OFF NIGERIA

Rferl on 23^rd September reported that pirates off the coast of Nigeria have kidnapped 12 crew members of a Swiss vessel, including workers from Philippines, Slovenia, Ukraine, Romania, Croatia, and Bosnia-Herzegovina.  The crew members were abducted on September 22^nd from the vessel that was traveling between the cities of Lagos and Port Harcourt.  Massoel Shipping said the MV Glarus was attacked while transporting wheat from Lniagos to Port Harcourt when it was attacked 45 nautical miles from Bonny Island in the Niger Delta, with12 of its 19 crew taken hostage, according to the BBC.

https://www.rferl.org/a/ukrainian-bosnian-among-crew-members-kidnapped-off-nigeria/29505417.html

https://www.porttechnology.org/news/pirates_take_12_hostages_in_cargo_ship_attack

OFAC: REMINDER FOR THE ANNUAL REPORT OF BLOCKED PROPERTY

On 24^th September, OFAC issued a reminder that persons holding property blocked pursuant to OFAC sanctions regulations to provide OFAC with a comprehensive report on all blocked property held as of June 30^th of the current year by September 30^th.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180924.aspx

TRACE PODCAST: SPOTLIGHT ON PANAMA

David Mizrachi of Panamanian law firm MDU Legal discusses recent AML enforcement in Panama and living under the cloud of the “Panama Papers”

https://www.traceinternational.org/bribe_swindle_or_steal

BREXIT AND CHEMICALS REGULATION (REACH)

On 24^th September, the House of Commons Library published a briefing paper discussing the EU REACH regulation for chemicals and the potential impacts of Brexit including in relation to a no deal scenario.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8403

MALDIVES PRESIDENT DEFEATED AFTER CORRUPTION REVELATIONS

OCCRP and others reported on 24^th September that Yameen Abdul Gayoom, the autocratic leader of the Maldives involved in dubious handouts of 50 of the country’s islands, has been defeated in a landslide election that elevated opposition lawmaker Ibrahim Mohamed Solih to power after 5 years of deepening autocracy.

https://www.occrp.org/en/daily/8634-maldives-president-defeated-after-corruption-revelations

FINLAND ARRESTS SUSPECTS OF INTERNATIONAL MONEY LAUNDERING – CLAIMED RUSSIAN/MALTA LINK

On 24^th September, OCCRP reported that Finnish authorities have detained 3 money laundering and tax fraud suspects and raided the premises of a Finnish company owned by a foreigner.  Among the detained is a Russian national with Maltese citizenship.  Finland’s national broadcaster YLE cited eyewitnesses claiming the premises of Airiston Helmi real estate company were raided.  Airiston Helmi was founded in 2007. A Russian man with citizenship of Malta was named chairman of the board.

https://www.occrp.org/en/daily/8633-finland-arrests-suspects-of-international-money-laundering

Kenneth Rijock in his blog soon latched on to the news that the Russian involved appeared to have a Maltese CBI passport.

http://rijock.blogspot.com/2018/09/russian-money-launderer-arrested-in.html

GERMAN WATCHDOG ORDERS DEUTSCHE BANK TO DO MORE TO PREVENT MONEY LAUNDERING

The Globe & Mail of Canada reported on 24^th September that Germany’s financial watchdog has ordered Deutsche Bank to do more to prevent money laundering and “terrorist financing,” and has appointed a third party to assess progress.  BaFin said that this was the first time it had made such an appointment at a bank related to money laundering.  European regulators are stepping up their scrutiny of banks’ dealings with their customers following a series of scandals, such at Danske Bank.

https://beta.theglobeandmail.com/business/article-german-watchdog-orders-deutsche-bank-to-do-more-to-prevent-money

SHOPKEEPER IN NEWCASTLE HIT WITH £1 MILLION TAX BILL OVER ILLEGAL CIGARETTES

On 24^th September, the Northern Echo reported that the owner of a mini-market had been given a £1 million tax bill as part of a new approach to target the black market in tobacco.  Investigations showed he had made £2,500 a day over a 5-year period.  Investigators are now estimating the revenue loss over a lengthy period, rather than concentrating on the relatively small amounts found and seized.

https://www.thenorthernecho.co.uk/news/local/northdurham/16899507.illegal-cigarettes-shopkeeper-hit-with-1m-tax-bill/

ICAEW REPRESENTATION ON PROPOSALS ON TIME LIMIT AND ASSESSMENTS IN FINANCE BILL

Accountancy Daily on 24^th September reported that the Institute of Chartered Accountants in England and Wales (ICAEW) has published its response to Finance Bill 2018-19 draft legislation to increase assessment time limits; saying that it does not think it is right that the distinction between innocent and careless errors is being removed by the new legislation and the 12-year time limit.

https://www.accountancydaily.co/cch_uk/cln/news_006923_rep107-18

REVERSE CHARGE VAT: WHAT THE CONSTRUCTION SECTOR NEEDS TO KNOW

The Construction Index on 24^th September published an article about changes to the way VAT is collected in construction that could affect up to 150,000 organisations and will cause cash-flow problems in an already squeezed sector – these changes due to come in during 2019.  The move is designed to deal with a particular type of crime known as ‘missing trader fraud’.  The scam has migrated across several industries, and is now taking root in construction supply chains, and involves fraudsters exploit weaknesses in the labyrinthine VAT system to steal government money.

https://www.theconstructionindex.co.uk/news/view/we-need-to-talk-about-vat

CYPRUS: PUBLIC OPINION FEELS GOVERNMENT IS LOSING GRIP ON CORRUPTION; WORLD BANK RATING SLIPS

The Financial Mirror in Cyprus on 24^th September reported that a World Bank report on governance indicators sees Cyprus losing ground on five out of six categories verifying a feeling among Cypriots that there is institutional corrosion.

http://www.financialmirror.com/news-details.php?src=ilaw&nid=35895

INDIAN AUTHORITIES ATTACH $60 MILLION OF ASSETS IN BITCOIN PONZI CASE

Atoz Markets reported on 24^th September that Indian authorities have attached $60 million worth of assets in connection with its probe against Amit Bhardwaj, in the alleged Bitcoin Ponzi fraud of $5.26 billion, according to the CCN news portal.  6 offices in Dubai, immovable properties of the owner of GainBitcoin.com, in addition to the residential apartments and bank balances of 2 of his associates have been “attached” under India’s AML Act 9A SORT OF TEMPORARY RESTRAINT ACTION).  It is said that Bhardwaj used Variabletech Pvt Ltd, Singapore to induce 8,000 people to invest in his Bitcoin-trading scheme.  The alleged conspirator, Gainbitcoin.com, is said to have held marketing events at pricey hotels across India, where his associates attracted attendees towards the Bitcoin mining investment schemes.

https://atozmarkets.com/news/indian-authorities-attach-60-million-in-bitcoin-scam-case

US CONTRACTOR PLEADS GUILTY TO $350 MILLION FRAUD

Global Construction Review on 24^th September reported that a US businessman has pleaded guilty in a case involving the fraudulent winning of federal government construction contracts intended for companies run by women, ethnic minorities, former servicemen and disabled people.  Thomas Brock, 51, of South Carolina, admitted that he misrepresented his businesses to win work.  The government is also prosecuting Brock’s wife, Tory, as well as 4 business associates and a former lover.

http://www.globalconstructionreview.com/news/us-contractor-pleads-guilty-350m-fraud

FUGITIVE BUSINESSMAN USED 3 INDIAN PASSPORTS, FLOATED 37 FIRMS IN US WITH BROTHER

First Post in India on 24^th September reported that fugitive economic offender Nitin Sandesara, wanted in India, may be using multiple Indian passports.  It says that sources said Nitin and his brother, Chetan, had floated 37 companies in the US, which were involved in real estate and port development.  Some of these companies, sources claimed, were also involved in funnelling money to Nigeria where he had acquired 2 oil exploration projects.

https://www.firstpost.com/business/exclusive-fugitive-businessman-nitin-sandesara-used-3-indian-passports-floated-37-firms-in-us-with-brother-chetan-5249401.html

CEO OF CHINA-BASED BOYAA INTERACTIVE GAMBLING COMPANY JAILED ON BRIBERY CHARGES

On 24^th September, Calvin Ayre reported that Boyaa Interactive has had a rough year, saying that the China-based gaming company has seen its revenue fall steeply after regulators began prohibiting a large number of social games.  Now, the chairman and CEO of the company, Zhang Wei, has been sentenced to spend some time behind bars and the company has been scrambling to find a suitable replacement.

https://calvinayre.com/2018/09/24/business/boyaa-interactive-ceo-jailed-bribery-charges/

FRANCE MULLS PLANS TO TAX FOREIGN-REGISTERED HGV

Lloyds Loading List on 24^th September reported that the scheme may be based on existing Swiss model, where truck drivers purchase an annual tax disc giving them access to operate on the country’s roads.

https://www.lloydsloadinglist.com/freight-directory/news/France-mulls-plans-to-tax-foreign-registered-HGVs/72898.htm#.W6k6V_ZFx9A

http://www.customstoday.com.pk/france-set-to-roll-out-tax-disc-for-foreign-truck-drivers/

HUNGARY: ORBAN’S FRIENDS ENJOY LUXURY YACHT, PRIVATE JET

On 24^th September, OCCRP reported that Atlatszo, an OCCRP partner organisation in Hungary, has found links between members of the Hungarian elite, including Prime Minister Viktor Orban, and a luxury yacht (Lady Mrd) and private jet, both registered abroad.  Lady Mrd is owned by a Maltese company called L&L Charter Ltd., which in turn is owned by PKF Fiduciaries International Ltd, another Maltese company.  PKF Fiduciaries is reported to be a proxy for other companies, managing more than 200 offshore firms.  The jet, a brand-new Bombardier Global 6000 valued at $62.38 million, is registered in Austria under the code OE-LEM.  Its owner is unknown, but it is operated by an Austrian business jet company.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8632-hungary-orban-s-friends-enjoy-luxury-yacht-private-jet

HAITIAN ANTI-GRAFT PROTESTERS DEMAND PROBE INTO OIL FUND SCANDAL

Baker McKenzie on 24^th September reported on demands for an investigation into the alleged misuse of funds marked for a cheap oil programme run by Venezuela.  Founded in 2005, the PetroCaribe program allowed several Latin American and Caribbean countries to acquire petroleum products at a low cost, and to pay their bills over 25 years at a 1% interest rate.  There have been 2 Haitian Senate investigations in 2016 and 2017 into the misuse of nearly $2 billion set aside for the fund.

http://www.riskandcompliancehub.com/haitian-anti-graft-protesters-demand-probe-into-oil-fund-scandal/

ANOTHER FORMER RITE AID EXECUTIVE CHARGED IN $5.7 MILLION KICKBACK SCHEME

Baker McKenzie on 24^th September reported another trial connected to the scamming of the drug store giant in a $5.7 million kick-back scheme that lasted 22 years.  James W. Pilsner, 60, of Harrisburg, Rite Aid’s ex-vice president for advertising, has entered a plea agreement.  Also accused are 2 Georgia businessmen, Larry Nuckols, 69, and Vance Taylor, 71, owners of Nuvision Inc. of Atlanta, who are said to have ran the con against Rite aid from 1995 until last year.

http://www.riskandcompliancehub.com/feds-charge-former-rite-aid-exec-in-5-7m-kickback-scheme/

VOLVO HALTS IRAN TRUCK ASSEMBLY DUE TO US SANCTIONS

KYC 360 on 24^th September reported that Swedish truckmaker AB Volvo has stopped assembling trucks in Iran because US sanctions are preventing it from being paid, a spokesman for the company said.

https://kyc360.com/news/volvo-halts-iran-truck-assembly-due-to-u-s-sanctions/

https://www.rferl.org/a/volvo-stops-operations-in-iran-due-to-u-s-sanctions/29507429.html

FACEBOOK HOSTING HUNDREDS OF ILLICIT WILDLIFE SALES LISTINGS IN THAILAND

Illicit Trade on 11^th September reported that researchers at an international wildlife trafficking monitor have discovered more than 1,500 listings for the sale of live animals on Facebook in Thailand.  Traffic found a total of 1,521 animals for sale on 12 Facebook groups in the SE Asian country in less than a month of monitoring in 2016.  Many of the species listed were under international protection, while some were not native to Thailand.  Additional research carried out in July of this year revealed that at least 9 of the groups were still active, and that their combined membership numbers had risen from 106,111 to 203,445 over the past 2 years.

https://www.illicit-trade.com/2018/09/facebook-hosting-hundreds-of-illicit-wildlife-sales-listings-in-thailand/

POTENTIAL CFIUS INTEREST IN TESLA PRIVATISATION?

On 22^nd September, a posting from Bass, Berry & Sims raised the possibility that Saudi investment in Tesla could prompt scrutiny from the Committee on Foreign Investment in the United States (CFIUS) – which you would have thought was aimed at preventing access/control of national security assets by the Chinese, Russians etc.  the posting points one to a fuller article published by Bloomberg on 15^th August.  It seems that the big question is whether this technology is really sensitive enough and whether if acquired by a non-US company it could have some kind of negative impact on US national security.

The big question is whether this technology is really sensitive enough and whether if acquired by a non-U.S. company it could have some kind of negative impact on U.S. national security.

https://www.bloomberg.com/news/articles/2018-08-15/musk-seen-facing-national-security-review-in-a-tesla-saudi-deal

https://www.bassberrygovcontrade.com/category/cfius/

NEW OBSERV INSTITUTE TO HELP FIGHT CORRUPTION IN LATIN AMERICA

Corporate Counsel from Law.com reported on 24^th September that the Observ Institute is an independent, non-profit group that plans to create a public database for bids on government contracts and use that data to identify corruption-related issues in the bidding process. It is described as a group of institutions that includes the Brazilian construction company Odebrecht, joined together to develop a digital platform supported by a network of blockchain.

https://www.law.com/corpcounsel/2018/09/24/new-observ-institute-to-help-fight-corruption-in-latin-america/

https://www.valor.com.br/international/news/5818821/observ-institute-will-monitor-public-bidding

https://www.criptonoticias.com/adopcion/odebrecht-blockchain-transparencia-corrupcion/  (in Spanish)

On 24^th September, the European Sanctions Blog provided a useful update on developments re certain CAATSA-related sanctions with respect to the Russian Federation.  The Secretary of State has added 33 additional persons to the section 231(d) CAATSA list of those “being a part of, or operating for or on behalf of, the defense or intelligence sectors of the [Russian government]” – there now being 72 names on the list, 39 having been listed in October 2017. Being listed does not itself impose sanctions, but any person who knowingly engages in a “significant transaction” with any of the identified persons will be subject to mandatory sanctions, the blog says.

https://europeansanctions.com/2018/09/24/new-caatsa-related-executive-order-33-persons-added-to-caatsa-list-of-russian-defence-intelligence-sectors-2-chinese-persons-sanctioned/

The list of 72 names can be found at –

https://www.state.gov/t/isn/caatsa/275116.htm

On 24^th September, the Home Office issued a news release providing confirmation that the Common Travel Area arrangements and the associated rights and privileges of British and Irish citizens are protected if the UK leaves the EU with no deal.  This does not mean goods (or even, perhaps, “duty-frees”?) but only the citizens, and not foreigners…

https://www.gov.uk/government/publications/travelling-in-the-common-travel-area-if-theres-no-brexit-deal/travelling-within-the-common-travel-area-and-the-associated-rights-of-british-and-irish-citizens-if-there-is-no-brexit-deal

On 24^th September, FATF released a mutual evaluation report on Saudi Arabia saying that it is achieving good results in fighting terrorist financing, but needs to focus more on pursuing larger scale money launderers and confiscating their assets.

http://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-saudi-arabia-2018.html

 

Field Fisher Waterhouse on 23^rd September published an article which examines some of the more common legal and practical issues faced by businesses in the cryptocurrency and payment platform sectors and discuss the latest thinking on how to overcome these obstacles.  It says that KYC and AML feature prominently at the top of most of the lists of concerns for regulated companies looking to participate in or use cryptocurrencies.  It asks how can AML/KYC be controlled on secondary markets?  It says that, technically, it is relatively straight-forward to KYC and AML-screen cryptocurrency investors at the point of investment.  But when crypto assets enter a secondary market and become tradeable on an exchange or off exchange in the over the counter (OTC) market, it becomes much more difficult for an issuer to keep a register of where these assets have gone.  It suggests the use of the WeChat system used in China as a model.  The article also looks at the question for initial coin offerings (ICO) – a method of fundraising using cryptocurrencies – whether a cryptocurrency is a fund or a security.  The article concludes that there is still a long way to go before crypto services become mainstream, trusted financial mechanisms, and regulatory challenges related to ICO remain among the murkiest in the cryptocurrency sector.  As for AML and KYC challenges, these are perhaps more easily solved than some of the other issues facing the crypto sector, it says, as they are essentially educational, rather than technical challenges.

https://www.fieldfisher.com/publications/2018/09/from-bitcoin-to-blockchain-solving-the-regulatory-cryptogram

Loadstar on 21^st September reported that forwarders must protect themselves from the risk of shipping counterfeit goods, trade in which is forecast to increase.  The business of fakes is expected to get a boost from the next round of tariffs on $200 billion-worth of Chinese goods, including handbags, leather and silk.  It notes that in June, 6 US trade associations wrote to the US Government saying that, rather than pay more for legitimate goods, we fear that consumers might seek cheap counterfeits as a replacement, whether knowingly or unknowingly.  In other words, US policy could help legitimise fake goods at the expense of rightful intellectual property owners and the lure of cheaper but fake goods is likely to grow among consumers.  Advice from a lawyer at the US Airforwarders Association is that forwarders need to check the documents and verify accuracy – using ‘reasonable care’.  The watchword for forwarders, she said, especially on shipments from places known for this stuff, is check and double-check the parties and the documents.

https://theloadstar.co.uk/warning-forwarders-appetite-fake-goods-will-rise-alongside-trade-war-tariffs/

The Irish Times on 23^rd September carried an article including an interview with the head of the Criminal Assets Bureau.  It is said that Irish organised crime gangs have become more savvy in disguising their investments and money laundering but they are still being undone by the need to flaunt their wealth in their home communities.  It is said that some 345 assets profilers have been trained to spot the trappings of unexplained wealth in their areas and feed that information back to CAB headquarters in Dublin for review.   Of those profilers, 318 are in the Garda and 27 others are Revenue or are social welfare officials.

https://www.irishtimes.com/news/crime-and-law/gangland-criminals-streetwise-but-not-educated-says-cab-chief-1.3638808

EU Observer on 24^th September reported that Panamanian authorities have revoked the flag of Aquarius 2, a migrant rescue ship run by French charities SOS Mediterranée and Doctors Without Borders.  The charities blamed Italy’s anti-migrant government for putting pressure on Panama.  The ship was the last NGO-run vessel rescuing people from international waters near Libya.

https://euobserver.com/tickers/142928

On 24^th September, Politico reported that the EU Commission is expected to start the next phase of an infringement procedure against the UK for “failure to make customs duties available to the EU budget,” according to EU officials.  It says that this means that action is being taken because British authorities for years failed to uncover the fact that importers evaded some €2.7 billion in customs duties by using fictitious or false invoices for Chinese goods, according to a 2017 report from OLAF.  The UK now has 2 months to react; the next step is a court referral.  It poses the (reasonable) question: why should Brussels allow Britain to collect customs duties on the EU’s behalf after Brexit (which is part of the proposals in the PM’s Chequers plan) when London can’t even do things properly while still a member?

