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OTHER THINGS YOU MAY HAVE MISSED – APRIL 26

26th April 2018

 AMENDMENTS AFFECTING BENEFICIAL OWNERSHIP RULES FOR IRISH COMPANIES AND TRUSTS AGREED BY EUROPEAN PARLIAMENT

Irish law firm, A & L Goodbody, produced an article on 25th April saying that the European Parliament has adopted a number of amendments to the proposed 5th AML Directive (5AMLD), which in turn will amend the 4th AML Directive (4AMLD) in relation to the beneficial ownership of companies and trusts.  It says that key changes which, if adopted, will affect the beneficial ownership rules currently applying to companies incorporated in Ireland (and other Member States), when transposed in due course into Irish law, include – any member of the general public is also to have access to the information on the central register of beneficial ownership; Member States are permitted to impose restrictions on access in certain circumstances; the beneficial ownership information is to be made available for at least 5 years, and for a maximum of 10 years after a set date; sanctions for breach of the beneficial ownership obligations may be increased; There are no changes proposed to the limited exceptions in 4 AMLD in relation to listed companies etc.  See the article for more detail.

https://www.algoodbody.com/insights-publications/amendments-affecting-beneficial-ownership-rules-for-irish-companies-and-trusts

AML: WILL NEW EU REGIME IMPACT THE UK?

In its Brexit Blog, law firm Kingsley Napley asks this question on 23rd April.  It says that matters are complicated for the UK – will the 5th ML Directive be adopted before the UK exits the EU and what are the consequences for the UK if it does not?  It points out that it is anticipated that there will be an 18-month period in which to implement the new Directive, taking us to the end of 2019, well past 29th March 2019 which is “Brexit-Day”.  A House of Commons Scrutiny Committee has said that it likely that most, if not all, of the new Directive will have to be transposed in the UK as a matter of law due to the transition arrangements for Brexit.  It points out that UK will remain a member of FATF.  As a result of the UK’s membership of FATF it will continue to be involved in setting the standards upon which the EU legislation is based.  It also points out that in the UK Anti-Corruption Plan 2017-22, further enhancing AML/CFT capability alongside stronger law enforcement, prosecutorial and criminal justice action, are set out as core actions to “strengthen the integrity of the UK as an international financial centre” and tackle illicit financing.  To do so, the article suggests, the simplest way to do this is to adopt the new Directive in its entirety whether that falls before or after Brexit-day.

https://www.kingsleynapley.co.uk/insights/blogs/brexit-blog/anti-money-laundering-will-new-eu-regime-impact-the-uk#page=1

ISLE OF MAN SANCTIONS LAW AMENDMENTS

On 25th April, the Isle of Man issued news releases advising that –

  • the European Union (Central African Republic Sanctions) (Amendment) Order 2018 came into operation on 24th April, alongside the Central African Republic Sanctions (Amendment) Regulation 2018. They apply and implement EU Regulation 2018/387/EU and UN SCR 2399 in the Island. They provide for certain amendments to the exemptions to the arms embargo, as well as to the designation criteria relating to persons and entities subject to restrictive measures; and
  • the European Union (Democratic Republic of the Congo Sanctions) Order 2018 and Democratic Republic of the Congo (Sanctions) Regulations 2018 came into operation on 24th They apply and implement in Island law EU Regulation 1183/2005/EC imposing certain specific measures directed against person acting in violation of the arms embargo with regard to DRC, as substantively amended by a number of subsequent instruments.

https://www.gov.im/news/2018/apr/25/european-union-central-african-republic-amendment-order-2018/

https://www.gov.im/news/2018/apr/25/european-union-democratic-republic-of-the-congo-sanctions-order-2018/

US DEPARTMENT OF STATE CONCLUDES $30 MILLION SETTLEMENT OF ALLEGED EXPORT VIOLATIONS BY FLIR SYSTEMS INC

The Imperial Valley News on 25th April reported that the US Department of State and FLIR have reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.  The case relates to alleged unauthorised exports of defence articles, including technical data; the unauthorised provision of defence services; violation of the terms of provisos or other limitations of licence authorisations; and the failure to maintain specific records involving ITAR-controlled transactions. FLIR’s alleged unauthorised exports also included the retransfer of ITAR-controlled technical data and provision of defence services to dual national employees of Iran, Iraq, Lebanon, and Cuba to which the US restricts exports of defence articles and defence services.

http://www.imperialvalleynews.com/index.php/news/latest-news/14409-u-s-department-of-state-concludes-30-million-settlement-of-alleged-export-violations-by-flir-systems-inc.html

NEW JERSEY WOMAN CHARGED WITH SCHEME TO SMUGGLE $2 MILLION IN AIRCRAFT PARTS TO IRAN

NJ.com reported on 25th April that Joyce Eliabachus faces charges of conspiracy to violate Iranian transactions and sanctions regulations, conspiracy to commit money laundering and conspiracy to smuggle goods from the US.  She served as principal officer and operator of Edsun Equipments LLC, an aviation parts trading business Eliabachus ran from her home, according to a criminal complaint. She is accused of working in a “sophisticated” network that covertly moved large amounts of plane components from US companies to Iran through freight-forwarding businesses in UAE and Turkey.  The scheme involved at least 49 shipments of approximately 25,500 aircraft parts, May-October 2015.  Some of the parts are said to have gone to an airline which provides various support to Iran’s powerful Islamic Revolutionary Guard Corps.

http://www.nj.com/essex/index.ssf/2018/04/nj_woman_charged_with_scheme_to_smuggle_2m_in_airc.html

MALTA JUDGE DECIDES AGAINST DEFLAGGING FISHING VESSELS AMID OIL SMUGGLING INVESTIGATIONS

The Times of Malta on 25th April carried a report saying that a court has upheld a request by a fishing company to block the striking-off of five vessels, part-owned by ex-footballer Darren Debono, from the Maltese shipping register.  The company insists its boats were only used for fishing.  The vseels were held pending ongoing proceedings over his alleged involvement in an oil-smuggling racket from Libya to Italy.

https://www.timesofmalta.com/articles/view/20180425/local/judge-decides-against-deflagging-fishing-vessels-amid-oil-smuggling.677435

CHINA IMPOSES RESTRICTIONS ON EXPORT OF SCIENTIFIC DATA

On 26th April, an article from Wilmer Hale advised that China has issued a new regulation which imposes potentially severe restrictions on the export of scientific data while at the same time calling for wider access to such data within the country.  The new order had effect from 17th March.  It is said that the measures apply to the collection, creation, processing and sorting out, openness and sharing, and management and use of “Scientific Data” that is funded through a government budget, and under specified circumstances may also apply to Scientific Data activity by any entity or individual inside China that is not funded by the government.

https://wilmerhalecommunications.com/26/2451/april-2018/china-expands-access-to-scientific-data-domestically–impose-restrictions-on-export-of-scientific-data.asp?sid=03a1ee66-05ec-48de-aa3d-a8ee0b483a58

CARGO THIEVES GET MORE SOPHISTICATED BY GOING BACK TO THE BASICS

Holland & Knight on 25th April published an article about thieves break into freight containers.  As well as simply breaking in, but a professional thief will want to conceal as much as possible about when, where, and how the theft occurred.  The cargo seal thus becomes a necessary target, because it is the easiest way for a shipper to identify when and where his cargo has been tampered with. The article says that a few highly-skilled career criminals can separate the traditional cargo seal and re-install it with a soldering gun – but now, even unskilled thieves have begun to use 3D printing to replicate seals, so hiding when (or even if) a theft had taken place.  The article warns though that not all theft is so technology driven: it’s a good old-fashioned hack with drills and hammers, and rather than bother with trying to re-create or duplicate the seal once it’s broken, thieves are simply taking the door off its hinges or removing the handle with the seal intact.  Security experts now openly acknowledge how easy it is for a thief to open a trailer or ocean container without breaking the seal. All it takes is a drill, some rivets, and a little paint.  The article suggests some preventative measures that a shipper can take to help discourage thieves.  It says dock personnel should be instructed to look carefully at seals and doors before opening the trailer or container.  The article concludes that, at the end of the day, a reliable carrier with a good security programme may be one of the best protections.

http://www.mondaq.com/article.asp?articleid=695330&email_access=on&chk=2325406&q=1630076

US TREASURY LIFTS SANCTIONS ON COLOMBIAN PROFESSIONAL SOCCER TEAM AFTER TIES SEVERED TO DESIGNATED CRIME GROUP

The US Treasury advised on 26th April that Colombian professional soccer team, Envigado Futbol Club S.A. (also known as Envigado F.C.) had been removed from its SDN list.  It had been added on November 19th 2014, pursuant to the Foreign Narcotics Kingpin Designation Act, because it was owned, controlled, or directed by, or acting for or on behalf of, La Oficina de Envigado and Juan Pablo Upegui Gallego.  However, the club recently completed a sale and restructuring of team management under the oversight of the Colombian government that eliminated ties to a Colombian crime group involved in international narcotics trafficking and other criminal activities and cut them off from any benefit from the sale.

https://home.treasury.gov/news/press-releases/sm0369

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180426.aspx

ISLE OF MAN SHIPPING LAW

DQ Advocates in the Isle of Man on 25th April announced that it had contributed the chapter on Isle of Man shipping law to the International Comparative Legal Guide, covering areas such as marine casualty law including pollution, cargo claims, passenger claims, vessel arrest and security against a maritime claim, recognition and enforcement of foreign judgments and awards.  It also mentions that the Ship Registry has been certificated to the new ISO standard – ISO 9001:2015.

https://iclg.com/practice-areas/shipping-law/shipping-2017/isle-of-man

INTERNATIONAL CONFERENCE ON COMBATING THE FINANCING OF DAESH AND AL-QAEDA

On 26th April, the French Government issued a statement at the conclusion of an international conference involving FATF, of FATF-Style Regional Bodies (FSRB, such as Moneyval), the G20 and the Global Coalition against Daesh.  They met to discuss the ways and means to strengthen the efficiency of our action against terrorism financing and the experience developed during our common fight to defeat Islamic State in Iraq and the Levant (ISIL/Daesh) in Syria and Iraq.  The conference proposes –

  • Further reinforcing the domestic legal and operational frameworks to collect, analyse and share information by national authorities;
  • Fighting anonymous financial transactions;
  • Enhancing the traceability and transparency of non-profit organisations (NPO) and charitable funds;
  • Anticipating and addressing the risk of new financial instruments being abused;
  • Partnering with the private sector, especially the tech industry, in the fight against terrorist financing;
  • Reiterating the usefulness of international and national asset freezing and seizure mechanisms;
  • Bolstering the effectiveness of international co-operation;
  • Support the authority, visibility and resources of the FATF and FSRB;
  • Strengthening the collective engagement vis-à-vis States that fall short of standards or that lack capacity; and
  • Maintaining a common mobilization against terrorist financing.

https://www.diplomatie.gouv.fr/en/french-foreign-policy/defence-security/events/article/final-statement-international-conference-on-combating-the-financing-of-daesh

BELGIUM CONSULTATION ON AML/CFT REGULATION

Payments Compliance reports that on 25th April the Financial Services and Markets Authority (FSMA) in Belgium launched a consultation on a new draft regulation on AML/CFT.

https://paymentscompliance.com/premium-content/research_report/belgium-financial-services-and-markets-authority-launches

NIGERIA CENTRAL BANK NEW AML ADMINISTRATIVE SANCTIONS REGIME

On 26th April, Vanguard in Nigeria reported that the Central Bank of Nigeria (CBN) had rolled out a new regime providing for fines for banks, directors and other key officials for 48 types of money laundering breaches.  The previous regime only allowed for fines on financial institutions.  The move also should ensure Nigeria’s compliance with FATF Recommendation 35.

https://www.vanguardngr.com/2018/04/cbn-rolls-new-anti-money-laundering-sanction-regime/

PILATUS – MALTESE GOVERNMENT PUBLISHES FULL TRANSLATED TEXT OF EFIMOVA COURT CASE IN GREECE

The Malta Independent on 26th April reported that the Maltese government has published “the full text of the Greek court decision regarding Marioa Efimova,” the Pilatus Bank whistleblower, and has provided links to the texts.

http://www.independent.com.mt/articles/2018-04-26/local-news/Government-publishes-full-translated-text-of-Efimova-court-case-in-Greece-6736188864?src=ilaw

LATVIAN PARLIAMENT PASSES BILL OBLIGING BANKS TO GET RID OF HIGH-RISK CLIENTS

Xinhua on 26th April reported that Latvia has passed amendments to its AML law, banning Latvian-registered banks from doing business with so-called shell companies.  The amendments to the law on the prevention of money laundering and terrorism financing were passed in a fast-track procedure.  57 parliament members voted for the initiative, while 17 voted against it and 4 abstained.

http://www.xinhuanet.com/english/2018-04/26/c_137139066.htm

HE HAD $22 MILLION IN CASH HIDDEN IN BUCKETS. NOW, HE’S OFF TO PRISON FOR 5 YEARS

The Miami Herald on 25th April carried a story saying that Luis Hernandez-Gonzalez ran a Miami indoor gardening supply store favoured by marijuana growers from across the nation — some legal, some not. They bought light bulbs, fans and fertilisers with names such as “Bud Candy” and “Big Bud”.  His business was so lucrative that he had to stash $22 million in buckets hidden above a closet in his home.

http://www.miamiherald.com/news/local/crime/article209728264.html#storylink=cpy

WORLD COUNCIL OF CREDIT UNIONS URGES INCREASED PRIVATE SECTOR INPUT DURING AML EVALUATIONS TO REDUCE REGULATORY BURDEN

CU Insight on 25th April reported that the World Council of Credit Unions has urged FATF to increase engagement with the private sector during evaluations of national AML/CFT regulations.  It also urged FATF to continue its efforts to reduce “de-risking” in the financial system, which although less prevalent for credit unions and other financial co-operatives in recent years due to clearer FATF guidance, credit unions in some jurisdictions continue to face obstacles when trying to establish correspondent bank accounts or clear checks, especially in parts of the Caribbean.

https://www.cuinsight.com/press-release/world-council-urges-increased-private-sector-input-during-anti-money-laundering-evaluations-to-reduce-regulatory-burden

MULTIPLE FRAUD CASE IN FRANCE – ​ACTION DAY LAUNCHED SIMULTANEOUSLY IN 16 EUROPEAN STATES BY A FRENCH INVESTIGATIVE JUDGE

A news release from Eurojust on 26th April reported that on 11th April, the large-scale ‘Carton Rouge’ operation was initiated by a French Investigative Judge in co-operation with the French Desk at Eurojust, leading to the arrest of 9 suspects in Paris and Marseille, the freezing of numerous bank accounts, as well as the blocking of internet sites throughout Europe.  The organised crime group behind this far-reaching swindling case is suspected of having committed the crimes of fraud, bank fraud, embezzlement, money laundering and participation in a criminal organisation.  The case involved execution of European Investigation Orders, and effectively responded to urgent requests for mutual legal assistance.  In August to November 2017, the members of the group had impersonated football agents who contacted 15 different French football clubs, claiming that certain football players’ bank accounts had changed and, therefore, the footballers’ salaries needed to be transferred to their allegedly new bank accounts. This fraudulently acquired capital was then further wired from those temporary accounts to accounts in Bulgaria and Malta for money laundering purposes.  In the course of the investigation, the French national authorities discovered a parallel swindle performed by the same perpetrators, involving a fake diamonds scheme.  A similar fraud case, performed by the same criminal group, using bitcoins instead of diamonds, was also revealed to the investigating authorities.  The proceeds of yielded by all 3 illegal activities amount to an estimated total of €2 million, to the detriment of approximately 50 victims.

http://eurojust.europa.eu/press/PressReleases/Pages/2018/2018-04-26a.aspx

REGIONAL TAXES IN SPAIN ON LARGE RETAIL ESTABLISHMENTS ARE COMPATIBLE WITH EU LAW

A news release on 26th April advised that judgments in a series of cases before the CJEU conclude that the purpose of the taxes is to contribute to environmental protection and to town and country planning by attempting to correct and counterbalance the adverse effects of large retail establishments.  Hence, these taxes (sometimes called “Tesco taxes” in the UK) are compatible with EU law.  The Court rules that neither freedom of establishment nor the law on State aid preclude taxes on large retail establishments such as those at issue.

https://curia.europa.eu/jcms/upload/docs/application/pdf/2018-04/cp180057en.pdf

SWISS AUTHENTICATION COMPANY SICPA FACES CORRUPTION PROBE IN BRAZIL

M Lex on 26th April reported that Sicpa, a Swiss company operating in the authentication of banknotes and traceability markets, is the target of an anti-corruption probe in Brazil, MLex has learned.  In addition to the administrative investigation, a former executive vice president is being tried on criminal charges in the country.  Both cases involve the alleged payment of millions of dollars in bribes to secure a contract with the Brazilian Mint.

https://mlexmarketinsight.com/insights-center/editors-picks/anti-bribery-and-corruption/latin-america/swiss-authentication-company-sicpa-faces-corruption-probe-in-brazil?src=ilaw

DISGRACED ROMANIAN BUSINESSMAN HIT WITH FRESH 10-YEAR SENTENCE FOR €12 MILLION FRAUD

Business Review on 26th April reported that disgraced Romanian businessman Sorin Ovidiu Vintu, currently serving a prison sentence, received a new 10-year sentence for defrauding the Association of Employees of SNP Petrom.

http://www.business-review.eu/news/disgraced-businessman-sorin-ovidiu-vintu-hit-with-fresh-10-year-sentence-for-eur-12-million-fraud-166923?src=ilaw

HEAD OF KYRGYZSTAN’S CORRUPTION AGENCY FIRED AFTER 10 DAYS IN JOB

Eurasianet reported on 26th April that Bolot Suyumbayev, former deputy head of the State Committee for National Security, or GKNB, the successor agency to the KGB, formerly a security guard (and one-time movie stuntman) for ex-President Almazbek Atambayev, whose term ended in November, was fired from that post on 7th April.  However, on April 16th, Prime Minister Sapar Isakov (another Atambayev ally who has since been fired) appointed him to the anti-corruption role, but he has now been sacked from the new post.

https://eurasianet.org/s/kyrgyzstan-head-of-corruption-agency-fired-after-10-days-in-job?src=ilaw

UK EXPORT OF OBJECTS OF CULTURAL INTEREST REPORT 2016/17

On 26th April, the Department for International Trade published the 63rd annual report on the Export of Objects of Cultural Interest by the Reviewing Committee on the Export of Works of Art and Objects of Cultural Interest.  It reports that between 1st May 2016 and 30th April 2017, 22 cases were considered by the Reviewing Committee.  15 were deferred by the Secretary of State for Digital, Culture, Media and Sport following the recommendation of the Committee.  The export deferred items included the painting by Bernardo Bellotto The Fortress of Königstein from the North; an English tapestry made in the Indian Manner by 17th Century London weaver Michael Mazarind; a Wedgwood First Day’s Vase; and vase designed for Cardiff Castle by the noted architect and designer William Burges.  4 items were bought by public institutions.

