Sanctions, proliferation, money laundering, export and trade control news etc
Baking Tech on 13th August reported that the FBI is said to be warning banks that cybercriminals are preparing to carry out a global fraud scheme known as an “ATM cash-out”. This cash-out means that thieves can use a bank or payment card processor and use cloned cards at cash machines to potentially withdraw millions of dollars in a few hours.
https://www.bankingtech.com/2018/08/fbi-sounds-alarm-over-atm-cash-out-attack/
OCCRP on 13th August reported that a court in Ukraine had ordered the arrest of Denys Aminiev, a former customs official in Odesa alleged to be involved in stealing $5.7 million worth of cargo from sealed shipping containers. An investigation detailed one scheme in which hundreds of shipping containers were relabelled in Odesa’s ports so as to dodge taxes levied on them. Customs officials and police were in on the scheme, said investigators.
Bailiwick Express on 14th August reported that the fraud trial has begun of Chris Byrne, 50, accused of losing £2,730,000 of clients’ money by knowingly getting them to invest in a unlicensed high-risk company, Lumiere Wealth Limited, without having told them all the facts; and through a Brazilian company called Providence which was said to deal in Brazilian factoring – a financial process whereby it would buy up company debts for less than the total amount and profit by chasing up those debts. The company’s boss Antonio Buzaneli promised investors massive returns of up to 28%.
https://www.bailiwickexpress.com/jsy/news/lumiere-wealth-fraud-trial-begins/?t=i#.W3KOJvZFx9A
In edition 5 of The Shipping Law Review, in July 2018, a whole chapter is devoted to the background to, impact and enforcement of international sanctions as they affect the shipping industry.
Oil Price on 13th August reported that oil smuggling has been a problem for the Philippine government for decades, with both the transfer of oil cargoes from one vessel to another offshore and so-called “technical” smuggling. With rising global oil prices smugglers are once again active. With direct smuggling, it says that some oil companies actually bring in vessels, dock in small ports, and discharge the fuel directly to waiting tanker trucks who then deliver to service stations. Some of the largest oil refining companies in the Philippines have at one time of another been accused of engaging in direct smuggling. Technical smuggling usually involves the import of oil products being declared as another less valuable product, with lower duties collected, sometimes involving the bribery of customs officials. The government uses fuel-marking programmes, using advanced technology molecular markers and sophisticated management systems to mitigate tax evasion and subsidy abuse, minimise financial losses, and raise revenue. A recent Asian Development Bank (ADB) report said that all countries are susceptible to fuel fraud, but for developing countries fuel fraud can substantially reduce a government’s total revenues. The report said that oil smuggling costs the Philippine government around $750 million a year in lost revenue. On 8th August, the Philippines announced a team to oversee the implementation of its new fuel marking programme.
https://oilprice.com/Energy/Energy-General/Philippines-Cracks-Down-On-Fuel-Pirates.html
ASIAN DEVELOPMENT BANK: FUEL-MARKING PROGRAMMES: HELPING GOVERNMENTS RAISE REVENUE, COMBAT SMUGGLING, AND IMPROVE THE ENVIRONMENT
The ADB report, mentioned in relation to the Philippines’ fuel smuggling problems, dates from 2015, and can be accessed here –
13th August 2018
A NEW BREED OF PIRATE IN VENEZUELA
On 2nd August, the Washington Post carried an article saying that, as chaos spreads in Venezuela, and as certain spots in the Caribbean become more dangerous than for decades, it is most dangerous off the coast of Venezuela.
EGYPT: A TOTAL OF 1,000 ANCIENT EGYPTIAN PIECES HAVE BEEN RECOVERED BY AUTHORITIES
Egypt Today on 12th August reported that the Supreme Secretary of Antiquities has announced that 1,000 smuggled ancient Egyptian antiques have been recovered; thanks to the efforts exerted by the ministry over the past couple of years, and that this was in addition to the recovery of the smuggled collection of antiques recovered in Italy recently.
http://www.egypttoday.com/Article/4/55841/1000-Ancient-Egyptian-pieces-recovered
PAKISTAN: IMPROVED GOVERNANCE GUIDELINES FOR BANKS OPERATING OVERSEAS
On 13th August, DAWN in Pakistan carried an article about the upcoming visit of the Asia-Pacific Group of FATF. It says that the group will examine whether Pakistan “has tightened the loose ends” of its AML policies. Based on its findings, the FATF will decide whether to keep the country on its watch list. It says that, in this context, the State Bank of Pakistan (SBP) has recently launched a framework of governance for overseas operations of banks. The guidelines follow the imposition of a penalty on Habib Bank Ltd (HBL) by the Department of Financial Services of New York in 2017 and the signing of a new agreement by United Bank Ltd (UBL) with New York’s Federal Reserve Bank last month to strengthen its compliance with the AML programme.
https://www.dawn.com/news/1426752/rules-for-responsible-conduct-abroad
TRADE-BASED MONEY LAUNDERING A MASSIVE GLOBAL PROBLEM
The Straits Times in Malaysia on 13th August carried an article warning of the dangers from trade-based money laundering which starts by saying that the Sinaloa drug cartel was once the largest and most powerful in the world. The Mexican organised crime body at one point controlled so much of the illicit drug trade across Mexico and the United States that taking them down is a process that began in the 1980s – and the key to their sinister “success”? Clothing and teddy bears from China. The article calls on banks to be proactive in fighting the problem. Crucially, it says that financial intelligence is most robust when information flows between the public and private sectors. In the case of human trafficking, for example, presentations by leading NGO and government enforcement agencies have improved the banks’ ability to detect potentially related financial transactions. In turn, they have helped law enforcement disrupt trafficking networks.
CASPIAN SEA BREAKTHROUGH TREATY SET TO BOOST OIL AND PIPELINE PLANS
Bloomberg on 12th August reported that 5 Caspian Sea states – Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan – reached a breakthrough agreement on sovereign rights to the sea, paving the way for new oil and gas extraction – and pipelines – after more than 2 decades of disputes, and it allows each to lay pipelines offshore with consent only from the neighbouring states affected, rather than from all Caspian Sea nations. The 5 states also signed agreements on trade and economic ties, transportation and fighting terrorism. The territorial disputes are said to have prevented the exploration of at least 20 billion barrels of oil and more than 240 trillion cubic feet of gas.
CORRUPTION SCANDAL IN ARGENTINA FELLS TITANS OF BUSINESS
AFP reported on 13th August that records kept in notebooks of the kinds used by schoolchildren are bringing down titans of Argentina’s industry in a multimillion-dollar corruption scandal. It says that what sets this case apart from other Argentine scandals is the large number of people going down — around 20 so far, with additional names surfacing regularly — and their high-flying status in the business world. The scandal involves under-the-table payments to the governments of Nestor and Cristina Kirchner, the Peronist couple who ruled before the current president, Mauricio Macri, but that one big mystery is whether the money went to enrich government officials personally or was helped finance election campaigns. Prosecutor Carlos Stornelli has said bribes paid in the so called “corruption copybooks” case total $160 million.
HONG KONG POLICE’S ANTI-FRAUD SQUAD FROZE HK$530 MILLION LOST TO SCAMMERS OVER PAST YEAR, WITH PLANS TO EXPAND UNIT
The South China Morning Post on 13th August carried a report on the work of the Anti-Deception Coordination Centre, also saying that in cases of commercial fraud through email, scammers cheated victims out of HK$759.4 million in the first 6 months of 2018 – the largest loss among all types of scams – with a Spanish electronics company involved in an €11 million case, the biggest single amount this year. The squad says that about 16% of funds, or HK$530 million, involved in detected scams were successfully frozen before they could be transferred to the accounts of criminals, mostly in Hong Kong and mainland China.
THE FOUNDATIONS OF COMPANY LAW COMPLIANCE IN IRELAND
Law firm, A&L Goodbody has published an e-book, a guide which is a summary of some of the key corporate governance and compliance requirements under the Companies Act and Irish company law. The guide applies to private limited liability companies, designated activity companies and private unlimited liability companies incorporated and registered in Ireland. It is not intended to be definitive or to cover all aspects of company law compliance and we would of course be happy to provide you with further information on request.
FEARS THAT MONEY LAUNDERING EVALUATION MAY BE USED TO PUNISH TAIWAN POLITICALLY
The Taiwan Times on 13th August reported that Taiwan’s third mutual evaluation by the Asia/Pacific Group on Money Laundering is scheduled for November, but there is concern China may attempt to distort the results to damage Taiwan. As Taiwan prepares for the evaluation, concern has emerged that China, an influential member of the APG, along with Hong Kong, Macao, and other allies, may attempt to apply political pressure to distort results, or completely sabotage the evaluation. The article points out that the Liberty Times notes that a recent mock evaluation revealed that Taiwan may be at risk of receiving poor marks in 12 of the areas that will be evaluated. In order to maintain its status as a “low-risk” country for money laundering, Taiwan must reduce the “at risk” areas to 8.
https://www.taiwannews.com.tw/en/news/3505566?src=ilaw
KENYA: BANKS CAUGHT UP IN NGINYO KARIUKI LAND FRAUD WEB
The Daily Nation on 13th August reported that Barclays and KCB are reportedly entangled in a suit involving Nairobi tycoon Lawrence Nginyo Kariuki, who has accused a real estate company of fraudulently sub-dividing and selling off his land.
OLEG DERIPASKA OFFERS SANCTIONS RELIEF PLAN TO US TREASURY
The Irish Times on 13th August reported that Oleg Deripaska’s aluminium-to-energy group En+ has presented the final version of a plan to the US Treasury in a bid to free itself from sanctions, which threaten to sink the company and upend global metal markets.
MALI´S FRAGILE PEACE
On 13th August, ETH Zurich provides a briefing on the situation in Mali saying that despite a large international civilian and military presence, Mali continues to struggle with widespread insecurity and Islamist extremism, and asking why this it the case. Key reasons relate to Mali’s chronic poverty problems, ethnic tensions and a weak state apparatus. It says that democracy has been quite stable in Mali, yet secessionist ideology runs deep through the Tuareg populations in the north; and this rift has manifested itself in no fewer than 3 rebellions in support of the autonomous Tuareg state of the “Azawad” prior to 2012.
CRYPTO MILLIONAIRE LOST 5,500 BITCOINS IN ALLEGED INVESTMENT SCAM
Coindesk on 13th August carried a report about the alleged scam involving a 22 year old cryptocurrency Finnish businessman and Thai actor in Thailand. In June 2017, the Finn was approached for investing in several Thai stocks, a casino in Macau as well as a new cryptocurrency called Dragon Coin that could be used at the casino.
https://www.coindesk.com/crypto-millionaire-lost-5500-bitcoins-in-alleged-investment-scam/
THE HUMAN RIGHTS MEASUREMENT INITIATIVE (HRMI)
This initiative is working to produce a free easy-to-access database of metrics, summarising human rights performance in countries around the world. It aims to be comprehensive by producing metrics that cover the full range of rights embodied in international law, particularly the collection of international treaties known as the International Bill of Human Rights. It says that HRMI will help everyone see the big picture more easily, influencing both global decision-makers and ordinary people.
https://humanrightsmeasurement.org/
RUSSIA SAYS “WILL DITCH US SECURITIES AMID SANCTIONS”
KYC 360 on 13th August reported that Russia will further decrease its holdings of US securities in response to new sanctions against Moscow but has no plans to shut down US companies in Russia, Finance Minister Anton Siluanov said on state TV.
https://kyc360.com/news/russia-says-will-ditch-u-s-securities-amid-sanctions-ria/
UNAUTHORISED VIRTUAL CURRENCIES ARE ILLEGAL IN SAUDI ARABIA
On 13th August, Mondo Visione carried an article saying that in Saudi virtual currency including, for example but not limited to, the Bitcoins are illegal in the kingdom and no parties or individuals are licensed for such practices.
EVEN THOUGH PORTS CAN BENEFIT FROM CUSTOMS FAST-TRACKING AND PRIORITY TREATMENT THROUGH AEO CERTIFICATION, IT’S STILL NOT WIDELY ADOPTED
Port Strategy on 6th August carried an article saying that during a recent IMO special event on ports, and as part of the drive for reducing border delays, achieving smoother cargo flows, improving security and reducing logistics costs, the push for AEO – Authorised Economic Operator – status was highlighted. It says that UK Border Force and HMRC are actively encouraging ports and others to go for AEO certification. AEO was created by the WTO, as part of its SAFE framework of standards, designed to secure and facilitate global trade. The framework is based on countries having mutual recognition to give priority clearance to AEO exporters and importers across borders. The WTO sees AEO as the future of international trade. The article focuses on the uptake of AEO by British ports.
OFAC ADDS 1 NAME TO ITS TERRORISM SANCTIONS LIST
On 13th August, OFAC added Qassim Abdullah Ali Ahmed of Iran to its list of designated persons.
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180813.aspx
TAX OFFICE BAGS PRESTON FRAUDSTER’S £70,000 POKER WIN
The BBC on 13th August reported that Adam Lulat, 26, a convicted fraudster involved in a £40 million money laundering scam and VAT fraud and jailed in 2015 who won £70,000 in a poker tournament in Manchester in March has been ordered to pay the cash to the tax office. He was part of a six-man gang ordered to repay £590,000, although Lulat only had to repay £1 as he had no assets, but he has now been brought back to court – he was also ordered to hand over £2,840 held in a personal bank account within 3 months or face another 15 months in jail.
https://www.bbc.co.uk/news/uk-england-lancashire-45168539?src=ilaw
KENYA FRAUD CHARGES OVER CHINESE-FUNDED $3 BILLION RAILWAY
The BBC on 13th August reported that 2 senior Kenyan government officials have been charged in court with fraud over the building of a $3.2 billion Chinese-funded railway line, accused of paying more than $2 million in compensation to private firms which falsely claimed to own land through which the line ran. The officials and 15 other accused have pleaded not guilty to the charges. The line runs between the port city of Mombasa and Nairobi. It is supposed to eventually connect landlocked South Sudan, eastern DRC, Rwanda, Burundi and Ethiopia to the Indian Ocean, but the project has been marred by corruption allegations, and claims by economists that the cost was too high.
https://www.bbc.co.uk/news/world-africa-45169690?src=ilaw
EU PLANS GOLDEN VISA CRACKDOWN
Cyprus Mail on 13th August reported that the EU is planning to crack down on EU countries including Cyprus that award citizenships to rich third-country nationals amid growing concerns over dirty money from Russia, according to the Financial Times. In 2017, 503 foreign investors acquired a Cypriot passport and a further 510 family members. 3 months ago it launched a PR campaign to improve its image abroad, tarnished by reports in the past linking it to the legalisation of illicit funds. The FT quoted the EU Commissioner for Justice, Vera Jurova, as saying that such schemes in 8 Member States will come under tougher scrutiny from the Commission as part of a broader drive against money laundering and corruption.
https://cyprus-mail.com/2018/08/13/eu-plans-golden-visa-crackdown/?src=ilaw
AML CASH TRANSFER MEASURES COME INTO EFFECT IN ZANZIBAR
The Citizen in Tanzania reported on 13th August that controls on the movement of $10,000 in cash or its equivalent into or out of Zanzibar have come into force. It is the latest of a series of AML-connected measures being introduced in Tanzania.