On 23^rd September, Online Poker.net posted a reaction to the agreement of 16 gambling regulators, including the UK, Malta and the Isle of Man, which say they have joined forces to call on video games companies to address the clear public concern around the risks gambling and some video games can pose to children.  Their declaration mentioned 4 elements – skin betting, loot boxes, social casino gaming and gambling-themed content – which the article goes on to briefly describe.

http://www.onlinepoker.net/poker-news/gambling-legislation/coalition-of-gaming-regulators-formed-to-combat-gambling-in-video-games/43439

On 23^rd September, the Daily Mail claimed that Joe Benton had been told by a senior FCO official to end the investigation by the specialist anti-corruption unit he led.  Benton said he had been given a dossier by Bill Browder, the colleague of murdered Russian lawyer, Sergei Magnitsky.  The NCA is quoted as responding that it was felt the best chance of conviction was elsewhere, and that it had co-operated with foreign counterparts investigating the allegations.

https://www.dailymail.co.uk/news/article-6198395/Corruption-boss-says-ordered-halt-probe-Russian-money-laundering-Foreign-Office.html

23^rd September 2018

HUNDREDS OF WILD ANIMALS SAVED AS SHIP STOPPED OFF INDONESIA

The Star online on 23^rd September reported that the animals were being sent to Thailand.  Besides 2 orangutan, other animals kept in 39 boxes were 2 baby Albino fox, 2 paradise birds (burung cenderawasih), 2 alba cockatoos, 2 electus parrots, 21 long-tailed parakeet birds (burung bayan nuri), a female great argus bird (burung kuang raya), 48 baby saltwater crocodiles (buaya tembaga) and 355 sugar glider squirrels.
The crew members are believed to have smuggled the wildlife from Sumatra
https://www.thestar.com.my/news/nation/2018/09/23/hundreds-of-wild-animals-saved-customs-foils-smuggling-attempt-in-joint-sea-patrol-with-indonesia/

NEARLY $18 MILLION WORTH OF COCAINE FOUND IN SHIPMENT OF BANANAS DONATED TO PRISON SERVICE

Global News in Canada on 22^nd September reported that the Texas Department of Criminal Justice (TDCJ) found nearly $18 million worth of cocaine underneath a shipment of bananas donated to it from Ports of America in Freeport because they were considered overripe.

https://globalnews.ca/news/4478539/cocaine-bananas-smuggling/

US AND ALLIES TO START ‘DISRUPTING’ NORTH KOREAN OIL SMUGGLING AT SEA

The Washington Examiner on 22^nd September reported that 3 US allies are to enhance the surveillance of North Korean oil tankers.  Japan, Australia, and New Zealand, announced they would aid “monitoring and surveillance activities against illicit maritime activities,” with a particular focus on ship-to-ship transfers of oil.

https://www.washingtonexaminer.com/policy/defense-national-security/us-to-start-disrupting-north-korean-oil-smuggling

2 SUSPECTS DETAINED IN LARGE-SCALE ILLEGAL LABOUR AND LAUNDERING OPERATION IN FINLAND

On 22^nd September, Yle reported that Finland’s National Bureau of Investigation says a foreign-owned firm in the south-west of the country is suspected of using grey market labour and laundering millions of euros.  NBI reported that it had carried out searches of dozens of business premises in connection with suspicions of aggravated money laundering and aggravated tax fraud, among other things, and interrogated 7 people, 2 of which were arrested.

https://yle.fi/uutiset/osasto/news/two_suspects_detained_in_large-scale_police_operation_near_turku/10418378

LUKA MODRIC HAS REPORTEDLY ADMITS 2 COUNTS OF TAX FRAUD, ACCEPTING AN 8-MONTH SUSPENDED PRISON SENTENCE

Futaa.com and others on 22^nd September reported that the Real Madrid footballer would be given the chance to substitute a prison term for £54,000 fine.  Spanish tax authorities sought information from authorities in the Isle of Man as part of their probe into Modric.  It is reported that he used a company called Ivano SARL based in Luxembourg, named in honour of his son and managed through his wife, Vanja Bosnic.  During the investigation the Treasury detected that Modric could have undeclared funds in the Isle of Man.

https://www.futaa.com/article/164676/madrid-ace-accepts-eight-month-suspended-prison-sentence

TIMELINE – SHELL’S OPERATIONS IN NIGERIA

In the light of the ongoing corruption trial(s) in Italy, Reuters on 23^rd September published a brief timeline of the operations of Royal Dutch Shell in Nigeria saying that it pioneered Nigeria’s oil and gas industry and remains a major investor in the West African country. But over the decades it has come under fire over spills in the Delta region and struggles with oil theft, corruption and oil-fuelled violence.

https://www.reuters.com/article/nigeria-shell-timeline/timeline-shells-operations-in-nigeria-idUSL8N1W74FU

HOW RUSSIAN SANCTIONS ARE HELPING PUTIN ACHIEVE HIS MOST DESIRED GOAL – BRINGING “LOST” RICHES HOME

On 22^nd September, Zero Hedge published an article reporting a Bloomberg report which says that the recent flurry of Russian sanctions put in place by the US are causing Russia’s oligarch billionaires to repatriate more of their offshore assets, perversely aiding a long-held ambition for Vladimir Putin, who has been trying to encourage such repatriations for the past 2 decades.  With the threat of further sanctions looming, the pace at which money is being repatriated has accelerated.  It is not just the billionaires: numerous Russian exporters have moved their assets out of US and European banks, as well.

https://www.zerohedge.com/news/2018-09-22/how-russian-sactions-are-helping-putin-achieve-his-most-desired-goal

DUBLIN WOMAN SUSPECTED OF LARGE-SCALE COCAINE IMPORTATION TOP TARGET FOR DRUGS AND ORGANISED CRIME BUREAU

The Journal on 23^rd September reported that a Dublin woman who is suspected of importing tonnes of heroin and cocaine into Ireland in the past 5 years is a top target of the Garda Drugs and Organised Crime Bureau.  Gardaí believe the woman is the brains behind a drug enterprise using connections in Amsterdam and Antwerp to transport quantities of drugs to Ireland through Dublin Port and is linked to top players in the Kinahan cartel.

http://www.thejournal.ie/garda-crime-drugs-woman-docb-4242566-Sep2018/

HOW ITALY’S FEARED CALABRIAN MAFIA BECAME ENTRENCHED IN AUSTRALIA

The Daily Mail in Australia on 22^nd September published an article saying that Italian anti-mafia prosecutor Nicola Gratteri reportedly has Australia in his sights following claims one of the richest and most powerful organised crime groups in the world has made its mark there.  Italian police believe the Calabian-based ‘Ndrangheta mafia is so entrenched in Sydney,Melbourne and Western Australia through alleged money laundering, drugs trafficking and extortion that it’s too late to completely stamp out.

https://www.dailymail.co.uk/news/article-6195951/Drug-trafficking-money-laundering-extortion-Calabrian-Mafia-entrenched-Australia.html

MINES AND IED EMPLOYED BY HOUTHI FORCES ON YEMEN’S WEST COAST

Conflict Armament Research has published a report which provides an extensive overview of landmines and IED being employed by Houthi forces on the west coast of Yemen.  Its investigations reveal that a significant portion of landmines are improvised and produced, domestically, by Houthi forces.  It concludes that IED and remote-controlled RCIED employed by Houthi forces continue to contain components that originate in Iran.  The most recent seizures of IED electronics reveal attempts to conceal their provenance.  Moreover, Houthi forces distribute military materiel to low-skilled users, as evidenced by their use of printed instructions, which are affixed to IED pressure plates, improvised grenades, and MANPADS.  The report deals with conventional and improvised landmines and naval mines and the components for all of them.

http://www.conflictarm.com/dispatches/mines-and-ieds-employed-by-houthi-forces-on-yemens-west-coast/

€1.7 MILLION IN KINAHAN CASH FOUND IN CAMPER VAN, ATTIC AND HOLDALL BAGS

The Irish times on 23^rd September reported that a camper van carrying cash owned by the Kinahan cartel was pursued by gardaí and around €200,000 was found inside the vehicle when it was brought to a stop.  That seizure was one of 3, in Dublin and Wexford, that has netted the Garda €1.7 million in cash owned by the gang.

https://www.irishtimes.com/news/crime-and-law/1-7-million-in-kinahan-cash-found-in-camper-van-attic-and-holdall-bags-1.3638703?src=ilaw

ANGOLA ARRESTS FORMER MINISTER OVER CORRUPTION

The Daily Nation in Kenya on 23^rd September reported that Angolan authorities arrested and charged Mr Augusto da Silva Tomás, a former transport minister, over corruption allegations.  He is the first top government official arrested over corruption allegations since independence from Portugal in 1975.

https://www.nation.co.ke/news/africa/Angola-arrests-former-minister-over-corruption/1066-4773838-13fh5pn/index.html

SECRETIVE CHICKEN CARTEL BROUGHT DOWN BY WHISTLEBLOWER IN SINGAPORE

On 23^rd September, the Straits Times reported that for years, a close-knit group of executives from firms that supply 90% of Singapore’s fresh chicken would gather at the Poultry Merchants’ Association in Defu, among other places, to discuss prices.  The 13 suppliers, some of whom had known each other for decades, would make verbal agreements to increase prices in tandem and avoid competition with each other, leaving little paper trail of their misdeeds.

https://www.straitstimes.com/singapore/secretive-chicken-cartel-brought-down-by-whistleblower

BANGLADESH: “CORRUPTION RAMPANT AT MONGLA, BURIMARI PORTS”

On 23^rd September, the Daily Star reported that Transparency International in Bangladesh has found massive corruption by customs house and port authorities of Mongla port as well as cases of extortion and corruption at Burimari land port.

https://www.thedailystar.net/business/corruption-rampant-in-mongla-bangladesh-burimari-land-ports-tib-1637449

https://www.dhakatribune.com/bangladesh/nation/2018/09/23/tib-widespread-corruption-at-mongla-burimari-ports

the report is available (if you can read Bengali…) at –

https://www.ti-bangladesh.org/beta3/index.php/en/research-policy/92-diagnostic-study/5691-burimari-land-port-customs-station-and-mongla-port-custom-house-governance-challenges-in-import-export-and-way-out

UN CHIEF: INTENSIFY INTERNATIONAL FIGHT AGAINST TAX EVASION, MONEY LAUNDERING

Baker McKenzie on 21^st September reported that the UN Secretary General has called for intensifying the war on illegal financial transfers, money laundering and tax evasion as one of the ways to ensure countries had adequate funds for development.  The world needs “a surge in investment” in the Sustainable Development Goals, Guterres said.

http://www.riskandcompliancehub.com/un-chief-intensify-international-fight-against-tax-evasion-money-laundering/

https://www.business-standard.com/article/news-ians/intensify-international-fight-against-tax-evasion-money-laundering-guterres-118092100121_1.html

EUROPOL REPORT WARNS AGAINST GROWING CRIMINAL ABUSE OF CRYPTOCURRENCIES

Baker McKenzie on 21^st September reported that Europol, in its Internet organised Crime Assessment 2018 (IOCTA), has recently warned against cryptocurrency-related threats like hacks and cryptocurrency mining malware, and against the use of privacy coins to launder money or finance terrorism, saying that cryptocurrencies are a preferred payment method for criminals.

http://www.riskandcompliancehub.com/europol-report-warns-against-growing-criminal-abuse-of-cryptocurrencies/

The report is at –

https://www.europol.europa.eu/internet-organised-crime-threat-assessment-2018

A SHOCKING UNDERWORLD TALE OF CASH FOR ABALONE

IOL in South Africa on 23^rd September carried an article about abalone-related crime in the country.  This includes, it says, armoured vans carrying legal shipments of farmed abalone are increasingly being ambushed by opportunistic poaching crime syndicates.  It says that the details of how prolific poaching is in the Western Cape has been disclosed in an explosive new book Poacher: Confessions from the abalone underworld, which gives first-hand accounts of the illicit hunt for the underwater treasure.  It is by a former abalone poacher for more than 10 years, co-authored the book with freelance journalist, Kimon de Greef.  It is said that the average amount of abalone poached every year is 2,174 tonnes amounting to R628 million (or nearly £34 million) in value.

https://www.iol.co.za/weekend-argus/news/a-shocking-underworld-tale-of-cash-for-abalone-17193809

WHAT IS “DEBT” FOR THE PURPOSES OF US UKRAINE/RUSSIA SANCTIONS?