https://www.gov.uk/government/statistics/export-of-objects-of-cultural-interest-report-201617

EUROPEAN COURT OF JUSTICE RULES IN TRUCK DRIVER’S FAVOUR IN CASE AGAINST REVENUE COMMISSIONERS

The Irish Examiner on 26th April reported that the ECJ has ruled in favour of a truck driver in his challenge against a tax penalty demand for €1.5 million from Greece concerning a demand that was served on him by Revenue over 10 years after his arrest, conviction and subsequent acquittal of smuggling cigarettes in Greece.  The driver claimed the Greek Authorities have not complied with the provisions of the relevant EU Directive before requesting the assistance of Revenue, and he was never properly notified of the demand nor was he given an opportunity to contest it, which is a breach of his rights.  He also was informed the demand was a penalty in respect of a criminal offence that he was acquitted of.

https://www.irishexaminer.com/breakingnews/ireland/–839470.html

CHARTERED INSTITUTE OF TAXATION PROPOSES IMPROVEMENTS TO SCRUTINY OF UK TAX LEGISLATION

On 26th April, the CIOT submitted a number of proposals for improving parliamentary scrutiny of the Finance Bill and other tax legislation.

https://www.tax.org.uk/media-centre/press-releases/press-release-institute-proposes-improvements-scrutiny-tax-legislation

CHINESE AUTHORITIES BUST MAJOR ONLINE CASINO GAMBLING RING

Calvin Ayre on 26th April reported that Chinese authorities have broken up a major illegal online gambling ring, arresting over 100 suspects in 2 major operations, froze bank accounts containing $13.4m in funds and seized property.

https://calvinayre.com/2018/04/26/business/china-bust-illegal-online-casino/

LATEST AML OVERHAUL WON’T HARMONISE EU RULES, EUROPEAN BANKING AUTHORITY WARNS

Law 360 on 26th April reported that the director of the EBA urged Parliament to rethink how they draft new laws aimed at cracking down on money laundering and terrorist financing, warning that the current approach doesn’t go far enough to ensure the regulation will be implemented harmoniously across the bloc.

https://www.law360.com/articles/1037486

SPAIN:  HOW A CRIME GROUP SMUGGLED MIGRANTS AND CANNABIS ON JET SKIS

Europol on 26th April published a news release that said an organised crime group from Morocco used jet skis to smuggle migrants and cannabis across the Mediterranean Sea to Spain.  n total, 19 people of Moroccan origin were detained in Spain.Police officers carried out 7 houses searches in Almeria, Spain, where they seized 11.6 kg of drugs and over €15 000 in cash.  21 devices were examined and 16 gigabytes of data submitted to the Spanish law enforcement agencies by Europol.  The organised crime group was made up of Moroccan citizens who were residing in various EU countries, mainly France, Italy and Spain.  They contacted and sheltered migrants who had been smuggled with falsified documents from the Spanish autonomous city of Ceuta, located on the north coast of Africa, to mainland Spain, crossing the Strait of Gibraltar.

https://www.europol.europa.eu/newsroom/news/morocco-to-spain-in-30-minutes-how-crime-group-smuggled-migrants-and-cannabis-jet-skis

IRELAND: CABINET APPROVES MINISTER’S PROPOSED LEGISLATION TO IMPLEMENT 4TH ML DIRECTIVE

Baker McKenzie on 26th April reported that the Minister for Justice and Equality has received Cabinet approval for the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018. The Bill transposes most of the provisions of the 4th EU Money Laundering Directive and implements the most recent recommendations of FATF.

http://www.riskandcompliancehub.com/ireland-cabinet-approves-minister-flanagans-proposed-legislation-to-tackle-money-laundering/

MAYOR OF ODESSA ACCUSED OF MEMBERSHIP OF CRIMINAL GANG

On 26th April, Baker McKenzie reported that, according to the BBC, the mayor of Odessa, Gennadiy Trukhanov, is said to have been a member of a criminal gang from Odessa and to have owned significant shares in 4 foreign companies in British tax havens.  Trukhanov is alleged to have been member of a criminal group that earned money from the oil industry.  In the 1990s, during the collapse of the USSR, members of the group based in Italy are alleged to been involved in smuggling drugs and weapons.

http://www.riskandcompliancehub.com/ukraine-mayor-of-odessa-accused-of-membership-of-criminal-gang/

THE BRITISH HACKER WHO BECAME THE ISLAMIC STATE’S CHIEF TERROR CYBERCOACH

In its April 2018 edition, the Combating Terrorism Center at west Point’s CTC Sentinel included an article providing a profile of Junaid Hussain.  Until his death in a US drone strike in August 2015, Junaid Hussain was the Islamic State’s most prolific English-language social media propagandist, working to incite and guide sympathizers in the UK, US, and beyond to launch terrorist attacks.  Before joining the jihad in Syria, Hussain was part of a hacking collective in the UK, focusing much of his attention on perceived injustices against Muslims.  In many respects, he was well integrated into British society with his family home in a leafy suburb of Birmingham.

https://ctc.usma.edu/british-hacker-became-islamic-states-chief-terror-cybercoach-profile-junaid-hussain/

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EU MYANMAR/BURMA SANCTIONS – EXTENDS AND STRENGTHENS ITS ARMS EMBARGO, ADOPTS A FRAMEWORK FOR TARGETED MEASURES AGAINST OFFICIALS RESPONSIBLE FOR SERIOUS HUMAN RIGHTS VIOLATIONS

On 26th April, a news release advised that the EU Council has imposed further restrictive measures on Myanmar/Burma, strengthening the EU’s arms embargo and extended it for a further year.  It also targeted the Myanmar/Burma army and border guard police officials.  It imposed restrictions on the export of equipment for monitoring communications that might be used for internal repression and prohibited the provision of military training to and military co-operation with the Myanmar/Burma army.  The necessary legislation will be published on 27th April.

http://www.consilium.europa.eu/en/press/press-releases/2018/04/26/myanmar-burma-eu-extends-and-strengthens-its-arms-embargo-and-adopts-a-framework-for-targeted-measures-against-officials-responsible-for-serious-human-rights-violations/

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MEP ASKS 50 FIU TO LAUNCH INVESTIGATIONS INTO PILATUS BANK

The Malta Independent on 26th April reported that PN MEP David Casa has written to over 50 Financial Intelligence Units requesting an investigation into various aspects surrounding Pilatus Bank.

www.independent.com.mt/articles/2018-04-26/local-news/David-Casa-requests-UK-FIAU-investigation-into-Pilatus-Bank-6736188847

Meanwhile, the newspaper also reported that MFSA officials confirmed that the due diligence on Pilatus Bank was not carried out by KPMG but refused to tell MEPs which firm had carried it out saying they were bound by a confidentiality clause.  They insisted it was not KPMGnor a Maltese firm but a reputable institution which was commissioned to carry out such jobs by other EU Member States, including the UK banking watchdog.  Moreover, they insisted that at the time they were not aware that the Pilatus Bank owner was already under investigation by the US authorities.

https://www.timesofmalta.com/articles/view/20180426/local/mfsa-refuse-to-say-who-carried-out-pilatus-licence-checks.677488

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CHINA’S HUAWEI MOBILE PHONE MAKER UNDER US PROBE FOR IRAN SANCTIONS VIOLATIONS

Phys.org and others on 26th April carried a story saying that the US DoJ has opened an investigation into suspected violations of Iran sanctions by China’s Huawei Technologies, the Wall Street Journal reported.  The Journal report gave no details about the investigation. The New York Times has reported that the company has been subpoenaed by the Commerce and Treasury Departments over alleged violations of Iran and North Korea sanctions.
https://phys.org/news/2018-04-china-huawei-probe-iran-sanctions.html#jCp

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OTHER THINGS YOU MAY HAVE MISSED – APRIL 24/25

24th April 2018

 US COURTS’ DISMISSAL OF CLASS ACTION AGAINST INTERNATIONAL BANK FOR ALLEGED AML CONTROL MISREPRESENTATIONS

On 20th April, Buckley Sander LLP published an article saying that on 13th April a district court’s dismissal of a proposed class action had been upheld.  The claim had allegedthat an international bank misrepresented the effectiveness of internal controls to investors, during a time when Russian traders were laundering more than $10 billion through the bank.  In May 2016, investors filed a class action complaint against the bank alleging securities law violations for touting its compliance efforts while Russian clients were engaging in “mirror trades”.

https://buckleysandler.com/blog/2018-04-20/2nd-circuit-affirms-dismissal-class-action-against-international-bank-alleged-aml-control-misrepresentations#page=1

AML AND FRAUD DEVELOPMENTS IN THE BVI

On 23rd April, law firm Harneys produced an article on recent developments re AML and fraud in the BVI.

https://www.lexology.com/navigator#!results/686/view

BRIBERY ACT CASE FLAGS NEED FOR ACTIVE PREVENTION IN UK

On 19th April, chartered secretaries’ association, ICSA, published an article saying that the outcome of a recent failure to prevent bribery case shows how seriously prosecutors are taking compliance.  Corporations in the UK are facing pressure to not merely abstain from crime, but to actively prevent their staff committing it.  Where once companies would not be culpable for the misbehaviour of staff, they are now being asked to have adequate measures in place to stop tax evasion and bribery, or face punishment.  After the Home Office published an anti-corruption strategy in December, some campaigners called for this approach to be applied to other types of economic crime.

http://www.mondaq.com/article.asp?articleid=693618&email_access=on&chk=1654442&q=960824

UWO AND THE STEADY EXPANSION OF EXTRA-TERRITORIAL JURISDICTION OVER FINANCIAL CRIME IN THE UK

On 19th April, Bright Line Law published an article which sets out to examine the ever-expanding jurisdiction of UK criminal courts over extra-territorial conduct, persons, and property.

http://www.mondaq.com/article.asp?articleid=693722&email_access=on&chk=1654546&q=960824

LAB-GROWN DIAMONDS THREAT TO BIG MINERS – BUT HOW MIGHT PATENTS PLAY THEIR PART?

On 23rd April, Urquhart-Dykes & Lord LLP published an article (originally published on 4th December) following an October FT article which discussed why/if lab-grown diamonds pose a threat to big miners such as De Beers in the diamond jewellery sector.  While sales of laboratory -grown diamonds are currently only about 2% of supply in this multibillion dollar sector, it is reported that they are expected to reach 10% by 2030 and perhaps more.  Speed of growth is linked to changing consumer taste and reduced costs.

http://www.mondaq.com/article.asp?articleid=686970&email_access=on&chk=1647794&q=960824

 

US UKRAINE-/RUSSIA-RELATED GENERAL LICENCES; PUBLICATION OF NEW FAQ

On 23rd April, OFAC issued a news release saying that General License 14 authorises US persons to engage in specified transactions related to winding down or maintaining business with United Company RUSAL PLC (RUSAL) and its subsidiaries until October 23rd 2018.  The FAQ include a clarification that, in accordance with preexisting OFAC guidance, OFAC will not impose sanctions on foreign persons for engaging in the same activity involving RUSAL or its subsidiaries that General License 14 authorises US persons to engage in​.  OFAC is also issuing another new licence, Ukraine-/Russia-related General License 12A, which replaces and supersedes General License 12 in its entirety.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180423.aspx

CIGARETTE SMUGGLING IN BULGARIA FOR Q4 2017 AT 6.6%

Focus FEN on 23rd April reported Cigarette smuggling in Bulgaria for the 4th quarter of 2017 was at 6.6%, according to data from a survey conducted by tobacco companies.  Compared to the previous quarter, it is an increase of 0.6%, but on an annual basis the decrease is 1.2%. The event was devoted to the fight against illegal trade.  The survey covered 20 major cities in the country or 47% of the population. 10 cities are above the average level, and the remaining 10 are below average.  The survey shows that Bulgaria ranks well compared to other EU countries. The UK and Ireland are at the top of the list with 30 to 38% of smuggled tobacco.

http://www.focus-fen.net/news/2018/04/23/429685/cigarette-smuggling-in-bulgaria-for-q4-2017-at-66.html

HELICOPTER-FLYING DRUG DEALERS SMUGGLED COCAINE THROUGH LYDD AIRPORT AND LANDED ON HELIPADS AT 2 KENT HOTELS

Kent Live on 23rd April reported that 3 men pleaded guilty to drug offences and 2 have already been sentenced.  The gang used a helicopter to fly £7 million worth of cocaine from Europe to the UK.

https://www.kentlive.news/news/kent-news/helicopter-flying-drug-dealers-smuggled-1491075

CROOKED EX-COP RAN GREEK TOBACCO SMUGGLING GANG

On 23rd April, Ekathimerini reported that a tobacco smuggling gang was led by a retired policeman, according to a spokesman for the Greek Police (ELAS).  The former officer, 56, and 2 other men, 47 and 60, were arrested in co-ordinated police sweeps.  Police said that the three men operated out of four warehouses, which they had transformed into factories that processed, produced and packaged contraband cigarettes and tobacco.  The warehouses were also used to store contraband tobacco products.

http://www.ekathimerini.com/227970/article/ekathimerini/news/crooked-ex-cop-ran-tobacco-smuggling-gang

STOLEN CALIFORNIA SUCCULENTS SMUGGLED TO ASIA

Herald Net on 23rd April reported that state wildlife officials say they have uncovered an international scheme in which thieves from Korea and China slip into wild landscapes in Northern California to pluck succulents to sell on the thriving black market in Asia.  The succulents, called Dudleya farinosa, fetch up to $50 each in Asia, where a growing middle class is fueling demand.  Since an investigation started in December, state officials have nabbed suspects from China and Korea in 3 separate thefts along the Humboldt and Mendocino coast and recovered thousands of plants.

http://www.heraldnet.com/nation-world/officials-stolen-california-succulents-smuggled-to-asia/

EU COMMISSIONER PLANS MALTA ‘MONEY LAUNDERING’ INSPECTION

On 23rd April, the EU Observer reported that Vera Jourova, the European Commissioner for Justice, told reporters she will go to Malta in the coming weeks to see how to improve the country’s the Financial Intelligence Analysis Unit, which probes money-laundering issues.  She will also look into the ongoing investigation of assassinated journalist Daphne Caruana Galizia.

https://euobserver.com/tickers/141676

PRIME MINISTER: WE HAVE UNTIL JULY TO CLEAN UP LATVIAN BANKING SECTOR

LSM on 24th April reported that Prime Minister Māris Kučinskis has said that Latvia has until July to show that it has taken real measures to tackle the problem of large-scale money laundering in its banking sector.

https://eng.lsm.lv/article/society/crime/prime-minister-we-have-until-july-to-clean-up-latvian-banking-sector.a276080/

DISCHARGED BANKRUPT STILL LIABLE FOR DEBT INCURRED THROUGH DISHONEST ACTIONS

In its Financial Litigation newsletter for April, law firm Gowling WLG reported that the English High Court has recently considered the meaning of fraud in the exception under s 281(3) of the Insolvency Act 1986 (IA).  It reminds one that the purpose of the qualification in s.281(3) IA is to prevent a person from using the process of bankruptcy or invoking his bankruptcy and discharge therefrom as a medium for becoming free from debts and liabilities resulting from his actual dishonesty.  It is an anti-avoidance and preservative provision aimed at continuing the rights of a creditor who has been defrauded by the bankrupt.

https://gowlingwlg.com/en/insights-resources/articles/2018/finance-litigation-april-2018?utm_source=insight&utm_medium=email&utm_campaign=insights

OLAF: ILLICIT CUT TOBACCO IS A SIGNIFICANT AND GROWING MARKET

EurActiv on 24th April reported that, according to OLAF, volume of illicit cut tobacco in Europe poses a significant problem and is a growing market.  Its director of policy is quoted as saying that trends suggest that the illicit cut tobacco products account for a high share of the overall cut tobacco market in Central and Eastern European countries.  The article explains that illicit cut tobacco, also called “chop-chop” or “bulk tobacco”, is a type of tobacco that is cut or shredded, usually sold in pouches or bags and smoked in handcrafted cigarettes (roll-your-own or make-your-own).  This product is typically priced by weight and packed in unbranded bags. It is sold as loose or cut/shredded tobacco leaf outside legitimate sale channels.  Studies suggest that the effect is €1 billion in lost revenue across 15 European markets.  EU policymakers fear that Free Trade Zones, such as the one located in Podgorica in Montenegro, are used in order to circumvent tax and products regulation.  However, overall legal tobacco consumption in the EU is steadily declining.  The article says that traditionally the illicit tobacco trade has been dominated by counterfeiting, but “illicit whites” steadily dominate the market. These cigarettes may be legally produced but are then smuggled and traded illegally.  OLAF emphasises that a particular problem area is the smuggling of cheap whites across the EU’s Eastern Border.

https://www.euractiv.com/section/economy-jobs/news/olaf-illicit-cut-tobacco-is-a-significant-and-growing-market/

OLAF SUSPECTS VAT FRAUD AT CHINA’S NEW GATEWAY TO EUROPE

EurActiv on 24th April carried an article saying that EU and Italian authorities are investigating suspected wide-scale tax fraud by Chinese criminal gangs importing goods via Greece’s largest port of Piraeus, a trade gateway between China and Europe.

https://www.euractiv.com/section/eu-china/news/olaf-suspects-vat-fraud-at-chinas-new-gateway-to-europe/

ORGANISED CRIME THREATENS UGANDA’S THRIVING GOLD TRADE

Defence Web on 24th April reported that gold has become one of Uganda’s top exports, but multiple questions surround this glittering trade.  The gold trade was worth $200 million to the Ugandan economy last year, but there are no official figures on where the gold came from, or where it is going’, the campaign leader in Uganda for NGO Global Witness told CNN shortly after a report was released in June 2017 on the trade in minerals from the Democratic Republic of the Congo (DRC) and South Sudan passed through Uganda on their way to international markets.  The article also says that a second report, submitted by the UN Group of Experts to the UN Security Council in August 2017, identified Uganda as a major transit route for the illicit smuggling of gold from the DRC to the UAE.  The UN Group of Experts traced the flow of gold exploited, taxed and trafficked by armed groups – particularly the FDLR (the Democratic Forces for the Liberation of Rwanda) and other militia groups operating in eastern DRC.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51477:iss-organised-crime-threatens-ugandas-thriving-gold-trade&catid=87:border-security&Itemid=188