VENEZUELAN PRESIDENT IMPLICATED IN US INVESTIGATION OF €160 MILLION LAUNDERED THROUGH MALTA
Baker McKenzie on 13th August reported that a criminal complaint filed in Miami alleges that Maduro’s stepsons helped launder $1.2 billion in funds embezzled from Venezuela’s state oil company PDVSA that were wired to an unnamed Maltese bank between late 2014 and early 2015. The scheme allegedly employed a series of fake investment schemes including fraudulent bond issues and investment funds.
THE NEW LEGAL LANDSCAPE FOR CROSS-BORDER INVESTMENT IN THE UNITED STATES: WHAT INVESTORS IN EUROPE AND ASIA NEED TO KNOW
Clifford Chance on 13th August produced a briefing on the implications of the Foreign Investment Risk Review Modernization Act (FIRRMA) and the Committee on Foreign Investment in the United States (CFIUS).
https://www.cliffordchance.com/briefings/2018/08/the_new_legal_landscapeforcross-borde.html
LEGISLATION IN WALES FOR MINIMUM PRICE FOR ALCOHOL RECEIVES ROYAL ASSENT
Local Government Lawyer on 13th August reported that a new law introducing a minimum price for alcohol in Wales has been granted Royal Assent. The Public Health (Minimum Price for Alcohol) (Wales) Act 2018 is part of wider efforts to reduce excessive drinking and is expected to come into operation in Summer 2019.
REGULATION AND THE LEGALISATION OF CANNABIS IN CANADA
On 13th August, Chatham house published an article saying that under a new law that comes into effect on October 17th, Canadians over the age of 18 will be able to buy and consume marijuana legally. To date, Uruguay, 9 US states, as well as the District of Columbia, have legalised marijuana for recreational use, but Canada will become the first G7 country to do so at a national level. The legislation permits the possession of up to 30g of legal cannabis or its equivalent in public; the sharing of up to 30g of legal cannabis or its equivalent with other adults; the purchasing of dried or fresh cannabis and cannabis oil from a provincially licensed retailer (including online). The article poses a number of questions, including how will Canada square the circle between regulating recreational and medicinal uses of the drug? How will the illegal market be eliminated? How should the drug be taxed? How should Canada manage commercialisation, advertising and the power of big cannabis companies?
https://www.chathamhouse.org/publications/twt/canadian-grasslands
MALAYSIA SEEKS FINANCIER’S $35 MILLION JET LINKED TO 1MDB SCANDAL
KYC 360 on 13th August reported that Malaysia is seeking to repossess a Bombardier Global 5000 $35 million private jet owned by financier Low Taek Jho as part of investigations into a multi-billion dollar scandal at state fund 1MDB. The jet was grounded last year in Singapore, according to some media reports.
https://kyc360.com/news/malaysia-seeks-financiers-35-million-jet-linked-to-1mdb-scandal/
THE FUTURE OF CHEMICAL WEAPONS: IMPLICATIONS FROM THE SYRIAN CIVIL WAR
On 13th August, this article from the Security Studies Journal analyses whether the Syrian case will lead to further proliferation and use of chemical weapons by states. It argues that chemical weapons have demonstrated limited military utility in Syria, either tactically or as a tool of civilian victimisation, the costs of use have been repeatedly demonstrated by the international reaction to their use, and the use of sarin — a nerve agent — has attracted a stronger international response than the use of chorine, a less lethal chemical agent.
https://www.tandfonline.com/doi/abs/10.1080/09636412.2018.1483640?journalCode=fsst20
Reuters on 13th August and the Guardian reported that a study published in the journal Nature Ecology and Evolution said many companies involved in illegal fishing worldwide used tax havens to register their vessels, while investments in farming that has damaged the rainforest often flow via offshore accounts. 70% of fishing vessels implicated in illegal, unreported and unregulated (IUU) catches had been registered at some point in a tax haven, led by Belize and Panama, while only about 4% of all the fishing vessels registered worldwide are flagged in tax havens. Documents from Brazil’s central bank which showed that almost 70% of foreign capital invested by major companies in soy and beef farming in Brazil from 2000-2011 had flowed through tax havens.
MLex on 13th August reported on a challenge to a unexplained wealth order (UWO) by the woman affected at the High Court in London, with the NCA quoted as saying that she had such lavish spending habits that it was highly likely to have come from illicit sources. The intention of the UWO is said to make the woman prove that funds used to buy 2 properties in south-east England for £22 million were legitimate.
On 13th August, EU Regulation 2018/1124/EU had the effect of removing the DIRECTORATE GENERAL OF GEOLOGICAL SURVEY AND MINERAL INVESTIGATION from its Iraq sanctions list, following the decision of the UN on 7th August.
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1124&from=EN
On 13th August, EU Regulation 2018/1117/EU contained amended information for 4 entries on its Burma/Myanmar sanctions list. See also Council Decision 2018/1126/CFSP.
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1117&from=EN
HM TREASURY AMENDS UK SANCTIONS LISTS
On 13th August, HM Treasury issued a Notice making the corresponding change to UK lists.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/733495/2018.1117_Burma.pdf
On 13th August, the EU published EU Regulation 2018/1115/EU which amended the sanctions regime concerning South Sudan sanctions list – Malek REUBEN RIAK RENGU and Paul MALONG AWAN are moved from Annex II to Annex I of EU Regulation 2015/735/EU. This followed the adoption of UN SCR 2428 on 13th July, and Annex I of the 2015 Regulation imposes sanctions on persons, entities and bodies designated by the UN.
Meanwhile, EU Regulation 2018/1116/EU amends the 2015 Regulation amends the exemptions to the arms embargo and related technical and financial assistance and amends the designation criteria for the persons and entities subject to the asset freeze, in the light of UN changes.
See also Council Decision 2018/1125/CFSP.
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1115&from=EN
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1116&from=EN
HM TREASURY AMENDS UK SANCTIONS LISTS
On 13th August, HM Treasury issued a Notice making the corresponding change to UK lists.
Radio New Zealand on 13th August reported that Tongan MP and former Prime Minister, Lord Tu’ivakano, has had his bribery and money laundering case adjourned until August 14th. He was arrested on 1st March and charged with 10 counts, including 1 of making a false declaration to obtain a passport, 2 perjury counts, 5 for accepting bribes and 2 counts of money laundering.
https://www.radionz.co.nz/international/pacific-news/363975/former-tongan-pm-s-case-adjourned-again
The Korea Joongang Daily on 13th August reported that the South Korean government has banned the entry of 4 ships into itsports after they were found to have smuggled North Korean coal into the country last year in violation of international sanctions. Korea Customs Service announced the results of an investigation that found 7 cases of illegal imports of North Korean coal and pig iron from April to October 2017, which were shipped into 5 different South Korean ports – a total of 35,028 tons, worth some $5.86 million. The 4 banned ships are the Panama-registered Sky Angel, Sierra Leone-registered Rich Glory and the Belize-registered Shining Rich and Jin Long. The coal came from the North Korean ports of Songlim, Chongjin, Daean and Wonsan, and was transhipped via the Russian ports of Vladivostok and Kholmsk.
http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=3051818
12th August 2018
MANILA PORT CUSTOMS CHIEF SACKED OVER BIG SHABU (METHAMPHETAMINE) SHIPMENTS
The Manila Standard on 12th August reported that the Customs Commissioner has sacked BoC-Manila International Container Port district collector Vener Baquiran and ordered the investigation of an accredited importer following the discovery of 500 kg of shabu at the MICP and another in Cavite.
ANCIENT SILVER FLASK SEIZED AT GATWICK REVEALED FOR THE FIRST TIME, AHEAD OF RETURN TO AFGHANISTAN
The Telegraph on 11th August reported that it is believed to be 4,000 years old and was dug up illicitly in Afghanistan and smuggled to Britain. It was seized at Gatwick in 2016, but whether Britain was its ultimate destination is unclear as smugglers use London’s airports as transit hubs.
NEW YORKER IMPRISONED FOR SMUGGLING $150,000 IN LION AND TIGER PARTS
National Geographic on 10th August reported that Arogkron Malasukum, a US citizen from Thailand, bought the items from undercover federal agents. By removing teeth from tiger and lion skulls, sorting them into individual parcels, and disguising the contents by labelling them “dog toys” and “home decorations”, he shipped 68 of the illicit packages to Thailand in less than 2 years. The article says that Malasukum’s case stemmed from an ongoing major US Fish and Wildlife Service investigation targeting the illegal trade in rhinoceros horn and elephant ivory in response to international poaching and smuggling syndicates. Named Operation Crash, the term for a group of rhinos, the multinational covert operation began 7 years ago when wildlife law enforcement became aware of an increase in rhino poaching and dozens of people have been convicted of illegally trafficking.
KEY IRAN COUNCIL BACKS AML MOVE
Reuters on 12th August reported that a top Iranian constitutional body, the Guardian Council, which vets legislation passed by parliament for compliance with Iran’s constitution, has approved measures passed by parliament to bring the country more into line with global AML standards, as Iran tries to attract investments despite the re-imposition of US sanctions. And in the hope it will be removed from a blacklist that makes some reluctant foreign investors.
WHY FINANCIAL CRIMINALS USE REAL ESTATE TO LAUNDER MONEY
The Curbed website on 10th August carried an article in the light of the Paul Manafort case, and saying that property is stable, functional, and less scrutinised than other landing spots for ill-gotten gains. Real estate prices are generally stable and will appreciate over time and real estate is also functional; a money launderer could use the property as a second home or rent it out, earning income from the investment.
https://www.curbed.com/2018/8/10/17674584/money-laundering-real-estate-paul-manafort-trial
SURINAMESE WOMEN FINED FOR TRYING TO LEAVE JAMAICA WITH ILLICIT CASH, SOME HIDDEN IN THEIR VAGINA
The Jamaica Observer on 12th August reported that she has been fined a total of $300,000, after pleading guilty to breaches of the Proceeds of Crime Act. Hairdressers, Ingrid Asaite, 31, and Claudia Clydesdale, 30, who had visited for Reggae Sumfest in Montego Bay were both fined $100,000 each or told to spend 6 months in prison for possession of criminal property. They were also ordered to pay $50,000 each or serve 6 months in prison on charges of concealment of criminal property and facilitating the retention of criminal property. Another Surinamese national, Dellroy Sanduliet, who was also held along with the women and found with $12,700 and €50 in his wallet and bag, also pleaded guilty to attempting to remove criminal property from Jamaica and was ordered to pay $10,000 or serve 3 months in prison.
IRAN: IS FRENCH COMPANY OUT OF SOUTH PARS GAS PROJECT AND REPLACED BY CHINA?
VOA on 11th August reported that China’s state-owned petroleum corporation has taken a majority share of the country’s South Pars gas project after French oil and gas company Total announced it would pull out because renewed US economic sanctions.
However, according to Rferl on 12th August and contradicting other reports, the Oil Ministry news agency SHANA quoted a senior Iranian oil official as saying the gas-field developmental contract remained unchanged.
https://www.rferl.org/a/29428302.html
US SANCTIONS SQUEEZE FREIGHT COMPANIES FROM IRAN
Lloyds Loading List on 12th August reported that international freight forwarding and logistics firms look set to withdraw from business with Iran due to tightening US sanctions and fears about their legal consequences, despite attempts by Europe to support JCPOA that lifted UN nuclear sanctions on Iran in January 2016. major container lines including CMA CGM, Maersk and MSC have confirmed their withdrawal from Iran in the face of the renewed US sanctions against the country. CMA CGM has also suspended its co-operation agreement with IRISL.
US NATIONWIDE LAW ENFORCEMENT AND EDUCATION INITIATIVE AIMED AT STOPPING VETERAN-RELATED CHARITY FRAUD
Target Letter law blog on 12th August reported that in July the Federal Trade Commission announced Operation Donate with Honor, a nationwide law enforcement and education initiative aimed at stopping veteran-related charity fraud. As part of it, the Attorney general has filed suits against 2 charities alleging that they were donating little to no money to their advertised causes and using deceptive practices to draw in donations. One charity sells dozens of memorial bracelets, military decals, hats and shirts on their website; the other promised to use donations to help veterans receive medical treatment that the Department of Veterans Affairs does not provide. The posting cautions readers to research before they donate in order to ensure that money is going to a legitimate cause.
https://www.targetletterlaw.com/2018/08/12/a-note-of-caution-on-charitable-giving/
SFO SUSPENDS LAWYER IN CHARGE OF UNAOIL BRIBERY INVESTIGATION
City AM on 12th August reported that Tom Martin, the senior lawyer in charge of an ongoing criminal investigation into Monaco-based oil firm Unaoil has been suspended for alleged gross misconduct. It reminds one that the SFO opened its investigation into Unaoil, which provides services in the Middle East, central Asia and Africa, in March 2016, and in June announced it was bringing 4 charges of corruption against the company in relation to alleged corrupt payments to secure construction contracts in Iraq for 2 multinationals.
http://www.cityam.com/290614/serious-fraud-office-suspends-lawyer-charge-unaoil
PAKISTAN: BILLIONAIRE MIAN MANSHA SUMMONSED IN A $95 MILLION MONEY LAUNDERING CASE
Customs Today on 12th August reported that the National Accountability Bureau (NAB) has ordered billionaire businessman Mian Muhammad Mansha to appear before it in a money laundering case. Mansha is described as the head of the Nishat Group and MCB and one of the richest people in Pakistan.
http://www.customstoday.com.pk/nab-summons-mian-mansha-in-a-95m-money-laundering-case/
FRANCE, GERMANY, ITALY, AND UK ARE STRENGTHENING THEIR ECONOMIC DEFENCES AGAINST CHINA. WILL MORE FOLLOW?
