On 16 June, the Global Initiative Against Transnational Organised Crime published this report which aims to provide a broad overview of cryptocurrencies and organised crime. It is meant for readers that may have an expertise in one, both or neither, as a means to better understand the challenges posed by emerging blockchain technologies and decentralised finance.
On 30 June, Appleby published an article about the situation in the Isle of Man following legislation enacted in 2021 permitting the cultivation, production, supply, possession, importation and exportation of certain medicinal cannabis products under licence. The first licence for a pharmacy to import and dispense certain cannabis-based products for medicinal use has been granted and an “approval in principle” for a company to cultivate, extract, manufacture, import and export medicinal cannabis.
On 30 June, FATF published a targeted update on implementation of FATF Standards on virtual assets (VA) and virtual asset service providers (VASP), with a focus on FATF’s Travel Rule. This report comes 3 years after FATF extended its AML/CFT measures to VA and VASP to prevent criminal and terrorist misuse of the sector. The report finds a continued need for many countries to strengthen understanding risks of the VA and VASP sector, and to rapidly implement FATF Recommendation 15/INR.15 to mitigate such risks. Of the 98 jurisdictions that responded to FATF’s March 2022 survey, only 29 jurisdictions have passed relevant Travel Rule laws, and a small subset of these jurisdictions have started enforcement. This, FATF says, demonstrates an urgent need for jurisdictions to accelerate implementation and enforcement to mitigate criminal and terrorist misuse of virtual assets.
DELAWARE: HOW A LITTLE-KNOWN TAX HAVEN MADE THE RULES FOR CORPORATE AMERICA
On 27 June, ICIJ posted an interview with the author of a new book,“What’s the Matter with Delaware?”, which explores the tiny state’s massive role in global financial secrecy; saying that one of the world’s biggest tax havens actually sits within the bounds of mainland US: the tiny, tax-free state of Delaware.
On 29 June, Nikkei Asia reported that an investigation by Nikkei had found that North Korea is likely shipping coal directly to Chinese ports, activity that is banned from international trade under UN Security Council sanctions.
On 28 June, the Wall Street Journal reported that prosecutors had dropped charges against 2 people accused of attempting to bribe officials in Haiti after new evidence came to light regarding lost recordings of calls that undercover agents conducted with one of the defendants. They had been accused of attempting to solicit bribes from FBI agents posing as potential investors in a project to develop an $84 million port in the Mole-Saint-Nicolas area of Haiti.
ISLE OF MAN: MEDICINAL CANNABIS FOR EXPORT LICENCE APPROVED
On 29 June, a news release advised that the Island’s Department for Enterprise had confirmed that GrowLab Organics (GLO) has been offered the first conditional medicinal cannabis licence for export in the Isle of Man. This came after the Isle of Man Gambling Supervision Commission (GSC), which is handling applications, issued the first letter of approval in principle to GLO to cultivate, extract, manufacture, import and export medicinal cannabis from the Isle of Man.
RUSSIAN ELITES, PROXIES, AND OLIGARCHS TASK FORCE JOINT STATEMENT
On 29 June, a news release from the US Treasury comprised a joint statement saying that REPO Task Force has leveraged extensive multilateral coordination to block or freeze more than $30 billion worth of sanctioned Russians’ assets, freeze or seize sanctioned persons’ high-value goods, and heavily restrict sanctioned Russians’ access to the international financial system. REPO members have achieved these successes through close and extensive national and international coordination and collaboration. The Task Force, launched in March, involves the US, UK, EU, Japan, Canada and Australia.
US TREASURY EXEMPTS CIVIL AVIATION SAFETY MEASURES FROM RUSSIA SANCTIONS
On 29 June, Flight Global reported that the US Treasury’s sanctions on Russian aircraft manufacturer United Aircraft would not apply in respect of the export and provision of services and technology aimed at ensuring civil aviation safety.
UK: CONSULTATION ON CODE PROVIDING GUIDANCE FOR PROSECUTORS ON THE EXERCISE OF THE INVESTIGATION POWERS UNDER POCA
On 29 June, the Home Office launched a public consultation on a new draft Code of Practice under section 377A of the proceeds of Crime Act 2002. This follows the commencement of Part 2 of the Economic Crime (Transparency and Enforcement) Act and changes made to the Unexplained Wealth Order (UWO) regime. The consultation period closes on 22 September.
EU AGREEMENT ON ‘KEY ELEMENTS’ OF ELECTRONIC EVIDENCE PACKAGE
On 29 June, EurActiv reported that the EU Parliament, Council and Commission have bridged their differences on several fundamental points regarding accessing cross-border electronic evidence, but that some political issues remain. The e-Evidence package is intended to facilitate access to electronic communications across EU countries in the context of criminal investigations – and, as a result, law enforcement agencies could request access to evidence directly from the service provider in the other member state or even ask that the data be retained. A political point still to be solved is if the executing member states ‘might’ or ‘shall’ contest the order if one or more grounds for refusal were found.
EUCOMMISSION PROPOSES TO PROHIBIT FLAVOURED HEATED TOBACCO PRODUCTS
On 29 June, the EU reported that the European Commission proposes to prohibit the sale of flavoured heated tobacco products in the EU, in response to the significant increase in the volumes of heated tobacco products sold across the EU.
2.2 MILLION ILLICIT CIGARETTES SEIZED IN GLASGOW RAID
On 29 June, the BBC reported that 2 men have been charged with excise duty fraud after HMRC officers seized about 2.2 million illicit cigarettes at a business unit in Glasgow. One of the men was also charged over a seizure of 1.1 million cigarettes in April. Another raid netted 1.8 tonnes of compressed raw tobacco leaf at a haulage depot on 24 June.
A Commentary from RUSI on 29 June says that Canada’s response to financial crime lags behind global peers, and that the planned financial crime agency is only part of the solution. It says that there are 2 big unknowns about Canada’s proposed financial crime agency: the specific problems the government thinks this new agency will solve; and the form the new agency will take.
LAW COMMISSION OF ENGLAND AND WALES ASKED TO REVIEW THE LAW ON CONTEMPT OF COURT
On 29 June, the Law Society Gazette reported that the Law Commission has been asked by the UK Government to review the ‘disordered and unclear’ law on contempt of court and consider ways to improve its effectiveness, consistency, and coherence; and that among the possibilities is codification. A consultation paper seeking views will be published at the end of this year.
UKRAINE UNCOVERS ANTIQUITIES LOOTED FROM CRIMEAN MUSEUMS
On 29 June, OCCRP reported that, while investigating money laundering linked to the funding of Russian occupied territories, Ukrainian authorities said they discovered a trove of ancient Scythian weapons believed to have been looted from museums in occupied Crimea.
13 ARRESTED OVER GERMAN CASHPOINT EXPLOSIONS THAT NETTED GANG OVER €1.6 MILLION
On 29 June, Europol announced that German authorities, together with their Dutch and Belgian counterparts, have arrested 13 members of a Dutch gang linked to 21 attacks against cash machines in Germany, causing millions of euros in damage.
3 CZECHS CHARGED WITH EU SUBSIDY FRAUD MONEY SPENT ON MODEL TRAINS INSTEAD
On 29 June, Radio Prague International reported that the European Prosecutor’s Office has filed charges against 3 people and 3 companies for subsidy fraud, damage to the EU’s financial interests and money laundering. It is said that the chief perpetrator pretended to be working on a project in the field of nanotechnology, but spent the bulk of the EU finances on model trains.
BANK OF ALBANIA REVOKED 12 FOREIGN EXCHANGE LICENCES IN FIGHT AGAINST MONEY LAUNDERING
On 29 June, Exit News reported that the Bank of Albania revoked 12 foreign exchange office licences over the last year, predominantly for non-compliance with AML measures, according to its Annual Supervision Report. It inspected some 90 exchanges during 2021 and, of these, 12 had their licences suspended, and 26 were fined, meaning over a third were found non-compliant in some form. Albania is currently on the FATF grey list for money laundering, and consecutive US State Department reports have found little in the way of progress in combating the issue.
SWITZERLAND: GAMBLING PASTOR IMPRISONED FOR BEGGING FRAUD
On 27 June, Swissinfo reported that a pastor who fraudulently begged parishioners for money to fuel his gambling habit has been handed a 3-year suspended jail sentence and must serve 6 months behind bars. He conned $3.4 million out of his flock by asking for loans between 2009 and 2018 to pay off his gambling debts – but rather than being cured of his gambling habit, he used the money to fund fresh losing sprees at casinos.
CAYMAN ISLANDS: STERLING ASSET MANAGEMENT SEEKS JUDICIAL REVIEW OF $300,000 AML FINE
On 27 June, Cayman Compass reported the firm was seeking judicial review of the penalty imposed on it by the Cayman Islands Monetary Authority for its AML failings, arguing that the fine imposed did not come within the legal powers of CIMA.
PODCAST: KHADIJA ISMAYILOVA ON KEEPING WHISTLEBLOWERS SAFE
In the latest TRACE podcast, Khadija Ismayilova speaks at the TRACE Prize for Investigative Reporting in Vancouver, describing the risks to whistleblowers and what one can do to encourage and protect them.
On 28 June, an article from CSIS says that in the US semiconductor funding a national security issue. It is said to be falling behind in both funding and encouraging development. It says that interdependence with China means there are transfers from the US should be allowed to continue. Sales of commodity chips or even some production in China pose no national security risk, and US export controls prevent the transfer of the advanced manufacturing equipment needed in China. It also discusses disagreements over providing subsidies to already wealthy companies in the US.
GIBRALTAR: COURT ORDERS SALE OF ARRESTED SUPERYACHT LINKED TO SANCTIONED RUSSIAN BUSINESSMAN
On 27 June, the Gibraltar Chronicle reported that the Supreme Court has ordered the sale of a superyacht linked to a Russian billionaire whose name appears on the UK’s Ukraine sanctions list. The Malta-flag vessel Axioma was arrested in Gibraltar in March over an admiralty claim filed by J.P. Morgan bank. Court documents state the bank had provided a €20.5 million loan in December and claims the owner effectively defaulted on the loan.
MATCH-FIXING GANG TARGETING SPANISH AND GIBRALTAR FOOTBALL LEAGUES MADE €500,000
On 29 June, the Gibraltar Chronicle reported that a “highly-structured” organised crime group involved in alleged match-fixing in the Royal Spanish Football Federation leagues and the Gibraltar National League is believed to have made more than €500,000 in profits, mostly on activities linked to Spain’s third division, Spain’s Policia Nacional said. Authorities have arrested 21 people and an additional 6 are under investigation.
UBS TO PAY $25 MILLION TO SETTLE SEC FRAUD CHARGES INVOLVING COMPLEX OPTIONS TRADING STRATEGY
On 29 June, a release on Mondo Visione advised that the SEC has announced that UBS Financial Services Inc has agreed to pay approximately $25 million to settle fraud charges relating to a complex investment strategy referred to as YES, or Yield Enhancement Strategy. UBS marketed and sold YES to approximately 600 investors through its platform of domestic financial advisors from February 2016 through February 2017.
RUSSIA: LEGISLATIVE AMENDMENTS AIMED AT IMPLEMENTING FATF RECOMMENDATIONS
On 28 June, a news release from the Office of the President announced that President Putin had signed a federal law on amendments to the federal law on countering the legalisation of criminal proceeds (money laundering) and the financing of terrorism and certain legislative Acts of the Russian Federation. It is said that the amendments provide for an adjusted procedure for freezing monetary funds or other property of persons listed by the UN Security Council or bodies specially created by decisions of the UN Security Council as organisations or individuals associated with terrorist organisations and terrorists or involved with the proliferation of WMD.
NIGERIA: INTERNATIONAL FRAUDSTER JAILED FOR 235 YEARS
On 29 June, media in Nigeria reported that a federal court had sentenced a “notorious international fraudster”, Scales Olatunji, to 235 years imprisonment for internet fraud and money laundering. He was sentenced to 5 to 7 years for each of 45 charges on the indictment, with sentences to run concurrently.
On 29 June, a news release from the EU advised that the EU Council has agreed its partial position on the proposal. The Council has added powers to the Authority to directly supervise certain types of credit and financial institutions, including crypto asset service providers, if they are considered risky. It also entrusts the Authority to supervise up to 40 groups and entities – at least in the first selection process – and to ensure a complete coverage of the internal market under its supervision. More powers are also given to the general board in the governance of AMLA. The Council’s position is partial as it has not yet agreed on the location at which the new Authority will be based. This proposal is part of a package of legislative proposals to strengthen the EU AML/CFT rules, presented by the Commission on 20 July.
On 29 June, the EU announced that negotiators from the EU Council Presidency and the European Parliament have reached a provisional agreement on the proposal updating the rules on information accompanying the transfers of funds by extending the scope of those rules to transfers of crypto assets. It says that the introduction of this “travel rule” will ensure financial transparency on exchanges in crypto-assets and will provide the EU with a solid and proportional framework that complies with the most demanding international standards on the exchange of crypto-assets, in particular FATF Recommendations 15 and 16. This proposal is part of a package of legislative proposals to strengthen the EU AML/CFT rules, presented by the Commission on 20 July 2021. The package also includes a proposal to create a new EU authority to fight money laundering.