SOME US ALLIES AFFECTED BY SANCTIONS IN OBTAINING RUSSIAN ARMS

Defence Web on 24th April reported that US sanctions on Russian military exports have put the brakes on a $6 billion deal with India and may derail the arms purchases of other US allies around Asia.  Any country trading with Russia’s defence and intelligence sectors will face sanctions.  But US allies who buy weapons and equipment from Russia, the world’s second-largest arms exporter, could suffer as well.  This is because the effects of the US sanctions law could be more sweeping than intended, said Cara Abercrombie, a visiting scholar at the Carnegie Endowment for International Peace.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51474:some-us-allies-caught-in-crossfire-of-sanctions-on-russian-arms&catid=113:international-news&Itemid=248

8 ARRESTED IN CHINA FOR MASSIVE PONZI FRAUD

The Shanghai Daily in its 25th April edition reports that 8 suspects who were allegedly involved in a Ponzi scheme worth US$9.6 billion have been arrested.  Zhou Boyun, the legal representative of Shan Lin Financial, the company which reportedly operated the scheme, turned himself in to the police on April 9th.  The company was established in 2013 and registered at the Shanghai free trade zone.  Zhou has opened over 1,000 branches since October 2013 without any permit.  Staff were recruited and trained to sell the financial products on which the company promised high returns of 5.4% to 15%, police said.  Zhou opened 4 online platforms since 2015 to sell the same products.

https://www.shine.cn/archive/metro/society/8-arrested-for-Ponzi-fraud/shdaily.shtml?src=ilaw

THE ANATOMY OF CONSTRUCTION CORRUPTION IN NEW YORK

The Real Deal, which focusses on the real estate sector in New York, carries an article in its April 2018 edition saying how bribery and overbilling schemes have become commonplace in the world of real estate’s middlemen – in the $45.3 billion construction industry.

https://therealdeal.com/issues_articles/the-anatomy-of-construction-corruption/?src=ilaw

GLOBAL INDUSTRIAL GIANT TECHINT FACES MULTINATIONAL MONEY-LAUNDERING AND BRIBERY ALLEGATIONS

OCCRP on 24th April reported that the Techint group operates steel and iron factories, manufactures gas and oil pipelines and builds energy plants.  It has been controlled by a family dynasty, and has been a mainstay of both the Italian and Argentinian economies since WW2.  The $25 billion group, which reportedly includes 450 operating companies and a 75,000-strong workforce in 45 countries, has never before faced questions about the probity of its worldwide financial operations.  It is said that journalists claim to have uncovered a previously unknown web of offshore entities  used by Techint associates to shuffle money through tax havens and to pay bribes to Brazilian state companies.  Denying the allegations, Techint’s Swiss and Italian subsidiaries told L’Espresso that the company would prove its innocence in court.

https://www.icij.org/blog/2018/04/kings-steel-pinballed-new-panama-paradise-papers-probe/?src=ilaw

BELGIUM’S “CAYMAN TAX” – €510 MILLION BUDGETED FOR AND €5 MILLION COLLECTED

The Brussels Times on 24th April reported that the Cayman tax, which targets the sums that Belgians have placed in tax havens, only brought in €5 million last year – a mere 1% of the €510 million which the Finance Minister had forecast in the 2017 budget.

http://www.brusselstimes.com/belgium/11107/cayman-tax-510-million-budgeted-for-5-million-collected?src=ilaw

ASEAN: TACKLING FINANCIAL CRIME THROUGH BIG DATA

On 24th April, Thomson Reuters Financial and Risk produced an article which said that the fight against financial crime will be a major talking point at this year’s ASEAN Regulatory Summit on 8th May, in particular the value of data analytics and cross-border public-private information-sharing.  It says that there needs to be a fundamental re-think of the current AML system, because the current regime is just not effective, and its inefficiencies pose a significant risk to the integrity of the global financial system, undermining public trust in the process.  However, no single party can combat financial crime alone.  As regulators require banks to make more stringent checks on their customers and perform rigorous due diligence to fulfil their compliance obligations, it’s crucial to use all the tools at our disposal to step up the fight against financial crime.

https://www.jdsupra.com/legalnews/tackling-financial-crime-through-big-95737/

NORWAY TO FURTHER RESTRICT PAYMENT TO INTERNATIONAL GAMBLING SITES

Calvin Ayre on 24th April reported that Norway’s government is proposing new methods of curbing competition of the state-owned gambling monopoly, including stricter monitoring of online gambling payment processing.   Lotteri-og Stiftelsestilsynet (Norwegian Gaming Authority) began a consultation on its proposals to further restrict internationally licensed online gambling operators’ access to Norwegian gamblers.  The consultation will be open until August 15th.

https://calvinayre.com/2018/04/24/business/norway-restrict-payments-gambling-sites/

EUROPEAN SANCTIONS BLOG AWARD

Congratulations to the always up to date European Sanctions Blog which, on 24th April, reported that it has been selected as one of the ‘Top 30 European Law Blogs’ by Feedspot.  The award is based on reputation and search ranking, influence and popularity on social media sites, quality and consistency of posts, and editorial team and expert review.

https://europeansanctions.com/

UN AMENDS 1 ENTRY ON ITS YEMEN SANCTIONS LIST

On 24th April a UN news release advised that the entry for ALI ABDULLAH SALEH had received minor amendments.

https://www.un.org/press/en/2018/sc13313.doc.htm

UK MIXED PAPER EXPORTS SLIDE 13%-PLUS IN EARLY 2018

Customs Today on 24th April reported that overseas shipments of mixed paper dropped from 264,049 tonnes in early 2017 to 229,425 tonnes, not least because of China’s new import stance.  Combining the figures for all grades of recovered fibre, UK exports were 3.6% lower in the first 2 months of this year.

http://www.customstoday.com.pk/uk-mixed-paper-exports-slide-13-plus-in-early-2018/

SHIP FIRE FORCES THE END TO DFDS LOSS-MAKING ROSYTH-ZEEBRUGGE RO-RO SERVICE

Loadstar on 24th April reported that a major ship fire has injured 1 crew member and forced DFDS to cancel its “loss-making” Rosyth-Zebrugge ro-ro route.  The fire aboard Finlandia Seaways happened on 16th April in the engine room, with the injured crew member being airlifted to hospital and treated for smoke inhalation.

https://theloadstar.co.uk/ship-fire-brings-end-dfdss-loss-making-rosyth-zebrugge-ro-ro-service/

UNODC-WCO CONTAINER CONTROL PROGRAMME REPORTS RECORD HIGH COCAINE SEIZURES IN LATIN AMERICA AND THE CARIBBEAN

The UN Office for Drugs and Crime on 24th April reported that the UN/WCO Container Control Programme (CCP), seek to improve the capacity of customs and law enforcement officials in Latin America and the Caribbean, among others, to detect and disrupt the flow of illicitly trafficked goods, while facilitating legitimate trade and raising state revenues.  In 2018, the joint customs and police Port Control Units (PCU) have made significant seizures of drugs, precursor chemicals, merchandise breaching Intellectual Property Rights (IPR) and protected wildlife.  UNODC experts cited 18 operations that netted more than 8.9 tonnes of drugs in addition to the detention of 18 containers due to IPR infringements.  CCP operates in 14 countries in Latin America and the Caribbean, including Argentina, Brazil, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Jamaica, Panama, Paraguay, Peru and Surinam. The Programme soon will expand to Bolivia and Colombia while negotiations with Mexico are ongoing.

https://www.unodc.org/unodc/en/frontpage/2018/April/unodc-wco-container-control-programme-reports-record-high-cocaine-seizures-in-latin-america-and-the-caribbean.html?ref=fs1

EU CASE COULD CALL ENTIRE FRAMEWORK FOR INTERNATIONAL DATA TRANSFERS INTO QUESTION

Out-Law on 24th April carried a briefing saying that the EU’s highest court is being asked to consider whether one of the main methods used by businesses to move personal data out of the EU is legal.  The CJEU is being asked 11 questions by the High Court in Ireland that could lead to it preventing businesses from relying on ‘model clauses’ to transfer personal data from the EU to ‘third’ countries, against what is provided for in EU data protection law.  The questions posed by the Irish court stem from an investigation by the country’s data protection authority into whether the use of model clauses to facilitate EU-US data transfers ensures compliance with EU data protection laws.

https://www.out-law.com/en/articles/2018/april/eu-international-data-transfers-framework/

CAYMAN ISLANDS INSISTS MONEY LAUNDERING REPORTING CANNOT BE DELEGATED TO THIRD PARTY

Baker McKenzie on 24th April reported that Cayman Islands investment funds must, from 1st June, appoint natural persons as their MLRO, rather than delegating their AML functions to corporate bodies. New AML regulations came into force on 2nd October, making both regulated and unregulated investment entities, as well as insurance entities and finance vehicles, subject to the AML regime and mandatory procedure obligations.  The reforms were necessary in order to comply with the Caribbean Financial Action Task Force’s inspection at the end of 2017.

http://www.riskandcompliancehub.com/cayman-islands-insists-money-laundering-reporting-cannot-be-delegated-to-third-party/

LGA “EXTREMELY CONCERNED” AT REPORTED BLOCKING OF PLANS TO CUT MAX FOBT STAKES IN UK

Local Government Lawyer on 24th April reported that the Local Government Association has expressed concern at reports that plans to reduce the maximum stakes on fixed odds betting terminals (FOBTs) have been blocked by the Treasury.

http://www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=35006%3Alga-extremely-concerned-at-reported-blocking-of-plans-to-cut-max-fobt-stakes&catid=61&Itemid=29

MONEY LAUNDERING – RECENT CASES FROM A EU BANKING SUPERVISORY PERSPECTIVE

On 24th April, the EU Parliament’s research service produced a briefing which provides some insight into recent cases of breaches or alleged breaches of AML rules by supervised banks and discusses which indicators may point to a potential money laundering problem.  The briefing also outlines the respective roles of European and national authorities in applying AML legislation that have been further specified in the 5th AML Directive adopted by the EU Parliament Plenary on 19th April.

http://www.europarl.europa.eu/RegData/etudes/IDAN/2018/614496/IPOL_IDA(2018)614496_EN.pdf

25th April 2018

US BARS 168 ARMS EXPORT CONTROL ACT VIOLATORS

On 24th April, American Shipper reported that the US State Department had announces the names of 168 individuals and entities banned from exporting defence articles that require a State Department licence.  It also notes that the International Traffic in Arms Regulations require anyone who has knowledge that another person is subject to debarment to refrain from participating directly or indirectly in any ITAR-controlled transaction in which the ineligible person might benefit or have a direct or indirect interest therein, unless State’s Directorate of Defense Trade Controls provides written approval.

https://www.americanshipper.com/main/news/state-debars-arms-export-control-act-violators-71175.aspx?source=Little4

UK MAGNITSKY LAW

On 24th April, in its UK and US sanctions update, K & L Gates noted that section 13 of the Criminal Finance Act 2017 came into force on 31st January, inserting ‘Magnitsky-style’ provisions into UK law that can target officials responsible for human rights abuses.  This, it notes, expands the current definition of ‘unlawful conduct’ in the Proceeds of Crime Act 2002 to include conduct occurring outside of the UK, which ‘constitutes, or is connected with, the commission of a gross human rights abuse or violation’.  The enforcement provisions now permit recovery orders and property freezing orders for property obtained via such ‘unlawful conduct’.

http://www.klgates.com/eu-and-uk-sanctions-and-export-controls-update-04-24-2018/

UK SELLS $445 MILLION OF ARMS TO ISRAEL, INCLUDING SNIPER RIFLES

The Middle East Eye claiming an exclusive reported on 24th April that the UK has approved the sale of arms to Israel worth $445 million since the 2014 Gaza war, including components for drones, combat aircraft and helicopters along with spare parts for sniper rifles, according to figures seen by Middle East Eye.  It says that arms export licences to Israel soared to £216 million last year from £20 million in the wake of the Gaza war, new Department for International Trade figures show.   However, this increase is boosted by a major £183 million licence covering “technology for military radars”, but ministers have also approved the sale for export of grenades, bombs, missiles, armoured vehicles, assault rifles, small arms ammunition, sniper rifles and components for sniper rifles.

http://www.middleeasteye.net/news/exclusive-uk-sells-more-500m-arms-israel-including-sniper-rifles-718473139

BOLIVIA: CHINESE CONTRABAND GARLIC AFFECTS LOCAL PRODUCT

The Fresh Plaza website reported that Chinese garlic, which is smuggled into the country, floods the local market and is sold at 40% less than the national product, which negatively affects national producers.  It says that 25 lb of national garlic arroba costs 190 to 200 bolivianos in the most populous markets of the city, while that of Chinese origin costs 160 to 170 bolivianos.

http://www.freshplaza.com/article/193370/Bolivia-Chinese-contraband-garlic-affects-local-product

PAIR JAILED FOR RECYCLING TAX SCAM INVOLVING IT EQUIPMENT

MRW on 24th April reported that 2 businessmen have been jailed for running a bogus IT recycling operation for a gang which was convicted of a £2.6 million tax fraud.  The businesses, Recycle Technology and CMS Computer Monitor Services, were run for a 23-strong gang, whose members were jailed in 2016 for a total of 54 years.  They claimed to repair computer monitors before selling them to customers in Africa, but HMRC investigators found this was a scam to steal VAT repayments, with each stage of the transaction chain backed up with fake documents.

https://www.mrw.co.uk/latest/pair-jailed-for-recycling-tax-scam/10030411.article

PILATUS BANK UK BRANCH CLOSED

Malta Independent on 24th April reported that Pilatus Bank’s UK branch has been closed down according to the UK’s Prudential Regulation Authority.  Pilatus Bank had established a registered branch in the UK, passporting in as an authorised EEA firm. They also said that the bank has a registered freedom of services passport in the UK.

http://www.independent.com.mt/articles/2018-04-24/local-news/Pilatus-Bank-UK-branch-closed-down-6736188731

ANGOLAN TYCOON’S FROZEN FUNDS HIGHLIGHT KPMG ROLE IN OFFSHORE SECRECY

The ICIJ on 23rd April reported that Mauritian authorities have frozen 91 bank accounts linked to investor Jean-Claude Bastos, a key figure from the Paradise Papers with close connections to Angola’s former leaders.  The Mauritius Supreme Court froze accounts in 4 judgements issued this month as part of probes involving Bastos and part of a $3 billion Angolan sovereign wealth fund investment, according to Mauritian newspaper L’Express.  Mauritius’ offshore regulator also suspended the licenses of 7 investment companies linked to Bastos’ Zurich-based management company, Quantum Global.  The article says that KPMG worked with Bastos and Quantum Management in Mauritius as tens of millions of dollars were shuffled by them from Angola to Mauritius and beyond.

https://www.icij.org/investigations/paradise-papers/angolan-tycoons-frozen-funds-highlight-kpmgs-role-in-offshore-secrecy/

VALUATION PROCEDURES UNDER THE UNION CUSTOM CODE – EARLIER SALES CONCESSION WITHDRAWN

On 25th April, HMRC published Customs Information Paper 5 about the withdrawal of the importers transitional arrangement for the earlier sale provision on 31st December 2017.  From that date all importers and their agents may no longer declare an earlier sale as the basis for the customs value.  Previously, where there was a series of sales before the importation of the goods, any sale in the supply chain prior to the last sale which led to the introduction of the goods into the customs territory could potentially be used as the basis of the customs value.

https://www.gov.uk/guidance/valuation-procedures-under-the-union-custom-code-earlier-sales-cip5

ICELANDIC FUGITIVE IN BITCOIN HEIST ARRESTED IN AMSTERDAM

Gambling 911 reported on 25th April that Amsterdam police have arrested an Icelandic fugitive suspected of masterminding the theft of hundreds of computers used to mine bitcoin and other virtual currencies.  Stefansson fled a low-security prison and flew to Sweden.  Icelandic officials said it was unlikely that Stefansson had to show a passport at the airport since he travelled within Europe’s passport-free travel zone but the plane ticket he used was under someone else’s name.  Stefansson was among 11 people arrested for allegedly stealing the computers in a series of burglaries in December and January.

https://www.gambling911.com/businessfinancial/icelandic-fugitive-bitcoin-heist-arrested-amsterdam-.html

G7 SECURITY MINISTERS COMMIT TO TACKLING MODERN SLAVERY WORLDWIDE

A new release from the UK Home Office on 25th April said that ministers from the G7 have agreed to 9 commitments aimed at protecting the most vulnerable from trafficking and forced labour.

https://www.gov.uk/government/news/security-ministers-commit-to-tackling-modern-slavery-worldwide

SOUTH AFRICA: POLICE RHINO ARREST SPARKS CALL FOR LIFESTYLE AUDIT

Defence Web on 25th April reported that the arrest of a policeman based at Skukuza in Kruger National Park in connection with allegations of poaching has been noted by Parliament’s Police Portfolio Committee with a call for vetting of all police officers near national parks.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51480:police-rhino-arrest-sparks-call-for-lifestyle-audit&catid=87:border-security&Itemid=188

US TO LOWER FOREIGN ARMS SALES SURCHARGE

Defence Web on 25th April reported that the US government will reduce its administrative surcharge on foreign arms sales to 3.2% from 3.5% from June as part of a broader bid to make US weapons more competitive internationally, a top US official told Reuters.  The US government assessed the surcharge on the full value of all government-to-government foreign arms sales to cover its administrative costs, and avoid any charge to US taxpayers for such transactions.  The move comes days after the Trump administration announced an overhaul of US arms export policy aimed at expanding sales to allies, saying it would bolster the American defence industry and create jobs at home.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51493:united-states-to-lower-foreign-arms-sales-surcharge&catid=113:international-news&Itemid=248

HMRC ADMITS “HUGE ERROR OF JUDGMENT” IN CITING POLITICAL DONATIONS IN REFUSAL TO RAID MONEY LAUNDERING SUSPECT

Buzz Feed on 25th April reported that HMRC made a “huge error of judgment” by citing political donations when it refused to help French authorities raid a money laundering suspect, Chancellor of the Exchequer Philip Hammond has admitted – and the government will conduct its own internal review into the matter.  An HMRC official, rejected a request from investigators in France, made direct reference to the fact that the UK telecoms giant Lycamobile is “the biggest corporate donor to the Conservative party”.

https://www.buzzfeed.com/richholmes/uk-admits-huge-error-of-judgment-in-citing-political?src=ilaw&utm_term=.jc9LPgXe6#.ablKWyMEa