One of multitudinous FAQ issued by OFAC is FAQ 371, which explains what “debt” (and “equity”) is for the purposes of the sanctions.  It says that “The term debt includes bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers’ acceptances, discount notes or bills, or commercial paper.  The term equity includes stocks, share issuances, depositary receipts, or any other evidence of title or ownership”.  It also goes into more detail about what the various prohibitions in specific directives mean.

https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#ukraine

Reuters on 23^rd September reported that people or businesses in the EU that wish to keep their financial affairs secret more often find the services they require inside the EU than in one of the tax havens blacklisted by the bloc, the Tax Justice Network (TJN) has said.  Such services include shell companies and banking secrecy and a third used by individuals or entities inside the EU are sourced from within it, the report said, while just 1% stem from places the EU has blacklisted as tax havens.

https://uk.reuters.com/article/us-europe-financial-secrecy/third-of-eu-financial-secrecy-comes-from-inside-its-borders-report-idUKKCN1M30P8

The report is available at –

https://www.taxjustice.net/2018/09/23/eus-tax-haven-blacklist-blocks-just-1-of-financial-secrecy-services-threatening-eu-economies/

Defence Web on 21^st September carried an article about the Africa Aerospace and Defence (AAD) 2018 and a little stand for Jotov & Son Ltd, a Bulgarian arms dealer, offering second-hand Bulgarian arms.  A regional manager is quoted as saying that the equipment might be pre-owned – in this case by the Bulgarian military – but it’s all battle proven, much of it in African conflicts, especially Angola in the 1980s, and thoroughly reconditioned.  Africa is Jotov & Son’s key market.  The company was established under licence by the Bulgarian government in 1991 in the thaw of the Cold War and the unbundling of the erstwhile Warsaw Pact. It is said to be involved in 2 African countries; Uganda and another he prefers not to name.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=53219%3Afrom-fighters-to-tanks-bulgarian-firm-offers-all&catid=7%3AIndustry&Itemid=116#.W6YT0aY0ImA.twitter

22^nd September 2018

US COURT SENTENCES BUSINESSMAN FOR UNLAWFUL EXPORT TO PAKISTAN MILITARY

LY News in India on 22^nd September reported that Imran Khan, 44, pleaded guilty to one count of violating the International Emergency Economic Powers Act.  Khan specifically admitted that, between August 2012 and January 2013, he procured, received and exported to Pakistan Atomic Energy Commission, the Pakistan Space & Upper Atmosphere Research Commission, or the National Institute of Lasers & Optronics.  All of these companies are listed in the US Department of Commerce Entity List, meaning that they were subject to export control prohibitions and restrictions.  When US manufacturers asked about the end-user for a product, the defendants either informed the manufacturer that the product would remain in the US or completed an end-user certification indicating that the product would not be exported.  Earlier this year, Khan’s father, Muhammad Ismail, and his brother, Kamran Khan, each pleaded guilty to money laundering, for causing funds to be transferred from Pakistan to the US in connection with the export control violations.

https://www.latestly.com/agency-news/us-court-sentences-pak-origin-businessman-for-unlawful-export-to-pak-military-396672.html

2 JAILED AFTER SMUGGLING £25 MILLION WORTH OF CANNABIS IN PARCELS OF RABBIT HAY

The Evening Standard reported on 21^st September that 2 used-car salesmen who smuggled at least £25 million of cannabis into the UK hidden among parcels of rabbit hay have been jailed for a total of more than 18 years. Mark Owens, 58, and Paul Seabrook, 52, were the British end of an international smuggling ring, who used the odour of the animal bedding to disguise the smell of the drugs.  Kent Police seized a lorry near to the Dartford Crossing in May 2016, seizing a metric ton of cannabis which had originated in The Netherlands.

https://www.standard.co.uk/news/crime/two-jailed-after-smuggling-25-million-worth-of-cannabis-in-parcels-of-rabbit-hay-a3942791.html

UN PROGRAMME ORGANISES CRACKDOWN ON “RIP ON, RIP OFF” SMUGGLING

Maritime Executive on 21^st September reported that a recent international operation to crack down on containerised drug shipments netted 5.8 tonnes of cocaine in 14 separate seizures around the globe.  44 countries and 52 seaports participated in the 2-week enforcement operation, “Sports Bag-2,” which was held under the UNODC-World Customs Organization Container Control Programme (CCP).  In particular, the sting targeted “rip on and rip off” trafficking – the contamination of legitimate containerised shipments with drugs, often packed in sports bags.  This method involves internal facilitators at the originating or transit port placing bags of illicit items into already-packed shipping containers for retrieval before customs inspection.  Neither the consignor or the consignee is aware that an illicit commodity has been transported within their consignment.  Last year’s operation netted about 7.1 tonnes of cocaine in 19 seizures.  UNODC says that with more than 90% of the world’s cargo transported by sea, CCP and similar programmes are essential to ensuring the security and integrity of the international supply chain.

https://www.maritime-executive.com/article/un-program-organizes-crackdown-on-containerized-smuggling

 

PHISHING, VISHING AND SMISHING: ORGANIZED CYBERCRIME UNDER GDPR, COULD NEW DATA RULES BE MAKING THINGS WORSE?

A newsletter from ACFCS on 21^st September relayed an article from Email Insider saying that far from helping, GDPR and other privacy laws could actually hamper investigation of cyber crimes.  For one thing, regulatory measures such as GDPR and the EU NIS Directive are limiting law enforcement’s ability to access data.  In addition, the redacting of all personal data from WHOIS records is “significantly hampering the ability of investigators across the world to identify and investigate online crime,” a Europol report states.  As if all that wasn’t bad enough, it says, here is the most bizarre thing: that steep GDPR fines for data breaches could lead to “scenarios where hackers may try to extort companies over their data loss,” the report states.  “While this is not new, it may be that the hacked companies would rather pay a smaller ransom to a hacker for non- disclosure than the steep fine that might be imposed by their competent authority”.

https://www.acfcs.org/news/419425/Financial-Crime-Wave–Danske-loses-leader-in-laundering-scandal-is-compliance-failing-and-more.htm

UGANDA: MOBILE MONEY TOOL POTENTIAL FOR TERRORISM FINANCING

The Daily Monitor in Uganda on 22^nd September reported that the US government has in its Global Terrorism Index report warned about mobile money services in Uganda as being vulnerable to exploitation by criminals and terrorists to finance illicit activities in and out of the country. Saying that the country’s AML Act does not put the same requirements on mobile money transfer.
Bank of Uganda revealed in December that with 22 million subscribers currently registered for mobile money, the platform had become instrumental in bringing Ugandans into the formal banking sector.

http://www.monitor.co.ug/News/National/Mobile-Money-tool-terrorism-financing—report-/688334-4771818-2cwgyr/index.html

UK GOVERNMENT ANNOUNCES DEFINITION FOR CANNABIS-BASED PRODUCTS FOR MEDICINAL USE

The Home Office on 21^st September published a news release saying that cannabis-based products for medicinal use will be available for specialist doctors to prescribe legally.  The Home Secretary has now set out how cannabis-based products for medicinal use will be defined in order to make it lawful for them to be prescribed when specialist doctors believe this is appropriate.  The government has been clear it has no intention of legalising the recreational use of cannabis. Due to the known harms of smoking and the potential operational impact on misuse and diversion, smoking will remain prohibited.  Patients will not be able to get cannabis-based medicinal products from their general practitioner.

https://www.gov.uk/government/news/government-announces-definition-for-cannabis-based-products-for-medicinal-use

https://www.gov.uk/government/publications/response-to-acmd-cannabis-derived-medicinal-products-21-september-2018

US: OPERATOR OF COUNTER-ANTIVIRUS SERVICE “SCAN4YOU” SENTENCED TO 14 YEARS IN PRISON

A DoJ news release on 21^st September reported that Ruslans Bondars, 38, a Latvian “non-citizen” (i.e. a citizen of the former USSR who resided in Riga) had been sentenced to 168 months in prison for offences related to his operation of “Scan4you,” an online counter-antivirus service that helped computer hackers determine whether the computer viruses and other malicious software they created would be detected by antivirus software.  Scan4you differed from legitimate antivirus scanning services in multiple ways.  For example, while legitimate scanning services share data about uploaded files with the antivirus community and notify their users that they will do so, Scan4you instead informed its users that they could upload files anonymously and promised not to share information about the uploaded files with the antivirus community.

https://www.justice.gov/opa/pr/operator-counter-antivirus-service-scan4you-sentenced-14-years-prison?src=ilaw

MORE CHINESE ONLINE GAMBLING ARRESTS

Calvin Ayre on 21^st September reported that police in Cixi City in Zhejiang province have arrested 71 individuals suspected of involvement in a pair of illegal online casino operations offering baccarat games to Chinese gamblers.

https://calvinayre.com/2018/09/21/business/china-illegal-online-gambling-scalps/

INDIA SET TO PAY FOR IRANIAN OIL USING RUPEE FROM NOVEMBER
The Times of India on 20^th September reported that India will settle payments for Iranian oil using rupee using local banks from November, according to sources in the industry. Indian refiners are currently using State Bank of India and Germany-based Europaeisch-Iranische Handelsbank AG to buy Iranian oil in euros.  SBI has told refiners it would stop handling Iranian payments in November.
https://timesofindia.indiatimes.com/business/india-business/india-set-to-pay-for-iranian-oil-using-rupee-from-november-sources/articleshow/65886501.cms?utm_source=twitter.com&utm_medium=social&utm_campaign=TOIDesktop

UK: MORE OVERSIGHT NEEDED ON ANTI-TERROR LEGISLATION TO PROTECT FUNDAMENTAL LEGAL RIGHTS

Ekklesia on 22^nd September reported that fundamental legal rights could be put at risk if the government proceeds with the Counter-Terrorism and Border Security Bill in its current form, the Law Society of England and Wales has warned.  The Law Society president has said that the idea people could be questioned for an hour before being able to get legal advice runs against all the usual standards of justice.  Even after an hour, a suspect would have to proactively request a solicitor, rather than being offered legal support.  The government needs to ensure everyone suspected of a crime is entitled to a solicitor and properly informed of their legal rights.

http://www.ekklesia.co.uk/node/26834

MALDIVES POLICE SEIZE OPPOSITION HEADQUARTERS ON EVE OF ELECTION

Al Jazeera on 22^nd September reported that the US and UK condemned the action after special operations police raided the 7-storey building in Male citing an investigation into “bribery and influencing votes”.  President Abdulla Yameen is seeking re-election in the Indian Ocean nation, better known for its upmarket honeymoon resorts, after a first 5-year term marred by allegations of corruption and human rights abuses.  The allegations of graft include the embezzlement of at least $79 million from tourism revenues and conspiracy to launder $1.5 billion through the Maldives central bank.  Yameen has denied any wrongdoing.  Observers say they do not expect the poll to be free or fair.

https://www.aljazeera.com/news/2018/09/maldives-police-seize-opposition-headquarters-eve-election-180922140633531.html

KINGPIN OF HIZBALLAH’S ILLICIT MONEY NETWORK ARRESTED BY BRAZILIAN POLICE

DEBKA File on 22^nd September reported that Assad Ahmad Barakat, alleged mastermind of Hizballah’s financial network in the notorious South American “Triple Frontier” region, has been detained by Brazilian police near the Paraguay-Argentine border.  A Lebanese national, Barakat is reputed to run Hizballah’s large-scale smuggling, drug-trafficking and money-laundering rings for funding is terrorist operations from the Triple Frontier” which is a hotbed of these and other crimes.   In 2006, the US Treasury listed Barakat as a “global terrorist”.

https://www.debka.com/mivzak/kingpin-of-hizballahs-illicit-money-network-arrested-in-paraguay/

CONVICTION OF NIGERIAN MIDDLEMEN ‘SPELLS TROUBLE FOR SHELL AND ENI ON EVE OF MAJOR TRIAL’

Ekklesia on 22^nd September reported that 2 middlemen have been found guilty of corruption offences relating to Shell and Eni’s 2011 deal for one of Nigeria’s most promising oil licences.  Emeka Obi and Gianluca Di Nardo have been sentenced to 4 years jail time and confiscations of over €100 million.  A larger trial including Shell, Eni and 13 other defendants is ongoing.  For years, Shell had claimed that it only paid the Nigerian Government for the OPL 245 oil block but in 2017 Shell admitted it had dealt with Etete who had awarded the OPL 245 oil block to his own secretly owned company, Malabu, while serving as Oil Minister.  The case against Eni and Shell alleges that $520 million from the deal was converted into cash and intended to be paid to the then Nigerian President Goodluck Jonathan, members of the government and other Nigerian government officials.  The prosecutors further allege that money was also channelled to Eni and Shell executives with $50 million in cash delivered to the home of Eni’s Roberto Casula.

http://www.ekklesia.co.uk/node/26832

FinCEN ADVISORY ON THE FATF-IDENTIFIED JURISDICTIONS WITH AML/CFT DEFICIENCIES

On 21^st September, FinCEN published an Advisory detailing the updating in June by FATF of its list of jurisdictions with strategic AML/ CFT deficiencies.

https://www.fincen.gov/sites/default/files/advisory/2018-09-21/FATF_Advisory_September_2018_FINAL_508_0.pdf

SIGNIFICANT SUMS OF CASH SEIZED DURING RAIDS ON ORGANISED CRIME GANG IN COUNTY WEXFORD

The Irish Mirror on 22^nd September reported that the Kinahan cartel was dealt another blow after gardai seized up to €1.2 million believed to be linked to the gang.  Gardai tackling organised crime discovered the huge sum after stopping 2 vehicles in Co Wexford.  4 men were arrested.

https://www.irishmirror.ie/news/irish-news/photos-show-significant-sums-cash-13292384

 

On 19^th September, Rferl published a timeline all the sanctions levied against Russia, and its countersanctions, since 2014.

https://www.rferl.org/a/russia-sanctions-timeline/29477179.html

On 21^st September, OFAC announced that it had extended the expiration date of certain general licences related to EN+ Group plc and United Company RUSAL PLC, and issued 3 general licences – authorising –

• certain transactions necessary to divest or transfer debt, equity, or other holdings;
• certain activities necessary to maintenance or wind down of operations or existing contracts with United Company RUSAL PLC; and
• certain activities necessary to maintenance or wind down of operations or existing contracts with EN+ Group PLC or JSC EuroSibEnergo.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180921.aspx

https://home.treasury.gov/news/press-releases/sm492

https://www.rferl.org/a/rusal-russia-deripaska-sanctions-aluminum-putin-us-treasury/29503029.html

 

Another item on the ACFCS newsletter on 21^st September comes from CNBC and says that bank financial crime compliance teams and first line staff can help combat the rising challenge of fraudsters taking advantage of customers’ faith – by asking more questions of individuals stating they are an investor focusing on religious groups, or if they see a customer start pulling out their funds for a supposedly blessed get-rich-quick scheme. Law enforcement officials call them “affinity frauds” — targeting victims through a common bond, most often religion.  It mentions the case of Ephren Taylor, who fleeced some $16 million from members of church flocks in 43 states by preaching so-called “prosperity gospel”.   The FBI has said that it is investigating $2 billion worth of affinity fraud in Utah alone, where an estimated 60% of the population belongs to the Mormon church.

https://www.acfcs.org/news/419425/Financial-Crime-Wave–Danske-loses-leader-in-laundering-scandal-is-compliance-failing-and-more.htm

https://www.cnbc.com/2018/09/06/religious-based-financial-fraud-is-rampant-heres-how-to-fight-it.html

 

A newsletter from ACFCS on 21^st September relayed an article from Email Insider saying that far from helping, GDPR and other privacy laws could actually hamper investigation of cyber crimes.  For one thing, regulatory measures such as GDPR and the EU NIS Directive are limiting law enforcement’s ability to access data.  In addition, the redacting of all personal data from WHOIS records is “significantly hampering the ability of investigators across the world to identify and investigate online crime,” a Europol report states.  As if all that wasn’t bad enough, it says, here is the most bizarre thing: that steep GDPR fines for data breaches could lead to “scenarios where hackers may try to extort companies over their data loss,” the report states.  “While this is not new, it may be that the hacked companies would rather pay a smaller ransom to a hacker for non- disclosure than the steep fine that might be imposed by their competent authority”.

https://www.acfcs.org/news/419425/Financial-Crime-Wave–Danske-loses-leader-in-laundering-scandal-is-compliance-failing-and-more.htm

21^st September 2018

 WRIGGLE ROOM? WHAT AMOUNTS TO THE “ORDINARY AND PROPER COURSE OF BUSINESS” EXCEPTION IN FREEZING ORDERS

Harneys Offshore on 21st September published an article about a recent decision of the High Court in London in PJSC Commercial Bank PrivatBank v Kolomoisky.  PrivatBank claimed that in breach of Ukrainian law the defendants had misapplied the bank’s assets for their own benefit and a world-wide freezing order had been made which contained exceptions and made specific provision for the trading and non-trading companies controlled by Kolomoisky.  Assets could be disposed of in the ordinary and proper course of business subject to prior notification.  In the proceedings, the bank challenged certain transactions involving non-trading companies (including companies registered in the BVI) and questioned whether they fell under the exception.  The court had to interpret what “in the ordinary and proper court of business” meant and whether the exception applied to what Kolomonsky had sought to do.

http://harneysoffshorelitigation.com/wriggle-room/

https://swarb.co.uk/pjsc-commercial-bank-privatbank-v-kolomoisky-and-others-chd-24-jul-2018/

UAE RE-AFFIRMS COMMITMENTS TO DEVELOPING NUCLEAR PROGRAMME TO HIGHEST SAFETY STANDARDS

Urudu Point on 20^th September reported that, addressing the 62^nd session of the IAEA General Conference, the UAE Permanent Representative to the IAEA said that the UAE is of the view that nuclear power as a clean source of energy is an important factor to meet growing energy demand and to achieve sustainable development goals, and is currently in the commissioning phase of its nuclear power programme, with construction of the first Unit at Barakah NPP now completed.  He said that, in line with the UAE policy and commitments to develop the programme to the highest standards of safety, security, non-proliferation and transparency, the country had hosted 10 major IAEA peer review missions to date.

https://www.urdupoint.com/en/middle-east/uae-re-affirms-commitments-to-developing-nucl-436936.html

AUSTRALIA TO SEND URANIUM SHIPMENT TO INDIA IN “NEAR FUTURE”

The Eurasian Times in India on 20^th September reported that while both the countries had signed a civil nuclear deal in 2014 to promote the supply of uranium to India, the exports of uranium are banned in the country as it is not a member of the Non-proliferation Treaty (NPT).  However, already, it was said, some samples were sent to the Indian authorities for testing.

https://eurasiantimes.com/australia-send-uranium-shipment-india-near-future/

CHINA RAISES PUBLIC AWARENESS ON COMBATING FOSSIL SMUGGLING

ECNS in China on 21^st September reported on an exhibition in central China’s Henan Province of fossils including a dinosaur embryo that was excavated in Henan in 1993, but taken out of the country and only returned to China in 2013.  Another exhibit was sold at an auction in the US for $420,000 and was only returned to China after 5 years of efforts.  To combat smuggling, China has implemented regulations on the excavation, collection, as well as import and export control of fossils.  More than 10,000 fossils are said to have been returned to China.