On 28 June, OCCRP reported on Belarusian PEP listed as owning real estate in Dubai, a kingdom in the UAE that has become a playground for the global rich. Following on from the Dubai Uncovered report in May, further investigations have identified a similar group of politically exposed citizens of Belarus among the listed property owners. They include Aliaksei Aleksin, a businessman sanctioned by the US and reputed to be Belarusian dictator Alexander Lukashenko’s “wallet,” and others with ties to the regime in Minsk. The investigation reveals that, even in a country whose government places a high priority on Soviet-style equality, people connected to the authorities can earn big money and offshore it to the UAE.
On 29 June, a short article from Infosecurity said that a major underground market has developed around hospitality and travel fraud, and that those working in these industries, and consumers looking out for a bargain, should beware. It refers to research showing that reveals 4,000 dark web references to airline and hotel fraud worldwide last year.
On 20 June, Brown University in the US published a study which says that melting ice in the Arctic Ocean could yield new trade routes in international waters, reducing the shipping industry’s carbon footprint and weakening Russia’s control over trade routes through the Arctic. However, Arctic’s changing climate will endanger countless species that thrive in sub-zero temperatures, scientists say. It is projected that, by 2065, the Arctic’s navigability will increase so greatly that it could yield new trade routes in international waters.
On 29 June, MONEYVAL published its MER for Liechtenstein, which acknowledges Liechtenstein’s progress in improving measures to combat money laundering and financing of terrorism. However, it calls on the country to make more effort to invested in investigating and prosecuting money laundering of the widest range of foreign predicates, which target sophisticated money laundering schemes, including complex legal structures established and managed in the country.
On 29 June, the New Arab published Part 1 of a feature based on an OCCRP investigation and concerned with Nizar Hanna Nasri, who it says sits atop an empire spanning pharmaceuticals, liquor imports, and real estate developments – but that his success was built on a far less visible foundation: a globe-spanning trade in black-market cigarettes. It alleges that his facilities have fed billions of cigarettes into black markets from Cameroon to Moldova, and that OCCRP identified 4 counterfeit cigarette factories in Iraq linked to Nasri. Publicly, Nasri is a real estate tycoon, bankrolling shopping malls, residential complexes, and office high-rises in the Iraqi Kurdish capital Erbil. It is said that industry sources estimate there are up to 6 illicit cigarette factories in operation in Iraq today, and these include 3 linked to the operation Nasri built. It is claimed that, to build his international network, Nasri struck alliances with a wide range of smugglers, criminals, and high-level politicians.
On 29 June, a Notice from HM Treasury advised that 8 further individuals and 5 entities had been added to its Russia sanctions lists. At the same time, it advised that the existing entry for Natalya BROWNING had been corrected.
On 19 June, a Notice from HM Treasury advised that Andrei Mikhailovich BOGATOV, Alexander Yuryevich CHAIKO, Sergey Fedorovich RUDSKOY, and Andrey Nikolaevich TROSHEV; together with EVRO POLIS LLC, MERCURY LLC, and VELADA LLC had been added to sanctions lists. All 7 are Russian.
Panama Covid-19 update – and so it continues…1 new fatality and 1,989 new cases reported today, with testing percentage still high, 14,520 active cases, 33 in ICU and 187 in other wards.
28 JUNE 2022
UK: THE GROWING COST OF WASTE CRIME
On 23 June, an article from Shoosmiths LLP said that the NAO had recently published its report ‘Investigation into the Government’s actions to combat waste crime in England’. The article takes one through the key findings of the report and highlights the statistics which have come to light in relation to confiscation under the Proceeds of Crime Act 2002 (PoCA). It is explained that waste crime is the illegal transport, disposal or management of waste. It includes fly-tipping and crimes such as the illegal export of waste, illegal operation of waste sites, misdescribing waste and falsifying records. Waste management has also allegedly been the target of quite sophisticated frauds. The government has begun to respond to certain elements of the report and revealed various initiatives and schemes to assist in tackling the issues raised by NAO – but there remains the strong prospect that criminals who deliberately breach the legislation in the pursuit of financial gain will continue to take the view that the risk-reward balance remains in their favour and is there to be exploited.
EU SANCTIONS – THE RUSSIAN CRUDE OIL AND TRANSPORT INSURANCE RESTRICTIONS EXPLAINED
On 23 June, an article from Reed Smith focuses on the sanctions which prohibit the purchase, import or transfer of crude oil and certain petroleum products from Russia into the EU; and insuring and financing the transport, in particular through maritime routes, of Russian oil to third countries.
THE PRESIDENT-ELECT OF COLOMBIA HAS PROPOSED ENDING THE EXTRADITION TO THE US OF THOSE INVOLVED IN THE “PEACEFUL DISMANTLING OF DRUG TRAFFICKING”
On 27 June, Newsroom Panama reported that the newly-elected President has proposed “subjecting extradition to non-compliance” those involved in “processes for the peaceful dismantling of drug trafficking”; but says that the measure will depend on “a negotiation with the United States”.
LAOS TO MIMIC POGO MODEL WITH NEW OFFSHORE GAMBLING LICENCES
On 28 June, iGB reported that Laos is set to regulate online gambling, setting up a regime where operators licensed in the country targeting markets elsewhere in SE Asia such as Thailand. It would use a model similar to Philippine Offshore Gaming Operators (POGO) and may not accept customers who are based in Laos.
On 28 June, the EU published 2 reports. One report examines indicator-based analysis which assesses the recent trends in EU tax systems, and identifies how tax policy, implementation or compliance could be improved. It identifies how tax policy, implementation or compliance could be improved. The other report says that in 2020 tax revenue as percentage of GDP increased slightly in the EU up to 40.1 % of the GDP – while tax revenues decreased in nominal terms in 2020, GDP decreased more, which raised the tax-to-GDP-ratio.
UK NOTICE TO EXPORTERS 2022/19: NEW OPEN GENERAL EXPORT LICENCES RE TRADE WITH INDIA PUBLISHED
On 28 June, the Department for International Trade published Notice to Exporters 2022/19 on the publication of 2 new Open General Export Licences (OGEL) for India. One permits the export of certain dual-use items to India; and the other permits the export of certain military goods and technology to India.
UK PARLIAMENTARY COMMITTEE REPORTS ON THE UK-EU RELATIONSHIP IN FINANCIAL SERVICES
On 27 June, an article from Orrick Herrington & Sutcliffe LLP said that 6 years following the UK voting in a referendum to leave the EU, the House of Lords European Affairs Committee published a report on the relationship between the UK-EU in financial services sector. The article summarises the key points from the report. Broadly speaking, the Committee was fairly optimistic about the future of the UK financial services.
FIRST REPORT ON THE UK’S FOREIGN DIRECT INVESTMENTS (FDI) REGIME
On 27 June, an article from Morgan Lewis said that the UK national security and investment regime came into effect on 4 January. A report now shows that during the initial 3-month period, the UK government received 222 notifications, out of which it only called in for investigation 17 transactions, clearing 3 (with the remaining 14 pending at the end of the reporting period).
ILLICIT CHROME MINING ECONOMY THRIVING IN SOUTH AFRICA
On 27 June, OCCRP reported that South Africa, the world’s largest chrome producer, is said to lose around 10% of its annual production to illegal mining which has served to empower mining mafias. It is trucked to Mozambique or domestic ports and, along the way, it vanishes into the legal supply chain and eventually ends up in China. Illegal chrome mines, which first came to the attention of South African investigators in 2016, have mushroomed in recent years.
US SUPREME COURT RULES THAT GOVERNMENT MUST PROVE BEYOND A REASONABLE DOUBT THAT A DOCTOR KNOWINGLY PRESCRIBED OPIOIDS “IN AN UNAUTHORIZED MANNER” IN ORDER TO SECURE A CONVICTION FOR THE ILLEGAL DISTRIBUTION OF CONTROLLED SUBSTANCES
On 27 June, Jurist reported on a ruling on a case in which 2 doctors were convicted of illegally distributing pain medication and charged with unlawful distribution of controlled substances, racketeering conspiracy, health care fraud conspiracy, and wire fraud conspiracy, among other charges. One was separately charged with money laundering.
X-RAY FINDS 109 LIVE ANIMALS IN WOMEN’S LUGGAGE AT BANGKOK AIRPORT
On 28 June, CNN reported that 2 women were arrested at Bangkok’s Suvarnabhumi Airport and accused of smuggling after 109 live animals were found in their luggage. Wildlife officials called to the scene discovered 2 white porcupines, two armadillos, 35 turtles, 50 lizards and 20 snakes.
TOYS AND GAMES MAKE UP 50% OF ALL COUNTERFEIT GOODS SEIZED BY BELGIAN CUSTOMS IN 2021
On 28 June, the Brussels Times reported that, in 2021, the Belgian Customs and Excise Administration intercepted 838,934 counterfeit goods. While this included knock-off smartphones, clothes and perfumes, toys and games made up the largest share of goods that were seized.
HUNDREDS OF STOLEN CARS RECOVERED IN GLOBAL POLICE OPERATION AGAINST VEHICLE TRAFFICKING
A news release from INTERPOL on 28 June announced that Operation Carback on 16 to 31 May was a police operation targeting stolen vehicle trafficking has led to the recovery of hundreds of cars, trucks and motorbikes in just 2 weeks.
HOW RUSSIAN CYBERCRIME GROUP, CONTI, TERRORISED LATIN AMERICA AND VANISHED
On 27 June, Insight Crime published an article saying that Conti, one of the most feared cybercrime operations in the world, unleashed a blitz of raids against government websites in Costa Rica and Peru. Why, it asks, has it now disappeared off the radar?
SMART CONTAINER FLEET TO EXPAND 8-FOLD OVER THE NEXT 5 YEARS
On 28 June, Hellenic Shipping News reported that the global telematics-enabled container equipment fleet is forecast to grow 8-fold over the next 5 years and account for 25% of global box inventories by 2026, driven by wider adoption across the dry container fleet. It explains that a container becomes “smart” when fitted with a telematics device that provides real-time tracking and monitoring, and allows beneficial cargo owners to understand the location and status of their cargo so that they can better control their supply chains.
SWISS APPEALS COURT CONVICTS EX-FIFA OFFICIAL VALCKE OF BRIBERY
On 24 June, Channel News Asia reported that an appeals court found former FIFA Secretary General Jerome Valcke guilty of forging documents and accepting bribes in a case involving World Cup media rights. He was secretary general of the body from 2007 to 2015. He received an 11-month suspended jail sentence.
TRADERS WITH SWISS LINKS CONTINUE TO BUY AND SELL RUSSIAN OIL
On 26 June, Swissinfo reported that around 20 traders have reportedly increased their shipments of Russian oil since the war in Ukraine broke out, and that a third of these players have strong connections to Switzerland. These include the Russian oil giant Lukoil, which sells most of its oil in Geneva via its subsidiary Litasco, and 2 unknown companies in Hong Kong, Bellatrix and Livna, while part of the Russia-China trade is reportedly channelled through a Swiss company.
DOZENS OF FIRMS REGISTERED AT AN EDINBURGH ADDRESS INVOLVE A MAN SANCTIONED BY THE UN AND THE UK
On 24 June, The Ferret reported on 38 Scottish Limited Partnerships (SLP), all of which were incorporated between 2008 and 2016, using an Edinburgh address, and were provided with a new “virtual” Scottish address between February and April this year.
US SEIZES 6 WEBSITES PROVIDING ILLEGAL ACCESS TO COPYRIGHTED MUSIC
A news release from US DoJ on 27 June advised that the DoJ had announced the seizure of six websites as part of ongoing efforts by the Department of Justice and Homeland Security Investigations (HSI) to combat copyright infringement, and prevent third parties from streaming and downloading copyright-protected content from these sites. Individuals visiting those sites now will see a message indicating that the site has been seized by the federal government, and visitors will be redirected to another site for additional information.
SOUTH AFRICA: ZONDO COMMISSION LET THE STATE CAPTURE BANKERS OFF THE HOOK
On 28 June, the Daily Maverick asks how did the State Capture network move billions of rand stolen from the South African people across the globe? The Zondo Commission report provides some of the details of the network of banks who profited from this — but fails to provide any remedy of how to prevent a repetition of these crimes.
3 DEFENDANTS INDICTED IN $88 MILLION SOFTWARE LICENCE PIRACY SCHEME TARGETING POPULAR TELEPHONE SYSTEM USED BY THOUSANDS OF COMPANIES
A news release from US DoJ on 28 June advised that a court in Oklahoma had unsealed an indictment charging 3 individuals with violating federal wire fraud and money laundering statutes in connection with an operation to sell over $88 million of stolen Avaya Direct International (ADI) software licences, which were used to unlock features of a popular telephone system used by thousands of companies around the globe.
On 26 June, an article from Homeland Security Today says that D-printed guns have gained traction among the far-right — accounting for all but one case — with examples appearing in 5 countries. Since 2019, there have been at least 9 examples of extremists, terrorists, or paramilitaries making, or attempting to make, 3D-printed guns in Europe and Australia. It refers to a report from the Global Network on Technology and Extremism published on 23 June. The report says that analysis of recent cases reveals 4 insights – 3D-printed guns have gained traction among the far-right; many of the cases also involve attempts to make explosives, meaning that 3D-printed guns have supplemented—and not replaced—existing threats; 3D printing is not a shortcut to acquiring a gun, as the process still involves considerable time and effort. It remains to be seen whether their arrival has shortened the attack planning process; and at least one extremist had joined the leading 3D printing gun forum, using it to obtain guidance on his firearms and explosives, seemingly unbeknown to its moderators.