2 SCOTS ARRESTED AMID INTERNATIONAL CYBERCRIME PROBE

2 men from Lanarkshire have been arrested after an international investigation into global cyber attacks.  The arrests follow the closure of a website linked to more than 4 million cyber attacks including those targeting some of the UK’s biggest banks.  Authorities in the Netherlands, Serbia, Croatia and Canada, with support from Police Scotland and Europol, targeted 6 members of the crime group behind webstresser.org.  Dutch police seized servers and took down the website.  Arrests were made in Croatia, Canada and Serbia and Scotland.  NCA bosses say cyber criminals have used webstresser.org to launch more than 4 million distributed denial of service (DDOS) attacks.

https://stv.tv/news/west-central/1413385-two-scots-arrested-amid-international-cybercrime-probe/?src=ilaw

http://www.nationalcrimeagency.gov.uk/news/1336-international-operation-shuts-down-notorious-cyber-crime-website

https://www.europol.europa.eu/newsroom/news/world%E2%80%99s-biggest-marketplace-selling-internet-paralysing-ddos-attacks-taken-down

FOUNDER OF CHINESE INVESTMENT FUND CONVICTED OF INSIDER TRADING IN PORTLAND TECH CASE

Portland Live in Oregon on 25th April reported Benjamin Chow, the founder of the Chinese-backed investment fund that tried in vain to buy Portland’s largest tech company, was convicted of insider trading.  Chow helped start Canyon Bridge Capital Partners, a Chinese-funded firm that offered $1.3 billion to buy Portland-based Lattice Semiconductor in 2016, but Trump blocked the deal on security grounds.

http://www.oregonlive.com/silicon-forest/index.ssf/2018/04/founder_of_chinese_investment.html?src=ilaw

FINANCIAL CRIMES ON THE RISE IN THE MIDDLE EAST

Gulf News in its 26th April edition reported that incidents of financial fraud surged last year with 34% of respondents reporting fraud/financial crime in PwC survey tracking trends frauds in economic crime.  According to PwC’s the 2018 Middle East Economic Crime and Fraud Survey, asset misappropriation, business misconduct and fraud committed by consumers are the 3 most frequent types of fraud and/or economic crime reported by respondents.  Internal Audit was the main contributor to detecting the most disruptive fraud experienced by respondents in the last 24 months, followed by internal tip-offs, fraud risk management and suspicious activity monitoring (14%).

https://gulfnews.com/business/sectors/banking/financial-crimes-on-the-rise-across-the-middle-east-1.2211778?src=ilaw

STRUCTURAL ENGINEER IMITATORS FACE UP TO 257 YEARS IN JAIL

Construction Manager on 18th March reported that 2 men who posed as structural engineers are have been arrested by California police and charged with 487 counts related to the sale of fraudulent documents.  Ruben Gutierrez and Wilfrido Rodriguez had previously worked for Palos Verdes Engineering, Rodriguez as an engineering drafter and Gutierrez as an architectural designer, but neither were licensed or trained architects or engineers, prosecutors said.  Police are reported to have discovered more than 735 potential victims of the scam throughout 56 cities in southern California.

http://www.constructionmanagermagazine.com/international/two-men-face-257-years-prison-impersonating-struct/

FAKE BOMB DETECTOR SELLER JAMES MCCORMICK JAILED AGAIN

The BBC on 25th April reported that A fraudster jailed for selling fake bomb detectors to war-torn countries has received 2 more years in prison for failing to pay back nearly £2 million.  James McCormick made a fortune selling his detectors to Iraq and other countries.  The 62-year-old businessman was ordered in 2016 to forfeit cash and assets worth nearly £8million.  McCormick, who was due to be released from jail soon, received a default sentence of 842 days in prison after refusing to meet a £1.8 million shortfall following a hearing.

http://www.bbc.co.uk/news/uk-england-somerset-43900624

BRITAIN BITES BACK IN THE FIGHT AGAINST LOAN SHARKS

A news release from the HM Treasury on 25th April said that more funding was to be provided to tackle unlawful lending, and an increase in the amount of money seized from loan sharks to support those most vulnerable to their tactics.  It says that, in England, since the Illegal Money Lending Team was established in England in 2004, they’ve made over 380 prosecutions, leading to 328 years’ worth of sentences, and have written off over £73 million of illegal debt, helping over 28,000 people to escape the jaws of the loan sharks.  Similar teams operate in Scotland and Wales.  The Police Service of Northern Ireland (PSNI) will get funding for a specialised officer who will lead on illegal lending within the Paramilitary Crime Task Force.

https://www.gov.uk/government/news/britain-bites-back-in-the-fight-against-loan-sharks

THE RISK TO UK PARENT COMPANIES FROM ENVIRONMENTAL CLAIMS BASED ON OVERSEAS ACTIVITIES

On 25th April, law firm Bryan Cave Leighton Paisner published a briefing saying that claimants are working hard to establish the ground rules for making environmental claims against UK parent companies for the activities of their overseas subsidiaries.  UK-based companies with overseas environmental exposure, particularly in developing countries, should be monitoring developments in this area of law.  It reflects on the February Court of Appeal case Okpabi and others v Royal Dutch Shell Plc (“RDS”) and Shell Petroleum Development Company of Nigeria Ltd.  The briefing warns that what has been largely absent from commentary thus far is a warning to parent companies that, where they are allowed to proceed in the UK, claims of this nature are unlikely to be in any way straightforward or routine to defend.  Where jurisdiction over a claim against a UK incorporated parent companies in connection with the activities of overseas subsidiaries is accepted, it says, claimants and claimant lawyers could hold a strong tactical hand.  Parent companies in the UK should take the possibility of these claims seriously and act accordingly.

http://www.blplaw.com/expert-legal-insights/articles/the-risk-to-uk-parent-companies-of-environmental-claims-based-on-overseas-activities

SWISS AUTHORITIES ALLOWED ISOPROPANOL EXPORTS TO SYRIA

Customs Today on 25th April reported that that 6 months after the Organization for the Prohibition of Chemical Weapons (OPCW) announced in May 2014 Syria had destroyed its stock of 120 metric tonnes of isopropanol, a Swiss company was able to export 5 metric tonnes of isopropanol to Syria without any opposition from the Swiss authorities.  Isopropanol, more commonly known as rubbing alcohol, is found in disinfectants, cleaning agents, paints and varnishes, but it is also a major component of the type of gas used in recent suspected chemical attacks by the Assad regime.  The company, SECO, is quoted as saying that the client was “a private Syrian pharmaceutical firm” and that there was “no indication that it had links to the Syrian regime at the time, nor today”, and “These products…did not need an authorisation in Switzerland at the time.

http://www.customstoday.com.pk/swiss-authorities-allowed-isopropanol-exports-to-syria/

DEADLY AND DANGEROUS FAKE FOOD AND DRINK SEIZED IN GLOBAL OPERATION

On 25th April, Interpol and Europol reported that rotten meat, chemically coloured tuna and fake baby milk powder were just a small sampling of the products seized as part of the latest OPSON investigation into the presence of counterfeit and substandard food and beverage products on the market in Europe and beyond.  Run over the course of 4 months (December 2017 – March 2018) across 67 countries, OPSON VII resulted in the total seizure of more than 3,620 tonnes and 9.7 million litres of either counterfeit or substandard food and beverages as a result of more than 41,000 checks carried out at shops, markets, airports, seaports and industrial estates.  In total some 749 people were arrested or detained with investigations continuing in many countries.

https://www.europol.europa.eu/newsroom/news/fraud-plate-over-3-600-tonnes-of-dangerous-food-removed-consumer-market

https://www.interpol.int/News-and-media/News/2018/N2018-033

CHINESE CUSTOMS TAKE TOUGH MEASURES AGAINST IP INFRINGEMENT

Xinhua on 24th April reported that Chinese customs took tough measures against intellectual property rights infringement last year, official data showed.  Customs authorities seized more than 19,000 shipments of goods suspected of IPR infringement in 2017, involving nearly 41 million individual items, according to the General Administration of Customs (GAC).  Over 98% of the goods were involved in trademark infringement. The value of those involved in patent infringement rose 41.2% year on year.  Most of the seized goods were transported by sea, and through customs offices in eastern coastal regions.

http://www.xinhuanet.com/english/2018-04/24/c_137133925.htm

RUSSIAN OFFICIALS FUNNELLED BILLIONS INTO OFFSHORE

Crime Russia on 25th April reported that Rosfinmonitoring (the Federal Financial Monitoring Service) analysed the data of the Panama Papers and the Paradise Papers and discovered thousands of offshore companies through which the Russians laundered billions of roubles.  Materials on deputies and governors were handed over to law enforcers.

https://en.crimerussia.com/gromkie-dela/russian-officials-funneled-billions-into-offshores/

INDIA TO OFFER DATED, REFURBISHED MILITARY MATERIEL TO ‘FRIENDLY’ COUNTRIES

On 25th April, Janes.com reported that India’s MoD has recently called upon the armed forces to draw up a list of outdated equipment that can be refurbished and gifted to ‘friendly’ countries in an effort to deepen regional defence ties.  The list is expected to include artillery field guns, armoured vehicles, helicopters, naval patrol vessels, and radar systems that are dated or nearing obsolescence.  India’s practice of gifting second-hand defence weapons and platforms is not new, with several countries such as Afghanistan and Myanmar receiving such equipment in recent years.

http://www.janes.com/article/79564/india-to-offer-dated-refurbished-materiel-to-friendly-countries

RECORD 9 TONNE HAUL OF COCAINE IN ALGECIRAS

On 25th April, the Gibraltar Chronicle reported Spanish authorities have seized 9 tonnes of cocaine stashed inside a container of bananas in the port of Algeciras, the largest haul of the drug ever detected in a European port.  The drugs were hidden between 1,080 boxes of bananas shipped from the port of Turbo in Colombia.

http://chronicle.gi/2018/04/record-nine-tonne-haul-of-cocaine-seized-in-algeciras/

POLICE IN CHINESE CITY SEIZE 600 COMPUTERS USED TO MINE BITCOIN

KYC 360 reported on 25th April that Police in the north China city of Tianjin confiscated 600 computers used to mine bitcoin cryptocurrency after the local power grid operator reported abnormal electricity usage, Xinhua reported.  China was home to the majority of cryptocurrency mining operations before Beijing last year began to discourage it as part of a larger crackdown on bitcoin and other cryptocurrencies.  It is unclear how much of mining activity has moved offshore or been shut down.

https://kyc360.com/news/police-chinese-city-seize-600-computers-used-mine-bitcoin/

 

 

 

 

 

 

 

 

 

 

 

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NEW NTI PAPER ASSESSES SEPARATED PLUTONIUM AS A TERRORIST TARGET AND RECOMMENDS STEPS TO REDUCE RISKS

On 25th April, the Nuclear Threat Initiative published a paper that says that separated plutonium is a sensitive material that presents both proliferation and nuclear security risks.  However, unlike highly enriched uranium (HEU), separated plutonium has not received sufficient attention as a security risk.  8 countries hold more than 375 metric tonnes of separated plutonium, which is produced by reprocessing irradiated nuclear fuel.  The paper recommends minimising stocks and specific actions in production, storage, and use of the material, including developing a code of conduct.  It says that even small quantities of plutonium could be of interest to terrorists if they see opportunities for acquiring plutonium in a number of locations or for use in a radiological dispersal device (RDD).

http://www.nti.org/newsroom/news/new-nti-paper-assesses-separated-plutonium-terrorist-target-and-recommends-steps-reduce-risks/

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HMRC PROSECUTES COMPANY FOR UNLICENSED EXPORTS OF CHEMICALS

On 25th April, a Notice to Exporters from the UK Export Control Joint Unit reported that HMRC has prosecuted UK company, Carbosynth Limited, for unlicensed exports of controlled chemicals.  Carbosynth made unlicensed exports of ‘dual use’ chemicals – R-(-)-3-quinicludinol, 2(diethyamino) ethanethiol an benzillic acid.  They also exported military list chemicals 1, 2, 4, butanetriol and decaborane.  The chemicals were exported variously to Japan, India, South Korea, Israel, USA, Germany and Canada.

https://www.gov.uk/government/publications/notice-to-exporters-201810-hmrc-prosecutes-company-for-unlicensed-exports/notice-to-exporters-201810-hmrc-prosecutes-company-for-unlicensed-exports

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VALUATION PROCEDURES UNDER THE UNION CUSTOM CODE – EARLIER SALES CONCESSION WITHDRAWN

On 25th April, HMRC published Customs Information Paper 5 about the withdrawal of the importers transitional arrangement for the earlier sale provision on 31st December 2017.  From that date all importers and their agents may no longer declare an earlier sale as the basis for the customs value.  Previously, where there was a series of sales before the importation of the goods, any sale in the supply chain prior to the last sale which led to the introduction of the goods into the customs territory could potentially be used as the basis of the customs value.

https://www.gov.uk/guidance/valuation-procedures-under-the-union-custom-code-earlier-sales-cip5

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MUMBAI HAWALA ‘KING’ ARRESTED MONEY LAUNDERING

The Times of India on 25th April reported that Mohammad Farooq, aka Farooq Shaikh, one of the city’s biggest hawala operators, was arrested in a money laundering case involving hisStelkon Infratel Pvt Ltd company, which was part of Farooq’s network of 160 shell companies and run from a one-room office.  It is said that Farooq was on the radar of various probe agencies since 2014 and is believed to be associated with underworld elements.

https://timesofindia.indiatimes.com/city/mumbai/hawala-trader-on-radar-since-2014-had-underworld-ties/articleshow/63903556.cms

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ILLICIT TRADE IN OIL & FUEL – AN EMERGING GLOBAL POLICY CHALLENGE

All Africa on 24th April carried an article claiming that every year, an estimated $133 billion of fuels are illegally stolen, adulterated, or defrauded from legitimate petroleum companies.  Roughly 30% of Nigeria’s refined fuel products are smuggled into neighboring states and pipeline fuel theft in Mexico is at record levels.  It also reports that the Philippines loses $750 million annually in tax revenue from fuel adulteration and smuggling and that the value of the illegal fuel trade in SE Asia ranges from $2 to $10 billion a year.  Research is said to shows connections between oil theft and drug cartels in Mexico; insurgents and human traffickers in Thailand; human smugglers in Libya; terrorists in Ireland; militant groups in Nigeria; rebel movements in Mozambique, and ISIS.

http://allafrica.com/stories/201804240809.html

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HOW THE ITALIAN MAFIA CONTROLS BETTING AND RIGS SLOT MACHINES

In Part 1 of a series, Italian newspaper Corriere della Sera on 24th April reported in a comprehensive article how illegal gambling used to provide funds for mafia bosses in hiding.  Every game played on slot machines in the arcades of businessman Carlo Cattaneo guaranteed the boss of Cosa Nostra the money he needed to stay in hiding.  The businessman had also set up a parallel illegal gambling system inside his arcades which even investigators found difficult to detect, since it used the same computers authorised by the state monopoly. He had his programmers install a small banner on the screen, which was apparently insignificant, but for those who knew how the mechanism worked, served as a gateway to offshore platforms.  This meant zero taxation in Italy and money laundering opportunities.

https://www.corriere.it/english/18_aprile_24/how-the-mafia-controls-betting-and-rigs-slot-machines-1ebc79e2-47e2-11e8-80f7-0314029e9b8f.shtml?refresh_ce-cp

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GLOBAL INDUSTRIAL GIANT TECHINT FACES MULTINATIONAL MONEY-LAUNDERING AND BRIBERY ALLEGATIONS

OCCRP on 24th April reported that the Techint group operates steel and iron factories, manufactures gas and oil pipelines and builds energy plants.  It has been controlled by a family dynasty, and has been a mainstay of both the Italian and Argentinian economies since WW2.  The $25 billion group, which reportedly includes 450 operating companies and a 75,000-strong workforce in 45 countries, has never before faced questions about the probity of its worldwide financial operations.  It is said that journalists claim to have uncovered a previously unknown web of offshore entities  used by Techint associates to shuffle money through tax havens and to pay bribes to Brazilian state companies.  Denying the allegations, Techint’s Swiss and Italian subsidiaries told L’Espresso that the company would prove its innocence in court.

https://www.icij.org/blog/2018/04/kings-steel-pinballed-new-panama-paradise-papers-probe/?src=ilaw

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VINCENT BOLLORE: FRENCH TYCOON QUESTIONED OVER ALLEGED AFRICA CORRUPTION

Deutsche Welle on 24th April reported that French billionaire Vincent Bollore has been detained on suspicion of corruption when making deals to operate ports in Africa.  A part of his conglomerate is alleged to have helped political campaigns to gain concessions.  The 66-year-old, who is head of the Bollore Group, was questioned along with other employees of the company. French newspaper Le Monde said the investigation focused on port deals in the Togolese capital, Lome, and Conakry in Guinea.  The multinational group is alleged to have used its communication and marketing subsidiary Havas to support election campaigns of Guinean President Alpha Conde and Togo President Faure Gnassingbe.  In exchange, the subsidiary known as Bollore Africa Logistics is alleged to have won contracts to operate shipping terminals after the leaders were elected.

http://www.dw.com/en/vincent-bollore-french-tycoon-questioned-over-alleged-africa-corruption/a-43509445?src=ilaw

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US UKRAINE-/RUSSIA-RELATED GENERAL LICENCES; PUBLICATION OF NEW FAQ

On 23rd April, OFAC issued a news release saying that General License 14 authorises US persons to engage in specified transactions related to winding down or maintaining business with United Company RUSAL PLC (RUSAL) and its subsidiaries until October 23rd 2018.  The FAQ include a clarification that, in accordance with preexisting OFAC guidance,  OFAC will not impose sanctions on foreign persons for engaging in the same activity involving RUSAL or its subsidiaries that General License 14 authorises US persons to engage in​.  OFAC is also issuing another new licence, Ukraine-/Russia-related General License 12A, which replaces and supersedes General License 12 in its entirety.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180423.aspx

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THE CHALLENGE OF EMERGING TECHNOLOGIES TO NON-PROLIFERATION EFFORTS: CONTROLLING ADDITIVE MANUFACTURING AND INTANGIBLE TRANSFERS OF TECHNOLOGY

A further new paper from the Stockholm International Peace Research Institute (SIPRI) says that “additive manufacturing” (AM) machines are multipurpose manufacturing instruments that rely on the transfer of build-information in a digital form.  AM is a rapidly developing technology with a growing range of applications, especially in the aerospace and defence industry.  It is also generating concerns about its potential to create ways of weakening or circumventing dual-use and arms export controls.  This SIPRI Paper examines –

  • the state of the art in AM;
  • its ability to produce military equipment and dual-use items;
  • the application of export controls to AM and their implementation at the national level; and
  • the challenges that implementation and compliance present for governments, companies and research institutes.