http://www.ecns.cn/news/2018-09-21/detail-ifyyehna1448659.shtml

ITALIAN NAVY VESSEL SMUGGLED CIGARETTES FROM LIBYA

The Local in Italy on 20^th September reported that the Italian Navy confirmed that a naval vessel was used to smuggle 3,600 cartons of cigarettes, weighing 700 kg, while returning from a mission to stop migrants from travelling from Libya to Europe.  The vessel had spent 3½ months in the port of Tripoli on an assistance mission with the Libyan coastguard to intercept and rescue migrant boats in the Mediterranean.  The cigarettes had been discovered after a routine check when the boat docked in Brindisi on July 16^th.

https://www.thelocal.it/20180920/italian-navy-vessel-smuggled-crates-of-cigarettes-from-libya

DNA ANALYSIS HELPS IDENTIFY AFRICA’S MAJOR IVORY SMUGGLERS

RTE and others on 20^th September reported that researchers in the US have used DNA analysis to reveal that there are 3 major exporters who are illegally smuggling the largest amounts of ivory out of African ports.  A previous study in 2015 used DNA analysis on ivory tusks to identify 2 major poaching hot spots in Africa.  Now scientists sampled 38 seizures made between 2006 and 2015 and using information from these researchers, allied to other information, were able to identify 3 large cartels responsible for ivory shipments out of Africa 2011-2014 when trafficking was peaking.  Mombasa in Kenya, Entebbe in Uganda and Lomé in Togo were found to be the ports from where the shipments were originating.

https://www.rte.ie/news/2018/0919/994813-ivory-smuggling-africa/

PAKISTAN DIDN’T SUFFICIENTLY ACT AGAINST LET, JEM IN 2017, SAYS US

New Kerala in India on 21^st September reports that the US State Department in its annual Country Reports on Terrorism for 2017 says that Pakistan did not take sufficient action against groups such as LeT and JeM in 2017, which continued to operate, train, organise and raise funds in the region.  UN-listed entities — including Lashkar-e-Taiba (LeT) and its affiliates — were not effectively prohibited from raising funds in Pakistan, nor being denied financial services.  Though Pakistan’s National Action Plan to combat terrorism sought to ensure that no armed militias are allowed to function in the country, several terrorist groups focused on attacks outside of the country and continued to operate from Pakistani soil in 2017, it is said in the report.  The report acknowledged that Pakistan’s laws technically comply with international AML/CFT standards

https://www.newkerala.com/news/read/48410/pakistan-didnt-sufficiently-act-against-let-jem-us.html

https://www.dawn.com/news/1434209/pakistans-effort-to-end-terrorist-financing-remains-uneven-us

SRI LANKA REMAINED VULNERABLE TO MONEY LAUNDERING AND TERRORIST FINANCING

The Daily Mirror in Sri Lanka on 21^st September reported that the US State Department in its annual Country Reports on Terrorism for 2017 said that Sri Lanka remained vulnerable to money laundering and terrorist financing although it is neither an important regional financial centre nor a preferred centre for money laundering.  The report noted that the country had been placed on the FATF “grey list” but had agreed to an action plan to address several vulnerabilities, including improving mutual legal assistance, issuing CDD rules for designated non-financial businesses and persons, and enhancing risk-based supervision.

http://www.dailymirror.lk/article/SL-remains-vulnerable-to-money-laundering-terrorist-financing-US-155793.html

TEXAS COURT REJECTS “SPACE TOURISM” CASE INVOLVING ISLE OF MAN COMPANY

The SE Texas Record on 20^th September reported that Japanese investor, Takafumi Horie, the billionaire founder of Internet service provider LDH, had filed suit against Houston attorney, Arthur Dula.  In 2005, they had met with Russian officials to discuss a “space tourism” business, to be conducted through an Isle of Man company, Excalibur Almaz.  Dula was the CEO of the company.  Horie, through his company Space Dream, agreed to purchase 75% of Excalibur’s shares for $49 million and became Excalibur’s majority shareholder before the end of 2005.  However, in 2006, Horie was arrested for securities fraud in Japan, following which his shareholding was reduced and placed under the control of a third-party trustee.  Subsequently, Horie sued Dula for breach of trust and fraud, alleging that Dula was his attorney and that Dula used the funds Horie invested in Excalibur to purchase 4 Almaz spacecraft capsules and 2 space stations without disclosing that the purchase contract prohibited any modification of the hardware – and that consequently, the spacecraft could not be modified to be returned to flight.  The trial court initially denied a motion to dismiss from Dula, but he then came back with a motion for summary judgment, which was granted, leading to Horie’s appeal.   On 18^th September, the appeal court affirmed the trial court’s judgment dismissing Horie’s claims without prejudice.

https://setexasrecord.com/stories/511576029-justices-kick-japanese-billionaire-s-fraud-suit-against-houston-attorney-out-of-texas-court-suit-filed-over-space-tourism-investment

DEFERRED PROSECUTION AGREEMENTS AND “ADEQUATE PROCEDURES”

On 20^th September, law chambers 6KBW published an article following the new SFO Director’s comments about the availability of DPA in the context of a defence of ‘adequate procedures’.  It says that there is a critical distinction to be drawn between compliance procedures at the time of the alleged offending (which goes to the commission of an offence), and those in place at the time of an SFO investigation (which goes to the availability of a DPA).

http://blog.6kbw.com/posts/adequate-procedures-watchful-eye-prosecutor

GERMAN BUSINESSES LEAD EXODUS OUT OF IRAN

Deutsche Welle on 21^st September that while German businesses in Iran have been preparing for months for the sanctions, the outflow of firms is not slowing down.  It says that the focus is on so-called “bottleneck sectors” — areas where there is little or no way to avoid a US connection, including aviation, banking, insurance, shipping and logistics, with the focus on banking, and this means many German companies are caught in the crosshairs.  Many of Germany’s biggest businesses are working with Iran, as are hundreds of the country’s medium-sized firms and Germany remains Iran’s biggest trading partner.  In 2015, when Iran deal was reached, German exports grew 27%.  In 2017, German exports to Iran were worth an estimated $3.5 billion.

https://www.dw.com/en/german-firms-lead-exodus-out-of-iran/a-45577191

ISRAELI POLICE DROP CORRUPTION PROBE INTO UN ENVOY

i24 on 21^st September reported that Israeli police said that they closed a corruption investigation into the country’s Ambassador to the UN, Danny Danon, citing insufficient evidence.  The probe was launched after an Israeli TV station aired interviews, documents and emails it said showed that he gave lucrative taxpayer-funded jobs in to associates in order to induce them to vote for him in the primaries of the ruling Likud party.

https://www.i24news.tv/en/news/israel/184600-180921-israeli-police-drop-corruption-probe-into-un-envoy

OVERVIEW OF EU VAT PROPOSALS CURRENTLY OR RECENTLY UNDER SCRUTINY

On 5^th September, the House of Commons EU Scrutiny Committee’s 36^th Report included, in the section on EU VAT Reform: implications of Brexit, a schedule containing details of current or recent proposals to amend EU VAT.

https://publications.parliament.uk/pa/cm201719/cmselect/cmeuleg/301-xxxvi/30118.htm#_idTextAnchor042

DOES PRESIDENT PUTIN CONTROL OR IS HE CONTROLLED BY THE RUSSIA’S SECURITY SERVICES, THE SILOVIKI?

On 21^st September, ETH Zurich published a research paper in which Michael Rochilz first looks at whether President Putin controls or is controlled by the Russia’s security services, the Siloviki, noting a shift in Putin’s worldview to one more in line with the siloviki.  VA Nomokonov and VV Filippov then analyse the role of the shadow state and crime in Russia, tracing its increasing influence on political, economic and legal affairs.  The edition also includes a book review by Robert Orttung on Peter Reddaway’s recent book on Putin’s symbiotic relationship with the siloviki.

http://www.css.ethz.ch/en/services/digital-library/articles/article.html/d25c0ed0-0354-4b07-bc92-3e487f1dbe6a

NEW YORK GOVERNOR’S CUOMO’S FORMER RIGHT-HAND MAN GETS 6 YEARS FOR BRIBERY

On 20^th September, Law 360 reported that a federal judge has jailed Joe Percoco, Cuomo’s former top aide, with a 6-year prison term for taking bribes in exchange for helping allies in the energy and real estate sectors with state projects.

https://www.law360.com/articles/1084439

VAT FRAUD HAULIER DELIVERED TO JAIL IN NORTHERN IRELAND        

On 21^st September, Accountancy Daily reported that a husband and wife team from County Tyrone who ran a haulage company have been given jail sentences for a £194,000 VAT fraud following an HMRC investigation.  Mark Lyons ran Lyons Haulage Ltd with his wife, Janet.

https://www.accountancydaily.co/vat-fraud-haulier-delivered-jail

E-BULK: SUBMITTING MULTIPLE APPLICATIONS FOR DBS CHECKING

On 21^st September, the Home Office published a news release providing updated guidance on using the e-bulk system for making multiple applications to the Disclosure and Barring Service, including how to register.  The e-bulk service allows DBS customers to submit multiple electronic applications for DBS certificates and receive the results electronically.  DBS processes requests for, and issues, DBS checks for England, Wales, the Channel Islands and the Isle of Man, making considered decisions regarding whether an individual should be barred from engaging in regulated activity with children, adults or both, in England, Wales and Northern Ireland and maintaining the children’s and adults’ barred lists.

https://www.gov.uk/guidance/e-bulk-submitting-multiple-applications-for-dbs-checking-formerly-crb

EU: VAT GAP: FREQUENTLY ASKED QUESTIONS

On 21^st September, the EU published a list of FAQ on the VAT Gap – the overall difference between the expected VAT revenue and the amount actually collected.  The accompanying news release says that EU Member States still losing almost €150 billion in revenues according to new figures.

http://europa.eu/rapid/press-release_MEMO-18-5788_en.htm

http://europa.eu/rapid/press-release_IP-18-5787_en.htm

UNEXPECTED, UNREPORTED, AND SO FAR UNEXPLAINED EMISSIONS OF CFC-11

On 13^th September, the Bulletin of the Atomic Scientists published an article about investigations into the cause of the recently discovered increase in the chlorofluorocarbon (CFC) known as CFC-11 — one of the most potent chemicals causing dangerous holes to form in the ozone layer of the Earth’s stratosphere.  It reports that initially 18 rogue factories in China were said to have been using CFC-11 in the manufacture of the spray foam insulation material that they were putting into refrigerators and buildings.  They were doing this even though this substance was banned under the Montreal Protocol — which China had signed back in the 1980s.  However, it says, things may not be all that clear-cut.  Other offending factories, and other sources of these synthetic compounds, may still be out there. The reasons for these suspicions: the numbers don’t add up, and it’s not clear that all of the CFC are coming from East Asia.  Another puzzling question raised concerns the absence of CFC-12 emissions, which have not been increasing alongside CFC-11, although this chemical is unavoidably produced at the same time.  China has now announced a special campaign to identify any illegal CFC-11 production, and local authorities have already filed charges against two of the firms found to be producing CFC-11 and CFC-12.

https://thebulletin.org/2018/09/unexpected-unreported-and-so-far-unexplained-emissions-of-cfc-11/

ANGOLA DROPS GRAFT CHARGES AGAINST EX-ARMY CHIEF

News 24 in South Africa reported that Angolan prosecutors dropped corruption charges against a former army chief of staff, Geraldo Sachipengo Nunda, who was sacked in April by President Joao Lourenco as he moved to shake up his predecessor’s administration because of a lack of evidence “proving criminal conduct”, according to the Supreme Court.  8 other accused, including a spokesperson for the ruling party, 4 Thai nationals, a Canadian and an Eritrean were placed under house arrest in connection to a $50 billion fraud and their trials are expected to begin before the end of the month.

https://www.news24.com/Africa/News/angola-drops-graft-charges-against-ex-army-chief-20180920

EUROPOL SEIZE 2.2 MILLION KG ILLICIT FUEL IN OPERATION ACROSS 23 EU STATES

ERR in Estonia on 21^st September reported that a joint operation conducted in 23 EU Member States, including Estonia, Latvia and Lithuania, and targeting organised crime groups involved in fuel fraud led to the arrest of 25 suspects thus far and the seizure of 2.2 million kg of illicit fuel.  It said that, to ensure the fuel was not subject to excise regime once on the market, the criminals involved produced a mixture of primarily gas oil and other added compounds to modify the final physical features of the product.

https://news.err.ee/863075/europol-seize-2-2-million-kg-illicit-fuel-in-operation-across-23-eu-states

ZIMBABWE AIRWAYS $70 MILLION SCANDAL PROBED

Zimbabwe Today on 21^st September reported that the Zimbabwe Anti-Corruption Commission (Zacc) has launched an investigation into the controversial Zimbabwe Airways (ZimAirways) deal where the airline controversially purchased 2 Boeing 777 planes for $18,5 million and $16,5 million in a probe that has sucked in former president Robert Mugabe’s son-in-law Simba Chikore and ex-transport minister Joram Gumbo.

https://www.theindependent.co.zw/2018/09/21/zimairways-us70m-scandal-probed/

RUSSIA LAUNCHES INTERNATIONAL MANHUNT FOR SPACE CONTRACTOR REPORTEDLY HIDING IN US

The Moscow Times on 21^st September reported that Russian investigators have launched an international manhunt for Sergei Slastikhin, the head of a bankrupt construction company, Inzherniye Sistemy, contracted by the country’s space agency who is accused of large-scale fraud and is believed to be hiding abroad.  He was charged with fraud in August and placed on an international wanted list in September.  His company is said to have held contracts for several Roscosmos Federal Space Agency sites and he reportedly had access to state secrets.

https://themoscowtimes.com/news/russia-launches-international-manhunt-space-contractor-reportedly-hiding-us-62954

AUSTRALIAN REGULATOR GOES AFTER FRAUDULENT ICO AND CRYPTO ASSET FUNDS TARGETING SMALL INVESTORS

Cryptoglobe on 21^st September reported that the Australian Securities and Investments Commission (ASIC) has disclosed its record of regulatory actions against ICO and crypto asset funds that aim to defraud retail investors by providing them with false information and unrealistic promises, while preventing them from accessing investor protections and guarantees by operating without registering with relevant government bodies.

https://www.cryptoglobe.com/latest/2018/09/australian-regulator-goes-after-fraudulent-icos-and-crypto-asset-funds-targeting-small-investors/

BOOKIE WORKER RAKED IN £40,000 RUNNING STING-STYLE BETTING SCAM ON FINISHED RACES

The Daily Record reported on 21^st September that Gavin Thomson discovered a flaw in Coral’s computer system that allowed him to place bets after the race was over.

https://www.dailyrecord.co.uk/news/scottish-news/bookie-worker-raked-40000-running-13284691

UK: 5 YEARS FOR MAN WHO RAN FORGERY FACTOR

On 21^st September, an NCA news release reported that Ukrainian national Sergiy Mykhaylov, 38, who manufactured and supplied counterfeit identity documents on a national scale has been jailed for over 5 years.  He was arrested in June 2018 by NCA surveillance officers outside his workplace in Hackney.  He used his home in Stratford as a forgery factory set up with computers and printers capable of producing tens of thousands of documents, and ran an online business through which he received orders and would post the forged documents to customers all over the UK.  In total, officers recovered over 3,000 completed identity documents, 3,500 passport style photos and 300 Construction Skills Certificate Scheme (CSCS) cards, as well as 40,000 bank cards and £15,000 in cash.

http://www.nationalcrimeagency.gov.uk/news/1473-five-years-for-man-who-ran-industrial-scale-forgery-factory

GAMBLING BROUGHT IN $261 BILLION TO THE US ECONOMY IN 2017

Calvin Ayre reported on 21^st September that the American Gaming Association (AGA) has released figures for the year 2017, showing that the gambling industry contributed $261.4 billion in business sales to the US economy in 2017, a 9.5% increase from 2014.

https://calvinayre.com/2018/09/21/business/gambling-brought-in-261b-to-us-economy-in-2017/

INTERNATIONAL EXPERTS MEET ON ELECTRONIC MUTUAL LEGAL ASSISTANCE

A news release from Interpol on 21^st September reported that the first phase of a project to determine the legal feasibility of electronically transmitting mutual legal assistance exchanges (e-MLA) concluded on 13^th September 2018 following a 2-day working group hosted by INTERPOL.  The study is said to have found that existing legislation, at both the domestic and international level, is capable of supporting the legal basis for such electronic transmission.

https://www.interpol.int/News-and-media/News/2018/N2018-097

SCOTTISH COURT OF SESSION ASKS CJEU WHETHER BREXIT CAN LEGALLY BE REVERSED

Monckton Chambers on 21^st September reported that the Inner House of the Court of Session in Scotland has decided to make a reference to the CJEU for a preliminary ruling on the question of whether the UK can withdraw the notification of its intention to leave the EU under Article 50 TEU.  The petition was brought by Andy Wightman MSP and others.  On 5^th June the Outer House of the Court of Session refused to make a reference to the CJEU on the basis that the question of revocation of the Article 50 notice was hypothetical.  However, in the new decision, the Inner House (the Scottish appeal court) has unanimously held that the issue is not hypothetical and should be answered by the CJEU.

https://www.monckton.com/court-of-session-asks-cjeu-whether-brexit-can-legally-be-reversed/