An Alert from FinCEN and BIS on 28 June urges financial institutions to be vigilant against efforts by individuals or entities to evade BIS export controls implemented in connection with the Russia’s further invasion of Ukraine. It further reminds financial institutions of their Bank Secrecy Act reporting obligations and details how suspected export control evasion activity may also be reported to BIS enforcement authorities. It provides financial institutions with an overview of BIS’s current export restrictions; a list of commodities of concern for possible export control evasion; and select transactional and behavioural red flags to assist financial institutions in identifying related suspicious transactions.
On 28 June, OFAC designated 70 entities, many of which are critical to the Russian Federation’s defence industrial base, including State Corporation Rostec, the cornerstone of Russia’s defence, industrial, technology, and manufacturing sectors, as well as 29 Russian individuals.
In addition, sanctions shall also apply to gold of Russian Federation origin, with immediate effect. This is part of joint action against Russian gold, the country’s biggest non-energy export, by the US, UK, Canada, and Japan.
A report from the Global Initiative Against Transnational Organised Crime on 27 June begins by mapping the major football supporters’ clubs in each of the Western Balkan countries. It then identifies which of these groups can be considered ‘ultras’. Further analysis singles out which of these ultras groups demonstrate attributes of football hooliganism, and how this hooliganism is linked to organised crime and politics. It recommends paying greater attention to the social conditions that motivate vulnerable youth to become involved in football hooliganism, which can serve as an entry point for organised crime. It also suggests ways to identify and sever the links between hooligan groups and organised crime.
On 28 June, a release on Mondo Visione advised that the SEC had charged Ernst & Young LLP for cheating by its audit professionals on exams required to obtain and maintain Certified Public Accountant (CPA) licences, and for withholding evidence of this misconduct from the SEC Enforcement Division during the investigation of the matter. EY admits the facts underlying the SEC’s charges and agreed to pay a $100 million penalty and undertake extensive remedial measures to fix the firm’s ethical issues.
On 27 June, the UN Office for Drugs and Crime published its annual World Drugs Report. It says that cannabis legalisation in parts of the world appears to have accelerated daily use and related health impacts; there has been record rises in the manufacturing of cocaine; there has been an expansion of synthetic drugs to new markets; and that there are continued gaps in the availability of drug treatments, especially for women. It also highlights that illicit drug economies can flourish in situations of conflict and where the rule of law is weak, and in turn can prolong or fuel conflict.
Nearly 90 % of the cocaine globally seized in 2021 was trafficked in containers and/or by sea.
Panama Covid-19 update – are figures falling? Too early to say, with 866 cases and 1 new fatality reported today, and active cases falling by nearly 1,000 to 14,148. There are 35 patients in ICU, 195 in other wards and 12 in hospital-hotel quarantine.
27 JUNE 2022
ISLE OF MAN: AMENDMENT OF RUSSIAN AND MYANMAR SANCTIONS LISTS
On 27 June, 2 news releases advised that 59 entries on the Russia sanctions list had been amended or corrected, and that the entry for SINS AVIA TRADING HOUSE LLC on the Myanmar sanctions list had been amended.
UK: APP FRAUD – WHAT NEW CHANGES ARE ON THE HORIZON FOR BANKS?
On 24 June, an article from Tenet Compliance & Litigation Ltd is concerned with APP fraud, or authorised push payment fraud, which occurs when someone is tricked into sending money to a fraudster posing as a genuine payee. On 18 November, the Payment Systems Regulator published a consultation paper on APP scams and focuses on 3 main proposals – the publication of fraud data by banks; improvements in scam prevention; and the mandatory reimbursement of victims. It says that banks need to act now to be ready for the proposed changes.
PLANS TO ADDRESS AUDIT FAILURES IN THE UK RAISE CONCERNS
On 24 June, the Wall Street Journal reported that plans to tighten controls over audits and accounting in the UK may end up giving corporate insiders too much leniency to be effective, some regulators and academics say. The plan would require directors from large listed companies to either comply with newly proposed audit rules or explain why they don’t – a “comply or explain” approach, a move that would be a step back from previous plans to hold directors personally liable for failed oversight of internal controls. This proposed change is part of a broader strategy to overhaul audit and governance rules as the UK aims to bolster confidence in corporate accounting. Introduced in 1992, the comply or explain principle already applies to other corporate matters. The Financial Reporting Council has said it expects to issue guidance soon on how it plans to respond to the government’s proposal.
RUSSIA TO SPEND $14.5 BILLION TO BOOST LOCAL AIRCRAFT PRODUCTION AMID SANCTIONS
On 27 June, WHTC.com reported that the Russia’s government has announced plans to invest $14.5 billion in the country’s aviation industry by the end of this decade to boost the share of domestically-manufactured aircraft. Russia has been pushing to localise aircraft production but only the Sukhoi Superjet regional aircraft is mass-produced inside Russia, while a significant number of its components, including vital engine parts, are imported. Other types are to be produced and Aeroflot is set to order large numbers of domestic types.
CANADA: BUDGET BILL GIVES CABINET NEW POWER TO REDISTRIBUTE SANCTIONED PROPERTY
On 27 June, CBC said that selling Russian-owned assets to pay for Ukraine’s reconstruction may sound like a logical approach to restitution, but as the Canadian government gains new powers to begin this process, questions remain about how it will work, and whether some issues are headed to court.
HONG KONG VASP REGIME TO TAKE EFFECT ON 1 MARCH 2023
On 26 June, Regulation Asia reported that amendments have been made to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) to enhance Hong Kong’s AML/CFT regulatory regime. The long-awaited amendments include a new licensing regime for virtual asset service providers (VASP) to be administered by the Securities and Futures Commission (SFC).
SWISS COURT CONVICTS CREDIT SUISSE IN MONEY LAUNDERING CASE
On 27 June, Investing.com reported that Switzerland’s Federal Criminal Court has convicted Credit Suisse and a former employee of failing to prevent money laundering in Switzerland’s first criminal trial of one of its major banks. The case related to an alleged Bulgarian cocaine trafficking gang laundering profits through the bank from 2004 to 2008.
REGIONAL AML/CFT GROUP BEGINS ONSITE EVALUATION OF ANGOLA
On 27 June, Foreign Brief reported that FATF-style regional body ESAAMLG (the Eastern and Southern Africa Anti-Money Laundering Group) representatives have begun their onsite evaluation of Angola. It warns that corruption puts it at risk of re-entering the FATF blacklist.
UK: LAW FIRM FINED AFTER WRONGLY SAYING IT HAD PROPER AML RISK ASSESSMENT
On 27 June, the Law Society Gazette reported that the regulator SRA has continued its clampdown on firms not complying with AML regulations by fining a Midlands practice. The firm reached a settlement with the regulator that it would pay a £2,000 fine and £1,350 costs after a number of shortcomings were identified.
On 27 June, the House of Commons Library published a briefing concerned with corporate criminal liability, explaining that corporates in themselves can’t think or act – it’s their members, employees or directors that do so. But they generally are ‘legal persons’, so can commit crimes. The briefing looks at calls for reform and the options.
US: A CLOSER LOOK AT THE CHINA FORCED LABOR ENFORCEMENT STRATEGY
On 27 June, an article from Sandler Travis Rosenberg considered the Uyghur Forced Labor Prevention Act, which effectively bans imports of all goods mined, produced, or manufactured in China’s Xinjiang Uyghur Autonomous Region, and the Department of Homeland Security recently issued strategy for enforcing this prohibition.
HUNGARY ARRESTS FORMER POLICE OFFICER TURNED “BRAZILIAN ESCOBAR”
On 27 June, OCCRP reported that police in Hungary had detained Sergio Roberto de Carvalho, whose network is suspected to have shipped 45 tons of cocaine from Brazilian ports to Europe. A total of 163 properties connected to Carvalho have been seized in Brazil, Portugal, Spain and Dubai over the years as well as 37 aircraft, 70 cars, and millions of euros.
FORMER PARAMILITARY COMMANDER AND DRUG LORD “MEMO FANTASMA” MAY WALK OUT OF PRISON IN COLOMBIA
On 27 June, Insight Crime reported that, if released, his high-level connections and millions in criminal assets could result in witnesses being threatened, or in Memo disappearing altogether. Guillermo León Acevedo Giraldo is facing money laundering charges alongside his mother and grandmother, and is seeking his release after spending a year in prison on pre-trial detention.
CONCERNS GROW THAT INDIA IS ‘BACK DOOR’ INTO EUROPE FOR RUSSIAN OIL
On 26 June, The Observer reported that before the war in Ukraine India’s imports of Russian oil were negligible due to high freight costs. But recently, imports of Russian oil to India have increased. It says that the volumes that India has been buying and exporting, however, suggest that some of the refined Russian crude may ultimately be used in Europe’s filling stations. It says that there are several tactics shippers are using to hide the origin of Russian oil: paying in Chinese currency – rather than the industry standard dollar; transfers of oil cargoes from ship-to-ship have spiked; increasing numbers of vessels have been “going dark” by switching off their AIS; and trading oil directly for other products, such as gold, food or weapons.
THE EncroChat HACK WAS HAILED AS A MAJOR COUP BUT EUROPE IS STILL AWASH WITH DRUGS
On 23 June, Vice News carried an article saying that when police hacked into organised crime’s secret messaging network, it led to a wave of high-profile arrests and drug busts. 2 years on, analysis by VICE World News shows that it has failed to dent drug supply.
On 27 June, Hellenic Shipping News reported that the UN Conference on Trade and Development (UNCTAD), in its latest maritime report, “Review of Maritime Transport 2021”, has put Iran in 22nd place among the countries with the largest shipping fleet based on deadweight tonnage.
On 20 June, an article from Refinitiv analyses how effective sanctions against Russia are likely to be, considering lessons from history, international unity and the ability of Russia to withstand the impacts.
RECOVERED CORRUPTION MONEY PROVIDES ‘LIFE-SAVING SUPPORT’ TO 150,000 VULNERABLE PEOPLE
On 27 June a post on the FCPA Blog details how £4.4 million from 2 Chad diplomats who took bribes from Canadian oil company Griffiths Energy was transferred to Chad and used in aid and development programmes. It explains how the money was used and asks if it made a difference? It concludes that, with total FCPA penalties to date nearing $25 billion in the US, the results in Chad show that even a modest financial investment in a developing country can have a tremendous impact.
RUSSIAN OIL TANKERS GET INDIA CLASSIFICATION VIA DUBAI COMPANY
On 24 June, Insurance Marine News reported that the Indian Register of Shipping (IRClass) is providing safety certification for dozens of ships managed by a Dubai-based subsidiary Russian shipping group Sovcomflot. This comes after western classification societies withdrew their guarantees after sanctions against Russia. The Sovcomflot tanker fleet was finding it difficult to remain in operation in the immediate aftermath of the imposition of sanctions, with liability insurance and classification being withdrawn, and financial associations limited by sanctions against Russian banks.
EUROPEAN EXPORTERS WARY OF UK CUSTOMS CHANGE, WITH TRADERS STILL UNPREPARED
On 27 June, Loadstar reported that UK ports face a “shit show” from 1 October, if even a fraction of the traders not yet using the country’s new customs declaration system fail to migrate before the September deadline. From then, UK imports will run through updated online system the Customs Declaration Service (CDS), as HMRC terminates support for the existing CHIEF platform – but many users have yet to make the switch.
ECOFIN REPORT TO THE EUROPEAN COUNCIL ON TAX ISSUES
On 20 June, KPMG published an article about this report which covered a slew of tax-related issues, including the EU Code of Conduct Group on Business Taxation, harmful tax practices, preferential tax regimes, and the EU List of Non-Cooperative Jurisdictions. The EU Code of Conduct Group on Business Taxation had a report accepted by the Council which included details of an update on the screening and listing exercise with regards to non-cooperative jurisdictions. It also agreed to continue working on defensive measures against non-cooperative jurisdictions for tax purposes.
TOXIC GAS LEAK IN SEAPORT IN JORDAN LEAVES 13 DEAD AND HUNDREDS INJURED
On 27 June, the Guardian reported that 13 people have died and 251 have been injured in a toxic gas leak from a storage tank – a tank filled with 25 tonnes of chlorine – at Aqaba port. A vessel had been waiting to load almost 20 containers of liquified gas “containing a very high percentage of chlorine”.
On 27 June, Europol published this Threat Assessment, saying that crimes against the environment threaten the survival of all living species and have an enormous financial impact, which is set to increase further. Opportunities for high profits, legal discrepancies among countries, low risk of detection and marginal penalties make environmental crime a very attractive business for criminal entrepreneurs. It goes into depth on the main typologies of environmental crimes investigated in the EU, namely waste and pollution crimes, wildlife trafficking, illegal, unreported and unregulated fishing, forestry crimes and the illegal pet trade. A special focus is paid to climate change, which functions as a push and pull factor for organised crime. The increasing scarcity of natural resources will likely trigger organised crime interests in terms of profit over their future allocation.
On 27 June, the Council of Europe body published the mutual evaluation report on Bulgaria following the onsite visit in September. The report highlights various shortcomings, but concludes that although there are some technical and procedural constrains, Bulgaria provides generally timely and constructive assistance across the range of requests for international co-operation, including mutual legal assistance. On effectiveness, it is said that Bulgaria has achieved a low level of effectiveness in areas related to the use of financial intelligence, investigations and prosecutions of money laundering, confiscation of proceeds of crime or property of equivalent value, targeted financial sanctions related to proliferation financing and the prevention of misuse of legal persons and arrangements.