The conclusions summarise potential options and considerations when expanding controls on AM.  Funding for the concept paper was provided by the US Department of State’s Export Control and Related Border Security (EXBS) Program.

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

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THE CHALLENGE OF SOFTWARE AND TECHNOLOGY TRANSFERS TO NON-PROLIFERATION EFFORTS: IMPLEMENTING AND COMPLYING WITH EXPORT CONTROLS

A new paper from the Stockholm International Peace Research Institute (SIPRI) saying that Transfers of software and technology can play a crucial role in the proliferation of conventional arms and WMD.  However, they can also take an intangible form or be transferred through intangible means that make them difficult to detect and monitor.  This SIPRI paper examines –

  • the different ways in which transfers of software and technology occur;
  • the proliferation-related challenges they generate;
  • the way controls are structured in the multilateral export control regimes and implemented in EU member states;
  • the particular challenges that implementation and compliance present for EU governments, companies and research institutes.

The conclusions highlight steps that different stakeholders can take to improve the consistency and effectiveness of software and technology controls.  Funding for the concept paper was provided by the US Department of State’s Export Control and Related Border Security (EXBS) Program.

https://www.sipri.org/publications/2018/other-publications/challenge-software-and-technology-transfers-non-proliferation-efforts-implementing-and-complying

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BRIBERY ACT CASE FLAGS NEED FOR ACTIVE PREVENTION IN UK

On 19th April, chartered secretaries’ association, ICSA, published an article saying that the outcome of a recent failure to prevent bribery case shows how seriously prosecutors are taking compliance.  Corporations in the UK are facing pressure to not merely abstain from crime, but to actively prevent their staff committing it.  Where once companies would not be culpable for the misbehaviour of staff, they are now being asked to have adequate measures in place to stop tax evasion and bribery, or face punishment.  After the Home Office published an anti-corruption strategy in December, some campaigners called for this approach to be applied to other types of economic crime.

http://www.mondaq.com/article.asp?articleid=693618&email_access=on&chk=1654442&q=960824

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OTHER THINGS YOU MAY HAVE MISSED – APRIL 23

23rd April 2018

 UKRAINE CRIME GANG HID PROCEEDS IN LUXURY LONDON FLATS

On 23rd April, a BBC TV Panorama programme following up the “Paradise Papers” reported that a Ukrainian crime gang used offshore firms in British tax havens to secretly invest millions of pounds in the UK.  The gangsters, and in some cases family members, bought luxurious property in prime London locations, including a £12.5 million flat.  The daughter of a man dubbed the “Don of Odessa” is the registered owner of 3 homes in one expensive block.  The gang were from the Black Sea port of Odessa and made money in the oil industry.  They came on to the police’s radar in the late 1990s when they were suspected of drugs and arms smuggling. In the chaos following the collapse of the Soviet Union the gang branched out into Europe, using Italy as a base.

http://www.bbc.co.uk/news/uk-43823962

DIFFICULTIES IN COMBATING MONEY LAUNDERING IN EUROPE

EurActiv on 23rd April carried an article saying that despite tougher rules against money laundering, there are still many shortcomings among Member States, the European Central Bank and the EU Commission has said.  One element that the article and report say is that the limited role of the European Central Bank on money laundering that has most handicapped the EU in its fight against money laundering. Indeed, the ECB does not have any formal powers to act against a bank which is infringing money laundering regulations, without the prior consent of the member state concerned.

https://www.euractiv.com/section/justice-home-affairs/news/difficulties-in-combating-money-laundering-in-europe/

GERMAN EXTRADITION OF ITALIAN NATIONAL TO THE US DOES NOT INFRINGE EU LAW

On 23rd April, Greenberg Traurig reported that an Italian national called Pisciotti started a case against Germany for extraditing him to the UniteUS where, since 2007, there had been a criminal case pending against him for alleged cartel anti-competitive agreements made in relation to tenders and prices from 1999-2006.  An arrest warrant was issued against Pisciotti in 2010 and he was listed as wanted by Interpol.  He was arrested by the German police in 2013 at a stopover at Frankfurt and was extradited to the US a year later, where he pleaded guilty and was fined and sentenced to 2 years imprisonment.  After he was released, Pisciotti argued that because he was an EU citizen, Germany violated EU law when it extradited him.  Eventually, the German courts asked the ECJ the EU Treaty precluded Member States from making a distinction between its nationals and nationals of other Member States under constitutional law when it comes to extradition to third countries.  As a result of the ECJ ruling, it is clear that EU law applies to a request for extradition to a third country when the citizen has exercised the right to move freely within the EU, and a Member State may distinguish between nationals and non-nationals on the grounds of constitutional law when it comes to extradition to third countries.

https://www.gtlaw.com/en/insights/2018/4/german-extradition-of-italian-national-to-the-us-does-not-violate-eu-law

 

EXPORT (PENALTY) (AMENDMENT) REGULATIONS 2018 

These UK regulations (SI 2018/507) come into force w.e.f. 14th May to replace references to the Community Customs Code (CCC) and associated legislation with references to the Union Customs Code (UCC) and associated legislation.

http://www.legislation.gov.uk/uksi/2018/507/contents/made

CHINA MAKES NEW MOVE TO CATCH FUGITIVE BILLIONAIRE GUO WENGUI

In a report dated 24th April, Nikkei Asian Review reports that social-media-loving Beijing critic may become hostage in a trade war.  Police in China are looking to work with US counterparts on an investigation into potentially forged official documents connected to wealthy businessman Guo Wengui, a vocal critic of the Chinese government now accused of donating money to US political campaigns.  Beijing is ratcheting up pressure for Washington to extradite Guo, who seeks asylum in the US.

https://asia.nikkei.com/Politics/International-Relations/China-makes-new-move-to-catch-fugitive-billionaire-Guo-Wengui?src=ilaw

TREASURY THROWS RUSSIAN ALUMINIUM GIANT RUSAL A LIFELINE

The Atlantic Council in the US on 23rd April reported that the US Treasury signalled on April 23rd that the Russian aluminium giant, RUSAL, could have US sanctions lifted if the Kremlin-linked oligarch Oleg Deripaska divests his holdings in the firm.  The decision by OFAC to extend the deadline for investors to exit RUSAL is neither surprising nor unusual given the firm’s size.

http://www.atlanticcouncil.org/blogs/new-atlanticist/treasury-throws-russian-aluminum-giant-a-lifeline?src=ilaw

https://europeansanctions.com/2018/04/23/ofac-issues-new-ukraine-russia-related-licence-and-faqs/

https://www.treasury.gov/index.php/news/press-releases/sm0365

ANGOLAN ARMY CHIEF SACKED IN LATEST ANTI-GRAFT MOVE

News 24 reported on 23rd April that Angolan President Joao Lourenco sacked his army forces’ chief of staff over corruption allegations in a deepening purge of senior figures linked with graft.  Geraldo Sachipengo Nunda was fired after being named by the attorney-general’s office in an investigation into a fraudulent international credit scheme worth $50 billion.

https://www.news24.com/Africa/News/angolan-army-chief-sacked-in-latest-anti-graft-move-20180423?src=ilaw

UK COURT ORDERS EXTRADITION OF AGROKOR FOUNDER OVER ALLEGED FRAUD

Reuters on 23rd April reported that a British judge has ordered that Ivica Todoric, founder of beleaguered food production and retail conglomerate Agrokor, be extradited to Croatia to face allegations of fraud totalling tens of millions of euros.  Agrokor, which accounts for 15% of Croatian GDP and is the largest employer in the Balkans, was placed under emergency state administration a year ago after it came close to collapsing under a mountain of debt.  Todoric, who founded the company in 1976, has denied accusations of fraud and said the Croatian investigation into his financial affairs was politically motivated.

https://uk.reuters.com/article/uk-croatia-agrokor-todoric-court/uk-court-orders-extradition-of-agrokor-founder-over-alleged-fraud-idUKKBN1HU1IN?src=ilaw

GARDAÍ SEIZE DOCUMENTATION TARGETING LIMERICK CRIMINAL GANG’S LAUNDERING OF PROCEEDS OF CRIME

The Irish Examiner reported on 23rd April that Gardaí have raided homes and professional offices in Limerick and Galway, in a planned operation targeting the alleged laundering of money generated from the proceeds of crime by a Limerick-based organised criminal gang.  4 properties, including 3 in Limerick city and county, and one at a location in Galway, were searched by officers attached to the Criminal Assets Bureau (CAB).

https://www.irishexaminer.com/breakingnews/ireland/–838775.html?src=ilaw

IRAN’S CENTRAL BANK IMPOSES BAN ON CRYPTOCURRENCY TRANSACTIONS

Bloomberg on 23rd April reported that Iran’s central bank prohibited domestic financial institutions from handling virtual currencies, citing money-laundering concerns, as it seeks to ramp up control over the nation’s currency markets.

https://www.bloomberg.com/news/articles/2018-04-23/ban-on-cryptocurrency-transactions-imposed-by-iran-central-bank?src=ilaw

SANCTIONS UPDATE – REVISED NORWEGIAN GUIDELINES ON ASSET FREEZING

DLA Piper on 23rd April published a briefing saying that the Norwegian Ministry of Foreign Affairs and the Financial Supervisory Authority published an updated version of the Norwegian guidelines on financial sanctions and asset freezing – the guidelines are based on the sanctions passed by the UN Security Council as well as restrictive measures decided by the EU which have been implemented into Norwegian legislation.  This updated version is meant to be more precise in its aim to provide interpretation guidance and support to the general public in this particular field of legislation.  As such, the guidelines are primarily addressed to banks, payment service providers and other regulated entities that are expected to ensure that their systems cannot be abused contrary to sanctions or other restrictive measures.

https://www.jdsupra.com/legalnews/sanctions-update-revised-norwegian-21858/

MERSEYSIDE PAIR USED LOGISTICS BUSINESS AS COVER FOR DRUG SMUGGLING

A news release from NCA on 23rd April reported that 2 friends from Liverpool who used their logistics firm as a front for drug trafficking have been jailed, after attempting to smuggle heroin on the same day.  Kevin Aitchison, 44, and Kevin Noble, 60, were both stopped hours apart in “PNT Express” marked Mercedes vans at the Channel Tunnel terminal in Coquelles in October 2017.

http://www.nationalcrimeagency.gov.uk/news/1334-logistics-firm-used-as-front-for-drug-smuggling

COURT RULES ‘EQUANIMITY’ FREE TO LEAVE INDONESIA

Superyacht News on 23rd April reported that a local court has said that the superyacht detained in Bali earlier this year as being an asset linked to the 1MDB scandal may leave the country.  A South Jakarta district court has ruled that the yacht has no link with 1MDB and that the vessel can thus be returned to its owner.  In a statement, Indonesia Special Economic Crimes Unit Director Dr Rudy Heriyanto Adi said that the police would follow the decision made by the court.

http://www.superyachtnews.com/business/court-rules-my-equanimity-free-to-leave-indonesia

PILATUS: A PRIVATE BANK FOR AZERBAIJAN’S RULING ELITE

On 23rd April, OCCRP provided a briefing on the Pilatus Bank, a controversial private bank in Malta which is being investigated for laundering money for its clients.

https://www.occrp.org/en/thedaphneproject/pilatus-a-private-bank-for-azerbaijans-ruling-elite

MAN FUNDING THE SO-CALLED ISLAMIC STATE APPREHENDED IN SPAIN

Europol on 23rd April reported that Spanish National Police, with the support of Europol and the National Intelligence Center, arrested a Moroccan individual in Málaga, Spain, suspected of terrorist financing.  The arrestee had been sending large amounts of money to his wife – highly radicalised and considered one of the most dangerous terrorists by the Spanish authorities – to help her travel to Syria and join the so-called Islamic State (IS).  It is estimated that the arrestee sent a total of €6,000 to his wife [showing the relatively small sums that can be involved in such cases], helping her reach IS territory in Syria and continue her terrorist activities from there.

https://www.europol.europa.eu/newsroom/news/man-funding-so-called-islamic-state-apprehended-in-spain

SENATE BILL IN US CALLS FOR NATIONAL STRATEGY TO COMBAT GLOBAL FINANCIAL NETWORKS USED BY CRIMINAL SYNDICATES

Homeland Preparedness News on 23rd April reports that bipartisan legislation introduced in the US Senate would require President Trump to draft a national strategy to identify and disrupt global financial networks used by transnational criminal organisations to transfer an estimated $870 billion around the world.  Under the Criminal Organizations’ Narcotics, Finances, Resources, Operations and Networks Targeting (CONFRONT) Act the President would work with federal agencies to target financial transactions related to criminal activities like opioid trade, drug dealing and identity theft.

https://homelandprepnews.com/stories/28026-senate-bill-calls-national-strategy-combat-global-financial-networks-used-criminal-syndicates/

 

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`MAN-IN-THE-MIDDLE’ FRAUD: HOW TO PREVENT IT, WHO IS AT RISK, AND WHAT TO DO

An item on its 23rd April e-Flash from logistics trade body FIATA is concerned with a form of fraud, colloquially known as a `man-in-the middle’ attack, which has become increasingly common in recent months.  Targets of a man in the middle attack range from individual consumers to large multi-nationals even freight forwarders.  A fraudster creates one or more email addresses that are visually similar to those of one party say, Party A to a legitimate commercial arrangement.  The fraudster’s initial way in relies on either fortunate guesswork on their part or on obtaining access to previous emails between Party A and Party B (e. g. by hacking one or other email accounts).

For more information see the briefing from law chambers, 20 Essex Street, from April 2017 –

http://www.20essexst.com/sites/default/files/Man%20in%20the%20Middle_0.pdf

https://fiata.com/media/e-flash/2018/e-flash-no-175-23-april-2018.html

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UK COURT ORDERS EXTRADITION OF AGROKOR FOUNDER OVER ALLEGED FRAUD

Reuters on 23rd April reported that a British judge has ordered that Ivica Todoric, founder of beleaguered food production and retail conglomerate Agrokor, be extradited to Croatia to face allegations of fraud totalling tens of millions of euros.  Agrokor, which accounts for 15% of Croatian GDP and is the largest employer in the Balkans, was placed under emergency state administration a year ago after it came close to collapsing under a mountain of debt.  Todoric, who founded the company in 1976, has denied accusations of fraud and said the Croatian investigation into his financial affairs was politically motivated.

https://uk.reuters.com/article/uk-croatia-agrokor-todoric-court/uk-court-orders-extradition-of-agrokor-founder-over-alleged-fraud-idUKKBN1HU1IN?src=ilaw

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INSIDER TRADING TRIAL KICKS OFF AGAINST EX-AMAYA AND POKERSTARS CEO DAVID BAAZOV

The Star in Canada reported on 23rd April that David Baazov is charged with 5 counts, including influencing or attempting to influence the market price of Amaya’s securities.

https://www.thestar.com/business/2018/04/23/insider-trading-trial-kicks-off-against-ex-amaya-ceo-david-baazov.html?src=ilaw

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COUNCIL OF EUROPE – ALLEGATIONS OF CORRUPTION

The Council of Europe on 23rd April reported that an independent external investigation body has publishes its report into alleged corruption in the Council of Europe Parliamentary Assembly (PACE) after 10 months of research looking into the conduct of members of the assembly.  It concluded there was “strong suspicion” that some former and current members were engaged “in activity of a corruptive nature”, related to Azerbaijan.  The investigation concluded that there was a lack of transparency in the assembly, and that there were conflicts of interests of some members and former members of PACE who dealt with Azerbaijan.

https://euobserver.com/institutional/141663

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UKRAINE CRIME GANG HID PROCEEDS IN LUXURY LONDON FLATS

On 23rd April, a BBC TV Panorama programme following up the “Paradise Papers” reported that a Ukrainian crime gang used offshore firms in British tax havens to secretly invest millions of pounds in the UK.  The gangsters, and in some cases family members, bought luxurious property in prime London locations, including a £12.5 million flat.  The daughter of a man dubbed the “Don of Odessa” is the registered owner of 3 homes in one expensive block.  The gang were from the Black Sea port of Odessa and made money in the oil industry.  They came on to the police’s radar in the late 1990s when they were suspected of drugs and arms smuggling. In the chaos following the collapse of the Soviet Union the gang branched out into Europe, using Italy as a base.

http://www.bbc.co.uk/news/uk-43823962

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SFO – ADEQUATE PROCEDURES UNDER THE BRIBERY ACT

On 20th April, Herbert Smith Freehills produced a briefing saying that, in her first published speech since taking over as Joint Head of Bribery and Corruption at the SFO, Camilla de Silva addressed compliance specialists at the recent ABC Minds Financial Services conference, tackling a number of familiar themes and giving some insight into the SFO’s approach to the “adequate procedures” defence under section 7 of the Bribery Act 2010 in particular.

https://www.lexology.com/library/document.ashx?g=70b8b31d-72af-4c44-af64-fd292e067c21

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DRAFT STATUTORY INSTRUMENTS AMENDING “RETAINED EU LAW” STARTING TO APPEAR

On 20th April, Herbert Smith Freehills published an article saying that the UK Government is beginning to publish in draft Brexit Statutory Instruments (SI) planned to be passed under the Brexit Bill once enacted.  These are designed to adapt EU law which will be retained in UK law after Brexit to operate in the UK once it is no longer a member of the EU.  This move to publish legislation in draft in effect means that there is more opportunity than originally expected to comment on drafts published before they become law, in the event that they raise concerns.

https://www.gov.uk/government/publications/information-about-the-withdrawal-bill

https://hsfnotes.com/brexit/2018/04/20/draft-statutory-instruments-amending-retained-eu-law-starting-to-appear/

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OTHER THINGS YOU MAY HAVE MISSED – APRIL 22

22nd April 2018

 SUPERYACHT AT THE CENTRE OF ‘BRITAIN’S BIGGEST DIVORCE BATTLE’ WAS REGISTERED IN ISLE OF MAN

On 21st April, Manx Radio reported that a superyacht at the centre of what’s being dubbed ‘Britain’s biggest divorce battle’ was registered on the Island – being first registered to a company in the Marshall Islands, before being transferred to the Isle of Man, then onto Panama and Liechtenstein.  Russian oligarch Farkhad Akhmedov is engaged in a battle with his former wife Tatiana, as tries to prevent her gaining access to his fortune.  However, he’s now been ordered to hand over his £180 million yacht, Luna, after a judge claimed he had tried to hide it from her.  It has been detained in Dubai.

https://www.manxradio.com/news/isle-of-man-news/oligarchs-yacht-was-manx-registered/

CORRUPTION INCORPORATED: THE ODEBRECHT STORY

A BBC Radio documentary first broadcast on 21st April starts by saying that Odebrecht was one of Brazil’s premier companies – the largest construction firm in Latin America. But some of its success in securing multimillion dollar contracts across the region was built on a policy of colossal bribery.  This edifice of graft began to crumble when the Brazilian authorities started to investigate the state-owned oil company, Petrobras.  The US DoJ called it “the largest foreign bribery case in history”.  After Brazilian multinational Odebrecht admitted guilt in a cash-for-contracts corruption scandal in 12 nations, it vowed to change its ways.  But Brazil’s authorities are still wrestling with an encrypted computer system used to run the firm’s illicit payment system.

https://www.bbc.co.uk/programmes/w3csxg1t

http://www.bbc.co.uk/news/business-43825294

 

LATVIA SECURES HELP FROM THE US TO CLEAN UP ITS SCANDAL-TAINTED BANKS

Bloomberg on 22nd April reported that Latvia’s financial investigators will receive more U.S. help as the Baltic nation races to emerge from a money laundering scandal that toppled its third-largest lender.  It agreed technical assistance from the US Treasury for the country’s FIU.  ABLV was the third Latvian bank the US has proposed to ban from the US financial system since the Treasury Department was given authority to do so in 2001.

https://www.bloomberg.com/news/articles/2018-04-22/latvia-secures-u-s-help-to-clean-up-its-scandal-tainted-banks?src=ilaw

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IMF SEEKS TO CRACK DOWN ON CORRUPTION AND PROBE ROLE OF ADVANCED ECONOMIES IN FEEDING CORRUPTION

Deutsche Welle on 22nd April reported that the IMF is calling on wealthier countries to limit potential safe havens for dirty money.  The IMF announced new guidelines Sunday aimed at systematically addressing corruption and its impact on economic growth in all 189 of its member states. The announcement came at the IMF’s and World Bank’s spring meeting in Washington.  The new policy also addresses how wealthy countries contribute to corruption in developing nations by failing to prevent bribery, money laundering and by allowing anonymous corporate ownership.  The new guidelines on good governance take effect July 1st and follow a recent review of the IMF’s 20-year-old policy. The language of the outgoing policy was criticised in the review for sometimes using euphemisms addressing corruption in member states. That often left local officials uncertain about IMF concerns and expectations.  The guidelines call for the fund to discuss good governance concerns in all annual economic reviews of member countries.