On 12th August, the European Council on Foreign Relations published an article posing this question, saying that the EU is posed to impose an investment screen in the near future. It says that by the end of 2018, France, Germany, Italy, and UK will all have taken important steps to protect economic assets from foreign takeovers. This unprecedented securitisation of foreign investment is a response to China’s plan to create global innovative industrial champions for itself, including in the defence sector.
THOUSANDS IN THE MILLION MARCH AGAINST CORRUPTION IN DOMINICAN REPUBLIC
Prensa Latina on 12th August reported that thousands of Dominicans are participating in the Million March Against Corruption and Impunity in the metropolitan area of this capital convened by the Green March collective. In June, the Attorney General’s Office filed a formal accusation and requested the opening of a trial in the case involving Brazilian construction and engineering company Odebrecht against businessman Angel Rondon, former President Andres Bautista, and former General Secretary of the Revolutionary Modern Party, Jesus Vasquez. The list also includes former Minister of Public Works and former Finance Secretary of the Dominican Liberation Party, Victor Diaz Rua, lawyer Conrado Pittaluga Arzeno, senator from San Cristobal Tommy Galan, and former senator Juan Roberto Rodriguez Hernandez.
The Liverpool Echo on 12th August reported that police have been fighting a war with a secretive Huyton-based organised crime group for the last 20 years. The drugs gang is said to be led by 2 brothers from Stockbridge Village and have flooded the UK with cocaine and has been responsible for spectacular violence across Liverpool and are said to operate on a scale similar to that of Curtiss Warren in the 1990s.
https://www.liverpoolecho.co.uk/news/liverpool-news/revealed-polices-secret-war-real-15013863
Public Finance International on 12th August reported that Ireland has been dubbed the biggest tax haven in the world in a study carried out by academics at the University California, Berkeley and the University of Copenhagen that claims that foreign multinationals shifted €90 billion of corporate profits to the country in 2015. The study said the profits hidden away in Ireland was more than those in all of the islands in the Caribbean combined (€83 billion) and well ahead of Singapore (€60 billion), Switzerland (€49 billion) and the Netherlands (€48 billion).
The study is at –
The Times of Israel reported on 12th August that US-Israeli billionaire and philanthropist, Shari Arison denies wrongdoing amid suspicions of pay-offs to foreign government representatives. She has been released but prohibited from leaving the country. Investigators at the Lahav 433 national crime unit in Lod also questioned Efrat Peled who is CEO of Arison Investments. The case is said to involve Shikun & Binui, one of Israel’s largest construction and infrastructure companies, which has many projects in Israel and around the world. 6 senior executives were arrested in February on suspicion of making the illicit payments to support construction projects in unnamed countries in Africa. In addition the bribery concerns, Arison and Peeled are suspected of Securities Law offences relating to business reports.
11th August 2018
LLOYD’S SUPERYACHT INSURANCE SHAKE-UP UNDERWAY
Superyacht News on 10th August reported that it is suggested that between 5 and 7 Lloyd’s syndicates have already dropped out of the yacht insurance market and further consolidation is expected. Lloyd’s of London had issued a warning to a number of its loss-making marine syndicates, including those that underwrite superyacht businesses. Giving them 3 months to create viable business plans or be dropped. It says that yachts are widely considered to be the greatest loss-maker within the Lloyd’s marine portfolio, and provides estimates of what appear to be unsustainable loss ratios – including the fallout from the severe damage caused by the hurricanes that decimated the Caribbean and Florida in 2017.
http://www.superyachtnews.com/business/lloyds-superyacht-insurance-market-shakeup-underway
MARIJUANA TRAFFICKING RING BRIBED PARAGUAY OFFICIALS FOR PROTECTION
Insight Crime on 10th August published an article saying that Paraguay has dismantled a trafficking network tied to officials in Canindeyú, a major marijuana-producing region bordering Brazil, highlighting the widespread and systematic corruption that has long facilitated the country’s role as South America’s main illegal marijuana producer. The case is said to have revealed a “well-structured ‘protection system’” composed of current and former police officers, soldiers, prosecutors and customs officials who accepted bribes.
INSIGHT CRIME’S PERSON OF INTEREST PODCAST: GUATEMALA’S POLITICAL FIXER
In its first podcast, Insight Crime looks at corruption in Guatemala’s campaign finance system through the story of Obdulio Solórzano, a political fixer for the UNE party who was assassinated in 2010, after helping Álvaro Colom reach the presidency. Solórzano worked his contacts for funding, among them the powerful, ambitious and violent criminal group from Mexico, the Zetas, which would later claim to give $11.5 million to UNE’s candidate. Later he would fall out of favour with the president and his party, and along with the Zetas, and would become the target of investigations into corruption and drug trafficking.
FinCEN RECEIVES 1,500 SAR ON CRYPTO PER MONTH
The Coin Telegraph on 11th August reported the Director of FinCEN saying that the agency has seen a surge in filings of crypto-related Suspicious Activity Reports (SAR). The number of complaints now exceeds 1,500 per month, he said at the 2018 Chicago-Kent Block Legal Tech Conference. It reminds one that, as indicated in FinCEN’s March 2013 guidelines, any acceptance or transfer of value that substitutes for fiat currency – including crypto – is considered to be money transmission, and entails specific regulatory obligations under the US Bank Secrecy Act (BSA). He also clarified that reporting obligations pertain to businesses that provide anonymising services — often dubbed “mixers” or “tumblers”.
His full speech is at –
NORTHERN IRELAND SOLICITOR ACCUSED OF £250,000 FRAUD ON CLIENTS
The Belfast Telegraph on 11th August reported that a solicitor, Elaine Mary Early, 53, has been ordered to stand trial accused of stealing more than £250,000 from various clients, including the wills of the deceased.
BROADCOM TECH BILLIONAIRE’S LATEST SCANDAL: DRUG-TRAFFICKING CHARGES IN VEGAS
The Daily Beast on 10th August reported that Henry Nicholas, a billionaire philanthropist, has been accused of massive securities fraud and spiking the drinks of tech executives. Now, he is facing alleged drug trafficking. He and Ashley Fargo (the ex-wife of an heir to the Wells Fargo fortune) were allegedly caught with heroin, cocaine, ecstasy, and methamphetamines in Nicholas’ Las Vegas hotel room and arrested on suspicion of narcotics trafficking.
MAERSK AND IBM LAUNCH BLOCKCHAIN SHIPPING PRODUCT
On 11th August, Lloyds Loading List reported that TradeLens, the tie-up between Maersk and IBM will continue as a collaboration rather than a joint venture but ports, freight forwarders and customs authorities have signed up as early adopters. It says that Pacific International Lines has joined Maersk and its subsidiary Hamburg Süd as one of the key carriers in Maersk’s ambitious plan to provide a gateway blockchain product for the container shipping sector. Maersk and IBM have been working on since their collaboration was announced in January, sees the 3 carriers joining forces with 20 port and terminal operators, customs authorities and logistics companies around the world in piloting the platform. TradeLens is based on IBM blockchain technology and lets partners collaborate by establishing a single shared view of a transaction without compromising details, privacy or confidentiality.
TradeLens is at –
Four Italian frogmen exit the Salvatore Todaro, a Type 212 SSK
CMS Law on 10th August published an article saying that India has recently passed the Prevention of Corruption (Amendment) Act 2018, which came into force on 26th July. The Act significantly changes the legal landscape in relation to corruption offences in India and brings the legislation more in line with recent similar amendments to the bribery laws in the UK, Brazil and elsewhere. However, the Act still only criminalises public sector bribery; private sector bribery remains outside its scope. The article provides the detail of the Act and the changes it makes. The article describes the changes as a step forward, but raises a potential query about the requirement for governmental consent to the opening of any investigation of current or former public officials for requesting or accepting bribes which, it says, could allow for political interference.
On 10th August, the EU announced that it had transposed into EU law UN SCR 2428 which notably imposes an arms embargo and adds 2 persons to the list of persons and entities subject to restrictive measures. The EU has had an arms embargo in place since 2011 and the 2 persons had already been designated by the EU on 18TH February. The total number of persons now under EU sanctions in view of the situation in South Sudan is 9, of which 8 are listed by the UN.
10th August 2018
HOW TO REMOVE A COMPANY FROM THE EAR CONTROLLED ENTITY LIST
On 9th August, China Law Insight published an article that explains that the Export Administration Regulations (EAR) are a set of regulations issued under the Export Administration Act that governs the export of certain US-origin commodities, including foreign-made products that incorporate certain US-origin goods, technology, or software. It also explains that being placed on the Controlled Entity List signifies that a committee has determined that the entity have been, or pose a significant risk of, acting contrary to US national security and foreign policy interests and the EAR impose additional licensing requirements on, and limit the availability of most licence exceptions for, exports, re-exports, and transfers of US-origin controlled goods and technology to such companies. The article lists the 44 Chinese businesses recently added to the List and goes on to outline the procedure to seek removal from the List.
NORTH KOREAN SMUGGLING SOUTH KOREAN COOKWARE
On 10th August, the Sierra Leone Times carried an article claiming that South Korean electric rice cookers made in the Kaesong joint industrial complex in North Korea and seized illegally by North Korea after the complex was shut down 2 years ago are being smuggled for sale to China by a North Korean trading company run by the sanctions-hit country’s powerful military. The cookware, left behind in the complex in 2016, were being moved “little by little, at first” by the company during the last year, it was claimed.
FUGITIVE MARK ACKLOM’S EXTRADITION FROM SWITZERLAND BLOCKED OVER NEW ALLEGATIONS
Sky News reported on 10th August that the extradition to the UK of fugitive Mark Acklom has been blocked because Swiss prosecutors have launched an investigation into new fraud allegations. If Acklom, 45, is charged and convicted in Switzerland, his British trial could be delayed for years. He is alleged to have lured “investors” by pretending to be an associate of Elon Musk and posed as a Spaniard named Manuel Conesa Escolar. A company called Swiss Disks claimed to be developing a black box data recorder for driverless cars.
AUSTRALIA: SOFTWARE MAGNATE ANTHONY CASTAGNA JAILED FOR $2.6 MILLION TAX FRAUD
The Sydney Morning Herald reported that former Macquarie Bank consultant Anthony Dante Castagna has been jailed for a minimum of 4 years for defrauding the taxpayer of $2.6 million through an “elaborate charade”.
AUSTRALIA: JAMES ESTATE WINES’ EX-CHIEF ON 99 CHARGES IN $20 MILLION CHEQUE FRAUD SCHEME
On 10th August, the Brisbane Times reported that former Hunter Valley vineyard owner David Anthony James has been charged with being involved in a cheque fraud scheme worth almost $20 million, whereby he deposited valueless cheques into an account and was able to draw down on uncleared funds. It reports that in 2013 his Hunter Valley print and wine empire collapsed, leaving company debts of more than $25 million.
BELGIUM: NEW RULES ON THE CRIMINAL LIABILITY OF LEGAL ENTITIES
On 8th August, NautaDutilh published a briefing explaining that the principle that legal entities can be held criminally liable was first introduced into Belgian law in 1999 and that this had now been adapted the existing rules on 2 major points. Firstly, the complicated system of non-concurring criminal liability has been repealed (it is explained that, under the old rules, only the legal entity or the natural person acting on its behalf could be held criminally liable and only the party that committed the more serious wrongful act would be deemed at fault). Secondly, the new law abolishes the immunity from criminal prosecution of certain legal entities of public law (notably municipalities and the federal government). The new rules entered into effect on 30th July but do not have retrospective effect.
NEW ADVANCED MANIFEST REGULATIONS APPLIED BY CHINESE CUSTOMS
On 10th August, BIFA reported that from 1st August advanced manifests must be submitted for all sea and air shipments inbound/outbound/via China comprising certain specific information. The legislation requires that complete and accurate digital manifest data must be submitted to China Customs before departure for air shipments, and 24 hours before loading for sea shipments.
https://www.bifa.org/news/articles/2018/aug/chinese-customs-applies-new-regulations?l=y
COUNCIL OF EUROPE SAYS MACEDONIA MADE NO REAL PROGRESS ON PREVENTING CORRUPTION
On 10th August, the GRECO committee of Moneyval reported that the Former Yugoslav Republic of Macedonia had made no substantial progress in implementing recommendations on preventing corruption among MPs, judges and prosecutors. Only 6 of the 19 recommendations made 4½ years ago have been implemented satisfactorily and of the remaining recommendations, 8 have been partially implemented and 5 have not been implemented.
LIBYA’S SOVEREIGN WEALTH FUND TO MOVE OFFICES AFTER ABDUCTIONS AND THREATS
On 10th August, Defence Web reported that Libya’s sovereign wealth fund has decided to move from its main office in Tripoli due to security breaches after a number of staff were threatened or abducted. Libyan Investment Authority (LIA) holds about $66 billion-worth of mostly frozen assets and has long been at the centre of leadership disputes and power struggles.
HAULAGE PERMITS AND TRAILER REGISTRATION ACT 2018
On 9th August, the House of Commons Library published a briefing paper on the above Act, outlines its provisions, explains those issues which were raised during its passage through Parliament, and provides some background as to where the Act has come from and what issues it is designed to address. The Act seeks to put into position a framework to replace the EU-linked current structure and meet relevant international requirements.
http://researchbriefings.files.parliament.uk/documents/CBP-8297/CBP-8297.pdf
SOUTH AFRICA: SOUTH AFRICA BITCOIN VAT EXEMPTION
On 10th August, VAT Live reported that SARS is proposing to follow the EU model on indirect tax, and not make trades subject to VAT. Other countries which have followed this route include Japan, Singapore, and, latterly, Australia. SARS is proposing to treat cryptocurrencies as an asset of intangible nature, and not a private currency as other countries have. The issue, acquisition, collection, buying or selling or transfer of ownership of any cryptocurrency will be included under the definition of financial services any transactions would be exempt from VAT.