 

SWISS BANKERS ASSOCIATION GUIDELINES ON OPENING CORPORATE ACCOUNTS FOR BLOCKCHAIN COMPANIES

On 21^st September, Mondo Visione carried a notice from the SBA saying that it welcomes this trend and takes a positive view of the high market momentum, as it boosts Switzerland’s attractiveness as a financial centre.  It says that, with the growth of blockchain companies, their demand for corporate accounts with banks in Switzerland has also risen.  Opening an account poses various challenges for banks, because the new blockchain technologies can also be associated with risks, especially in relation to ​​money laundering.  Switzerland has strict laws and due diligence requirements in place governing financial transactions.  Banks must therefore carry out careful checks when opening an account.  SBA set up an internal working group involving member banks and also the Crypto Valley Association (CVA), and the guidelines are the fruits of this work.

http://www.mondovisione.com/media-and-resources/news/opening-corporate-accounts-for-blockchain-companies-swiss-bankers-association/

ROMANIAN WOMAN PLEADS GUILTY IN US TO HACKING OF METROPOLITAN POLICE DEPARTMENT SURVEILLANCE CAMERAS

A news release from the DoJ on 20^th September reported that Eveline Cismaru, a citizen of Romania, has pleaded to federal charges stemming from her role in a conspiracy to illegally access approximately 126 computers associated with Metropolitan Police surveillance cameras in London and to use those computers in connection with a scheme to distribute ransomware in January 2017.

https://www.justice.gov/usao-dc/pr/romanian-woman-pleads-guilty-federal-charges-hacking-metropolitan-police-department

 

The Asia Pacific Group, the regional FATF-style reporting body, has published its 2018 edition of its yearly typologies report.  It is designed to assist governments and other stakeholders to better understand the nature of existing and emerging ML and TF threats and pursue effective strategies to address those threats.  The APG’s yearly typologies reports include: observations on ML and TF techniques and methods; case studies; and ‘red flag’ indicators.

http://www.apgml.org/includes/handlers/get-document.ashx?d=aae9e373-fe1b-44bc-a77e-770629921869

The Conservation on 21^st September carried an article saying that antique guns are increasingly cropping up in violent crimes due to a lack of control around the sale, transfer and ownership of firearms made before 1939.  Antique weapons are exempt from the Firearms Act 1968 – though at present there is no clear definition of what constitutes an antique.  Instead, the Home Office provide guidance on what should be considered “antique” based on a number of factors.  There is also the additional requirement that an antique firearm must be held as a curiosity or ornament.  As antique weapons are exempt from firearm legislation, there is no need to hold them on a firearms licence.  They can be transferred and sold freely for cash – and there is no requirement to record any details of the transaction.  A government consultation in 2017 aimed to clearly define what the term “antique” means and provide a cut-off guidance date for manufacture.  The feedback received from this consultation is currently being analysed.

https://theconversation.com/criminals-are-using-antique-weapons-due-to-a-loophole-in-uk-law-102666?utm_source=twitter&utm_medium=twitterbutton

Bryan Cave Leighton Paisner published a briefing on 21^st September in which experts discuss data subject requests in the light of the GDPR.  It says that DSAR were still the number one reason for complaints to the ICO.  Many of the organisations named in such complaints will receive letters from the ICO asking for an explanation, which will require time and care in their response.

http://www.blplaw.com/media/pdfs/Corporate%20pdfs/What_has_the_GDPR_(ever)_done_for_Subject_Access_Requests_-_Kate_Brimsted__Tom_Evans,_Bryan_Cave_Leighton_Paisner_(Volume_18_Issue_8).pdf

An article published by the Royal United Services Institute on 21^st September says that China appears to be reigning in its distant-water fishing fleet – the fleet of vessels that fish in areas outside the country’s domestic waters. The move has come as a surprise to fishing companies and the counter-illegal, unreported and unregulated (IUU) fishing community alike given the country’s previous apparent reluctance to tackle illegal activity in its domestic fishing industry.  This is good news for environmental protection, but the article warns that China watchers should pay attention to the potential knock-on effects.  It asks how will China tackle IUU fishing where maritime borders are disputed (such as in the South China Sea)?   It also asks how might China’s crackdown on Chinese fishers impact Taiwanese fishers abroad at a time of heightened tension between China and Taiwan?  The article says that China’s role in the global IUU fishing problem is well-documented. China’s fishing operations are the world’s largest and farthest-ranging.  Greenpeace estimated that China’s DWF is comprised of 2,500 vessels; in 2016, Chinese-flagged vessels were seized off South Africa and Argentina, among other locations.

https://rusi.org/commentary/cracking-down-china’s-distant-water-fishing-fleet-what-impacts-closer-home

On 21^st September, the Isle of Man advised that numerous entries in the lists of those subject to the Ukraine sanctions regime had been amended in accordance with changes contained in EU Regulation 2018/1230/EU.

https://www.gov.im/news/2018/sep/21/financial-sanctions-ukraine/

The Wall Street Journal on 20^th September reported that authorities in Liberia said they were investigating the disappearance of $104 million in newly-printed banknotes intended for the central bank, in a possible fraud equal to 5% of GDP.  The justice ministry confirmed that 15 officials, including the son of former president and Nobel Prize winner, Ellen Johnson Sirleaf, and the former central bank governor, were under investigation and had been banned from leaving the country.  It is reported that shipping containers carrying the cash, ordered from printers in Sweden and China, arrived at Liberia’s port and then vanished.

https://www.wsj.com/articles/liberia-investigates-central-banks-missing-104-million-in-cash-1537442778?mod=searchresults&page=1&pos=2

https://qz.com/africa/1396746/george-weah-liberia-loses-containers-with-104-million-bank-notes-cash/

Hong Kong Free Press on 21^st September reported that OFAC had imposed CAATSA sanctions against a Chinese military organisation, the Equipment Development Department of the Chinese Ministry of Defense, and its top administrator, Li Shangfu, for buying Russian fighter jets and missiles.

https://www.hongkongfp.com/2018/09/21/us-sanctions-chinese-military-unit-buying-russian-jets-missiles/

20^th September 2018

RUSSIAN TAX AUTHORITIES’ GUIDANCE ON DETERMINATION OF TAX RESIDENCE BETWEEN CYPRUS AND RUSSIA

On 19^th September, Elias Neocleous & Co LLC published an article comparing the 2017 additional rule on what made a person tax resident in Cyprus with a statement from the Russian Ministry of Finance on the application of the Cyprus-Russia double taxation agreement following the introduction of the new residence provisions in Cyprus.  The Russian statement makes clear that it will judge tax residence only in terms of the Russian rules, and that possession of a tax residence certificate from Cyprus does not have any automatic effect in this regard.

https://www.neo.law/2018/09/17/the-russian-tax-authorities-guidance-on-determination-of-tax-residence-between-cyprus-and-russia/

BUSINESS CRIME BRIEFS: BVI AND CAYMAN ISLANDS

On 17^th September, Maples and Calder published separate guides to the law enforcement and courts arrangements in the two jurisdictions, as well as on the law relating to various business crimes, including embezzlement, tax crimes, bribery and insider trading.

https://www.maplesandcalder.com/news/

IRELAND: CONDUCTING CORPORATE INVESTIGATIONS – RECENT DEVELOPMENTS

On 17^th September, Matheson reviewed recent developments in Ireland re corporate investigations, saying that all the cases involved allegations of corruption and/ or fraud, and thus these decisions are even more significant when viewed in the context of the recently enacted Criminal Justice (Corruption Offences) Act 2018 (CJCA).  It also advises that companies should give careful consideration to putting in place a protocol regarding the establishment of internal investigations and the treatment of documents generated in relation to the process.

https://www.matheson.com/news-and-insights/article/conducting-corporate-investigations-recent-developments

ASSOCIATED BRITISH PORTS (ABP) IS TO PILOT A BLOCKCHAIN SOLUTION ACROSS ITS UK SITES

On 20^th September, Loadstar reported that an MoU with Marine Transport International (MTI) will see ABP commit shipments for MTI’s blockchain technology.  ABP operates 21 ports across the UK, handling 25% of the country’s seaborne cargo.

https://theloadstar.co.uk/abp-signs-trial-blockchain-technology-across-uk-port-operations/

https://www.lloydsloadinglist.com/freight-directory/news/ABP-signs-blockchain-deal-to-improve-port-connectivity/72885.htm

FIRST TIR INTERMODAL SHIPMENT ON WAY FROM MIDDLE EAST TO EUROPE

Loadstar on 20^th September reported that a container has left the UAE bound for Europe on the first intermodal TIR transport between the Gulf Cooperation Council (GCC) and the EU, destined for the Czech Republic.  It will travel by land and sea, arriving in Hamburg.  TIR means a vehicle travelling under the TIR Convention which facilitates the international carriage of goods from one or more customs offices of departure to one or more customs offices of destination (up to a total of 4 customs offices departure and destination) and through as many countries as necessary.  As a rule, the vehicle remains sealed throughout the TIR transport and, thus, goods are generally not inspected at border crossings.

https://theloadstar.co.uk/first-tir-intermodal-shipment-middle-east-europe-way/

LISA OSOFSKY OUTLINES HER PRIORITIES AS NEW DIRECTOR OF THE SFO

Wilmer Hale on 14^th September reported that on 3^rd September, Lisa Osofsky gave her inaugural speech as the new Director of the SFO to the annual Cambridge International Symposium on Economic Crime.  It says that Osofsky was keen to establish at this early stage that she will be “a different kind of Director”.  By extension, it concludes, we may find ourselves dealing with a different kind of SFO.

https://www.wilmerhale.com/en/insights/blogs/WilmerHale-W-I-R-E-UK/20180914-i-will-be-a-different-kind-of-director-lisa-osofsky-outlines-her-priorities-as-new-director-of-the-serious-fraud-office

UK: SECURITY FEATURES FOR TOBACCO TRACK AND TRACE TO BE IMPLEMENTED BY 20 MAY 2019

On 20^th September, HMRC published a news release saying that from 20^th May 2019, all unit packs of cigarettes and hand-rolling tobacco manufactured in, or imported into the UK must carry at least 5 security features which include overt, semi-covert and covert elements.  A unit packet includes the cellophane wrapper only if it is affixed in a way that its removal would leave a mark.  Other tobacco products (e.g. cigars) do not need security features until May 2024.  They are therefore not required to apply the necessary features.  Further details on the security features for these products will be provided in due course.

https://www.gov.uk/guidance/security-features-for-tobacco-track-and-trace

HOW PUERTO RICO BECAME THE NEWEST TAX HAVEN FOR THE SUPER RICH

On 18^th September, GQ Magazine published an article which says that a year after the tragedy of Hurricane Maria, the “51^st state” has become the favourite playground for extremely wealthy Americans looking to keep their money from the taxman.  The only catch?  They have to cut all ties to the mainland (wink, wink).  Individuals must prove to the IRS that they have become bona fide residents of Puerto Rico, without “close contacts” on the mainland and most native Puerto Ricans are not eligible for the exemption.  The mainlanders who have relocated belong to the middle class of the ultra-rich.

https://www.gq.com/story/how-puerto-rico-became-tax-haven-for-super-rich

FRENCH RULES REGARDING THE LIABILITY OF LEGAL ENTITIES, WHETHER PRIVATE OR PUBLIC (EXCEPT THE STATE)

On 20^th September, Bird & Bird published a briefing outlined the position of companies and other legal entities under French law and how the entity can be liable if a representative commits a criminal act.  Employees who do not hold a delegation of authority will be solely responsible, but the legal entity can be prosecuted if the offence was perpetrated for its benefit.  A managing officer who has not taken “adequate measures to avoid the perpetration of the offence” may also be prosecuted alongside the perpetrator and the legal entity under what is called “cumulative liability”.  The article also notes that French criminal law is evolving: gradually moving towards a negotiation mechanism with a form of deferred prosecution agreement available for corruption offences, for example.

https://www.twobirds.com/en/news/articles/2018/france/criminal-justice-companies-managers-employees-all-concerned-all-accomplices

RUSSIAN OIL FIRM SEEKS PAYMENTS IN EUROS AMID US SANCTION THREAT

EurActiv on 20^th September reported that Surgutneftegaz, representing 11% of oil production in Russia, is pushing buyers to agree to pay for oil in euros instead of US dollars if the need arises, apparently as insurance against possible tougher US sanctions.

https://www.euractiv.com/section/global-europe/news/russian-oil-firm-seeks-payments-in-euros-amid-us-sanction-threat/

EUROPOL: COMPANIES MAY TRY TO BYPASS GDPR FINES BY NEGOTIATING WITH CYBERCRIMINALS

On 20^th September, EurActiv reported that the 5^th Internet Organised Crime Threat Assessment (IOCTA) from Europol warned that EU data protection laws may lead to an increase in cyber-extortion and of the implications of companies breaching General Data Protection Regulation (GDPR) rules and choosing to pay hackers bribes – as this may be cheaper than the 4% of global turnover for GDPR breaches.

https://www.euractiv.com/section/cybersecurity/news/companies-may-try-to-bypass-gdpr-fines-by-negotiating-with-cybercriminals-europol-say/

DRUG INDUSTRY REACTS TO OXFAM’S ALLEGATIONS OF TAX-DODGING

EurActiv on 19^th September reported that the 4 multinationals named in research carried out by Oxfam deny that they hid their profits in tax havens.  Pfizer, Merck, Johnson & Johnson, and Abbott, are behind some of Europe’s best-known brands such as Neutrogena, Anadin and Tylenol, as well as lifesaving medicines with global revenues topping €1.5 trillion in the 10 years from 2006 to 2015.  According to the Oxfam report, the drug companies appeared to underpay an estimated €1.2 billion in taxes in 6 European countries (Denmark, France, Germany, Italy, Spain and the UK) over a 3-year period.

https://www.euractiv.com/section/economy-jobs/news/drug-industry-reacts-to-oxfams-allegations-of-tax-dodging/

EU COMMISSION PUBLISHES NEW GUIDANCE FOR ENDING UNJUSTIFIED GEO-BLOCKING AND MAKING CROSS-BORDER PARCEL DELIVERY MORE AFFORDABLE

On 20^th September, the Commission issued updated guidance for ending unjustified geo-blocking to help Member States and businesses active in the area of e-commerce to adapt to the new rules which start applying across the EU as of 3^rd December.  A new EU Regulation on cross-border parcel delivery entered into force earlier this year.  The measures now adopted specifies the information that parcel delivery service providers will have to hand in to national regulators.

http://europa.eu/rapid/press-release_MEX-18-5838_en.htm

https://ec.europa.eu/digital-single-market/en/news/ending-unjustified-geoblocking-boost-online-shopping-eu

CHINA ESTABLISHES INTERNATIONAL COMMERCIAL COURTS

On 19^th September, Forwarder Law reported that China’s Belt & Road Initiative (BRI), launched in 2013, is well underway in increasing China’s regional connectivity and stimulating trade.  The BRI includes multiple infrastructure projects as well as IT and finance initiatives.  On 29^th June, the Supreme People’s Court of China officially launched its First and Second International Commercial Courts (the CICC) in Shenzhen and Xi’an respectively to handle a wide range of international commercial disputes.  The article describes their key features.  The CICC is intended particularly to deal with disputes arising out of projects under the BRI.

http://forwarderlaw.com/2018/09/19/china-establishes-international-commercial-courts/

TRADING IN DRUG PRECURSORS CHEMICALS IF THERE’S NO BREXIT DEAL

On the 20^th September, the Home Office issued updated information on how trading in drug precursor chemicals would be affected if the UK leaves the EU with no deal.  Drug precursors are chemicals that can be used in the illicit manufacture of narcotic drugs.  They also have legitimate commercial uses and are legally used in a wide variety of industrial processes, such as medicines, flavourings and fragrances.  They are divided into 4 categories:

• Category 1: the most sensitive substances (the ‘main’ drug precursors)
• Category 2: less sensitive substances and pre-precursors
• Category 3: bulk chemicals that can have different types of uses in the manufacturing process, for example as feedstock, solvents or impurities removers
• Category 4: covers medicinal products for human and veterinary use containing ephedrine or pseudoephedrine

https://www.gov.uk/government/publications/trading-in-drug-precursors-if-theres-no-brexit-deal/trading-in-drug-precursors-if-theres-no-brexit-deal

ARMENIA: FORMER YEREVAN MAYOR QUESTIONED IN CORRUPTION PROBE

On 20^th September, Rferl reported that Armenia’s National Security Service (NSS) has questioned former Yerevan Mayor Taron Markarian as part of a criminal investigation into a municipal fund that was overseen by him.  NSS officers searched the offices of the Yerevan Fund and arrested its executive director and another municipal official in mid-June.  The men were accused of extorting hefty payments to the charity from individuals seeking construction permits from the mayor’s office.

https://www.azatutyun.am/a/29500948.html

BELGIAN PROBE IMPLICATES BRITAIN IN PHONE SPYING

AFP reported on 20^th September that a confidential report by Belgian investigators confirms that British intelligence services hacked state-owned Belgian telecom giant Belgacom on behalf of the US.  It says that the report, which summarises a 5-year judicial inquiry, is almost complete and was submitted to the office of the Justice Minister, a source close to the case told AFP

https://www.afp.com/en/news/23/belgian-probe-implicates-britain-phone-spying-doc-19a2bs1