Panama Covid-19 update – the Chamber of Commerce, Industries and Agriculture of Panama (Aciap) has called for an end to the state of ermergency declared in March 2020; noting that although it is true that the special procedure for State purchases has already been suspended, measures such as the Panama Solidarity Plan, with its different components and the mandatory use of the mask in closed spaces, are still in force. However, last week the President announced that the digital voucher (Panama Solidarity Program) benefits scheme has been extend to the end of the year.
Meanwhile, back to what now passes for “normal”, with test positive results up again to 18.9%, 1 new fatality and 1,125 new cases. The total number of active cases has been falling, but is still at 15,141, with 39 in ICU and 207 in other wards.
26 JUNE 2022
AN ASSESSMENT OF THE SCALE OF CHANGE TO COME FROM BREXIT
On 23 June, the Resolution Foundation published this report which finds that the expected large relative decline in UK-EU exports haven’t occurred and instead Brexit appears to be weighing on both UK openness and competitiveness across both EU and non-EU markets. It says that it will take many years for the economy to fully adjust and this report provides the most detailed assessment to date of the long-run impacts of the final deal agreed with the EU. It finds that the long-run impacts will mean significant change for some sectors of the economy – for example, fishing – but the aggregate effect will be to reduce household incomes as a result of a weaker pound, and lower investment and trade. This adjustment will be substantial, but one should not expect it to fundamentally alter the nature of the economy, including the UK’s overall services focus and export specialisation. Understanding the scale and nature of this change, and the extent of progress so far, is crucial for policymakers looking to reset the country’s economic strategy. That is the focus of this report, part of the Economy 2030 Inquiry.
VALUED AT $500,000, PANAMA’S NATIONAL BIRD – THE HARPY EAGLE – A TRAFFICKING TARGET
On 25 June, Mi Diario reported that the giant bird has become one of the most coveted species for “collectors”. It can reach 1.2 metres in height, with a wingspan of 2.24 metres, and Panama has the largest population in Central America.
MEGAYACHTS RUN LOW ON SAFE HARBOURS AS RUSSIA SANCTIONS BITE
On 26 June, Moneyweb reported that Russian tycoons are running out of places to park their floating palaces. The US and Europe are going after their superyachts, villas and other assets because of their ties to Putin. Already, more than a dozen boats worth more than $2.25 billion have been seized by the US, EU nations and willing allies — such as Fiji.
On 26 June, RTHK reported that Customs authorities in Hong Kong and Macau have seized more than HK$110 million worth of smuggled goods and cash – including red wine, frozen meat, cigars and electronic products, after officers intercepted 2 river trade vessels in waters between the special administrative regions. The HK$23 million seized is said to be the first time Customs has found criminals smuggling a large amount of cash from Hong Kong to Macau using river trade vessels. It is said that as land transport has been disrupted since the pandemic, criminals have used sea routes to smuggle goods
TORY DONOR AND VLADIMIR PUTIN ASSOCIATE FACING FORGERY CHARGES IN LUXEMBOURG
On 26 June, the Guardian reported that a contributor to the Conservative Party in the UK – Gérard Lopez, 50, who chaired the Lotus Formula 1 team in the UK – and who has been described as a friend of Vladimir Putin, is facing charges of forgery in Luxembourg. It is said that that investigators have examined transfers of hundreds of thousands of pounds between the former operations of Lotus in the UK, a Luxembourg football club and a Hong Kong-based investment company.
IS STANDARDISATION THE SECRET WEAPON AGAINST TRADE FINANCE FRAUD?
On 23 June, an article from Fintech Futures starts by saying that trade finance fraud is not a new financial crime, but it has been resurfacing in headlines increasingly in recent years. It goes on to says that a number of high-profile banks moving away from the funding trade because of growth in fraud that has been plaguing this line of business lending, which historically offered banks a significant return on their investment. It says that one needs to understand what has changed and examine the different aspects of trade fraud. It details some of the many challenges that arise for financial institutions in developing a strategy to detect and prevent trade financing fraud.
HOW UNITED STATES CUSTOMS SCIENTISTS AT THE BORDER ARE STEMMING THE FLOW OF OPIOIDS AND OTHER DANGEROUS DRUGS
In the most recent edition of WCO News, an article from US Customs & Border Protection explains how it improved the control on fentanyl and other drugs by speeding up analysis services by locating lab scientists on-site at US ports.
AUTOMATIC DETECTION TOOLS HELP WITH IDENTIFYING THE ILLICIT TRADE IN IVORY
An article in the latest edition of WCO News provided an update on automatic detection tools, commonly known by the acronym ATR, which means automatic threat recognition, or assisted target recognition; and the results achieved in terms of developing ATR specifically to identify the illicit trade in ivory. It says that automatic detection tools leveraging AI and machine learning (an application of AI that allows machines to learn from data without being specifically programmed to do so), have made great strides forward with more and more algorithms being developed, tested and deployed. Besides wildlife items, machine learning using X-ray systems has already proven efficient for detecting weapons, bottled liquids and cigarettes within seconds. New algorithms can be developed to address specific enforcement concerns and be added to the system software at any time.
HIGH-PERFORMANCE ANALYTICAL TOOLS TO REVOLUTIONIZE CUSTOMS CONTROL
An article in the latest edition of WCO News describes a model used to evaluate the services of an analytical tool system supplier, stressing how important data on companies is for the purpose of thorough profiling.
FORMER CHAIRMAN OF SWEDISH FOOTBALL CLUB OSTERSUND JAILED FOR BRIBERY
On 23 June, AP reported that Daniel Kindberg, the former chairman of Ostersund, has been sentenced to 2½ years in prison for bribery. He was also banned from doing business for 3 years, and has to pay around $540,000. The offences occurred in 2014-18, when he was CEO of the Ostersund municipality’s housing corporation.
DEADLY DISINFORMATION: HOW ONLINE CONSPIRACIES ABOUT SYRIA CAUSE REAL-WORLD HARM
The Institute for Strategic Dialogue (ISD) has produced this report saying that the Syrian regime has used violence and disinformation as tools to silence those who dare to oppose it, especially those brave enough to expose the war crimes being committed. Civilians, doctors, humanitarians and human rights defenders have all faced real-life consequences of online harms. Their experiences are testament to the deadly cost of disinformation. It says that new data gathered and analysed by the ISD for this report shows that disinformation about the conflict in Syria has created a dangerous ecosystem that permeates beyond the online bubble of social media and impacts both lives and government policies in the real world. ISD found a total of 47,000 disinformation tweets by the 28 identified disinformation actors, 19,000 of which were original posts. Amongt the most common false narratives were the denial or distortion of facts about the Syrian regime’s use of chemical weapons, and attacks on the findings of reports by the Organization for the Prohibition of Chemical Weapons (OPCW) on Syria.
On 22 June, an article from CSIS looks at the effect sanctions may have had on Russia and concludes that using sanctions to coerce Russia to end the war now seems unlikely to succeed unless Russia’s battlefield prospects seem bleak to Moscow. The existing sanctions, especially export controls, may contribute to favourable military outcome for Ukraine by weakening Russia’s ability to resupply its forces. But ultimately, this is a war, and the road to a settlement probably goes through the battlefield.
CANADA: NEW FEDERAL BILL WOULD COMPEL KEY INDUSTRIES TO BOLSTER CYBER SECURITY — OR PAY A PRICE
On 14 June, CBC reported that the federal government has tabled a bill, the Act Respecting Cyber Security, that would allow it to compel companies in the finance, telecommunications, energy and transportation sectors to either shore up their cyber systems against attacks or face expensive penalties. It would give the federal government more control over how private companies in critical industries respond to potential attacks.
On 21 June, the Wolfsberg Group of leading banks announced the release of a paper which expands on a key element for developing an effective AML/CFT programme, which is to engage with the public sector, including law enforcement. The paper specifically focuses on successful engagement through Public-Private Partnerships and is intended to be an introduction to the subject for those who may be less familiar with the principles underpinning these arrangements and the pivotal role that national authorities must play.
On 26 June, a news release from the Prime Minister’s Office advised that new exports of Russian gold will no longer be allowed to be enter the UK, Canada, US and Japan thanks to tough new measures to be announced at the G7 Summit. Gold is a major Russian export, worth £12.6 billion to the Russian economy in 2021. The measures announced build on the action taken by the London Bullion Market on 7 March to suspend 6 Russian refineries. The import ban, which will come into force shortly, will apply to newly mined or refined gold. It will not impact Russian-origin gold previously exported from Russia, and there are no plans to extend restrictions to Russian gold purchased legitimately before the import ban was put in place.
Panama Covid-19 update – positivity in tests fell to “only” 14% today – but there were still 1,584 new cases reported and 4 new fatalities. There are also 15,828 active cases, with 38 in ICU and 197 in other wards; but only 15 in the hospital-hotel quarantine.
25 JUNE 2022
SMALL ARMS AND LIGHT WEAPONS PROLIFERATION AND VIOLENCE: ESTIMATING ITS SCALE AND FORMS
On 22 June, Relief Web published a briefing paper which summarises the available data which is considered reliable from credible sources. Most of this data comprises estimates which suffer from gaps in collection by governments. Reliability is somewhat improved after a few years of cross-checking by UN bodies. It outlines the proliferation of small arms and light weapons (SALW) and describes the scale of SALW violence by providing a detailed analysis of significant statistics. It concludes with some recommendations to governments that would improve the collection and reporting of relevant data that will help curb the proliferation and violent use of SALW by different actors. The Small Arms Survey estimates that 1 billion firearms are in global circulation as of 2017: 857 million (85%) are in civilian hands (includes gangs, non-state armed groups and private security companies); 133 million (13%) are in military arsenals; and 23 million (2%) are owned by law enforcement agencies. A total of 38 countries exported at least $10 million worth of small arms and light weapons, including their parts, accessories, and ammunition.
US BUREAU OF INDUSTRY AND SECURITY (BIS): A NEW APPROACH TO IDENTIFYING CERTAIN “CRITICAL TECHNOLOGIES”
An article from Morrison and Foerster LLP on 24 June said that in May the BIS announced a shift that discards the “emerging” and “foundational” technologies distinction altogether and introduces a new categorisation of “Section 1758 technologies”. It says that BIS will abandon its attempts to determine which technologies subject to new export controls under the Export Control Reform Act (ECRA) are “emerging” or “foundational” and instead identify all such technologies together as “Section 1758 technologies”. The article argues that the change could lead to an increase in designations of such technologies and, in turn, more transactions could trigger mandatory filings with the Committee on Foreign Investment in the United States (CFIUS).
RUSSIA SANCTIONS: NEW GUIDANCE ON THE UK AVIATION AND SPACE GOODS INSURANCE BAN
An article from Steptoe & Johnson on 24 June included mention of revised guidance in relation to the prohibition on providing insurance and reinsurance services in relation to certain specified aviation and space goods and technology. The changes clarify that the prohibition would not apply when the insurance in question is for the benefit of the non-Russian owner of the goods/technology, rather than the user or operator of such goods/technology; or the items remain in Russia as the result of the termination of a lease and against the lessor’s will, or are being flown out of Russia in the process of being returned to their owner.
PAKISTAN: CUSTOMS SEIZES A LARGE QUANTITY OF SMUGGLED BLANKETS
On 25 June, the Pakistan Observer reported that the Pakistan Customs Enforcement Collectorate’s Anti-Smuggling Organisation in Karachi had seized a huge quantity of smuggled blankets in a raid conducted in the Orangi Town area. It seized 217 bundles of smuggled blankets. It did not indicate the origin of the blankets.
PAKISTAN JAILS 2008 MUMBAI ATTACK HANDLER SAJID MIR AHEAD OF FATF ON-SITE VISIT
On 25 June, various media in India reported that Sajid Majeed Mir, 44, one of India’s most wanted terrorists and the main man behind the 2008 Mumbai attacks by Lashkar-e-Taiba, a militant Islamist organisation operating against India. Despite having previously been declared dead by Pakistan, he has now been jailed for over 15 years in a terror-financing case by an anti-terrorism court in the country, which is struggling to exit the grey list of the FATF. Mir is also on the FBI’s list of most-wanted terrorists, and the US has placed a bounty of $5 million on him for his role in the Mumbai terror attacks that left 166 people dead, including 6 Americans.
THE REAL ESTATE SECTOR IS OF TOP CONCERN TO THE COMMISSION OF INQUIRY INTO MONEY LAUNDERING IN BRITISH COLUMBIA
On 24 June, the Richmond News in Canada published an article about the findings of the Cullen Commission, saying that nearly half of the recommendations are directly or indirectly related to real estate regulations in BC despite inconclusive findings. Of the 101 recommendations made in the final report, 40 are directly related to real estate, and several others are ancillary, such as proposals to strengthen AML policies within financial institutions and the asset forfeiture legal regime, as well as greater controls on notaries and lawyers, who process transactions.
GREECE FILES $214 MILLION LAWSUIT AGAINST NOVARTIS OVER BRIBERY
On 24 June, OCCRP reported that, after years of investigations, obstructions and politicking, Greece has taken legal action against Swiss-based pharmaceutical giant Novartis over allegations it bribed doctors to inflate drug prices. The scandal first erupted in 2016 and involved former prime ministers and ministers suspected of accepting tens of millions of euros from the Swiss pharmaceutical giant in order to secure high prices for its products.