GAMBLING ADVERTISING IN ITALY ENDED
Calvin Ayre on 10th August reported that gambling advertising in Italy is no more. The country’s parliament has passed a Bill banning all gambling advertising and going forward, no gambling products can be advertised on the TV, radio or Internet. Not only is gambling advertising now outlawed, so are sports sponsorships.
https://calvinayre.com/2018/08/10/business/gambling-advertising-italy-officially-dead/
LATIN AMERICA’S BIGGEST PORT IN BRAZIL JUST MADE ITS LARGEST COCAINE SEIZURE EVER — THE LATEST BUST IN A THRIVING DRUG-TRAFFICKING CORRIDOR
Customs Today on 10th August reported that officials in Brazil intercepted a shipment of 2,052 kg of cocaine at the port of Santos, near São Paulo, the biggest bust ever made at the port. Revenue officials found the drugs at a container terminal at a wharf in Guaruja. During a survey of the containers, customs officials found it hidden among legal, declared shipments of coffee, sugar, and soy. The containers were to be loaded on a ship called the Cap San Marco, destined for Hamburg, Le Havre, and Algeciras.
ISLE OF MAN CONSULTS ON PUTTING THE LAW RELATING TO CONTEMPT OF COURT ON TO A STATUTORY FOOTING
On 10th August, the Isle of Man launched a consultation on the proposed Contempt of Court Bill 2018. Following a recent incident which led to the discharge of a jury, it became apparent that, unlike in the UK, there is no legal provision prohibiting unauthorised recording in courts other than perhaps the inherent power of the court to regulate its own proceedings. The consultation runs to 28th September.
https://consult.gov.im/attorney-generals-chambers/contempt-of-court-bill-2018/
ANTI-CORRUPTION SURVEY SHOWS CHINA, LATIN AMERICA RISKS WORRY IN-HOUSE LEGAL TEAMS
Corporate Counsel from law.com on 10th August carried an article says that the 6th annual global anti-corruption survey from legal recruiter AlixPartners found that 90% of companies operating in Latin America, and 94% of companies operating in China, reported their industries are exposed to corruption risk. In addition, the report revealed that in-house counsel are also concerned about growing risks in Russia, Africa and the Middle East – 31% of respondents said Russia is a place where it is impossible to avoid corrupt business practices, while 27% said Africa. About 11% more respondents this year said the Middle East has “significant” corruption risk than said this in the 2017 survey, and some 44% of respondents said their companies have pulled out or delayed an acquisition due to corruption risks, up 7% over the prior year.
CHINESE CORRUPTION INQUIRY FINDS $39 MILLION IN CASH AT HOMES OF EX-BOSS OF HUARONG ASSET MANAGEMENT
South China Morning Post on 10th August reported that Lai Xiaomin, chairman of state-owned firm, has been under investigation for ‘serious discipline violations’ since April. Set up in 1999 to handle distressed assets, Huarong is one of China’s big 4 “bad” banks, which between 1999 and 2005 soaked up non-performing loans from state-owned banks.
CARS AND CASH WORTH OVER £1.2 MILLION CLAWED BACK FROM EVANS HALSHAW FRAUDSTER
Teeside Live on 10th August reported that assets including cars and 4 houses have been clawed back from Allan Curry, a fraudster who fiddled car dealer Evans Halshaw out of £2.7 million and who was jailed for 6 years in December. His ill-gotten gains were confiscated and Pendragon, the firm which owns the Evans Halshaw group, launched a civil claim against Curry to recover get its losses back.
https://www.gazettelive.co.uk/news/teesside-news/evans-halshaw-fraudster-assets-seized-15013089
YANUKOVYCH LOBBYIST ARRESTED FOR ATTEMPTING TO GIVE A $200,000 BRIBE TO A PROSECUTOR
Ukrinform on 10th August reported that Ukrainian law enforcers have detained Oleksiy Tamrazov, a former first deputy chairman of PJSC Ukrgazvydobuvannya.
BUILDINGS TUMBLE AS KENYA CRACKS DOWN ON CONSTRUCTION CORRUPTION
Bloomberg on 10th August reported that the demolitions are part of a widening state clampdown on corruption as President Uhuru Kenyatta seeks to improve controls over public funds, with 3 buildings demolished in a week. Kenya’s public prosecutor said his office would investigate government officials that authorised the structures.
WOLVERHAMPTON MAN ACTED AS BANKER FOR HUMAN SMUGGLING NETWORK
On 10th August, an NCA news release said that Egyptian national, Ahmed Saleh Elsayed Mustafa, 39, was arrested by NCA officers in January 2017 as part of a joint operation with the Danish police. His criminal boss and now convicted people smuggler, Mohamed Elsaid Khalil Ali, was arrested in Esbjerg, Denmark shortly before Mustafa’s arrest. Ali facilitated the travel of 51 migrants who entered the UK from Denmark via the port of Immingham hidden within freight lorries between May 2016 and January 2017. On 6th August at Birmingham Crown Court, Mustafa pleaded guilty to money laundering and helping an asylum seeker to enter the UK. He has been sentenced to 3½ years in prison.
UK GAMBLING OPERATORS CAN EXPECT REQUESTS FOR DATA FOR RESEARCH INTO HARM
Out-Law on 10th August reported that gambling companies operating in Britain will be asked to disclose more data to help inform research into harmful play. It says that the Gambling Commission said the research will look into “whether some gambling products and environments are more harmful than others”. The first phase of the project will focus on online gambling.
https://www.out-law.com/en/articles/2018/august/gambling-requests-data-for-harm-research/
ENGLISH COURT HAS JURISDICTION ALLOWING CONSPIRACY CLAIM BY GUERNSEY COMPANY AGAINST PERUVIAN RESIDENTS IN GAMBLING CASE
Out-law on 10th August carried an article saying that the Court of Appeal has ruled that a Guernsey-registered online gambling company (Eurasia Sports Ltd, is a betting agency incorporated and regulated in Alderney) can pursue a conspiracy claim against a group of Peruvian-resident customers in the English courts. The company operates through an agency called Xanadu, which is incorporated in Ireland but which provided its relevant services through consultants based in England. Eurasia has claimed that 11 defendant individuals, all of whom were resident in Peru at the time of the relevant events, conspired to defraud it by placing bets on credit that they had no intention of repaying. Before the case could proceed, Eurasia first had to establish that it was able to bring its claims in England and Wales, based on the common law – this was a complex argument that could include not just the UK and Peru, but also Alderney, Guernsey, Ireland, Peru and Malta
https://www.out-law.com/en/articles/2018/august/english-court-jurisdiction-claim-gambling/
AFRICA SHOULD PRIORITISE WAR ON TAX EVASION AND MONEY LAUNDERING
Baker McKenzie on 10th August reported that the Executive Secretary of UN Economic Commission for Africa, (ECA) Vera Songwe, African Leadership Forum 2018 in Kigali, has said that combating bribery, money laundering and tax evasion should be a priority if Africa has to finance its transition to middle income status and increase prosperity.
CAPTURE OF VENEZUELA GANG IN PERU IS OMINOUS SIGN FOR REGION
Insight Crime on 10th August reported that the recent capture of several members of a Venezuela criminal group in Peru illustrates how criminals in are migrating and sometimes carrying their criminal habits with them. The gang, Train of Aragua (El Tren de Aragua) operates in one of Venezuela’s central coastal states and it is reported that at least 15 members have entered Peru in recent weeks. In Venezuela, it has more than 200 members who operate on the streets and thousands more that work from within Venezuela’s prisons. Venezuela’s political crisis has spurred massive migration including, it seems, its criminals.
https://www.insightcrime.org/news/analysis/capture-venezuela-mega-gang-peru-ominous-sign/
In the European Journal of International Security on 10th August was this article which says that ‘third countries’ are frequently exploited by those involved in networks to transfer proliferation-sensitive technologies, allowing procurement agents to obscure the end user or vendor located in the proliferating state, and to deceive industry, export licensing officials, and intelligence services. Using 3 cases, the article proposes a loose typology considering the ways in which third countries can be exploited by proliferation networks. The article argues that other factors beyond the lax regulatory environment, such as level of development, and personal connections, are often as important in driving the decisions of proliferation networks.
On 8th August, the daily Mail published this fascinating article, with amazing photos, of a former Soviet research establishment – complete with rusting torpedoes and mouldy books in its library, left as it was when the Soviet Union collapsed 25 years ago. It was hidden on the eastern shores of the Black Sea in Abkhazia, now a contested part of Georgia. I have my own memories of visiting a formerly secret underground submarine base in Balaclava, Crimea (just across the water from a flashy yachting marina and the ruins of a Phoenician coastal fort).
Out-law on 10th August carried an article saying that the Court of Appeal has ruled that a Guernsey-registered online gambling company (Eurasia Sports Ltd, is a betting agency incorporated and regulated in Alderney) can pursue a conspiracy claim against a group of Peruvian-resident customers in the English courts. The company operates through an agency called Xanadu, which is incorporated in Ireland but which provided its relevant services through consultants based in England. Eurasia has claimed that 11 defendant individuals, all of whom were resident in Peru at the time of the relevant events, conspired to defraud it by placing bets on credit that they had no intention of repaying. Before the case could proceed, Eurasia first had to establish that it was able to bring its claims in England and Wales, based on the common law – this was a complex argument that could include not just the UK and Peru, but also Alderney, Guernsey, Ireland, Peru and Malta
https://www.out-law.com/en/articles/2018/august/english-court-jurisdiction-claim-gambling/
On 9th August, the UN advised that ADNAN ABOU WALID AL-SAHRAOUI had been added to the list of those subject to sanctions because of connections to ISIL (Da’esh)/Al-Qaida following a decision of the relevant sanctions committee. He is said to be a former spokesperson of the Mouvement pour l’Unification et le Jihad en Afrique de l’Ouest (MUJAO), Emir of the Al-Mourabitoun group in Mali, and he pledged allegiance to ISIL.
https://www.un.org/press/en/2018/sc13452.doc.htm
HM TREASURY UPDATES ITS ISIL/AL-QAIDA SANCTIONS LIST
A Notice from HM Treasury on 10th August advised that the new name had been added to UK sanctions lists under the temporary designating provisions and pending his listing under an EU Regulation.
Rferl on 10th August reported that Russia and China have blocked a US proposal to add –
to a UN blacklist. They have already been added to the US sanctions lists.
On 10th August, KYC 360 reported that executives at a firm that supplied engines to London Fire Brigade have been banned for committing some of the ‘most serious’ misconduct crimes brought before the Financial Reporting Council and a tribunal hearing. The allegations included dishonesty and failing to act in accordance with core standards of integrity and objectivity regarding dealing with company funds. The charges also related to the preparation of financial statements, and the recognition of fictitious assets and revenue. Former CEO, John Shannon, ex-CFO Raymond Flynn and former financial controller Matthew Boyle – were banned respectively for 16, 14 and 12 years; and in addition, fines of £250,000, £150,000 and £100,000 were respectively imposed.
https://kyc360.com/news/uk-accounting-watchdog-bans-three-bosses-over-most-serious-misconduct/
This is Guernsey on 10th August reported that 6 months after restrictions were lifted on the sale of certain CBD oil products, a new alternative health care shop is set to open. Cannabinol or cannabinol derivatives with a concentration of less than 3% by weight are now exempt from the laws governing the possession and supply of CBD products.
https://guernseypress.com/news/2018/08/10/first-shop-selling-cannabinol-products-to-open-tomorrow/
On 10th August, the Home Office published an Impact Assessment on the UK involvement in the proposed EU Directive and EU Regulation about the exchange of information on third-country nationals and the European Criminal Records Information System (ECRIS). ECRIS seeks to ensure greater access to previous convictions of third country nationals as Member States will be able to check identity information against a centralised system enabling targeted ECRIS requests to be sent to relevant Member States. This will ensure that EU wide criminality committed by non-EU nationals is captured and accessible to Member States.
On 10th August, the Isle of Man advised that the Export Control (Burma Sanctions)(No 2) Order 2018 comes into operation on 14th August and makes the necessary amendments to bring the Island’s export control law into line with the latest changes to EU sanctions on Burma/Myanmar.