Bloomberg reports that to address the “supply side,” the IMF will study the legal and institutional systems of nations that volunteer to be scrutinised. It’ll check whether countries criminalize and prosecute bribery abroad, and whether they have rules to stop money laundering.  G7 nations, as well as Austria and the Czech Republic, have volunteered so far.

http://www.dw.com/en/imf-seeks-to-crack-down-on-corruption-world-bank-boosts-lending-capacity/a-43489222?src=ilaw

https://www.bloomberg.com/news/articles/2018-04-22/imf-to-probe-role-of-advanced-economies-in-feeding-corruption?src=ilaw

See also the IMF Blog –

https://blogs.imf.org/2018/04/22/shining-a-bright-light-into-the-dark-corners-of-weak-governance-and-corruption/?src=ilaw

And the official news release –

http://www.imf.org/en/News/Articles/2018/04/21/pr18142-imf-board-approves-new-framework-for-enhanced-engagement-on-governance

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FREEZE ON ILLEGAL LOBSTER MAGNATE’S MULTIMILLIONS IN JERSEY

The Jersey Evening Post on 22nd April reported that a South African fishing magnate who made a fortune selling illegally caught lobster has been told that he cannot get his hands on millions of pounds held in Jersey.  The Royal Court has decided to maintain a freeze on the assets of Arnold Bengis, who admitted his involvement in a conspiracy to land huge amounts of the prized shellfish in excess of permitted quotas between 1999 until 2001. The illegally caught lobster were shipped to the US.  An appeal had been launched by a Lichtenstein-based trust company.  Bengis, who owned Hout Bay Fishing Industries, pleaded guilty in a South African court in 2002 to 28 charges under the country’s Marine Resources Act.  Around $23.3 million of Mr Bengis’s money was ‘held by 3 companies with SG Hambos Bank (Channel Islands) Limited in Jersey’ according a judgment issued by the Royal Court setting out its reasons for rejecting the appeal.  In July 2017, following a request from US authorities, the Attorney General granted a forfeiture order of $37.2 million.

https://jerseyeveningpost.com/news/2018/04/22/freeze-on-illegal-lobster-magnates-multi-millions/#8830eYvUD8zrrPLH.99

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OTHER THINGS YOU MAY HAVE MISSED – APRIL 21

21st April 2018

US CALL TO AMEND MTCR TO ALLOW MORE DRONE EXPORTS

In Defense One on 20th April, the president and CEO of the National Defense Industrial Association (NDIA) argues that, along with the just-announced US national policy on the export of unmanned aerial systems (UAS), the US Government needs to seek changes to the Missile Technology Control Regime which currently can classify UAS (aka UAV or RPA – remotely piloted aircraft) as if missiles.  He proposes an additional criterion to exclude from the MTCR RPA with a maximum speed of 800 kmh or less.

https://www.defenseone.com/ideas/2018/04/white-house-relaxing-drone-exports-heres-good-next-step/147611/

See also –

http://www.newsroomamerica.com/story/654389/fact_sheets_u.s._policy_on_the_export_of_unmanned_aerial_systems.html

FORMER MEXICAN GOVERNOR EXTRADITED FROM ITALY TO US

On 20th April, Swissinfo reported that former Mexican governor, Tomas Yarrington, accused of having ties to Mexican drug cartels has been extradited to the US from Italy, a Mexican security source said.  He governed the state of Tamaulipas from 1999 to 2005 for the ruling Institutional Revolutionary Party (PRI), and was arrested last year by Italian police pending an extradition request from a federal judge in Texas.  He has been accused by US and Mexican prosecutors of accepting millions of dollars in bribes from criminal organisations in Mexico. He is also accused of extortion and money laundering.

https://www.swissinfo.ch/eng/reuters/former-mexican-governor-extradited-from-italy-to-u-s—-source/44063812

MACAU MONETARY AUTHORITY ISSUES WARNING ON CRYPTO FOLLOWING CRIMINAL TIES TO ICO

Coin Telegraph on 21st April reported that the Monetary Authority of Macau has issued a warning to the public regarding the possibility “fraud and criminal activities” in cryptocurrencies.  This after the Macuau Dragon Group, a firm associated with Chinese gangster Wan Kuokoi, employed Cambridge Analytica to promote Dragon Coin, a new virtual currency for gamblers to transfer money to Macau casinos.  Wan has reportedly spent more than 10 years in prison for various crimes, including leading the “14K” triad group in Macau.  Banks and payment institutions are forbidden from direct or indirect involvement in providing services for cryptocurrency exchanges under Macau monetary regulations, but there are no rules restricting ICOs in the private casino industry.

https://cointelegraph.com/news/macau-monetary-authority-issues-warning-on-crypto-following-criminal-ties-to-ico?src=ilaw

CUSTOMS OFFICIALS RAID KOREAN AIR OVER ALLEGED IMPORT TAX EVASION BY CHAIRMAN’S DAUGHTER

The Yonhap News Agency on 21st April reported that customs officials raided the headquarters of Korean Air Lines and the residence of the chairman’s daughter to look into allegations that the heiress didn’t pay duties on luxury goods brought into the country.  It was reported the family used to airline’s aircraft to import goods misdescribed and without paying import duties.

http://english.yonhapnews.co.kr/news/2018/04/21/0200000000AEN20180421001900320.html?input=rss

33 TAIWANESE FRAUD SUSPECTS DETAINED FOLLOWING DEPORTATION FROM POLAND

Focus Taiwan on 21st April reported that a group of 33 Taiwanese telecommunication fraud suspects arrested in Poland earlier this year have been taken into custody by Taiwan prosecutors.  Prosecutors are currently questioning a second group of 14 suspects who were arrested in the same case and deported to Taiwan.

http://focustaiwan.tw/news/asoc/201804210003.aspx?src=ilaw

PODCAST: PATRICK HO, CHINA MONEY AND THE SEARCH FOR RESOURCES

Episode 837 of Planet Money on National Public Radio in the US is a 22½-minute podcast about why FBI agents arrested Patrick Ho, charging him with money laundering and bribery.  In the show, we follow the money around the world, his connections in Africa and get a rare look into how China is scrambling for resources in Africa.  Always interesting.  For example, why are there more Chinese barbers in Uganda?

https://www.npr.org/sections/money/2018/04/20/604463930/episode-837-the-belt-the-road-and-the-money?src=ilaw

HOW A NUCLEAR BLAST WOULD AFFECT YOUR LOCALITY

An interactive tool enables you to see what effect a nuclear weapon blast would have on where you live.  For example, a 300 KT (Minuteman III W87 warhead) ground burst on central Isle of Man (where mostly hills) would yield only immediate 138 deaths and 5,600 injuries.  However, an air burst in the same place would kill an estimate 1,965 and injure 21,462.

https://outrider.org/nuclear-weapons/interactive/bomb-blast/

INDIA TO SEIZE PROPERTY OF SUPER-RICH FUGITIVES

Reuters on 21st April reported that Indian authorities will be empowered to seize properties of super-rich fugitives whose economic offences or crimes involve sums over $15 million, according to a government document seen by Reuters.  The move comes as the country reels from a series of banking scandals, including a $2 billion fraud at state-run Punjab National Bank.

https://in.reuters.com/article/india-crime-fugitives-nirav-modi/india-to-seize-property-of-super-rich-fugitives-document-idINKBN1HS0H6?src=ilaw

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Full-size poster available on eBay.

US STATE DEPARTMENT CRITICISES BULGARIA ON PRISONS, JUDICIARY, CORRUPTION, PEOPLE-TRAFFICKING AND VIOLENCE AGAINST MINORITIES

The Sofia Globe reported on 21st April that the most significant human rights issues in Bulgaria in 2017 included harsh conditions in prisons and detention facilities; lack of judicial independence; corruption in all branches of government; trafficking in persons; and societal violence against ethnic minorities, according to the US State Department’s annual report on human rights practices.

https://sofiaglobe.com/2018/04/21/us-state-dept-criticises-bulgaria-on-prisons-judiciary-corruption-people-trafficking-and-violence-against-minorities/?src=ilaw

POKERSTARS PARENT TO ACQUIRE SKY BETTING AND GAMING

Calvin Ayre on 21st April reported that the Stars Group, parent company of online gambling giant PokerStars, has reached a $4.7 billion deal to acquire Sky Betting and Gaming (SBG).

https://calvinayre.com/2018/04/21/business/stars-group-buys-sky-betting-gaming/

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ILLEGAL WASTE TRAFFICKING: HOW TO MAKE €1.8 MILLION FROM 200,000 USED TYRES

On 21st April, a news release from Europol reported that, as part of Operation ROTAMM, the Guardia Civil dismantled a criminal group operating from Spain that acquired used tyres and sold them illegally in Africa, America and Europe.  The operation involved 17 countries from the 3 continents.  It is estimated that the criminal organisation could have obtained net profits amounting to nearly €2 million.  The network acquired the used tyres in Spain and other European countries, particularly where tyres are generally changed early.  Once in Spain, the tyres that were meant for disposal were instead sold to low-income third countries to be reused on vehicles.  Outside Europe, the sale of tyres reached as far as Bolivia, Colombia, Congo, the Dominican Republic, El Salvador, Ghana, Mauritania, Panama, Paraguay, Puerto Rico and Senegal.

https://www.europol.europa.eu/newsroom/news/illegal-waste-trafficking-how-to-make-eur-18-million-200-000-used-tyres

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IRAQ TO WORK WITH IRAN ON MILITARY INDUSTRIAL DEVELOPMENT

Janes.com on 21st April reported that Iran and Iraq are to collaborate on reviving Iraq’s military industrial capabilities, Iraqi news media reported.  The agreement covers the transfer of technology to Iraq and the localisation of military and civilian products, as well as efforts to “improve and expand future co-operation in military and civilian industrial projects”.  Specific projects were not detailed, but it was stressed that Iraq was seeking to improve its self-sufficiency in military equipment manufacturing, particularly on systems such as ammunition, mortars, artillery, unmanned aerial vehicles, and communications systems.

http://www.janes.com/article/79466/iraq-to-work-with-iran-on-military-industrial-development

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OTHER THINGS YOU MAY HAVE MISSED – APRIL 20

20th April 2018

KOREAN AIR CHO FAMILY “USED AIRLINE TO SMUGGLE PERSONAL GOODS”

The Investor on 20th April claimed that family members abused their status as an airliner operator to smuggle in all kinds of goods including clothes in bulk and furniture. They were brought in under the code name “KIP,” which is short for Korean Air VIP.  It is alleged that there was a flight from New York that usually served as the main carrier, and there were all sorts of stuff, from clothes to furniture to even food, which is banned from being transported.  The Cho family allegedly did not pay custom duty for these shipments, as most of the time they were disguised as company goods or even aircraft parts.

http://www.theinvestor.co.kr/view.php?ud=20180420000392

EX-VENEZUELAN OFFICIAL PLEADS GUILTY TO MONEY LAUNDERING CHARGE IN US

Law 360 and others reported that a former Venezuelan official Cesar David Rincon Godoy, 50, pleaded guilty in Texas federal court to a $7 million money laundering scheme involving bribe money allegedly paid by US-based companies to government officials in Venezuela in order to obtain energy contracts.  He had been the general manager of a state-run company in Venezuela and one of several oil executives implicated in the scheme.

https://www.law360.com/texas/articles/1035429/ex-venezuelan-official-cops-to-money-laundering-scheme

HOW “SHARP ARE THE TEETH” OF A FREEZING ORDER DISCLOSURE – OBLIGATIONS UNDER A WORLDWIDE FREEZING ORDER

On 23rd March, Mayer Brown published an article asking if a worldwide freezing order granted by a court in England and Wales have any “teeth”? It says that the English Commercial Court recently considered (in PSJC Commercial Bank Privatbank v Kolomoisky) the extent of the defendant’s obligations to disclose its assets in the context of worldwide freezing orders, providing useful guidance to those considering applying for such orders.  A freezing order (which used to be called a Mareva injunction) is an interim injunction that restrains the subject party from disposing of, or dealing with, its assets, and is usually granted in order to preserve the defendant’s assets until the litigation has concluded and the claimant (assuming it is successful) has had the opportunity to enforce that judgment.  The briefing says that they serve a valuable purpose in assisting claimants to obtain some comfort that their potential victory will be more than merely pyrrhic.

https://www.mayerbrown.com/How-sharp-are-the-teeth-of-a-freezing-order-English-Commercial-Court-addresses-the-disclosure-obligations-under-a-worldwide-freezing-order/

UK HIGH COURT JUDGMENT SHINES LIGHT ON SHADOW DIRECTORS

On 19th April, Accountancy Daily reported that the High Court has handed down judgment in a complex case which has shed light on the issues of what fiduciary duties are owed by shadow directors.  The judge held that it might not be helpful to attempt to define the duties of a ‘typical shadow director’.  Rather he said the question was particularly fact sensitive and it is usually helpful to ask whether the individual has expressly or impliedly (from the circumstances) undertaken or assumed a position of trust and confidence or whether there is a legitimate expectation that he will not use his position in a way adverse to the interests of the other.  He went on to say that it is open to a court to hold that a person owed some of the usual fiduciary duties, but not all of them, or to hold that the specific fiduciary duty owed is a qualified form of the general fiduciary duty.  This means that the court is not confined to an all or nothing response to the question.  Whether a particular shadow director owes fiduciary duties and the extent of those duties will be highly fact sensitive – Instant Access Properties Ltd (in liquidation) vs Rosser & Ors

https://www.accountancydaily.co/high-court-judgment-shines-light-shadow-directors

EU SAYS IT MAY IMPOSE MORE SANCTIONS ON VENEZUELA IF DEMOCRACY UNDERMINED

EurActiv on 20th April reported that the EU has said it could impose further sanctions on Venezuela if it believes democracy is being undermined there, after the president called for elections next month that the main opposition has said it will boycott.

https://www.euractiv.com/section/freedom-of-thought/news/eu-says-it-may-impose-more-sanctions-on-venezuela-if-democracy-undermined/

THE CHINA BELT AND ROAD INITIATIVE: THE ROLE OF BELARUS

On 20th April, HK TDC published an article on the role of Belarus, a transit country for the China-Europe rail connection.  It says that, strategically located on the new Eurasia land bridge, 8 rail container routes on the China-Western Europe trade pass through Belarus, enabling cargo to move much faster between China and Germany via Kazakhstan, Russia, Belarus and Poland, taking about 17 days. In comparison, sea freight takes around 3 weeks longer, although the freight cost of travelling by rail is about 60-70% higher.  Standing at the border between Belarus and Poland is the Kozlovichi-Kukuryki checkpoint – one of the busiest cargo truck checkpoints between the Commonwealth of Independent States (CIS) and the EU.  Chinese investment, which grew more than 11-fold between 2011 and 2017, is one of the factors spearheading the manufacturing investment in Belarus.