JAPANESE REFINERS STOP BUYING IRAN OIL AHEAD OF SANCTIONS

Oil Price.com on 20^th September reported that Japanese refiners have stopped buying Iranian crude ahead of the November 4^th deadline set by Washington to all countries doing business with Iran before economic sanctions return.  Japan is one of Iran’s largest oil importers, but it is also the US staunchest ally in Asia.

https://oilprice.com/Latest-Energy-News/World-News/Japanese-Refiners-Stop-Buying-Iran-Oil-Ahead-Of-Sanctions.html?src=ilaw

MOVE TO FREEZE 2 TRINIDAD ISIS AGENTS’ ASSETS

The Trinidad & Tobago Guardian on 19^th September reported that 2 Trinidad & Tobago na­tion­als, iden­ti­fied as Em­raan Ali and Ed­die Ale­ong, have been des­ig­nat­ed by the US and sanc­tioned for be­ing fi­nanciers of the ISIS ter­ror net­work, as re­gion­al­ly co-or­di­nat­ed in­ves­ti­ga­tions seek out cer­tain tar­gets be­tween the country, Suri­name and oth­er ar­eas.  The news release from the US Treasury said Ale­ong, 38, was based in the country and is al­so known as “Ish­mael Mo­hammed,” “Ish­mail Muhammed” and “Is­ma’il Ali Yong”; while Ali, 51, was based in Syr­ia.

http://www.guardian.co.tt/news/move-to-freeze-2-trini-isis-agents-assets-6.2.671593.7d055d2227

LAW FIRM UNDER SCRUTINY IN PNB SCAM

The Telegraph in India on 20^th September reported that the country’s largest law firm, Cyril Amarchand Mangaldas (CAM), is being scrutinised by federal agents after they seized documents related to the $2 billion fraud at state-run Punjab National Bank (PNB) from CAM’s premises.  CAM declined to comment on its relationship with Modi, who is on the run overseas.

https://www.telegraphindia.com/business/lens-on-law-firm-in-pnb-scam/cid/1669590?ref=search-page

BRIEFING PAPER ON BAILIFFS

The House of Commons Library has published a briefing paper on bailiffs in England and Wales which summarises recent changes to the regulation of bailiffs, and attempts to answer the most common questions about bailiff action.  A bailiff, now known officially as an enforcement agent, can either be an officer of the court or employed by a private debt collection company. They are authorised to collect certain debts on behalf of a creditor. They may do this by asking for immediate payment of the debt, or by “levying distress”, which means seizing the debtor’s goods and selling those at auction to raise the money needed to repay the debt and cover the bailiff’s fees.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN04103

 

CZECH REPUBLIC: WATCHDOG CALLS FOR EU PROBE OVER PRIME MINISTER’S ALLEGED CONTROL OF AGROFERT

On 20^th September, Radio Prague reported that the Czech branch of anti-corruption watchdog Transparency International has sent a formal complaint to the European Commission alleging a conflict of interest between PM Andrej Babiš and his economic interests in relation to the Agrofert group.

https://www.radio.cz/en/article/556886

UK – ILLEGAL WORKING CIVIL PENALTIES: AN EMPLOYER’S GUIDE

On 20^th September, UK Visas and Immigration issued updated guidance on the civil penalty scheme for employers who give a job to an illegal worker.  Employers may have to pay an illegal working fine (also known as a civil penalty) if they employ someone who does not have the right to work in the UK.

https://www.gov.uk/government/publications/illegal-working-fines-employers-guide

BLOCKCHAIN, SMART CONTRACTS AND THE MINING AND METALS GLOBAL SUPPLY CHAIN

On 20^th September, White & Case published a briefing which starts be explaining what a blockchain is, what smart contracts are, and says that blockchain’s role in sustainable and transparent supply chains could be a game-changer, thanks to its ability to promote trackability, transparency and security through open, peer-to-peer and incorruptible data sharing.  It then looks at benefits for the mining and metals global supply chain, saying it is a question of when, not if.

https://www.whitecase.com/publications/insight/digitalising-mining-metals-global-supply-chain-rise-blockchain-and-smart

UPDATED SECURITY CRITERIA FOR C-TPAT TO BE PHASED IN STARTING IN 2019

On 20^th September, Sandler Travis & Rosenberg reported that US Customs and Border Protection (CBP) is currently circulating within the trade community draft modifications to the minimum security criteria (MSC) associated with the Customs Trade Partnership Against Terrorism (C-TPAT).  This is said to be the first major revision of the MSC since the introduction of C-TPAT.  The article says that, generally, the changes include establishing 3 focus areas and 3 new criteria categories, explicitly delineating requirements as “must” or “should” based on risk, and providing guidance on how to combat terrorism financing and money laundering.  The article provides an overview of the updated MSC.

https://www.strtrade.com/news-publications-CTPAT-minimum-security-criteria-092018.html

For more information on C-TPAT, see –

https://www.cbp.gov/border-security/ports-entry/cargo-security/ctpat

When an entity joins C-TPAT, an agreement is made to work with CBP to protect the supply chain, identify security gaps, and implement specific security measures and best practices.  Applicants must address a broad range of security topics and present security profiles that list action plans to align security throughout the supply chain.  C-TPAT members are considered to be of low risk, and are therefore less likely to be examined at a US port of entry.

MORE WORK NEEDED TO STOP ILLEGAL LOGGING IN PERU

On 21^st September, Sandler Travis Rosenberg reported that the Office of the US Trade Representative has indicated that more work needs to be done to stop illegal logging in Peru.  Only 2 of 3 shipments verified were found to be compliant with all relevant laws and regulations but a third shipment was found to be non-compliant.

https://www.strtrade.com/news-publications-Peru-timber-verification-USTR-092118.html

PAKISTAN’S EX-PM RELEASED ON BAIL OVER LUXURY LONDON FLATS

OCCRP on 20^th September reported that a Pakistani court has ordered ex-prime minister Nawaz Sharif and 2 of his family members to be released on bail while they appeal corruption charges related to their ownership of luxury properties in London.  Sharif spent 69 days in prison after being sentenced in absentia over 4 luxury London flats he and his children allegedly own through offshore companies found in the “Panama Papers”.  He was arrested a week after his sentencing, on July 13^th

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8620-pakistan-s-ex-pm-released-on-bail-over-luxury-london-flats

https://www.jurist.org/news/2018/09/pakistan-court-suspends-nawaz-sharifs-prison-sentence/

COCA CROPS IN COLOMBIA AT ALL-TIME HIGH

UNODC on 19^th September reported that the area under coca cultivation in Colombia reached the highest-ever recorded figure of 171,000 hectares in 2017, according to the UNODC Coca Cultivation Survey Report for Colombia. This represents an increase of 25,000 hectares, or 17% in 2017 compared to 2016.

https://www.unodc.org/unodc/en/frontpage/2018/September/coca-crops-in-colombia-at-all-time-high–unodc-report-finds.html?ref=fs1

WHY TITLE INSURANCE FIRMS ARE PAYING CLOSE ATTENTION TO LATEST US RUSSIAN SANCTIONS BILL

Baker McKenzie on 20^th September reported that a US Treasury programme that spotlights anonymous real estate purchases in a number of gateway cities could become a nationwide law if the Defending American Security from Kremlin Aggression Act of 2018, a bipartisan bill introduced to the Senate last month is passed.  One provision in, would force title insurance companies to report the identities of people using limited liability companies behind high-priced real estate transactions across the country.  It could see Geographical Targeting Orders (GTO) applied nationwide.  Title insurance is indemnity insurance that protects the holder from financial loss sustained from defects in a title to a property and from the invalidity or mortgage loans being unenforceable.

https://therealdeal.com/2018/09/19/why-title-insurance-firms-are-paying-close-attention-to-the-latest-russian-sanctions-bill/

BANKS AND TRADERS UNVEIL KOMGO FOR BLOCKCHAIN-BASED TRADE FINANCE

On 20^th September, Banking Tech reported that a group of 15 big-name organisations have unveiled a new blockchain-based platform for trade finance.  Komgo involves partners who invested in it, including ABN Amro, BNP Paribas, Citibank, Crédit Agricole, Gunvor, ING, Koch, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, inspection, verification, testing and certification company SGS and Societe Generale.  It will be managed and operated as an independent entity and the plan is to launch the platform before the end of the year.

https://www.bankingtech.com/2018/09/banks-and-traders-unveil-komgo-for-blockchain-based-trade-finance/

UK CLAIMS MANAGEMENT COMPANIES FACE AN END TO “PHOENIXING”

On 20^th September, Legal Futures reported that an end to owners of claims management companies (CMC) closing down one firm without fulfilling their obligations or paying their debts and opening another – known as ‘phoenixing’ – is on the cards under new proposals from the FCA, which takes over their regulation next year, with a consultation having been published.

https://www.legalfutures.co.uk/latest-news/cmc-owners-face-an-end-of-phoenixing

 

US SECRETARY OF STATE BACKED CONTINUING SUPPORT FOR SAUDI WAR IN YEMEN

The Wall Street Journal on 20^th September reported that Secretary of State Mike Pompeo backed continued US military support for Saudi Arabia’s war in Yemen over the objections of staff members after being warned that a cut-off could jeopardise $2 billion in weapons sales to Gulf allies, according to a classified memo and people familiar with the decision.

https://www.wsj.com/articles/top-u-s-diplomat-backed-continuing-support-for-saudi-war-in-yemen-over-objections-of-staff-1537441200

WREXHAM: ILLEGAL WASTE DUMPING LINKED TO “MAJOR ORGANISED CRIME”

Wrexham.com carried a story on 20^th September saying that an industrial estate near Wrexham has been targeted by illegal waste dumping of 1,000 tonnes of mixed waste which has been linked to major organised crime.  A representative of Natural Resources wales is quoted as saying that with China not being willing to import rubbish there is going to be a bigger problem.

http://www.wrexham.com/news/illegal-waste-dumping-linked-to-major-organised-crime-hits-llay-industrial-estate-156195.html

CHINESE GANGS FUEL ILLEGAL SOUTH AFRICA ABALONE TRADE

Deutsche Welle on 19^th September reported that Chinese crime syndicates working with local South African gangs have caused stocks of abalone to be depleted at a record rate, with the illegal trade in the marine molluscs extending across sub-Saharan Africa.  TRAFFIC, a wildlife trade monitoring network, said that 96 million individual abalone worth nearly $900 million have been illegally poached off South Africa’s shores in the past 17 years.  Nearly all of the large sea snails were sent to China and Hong Kong, where they are considered a delicacy and only around a third of abalone harvested off South Africa’s coast was fished legally.

https://www.dw.com/en/chinese-gangs-fuel-illegal-south-africa-abalone-trade-report/a-45567801

UK BORDER DETAINEES COULD BE DENIED ACCESS TO LAWYER FOR AN HOUR

PNLD and the Guardian on 19^th September reported that travellers stopped at UK borders may be denied the right to consult a lawyer for up to an hour and officers will be allowed to listen in to private consultations under new security powers contained in the Counter-Terrorism and Border Security Bill.  The Guardian says that powers delaying access to a lawyer and permitting police to listen in to legal consultations during border stops have not been publicised previously partially because the Bill contains so many other complex legal details.

https://www.theguardian.com/uk-news/2018/sep/17/uk-border-detainees-access-lawyer-hour-airport-security-bill

DISCLOSURE OF DOCUMENTS TO A REGULATOR HELD NOT TO INFRINGE PRIVILEGE

Clyde & Co on 20^th September published an article about the recent decision of the High Court that an entitlement to legal professional privilege (LPP) on the part of an auditor’s client is not infringed by the production of documents to the Financial Reporting Council when the purpose of the disclosure was for a confidential investigation carried out by the FRC into the auditor’s conduct.

https://www.clydeco.com/insight/article/disclosure-of-documents-to-a-regulator-held-not-to-infringe-privilege

AUSTRALIA: ACTION AGAINST SEVERAL PROPOSED INITIAL COIN OFFERINGS OR TOKEN-GENERATION EVENTS TARGETING RETAIL INVESTORS AND A CRYPTO-ASSET MANAGED INVESTMENT SCHEME

On 20^th September, Mondo Visione carried a notice from Australian regulator, ASIC, saying that it has acted to stop several proposed initial coin offerings or token-generation events (ICO), targeting retail investors.  As well, ASIC recently stopped the issue of a Product Disclosure Statement for a crypto-asset managed investment scheme.

ASIC has also updated its Information Sheet on ICO and cryptocurrency, and issued Moneysmart guidance page on ICO.

http://www.mondovisione.com/media-and-resources/news/asic-acts-against-misleading-initial-coin-offerings-and-crypto-asset-funds-targe/

https://asic.gov.au/regulatory-resources/digital-transformation/initial-coin-offerings-and-crypto-currency/

https://www.moneysmart.gov.au/investing/investment-warnings/initial-coin-offerings-icos

 

 

On 20^th September, The Crime Report reported that Cody Wilson, a Texas man who received national attention for his push to make blueprints for 3D-printed guns publicly available on the internet, has been charged with sexually assaulting an underage girl.  A warrant was issued but he flew to Taiwan before he could be detained.  Authorities are trying to bring him back from Taiwan.  The BBC says that there is no extradition treaty between the US and Taiwan.

https://thecrimereport.org/2018/09/20/3-d-gun-maker-accused-of-sex-assault-leaves-u-s/

https://www.bbc.co.uk/news/world-us-canada-45584598

On 19^th September, the UN announced that the relevant UN Sanctions Committee had recommended that the STATE COMPANY FOR ELECTRICAL INDUSTRIES and the STATE ENTERPRISE FOR DRUG INDUSTRIES should be removed from the sanctions list maintained under UN SCR 1518.

https://www.un.org/press/en/2018/sc13512.doc.htm

On 20^th September, Sandler Travis & Rosenberg reported that US Customs and Border Protection (CBP) is currently circulating within the trade community draft modifications to the minimum security criteria (MSC) associated with the Customs Trade Partnership Against Terrorism (C-TPAT).  This is said to be the first major revision of the MSC since the introduction of C-TPAT.  The article says that, generally, the changes include establishing 3 focus areas and 3 new criteria categories, explicitly delineating requirements as “must” or “should” based on risk, and providing guidance on how to combat terrorism financing and money laundering.  The article provides an overview of the updated MSC.

https://www.strtrade.com/news-publications-CTPAT-minimum-security-criteria-092018.html

For more information on C-TPAT, see –

https://www.cbp.gov/border-security/ports-entry/cargo-security/ctpat

When an entity joins C-TPAT, an agreement is made to work with CBP to protect the supply chain, identify security gaps, and implement specific security measures and best practices.  Applicants must address a broad range of security topics and present security profiles that list action plans to align security throughout the supply chain.  C-TPAT members are considered to be of low risk, and are therefore less likely to be examined at a US port of entry.

On 20^th September, HM Treasury issued a Notice advising of changes to the details of various individuals and entities subject to sanctions under EU Regulation 269/2014/EU.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/742181/Notice_Ukraine_2018_1230.pdf

On 27^th August, Nyman Gibson Miralis published a briefing on the position re Ethiopia, Pakistan, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen; saying that, as part of its ongoing review of global compliance with AML/CFT standards FATF has identified these jurisdictions with deficiencies and which have made a high-level political commitment to work with the FATF to address the identified deficiencies.

https://ngm.com.au/fatf-aml-cft-compliance/

On 20^th September, the House of Lords EU External Affairs Sub-Committee has published a report on the Government’s Chequers proposal for a Facilitated Customs Arrangement (FCA) and the customs challenges under ‘no deal’.  The report finds that under the FCA, UK importers would face an administration cost of £700 million per year – a fraction of the annual £18 billion ‘no deal’ cost to UK traders.  However, the FCA raises a number of significant questions that need to be resolved for it to be workable and acceptable to the EU.  Its findings include that in the event of ‘no deal’, customs checks of EU goods could be unilaterally suspended to keep goods moving, may be in breach of WTO rules; the Government has not yet made clear how goods under the FCA could be reliably tracked and who would carry liability for keeping EU and UK-destined goods separate; and part of the implementation of the FCA relies on the establishment of new trusted trader schemes and maximising the take-up.  The Committee recommends simplifying the application process to facilitate access for small and medium-sized enterprises and newly established businesses.

https://www.parliament.uk/business/committees/committees-a-z/lords-select/eu-external-affairs-subcommittee/news-parliament-2017/brexit-customs-report-publication/

On 20^th September, OFAC announced that a Chinese individual, Shangfu LI, and a Chinese company EQUIPMENT DEVELOPMENT DEPARTMENT (formerly known as the GENERAL ARMAMENT DEPARTMENT) had been added to its Countering America’s Adversaries Through Sanctions Act sanctions list for engaging in a significant transaction with a person that is part of, or operates for or on behalf of, the defence or intelligence sectors of the Government of the Russian Federation.