8th August 2018
THE JUNE 2018 COLOGNE RICIN PLOT
In the August 2018 edition of the CTC Sentinel, an article says that, in June 2018, German security services uncovered an alleged terrorist plot involving ricin by a Tunisian extremist living in Cologne suspected of being inspired by and in touch with the Islamic State. It was the first time a jihadi terrorist in the West has successfully produced the toxic biological agent. The article says that the case illustrates the existing threat of bioterrorism in Europe. It also shows the importance of electronic surveillance to uncover plots by radicalised individuals using the Internet to obtain deadly material. It mentions previous plots using ricin, then details the Cologne case. If the allegations are proven, the suspect would be the first jihadi terrorist suspect in the West to successfully produce ricin.
https://ctc.usma.edu/june-2018-cologne-ricin-plot-new-threshold-jihadi-bio-terror
THE RENEWED JIHADI TERROR THREAT TO MAURITANIA
In the August 2018 edition of the CTC Sentinel an article says that a decade ago, terrorism was rampant in Mauritania, but then it stopped, even as terrorist activity was rapidly proliferating all around it. Instead of being a target of terrorism, Mauritania became a node of passive jihadi activity. Various explanations were proffered as to why this was happening: Mauritania was good at counter-terrorism; the government had made a deal with the devil; jihadi groups respected Mauritania’s neutrality. However, in May Al-Qaida in the Islamic Maghreb (AQIM) issued a communiqué that specifically mentioned Mauritania in a call for attacks, signalling a possible renewed jihadi terror threat to the country. The article looks at the history of the threat to the country, and why circumstances may have changed.
https://ctc.usma.edu/renewed-jihadi-terror-threat-mauritania
THE ISLAMIC STATE IN AFRICA
Another article in the August 2018 edition of the CTC Sentinel examines the presence of IS in the African continent. It says that best estimates suggest the presence of approximately 6,000 Islamic State fighters in Africa today, spread over a total of 9 Islamic State “cells”. It looks in turn at each of these cells – in West Africa (where a cell ostensibly replaced Boko Haram), in the Sinai, in Libya, in Greater Sahara (Mali), in Somalia (where the cell is secondary to Al-Shabaab), in Tunisia, Egypt, Algeria, and in Somalia and East Africa. It also considers the future of IS fighters in Africa.
https://ctc.usma.edu/islamic-state-africa-estimating-fighter-numbers-cells-across-continent
INTERVIEW WITH UK CHEMICAL AND BIOLOGICAL TERRORISM EXPERT
Another article in the August 2018 edition of the CTC Sentinel consists of an interview with Hamish de Bretton-Gordon is a highly experienced CBRN practitioner and a leading expert in chemical and biological counterterrorism and warfare. He was the commanding officer of the UK Chemical, Biological, Radiological and Nuclear (CBRN) Regiment between 2003 and 2007 and NATO’s Rapid Reaction CBRN Battalion between 2005 and 2007. A veteran of the First Gulf War and tours in Iraq, Afghanistan, and the Balkans, he retired from the British Army in 2011. He advises the MoD and FCO as well as the Kurdistan Regional Government on CBRN issues and is the managing director of CBRN at Avon Protection, which designs, develops, and manufactures CBRN respiratory protection products. Asked are such cheerful questions as “What are your greatest concerns when you look at the spectrum of CBRN threats?”, “What worries you about the capability of jihadis to use these kind of weapons?” [i.e. chemical weapons], “What chemical weapons threats most concern you?”, “How big a threat do radiological devices or “dirty bombs” pose?”.
MILLIONS FLOW TO PENTAGON’S BANNED CONTRACTORS VIA A BACK DOOR
On 6th August, Bloomberg Business published an article that says that some of the world’s largest companies have benefited from a little-known law that lets the Us DoD override decisions barring contractors accused or convicted of bribery, fraud, theft, and other crimes from doing business with the US government. This is achieved through a process allows the DoD in rare cases to determine that the need to fulfil certain contracts justifies doing business with companies that have been suspended from government work. 22 such determinations were revealed to Bloomberg Business – they include contracts to provide food services for DoD personnel at an Army base in Afghanistan, “vital” web-hosting services for an agency that serves the Pentagon and the US intelligence community, and aviation fuel sold to the Defense Logistics Agency. It seems that there have only been 30 determinations since the law allowing them was enacted in 1981.
https://about.bgov.com/blog/millions-flow-pentagons-banned-contractors-via-back-door/
9th August 2018
IRISH DJ JAILED IN AUSTRALIA AFTER SMUGGLING MILLIONS WORTH OF COCAINE AND ECSTASY IN NOODLE CONTAINERS
The Irish Sun reported on 8th August that Stephen Donnelly, 37, from Co Meath was caught supplying large amounts of cocaine and ecstasy to the Australian party scene and was jailed for 6 years and 9 months.
https://www.thesun.ie/news/2958558/stephen-donnelly-jailed-drug-smuggling-australia/
ICELAND CONSULTS ON BILL REFORMING AML/CFT LAW
Payments Compliance on 8th August reported that in July a consultation was launched on a Bill to implement the 4th AML Directive in Icelandic law (even though Iceland is not an EU Member State).
FORMER VANUATU PUBLIC SERVANT FACES MONEY LAUNDERING CHARGES OVER EU FUNDS
Radio New Zealand on 9th August reported that Victor Rory, a former senior public servant, is facing money laundering charges after allegations he stole almost $135,000 while in charge of EU projects. He was the Principal Aid Negotiator when the alleged offences occurred.
BERMUDA: MONEY LAUNDERING BILL PASSES SENATE
The Royal Gazette on 8th August reported that what it described as the final piece of legislation in a raft of new safeguards to protect Bermuda from money laundering and terrorist funding has been passed by the Senate and now goes to the other house of the parliament for its approval. The Bill follows earlier changes and comes ahead of an assessment of the island’s AML/ATF regime by the Caribbean Financial Action Task Force, with an evaluation team due to visit Bermuda for 2 weeks in September to complete the on-site portion of the assessment. The Bill is said to close gaps identified during the national risk assessment in relation to Bermuda’s technical compliance with FATF recommendations as to admission to the legal profession, disciplinary action in relation to not just AML/ATF compliance but also as to compliance with supervisory functions.
http://www.royalgazette.com/politics/article/20180808/senate-money-laundering-bill-passes
SARDINIA SAND THIEVES FACE FINES OF UP TO €3,000
The Guardian on 8th August reported on a crackdown on Sardinia on tourists who steal sand from the island’s pristine beaches as a souvenir. One was recently fined €1,000 after police caught him in possession of a bottle of sand from Gallura beach, on the island’s north coast.
https://www.theguardian.com/world/2018/aug/08/sardinia-sand-thieves-face-fines-of-up-to-3000
JERSEY LIMITED LIABILITY PARTNERSHIPS
On 31st July, Ogier published an article saying that the Limited Liability Partnerships (Jersey) Law, 2017 is now in force and the Registrar of Limited Liability Partnerships is in a position to accept applications to register Jersey LLP incorporated under the Law. It explains that an LLP is a legal person distinct from its partners which can own property, sue and be sued in its own name. Each of its partners is obliged to contribute effort and skill or capital to the business of the LLP and is an agent of the partnership but not of the other partners.
https://www.ogier.com/publications/jersey-limited-liability-partnerships
CAYMAN ISLAND MONETARY AUTHORITY AML GUIDANCE FOR INVESTMENT FUNDS
On 30th July, Maples and Calder reported that CIMA has recently issued a set of FAQ in relation to how they expect AML procedures and functions to be undertaken by investment funds.
http://thoughts.maplesandcalder.com/post/102ezqn/cima-faqs-for-fund-aml-officers
The CIMA Notice of 20th July is available at –
SOUTH AFRICA: CORRUPTION WATCH REPORT SHOWS DISTURBING AMOUNT OF BRIBERY AND EMBEZZLEMENT
Business Day on 8th August reported that bribery‚ procurement irregularities‚ embezzlement and stolen resources were the most common forms of corruption for the first half of 2018 according to a report from civil society organisation, Corruption Watch. It received 2,469 reports of corruption in the first half of 2018 with most complaints relating to schools‚ municipalities‚ police‚ licensing centres‚ state-owned entities and the health sector. Corruption Watch said it had received 23‚000 reports of corruption since it was formed in January 2012. In law enforcement‚ just more than 4 in 10 complaints concerned the abuse of power within the police.
THAILAND’S ‘JET-SET’ MONK SENTENCED TO 114 YEARS IN PRISON
Reuters on 9th August reported that a former Thai Buddhist monk, Wirapol Sukphol, formerly known by his monastic name Luang Pu Nenkham, who provoked outrage with his lavish lifestyle sentenced to 114 years in prison after a court found him guilty of fraud, money laundering and computer crimes.
1MDB SUES FOR OWNERSHIP OF SUPERYACHT EQUANIMITY
Maritime Executive on 8th August reported that state investment fund 1Malaysia Development Berhad (1MDB) has claimed ownership of the $250 million superyacht Equanimity, which was arrested in Indonesia this March on charges that it was purchased with stolen funds and is now in a port in Malaysia. It is said that officials believe that it will cost more than $700,000 per month to maintain to vessel.
CPS: UK MODERN SLAVERY CHARGES RISE BY 27% BUT CONVICTIONS DO NOT
The Law Society Gazette on 9th August reported that despite the rise, figures in the first CPS Modern Slavery Report show that the number of convictions as almost the same as the previous year, and down from 2015/16.
https://www.lawgazette.co.uk/law/modern-slavery-charges-rise-by-27-cps/5067213.article
FiNCEN EXTENSION OF LIMITED EXCEPTION FROM BENEFICIAL OWNERSHIP REQUIREMENTS FOR LEGAL ENTITY CUSTOMERS OF CERTAIN FINANCIAL PRODUCTS AND SERVICES WITH ROLLOVERS AND RENEWALS
On 8th August, FinCEN made this announcement that it was extending the limited exception originally granted on 11th May for an additional 30 days, up to and including September 8th, from the obligations of the Beneficial Ownership Rule for rollover or renewal of certain financial products and services (i.e. certificate of deposit or loan accounts) that were established before May 11th 2018 to further consider the issue.
EU RESTRICTIONS ON HIGH-RISK FINANCIAL CONTRACTS FOR DIFFERENCE (CFD) AND BINARY OPTIONS TAKE EFFECT
Out-Law on 8th August published an article saying that EU-wide temporary restrictions by the European Securities and Markets Authority (ESMA) on the sale, marketing and distribution of high-risk speculative investment contracts for difference (CFD) products to retail investors have now taken effect, from 1st August. ESMA also imposed a temporary ban on the marketing, distribution or sale of so-called ‘binary options’ to retail investors, which took effect on 2nd July.
https://www.out-law.com/en/articles/2018/august/restrictions-high-risk-financial-contracts/
MOST VICTIMS TRAFFICKED INTERNATIONALLY CROSS OFFICIAL BORDER POINTS
The International Organization for Migration reported on 30th July that new data released by IOM, the UN Migration Agency, show that in the last 10 years, almost 80% of journeys undertaken by victims trafficked internationally cross through official border points, such as airports and land border control points. It says that trafficking in persons is often seen as an underground activity, linked to irregular migration, and hidden from the authorities and the general public. IOM case data depict a different story.
http://www.iom.int/news/iom-most-victims-trafficked-internationally-cross-official-border-points
FCA CONSULTS ON OBLIGATIONS FOR E-MONEY ISSUERS AND PAYMENT INSTITUTIONS
An article from Paul Hastings on 8th August reported that on 1st August the FCA published a consultation on General Standards and Communication Rules for the Payment Services and E-Money Sectors (CP18/21).
https://www.paulhastings.com/publications-items/details/?id=5ac34a6b-2334-6428-811c-ff00004cbded
UN REPORT DETAILS RUSSIAN ACTIVITY IN CENTRAL AFRICAN REPUBLIC
On 7th August, Janes.com reported that a UN panel of experts’ report has provided details of Russian support for the military and security forces of CAR: a subject that has attracted more attention following the murder of 3 journalists investigating the activities of Russian mercenaries in the country. Russia had been reported to have supplied, with UN permission, small arms and ammunition, and its reported to be training approximately 900 personnel from both the army and the Presidential Guard in CAR and Sudan. What are described as Russian “instructors” are present, and are guarding Russian-donated hospitals and convoys of materials. There are said to be 5 military and 170 civilian instructors involved.
https://www.janes.com/article/82222/un-report-details-russian-activity-in-car?from_rss=1
CANADA LABELLED A MONEY LAUNDERING HUB
On 9th August, the Wall Street Journal Risk & Compliance report said that two-thirds of Canadian banks examined by regulators had “significant levels” of non-compliance with AML rules, according to report to lawmakers reviewed by the newspaper. The piece said that factors producing this situation included strict privacy laws making it difficult to obtain warrants, a reluctance to prosecute and the failure in some cases of banks to report suspicious transactions.
DRUG FIRMS FIGHT US GOVERNMENT’S IRAQ CORRUPTION PROBE
Pharmaphorum on 9th August reported that major drug companies have denied any involvement in corruption that allegedly led to medical supplies being used to fund attacks against US soldiers in Iraq. The denial comes in the wake of reports of the DoJ making inquiries into the activities of AstraZeneca and others.
https://pharmaphorum.com/news/drug-firms-fight-us-governments-iraq-corruption-probe/?src=ilaw
SREBRENICA – “MONEY LAUNDERING HEAVEN”
The Independent Balkan News Agency reported on 9th August that Deputy of the Srebrenica municipal Assembly Speaker had stated that in the past several years, the Party of Democratic Action (SDA) in collusion with the former mayors had “laundered” around € 10 million. He called on the competent authorities to investigate and identify the people who abused office and took part in the alleged embezzlement of money donated in aid and money laundering.
https://www.balkaneu.com/srebrenica-money-laundering-heaven/?src=ilaw
BRITISH COMPANIES EMBROILED IN POLAND’S ‘TRASH MAFIA’ SCANDAL
The Telegraph on 8th August reported that 3 British waste disposal companies handling household waste are embroiled in an international criminal investigation into a fake recycling scandal in Poland. It says that Polish authorities have also revealed that more than 1,000 tonnes of British waste falsely labelled as recyclable plastic has been seized by government inspectors.
https://www.telegraph.co.uk/news/2018/08/08/british-firms-embroiled-polands-trash-mafia-scandal/
PHYSIOTHERAPIST STRUCK OFF FOR WEAPONS DEALING
The BBC reported on 3rd August that a physiotherapist from Handsworth, Birmingham has been struck off the healthcare register after being convicted of conspiracy to transfer prohibited weapons and ammunition. Dr Mohinder Surdhar had admitted the offence and was jailed for 14 years in January. A healthcare tribunal panel said his conduct was “appalling” and a “fundamental departure” from trust. He used a legitimate firearms certificate to get weapons which were sold on by co-conspirators
https://www.bbc.co.uk/news/uk-england-hereford-worcester-45048338
ARE PARENT COMPANIES LIABLE FOR VIOLATIONS BY OVERSEAS SUBSIDIARIES?