REDISTRIBUTING FROZEN ASSETS – A LEGISLATIVE PERSPECTIVE
In the 23 June edition of Trust & Verify, the newsletter from VERTIC starts be restating the basic position – asset-freezing measures are part of economic or financial sanctions regimes, and frozen assets remain the property of the sanctioned person or entity. To transfer the ownership of property would constitute expropriation and would normally be unlawful under international law, unless there has been a legal determination that they are the proceeds of criminal activities. It says that, no matter the route, the legal path to the redistribution of assets in a sanctions framework is not a straightforward one. Under international law, the assets of convicted war criminals can be used to compensate victims – although this measure has never been applied to Russia.
ELIMINATING THE USE OF HIGHLY ENRICHED URANIUM (HEU) FOR CIVIL PURPOSES: LOSING MOMENTUM?
Another article in the 23 June edition of Trust & Verify, the newsletter from VERTIC, says that, since at least 2006, there has been a concerted effort to eliminate the use of highly enriched uranium (HEU) for civil purposes and to promote non-HEU alternatives. ‘Civilian’ HEU can be defined as HEU that has been fabricated into fuels for power and research reactors or for marine propulsion. In other words, for non-weapon purposes. It notes that, as of late 2015, there were over 150 nuclear-powered submarines and ships that continue to use HEU as fuel; about 100 research reactors fuelled with HEU (although others put the figure at 72 research reactors); and, several countries still use HEU neutron ‘targets’ for medical radioisotope production. More recently, 22 countries were said to have at least 1 kg of HEU in their civilian stocks.
NEW TYPE OF SHIP COULD BE NEEDED TO CARRY ELECTRIC VEHICLES
On 24 June, Lloyds List reported that Lithium-ion batteries can enter into an uncontrollable self-heating state in event of a fire, warns protection and indemnity insurance specialist. He says that older ships were designed to carry internal combustion engine vehicles, whether that is a pure car carrier, a car and truck carrier or a ro-ro. Design has not quite caught up with the changeover to electric vehicles.
OUTSOURCING MANUFACTURING OF SENSITIVE ITEMS TO FOREIGN FIRMS PRESENTS US EXPORT CONTROL CHALLENGES
On 22 June, an article from Williams Mullen says that while outsourcing the design and manufacturing of products, components and software to foreign contractors has become a significant part of manufacturing in the US, if the items involved are subject to export restrictions, outsourcing the design and/or manufacturing of these items to foreign firms can raise significant export control requirements – and potential legal liability – for the US companies involved. It notes that this includes 3D printing of parts, quoting an official who stated that outsourcing 3-D printing of space and defence prototypes to China harms US national security.
On 23 June, the Center for International maritime Security released a podcast in which Dr Gohar Petrossian, an Associate Professor of Criminal Justice and the Director of the International Crime and Justice Master’s Program at John Jay College of Criminal Justice, discusses global fish transshipment networks, how to identify central actors, and recommendations for enforcement organisations.
HOW BEEF GIANT JBS’S LINKS TO AMAZON DEFORESTATION AND HUMAN RIGHTS ABUSES ARE AIDED BY UK, US AND EU FINANCIERS, IMPORTERS AND SUPERMARKETS
On 23 June, Global Witness published an article saying that 70% of the felled Amazon is now populated by cattle, with Brazilian meat company JBS – reportedly the world’s largest – the top buyer. An audit of its supply chain by Brazilian prosecutors in one Amazon state had caught it buying over one-third of its cattle from ranches responsible for illegal deforestation.
HOW EUROPEAN RUBBER IMPORTS AND FINANCING HAVE DRIVEN THE DESTRUCTION OF CLIMATE-CRITICAL FORESTS IN WEST AND CENTRAL AFRICA
On 16 June, Global Witness reported that rubber plantations across west and central Africa linked to almost 520 km2 of deforestation since 2000. The EU imports over 30% of all rubber shipped by Africa’s top producers, yet rubber is excluded from the bloc’s recently proposed anti-deforestation legislation; although rubber, not palm oil, appears to be the biggest export-driven threat to west and central Africa’s climate-critical tropical forests. Almost all plantations linked to deforestation are currently owned by just 3 multinational companies, which together have made deals worth billions of euros with European banks such as Rabobank, BNP Paribas, Deutsche Bank and Barclays.
TUNISIA: IMPRISONED EX-PRIME MINISTER JEBALI HOSPITALISED FOLLOWING HUNGER STRIKE
On 25 June, Middle East Eye reported that Jebali, arrested for alleged money laundering. Jebali is a former senior official in the Islamist-inspired Ennahdha party that is a key rival of President Kais Saied.
WHISTLEBLOWING MOVING UP UK GOVERNMENT AGENDA DESPITE FCA SHORTCOMINGS
On 21 June, an article in FT Adviser says that the FCA response to whistleblowing has been criticised, such as when warnings given about London Capital and Finance and Blackmore Bond ahead of their collapses were not heeded. Last year, the FCA took steps to encourage whistleblowers to call out financial institutions for various acts of wrongdoing via the launch of its “In confidence, with confidence” campaign. The article considers the level of success that the FCA has achieved so far in encouraging and protecting whistleblowers, the stumbling blocks that appear to be inhibiting substantive progress, and how whistleblowers may best navigate the risks of the current landscape.
Panama Covid-19 update – for the second day in a row our district of the city has the highest number of new cases…today there being 1,826 new cases, with 5 new fatalities. There are 16,095 active cases, of which 37 are in ICU and183 in other wards.
24 JUNE 2022
GIBRALTAR: SEIZED RUSSIAN SUPERYACHT TO BE AUCTIONED
On 23 June, Superyacht News from eSysman reported that the superyacht Axioma, arrested in Gibraltar over the default on a €20.5 million loan from JP Morgan is to be auctioned, following a court order. The yacht, valued at over $70 million, is owned (via the usual chain of front companies) by Dimitry Pumpyanskiy. There appear to be 2 grounds for the default on the loan agreement – firstly that Pumpyanskiy has been added to sanctions lists, and secondly that the yacht apparently changed ownership (on paper at least) just prior to the sanctions being imposed.
A news release from the Isle of Man on 24 June advised of the implementation in the Island of the Russia Sanctions (Application) (No.8) Regulations 2022, which apply the provisions of the various recent UK financial and trade sanctions.
RARE DIRECT SHIPMENT BETWEEN THE 2 KOREAS, A LIKELY VIOLATION OF UN AND SOUTH KOREAN SANCTIONS
On 17 June, NK Pro reported that a freight ship visited the North Korean port of Nampho, a month after picking up cargo in Busan, ship-tracking data shows. The ship’s movements point to what was likely a rare and illegal shipment directly from South to North Korea. She was supposed to sail from Busan to the Chinese port of Dalian, according to Marine Traffic data.
DUBAI BECOMES THE NEW SWITZERLAND FOR TRADERS OF RUSSIAN COMMODITIES
On 21 June, Bloomberg reported that traders of Russian commodities are rushing to set up businesses in Dubai as Switzerland makes it increasingly challenging for them to deal with Moscow. Switzerland has for decades been home to middlemen helping to match Russian producers with buyers all over the world.
SWEDISH COURT UPHOLDS BAN ON HUAWEI SALE OF 5G EQUIPMENT
On 22 June, Reuters reported that a Swedish appeals court has upheld a ruling by a lower court that banned Huawei from selling 5G equipment in the country, in the latest setback to the Chinese telecoms company’s hopes of staging a comeback.
HONG KONG COURT HELPS VICTIM RECOVER CRYPTO-ASSETS AGAINST PILFERING AGENT
On 23 June, an article from Herbert Smith Freehills LLP reported that the Hong Kong High Court has recently granted proprietary remedies over bitcoins that were misappropriated by a fraudulent agent. The victim was granted relief to recover the misappropriated bitcoins, sale proceeds and the fruits thereof. This decision suggests that bitcoins, and by extension other cryptocurrencies, may be protected as property under Hong Kong law.
On 22 June, Hopgood Ganim published an article looking at TBML from an Australian perspective, saying that those routing money or other assets via or to an ultimate destination in Australia will confront tough AML/CFT legislation and some of the most effective enforcement agencies in the world.
BIOLOGICAL WEAPONS DEVELOPMENT IN CIVILIAN LABORATORIES
On 8 June, 20 Minuten News in Switzerland published an article in which the head of the think tank at the Center for Security Studies at ETH Zurich, warns of weaknesses in the Biological Weapons Convention, saying that, “There is a lack of efficient verification tools to prevent biological research from being misused for military purposes”. In Switzerland, inspections are carried out regularly, but there is a need for action at the international level.
SCRAPPED CARS A GOLD MINE FOR INDIA-JAPAN RECYCLING VENTURE
On 23 June, an article in Nikkei Asia reported that a joint venture between an Indian and a Japanese company has uncovered a treasure trove in India in the form of auto parts salvaged from some of the roughly 10 million cars scrapped in the country as the government puts tighter emissions standards in place. It is recycling parts, such as headlights, taillights and hoods, for resale.
PARAGUAY LAUNCHES NATIONAL RISK ASSESSMENT OF MONEY LAUNDERING AND ILLICIT FINANCING
On 23 June, the IP news agency reported that the Secretariat for the Prevention of Money Laundering (Seprelad) and financial organisations in Paraguay have presented a National Risk Assessment regarding money laundering and financing of terrorism and the proliferation of WMD. The NRA will involve public and private institutions, plus consultants from the Inter-American Development Bank (IDB) to identify in working groups the strengths and risks at the country level in the fight against the financing of terrorism and money laundering. It is expected to know the results of the evaluation in July.
TUNISIAN FORMER PRIME MINISTER JEBALI ARRESTED ON SUSPICION OF MONEY LAUNDERING
On 24 June, Al Jazeera reported that Tunisian police have arrested former Prime Minister Hamadi Jebali, a former senior member of the Ennahdha party, on suspicion of money laundering. It is said that Jebali’s arrest raises opposition concerns over the human rights situation in Tunisia since President Kais Saied dissolved parliament in July 2021, in a move his opponents called a coup.
WHY NOT A SINGLE BANKER WAS JAILED OVER HSBC’S BILLION-DOLLAR MONEY LAUNDERING SCANDAL
On 24 June, The i in the UK published a “long read”, saying that no senior banker went to jail; and no HSBC banker was charged, let alone went to jail, when the bank admitted in 2012 to enabling the laundering of billions of dollars of drugs money for El Chapo and his Mexican Sinaloa cartel.
FROM CASINOS TO HOUSES: WHY AUSTRALIA REMAINS A MONEY LAUNDERING HAVEN
An article in The Age on 24 June asks that, as the inquiry into the Star casino draws to a close, where did all the laundered money go? It asks if the millions, possibly billions, of cash ‘washed’ through Star casino end up being spent on property, helping push up already record houses prices, or was it invested into cash intensive businesses, such as bars and nightclubs, or into goods such as luxury cars or jewellery? It contends that the inquiry has confirmed is that Australia has a poor reputation internationally for fighting the estimated “tens of billions” in criminal money laundered nationally every year.
UK: WHAT IS HAPPENING WITH THE MODERN SLAVERY ACT 2015?
An article from Bird & Bird on 24 June posed this question, saying that the 2022 Queen’s Speech announced a Modern Slavery Bill that promises to strengthen the protection and support for victims of human trafficking and modern slavery and increase the accountability of companies and other organisations to drive out modern slavery from their supply chains. It is argued that there is nothing to show to date, except a reminder in the recent Queen’s Speech that there may be jam, not tomorrow, but perhaps sometime in the next parliamentary term.
EU: RUSSIA SANCTIONS – FURTHER RESTRICTIVE MEASURES TO SUSPEND THE BROADCASTING ACTIVITIES IN THE EU, OR DIRECTED AT THE EU, OF CERTAIN MEDIA OUTLETS
EU Regulation 2022/994/EU of 24 June provides that the restrictive measures should apply as of 25 June in respect of all entities referred to in Annex VI to EU Regulation (EU) 2022/879 – Rossiya RTR / RTR Planeta; Rossiya 24 / Russia 24; and TV Centre International.
UK: DIRECTOR OF PUBLIC PROSECUTIONS HIGHLIGHTS HOW MORE MONEY COULD BE RETURNED TO VICTIMS OF CRIME
On 23 June, a news release from the CPS said that the DPP has supported the review into legislation to ensure more money can be returned to victims of crime, when giving evidence at the House of Lords Fraud Act 2006 and Digital Fraud Select Committee. He highlighted the limitations of the current compensation legislation, and recommended the government consider court powers to reimburse victims with any additional funds that are recovered.
AUSTRALIA: NSW CABINET BACKS NEW MONEY LAUNDERING LAWS TO TARGET ORGANISED CRIME
On 23 June, the Sydney Morning Herald reported that the New South Wales government will introduce laws to confiscate unexplained wealth from criminal gangs and ban the use of encrypted devices as part of long-waited reforms to combat money laundering and organised crime. The new powers allow for the confiscation of unlawfully acquired assets of major convicted drug traffickers and expand powers to stop and search for unexplained wealth. Legislation will be introduced when parliament returns for the spring session.
100 YEARS OF THE ‘NDRANGHETA CALABRIAN MAFIA IN AUSTRALIA
On 22 June, Policing Insight published an article saying that recent operations by the Australian Federal Police against organised crime have brought the activities of the ‘ndrangheta under the spotlight; but it is argued that the organisation has been well-established across Australia for many decades, and any attempt to take the ‘ndrangheta seriously will require sustained political will and resources, rather than a sporadic focus on drug importation.