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http://economists-pick-research.hktdc.com/business-news/article/Economists-Pick-Research-Articles/Belt-and-Road-Initiative-The-Role-of-Belarus/rp/en/1/1X32LK39/1X0ADPHG.htm

US-COLOMBIA PROBE TARGETS VENEZUELA FOOD IMPORT PROGRAMME

On 20th April, Reuters reported that the US and Colombia have cited new evidence of fraud in Venezuela’s food import programme for the needy, saying part of the funds often ended up in the hands of corrupt government officials after being funnelled through businesses in nearby countries.  Financial intelligence units from the US and Colombia presented fresh evidence of such activity during a meeting in Washington on the sidelines of the spring meetings of the World Bank.

https://uk.reuters.com/article/uk-venezuela-corruption-food/u-s-colombian-probe-targets-venezuela-food-import-programme-idUKKBN1HQ3A2?src=ilaw

$80.3 MILLION RECYCLING FRAUD CONSPIRACY BUST IN SACRAMENTO

CBS Sacramento on 19th April reported that a grand jury indicted the owner of Recycling Services Alliance Corporation and 4 employees on a total of 166 counts, including grand theft, recycling fraud, perjury and conspiracy.  They allegedly fraudulently processing out-of-state empty beverage containers for California Redemption Value refunds and conspiring to manufacture fraudulent weight tickets to justify state payments and reimbursement claims.

http://sacramento.cbslocal.com/2018/04/19/80-3-million-recycling-fraud-conspiracy-bust-in-sacramento/?src=ilaw

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LONDON LAW FIRM SHUT DOWN OVER DISHONESTY SUSPICIONS

The Law Society Gazette on 19th April reported that the Solicitors Regulation Authority has shut down a London firm over suspicions of dishonesty involving the 2 managers.  Regulators intervened into Malik Law Chambers, which has offices in east and west London as well as Birmingham, after also expressing concerns the firm had failed to comply with SRA principles.  The firm specialised in immigration, nationality, asylum, human rights and administrative law.

https://www.lawgazette.co.uk/practice/london-firm-shut-down-over-dishonesty-suspicions/5065717.article

OVERSEAS COMPANIES BIDDING FOR UK PUBLIC CONTRACTS WILL NEED TO REGISTER BENEFICIAL OWNERSHIP ON PUBLIC REGISTER

Osborne Clarke on 19th April reported that the UK government has set out its thinking on how the forthcoming beneficial ownership register for bidding on public contracts will work ahead of the draft legislation which is due to be published by July 2018.  It has confirmed a number of policy decisions about the new register for contractors.  The requirement will only apply to contracts valued at more than £10 million.  The regime will be mandatory for procurements by central government, and voluntary for local government and other public sector bodies.

http://www.osborneclarke.com/insights/overseas-companies-bidding-for-uk-public-contracts-need-to-register-beneficial-ownership-on-public-register/

MAPPING PALESTINE – ARMED GROUPS

As part of a comprehensive guide to Palestine politics, groups etc, the European Council on Foreign Relations provided a useful guide to Palestinian armed groups –

http://www.ecfr.eu/mapping_palestinian_politics/detail/introduction_armed_groups

BRIEFING ON THE SET-UP OF THE RUSSIAN INTELLIGENCE SERVICES

On 20th April, Cipher Brief carried a feature about the array of often overlapping and competitive security and intelligence services to create multiple sources of intelligence, encourage risk-taking and keep a wary eye on each other.  It reflects on the history of such services – [the famed (infamous?)] KGB and GRU military intelligence.  Since the collapse of the Soviet Union, Russia broke the KGB largely into four services – the Federal Security Service (FSB), Foreign Intelligence Service (SVR), Federal Protection Service (FSO), and the Interior Ministry (MVD) – while cutting the GRU workforce significantly.  Reform has been proposed but there has been little public reporting on any progress.

https://www.thecipherbrief.com/inside-competitive-corrupt-world-russian-intelligence

GVA DICTATOR ALERT

An odd, but interesting Twitter feed, tracking planes used by authoritarian regimes landing at Geneva Airport.

https://twitter.com/GVA_Watcher

PROSECUTORS DETAIN CHIEF OF POLICE IN RAKOVSKI FOR BRIBERY

Focus Radio in Bulgaria on 20th April reported that the chief of police in Rakovski, Georgi Iliev, has been detained for requesting a bribe from a cigarette smuggler in March 2017 to stop the investigation against him.  He acted together with 2 of his subordinates who were detained last month and have given detailed testimony before a judge.

http://www.focus-fen.net/news/2018/04/20/429608/prosecutors-detain-chief-of-police-in-rakovski-for-bribery.html?src=ilaw

MALTA: REQUEST NEW MAGISTERIAL INQUIRY INTO LATEST REVELATIONS

The Malta Independent on 20th April reported that MP Simon Busuttil and MEP David Casa today filed a court application requesting a magisterial inquiry in relation to the recent revelations by the Daphne Project on Tourism Minister Konrad Mizzi and OPM Chief of Staff Keith Schembri.  A consortium of 18 news organisations are pursuing the stories that had been followed by slain journalist Daphne Caruana Galizia, and will be publishing the work.  The news organisations include the New York Times, The Guardian, and Süddeutsche Zeitung, the newspaper behind the Panama Papers revelations.  The project (dubbed the Daphne Project) was organised by an investigative non-profit organisation called Forbidden Stories.

http://www.independent.com.mt/articles/2018-04-20/local-news/Casa-Busuttil-to-request-magisterial-inquiry-into-money-laundering-case-6736188491?src=ilaw

FORMER RUSSIAN HIGH-RANKING INVESTIGATOR SENTENCED TO 13 YEARS FOR CORRUPTION

RAPSI, the Russian legal information portal, reported on 20th April that a Moscow City Court has sentenced ex-chief of the Investigative Committee’s Internal Security Directorate, Mikhail Maksimenko, to 13 years in a penal colony for taking especially large-scale bribes.  He had been arrested along with other high-ranking investigators, his deputy Alexander Lamonov and the First Deputy Head of the Investigative Committee’s Moscow Directorate, General Denis Nikandrov.  They were charged with taking €500,000 from alleged gang leader Zakhariy Kalashov, who was sentenced to 9 years and 10 months on March 29th.

http://www.rapsinews.com/judicial_news/20180420/282549050.html?src=ilaw

SWISS LAW ENFORCERS GET TOUGH ON CROSS-BORDER CRIME

Reuters on 20th April reported that Switzerland’s Attorney General took on 237 new criminal investigations last year, 25% more than in 2016, as it steps up efforts to tackle international crime.  His office was also working on 307 requests for mutual assistance from abroad, after getting nearly 200 new requests in 2017, many for help on complex, cross-border cases involving bribery, money laundering and potential extremism.  The 234-person staff is described as “nearing its limits” with the present caseload.  At the end of 2017, the Attorney General said his lawyers were handling 478 ongoing criminal investigations.

https://lta.reuters.com/article/marketsNews/idLTAL8N1RX1UL?src=ilaw

MALAYSIAN CORRUPTION ALLEGEDLY SPREADS TO CANADA

The Business Times from Singapore reported on 20th April that a Malaysian governor and his family are accused in a lawsuit of funnelling proceeds of corruption into Canadian real estate, with a Swiss environmental group pressing some of Canada’s biggest financial firms to turn over information on how the money flowed.  Sarawak governor Abdul Mahmud Taib’s family allegedly used the money to fund the expansion of the Ottawa-based real estate company Sakto Group’s C$250 million real estate empire.

http://www.businesstimes.com.sg/government-economy/malaysian-corruption-allegedly-spreads-to-canada?src=ilaw

US CITES TAIWAN’S HUA NAN COMMERCIAL BANK FOR MONEY LAUNDERING VIOLATIONS

The Standard on 20th April reported that the US Federal Reserve has issued a cease and desist order against Taiwan’s Hua Nan Commercial Bank and its agency in New York, citing non-compliance with AML laws, having identified significant deficiencies in the agency’s risk management and compliance with applicable federal laws, rules, and regulations relating to AML compliance, including the Bank Secrecy Act (BSA), during the most recent examination that concluded on June 30th.  However, it is said that Hua Nan has taken steps to mitigate its BSA/AML risk and to continue to implement improvements.

http://www.thestandard.com.hk/breaking-news.php?src=ilaw&id=106133&sid=2

SENIOR KBR EXECUTIVE ARRESTED IN SFO UNAOIL PROBE

M Lex on 17th April reported the previously unreported arrested of the president of US oil and gas engineering company KBR’s oil and gas business, Jan Egil Brændeland.  He was not charged and soon released.  The revelation came at the High Court in London where KBR is challenging the SFO’s attempts to access 21 years’ worth of documents held by its US arm. The SFO is investigating suspected corruption by the company’s British subsidiary and executives connected to the company’s relationship with Monaco-based oil services company Unaoil.  KBR’s US arm is not under investigation.  Having initially stated that the whole group would collaborate, the company refused to hand over US-held documents.  The article says that this is not the first time the SFO investigative powers have been tested in this way.  In January 2017, Unaoil executive Saman Ahsani failed in a bid to force a review of such powers after the SFO ordered him to hand over documents located abroad.

https://mlexmarketinsight.com/insights-center/editors-picks/anti-bribery-and-corruption/cross-jurisdiction/senior-kbr-executive-was-arrested-as-part-of-sfo-probe,-court-hears

HONG KONG CUSTOMS SEIZE 24 TONNES OF WOOD FROM HONDURAS IN HK$2.4 MILLION SMUGGLING CASE

The South China Morning Post on 20th April reported that officers are looking into where consignment of Honduras rosewood hidden in shipping container was headed, having arrived from Central America – the third wood-smuggling case reported in the city this year.

http://www.scmp.com/news/hong-kong/law-crime/article/2142590/hong-kong-customs-seize-24-tonnes-wood-honduras-hk24

NOW OPEN: THE UNDERGROUND, THE MOB MUSEUM’S PROHIBITION HISTORY EXHIBITION FEATURING A WORKING DISTILLERY AND SPEAKEASY

In Las Vegas, a new attraction.  This immersive experience transports guests back to the 1920s, when outlawed liquor gave rise to the Mob.  A working distillery produces corn-mash moonshine and the onsite craft brewery produces beer.  The speakeasy serves The Underground’s signature spirits and Prohibition era-inspired cocktails.

http://www.prweb.com/releases/2018/04/prweb15424266.htm

https://themobmuseum.org/

A PIRATE-OBSESSED NIGERIAN HACKING GROUP IS ATTACKING THE MARITIME INDUSTRY

Homeland Security Today on 18th April reported that a criminal splinter faction from a pirate symbology-obsessed Nigerian “confraternity” has been running business email compromise scams for hundreds of thousands of dollars targeting the global maritime industry.  It says that researchers from SecureWorks’ Counter Threat Unit (CTU) explained to Computerworld UK how they raced to prevent a legitimate client of a small South Korean shipping company from signing off on a fraudulent claim for $325,585, and had successfully mitigated $800,000 of the $3.9 million in attempted fraud by the group.

https://www.hstoday.us/subject-matter-areas/maritime-security/a-pirate-obsessed-nigerian-hacking-group-is-attacking-the-maritime-industry/

https://www.computerworlduk.com/security/criminal-campus-cult-splinter-faction-nigeria-gold-galleon-secureworks-3675724/

CAUCASIAN MAFIA ORGANISATION COMMITTING BURGLARIES AND RETAIL THEFTS IN FRANCE AND GREECE DISMANTLED THANKS TO FIRST-EVER JOINT INVESTIGATION TEAM BETWEEN THE 2 COUNTRIES

Eurojust on 20th April reported that, on 17th April, more than 30 suspects, including the 4 leaders of the organised crime group, composed of Georgian and Armenian nationals, were arrested after simultaneous operations of the French and Greek judicial and law enforcement authorities in Caen and Thessaloniki.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2018/2018-04-20.aspx

DUTCH CRIMINAL JAILED FOR 18 YEARS FOLLOWING EXTRADITION FROM IRELAND

The Irish Times on 20th April reported that Naoufal Fassih, 37, a Dutch citizen of Moroccan origin, and a gang leader with links to Kinahan cartel sentenced for role in 2015 shooting in Holland.

https://www.irishtimes.com/news/social-affairs/dutch-criminal-jailed-for-18-years-following-extradition-from-ireland-1.3468812?src=ilaw

UK BOLSTERS FINANCIAL SANCTIONS WATCHDOG TO TACKLE ‘DIRTY MONEY’

On 20th April, Reuters reported that the UK is increasing by nearly 20% the number of staff in OFSI (the Office of Financial Sanctions Implementation) who are focused on detecting and investigating breaches of international economic sanctions.  It will bring the total of staff, which includes intelligence and police officers, to 40.

https://uk.reuters.com/article/uk-imf-g20-britain-sanctions/uk-bolsters-financial-sanctions-watchdog-to-tackle-dirty-money-idUKKBN1HR2EN?src=ilaw

WORLD BANK WILL TRACK OWN FUNDS AS “CORRUPTION IS EVERYWHERE”

OCCRP on 20th April reported that World Bank President Jim Yong Kim has told reporters that corruption is widespread and that the Bank has introduced measures to follow every dollar it lends to make sure that its funds are being used for the intended purposes.

https://www.occrp.org/en/daily/7980-world-bank-will-track-own-funds-as-corruption-is-everywhere?src=ilaw

SEC CHARGES ONE MORE IN CENTRA TECH ICO CASE

On 20th April, Mono Visione carried a report saying that the SEC has announced additional fraud charges stemming from an investigation of Centra Tech Inc’s $32 million initial coin offering (ICO).

In an amended complaint, the SEC charged one of Centra’s co-founders, Raymond Trapani, in a fraudulent scheme related to Centra’s 2017 ICO, in which the company issued “CTR Tokens” to investors.   Earlier this month, the SEC and criminal authorities charged Centra’s 2 other co-founders, Sohrab “Sam” Sharma and Robert Farkas, for their roles in the scheme.

http://www.mondovisione.com/media-and-resources/news/sec-charges-additional-defendant-in-fraudulent-ico-scheme/

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https://twitter.com/illicit_trade_

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EU SUSPECTS TAX FRAUD AT CHINA’S NEW GATEWAY TO EUROPE AT PIRAEUS

Reuters on 20th April reported that EU and Italian authorities are investigating suspected wide-scale tax fraud by Chinese criminal gangs importing goods via Greece’s largest port of Piraeus, a trade gateway between China and Europe.  VAT is completely evaded, with enormous damage to the national tax authorities and to the community, said one Italian official.  OLAF confirmed it was working with Italy on the investigation.  It is said that groups import goods, often counterfeit clothing and footwear, and massively understate their value to EU customs to avoid import duties, and also lie about the firms that receive the goods, enabling them to avoid VAT.

https://uk.reuters.com/article/uk-china-beltandroad-piraeus-exclusive/eu-suspects-tax-fraud-at-chinas-new-gateway-to-europe-idUKKBN1HR2LL?rpc=401&

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OFSI GUIDANCE: NORTH KOREA: PROLIFERATION AND COMPLIANCE CHALLENGES

On 1st March, the blog maintained by HM Treasury’s Office of Financial Sanctions Implementation (OFSI) made available guidance for businesses about how to manage risk over North Korean sanctions.  It provides 3 basic tips –

  • Understand your risk and potential exposure;
  • Consider your activities, and the services you provide, from the perspective of a proliferator or individual seeking to undertake illicit activity.; and
  • Engage critically with your customer and trading data

https://ofsi.blog.gov.uk/2018/03/01/north-korea-proliferation-and-compliance-challenges/

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MAERSK AND CORRUPTION IN THE MARITIME WORLD

In its annual sustainability report, shipping giant Maersk hit out at the ongoing corruption in the maritime sector, criticising “an environment where facilitation payments and extortion are common occurrences”.  It says it has zero tolerance towards corrupt behaviour and participate actively in the fight against corruption.  Maersk Line is an active, founding member of the Maritime Anti-Corruption Network (MACN), a global business network working for a maritime industry free of all types of corruption.  AP Moller-Maersk works with the Business & Industry Advisory Committee to the OECD on the development of an OECD-backed project on facilitation payment reduction in selected countries. Furthermore, Maersk businesses participate in a number of projects aimed at eliminating facilitation payments.  The report also comments on the enhanced integration of human rights into the company’s operations, and improved guidance on the use of guards launched in 2017.  It refers to the AP Moller-Maersk whistleblower hotline provides internal and external stakeholders with a channel to report suspicions of behaviour or practices that violate laws or key company policies. The hotline has been in operation for 7 years and is available in 75 languages.

https://www.maersk.com/business/sustainability/risk/anti-corruption

The report is available at –

https://www.maersk.com/-/media/business/sustainability/sustainability-highlights-2017/apmm_sustainability_report_2017_a3_180209.ashx?la=en

More information on the OECD Maritime Anti-Corruption Network (MACN) –

https://www.law.columbia.edu/sites/default/files/microsites/public-integrity/338028932-capi-maritime-anti-corruption-network-issue-brief.pdf

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GLOBAL SEA PIRACY ATTACKS JUMP IN FIRST QUARTER OF THE YEAR

On 18th April, Homeland Security Today reported that a surge in armed attacks against ships around West Africa is pushing up global levels of piracy and armed robbery at sea.  The International Maritime Bureau (IMB) Piracy Reporting Centre recorded 66 incidents in the first quarter of 2018, up from 43 for the same period in 2017, and 37 in Q1 2016.  Worldwide in the first 3 months of 2018, 100 crew were taken hostage and 14 kidnapped from their vessels.  A total of 39 vessels were boarded, 11 fired upon and 4 vessels hijacked. IMB received a further 12 reports of attempted attacks.  The Gulf of Guinea accounts for 29 incidents in 2018 Q1, more than 40% of the global total.  Of the 114 seafarers captured worldwide, all but 1 were in this region.  All 4 vessels hijackings were in the Gulf of Guinea, where no hijackings were reported in 2017.  2 product tankers were hijacked from Cotonou anchorage in mid-January and early February, prompting the IMB PRC to issue a warning to ships. Toward the end of March, 2 fishing vessels were hijacked 30 nautical miles off Nigeria and 27 nautical miles off Ghana.

https://www.hstoday.us/subject-matter-areas/maritime-security/global-piracy-attacks-jump-first-quarter-year/

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WHOIS WEB TOOL IN PERIL AFTER EU PRIVACY REGULATORS REJECT PROPOSED FIX

The Recorder from Law.com on 17th April reported that the public directory that contains information about who has registered every domain on the web looks increasingly at risk of going dark next month due to a clash with the GDPR.  The WHOIS directory is relied upon by many attorneys, as well as law enforcement authorities, as a tool to help fight infringement and track malicious activity online.  Some say its demise or fragmentation would make doing so significantly harder.

https://www.law.com/therecorder/2018/04/17/icann-whois-gdpr/

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ALL YOU NEED TO KNOW ABOUT MIGRANT SMUGGLING IN THE EU

On 20th April, Europol published a news release about Europol’s 2-year activity report from the European Migrant Smuggling Centre (EMSC) that provides a detailed overview of the developments and trends in migrant smuggling.

https://www.europol.europa.eu/newsroom/news/all-you-need-to-know-about-migrant-smuggling-in-eu

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SUPERYACHT ‘LUNA’ SEIZED IN DUBAI IN DIVORCE BATTLE

On 20th April, Superyacht News reported that 115-metre explorer superyacht, Luna, has been seized in Dubai as judges at the High Court in London have sought to enforce one of the largest divorce pay-outs in history.  The court had ruled that Russian owner, Farkhad Akhmedov, owes his ex-spouse, Tatiana Akhmedov, $567 million.  In the judgement, the judge had suggested that Farkhad Akhmedov had attempted to ring-fence a number of assets from the UK courts, including the yacht, restricting her access to his global assets for her share of the settlement.  Luna was originally built in Germany for Chelsea FC owner, Roman Abramovich, in 2010.

http://www.superyachtnews.com/business/115m-my-luna-seized-in-dubai-

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NORTH KOREAN-FLAGGED VESSELS TARGETED BY OFAC CHANGE COMPANIES AND NAMES

NK News on 20th April reported that [unsurprisingly] several North Korean vessels under US Treasury sanctions have changed their names and ownership since their designation, several maritime databases show.  The North Korean ships and their owners were added to the OFAC blacklist late last year, and have since changed to different DPRK-based companies and continued visiting foreign ports.

https://www.nknews.org/pro/north-korean-flagged-vessels-targeted-by-ofac-change-companies-names/

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EU ADDS 4 PERSONS TO NORTH KOREA SANCTIONS LIST

On 20th April, EU Regulation 2018/602/EU added 4 additional individuals to its sanctions lists, as announced in a news release on 19th April.