On 9th August, a briefing from Gowling WLG examined this question in the light of a case where claimants sought to argue that Unilever plc (as the UK parent) was responsible along with Unilever Tea Kenya Ltd (as the foreign subsidiary) for the latter’s failure to protect the claimants and their families from the risk of extreme ethnic violence endured after the 2007 Kenyan presidential election. Supporters of the losing candidate had attacked the tea plantation where the claimants, members of an ethnic community that had supported the winning candidate, assaulting, killing and raping. They had to establish a “duty of care”, by showing the risk was reasonably foreseeable and this could be attached to the parent. The High Court had dismissed the claim, and the matter had passed up to the Court of Appeal, which confirmed the High Court’s decision but for different reasons. Despite dismissing this claim, the Court of Appeal gave 2 examples of where a parent could still be liable –
KOSOVO APPOINTS FUGITIVE FROM SERBIA AS CONSTITUTIONAL COURT JUDGE
Reuters on 9th August reported that Kosovo has appointed a judge, ethnic Serb Radomir Laban, who fled from Serbia to Kosovo to avoid a prison sentence for corruption to serve on its constitutional court. He was approved by a vote in parliament in May. A senior police source is quoted as saying that he is still a wanted person by Belgrade authorities and there is an Interpol red notice warrant for him. In 2011 he was sentenced to 6 years in jail for corruption as an official of the Serbian customs, served half his sentence in pre-trial detention between 2006 and 2009, temporarily released and he then fled to neighbouring Kosovo.
STRUGGLING AML UNIT IN GERMANY
The National in the UAE on 9th August carried a lengthy article claiming how the failings of the German FIU may have allowed extremists to funnel money to Syrian terrorists. It says that the FIU was only established in 2016 and has 165 full-time workers, who reportedly have a backlog of 20,000 reports to review and more than 70,000 new ones are expected this year. It mentions the Islamic KT Bank in Frankfurt, a subsidiary of the Turkish banking institution Kuveyt-Turk Participation Bank, which is itself owned by the Kuwaiti Finance House (KFH). It says that both have been accused of being used to funnel money to ISIS, al-Qaeda and Hamas, and that US officials have alleged KFH had been used by Gulf-based extremists to help fund the former al-Qaeda Syrian offshoot Al-Nusra Front.
OFFSHORE FINANCIAL REGULATORS ANNOUNCE COLLABORATIVE FINTECH PARTNERSHIP
Low Tax.net on 9th August reported that 11 financial regulators – including those of some low-tax financial centres keen to attract FinTech start-ups – have announced the creation of the Global Financial Innovation Network, a partnership intended to support businesses to engage in innovative financial technology projects in their territories.
Insight Crime on 9th August carried an article saying that Peru’s entire judicial apparatus is in chaos following the leak of audio recordings that appear to show powerful officials engaged in various influence peddling and corruption schemes. The article explains what is in the recordings, the fallout (including, on July 20th, the Congress dismissing all those on the National Judiciary Council who had not already resigned after being implicated in the tapes) and what might come next – with more revelations promised. The National Judiciary Council (Consejo Nacional de la Magistratura) is the independent arm of the government in charge of naming and overseeing important judicial officials.
https://www.insightcrime.org/news/analysis/perus-judicial-corruption-scandal-explained/
In April, this book was published and remains available in downloadable pdf form online. It includes chapters on several EU countries, including the UK, as well as Ukraine and North Africa.
The UK chapter is available as “From the IRA to ISIS: Exploring terrorist access to the UK’s illicit firearms market” at –
The entire book is available at –
On 9th August, the Wall Street Journal reported on a diplomatic dispute between Canada and Saudi Arabia after Canada criticising Saudi for arresting human rights activists. Saudi has ordered its citizens to leave the country, said it intends to sell its Canadian financial assets and freeze trade. However, the newspaper says the trade in Saudi oil is unaffected.
On 8th August, a UN news release advised that the entry for PRO-GAIN GROUP CORPORATION had been amended, deleting the Samoa address formerly provided.
Politico on 9th August reported that the Trump Administration will impose new sanctions on Russia over the attempted assassination in Britain of a former Kremlin spy, Sergey Skripal. After concluding that Russia used a banned nerve agent, Novichok. The sanctions would cover sensitive national-security controlled goods, a senior State Department official told reporters. There would, however, be exemptions for space flight activities, government space co-operation, and areas covering commercial passenger aviation safety, which would be reviewed on a case by case basis. The official said a second batch of “more draconian” sanctions would be imposed after 90 days unless Russia gives “reliable assurances” that it will no longer use chemical weapons and allow on-site inspections by the UN or other international observer groups. The sanctions are being imposed under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991.
Law firm Walkers, on 8th August, published a briefing on the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018, expected to become law in Ireland in November. It will give effect to the 4th Money Laundering Directive. The Bill includes provisions that extend the scope of AML/CFT law, require a risk assessment approach, extend CDD requirements to domestic PEP, give additional powers to the competent authorities and require a central beneficial ownership register to be maintained – the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations in November 2016 (S.I. 560/2016) having already required incorporated entities to maintain an internal register of beneficial owners. A separate order is expected to make providers of gambling services in the bookmaking and online gambling designated persons for AML/CFT purposes.
8th August 2018
US REIMPOSES FIRST TRANCHE OF IRAN-RELATED SANCTIONS
A useful, and comprehensive summary of the re-imposed US sanctions is provided by Wilmer Hale – with others due to take effect in a further 3 months.
HUNDREDS OF THOUSANDS OF FAKE NIKE AIR JORDANS SMUGGLED INTO NEW YORK, NEW JERSEY
NBC in New York on 7th August reported that a group that allegedly smuggled more than 300,000 pairs of fake Nike Air Jordan trainers into New York and New Jersey has been broken up. More than 42 containers were imported from factories in China through Port Newark between January 2016 and July 2018. Federal prosecutors said the counterfeiting scheme cost Nike at least $73 million. 5 people have been arrested. Prosecutors said the trainers were labelled and shipped as generic shoes. Once in New York, smugglers would allegedly add certain stamps, trademarks and logos in warehouses and then would be sold and shipped to buyers across the US.
OVERDOSE DEATHS LINKED TO FENTANYL UP BY NEARLY A THIRD IN ENGLAND AND WALES
Illicit Trade on 7th August reported that the number of drug overdose deaths in which synthetic opioid fentanyl played role increased by 29% to 75 in England and Wales last year, according to the latest data from the Office for National Statistics (ONS). The ONS also noted that carfentanyl, a derivative of fentanyl that is said to be up to 10,000 times more potent than morphine, was mentioned for the first time in death certificates.
DRUG MISUSE DEATHS FALL BUT STILL REMAIN TOO HIGH
The Gov.uk blog from Public Health England on 8th August comments on the ONS report.
MALAYSIAN EX-PM NAJIB CHARGED WITH MONEY LAUNDERING
The Manila Bulletin and others on 8th August reported that Malaysia’s former prime minister, Najib Razak, faces new charges linked to a multibillion dollar financial scandal that contributed to his shock election defeat in May. Najib was charged with 3 counts of money laundering over claims he pocketed $10.3 million, and pleaded not guilty. He faces up to 15 years in jail for each charge. The charges are in addition to the charges he faced last month after he was first arrested — 3 for criminal breach of trust and a separate count that he abused his position to take the money. He faces up to 20 years in jail for each of those charges, which he has also denied.
https://news.mb.com.ph/2018/08/08/malaysian-ex-pm-najib-charged-with-money-laundering/
ARGENTINE EX-VICE PRESIDENT AMADO BOUDOU CONVICTED FOR CORRUPTION UNDER FORMER PRESIDENT CRISTINA KIRCHNER
Japan Times on 8th August reported that Amado Boudou has been sentenced to nearly 6 years in prison after being found guilty of corruption while serving under former President Cristina Kirchner. The charges related to his attempt to buy a company that printed currency through a front business while serving as economy minister.
ROYAL MAIL DATA REVEALS USA IS UK’S TOP EXPORTING DESTINATION
Postal and Parcel Technology on 7th August reported that the US is the UK’s top exporting hotspot for business parcels (and has been for 4 years). The data for the 2017/2018 financial year, also revealed that France and Germany take the second and third spots, respectively, with Australia fourth and Ireland fifth. The top 5 countries that the UK imports goods from remains unchanged over the past 3 years – China, Germany, US, Netherlands, Switzerland. For letters, the most inbound have come from the US for the past 3 years; followed by France and Germany.
FORMER EL SALVADOR PRESIDENT PLEADS GUILTY TO MONEY LAUNDERING
Reuters on 8th August reported that former El Salvadoran President Antonio Saca pleaded guilty in court to embezzlement and money laundering involving more than $300 million during his government.
US PROSECUTORS TARGET GOLDMAN SACHS IN 1MDB PROBE
On 8th August, Reuters reported a New York Times story saying that US prosecutors are investigating whether Goldman Sachs Group Inc has any culpability in a Malaysian fraud involving the 1MDB government fund. Prosecutors are also considering criminal charges against former Goldman investment banker who worked closely with 1MDB.
UNIQUE POLLEN SIGNATURES IN AUSTRALIAN HONEY COULD HELP TACKLE A COUNTERFEIT INDUSTRY
The Conversation carries this report about fears growing about “counterfeit” or adulterated food, especially high-value foods like olive oil, coffee, saffron and honey, but says that Australian honey, produced from domesticated European honey bees mostly foraging in native vegetation, is unique. Counterfeit food is a growing threat to both consumers and producers, it says.
DAIMLER ABANDONS IRAN EXPANSION PLANS AS US SANCTIONS BITE
Reuters on 8th August reported that German car and truck manufacturer Daimler has said it has dropped plans to expand its Iran business in reaction to renewed US sanctions. In early 2016, Daimler established a joint venture with Iranian vehicle manufacturer and dealer Iran Khodro Co to make and distribute Mercedes-Benz trucks in the country.
IS IRAN A THREAT TO GERMANY?
Nordwest Zeiting in Germany (and in German) on 8th August poses this question, saying that Iran appears to be continuing its WMD and missile programmes, and examining Iranian activities in Germany. It concludes that the regime in the Iran pursued a range of hostile activities against Germany and other democratic States and that Germany is in many ways a direct target of Iranian intelligence services.
INDUCEMENT IN FRAUDULENT MISREPRESENTATION CASES
On 7th August, Dechert LLP published an article about a recent High Court case that provides a warning about giving estimates as negotiating devices which are not based on an honestly held belief as to their accuracy; and also clarifies the test applicable to establish inducement for the purposes of a fraudulent misrepresentation claim. The case also confirmed an earlier decision that in misrepresentation cases the representation needed only to be a factor in the representee’s decision to enter into the contract, not the sole factor.
ECJ AT ODDS WITH ADVOCATE GENERAL ON EUROPEAN ARREST WARRANTS AND DOUBLE JEOPARDY
On 25th July, Brick House Chambers published an article about an important case concerning the European Arrest Warrant system. The case concerns 2 warrants issued by the Croatian courts in respect of an individual who is the subject of criminal proceedings in Croatia. The Hungarian authorities refused to execute the first warrant, because the same allegations had already been investigated in Hungary, and the investigation had been closed with no further proceedings. Importantly, the ECJ held that grounds for non-execution of a European Arrest Warrant must be interpreted strictly, and since the Hungarian investigation was conducted against an unknown person, that could not be grounds to refuse the warrant.
The judgment is at –
ISRAEL’S MIZRAHI BANK REJECTS $342 MILLION US TAX SETTLEMENT OFFER
Reuters on 8th August reported that Mizrahi-Tefahot Bank, Israel’s third-largest bank, said it would not accept a proposal from the DoJ to pay a fine of $342 million to settle a US tax evasion investigation, arguing the fine should be smaller.
JERSEY: WHEN IS A TAX RESIDENT NOT A TAX RESIDENT?
Bailiwick Express on 8th August reported that officials in Jersey are looking for views on their plans for what companies need to do in order to claim tax residency in the island, and in connection with commitments made in 2017 to the EU Code of Conduct Group on Business Taxation. It also refers to a 54-page report published in June by the Committee:
http://data.consilium.europa.eu/doc/document/ST-9637-2018-INIT/en/pdf
The consultation is at –
https://www.gov.je/Government/Consultations/Pages/IntroductionSubstanceRequirementsCompanies.aspx
https://www.bailiwickexpress.com/jsy/business/when-tax-resident-not-tax-resident/?t=i#.W2qtSfZFx9B
QC SEES DISPUTED TAX PENALTIES CUT FROM £1 MILLION TO £220,000
Accountancy Daily on 8th August reported that a leading barrister who has been involved in a long running dispute with HMRC over more than £1 million of penalties imposed for late self-assessment returns in connection with his role as the executor for the estate of his late father, Osias Tager, has won his case in the Court of Appeal on the grounds that there was no sign of ‘deliberate concealment’.
https://www.accountancydaily.co/qc-sees-disputed-tax-penalties-cut-ps1m-ps220k
80% OF EUROPEAN HASHISH SMUGGLED IN EVERY YEAR TO SPANISH TOWN, LA LINEA, NEAR GIBRALTAR
Customs Today on 3rd August reported that a Spanish coastal town of under 65,000 people is the entry point for 80% of the hashish resin consumed annually by Europe, claims a report by northern Spanish daily La Voz de Galicia. It says that at least 280,000 tonnes of hashish arrive via La Línea de la Concepción every month, according to an anti-narcotics officer interviewed for the report. The officer estimates that smugglers drop off 2 tonnes of hashish 7 times per night, 20 days per month.
PHILIPPINES: DUTERTE FIRES OFFICIAL PROBING HIM FOR GRAFT
OCCRP on 7th August reported that the order to fire an anti-corruption official who was investigating President Duterte over millions of dollars of unexplained family wealth will be carried out.
JOINT NGO POSITION PAPER ON THE BIOLOGICAL WEAPONS CONVENTION
On 7th August, VERTIC reported on a joint paper submitted to the Biological Weapons Convention Meetings of Experts encouraging state parties to take action on, amongst other things, cooperation and assistance, national implementation, and institutional strengthening. The position paper gives 31 recommendations on a wide range of issues, including the call on states to ‘adopt and enforce the necessary legal measures’ to bring the convention into effect on a national level. As well as VERTIC, the document has been endorsed by 11 NGO and several individual experts on biological arms control.
The report is at –
ITALY TO SPARK AN E-INVOICING REVOLUTION?