INDIA IS PROVIDING SAFETY CERTIFICATION FOR DOZENS OF SHIPS MANAGED BY A DUBAI SUBSIDIARY OF TOP RUSSIAN SHIPPING GROUP SOVCOMFLOT
On 24 June, Hellenic Shipping News reported that certification by the Indian Register of Shipping (IRClass), one of the world’s top classification companies, provides a final link in the paperwork chain – after insurance coverage – needed to keep state-owned Sovcomflot’s tanker fleet afloat and delivering Russian crude oil to overseas markets. It is reported to have certified more than 80 ships managed by SCF Management Services (Dubai) Ltd, a Dubai-based entity listed as a subsidiary of Sovcomflot.
On 24 June, The Negotiator published an article saying that UK estate agents are said to have spent £6 million on AML fees last year, but says that this seems like a huge sum of money, and the true cost is many times this amount.
BREXIT WILL EXACERBATE LONG-TERM CHALLENGES FACING THE UK ECONOMY
A post from the LSE Bulletin on 24 June warns that the impact of Brexit won’t be a one-off event. Structural changes will take place over the long term, as capital and labour adjust to the new trading arrangements. Household incomes will decrease as a result of a weaker pound and there will be lower investment and trade.
THE ECONOMICS OF BREXIT: WHAT HAVE WE LEARNED? A NEW eBOOK
On 24 June, VOX from the Centre for European Policy Research says that, 6 years on from the EU referendum, and over a year since the implementation of the UK–EU Trade and Cooperation Agreement, a new eBook brings together leading academic researchers on trade, immigration, and the political economy of Brexit to present new research and evidence on different aspects of this question.
On 24 June, the World Politics Review reported on a dispute between Algeria and Spain. Algeria has suspended its Friendship and Neighbourliness Treaty with Spain, in response to Madrid’s recent alignment with Morocco on the Western Sahara conflict. The suspension of the treaty so far excludes contracts for gas, of which Algeria is Spain’s biggest supplier.
ALLEGED RETALIATION AGAINST THOSE REPORTING CORRUPTION, MISMANAGEMENT AND SEXUAL ABUSE INTERNALLY WITHIN UN AGENCIES
On 24 June, World Whistleblowers Day, Transparency International reported on a a powerful new documentary from the BBC about alleged retaliation spanning many years against those reporting corruption, mismanagement and sexual abuse internally within UN agencies.
EU COMMISSION TO LAUNCH A STUDY OF THE ECONOMIC IMPACT OF EU SANCTIONS
On 24 June, EU Sanctions blog reported that the EU Commission had issued a tender inviting bids by 1 July for a study to develop a methodology for assessing the economic impact of EU sanctions and apply it to case studies of autonomous EU sanctions regimes.
REGULATION OF FORCED LABOR IN SUPPLY CHAINS: WHY IT MATTERS AND HOW COMPANIES CAN COMPLY
On 24 June, an Alert from Wilmer Hale provides a detailed overview of applicable or pending legislation related to forced labour in supply chains–including in the US, UK, Germany, France, the Netherlands, Switzerland, the EU, and Australia – followed by practical suggestions to move companies to timely compliance with these requirements.
US: FORMER ARMED FORCES OF LIBERIA COMMANDING GENERAL CHARGED WITH IMMIGRATION FRAUD AND PERJURY
On 24 June, a news release from US Immigration & Customs Enforcement advised that Moses Slanger Wright, 69, of Philadelphia, with fraudulently attempting to obtain citizenship, fraud in immigration documents, false statements in relation to naturalisation, and perjury. The indictment alleges that the defendant, when applying for US citizenship in 2013, was not truthful about his activities during Liberia’s First Civil War while he was a member, and ultimately the commanding general of, the Armed Forces of Liberia, which was involved in the persecution, murder, and assault of civilian non-combatant tribesmen, as well as the false arrest and false imprisonment of civilian non-combatants.
NIGERIA BOOSTS MARITIME SECURITY WITH ARMOURED VEHICLES, UAS AND PATROL BOATS
On 23 June, Homeland Security Today reported that the Nigerian Maritime Administration and Safety Agency (NIMASA) has taken delivery of additional mobile assets for enhanced maritime security under its “Deep Blue” project. 2 unmanned aircraft systems (UAS), 9 interceptor patrol boats and 10 armoured vehicles have been added to the existing assets earlier procured by the Nigerian Federal Government. NIMASA’s assets also include the Command, Control, Communication, Computer, and Intelligence Center (C4i) for intelligence gathering and data collection, 600 specially-trained troops for interdiction, special mission vessels, fast interceptor boats, and surveillance and rescue aircraft.
DEFENDANT IN RUSSIAN OLIGARCH ‘RAIDER ATTACK’ CASE ALLOWED TO CHALLENGE IRISH JURISDICITION
On 24 June, the Irish Examiner reported that 4 companies have sued EU-sanctioned Russian billionaire, Dmitry Mazepin, alleging conspiracy to defraud them of their shares in a Russian ammonia-producing company. One of the defendants in the alleged €2 billion conspiracy-to-defraud action can challenge the jurisdiction of the Irish courts to hear the case.
US: SERIAL FRAUDSTER PREVIOUSLY EXTRADITED FROM MEXICO PLEADS GUILTY TO MULTIPLE INVESTMENT FRAUD SCHEMES
A news release from US DoJ on 24 June advised that Daniel Thomas Broyles Sr (aka Dan Thomas, and Daniel Cruz Torrez), 64, of Malibu, participated in a high-yield investment fraud scheme involving a sham company named Niyato Industries Inc. He allegedly falsely portrayed Niyato as a business engaged in electric vehicle manufacturing and converting vehicles to run on compressed natural gas. In reality, Broyles knew, or intentionally avoided learning, that Niyato was merely a sham company that lacked any operational facilities or proprietary technology, and virtually all investor funds were being disbursed among the co-conspirators and not used to promote Niyato’s business.
US: AN AML BILL THAT COULD HAVE PROFOUND EFFECTS ON THE ART MARKET JUST TOOK A BIG STEP FORWARD
On 24 June, Artnet reported that lawmakers in Washington have moved one step closer to passing a general AML law that could have profound effects on the art market. The Enablers Act would amend the Bank Secrecy Act to require art and antique dealers, as well as lawyers, trust companies, public relations firms, and others, to investigate potential clients and report financial wrongdoing.
This report from Control Risks and the Americas Society and the Council of the Americas published the fourth edition of the Capacity to Combat Corruption (CCC) Index. First launched in 2019, the Index assesses Latin American countries’ ability to detect, punish and prevent corruption. It evaluates and ranks countries based on how effectively they can combat corruption. Countries with a higher score are deemed more likely to see corrupt actors prosecuted and punished. Continued impunity is more likely in countries at the lower end of the scale. The Index looks at 14 key variables, including the independence of judicial institutions, the strength of investigative journalism, and the level of resources available for combating white collar crime. The country with the highest score in the 2022 CCC Index is Uruguay, Panama is at the mid-point (scoring 4.96 out of 10) and Venezuela has the lowest score (1.93).
On 21 June, the US Defense Advanced Research Projects Agency said that distributed ledger technology (DLT), such as blockchains, has become more prevalent across a variety of contexts over the past decade. The premise is that blockchains operate securely without any centralised control and that they are immutable or unsusceptible to change. DARPA set out to understand those security assumptions and determine to what degree blockchains are actually decentralised. It says that its study resulted in a report that provides holistic analysis that’s available to anyone considering blockchains for important matters so they can better understand the potential vulnerabilities within these systems.
A news release from Europol on 24 June said that a joint operation by European law enforcement entities has dealt yet another major blow to organised crime groups involved in global glass eel trafficking – Operation Lake VI ran from November 2021 to June 2022. 27,701 inspections were carried out all over Europe, which led to the arrest of 49 individuals and the seizure of 1,255 kg of glass eels worth about €1.9 million in total. The trafficking of glass eels is one of the most substantial and lucrative illegal trades of protected species worldwide, with illegal profits estimated to be up to €3 billion in peak years.
On 24 June, the Law Society Gazette reported that the SRA chief executive has said that the regulator had identified a cohort of cases where it had received reports or intelligence that a firm may be involved in a SLAPP. Critics accuse law firms of aiding kleptocrats – including oligarchs and allies of Vladimir Putin – in intimidating journalists and shutting down reports of corruption. Even when such cases are meritless they can be prolonged so that costs escalate and defendants are forced to back down.
On 24 June, the International Business Times published an article saying that coin mixers or crypto mixers or cryptocurrency tumblers is a service that allows users to ‘mix’ their cryptocurrencies with cryptocurrencies from various addresses, making them untraceable. These mixers have often been criticised for their use in multiple money laundering cases.
On 23 June, Kharon published Part 1 of a series investigating risks to importers under the UFLPA. It notes that China produces more beer than any other country, while its western region of Xinjiang is one of the leading hop-producing regions in the world, accounting for more than 14% of global production. Xinjiang-origin hops are inputs for both homegrown Chinese breweries and western conglomerates with brewing operations in China.
Panama Covid-19 update – in the news today, Panama received UN recognition for the response, attention and information platforms related to COVID, based on a QR Code. This QR code was used by shops and establishments to control capacity. The recognition was in the form of an award for Excellence in Public Service.
Meanwhile, today’s figures show no sign of an easing of the current wave; although hospitalisations and deaths remain (thankfully) low. However, 3 new fatalities reported today, alongside 2,130 new cases. 16,258 actives cases, with 38 in ICU and 193 in other wards.
23 JUNE 2022
SPECIFIC FRAUD RISK RATHER THAN GENERAL RED FLAGS ARE NEEDED TO INVOKE THE QUINCECARE DUTY
On 21 June, an article from MacFarlanes is concerned with a recent High Court case in England that is said to demonstrate that the scope of the Quincecare duty is narrow, and that there is a distinction between being on notice of a specific fraud, and general financial crime “red flag” factors which only give rise to a general suspicion of fraud. The latter will not be sufficient to invoke the Quincecare duty and underpin a claim. It is said that the judgment contains useful discussion of the standards expected of financial institutions with respect to their own customers.
HOW ILLEGAL FISHING OFF CAMEROON’S COAST WORSENS MARITIME SECURITY
On 17 June, an article from Dryad Global contends that, in Cameroon there is growing awareness that there’s a direct relationship between illegal and unregulated activity in the fisheries sector, and maritime security in the waters off the country’s coast. Earlier this year the European Commission called out the country for failing to control vessels engaged in illegal fishing under the country’s flag. It also pointed to weak governance, including poor knowledge of the scale of illegal fishing. The author of the article says research shows that both artisanal and industrial fishing vessels are being intercepted and used for smuggling fuel, arms, other contraband and illegal migrants.
SWITZERLAND: THE POWERS OF A FOREIGN BANKRUPT COMPANY AND THE FOREIGN BANKRUPTCY ADMINISTRATOR IN CASE OF FRAUD
On 21 June, an article from Monfrini Bitton Klein starts by saying that when a foreign company is defrauded and goes bankrupt, several connections with Switzerland may exist and several proceedings may therefore be necessary in Switzerland, not only to establish the liability of legal entities and individuals, but above all to recover funds to reduce the damage caused. This will involve, for example, civil and criminal proceedings against Swiss banks and their employees who participated in the fraud or in the laundering of its proceeds. The article considers the implications, saying that the bankruptcy of a foreign company with links to Switzerland is likely to trigger numerous administrative, civil or criminal proceedings; and that Swiss law offers several legal avenues to obtain compensation in case of fraud.
GAMBLING OPERATOR TIPWIN REPORTED TO DANISH POLICE OVER MONEY LAUNDERING FAILINGS
On 23 June, iGB reported that the Danish gambling regulator has reported German gambling operator Tipwin to the police for violating the Money Laundering Act. It is reported that the operator hadnot prepared a risk assessment of its sale of retail bets until 16 May, there was a lack of written policies on its retail offering, and it did not have any written business procedures and controls for its land-based offering in relation to money laundering until 25 May.
CHINESE, MIDDLE EASTERN AND WESTERN BANKS HAVE PROVIDED BANKING SERVICES TO IRAN’S SANCTIONED ENERGY AND INDUSTRIAL SECTORS
On 22 June, the Wall Street Journal reported that, through a network of proxy companies, foreign exchange houses and intermediaries, Iran holds bank accounts that collectively transact tens of billions of dollars a year in trade that is otherwise banned under US sanctions. HSBC and Standard Chartered are among the institutions that provided services to companies that handled banned trade on behalf of major Iranian exporters. While it is said that there is no evidence that the banks are complicit in permitting the sanctioned Iranian transactions, senior bank compliance officers said companies registered outside of Iran that secretly maintain bank accounts for Iranian companies could escape controls meant to catch money laundering.
WHY THE CONDUCTOR VALERY GERGIEV IS NOT ON THE EU SANCTIONS LIST
On 22 June, an article in Opera Wire reported that the Foreign Minister had told the Dutch Parliament said he did not meet the criteria for designation. While not listed, he has stood down or been fired from a number of posts, and has recently been conducting full-time in Russia where he is leading the Stars of the White Night Festival.
UK: FCA HAS FINED GHANA INTERNATIONAL BANK £5.8 MILLION FOR FAILINGS IN ITS AML CONTROL FAILINGS
On 23 June, Reuters reported that the FCA had said that the bank provided correspondent banking services to other lenders, and that between January 2012 and December 2016 the bank did not adequately perform the additional AML checks required. Following a visit by the FCA in 2016 the bank voluntarily agreed not to take on new customers.