The CAATSA sanctions procedure is explained at https://www.state.gov/t/isn/caatsa/275118.htm

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180920_33.aspx

It also announced a new Executive Order signed by President Trump authorising the implementation of certain sanctions set forth in CAATSA, plus a new FAQ explaining the purpose of the Executive Order which provides for comprehensive implementing and penalties provisions that enable OFAC, among other things, to promulgate regulations and issue administrative subpoenas, licenses, and the full range of civil enforcement actions with respect to sanctions violations.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180920.aspx

https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#627

On 19^th September, OFAC advised that 2 Trinidadian nationals, Eddie ALEONG (aka MOHAMMED, Ishmael; MUHAMMAD, Ishmail; and YONG, Isma’il ‘Ali), and Emraan Syria ALI had been added to the SDN List because of connections to ISIL.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180919.aspx

19^th September 2018

US HOUSE OF REPRESENTATIVES VOTES TO ESTABLISH COUNTERING WEAPONS OF MASS DESTRUCTION OFFICE AT DHS

On 14^th September, Homeland Security Today reported that te House of Representatives unanimously passed by voice vote a bill to replace the Domestic Nuclear Detection Office at the Department of Homeland Security with the Countering Weapons of Mass Destruction Office.  The new office, if approved by the Senate and sent to President Trump for his signature, would be led by an assistant secretary for the Countering Weapons of Mass Destruction Office appointed by the president.  The Office shall be responsible for coordinating with other Federal efforts and developing departmental strategy and policy to plan for, detect, and protect against the importation, possession, storage, transportation, development, or use of unauthorized chemical, biological, radiological, or nuclear materials, devices, or agents in the US and to protect against an attack using such materials, devices, or agents against the people, territory, or interests of the US.

https://www.hstoday.us/subject-matter-areas/counterterrorism/house-votes-to-establish-countering-weapons-of-mass-destruction-office-at-dhs/

NEW DOUBTS EMERGE ABOUT US-LED SANCTIONS ON NORTH KOREA

The Wall Street Journal on 16^th September reported that fresh doubts are emerging about the potency of a US-led sanctions campaign aimed at crippling North Korea’s economy and forcing the country to end its nuclear weapons programmes, as denuclearisation talks have stalled.  A confidential new UN report, reviewed by The Wall Street Journal, says North Korea, often with help from people in Russia and China, has been able to circumvent restrictions, rendering “the latest U.N. sanctions ineffective”.

IS RUSSIA SMUGGLING FUEL TO NORTH KOREA?

Oilprice.com on 18^th September posed this question and said that the US at the UN had alleged that Russia has been helping North Korea to procure fuel via overseas transfers and had failed to expel a North Korean blacklisted by the council last year.  Officials claimed to have collected proof of 148 cases just this year of oil tankers delivering fuel to North Korea, in direct violation of UN sanctions.

https://oilprice.com/Energy/Energy-General/Is-Russia-Smuggling-Fuel-To-North-Korea.html

“LAWFUL INTERCEPT” PEGASUS SPYWARE FOUND DEPLOYED IN 45 COUNTRIES

On 18^th September ZD Net and others reported that at least 10 operators of Pegasus (or Trident) spyware, created by Israeli cyber-security company NSO Group, have deployed the malware outside their country’s border.  Researchers have found evidence that a piece of malware marketed as “lawful intercept” software to government agencies has been deployed against victims located in 45 countries, including the UK, a number that far outweighs the number of known operators, meaning that some of them are conducting illegal cross-border surveillance.  It can hide on Apple or Google devices, spying via the camera, listening in on conversations through the microphone, stealing documents and siphoning off once-private messages, amongst other surreptitious activities, and has been mostly spotted in campaigns targeting iPhone users primarily.  On infected devices, The company has been caught up in spying scandals in Mexico and the UAE, where civil rights organisations said it had had targeted activists, journalists and lawyers, among others who appeared entirely innocent of any crimes.  NSO Group said it worked in full compliance with all countries’ applicable laws, including export control regulations.

https://www.zdnet.com/article/lawful-intercept-pegasus-spyware-found-deployed-in-45-countries/

https://www.forbes.com/sites/thomasbrewster/2018/09/18/america-one-of-45-countries-infected-by-uber-powerful-israeli-smartphone-spyware/#194e53c772ff

BAHAMAS TO ‘FARE WELL’ IN FINANCIAL CRIME ASSESSMENT

Tribune 242 reported that the Bahamas Government is confident the country will “fare well” in the latest assessment of its anti-financial crime defences following corrective action.  This is according to the Deputy Prime Minister, speaking at an AML conference in Nassau.  The July 2017 Mutual Evaluation Report (MER) had identified numerous legal and practical deficiencies in the Bahamas AML/CFT regime.  The Bahamas’ was found to have “low” effectiveness in six out of 11 categories, prompting the Government to enact several pieces of legislation to address these concerns ahead of another review this year.

http://www.tribune242.com/news/2018/sep/18/dpm-bahamas-to-fare-well-in-financial-crime/

BRAZIL’S ANTI-TRUST AGENCY LAUNCHES PROBE INTO MAJOR BANKS REGARDING CRYPTO TRADE

Reuters on 19^th September reported that Brazil’s anti-trust regulator is reportedly inspecting 6 major national banks for alleged monopolistic practices in cryptocurrency.  According to Reuters, the investigation by the CADE was initiated on the request of the Brazilian Blockchain and Cryptocurrency Association (ABCB) following several complaints.

https://cointelegraph.com/news/reuters-brazils-antitrust-agency-launches-probe-into-major-banks-regarding-crypto-trade

DANSKE BANK CEO RESIGNS IN RUSSIA SCANDAL

EU Observer on 19^th September reported that Thomas Borgen, the Norwegian CEO of Danske Bank, Denmark’s biggest lender, has resigned over allegations it laundered billions of illicit Russian money.

https://euobserver.com/tickers/142892

BANK TO ISSUE REPORT ON RUSSIA, EX-SOVIET MONEY LAUNDERING

RFerl on 19^th September reported that Danske Bank is to release a major report on how billions of euros in possibly laundered money from Russia and other former Soviet states flowed through the bank’s affiliate in Estonia.

https://www.rferl.org/a/denmark-bank-russia-money-laundering/29497532.html?src=ilaw

EU PROPOSES TO SANCTION COUNTRIES BREACHING WTO RULES

EurActiv on 18^th September reported that the European Commission has proposed sanctions on countries that commit “wilful and repeated” obfuscation of their trade policies, as part of an effort to modernise the World Trade Organisation.  The Commissioner for Trade said that the WTO “must adapt or it will be in serious trouble”.   The sanctions would not include economic penalties.   The Commission suggests limiting certain rights related to the participation in WTO proceedings, such as the ability to chair WTO bodies, seeking replies from other countries or taking the floor during committee meetings.

https://www.euractiv.com/section/economy-jobs/news/eu-proposes-to-sanction-countries-breaching-wto-rules/

EU PUBLISHED REGULATION ESTABLISHING EUROPEAN TRAVEL INFORMATION AND AUTHORISATION SYSTEM (ETIAS)

On 18^th September, the EU published EU Regulation 2018/1240/EU establishing ETIAS, which applies to to third-country nationals who are exempt from the visa requirement, and to third-country nationals who are exempt from the visa requirement who are family members of certain EU citizens.  For more information on ETIAS see –

https://www.schengenvisainfo.com/etias/

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2018:236:FULL&from=EN

INDIA: UAE COURT ORDERS EXTRADITION OF BRIT TO INDIA IN BRIBERY CASE

Scroll in India on 19^th September reported that a UAE court has ordered the extradition of alleged middleman in AgustaWestland scam to India.  Christian Michel, a British national, is wanted by Indian investigative agencies for allegedly organising the payment of bribes to Indian defence officials connected to the purchase of 12 luxury helicopters under a 2007 deal.  He was arrested in the UAE in June.

https://scroll.in/latest/894921/agustawestland-scam-uae-court-orders-extradition-of-alleged-middleman-to-india-say-reports

MEXICO’S NEW AML CZAR VOWS ACTION AFTER ‘SHAMEFUL’ ODEBRECHT

Reuters on 19^th September reported that Mexico’s incoming financial intelligence chief said it was “shameful” how little had been done about bribes that Brazilian construction firm Odebrecht executives said were paid to secure Mexican public works contracts, and vowed to re-examine the case once in office.

https://www.reuters.com/article/us-mexico-crime-moneylaundering/mexicos-next-anti-money-laundering-czar-vows-action-after-shameful-odebrecht-idUSKCN1LZ02G

FAKE ID DOCS SOLD ON WEBSITES TARGETED BY US FEDERAL AGENCY

PYMNTS.com on 18^th September reported on recent Federal Trade Commission action where it had it shut down websites where consumers could buy fake financial and other documents – such as pay stubs, income tax forms, and medical statements – which can be used to facilitate identity theft, tax fraud, and other crimes.  It refers to a case involving a company, Innovative Paycheck Solutions and its website FakePayStubOnline.com through which a customer could buy a fake stub for as little as $40 or a fake tax return for $150 or more.  Visitors could also customise their documents and to edit real bank statements.  Another company named is Integrated Flight Solutions and its website NoveltyExcuses.com, as well as websites run by George Jiri Strnad II, such as iVerifyMe.

https://www.pymnts.com/fraud-prevention/2018/fake-id-docs-sold-on-websites-targeted-by-feds/?src=ilaw

“I CAN FIX A TOP ALGERIAN FOOTBALL MATCH FOR $68,000”

On 19^th September, the BBC published a video report in which whistleblowers explain how bribery has impacted on all levels of football in Algeria.  The BBC says that, over 3 years, BBC Arabic spoke to referees, players, club chairmen and two match fixers, known as “intermediaries”, about how it works day-to-day.

https://www.bbc.co.uk/news/av/world-africa-45551535/i-can-fix-a-top-algerian-football-match-for-68000?src=ilaw

UK LATEST TAX DEFAULTERS LIST

On 19^th September, HMRC published its latest list of serious tax defaulters where penalties involve tax of over £25,000.  Note that the law requires that HMRC does not publish any information about the person for more than 12 months from the date it is first published, and the lists of deliberate tax defaulters will not be captured for the National Archives.

https://www.gov.uk/government/publications/publishing-details-of-deliberate-tax-defaulters-pddd

CANADA’S CORPORATE REGISTRY RIFE WITH FAULTY INFORMATION

Customs Today on 19^th September reported that the public registry of federal corporations is riddled with thousands of errors and omissions because too many business owners are failing to keep the federal government in the loop about basic corporate information, says an audit by Corporations Canada for 2017-18.  When the federal agency confronted the delinquent corporations with those problems, fewer than half fixed them.  Critics have long complained the Corporations Canada registry is of little value in helping police track down money-launderers because there’s no legal requirement for federal corporations to identify their real owners, known as “beneficial ownership” information.

http://www.customstoday.com.pk/ottawas-corporate-registry-rife-with-faulty-information/

FEW COUNTRIES ARE PRICING CARBON HIGH ENOUGH TO MEET CLIMATE TARGETS

The OECD on 18^th September reported that governments need to raise carbon prices much faster if they are to meet their commitments on cutting emissions and slowing the pace of climate change under the Paris Agreement, according to a new OECD report.  The report presents new data on taxes and tradeable permits for carbon emissions in 42 OECD and G20 countries accounting for around 80% of global emissions.  It finds that today’s carbon prices – while slowly rising – are still too low to have a significant impact on curbing climate change.

http://www.oecd.org/newsroom/few-countries-are-pricing-carbon-high-enough-to-meet-climate-targets.htm

US CONVICTS WOMAN INVOLVED IN JAMAICAN LOTTERY SCAM

OCCRP on 18^th September reported that the DoJ has announced that a court has convicted a Rhode Island woman for her participation in a Jamaican lottery fraud scheme, which has affected about 100 identified victims with reported losses totalling more than $6.7 million.  She was convicted on conspiracy and substantive mail fraud and wire fraud charges, as well as one count of money laundering conspiracy.  She was the last of dozens of defendants in a case that the authorities have been investigating and trying for 6 years.  The others either pleaded guilty or were convicted earlier.  The number of Jamaican Lottery Fraud victims is in the millions, with some estimates of annual losses in excess of $1 billion.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8593-u-s-convicts-woman-involved-in-jamaican-lottery-scam

JERSEY LLC LAW STRENGTHENS ITS OFFER TO US CLIENTS

On 18^th September, Ogier published a briefing Jersey’s new LLC law that it says strengthens the Island’s offering to US managers to build on the £169 billion of US assets and funds already administered.  The Island’s legislature gave final approval to the new LLC structure, which largely mirrors the existing Delaware model.

https://www.thelawyer.com/knowledge-bank/white-paper/new-jersey-llc-law-strengthens-the-islands-offering-to-us-managers/

SOUTH AFRICA: TOP COURT DECRIMINALISES PERSONAL USE OF MARIJUANA

On 18^th September, Jurist reported that South Africa’s Constitutional Court has decriminalised personal consumption of marijuana (known as “dagga” in South Africa).  There is now up to 24 months to change the Drugs Act.  The new provisions would only allow citizens to possess fewer than 100 grams.

https://www.jurist.org/news/2018/09/south-africa-top-court-decriminalizes-marijuana-use/

DHL TAKES THE COMPLEXITY OUT OF CUSTOMS WITH CUSTOMS CONNECTION IN US

The American Journal of Transportation on 18^th September reported that DHL Global Forwarding, the air and ocean freight specialist within Deutsche Post DHL Group, announced the launch of its new Customs Connection platform in the US.  Customs Connection replaces the previous DHL platform and acts as a one-stop shop for all customs processes backed by a sophisticated technological architecture.

https://www.ajot.com/news/dhl-takes-the-complexity-out-of-customs-with-customs-connection

HIGH COURT REJECTS PRIVILEGE CLAIM IN REGULATOR REQUEST FOR DOCUMENTS

Out-Law on 17^th September reported that documents sought by the Financial Reporting Council (FRC) from Sports Direct in connection with an FRC investigation into Sports Direct’s auditor must be handed over.  Sports Direct had claimed that the documents need not be handed over as they were protected by legal professional privilege (LPP).  However, the High Court has now ruled that the production of documents to a regulator solely for the purposes of a confidential investigation by the regulator into conduct of a regulated person does not infringe privilege.

https://www.out-law.com/en/articles/2018/september/high-court-rejects-privilege-claim/

UK PROSECUTORS TO SENIOR PROCUREMENT OFFICER FROM CONOCO PHILLIPS AS A KEY WITNESS IN CORRUPTION TRIAL

On 18^th September, the Wall Street Journal reported that the SFO will call a senior procurement officer from ConocoPhillips as a key witness in the London trial of 4 individuals charged with bribery to secure business related to the Jasmine gas field in the North Sea – for allegedly making or accepting illegal payments to ensure that logistics and freight operations company F.H. Bertling won contracts 2010-13.  This is the second corruption case the SFO has brought against F.H. Bertling, which closed its UK operations in 2017 following the first prosecution. In 2016 the SFO charged the company, along with 7 current and former directors, with one count each of making corrupt payments to an agent of the Angolan state oil company, Sonangol.  3 were found guilty, 3 pleaded guilty and 1 was acquitted. The company itself pleaded guilty.

https://www.wsj.com/articles/u-k-corruption-trial-to-hear-from-big-oil-1537307737?mod=searchresults&page=1&pos=3

FORMER MALAYSIAN LEADER NAJIB ARRESTED AND FACES NEW CHARGES IN 1MDB SCANDAL

The Wall Street Journal on 19^th September reported that former Malaysian Prime Minister Najib Razak had been arrested in connection with the 1MDB financial scandal over his alleged receipt of more than $600 million into his personal bank account.

https://www.wsj.com/articles/ousted-malaysian-leader-najib-arrested-to-face-new-charges-in-1mdb-scandal-1537350993?mod=searchresults&page=1&pos=1

REPORT: CRYPTOCURRENCY EXCHANGES ARE VULNERABLE TO MANIPULATION

The Wall Street Journal on 18^th September reported that the New York Attorney General has published a report saying that a number of cryptocurrency exchanges lack basic consumer protections and are vulnerable to exploitation by market manipulators.  A study found that online platforms where virtual currencies such as bitcoin can be bought and sold by individuals operate with lower safeguards than traditional financial markets, are vulnerable to market manipulation and put customer funds at risk.  The AG has asked authorities to consider if 3 exchanges located in the state are operating lawfully.

https://www.wsj.com/articles/cryptocurrency-exchanges-are-vulnerable-to-manipulation-report-finds-1537290031?mod=searchresults&page=1&pos=5

https://www.reuters.com/article/us-cryptocurrency-exchanges/cryptocurrency-exchanges-at-risk-of-manipulation-report-idUSKCN1LY2UG

the report is available at –

https://ag.ny.gov/press-release/ag-underwood-issues-virtual-markets-integrity-report-finding-many-platforms-vulnerable

RUSSIAN OLIGARCH VITALY ORLOV LOSES BID TO KEEP FREEZING ORDER SECRET

On 19^th September, the Law Society Gazette reported that the High Court in London has rejected an attempt to keep secret a worldwide freezing order worth $350 million in the latest twist in a dispute over the ownership of a fisheries company.  The freezing order was obtained by Alexander Tugushev, a former business partner of Orlov, amid a long-running legal dispute to secure his one third interest in the Norebo Group.  Orlov’s legal team had argued that Tugushev should not able to notify relevant third parties of the freezing order without Orlov’s consent or the permission of the court, saying this would amount to self-incrimination, because of a money laundering investigation in Russia.