Banking Tech on 8th August carried an article asking this question. It says that 1st July marked the start of a significant revolution within fintech in Europe, as the first stage of Italy’s new e-invoicing legislation kicked in and the wheels were set in motion to usher in one of the biggest tax reforms Italy has ever undertaken. From 1st September, e-invoicing will be required for tax-free shopping. From 1st January, B2B e-invoicing will become mandatory for suppliers of goods and services between all parties established and VAT-registered in Italy, and will also apply to B2C contracts where the customer expressly requests an invoice. Exclusions will apply purely for non-resident taxpayers identified purely for VAT purposes.
https://www.bankingtech.com/2018/08/italy-to-spark-an-e-invoicing-revolution/
RESTORING ECONOMIC SANCTIONS: THE IMPACT ON IRAN
In the July 2018 edition of its Strategic Assessment journal, the Institute for National Security Studies at Tel Aviv University says that analysis reveals that the US economic campaign can be expected in upcoming quarters to intensify the foreign currency crisis in Iran, increase inflation, and reduce the scope of local and foreign investments and this could lead the Iranian economy to a situation similar to the one it faced on the eve of the JCPOA nuclear agreement in 2015. In terms of the political implications of the renewal of sanctions it is too early to assess whether the pressure in itself will serve to moderate the regime’s policies. It is also difficult to predict how the economic pressure will affect public opinion. Heightened pressure could serve to intensify popular protest in Iran, but it could also help the regime mobilise public support against the West.
http://www.inss.org.il/publication/restoring-economic-sanctions-impact-iran/
SAUDI ARABIA: WALKING THE NUCLEAR PATH
In the July 2018 edition of its Strategic Assessment journal, the Institute for National Security Studies at Tel Aviv University examines Saudi Arabia’s nuclear policies, including that alongside civil developments, senior Saudi officials have threatened publicly and explicitly that if Iran acquires nuclear weapons, Saudi Arabia will immediately follow suit.
http://www.inss.org.il/publication/saudi-arabia-walking-nuclear-path/
CAN A SIMPLE CAUTION BE GIVEN ON ADMISSION ALONE?
PNLD on 8th August carried a Q&A, saying that an admission is a pre-requisite of issuing a simple caution, but there must also be sufficient evidence to provide a realistic prospect of conviction if the offender were to be prosecuted.
NIGERIA, NIGER AND BENIN TO HOLD RICE SMUGGLING SUMMIT
On 7th August, Illicit Trade reported that ministers from Nigeria, Niger and Benin have agreed to meet to discuss the growing problem of rice smuggling in the region. Benin ambassador to Nigeria said the smuggling of rice and other products posed a threat to relations between the countries. She said that while the Economic Community of West African States (ECOWAS) protocol had paved the way for free movement within the region, local countries have a responsibility to do more to crack down on rice smuggling and other crimes.
US FINALISES NEXT CHINA TARIFF LIST TARGETING $16 BILLION IN IMPORTS
Reuters on 7th August reported that the US will begin collecting 25% tariffs on another $16 billion in Chinese goods from 23rd August as it published a final tariff list targeting 279 imported product lines. The latest list will hit semiconductors from China, even though many of the basic chips in these products originate from the US, Taiwan or South Korea. The 25% tariffs also will apply to a broad range of Chinese electronics, plastics, chemicals and railway equipment.
AGREEMENT SIGNED BETWEEN ETHIOPIA AND OROMO LIBERATION FRONT
On 8th August, Defence Web reported that Ethiopia’s government has signed an agreement to end hostilities with the Oromo Liberation Front, which it previously declared a terrorist movement. Since the 1970s, the rebels fought a low-level insurgency for self-determination for the Oromiya region.
EX-NAIROBI GOVERNOR KIDERO ARRESTED, TO FACE GRAFT CHARGES
Capital FM in Kenya on 8th August reported that former Nairobi Governor Evans Odhiambo Kidero has been arrested by detectives from the Ethics and Anti-Corruption Commission over graft allegations. The DPP says there is overwhelming evidence linking Kidero and 7 others to mismanagement and embezzlement of public funds.
LESSONS FROM DOWN UNDER: THE SOFT POWER DIVIDEND OF FINANCIAL CRIME TECHNICAL ASSISTANCE
An article on the Royal United Services Institute website on 8th August says that, in the face of an imminent FATF evaluation, as the UK improves its legislation (e.g. the Criminal Finance Act) and boosts resources for its FIU and others (although, as the article points out, 10 years after having promised to do so – the last time that FATF evaluated the UK…), what is it doing to improve financial integrity and fight financial crime elsewhere? Despite talk of international co-operation and a global crackdown on dirty money, the article suggests that the UK is still, in reality, not matching its rhetoric. It compares what the UK has done to that of AUSTRAC in Australia. It says that there are several benefits to be gained if the UK were to become a global leader in the provision and co-ordination of technical assistance by turning its financial crime-fighting focus abroad.
FEW SWEDISH COMPANIES AFFECTED BY US SANCTIONS ON IRAN
Radio Sweden on 8th August reported that only some Swedish faced difficulties, and published an 4-minute audio interview with an export specialist to assess the impact; and he emphasised that the main challenge was the US dollar payment channel. They also spoke to a spokesperson for Scania.
https://sverigesradio.se/sida/gruppsida.aspx?src=ilaw&programid=2054&grupp=3583&artikel=7015799
MOSCOW COURT RECOVERS OVER $3.9 MILLION FROM RUSSIAN AUTHORS’ SOCIETY EX-HEAD
RAPSI in Russia reported on 8th August that Sergey Fedotov, ex-Director General of the Russian Authors’ Society (RAO), had been sentenced to 1½ years in a penal colony for large-scale fraud. RAO is a non-governmental organisation created in 1993 for collective management of author’s rights. At this moment over 25,000 people are listed as members.
http://www.rapsinews.com/judicial_news/20180808/286060934.html?src=ilaw
8,000 BOTTLES OF FAKE AUSTRALIAN PENFOLDS WINE SEIZED IN NORTHERN CHINA
The Drinks Business on 8th August reported that police have seized more than 8,000 bottles of the fake wine, just 3 months after a previous seizure of 50,000 bottles in central China.
https://www.thedrinksbusiness.com/2018/08/8000-bottles-of-fake-penfolds-busted-in-northern-china/
GHOST BROKERS IN DOCK AFTER ESURE AND POLICE UNCOVER RACKET
Insurance Age on 6th August reported that a team of East London-based fraudsters who set up a ghost-broking operation targeting minicab drivers have collectively been sentenced to 57 months suspended following being convicted of conspiracy to commit fraud. The defendants set up AHD Solutions and operated between June 2012 and August 2013. They went to great lengths to seem legitimate, conducting the scam out of a real office and even setting up a website. In order to appear authentic, AHD Solutions were also using insurer Esure’s name on their website, which alerted Esure, and eventually led to their downfall.
OVERSEAS BUSINESS RISK – THE OCCUPIED PALESTINIAN TERRITORIES
On 8th August, the FCO and Department for International Trade published an updated edition of this guidance that looks at the intellectual property, organised crime, human rights, bribery and corruption and terrorism risks that UK businesses may face when operating in the Occupied Palestinian Territories.
https://www.gov.uk/government/publications/overseas-business-risk-palestinian-territories
TAIWAN CUSTOMS SEIZE MAJOR DRUGS HAUL BOUND FOR MALAYSIA
Customs Today on 8th August reported that a total of 1.6 million pills of the controlled hypnotic drug Nimetazepam (Erimin-5) have been seized by Taiwan customs and police. The drugs were found hidden in 32 boxes disguised as live bait ready to be exported to Malaysia.
http://www.customstoday.com.pk/taiwan-customs-seize-major-drugs-haul-bound-for-malaysia/
ISLAMIC STATE SMUGGLING WOOD TO FINANCE MILITANCY IN AFGHANISTAN
Customs Today on 8th August reported that Islamic State is chopping down fruit trees and smuggling the timber into Pakistan, claim Afghan officials and local residents of the Deh Bala district of eastern Nangarhar province. The district has thousands of pine nut trees that locals rely on as the only natural source of income. Nangarhar province in eastern Afghanistan is famous for its precious stone mines and, according to an Afghan anti-corruption network report published in 2017, militant groups received at least $46 million from minerals and precious stones illegally exported in 2016 from the eastern Nangarhar province to neighbouring Pakistan.
http://www.customstoday.com.pk/is-smuggling-wood-to-finance-militancy-in-afghanistan/
https://www.mapsofworld.com/answers/defence/top-20-arms-producing-companies-world-sales/
FOREIGN INVESTMENT RISK REVIEW MODERNIZATION ACT – THE MOST IMPORTANT REFORMS TO CFIUS IN 30 YEARS
On 8th August, Reed Smith published a Client Alert saying that on Monday August 13th President Trump is expected to sign into law the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), the most significant changes to the law governing the Committee on Foreign Investment in the United States (CFIUS) since the creation of the US foreign investment regime in 1988. The Alert details the expanded jurisdiction of the law and other changes. There are also changes to export control legislation which requires the administration to identify “emerging” and “foundational” technologies, and to impose licences on exports to China and certain other countries. This classification process is expected to take place over the coming months.
http://bakerxchange.com/rv/ff003efb18b47149cfc6f507ca428a71413b00a0
RDC is offering a free webinar on 9th October on the use of adverse media in KYC compliance. As a current tool utilised by most large financial institutions to support their AML/KYC processes, adverse media can play a significant role in realising operational efficiency and improved risk decision making. The challenge for many organisations is how to deploy this technology not just in a high-risk business line, but enterprise-wide, without creating a mountain of work for internal teams. The webinar will discuss how adverse media can assist in compiling an aggregate story for a sound risk decision to be made, or simply drive a binary decision in a low-risk line of business. The webinar will cover –
https://rdc.com/insights/webinar-adverse-media-secret-better-kyc-aml-screening/
Defence Web on 8th August reports that the inaugural conference on combatting the illicit smuggling of charcoal was held at the Combined Maritime Forces (CMF) headquarters in Bahrain on 23rd July. The aim of the conference was to identify potential methods to disrupt the illicit trade in charcoal emanating from Somalia. It is said to be estimated that terrorist organisations such as Al-Shabaab earn in the region of $10 million per year by smuggling charcoal from Somalia, which is often marketed as legitimate charcoal to buyers in Gulf countries. The UN placed a total ban on the export of charcoal from Somalia in 2012, and in 2014, authorised Member States to inspect vessels suspected to be carrying charcoal from Somalia in violation of the ban, to seize and dispose of the illicit cargo and to divert the vessels to a port for such disposal. It is said that, on current usage and smuggling, it is estimated that there will be no trees left in Somalia by the year 2060 and this can lead to drought and famine, environmental and humanitarian disaster.
In the latest TRACE podcast, Peter German, author of the comprehensive German Report, discusses the unique and unsettling “Vancouver Model” of financial crime, which includes both money-laundering and drug trafficking using casinos as the way station.
On 7th August, the UN announced that the DIRECTORATE GENERAL OF GEOLOGICAL SURVEY AND MINERAL INVESTIGATION had been removed from its Iraq sanctions list on the recommendation of the relevant Sanctions Committee.
In the July 2018 edition of its Strategic Assessment journal, the Institute for National Security Studies at Tel Aviv University carries an article proposing that credit agencies should consider a bank’s OFAC violations and pending ATA lawsuits when calculating their rating, as an alternative to lawsuits and regulations to force banks into compliance.
http://www.inss.org.il/wp-content/uploads/2018/07/adkan21.2ENG_4-113-125.pdf
Control Risks on 8th August published a report concerned with offshore oil and gas discoveries in 2014 and 2015, and Senegal’s newfound status as one of Africa’s most exciting investment prospects in Senegal and its waters and on the Senegal-Mauretania maritime border. The report warns that the countries of the so-called Mauritania-Senegal-Guinea-Bissau Basin (MSGB) share 2 characteristics: a lack of prior experience with the oil and gas sector, and elevated levels of political volatility, with violent transitions of power having occurred in all bar Senegal in the last decade.
The report outlines 7 lessons that investors looking for “new oil” would do well to take into account. These include to anticipate security challenges – saying that Dakar is an attractive target for Islamist militants operating in the Sahel, while questions remain over whether a rumoured non-aggression pact with Mauritania will protect the country from further attacks in the coming years.
https://www.controlrisks.com/our-thinking/insights/new-oil-along-the-west-african-coast
In a news release published on 7th August, the Advocate General Opinion is provided in the case of a man arrested in Ireland on a warrant issued by the UK. The High Court in Ireland referred the challenge made against the validity of the warrant, on the basis that the UK decision over Brexit affected it, to the CJEU. The Advocate general has said that Brexit does not affect the warrant, and it remains valid (at least) until the UK formally ceases to be a Member State. Whilst the Court normally follows the line given in such an Opinion, an Advocate General’s Opinion is not binding on the Court. Rather, it is the role of the Advocates General to propose to the Court, in complete independence, a legal solution to the cases for which they are responsible.
https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-08/cp180124en.pdf
7th August 2018
NSO GROUP: “A GO-TO COMPANY FOR HUMAN RIGHTS ABUSERS”
On 6th August, Amnesty International published an article about the Israeli company NSO Group, which is based in Israel and manufactures surveillance tools and sells them exclusively to governments. In a statement to Amnesty International, NSO said that its technology “allows government agencies to identify and disrupt terrorist and criminal plots”. But over the past few years, Amnesty says, digital rights groups including Citizen Lab and Access Now have traced a number of malicious state-backed attacks on human rights activists back to NSO’s tools. Amnesty cites cases in Mexico and UAE and argues that existing export controls and reliance of contract law are not adequate to control the sale of such software.
https://www.amnesty.org/en/latest/news/2018/08/is-nso-group-a-goto-company-for-human-rights-abusers/
SOUTH KOREAN FINANCIAL AUTHORITIES GRAPPLE WITH ALLEGED NORTH KOREAN COAL SMUGGLING
Business Korea on 7th August carried an article saying that the US government is expected to impose sanctions on not only Korea South-East Power Company, which is alleged to have imported North Korean coal, but also domestic banks which opened a letter of credit to facilitate the transactions. It says that South Korean financial authorities are even having difficulties finding out which banks are involved in the case and 2 banks that are suspected of having opened a letter of credit also strongly deny the allegations.