UK: EXPLAINING THE SECONDARY LEGISLATION FOR THE REGISTER OF OVERSEAS ENTITIES – PART 1
A blog post from Companies House on 23 June provided an update on the progress of the Register of Overseas Entities. It says that this new register forms part of the government’s strategy to combat economic crime, while making sure that legitimate businesses continue to see the UK as a great place to invest. It says that a significant milestone has been reached as secondary legislation has been laid before Parliament.
UK: CAR WASH SLAVERY RINGLEADERS JAILED FOR 25 YEARS
A news release from the NCA on 22 June advised that a couple who kept vulnerable people as slaves and made them work for free at a car wash business in Bristol have been jailed for a total of 25 years following a NCA investigation. Maros Tancos and Joanna Gomulska were the ringleaders of a modern slavery and human trafficking operation in Bristol, persuading vulnerable people to travel from Slovakia to work for them. Tancos would use his links to orphanages and camps in Slovakia to recruit victims, promising them transport, a place to live and food, and a better life.
UK: 2 BROTHERS FROM THE BRADFORD AREA HAVE AGREED TO PAY THE NCA APPROXIMATELY £4.3 MILLION FOLLOWING A CIVIL RECOVERY INVESTIGATION INTO THEIR MULTI-MILLION-POUND PROPERTY PORTFOLIO.
On 22 June, a news release from NCA advised that Parvez Akhtar (55), known locally as ‘Boney’, and his brother Zaheer Akhtar Nazir (50) have been property developers in the area for over 30 years. In its case at the High Court the NCA alleged the brothers used their property portfolio to launder hundreds of thousands of pounds worth of criminal monies on behalf of other prolific criminals; and alleged that Akhtar has been involved in a range of serious criminality since the 1990s including international VAT fraud, money laundering and fraud.
GERMANY: CUSTOMS DOG SNIFFS OUT HUNDREDS OF ENDANGERED SEAHORSES AT AIRPORT
On 22 June, Newsweek reported that officers found more than 800 endangered seahorses being smuggled through an airport to be used as “natural viagra” by bogus healers. The 5 kg of dried seahorses had been stashed in a freight package going through Germany’s Leipzig/Halle Airport when they were found by a sniffer dog.
NETWORK THAT TRAFFICKED OVER 30 TONNES OF IVORY YET TO FACE JUSTICE
On 22 June, OCCRP reported that, despite charges of illicitly trafficking over 30 tonnes of ivory for over a decade now, the alleged members of one of Africa’s largest wildlife-trafficking networks have by and large managed to evade conviction. It is alleged that Liberian national Moazu Kromah — aka ‘Kampala Man’ — is believed to stand at the head of this criminal organisation. Despite his arrest in 2017, his extradition to the US in 2019, and his guilty plea for 3 wildlife-trafficking offences in March, the speed at which his case was processed has raised troubling concerns as to when the network as a whole will face justice for their actions.
SRA REPORTS £161 MILLION OF SUSPECT TRANSACTIONS BY LAW FIRMS TO NCA
On 23 June, Legal Futures reported that the Solicitors Regulation Authority (SRA) reported £161 million worth of suspect transactions, in 39 SAR, involving the profession to the NCA during the 18 months to April 2022, with failures to check the source of funds the main trigger. In the previous year, the SRA made 26 SAR, involving transactions worth over £200 million.
SINGAPORE TO AMEND FINANCIAL CRIME RULES FOR BUSINESS SERVICE PROVIDERS
On 23 June, Out-Law reported that the Accounting and Corporate Regulatory Authority (ACRA) has proposed corporate governance and regulatory changes to boost compliance with global standards. It is consulting on proposals designed to tackle recommendations by FATF relating to the combating of money laundering, terrorism financing and financing of proliferation of WMD. The package also seeks to tackle the risks arising from the abuse of nominee arrangements when creating shell companies to facilitate money laundering, and to impose new qualification requirements on individuals who serve as nominee directors on a business basis. The consultation closes on 19 July.
UK: FCA IS USING DATA TO TACKLE ONLINE FRAUD FASTER BY SCANNING APPROXIMATELY 100,000 WEBSITES CREATED EVERY DAY TO IDENTIFY THOSE THAT APPEAR TO BE SCAMS
A release on Mondo Visione on 23 June advised that, as part of an update on its data strategy, where the FCA identifies fraudulent websites, it is proactive in requesting the website host shut them down, though it does not have the powers to force them to. Between May 2021 and April 2022, the FCA added 1,966 possible scams to its consumer warning list – over a third more than during the same period the previous year. The release details other parts of the strategy.
THE POLITICAL ECONOMY OF HUMAN SMUGGLING AND TRAFFICKING IN NORTH AFRICA AND THE SAHEL
On 22 June, the Global Initiative Against Transnational Organised Crime reported a programme involving series of briefs which underscore the rebounding importance of smuggling from and through Libya, Tunisia, Niger, Chad and Mali and the ways in which dynamics are intensifying as the COVID-19 pandemic ebbs and a rough peace is maintained in Libya. This is a monthly monitoring programme focused on the political economy of human smuggling and trafficking in North Africa and the Sahel.
EU: SUCCESSFUL ACTION AGAINST VAT FRAUD IN TRADE OF USED CARS
A news release from Eurojust on 22 June advised that, supported by Eurojust, authorities in Lithuania, Hungary, Slovakia and Latvia have undertaken a successful operation against large-scale VAT fraud involving the sale of used cars from the US. The managers of 5 companies who allegedly acted together may have avoided paying at least €4 million in taxes to the Lithuanian authorities. The suspects may have used non-operating companies registered in Slovakia and Hungary.
EU LEADERS TO KEEP SANCTION PRESSURE ON RUSSIA, WITH GOLD FLAGGED AS NEW TARGET
On 21 June, EurActiv reported that a draft document showed gold among assets that may be targeted in a possible next round of measures. It notes that several sectors including gas remain largely untouched as EU governments avoid measures that could damage their own economies more than Russia’s. Gold is a crucial asset for the Russian Central Bank, which has faced restrictions on accessing some of its assets held abroad because of Western sanctions.
On 21 June, an article from Politico says that Western-made tech and machinery are vital for both military and civilian use, as well as to maintain exports of oil and gas to countries like India where they are not banned. Moscow is likely to try to import restricted goods through new trade routes, using torturous methods to avoid or evade Western scrutiny. The list of countries seen as potential weak spots for sanctions enforcement and compliance is varied and Putin will find willing partners deep inside Europe and beyond.
A DISTURBING MARKET IN ILLEGAL SURFACE TO AIR MISSILES GROWS WORLDWIDE
On 21 June, OCCRP reported on a disturbing trend of another type of weapon proliferating worldwide – shoulder-mounted surface-to-air missile launchers. It refers to a report from the Small Arms Survey which has identified reports of illicit MANPADS in 32 countries and territories on 5 continents since 2011.
On 23 June, a post on the FCPA Blog reported that, so far in 2022, there have been 4 FCPA enforcement actions totalling $865 million in penalties and disgorgement; and that pushes all-time FCPA resolutions over $24 billion since 1977.
CONTAINERS LOST AT SEA INCREASED 400% IN 2020 – 2021
On 22 June, Seatrade Maritime News reported a 4-fold increase in the number of containers lost overboard during the 2020 – 2021 compared to the previous 2-year period.3,133 containers were lost overboard in the 2020 – 2021 period compared to 779 in the previous period. Meanwhile, Loadstar reported that that the World Shipping Council is to increase its carrier surveys on container losses to annual events rather than tri-annual surveys.
On 16 June, ABC News reported that the Philippine government has designated a former peace negotiator and 5 other suspected communist rebel leaders as “terrorists” to allow the freezing of their financial assets. The latter are commanders of the Abu Sayyaf, a small but violent Muslim militant group in the country’s south, and they have been linked to the Islamic State. 6 rebel leaders are accused of membership in the Communist Party of the Philippines, its armed wing the New People’s Army and related organisations were led by Luis Jalandoni, a former Roman Catholic priest.
CHANGES, INCLUDING INCOMING RULE CHANGES, LOOK SET TO MARK THE END OF THE PASSENGER AIR FREIGHTER
On 23 June, Loadstar reported that a dearth of capacity at the onset of Covid, and high demand for air cargo, saw aviation safety authorities tweak the rules to allow the carriage of cargo in passenger cabins – on seats, or with seats removed. However, the European regulator has indicated that there is no likelihood of an extension. Looking at other regulators, it says that the FAA ended the exemptions for US carriers on 31 December and China was thought to have ended the exemptions, but in Hong Kong there seems to be a continuing flexible approach.
THE RISING THREAT TO CENTRAL AFRICA: THE 2021 TRANSFORMATION OF THE ISLAMIC STATE’S CONGOLESE BRANCH
In the June issue of CTC Sentinel an article argues that the Congolese branch of the Islamic State’s Central Africa Province (ISCAP-DRC), locally known as the Allied Democratic Forces (ADF), is a rising threat to the region. Its modi operandi evolved in 7 key areas — from a surge in IS-supported propaganda to its first use of suicide bombings — that have contributed to the group’s escalating terror campaign in Congo and abroad. Together, these changes have enabled the ADF — already the deadliest group in eastern Congo — to become bolder and a more lethal terrorist organisation, poised to further export its operations to the region. This article seeks to unpack the ADF’s transformation within the wider context of the overall operations of ISCAP-DRC last year.
THE LIMITED 2022 FAR-RIGHT FOREIGN FIGHTER MOBILISATION TO UKRAINE
An article in the June issue of the CTC Sentinel says that, given the significant presence of far-right fighting units and far-right foreign fighters on both sides of the conflict in Ukraine since 2014, there was concern that the February 2022 Russian invasion might result in large flows of foreign fighters (including right-wing extremists) to far-right-linked units on both sides of the conflict. However, flow of foreign fighters into Ukraine has been much smaller than anticipated; and, despite the efforts of some extreme-right ‘influencers,’ the 2022 conflict has, for the most part, not energized Western right-wing extremists, nor persuaded them to travel.
BUYER BEWARE ON AN ACQUISITION: SETTLING ALLEGATIONS COSTS MANUFACTURER $5.2 MILLION
On 23 June, an article from Bass Berry & Sims reported that Numet Machining Techniques, a Connecticut-based machined parts manufacturer for commercial and military aerospace engines, recently agreed to pay $5.2 million to settle alleged violations of the False Claims Act (FCA) for misrepresenting its size standard following an acquisition. It seems that, following the acquisition, Numet Machining no longer qualified as a “small business concern” due to its affiliation with the other businesses; however, it continued to bid on, and win, contracts using an improper “small business” designation. The article explains that the Small Business Administration (SBA) procurement programs in the US are designed to promote and protect the small business community and investigating cases of false size status representations is a priority for the Department of Defense.
FATF-STYLE BODY APPROVES MUTUAL EVALUATION REPORT ON UZBEKISTAN
On 3 June, the Eurasian Group on Combating Money Laundering and Financing of Terrorism, a FATF-style regional body (FSRB) announced the outcome of its recent Plenary, at which it approved an MER on Uzbekistan. The Plenary also heard about the 3rd follow-up report on Tajikistan without technical compliance re-rating under and noted the progress made by Tajikistan in development of its national AML/CFT system.
ISLE OF MAN ISSUES A LICENCE FOR THE IMPORTATION AND DISPENSING OF CANNABIS-BASED PRODUCTS FOR MEDICINAL USE
On 23 June, a news release advised that the Department of Health and Social Care had awarded a licence for the importation and dispensing of cannabis-based products for medicinal use (CBPM) on Island. This means that Island residents with private prescriptions for medicinal cannabis products will be able to have their prescriptions fulfilled locally for the first time, by the pharmacy holding the licence.
UK: ILLEGAL CANNABIS FARMS CLAIMS – A GROWING ISSUE FOR INSURERS
On 23 June, DAC Beachcroft issued an article about an escalation of cannabis farm claims related to landlord or property claims. It explains that, in addition to the risk cannabis farms pose to those who are recruited to maintain them; these farms frequently degrade the spaces they are found in. The farms have been identified in both domestic settings and in a wide range of commercial properties with the former being the preferred location. Landlords are often left with the bills resulting from the damage caused by the tenants, which includes modifying the supply of electricity into the property so that usage isn’t recorded.
On 23 June, FATF released this White Paper, saying that it is conducting a review of Recommendation 25 on the transparency and beneficial ownership of legal arrangements. The objective is to improve R.25 and its Interpretive Note to better meet its stated objective to prevent the misuse of legal arrangements for money laundering or terrorist financing. FATF’s work in this area is ongoing, and will benefit from hearing views from stakeholders, including trustees, financial institutions, designated non-financial businesses and professions (DNFBP), and non-profit organisations (NPO). Responses are due by 1 August.
On 22 June, CSIS published a review, in the form of a Q&A, of their impact and effect. It assesses the effect Western sanctions are having on the Russian economy and war effort, evaluates additional potential sanctions, and discusses lessons learned for economic statecraft.
On 23 June, the Department for International Trade published this amended Notice to Importers on 21 June to reflect the implementation of new import sanctions measures that relate to certain ‘revenue generating goods’. The new measures also extend to the provision of ancillary services related to certain iron and steel products.
An article from Oppenhof & Partner in Germany on 22 June considers new FAQ from the EU on interpretation of the sanctions on Russia. It starts by saying that, generally, a listed person holds an ownership position in a third party in case of a majority shareholding, i.e. if the listed person holds more than 50% of the shares in the company (so-called “50% rule”). However, the updated FAQ says that “One should take into account the aggregated ownership of the entity. For example, if one listed person owns 30% of the entity and another listed person owns 25% of the entity, the entity should be considered as owned by listed persons“.