https://www.lawgazette.co.uk/law/oligarch-loses-bid-to-keep-freezing-order-secret/5067609.article

CLAIMS IN UK COURTS AGAINST MULTINATIONAL COMPANIES FOR THEIR OVERSEAS SUBSIDIARIES’ ENVIRONMENTAL AND HUMAN RIGHTS ABUSES

On 19^th September, Bryan Cave Leighton Paisner published a briefing saying that 4 large multi-claimant environmental/human rights claims in the courts of England and Wales have received a lot of press coverage recently.  It points out the claimants involved live overseas, the alleged injury and damage took place overseas, and the entity alleged to be most directly connected to the injury and damage is a foreign-registered entity.  The briefing reviews the background, saying that the claimants in the cases are taking advantage of a rule that the courts will hear a claim against a foreign-registered company where it is a necessary and proper party to a claim against another company over which the court will take jurisdiction, as long as it is satisfied that there is a “real issue” to be tried against that other company.  It contains advice for multinationals that might be at risk.

http://www.blplaw.com/expert-legal-insights/articles/risk-of-environmental-claims-in-courts-of-england-wales-puts-multinational-companies-in-a-dilemma

CIVIL RECOVERY AN ESSENTIAL TOOL FOR BUSINESSES IN FIGHT AGAINST BRIBERY

Out-Law on 19^th September published an article saying that businesses which are victims of bribery and fraud, can find that civil remedies can be a quicker and more effective means of obtaining redress than awaiting the outcome of a criminal investigation and prosecution.  It starts by saying that is estimated that fraud costs the UK economy £190 billion a year (according to The Annual Fraud Indicator 2017), while a report by PwC found that the number of UK businesses which had experienced bribery and corruption in the last 2 years had jumped to 23% from just 6% in 2016.  However, the article says that for criminal cases Obtaining admissible evidence from overseas is challenging, and building a criminal case investigation can take years of work and significant funding.  The article says that use of civil law remedies would increase the number of culpable individuals who are held to account – and the number of victims who obtain a form of redress.

https://www.out-law.com/en/articles/2018/september/civil-recovery-businesses-fight-against-bribery/

EU COURT UPHOLDS SANCTIONS AGAINST RUSSIA

On 19^th September, Out-Law reported that sanctions adopted in 2014 against Russian banks and energy companies by the European Council in response to Russian action in Ukraine have been upheld by EU’s General Court.  Gazprom and the other challengers in this case had argued that the EU’s original sanctions programme lacked an appropriate legal basis, breached the EU legal principle of proportionality and infringed the 1997 EU-Russia Partnership agreement.  They also claimed that the EU had failed to provide sufficient reasons for its decision.  The judgment said that the it was not necessary for the European Council to provide specific reasons for targeting certain sectors of the economy, or for prohibiting the export of certain goods and services considered ‘sensitive’, and that the Council had broad discretion.

https://www.out-law.com/en/articles/2018/september/eu-court-upholds-sanctions-against-russia/

LATVIA: 3 CUSTOMS OFFICIALS DETAINED FOR ABETTING IN CONTRABAND ACTIVITIES

The state broadcaster in Latvia, LSM, on 19^th September reported that 3 customs officials have been detained at the Paternieki border crossing with Belarus on suspicion of abetting in contraband activities following the seizure of a cargo of approximately 10 million illegal cigarettes.  2 Belarus nationals were also arrested.

https://eng.lsm.lv/article/society/society/three-customs-officials-detained-for-abetting-in-contraband-activities.a292924/

TRACE PODCAST: THE ALARMING WORLD OF INSURANCE FRAUD

In the TRACE podcast, Alexandra Wrage explores the world of financial crime – corruption, fraud, money laundering and sanctions.  Through interviews with investigative reporters, business people and prosecutors, she examines different angles of financial crime and explores what motivates people to break the law, how wrongdoers cover their tracks and what can be done to put a stop to the looting.  In this latest edition, Jim Quiggle, of the Coalition Against Insurance Fraud, joins her to discuss the many grisly shapes that insurance fraud takes including, astonishingly, parachute sabotage.

https://www.traceinternational.org/bribe_swindle_or_steal

REPORT TO US CONGRESS ON IRAN’S FOREIGN AND DEFENCE POLICY

On 19^th September, USNI published a 11^th September report from the Congressional Research Service report: “Iran’s Foreign and Defense Policies”.  It starts by saying that Iran’s national security policy is the product of many overlapping and sometimes competing factors such as the ideology of Iran’s Islamic revolution; perception of threats to the regime and to the country; long-standing Iranian national interests; and the interaction of the Iranian regime’s factions and constituencies.  Amongst other things, it says Iran’s leadership has sought to use the sanctions relief provided by the July 2015 multilateral nuclear agreement JCPOA to emerge as a regional energy and trade hub and to negotiate future weapons buys.  US officials assert that sanctions easing has provided Iran with additional financial resources to further its regional interventions.  It also examines Iran’s policies in the Persian Gulf, Yemen, Iraq and Syria and elsewhere; and its relationship with Hamas, Hezbollah and other organisations.

https://news.usni.org/2018/09/19/report-congress-irans-foreign-defense-policy

3 CHARGED IN $364 MILLION PONZI SCHEME THAT ENTRAPPED HUNDREDS OF VICTIMS

Trib Live and others on 19^th September reported that federal prosecutors in Maryland say 3 men are facing charges in a $364 million investment scheme that entrapped more than 400 victims nationwide.  The indictment alleges that the suspects invited people to buy consumer debt portfolios and falsely represented that they’d profit from debt payments and flipping portfolios.

https://triblive.com/usworld/world/14095882-74/3-charged-in-364-million-ponzi-scheme-that-entrapped-hundreds-of-victims

https://www.accountingtoday.com/news/sec-halts-345-million-ponzi-like-scheme

THIRD BELGRAVIA FRAUD SUSPECT EXTRADITED FROM PHILIPPINES TO JERSEY TO FACE CHARGES

International Adviser on 19^th September reported that Simon Bailey is accused of 6 offences linked to the Belgravia Financial services affair, including the fraudulent sale of a former fund management company.  The former Jersey resident’s return follows a lengthy process that involved collaboration including Interpol, NCA, Jersey FSC and the Philippine Authorities.  A spokesperson for the FCU said that Bailey had been in the Philippines when the extradition proceedings were issued against him.

https://international-adviser.com/third-belgravia-fraud-suspect-in-jersey-to-face-charges/

ITALY COURT FINDS SAIPEM OIL SERVICES GROUP GUILTY IN ALGERIA GRAFT CASE BUT ACQUITS ENI

Reuters on 19^th September reported that an Italian court Saipem and a former CEO guilty of corruption in a long-running trial over bribes in Algeria but acquitted oil major Eni.  Pietro Tali was sentenced to 4 years and 9 months in prison and seized €197.9 million from the company. Saipem was also fined €400,000.

https://www.reuters.com/article/saipem-algeria-corruption-verdict/update-2-italy-court-finds-saipem-guilty-in-algeria-graft-case-but-acquits-eni-idUSL8N1W54T5

DEUTSCHE BANK EXECUTIVE LINKED TO MALAYSIA FUND SCANDAL

Handelsblatt in Germany on 19^th September reported that investigators in Singapore are probing the role of a Deutsche Bank manager in the multibillion-dollar 1MDB Malaysian state fund corruption scandal.  She was Asia Pacific head of Deutsche Bank’s Financial Institutions Group until August.

https://global.handelsblatt.com/finance/deutsche-bank-1mdb-scandal-964634

HMRC RAIDS FORECOURTS IN £11 MILLION FUEL FRAUD INVESTIGATION

Forecourt trader on 19^th September reported that 3 men have been arrested and a suspected fuel laundering plant dismantled in Northern Ireland as part of a HMRC investigation into a suspected multimillion-pound fuel fraud.  There were searches of 9 business and four residential addresses in Stoke, Crewe, Manchester, Surrey, Gloucestershire, Devon and Northern Ireland.  A suspected fuel laundering plant was dismantled, and it is believed it had the capacity to produce 20 million litres of illicit fuel a year, potentially evading £11 million in revenue.

https://forecourttrader.co.uk/news/fullstory.php/aid/15672/

The BBC on 19^th September published an article following the arrest (and release under investigation) of a Pakistani husband and wife for alleged money laundering in the UK believed to be the result of corruption in Pakistan.  However, the BBC, working with Transparency International, claims to have seen papers showing UK properties were bought several years after a major international investigation had already been launched against Farhan Junejo.  He and his wife, Binish Qureshi, are British citizens. He was a civil servant in Pakistan and an officer in the Pakistani Peoples Party.  He was placed under investigation in Islamabad in 2013 and accused of involvement in a multimillion-pound corruption scandal and his assets were frozen.  Nevertheless, and despite being PEPs, he and his wife were able to subsequently buy a portfolio of property in southern England.

https://www.bbc.co.uk/news/uk-45576161

The US National Association of Corporate Directors published in July a technical briefing, developed in partnership with Broadridge, which seeks to help boards assess their business’s use case with tools, such as the decision tree below, for blockchain adoption, adapted from one developed by the US Department of Homeland Security.  It appears to be an excellent, concise yet easy to understand to the subject matter.

https://www.nacdonline.org/insights/publications.cfm?ItemNumber=59239

On 9^th August, the US Congressional Research Services published a report that looks at the current and the proposed, or possible, future export control system in the US.  It remarks that the US export control system is split between several different licensing and enforcement agencies.  Exports of dual-use goods and technologies — as well as some military items — are licensed by the Department of Commerce, munitions are licensed by the Department of State, and restrictions on exports based on US sanctions are administered by the US Treasury. Administrative enforcement of export controls is conducted by these agencies, while criminal penalties are issued by units of the Department of Homeland Security and the Department of Justice.

https://crsreports.congress.gov/product/pdf/R/R41916

A news release from the EU courts on 19^th September gave notice that, in the absence of substantial grounds to believe that the person who is the subject of that warrant is at risk of being deprived of rights following the withdrawal from the EU of UK, a warrant must be executed while the UK remains a member of the EU.  The case, C-327/18, involved 2 warrants issued by the UK in 2016 and challenged by the suspect in Ireland, where he has been in custody since February 2016.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-09/cp180135en.pdf

https://www.lawgazette.co.uk/law/ireland-told-to-stop-blocking-extraditions-to-uk-/5067608.article

On 15^th September, Europol published this report which aims to provide a comprehensive overview of the current, as well as anticipated future threats and trends of crimes conducted and/or facilitated online.  Its key findings include –

• Ransomware remains the key malware threat in both law enforcement and industry reporting;
• Cryptomining malware is expected to become a regular, low-risk revenue stream for cybercriminals. The use of exploit kits (EK) as a means of infection continues to decline, with spam, social engineering and newer methods such as Remote Desktop Protocol (RDP) brute-forcing coming to the fore;
• New legislation relating to data breaches will likely lead to greater reporting of breaches to law enforcement and increasing cases of cyber-extortion;
• Payment Fraud – the threat from skimming continues and shall do as long as payment cards with magnetic stripes continue to be used; the abuse of PoS terminals is taking on new forms: from manipulation of devices to the fraudulent acquisition of new terminals; and telecommunications fraud is a well-established crime but a new challenge for law enforcement.
• The Darknet market ecosystem is extremely unstable. While law enforcement shut down 3 major marketplaces in 2017, at least 9 more closed either spontaneously or as a result of their administrators absconding with the market’s stored funds; and the almost inevitable closure of large, global Darknet marketplaces has led to an increase in the number of smaller vendor shops and secondary markets catering to specific language groups or nationalities.
• Islamic State (IS) continues to use the internet to spread propaganda and to inspire acts of terrorism – law enforcement and industry action has pushed IS sympathisers into using encrypted messaging apps which offer private and closed chat groups, the dark web, or other platforms which are less able or willing to disrupt their activity. While IS sympathisers have demonstrated their willingness to buy cyber-attack tools and services from the digital underground, their own internal capability appears limited.
• West African and other fraudsters have evolved to adopt emerging fraud techniques, including those with more sophisticated, technical aspects, such as business email compromise.
• Phishing continues to increase and remains the primary form of social engineering. Although only a small proportion of victims click on the bait, one successful attempt can be enough to compromise a whole organisation.
• Many of the classic scams, such as technical support scams, advanced fee fraud and romance scams still result in a considerable number of victims.
• Cyber-attacks which historically targeted traditional financial instruments are now targeting businesses and users of cryptocurrencies.
• While Bitcoin’s share of the cryptocurrency market is shrinking, it still remains the predominant cryptocurrency encountered in cybercrime investigations.
• A combination of legislative and technological developments, such as 5G and the redaction of WHOIS, will significantly inhibit the attribution and location of suspects for law enforcements and security researchers.

https://www.europol.europa.eu/sites/default/files/documents/iocta_2018.pdf

 

Out-Law on 17^th September reported that documents sought by the Financial Reporting Council (FRC) from Sports Direct in connection with an FRC investigation into Sports Direct’s auditor must be handed over.  Sports Direct had claimed that the documents need not be handed over as they were protected by legal professional privilege (LPP).  However, the High Court has now ruled that the production of documents to a regulator solely for the purposes of a confidential investigation by the regulator into conduct of a regulated person does not infringe privilege.

https://www.out-law.com/en/articles/2018/september/high-court-rejects-privilege-claim/

The National Police Chiefs Council reported on 19^th September that a new national unit will assist police forces to use alternatives if the UK loses access to current EU data sharing and cooperation tools, such as the European Arrest Warrant or Europol systems.   Contingency plans agreed by all chief constables will see UK law enforcement revert to use of international police tools through Interpol, bilateral channels and Council of Europe conventions to enable extradition of suspects, trace missing people and share intelligence about crime and terrorism.  A small team led by the NCA and National Police Chiefs’ Council (NPCC) have reviewed the UK’s use of EU instruments and the operational risks posed by their loss as well as identifying alternative non-EU tools and processes for using them.

https://news.npcc.police.uk/releases/police-chiefs-to-establish-a-safety-net-if-access-to-eu-security-tools-is-lost

PYMNTS.com on 18^th September reported on recent Federal Trade Commission action where it had it shut down websites where consumers could buy fake financial and other documents – such as pay stubs, income tax forms, and medical statements – which can be used to facilitate identity theft, tax fraud, and other crimes.  It refers to a case involving a company, Innovative Paycheck Solutions and its website FakePayStubOnline.com through which a customer could buy a fake stub for as little as $40 or a fake tax return for $150 or more.  Visitors could also customise their documents and to edit real bank statements.  Another company named is Integrated Flight Solutions and its website NoveltyExcuses.com, as well as websites run by George Jiri Strnad II, such as iVerifyMe.

https://www.pymnts.com/fraud-prevention/2018/fake-id-docs-sold-on-websites-targeted-by-feds/?src=ilaw

On 18^th September, EU Regulation 2018/1245/EU added this leader of armed militias to its Libyan sanctions lists following his addition to UN lists on 11^th September.

See also Council Decision 2018/1250/CFSP.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.235.01.0001.01.ENG&toc=OJ:L:2018:235:TOC

The Isle of Man issued a news release on 19^th September –

https://www.gov.im/news/2018/sep/19/financial-sanctions-libya/

And HM Treasury –

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/741804/2018.1245_Libya.pdf

If you want to understand the implications of the US withdrawal from the JCPOA, the EU and Iranian reactions, and for companies now caught between 2 sets of opposing laws, you could do worse than listen to this podcast where an expert from UK Finance is interviewed.

https://www.armscontrolwonk.com/archive/1205943/jcpo-eh-iran-the-eu-and-the-us/

The Trace on 18^th September carried an fascinating article on the smuggling of guns from the US to Mexico.  It says that whilst federal law prohibits the ATF and local law enforcement agencies from releasing the results of crime gun traces, firearm trafficking patterns are hidden from public view.  However, it says, leaked records reviewed by The Trace tell 2 clear stories: high-volume gun traffickers often depend on a single retail gun dealer for most of their wares, and rarely do those gun sellers face consequences.  The data reviewed by The Trace represents only a slim fraction of the total number of US-purchased guns recovered by Mexican authorities.  Every year, the ATF conducts 10,000 to 20,000 traces of guns found at Mexican crime scenes, 70% of which were originally sold by American retailers.  One expert is quoted as saying that a relatively small number of retailers in this country are disproportionately involved in selling guns later used in firearm-related violent crime in Mexico.  Under US federal law, gun dealers only have to notify the ATF of very specific purchasing patterns: namely, if a single person buys more than 1 handgun from the same licensed dealer within 5 business days.  In states along the south-west border — Texas, New Mexico, Arizona, and California — dealers also have to alert the ATF if they sell more than 1 rifle or shotgun to the same person within 5 business days.

https://www.thetrace.org/2018/09/atf-documents-crime-guns-us-mexico-trafficking/