http://www.businesskorea.co.kr/news/articleView.html?idxno=24151
JORDAN: INTERNATIONAL ARREST WARRANT ISSUED IN TOBACCO MANUFACTURING AND SMUGGLING CASE
The Jordan Times on 6th August reported that a public prosecutor has issued an International Red Notice against the main suspect in the case of illegal tobacco manufacturing and smuggling which has rocked Jordan and implicated high-ranking officials. It is said to be for Awni Mutee, a businessman who reportedly fled the country to Lebanon a day ahead of a crackdown on illegal facilities linked to the case.
http://www.jordantimes.com/news/local/intl-arrest-warrant-issued-tobacco-case
CASE COMMENT: SFO V SALEH – APPEAL AGAINST A PROPERTY FREEZING ORDER
On 9th July, an article from 6 King’s Bench Walk chambers in London was concerned with a High Court appeal against a property freezing order obtained by the SFO in connection with suspected bribery and corruption involving a former ambassador of Chad and shares held by his wife. It says that the case illustrates the willingness and ability of the SFO to obtain civil recovery orders against property under Part 5 of the Proceeds of Crime Act 2002, where the only connection to the UK is that the money was held in a UK bank account. The shares involved were in a Canadian mining company, and the Court decided that the extremely low price for the shares was prima facie not for any obvious commercial reason, and that the act in Canada would have been an offence in the UK also.
http://blog.6kbw.com/posts/case-comment-sfo-v-saleh-2018-ewhc-1012
FRENCH PORTS CUT OUT OF EU TRADE ROUTE AFTER BREXIT
This exclusive report from Politico, updated on 7th August, says that the EU Commission has adopted plans to reroute Ireland’s freight to ports in Belgium and the Netherlands as a contingency plan for the post-Brexit period, and angered the French ports by doing so. The Commission has adopted a proposal to revise the routing of one of its strategic transport corridors to connect Dublin and Cork with the Belgian ports of Zeebrugge and Antwerp and the Port of Rotterdam in the Netherlands, to channel trade directly from Ireland to mainland Europe after Brexit – to prevent Irish traffic being caught up in problems in the UK.
https://www.politico.eu/article/brexit-french-ireland-ports-cut-out-of-eu-trade-route-after-brexit/
AGREEMENT BETWEEN THE EU AND NORWAY ON ADMINISTRATIVE CO-OPERATION, COMBATING FRAUD AND RECOVERY OF CLAIMS IN VAT
On 7th August, the EU published information saying that the Agreement comes into force on 1st September. For the Agreement, see –
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2018:195:TOC
EU LEGISLATION SEEKING TO MITIGATE EFFECT OF REIMPOSED US SANCTIONS
On 7th August, the EU published 2 new Regulations on the amendment of existing EU “blocking” legislation, and a decision granting an EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union, as regards Iran.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2018:199I:TOC
https://europeansanctions.com/2018/08/06/updated-eu-blocking-statute-in-force-tomorrow/
UK REPORT: THE ECONOMIC AND SOCIAL COSTS OF CRIME
On 6th August, the Home Office published the 2nd edition of a report that uses existing crime and cost data to update previous analysis by the Home Office to estimate the economic and social costs of different offences. It says that such estimates are important in helping to develop an understanding of the wider costs and benefits associated with changes in the number of crimes. The report estimates the total costs of crime in England and Wales in 2015/16 to be approximately £50 billion for crimes against individuals and £9 billion for crimes against businesses.
https://www.gov.uk/government/publications/the-economic-and-social-costs-of-crime
CHINA PROBES HEAD OF SHANGHAI AIRPORTS OPERATOR FOR CORRUPTION
Bloomberg on 7th August reported that the Chinese Communist Party is probing Wu Jianrong, 56, the chairman of the Shanghai Airport Authority for alleged corruption as President Xi Jinping continues his more than 5-year-old crackdown on graft.
£700,000 SEIZED FROM GANGSTERS ON OFFER TO NORTHERN IRELAND CRIME PREVENTION PROJECTS
The Belfast telegraph on 7th August reported that £700,000 recovered from the proceeds of crime, including cars and property, is being made available to groups across Northern Ireland and public sector bodies, voluntary and community sector organisations to bid for a share of the fund are being invited to bid for a share. The 2018/2019 Assets Recovery Community Scheme (ARCS) will mean that a total of £5million of criminal assets will have been distributed to the community since the scheme began in 2012.
FORMER BERNARD MADOFF CUSTOMERS ARE FIGHTING TO PROVE HIS SCANDAL WASN’T A PONZI SCHEME
The Toronto Star on 6th August reported that scores of Bernard Madoff’s former customers are pushing for access to a massive database of trading records and other documents seized from the con man’s now-defunct securities firm to advance a theory about the epic fraud. If it wasn’t a Ponzi scheme, they needn’t surrender more than $100 million in what the trustee of Madoff’s firm calls false trading profits.
ARRESTED ABROAD: ADVICE FOR BRITISH NATIONALS
On 6th August, the FCO issued updated guidance on what to do, or can be done, if you are arrested in another country.
UK: GUIDANCE FOR EXPERT WITNESSES
On 6th August, the Forensic Science Regulator published issue 6 of guidance and obligations placed on expert witnesses in the criminal justice system in England and Wales.
UK HIGH COURT HOSTS NEW MEGA-MONEY RUSSIAN DISPUTE
The Law Society Gazette on 7th August reported on a case involving a stake in a Russian fishing company valued at more than a billion pounds which has opened in the High Court – though the relevance of England and Wales as a jurisdiction has again been called into question. Alexander Tugushev is fighting billionaire Vitaly Orlov for a stake in the $1.5 billion valued Norebo Group, which is one of the largest international fishing companies in the world. Orlov took control of Norebo in 2016 but Tugushev claims his one-third stake in the company is not being recognised.
https://www.lawgazette.co.uk/law/high-court-hosts-new-mega-money-russian-dispute-/5067195.article
CJEU RULES BRAND OWNERS CAN PREVENT DE-BRANDED PARALLEL IMPORTS
Gowling WLG on 6th August published an article saying that the CJEU has held that the proprietor of a mark may take action against parallel importers of their products who remove all signs identical to their mark and replace them with other signs, without the consent of the trade mark owner and with a view to importing and trading the products for the first time in the EEA. The case involved Mitsubishi-built forklift trucks and, after acquiring them from a company in the Mitsubishi group, and in a customs warehousing regime, removed all the Mitsubishi marks from the trucks and affix their own signs and replaced the identification plates and serial numbers and modify the trucks so that they were compliant with EU standards. These modified forklift trucks would then be imported into the EEA and marketed within and outside the EEA.
FCA HAS SECURED CONFISCATION ORDERS IN ITS LONGEST-RUNNING AND MOST COMPLEX INSIDER TRADING CASE
On 6th August, Allen & Overy published a briefing saying that the FCA has secured confiscation orders totalling £1.69 million as part of Operation Tabernula triggered by an STR concerning the trades of 2 individuals in a listed company. 5 Operation Tabernula defendants were accused by the FCA of a single count of insider trading occurring between November 2006 and March 2010. The trial began in January 2016 and 2 defendants were found guilty. To date, the FCA has secured 5 convictions in respect of Operation Tabernula and 1 additional individual is still due to stand trial.
ROBBERS IN MALAYSIA STEAL 50 KG OF DRUGS FROM CUSTOMS
Euronews on 6th August reported that police in Malaysia have arrested 2 customs officers and 3 other suspects after a gang of thieves stole about 50 kg of narcotics, ketamine and heroin, from a customs storage facility. The thieves targeted a container that had been recently impounded.
http://www.euronews.com/2018/08/06/robbers-in-malaysia-swipe-50-kg-of-drugs-from-customs
SEC UPDATES LIST OF UNREGISTERED FIRMS USING INACCURATE INFORMATION TO SOLICIT INVESTORS
On 6th August, a news release on Mondo Visione said that the SEC has announced that it has updated its list of unregistered firms that use misleading information to primarily solicit non-US investors, adding 16 soliciting entities, 4 impersonators of genuine firms, and 9 bogus regulators.
RUSSIA’S RUSAL SAYS SANCTIONS FORCING SHUTDOWN OF PLANT CATERING TO US CUSTOMERS
Rferl on 7th August reported that Russian aluminium giant Rusal says US sanctions are forcing it to shut down one of its smaller plants, the Nadvoitsky aluminum smelter, that catered to US customers and find new jobs for hundreds of the plant’s workers because the plant stands to lose U.S. customers under the sanctions as well as a steady supply of raw materials.
IRISH CUSTOMS SEIZES €90,000 IN DUBLIN AIRPORT
On 7th August, the Irish Revenue Commissioners reported that officers seized €90,000 in cash when they stopped and searched a UK national in her 30s travelling to Amsterdam, following routine profiling. The cash was found hidden in a suitcase with the assistance of Revenue detector dog Josie.
CRIMINAL GANG TO USE SMALL BOATS AND A JET SKI TO SMUGGLE MIGRANTS ACROSS THE CHANNEL INTO THE UK
A news release from the NCA on 7th August reported that 6 men who were part of a crime group attempting to use small boats and a jet ski to smuggle migrants across the Channel into the UK have been found guilty, following a 9-week trial. The lengthy investigation, led by the NCA, focused on 2 separate criminal networks working together, one Albanian and one from Kent.
LITHUANIA’S EX-PRESIDENT’S WIDOW ENTANGLED IN TAX EVASION
OCCRP on 7th August reported that Lithuanian authorities have raised tax evasion charges against the son of the ex-president’s widow, Kristina Brazauskiene, the widow of Lithuania’s former president Algirdas Brazauskas, because the company her son from her first marriage, Ernestas Butrimas, runs and co-owns with his mother allegedly failed to pay some €40,000 in profit tax on a real estate trade in Florida.
SPAIN: 3 RUSSIANS ARRESTED FOR PLOTTING MURDER OF RIVAL GANG LEADER
OCCRP on 7th August reported that Spanish police arrested 3 high-profile members of the Russian mob in the resort town of Marabella, catching them as they allegedly plotted to consolidate their hold in the region by murdering a rival mafioso. It is claimed that the men were part of Vory v Zakone, or “Thieves in Law”, a brotherhood of elite professional criminals from across the post-Soviet space.
COURT OF APPEAL REJECTS “CYNICAL” ATTEMPT BY 2 MEN TO BLAME THEIR BARRISTER FOR CONFISCATION ORDERS
Legal Futures on 7th August reported that the Court of Appeal has rejected what it described as a “cynical” attempt by 2 men convicted of money laundering to blame their barrister for confiscation orders. It is said that were initially “content” with the confiscation orders, but ceased to be so when they were unable to mortgage commercial properties. The Court rejected “the unseemly attempt by the applicants to create grounds of appeal by making false allegations against their former counsel”.
SOUTH AFRICA BECOMES PART OF AFRICAN HEROIN TRAFFICKING TRAIL
On 3rd August, ENACT Africa published an article asking have South Africa’s ports and authorities been absorbed into the heroin economy? The volume of heroin being trafficked through Southern and East Africa’s coastal countries has risen dramatically in recent years, part of a major transit path for heroin being shipped from Afghanistan to Europe, and a few other markets. Conflict and improved policing along the main land-based drug-trafficking route to Europe via the Balkans, as well as skyrocketing poppy production, have caused the alternative route to become more important. It has also caused increased problems in Africa from users. The article says that research by the ENACT organised crime project suggests that since 2015, the heroin market in South Africa has grown substantially. In part this phenomenon has been obscured by language – Chatsworth thought it had a ‘sugars’ problem, Cape Town an ‘unga’ problem and Johannesburg a ‘nyaope’ problem, without realising that the base ingredient in all these drugs is heroin.
IS THE AFRICAN UNION ON TRACK TO SILENCE THE GUNS?
An article from ENACT Africa on 26th July says that stemming demand for arms and ammunition is key if Africa is serious about “Vision 2020”. In May, it says that the African Union Peace and Security Council (AU PSC) underlined the need for AU member states to increase their efforts in the fight against organised crime – including illicit financial flows; wildlife crime; the exploitation of natural resources – notably by armed groups; and the illicit proliferation of weapons. That meeting reflected on issues that stand in the way of achieving the AU’s goal of silencing the guns as required by Vision 2020.
DJIBOUTI REJECT “BIASED” LONDON COURT DECISION OVER CONTAINER TERMINAL
On 7th August, Loadstar reported that Djibouti has attacked a London court ruling in favour of DP World over its government’s seizure of the Doraleh Container Terminal (DCT) of which a new law earlier this year allowed the government to take control. DP World had built the terminal after winning a concession in 2006. The London Court of International Arbitration (LCIA) has ruled the seizure illegal, and said the concession agreement remained valid. The Djibouti government has said it does not accept the decision. The government said the dispute should be resolved with a compensatory settlement, which, it added, was in line with the principles of international law. The terminal is Djibouti’s largest single employer. The government holds a 67% stake and DP World 33%. But Djibouti has also received significant investment from China Merchants, which has bought a 23% stake in the wider port of Djibouti.
https://theloadstar.co.uk/djibouti-rejects-biased-court-ruling-doraleh-box-terminal-seizure/
On 7th August, Fox Rothschild published a lengthy article that concludes by recommending that those “innocent” institutions caught up in Ponzi schemes, such as those of Bernie Madoff, would be better trying their luck before state than federal courts. It says that Ponzi schemes have spawned thousands of “fraudulent transfer” cases. It says that Anglo-American fraudulent transfer law has a long history dating back 4 centuries to the Statute of 13 Elizabeth, enacted in 1571, and to the first reported fraudulent transfer case, Twyne’s Case, decided in 1601. The article goes on to say that, in an effort to obtain funds for the victims of the Ponzi schemes, bankruptcy trustees and receivers have commenced fraudulent transfer cases to recover payments made by the Ponzi fraudster. It says that many of the defendants had no knowledge of the Ponzi scheme and had innocently loaned money or provided goods and services, and therefore they had done nothing wrong. Nevertheless, most of the defendants lost—at least in federal courts. It says that 2 cases – Finn and The Golf Channel indicate that the transferee-defendant will be more likely to escape the constrictions of the Ponzi scheme presumptions in state court than in federal court.