A blog post from Mark Elliott, Professor of Public Law and Chair of the Faculty of Law at the University of Cambridge, considers the new UK Bill of Rights Bill, which would replace the European Convention on Human Rights in UK law. He looks at what will not change; what would change; and the broader implications of the Bill in terms of human rights protection in the UK. He claims the effect of the Bill would be to reduce available rights and (as with the Northern Ireland Bill post-Brexit) is based on a false idea – that it is possible to legislate domestically in order somehow to manipulate or magic away treaty obligations that are binding upon the UK as a matter of international law; and that so long as it remains party to the ECHR it is bound by it, regardless of what the Bill might say.
On 20 June, Osborne Clarke reported that, on 17 June, the UKFIU had released an update on suspicious activity reports (SAR) glossary codes and reporting routes, which replaces the previous guidance on this topic. SAR glossary codes allow the UKFIU to conduct further analysis to identify money laundering trends, high-risk cases for development and to take immediate action where necessary. It is possible to have a SAR with several codes (or no code may apply at all). There are new codes for SAR where the value is less than £3,000 and where one is unaware of any existing law enforcement interest at the time of reporting.
Panama Covid-19 update – not a lot of change to report, with the percentage of positive tests (of 10,470 recorded) still high at 18.7% (the WHO says 5% or else is acceptable). Today saw no new fatalities reported, but 1,957 new cases; with 15,887 active cases, including 34 in ICU, 197 in other wards and 19 in hospital-hotels. Of course, it is unclear how many, except for those in the hospital-hotel quarantine, are in hospital “with” Covid or “because” of it.
22 JUNE 2022
CREDIT SUISSE SEEKS LOOPHOLE TO SHED $600 MILLION COURT JUDGMENT IN “ROGUE BANKER” CASE
On 21 June, the Wall Street Journal reported that lawyers for a life insurance unit of the bank said a billionaire former client can only collect damages from his own account under Bermuda company law. A last-minute legal challenge, if successful, would wipe out a large liability hanging over the bank. The amount represents what Mr Ivanishvili would have made from his accounts at Credit Suisse Life Bermuda Ltd if his money had been invested in a medium-risk investment portfolio. He had sued for breach of contract and fiduciary duty after his private banker, Patrice Lescaudron, admitted to cutting and pasting signatures to make unauthorised stock bets. Credit Suisse had said it, too, was a victim of Mr. Lescaudron and shouldn’t be held liable for his actions.
US COURT DEEPENS SPLIT OVER EXTRATERRITORIALITY OF CIVIL RICO
On 20 June, a post on the Transnational Litigation Blog discussed a recent decision on the extraterritorial application of RICO’s private right of action. In determining whether there is injury to business or property in the US, the court rejected a decision rejecting the residency-based test. It is said that the decision is significant not only for what it has to say about the extraterritoriality of civil RICO, but also because it develops another tool for judgment creditors to recover assets from judgment debtors. It reminds one that the RICO (Racketeer Influenced and Corrupt Organizations Act) targets organised crime by prohibiting patterns of criminal activity in connection with an enterprise. It also allows “[a]ny person injured in his business or property” by a criminal violation of RICO to sue for treble damages.
On 17 June, an article from Mourant focusses on the current state of play in the Cayman Islands and some of the questions which Cayman Islands funds are facing in practice. In practice, the financial sanctions in force in the Cayman Islands are essentially those in force in the UK. It is the UK’s policy to ensure that British Overseas Territories like the Cayman Islands are legally and practically enabled to implement UN and UK sanctions in order to ensure compliance with international obligations.
IRELAND: RECENT UPDATES TO VAT TREATMENT OF eGAMING SERVICES
On 20 June, an article from law firm Matheson reported that the Irish Revenue Commissioners recently updated their guidance material in respect of the VAT treatment of e-gaming services. They have announced certain updates to the Guidance in Revenue e-Brief 112/22 published on 21 May which are summarised in the article. These updates provide some welcome clarity to the methodology to be applied when calculating the VAT liability on supplies of eGaming services to Irish customers.
THE ECONOMIC CRIME (TRANSPARENCY AND ENFORCEMENT) ACT 2022: AN ISLE OF MAN PERSPECTIVE
On 21 June, Finance IOM published this short guide to the effect of the UK Act in the Isle of Man. The Act will apply to all Isle of Man entities that are treated as legal persons under Isle of Man law.
PANAMA ASKS FOR THE MILLIONS SEIZED IN THE US FROM THE MARTINELLI BROTHERS
On 22 June, El Siglo reported that the Public Prosecutor’s Office has held talks with the judicial authorities of the US about money seized from the brothers Luis Enrique and Ricardo Alberto Martinelli (sons of former President Martinelli). $18 million were deposited in a Swiss bank, in addition to a property in Miami, which was confiscated.
IRELAND HAS FROZEN €1.72 BILLION OF RUSSIAN ASSETS THROUGH SANCTIONS
On 21 June, the Irish Times reported that Ireland has frozen €1.72 billion of assets linked to sanctioned Russian individuals and entities. This marks a significant increase from a figure of €839 million that was contained in an EU document in early April.
CANADA: AML RULES EXPANDED TO INCLUDE PAYMENT SERVICE PROVIDERS AND CROWDFUNDING PLATFORMS
On 21 June, Bennett Jones LLP published an article saying that payment service providers and crowdfunding entities that were not previously subject to AML/CFT legislation in Canada should be aware of changes that came into force on 5 April. The amendments made follow the so-called “freedom convoy” protests.
IRELAND: EX-MILLIONAIRE IN LEGAL ACTION TO CLEAR NAME OVER ALLEGED PROPERTY FRAUD
On 22 June, the Irish Independent reported that Philip Marley has initiated proceedings against the Director of Public Prosecutions, Ireland and the Attorney General. He is due to go on trial in April 2024 on 8 charges in relation to alleged dealings involving 2 properties. Earlier this year he failed in a High Court bid to have the fraudulent registration charges he is facing dealt with at 2 separate trials.
INDONESIA DEPORTS JAPANESE FUGITIVE ACCUSED OF COVID RELIEF FRAUD
On 22 June, the Mail Online reported that Indonesia has deported Mitsuhiro Taniguchi, 47, a fugitive accused of masterminding a lucrative scheme in his native Japan to defraud a government fund offering Covid-19 relief subsidies. He reportedly entered Indonesia in October 2020, several months after the scheme was uncovered by Japanese police.
DOZENS OF ELDERLY AMERICANS WERE DUPED OUT OF $13 MILLION IN FAKE WINE AND WHISKEY INVESTMENT SCAM AFTER BEING CONNED BY ‘MEN WITH BRITISH ACCENTS’ POSING AS EXPERTS
On 22 June, the Mail Online reported that at least 150 elderly people were swindled out of $13 million over a 5-year scam which spanned 2 continents utilising 3 companies to allegedly defraud investors by dangling promises of high returns on their investments in rare wines and whiskeys.
KAZAKHSTAN INVESTIGATES ANOTHER RELATIVE OF FORMER RULER NAZARBAYEV
On 22 June, OCCRP reported that authorities are investigating claims made by a local businessman who accused the brother of ex-President Nursultan Nazarbayev and one of his unofficial wives of having illegally taken over his share in a mining company.
RUSSIAN TANKERS DELIVERING OIL TO EU PORTS DESPITE SANCTIONS
On 22 June, OCCRP reported that a Russian state-backed shipping company sanctioned by the US and EU in February continues to deliver crude oil to European ports. Experts say the company disguised its ownership of the vessels by basing subsidiaries in Cyprus and the UAE and sailing under Liberian flags. Hence, oil tankers owned by Russia’s state-backed fleet operator Sovcomflot are still delivering to ports in Europe and earning Moscow much-needed foreign currency, despite Western sanctions aimed at limiting imports of Russian crude oil.
PHISHING GANG BEHIND SEVERAL MILLION EUROS WORTH OF LOSSES BUSTED IN BELGIUM AND THE NETHERLANDS
On 21 June, a news release from Europol announced that a cross-border operation, supported by Europol and involving the Belgian Police and the Dutch Police, resulted in the dismantling of an organised crime group involved in phishing, fraud, scams and money laundering.
On 22 June, an article from Out-Law explains that, at their core, imaging orders are effectively a screenshot of electronic evidence held by the individual or organisation against whom the order is made, including potentially relevant evidence that could implicate the fraudster. Such an order requires a party to give immediate access to electronic storage devices to an independent computer specialist, to copy the contents. Such devices range from computers to smart phones to virtual cloud storage, as well as online accounts including email accounts and payment systems.
On 21 June, Insight Crime reported that one of the largest suspected drug traffickers in the world, Sergio Roberto de Carvalho, a former Brazilian army major, has been arrested in Hungary after a prolonged manhunt. After being arrested in Spain under a false name in 2020, Carvalho disappeared without a trace. According to media reports, Carvalho was rumoured to have spent time in Portugal, Ukraine and Dubai since fleeing from Spain.
UK: FCA FINES INSURANCE BROKER £7.8 MILLION FOR FINANCIAL CRIME CONTROL FAILINGS
On 22 June, a release on Mondo Visione advised that the FCA had fined JLT Specialty Limited (JLTSL) £7,881,700 for financial crime control failings, which in one instance allowed bribery of over $3 million to take place. JLTSL is based in the UK and provided insurance broking, risk management and insurance claims services. It was part of JLT Group plc, which had a number of subsidiaries around the world. JLTSL placed business in the London reinsurance market for JLT Re Colombia, another company in the JLT group. The business had been introduced by a third-party based in Panama.
CANADA: KPMG CLAIMS IT HAS BEEN ‘CLEARED’ BY CRA PROBE OF OFFSHORE TAX SCHEME
On 20 June, CBC reported that KPMG claims it has been “cleared of any wrongdoing” by a months-long Canada Revenue Agency criminal probe into an offshore tax scheme that allowed wealthy Canadians to receive tax-free funds. KPMG set up a system through which wealthy Canadians transferred assets to the Isle of Man tax haven and then recovered the funds tax-free.
MEXICO INVESTIGATES STOLEN MILITARY EQUIPMENT SOLD TO CARTELS
On 20 June, OCCRP reported that the Mexican navy is investigating a large theft of military equipment, including uniforms, body armour and other paraphernalia, which is intended to be sold to powerful cartels who could then use it to impersonate the military. The goods are believed to have been stolen by active military members.
FORMER ERICSSON EXECUTIVES ACQUITTED OF DJIBOUTI BRIBERY CHARGES BY SWEDISH COURT
On 21 June, ICIJ reported that 4 former Ericsson executives were acquitted in Sweden on charges of bribing high-ranking Djibouti officials to win a 3G contract worth nearly $20 million. The Prosecutor said that that he will review the verdict to see if there are grounds to appeal. Ericsson had previously admitted to engaging in bribery and other misconduct in Djibouti, China, Vietnam, Indonesia and Kuwait from 2000 to 2016 in a billion-dollar corruption settlement with the US DoJ.
PODCAST: MONEYLAND, KLEPTOPIA AND ON CORRUPTION IN AMERICA
In the latest TRACE podcast, Oliver Bullough, Tom Burgis and Sarah Chayes, authors of 3 of the best books on global corruption, gather for a panel at the Annapolis Book Festival for a fascinating discussion about how the corrupt operate, often with impunity, and what can be done to slow the pace of looting.
US: STATEMENT ON BANK SECRECY ACT DUE DILIGENCE FOR INDEPENDENT ATM OWNERS OR OPERATORS
On 22 June, FinCEN issued a statement to provide clarity to banks on how to apply a risk-based approach to conducting customer due diligence (CDD) on independent Automated Teller Machine (ATM) owners or operators.
BANK OF ISRAEL CONTINUES TO REGULATE USE OF CRYPTOCURRENCIES
On 22 June, an article from Barnea Jaffa Lande & Co says that Israel’s financial regulatory authorities are regulating virtual currencies (cryptographic currencies). It says that the Capital Market, Insurance and Savings Authority (CMISA) issued an AML order specifically addressing cryptocurrencies, which came into effect in November 2021. The Supervisor of Banks is continuing this trend and has recently taken an initial measure to regulate the use of virtual currencies and the amendment to the Proper Conduct of Banking Business Directive 411 will come into effect on 9 November.
About best practices in seafood traceability to combat Illegal, Unreported, and Unregulated (IUU) fishing and keep IUU fish out of major market states.
Are you sure the seafood you just bought isn’t Russian?
The ban on seafood could pack a significant blow to Russia’s economy. It is meaningless, however, without tools to help trace the origins of the food that ends up in restaurants, grocery stores and seafood markets in the US.
On 22 June, the Religious News Service reported that judges have announced that the prosecution and defendants in the case plan to call more than 200 witnesses in a trial that has already taken nearly a year, since starting in July 2021, to get through 10 defendants. At the heart of the case is the controversial purchase by the Vatican’s Secretariat of State of a property in London, which according to Vatican prosecutors cost the church €350 million, drawn in part from donations to a papal charity called Peter’s Pence.
On 21 June, Jurist reported that he became Prime Minister in April after a vote of no confidence ousted Prime Minister Imran Khan. The current investigation stems from allegations that Sharif abused his power when he was Punjab’s chief minister. From 2013 to 2018, Sharif allegedly gave out contracts to those connected to his party. Sharif’s political party — the Pakistan Muslim League — has been accused of corruption in the past.