See also EU Council Decision 2018/611/CFSP.

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R0602&from=EN

http://www.consilium.europa.eu/en/press/press-releases/2018/04/19/north-korea-eu-adds-four-persons-involved-in-financing-of-nuclear-programme-to-sanctions-list/

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SECOND-HAND CARS ARE BEING USED TO SMUGGLE TOXIC E-WASTE INTO NIGERIA FROM EUROPE

The Unearthed website on 19th April reported that around 41,500 tonnes of second-hand electronics were shipped inside used vehicles to Nigeria in 2016, according to a new study.  Goods are largely being imported by informal networks based in Nigeria, but waste disposal companies could also be involved, the researchers said.  Almost a quarter was exported from the UK, with only Germany responsible for more. Only 2% came from the US.  The European Union Network for the Implementation and Enforcement of Environmental Law (IMPEL), a umbrella body for environmental regulators across Europe told Unearthed that the report’s findings were in line with their own work on the subject and that European countries have been carrying out inspections on waste shipments since 2006.  Around a third were found to be illegal, included those stored in used vehicles.

https://unearthed.greenpeace.org/2018/04/19/photocopiers-fridges-and-flatscreen-tvs-how-second-hand-cars-are-being-used-to-smuggle-toxic-e-waste/

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OTHER THINGS YOU MAY HAVE MISSED – APRIL 19

19th April 2018

ITALIAN OFFICIALS AND GERMAN COMPANY FACE LEGAL ACTION OVER SAUDI ARMS SALES

The Guardian reported on 18th April that legal action has been launched against Italian government officials and a major European arms manufacturer over alleged involvement in the aerial bombardment of Yemen that has killed thousands of civilians.  A coalition of human rights organisations from Germany, Italy and Yemen filed a complaint with the prosecutors’ office in Rome against officials from the Italian foreign ministry and the local subsidiary of the German conglomerate Rheinmetall, RWM Italia, over arms sales to Saudi Arabia.

https://www.theguardian.com/world/2018/apr/18/italian-officials-and-german-firm-face-legal-action-over-saudi-arms-sales

LIBYA OIL CHIEF SAYS FUEL SMUGGLING COSTING $750 MILLION A YEAR, CRACKDOWN PROPOSED

Bloomberg on 19th April reported that the head of the national oil company had claimed that About 30% to 40% of fuel produced and imported by Libya is stolen or smuggled.  Meanwhile, Marine Link on 19th April reported that Libya’s National Oil Corporation (NOC) is considering using a chemical marking system to help trace oil products smuggled out of the country.  Its head also called on a EU naval mission to combat smugglers by seizing their ships in the Mediterranean, said the UN should consider sanctioning smugglers, and urged Libya to reform massive subsidies that allow fuel to be sold for as little as 2-3 US cents per litre.

https://www.marinelink.com/news/smuggling-cracking-libya436539

MALTA DAPHNE PROJECT: $1.6 MILLION TRANSFER TO COMPANY LINKED TO PANAMA PAPERS AND MALTESE GOVERNMENT OFFICIALS

On 18th April the Times of Malta reported that a total of $1.6 million was transferred to a Dubai company listed as one of the “target clients” which would pay in money to Keith Schembri’s and Konrad Mizzi’s once-secret Panama companies.  These findings come as part of an investigation by more than 18 media organisations, including Times of Malta, known as the Daphne Project.

https://www.timesofmalta.com/articles/view/20180418/local/mizzi-and-schembris-panama-target-client-received-16-million.676783

IRISH POLICE FIND €250,000 IN MATTRESS WOMAN WAS SLEEPING ON AS IT TARGETS DRUGS AND MONEY LAUNDERING GANG

The Irish Independent on 18th April reported that gardai who raided an apartment as part of an investigation into an operation involved in trafficking cocaine into Australia and New Zealand and then laundering the money back to Ireland, and being run from north Dublin, have found €250,000 in a mattress a woman was sleeping on.

https://www.independent.ie/irish-news/crime/armed-officers-find-250000-in-mattress-woman-was-sleeping-on-as-garda-target-gang-led-by-socialite-36820278.html

THE NEW GERMAN TRANSPARENCY REGISTER

On 18th April, McDermott, Will & Emery published an article about the German transparency register established under the German money laundering Act that now applies to many international clients.  At the end of 2017, to implement the EU 4th AML Directive, Germany established a transparency register (Transparenzregister) containing information on the natural person who are the ultimate beneficial owners of almost every legal entity incorporated in Germany.  Since 1st October 2017 the ultimate beneficial owners of German legal entities, privately held corporations (e.g., GmbH, AG, KGaA, SE) and registered partnerships (i.e., OHG, KG) must be registered.  The article details the requirements.

http://viewer.zmags.com/publication/372a8be8#/372a8be8/10

ACTION GROUP CALLS FOR INSURANCE FRAUD GARDA UNIT TO BE SET UP IMMEDIATELY

The Irish Independent on 19th April reported that businesses are demanding that a specialist garda unit to investigate false insurance claims be set up without delay.  The Alliance for Insurance Reform, made the demand.  The head of the alliance said there was also a need for false cases to be immediately referred to the gardaí.  The Government’s Cost of Insurance Working Group has recommended that a dedicated garda unit be set up to focus exclusively on insurance fraud.  It would be funded by the insurance industry.

https://www.independent.ie/business/personal-finance/action-group-calls-for-insurance-fraud-garda-unit-to-be-set-up-immediately-36820587.html?src=ilaw

POWER OF PASSPORT: WHY DID BILLIONAIRE SURENDRA HIRANANDANI DITCH INDIA FOR CYPRUS?
The Economic Times in India posed this question on 19th April after Real estate tycoon Surendra Hiranandani, co-founder of the Hiranandani Group, gave up his Indian citizenship to become a citizen of Cyprus.  Hiranandani says tax is not his reason to embrace Cyprus.  The article says that India witnessed the second largest number of millionaire outflow globally after China with 7,000 high net worth individuals changing their domicile during 2017, 16% more than last year, according to a report by New World Wealth.  7,000 ultra-rich Indians shifted overseas in 2017.  In 2016, the figure stood at 6,000, while in 2015 as many as 4,000 millionaires shifted base.

https://economictimes.indiatimes.com/news/company/corporate-trends/power-of-passport-why-did-billionaire-surendra-hiranandani-ditch-india-for-cyprus/articleshow/63826128.cms?src=ilaw

MURDERED MALTESE JOURNALIST WAS INVESTIGATING ISLAND’S GOLDEN VISAS

OCCRP on 18th April reported that when Maltese blogger Daphne Caruana Galizia was murdered in a car bombing in October 2017, she had been digging for months into the island’s hugely profitable “passports for sale” programme, which had brought in an estimated €850 million since January 2014.  The contract with Malta specifies that Henley & Partners is the “unique concessionaire” of the IIP programme.  Since the IIP programme began in 2014, more than 1,300 people from around the world have ​used it to apply ​for Maltese passports, and more than 1,000 have been approved.  This means just over 1 in 5 applications is rejected.  What is clear is that anybody who applies for an IIP is, by definition, rich. The base cost is €650,000 for each primary applicant, with additional, smaller fees charged for family members.  Russians appear to make up nearly half of the new Maltese, but it is hard to be sure since the government does not release detailed information on country of origin.  The article contains several allegations about the use or misuse of the programme.

https://www.occrp.org/en/thedaphneproject/murdered-maltese-journalist-was-investigating-islands-golden-visas

HUMAN TRAFFICKING FROM HAITI TO CHILE

On 18th April, Insight Crime reported that authorities in Chile have dismantled a transnational network that used travel agencies to traffic Haitian migrants, highlighting how push factors from Haiti and the appeal of Chile’s relative stability are making migrants increasingly susceptible to illegal schemes. It is claimed that legal travel agencies were used to facilitate the illegal entry of thousands of Haitians, according to information from Chile’s Attorney General’s Office – charging Haitian migrants up to $2,000 for “travel packages” promising to help migrants enter Chile as tourists in order to acquire jobs and longer-term visas later.  However, upon their arrival, the trafficking network stripped the migrants of the cash and left them without hotel accommodations, job prospects or visa help as initially promised.

https://www.insightcrime.org/news/brief/insecurity-haiti-laid-groundwork-trafficking-ring-chile/

BRITAIN’S FIRST WHATSAPP FINGERPRINT CONVICTION LEADS TO FLOOD OF NEW CASES

PNLD on 18th April reported a telegraph article from 15th April about how South Wales police used pioneering techniques to enhance a photograph of 3 fingers holding ecstasy tablets, which was found on a mobile phone after an arrest linked to a drug-dealing investigation in Bridgend.

https://www.telegraph.co.uk/news/2018/04/15/britains-first-whatsapp-fingerprint-conviction-leads-flood-new/

EU URGES MOLDOVA TO HUNT DOWN CASH FROM $1 BILLION FRAUD

KYC 360 on 19TH April reported that the EU has called on Moldova to retrieve funds from a one billion dollar banking fraud and bring to book the criminals behind the scam.  It says that the banking fraud occurred in 2014, involving 3 banks.  Funds worth $1 billion – roughly 13% of Moldova’s GDP – are believed to have been shifted from Moldova to shell firms in the UK and Hong Kong, and then routed into individual bank accounts.

https://kyc360.com/news/eu-urges-moldova-hunt-cash-1-billion-scam/

CFTC LAUNCHES LEGAL ACTION ALLEGING FRAUD INVOLVING BINARY OPTIONS AND ATM COIN

On 18th April, Mondo Visione reported that the US Commodity Futures Trading Commission (CFTC) had announced the filing of a complaint against a number of persons, including Blake Harrison Kantor (aka Bill Gordon) and a UK business, Blue Bit Blanc, alleging operation of a  fraudulent scheme involving binary options and a virtual currency known as ATM Coin.

http://www.mondovisione.com/media-and-resources/news/cftc-charges-multiple-individuals-and-companies-with-operating-a-fraudulent-sche/

ELECTRONIC REGISTRATION OF SALES IS INTRODUCED IN THE CZECH REPUBLIC AND  A TAX “LOTTERY” INCENTIVE

Bird & Bird on 18th April provided a briefing on this new requirement introduced in the Czech Republic to counter long-term and systematic tax evasion that is said to have become common practice in certain areas of business in the Czech Republic.  The electronic registration of sales is aimed at all entities that pay or are obliged to pay income tax in the Czech Republic.  That means all individual entrepreneurs as well as legal entities with business activities.  Retail trade and wholesale has been required to comply since 1st March 2017, and since 1st March 2018 it applied to other professions (except those in the fourth phase), such as freelance professionals, transport and agriculture providers.  On 1st June, the fourth phase should be in force and thus, the electronic registration of sales should be applicable others, including selected crafts and manufacturing activities providers.  Businesses are obliged to register sales that come from their business activities and are paid in cash, by credit card, cheque, promissory note or other similar means such as a meal ticket.  However, direct bank account transfers are exempt from the registration of sales.

A novelty is the Receipt Lottery started on 1st October, having as its main purpose to support the effectivity of sales registration and proper tax revenue.  Everybody who registers his or her valid receipt through the designated web page or mobile app takes part in monthly draw.  The draw is every 15 days in the following month after the registration. Distributed winnings reach approximately CZK 5.4 million each month.

https://www.twobirds.com/en/news/articles/2018/czech-republic/electronic-registration-of-sales-is-introduced-in-the-czech-republic

A NEW CORPS OF DEDICATED AFRICAN COUNTER-TERRORISM EXPERTS

On 18th April, Defence Web reported that the Institute for Security Studies (ISS) is assisting African police to understand and combat terrorism on the continent and to investigate and prosecute terrorism cases, and the Pretoria headquartered ISS is building a corps of properly trained African counter-terrorism experts and adapting international best practice to local conditions.  Threats are said to include Boko Haram in Nigeria and the Lake Chad Basin, al-Shabaab in Kenya and Somalia and al-Qaida affiliates across the Sahel and North Africa, and 3 African countries – Nigeria, Somalia and Egypt – are in the global top ten countries most affected by terrorism, according to the 2016 Global Terrorism Index.  Police and prosecution services need specific skills to detect, combat, investigate and prosecute terrorism.  The ISS helps build these capacities through its expert staff and professional networks.  ISS training spans national, regional and international legal instruments, extradition, state-sponsored terror, counter-intelligence, border control, biological weapons, dirty bombs and evidence collection. ISS trainers are supported by African experts with top-class experience in subjects ranging from hostage negotiations, incident management and prosecution of terrorists.  Discussions are said to be underway with a top South African university to accredit training to diploma or post-graduate level and then offer it as a distance learning module.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51402:a-new-corps-of-dedicated-african-counter-terrorism-experts&catid=49:National%20Security&Itemid=115

SFO PROBES UK COMPANY’S CONDUCT IN ALGERIA 

Insider media and others on 19th April reported that a criminal investigation is been launched by the SFO into a Staffordshire-based division of the defence, security and transport group, Ultra Electronics Holdings, and its conduct in Algeria.  The business, which operates from a plant in Rugeley, makes a range of power transformers and reactors, as well as substation equipment for the rail industry.

https://www.insidermedia.com/insider/midlands/SFO-probes-firms-conduct-in-Algeria?src=ilaw

https://uk.reuters.com/article/uk-ultra-electronic-fraud/ultra-electronics-under-sfo-investigation-over-suspected-corruption-in-algeria-idUKKBN1HQ0O6?src=ilaw

SOUTH AFRICAN ASSET FORFEITURE UNIT MOVES TO RECOVER POLICE COMMISSIONER’S ILL-GOTTEN GAINS

In South Africa, Business Day on 19th April reported that the Asset Forfeiture Unit has launched a confiscation application to recover money that former Western Cape police commissioner, Arno Lamoer, received through corruption.  The retired policeman pleaded guilty to corruption in February‚ after a 35-year career.  He faced more than 100 charges of corruption‚ racketeering and money laundering.  Lamoer was charged along with businessman Salim Dawjee and former police brigadiers Sharon Govender (who was acquitted)‚ her husband Colin Govender and Darius Van der Ross.

https://www.businesslive.co.za/bd/national/2018-04-19-asset-forfeiture-unit-moves-to-recover-arno-lamoers-ill-gotten-gains/?src=ilaw

ENFORCING IP RIGHTS IN CHINA: A ROAD MAP FOR US COMPANIES

On 18th April, law firm Wilmer Hale published this briefing, originally published on Law 360 on 16th April.  The introduction says that the US loses between $225 and $600 billion each year due to misappropriation of intellectual property — an estimated 50-80% of which has been attributed to China.  While Chinese officials have taken steps to better protect IP owners, many American companies remain vulnerable.  It is imperative that US IP owners know what rights do exist and how to enforce them.

https://www.jdsupra.com/legalnews/enforcing-ip-rights-in-china-a-road-map-67372/

ASSET RECOVERY UNDER POCA VERSUS THIRD-PARTY PROPRIETARY RIGHTS

On 18th April, Berwin Cave Leighton Paisner published a briefing saying that the judgment in Faichney v Vantis HR Ltd reiterates that common law and equity cannot frustrate the operation of the Proceeds of Crime Act 2002 (POCA), but equally POCA does not give rise to a general consideration of public policy to deprive third parties of their proprietary rights.  The briefing examines the interplay between recovery of the proceeds of crime from convicted fraudsters and common law proprietary rights of third parties.  The underlying dispute arose from attempted tax avoidance scheme promoted by VTL, a company at which Mr Faichney and Mr Perrin were directors.  The 2 former directors were found guilty of fraud offences involving cheating the Revenue in a subsequent criminal trial and a confiscation order was made in relation to their assets based on the fact that the benefit to them of their crimes was the £4.55 million.  The resulting case involved conflicting claims to the assets of the 2 former directors between the CPS and Aquila Advisory Ltd.

http://www.blplaw.com/expert-legal-insights/articles/clash-between-asset-recovery-under-poca-and-third-party-proprietary-rights-faichney-and-another-v

CHINA BANS IMPORTS OF 16 MORE SCRAP WASTE PRODUCTS FROM END OF 2018

On 19th April, Customs Today reported that China will ban the imports of 16 more scrap metal and chemical waste products from the end of this year, the environment ministry said.  The 16 banned products include steel smelting slag containing more than 25 percent of the metal manganese, and ethylene polymer waste, the Ministry of Ecology and Environment (MEE) said in a document published on its website.  MEE also listed another 16 items that will be banned by the end of 2019, including timber waste and scrap metals such as stainless steel, tungsten and magnesium.

http://www.customstoday.com.pk/china-bans-imports-of-16-more-scrap-waste-products-from-end-2018/

SRI LANKA SLAPS NEW TAX ON GOLD TO CURB IMPORTS – SUSPICION OF SMUGGLING TO INDIA

On 19th April, Customs Today reports that Sri Lanka has slapped a 15% tax on gold to curb surging imports that have impacted the trade deficit and put pressure on the exchange rate.  The finance ministry said the tax was reintroduced after a 5-year hiatus as authorities detected a rapid spike in imports in recent months.  The steep increase had not translated to a boon in jewellery manufacturing — sparking suspicions it was being spirited to neighbouring India, the world’s largest consumer of gold.

http://www.customstoday.com.pk/sri-lanka-slaps-new-tax-on-gold-to-curb-imports/

MORE THAN 3 TONNES OF IVORY DESTINED FOR CAMBODIA SEIZED IN MOZAMBIQUE

The Phnom Penh Post on 18th April reported that 3.5 tonnes of ivory reportedly bound for Cambodia was seized by authorities in Mozambique, according to CITES.  The information was based on a report from local media reports.  The amount of ivory was initially reported as 1.5 tonnes, but was later upped to 3.5 tonnes, with the shipment reportedly hidden underneath plastic bottles.

https://www.phnompenhpost.com/national/more-three-tonnes-ivory-reportedly-bound-cambodia-seized-mozambique

US: COMPANY SETTLES CREDIT CARD LAUNDERING SCHEME WITH FTC

On 17th April, Reed Smith published an article saying that the Federal Trade Commission (FTC) had  announced a $1,384,500 settlement with Michael Abdelmesseh and KMA Merchant Services, LLC in a lawsuit regarding a deceptive credit card laundering scheme.

http://www.mondaq.com/article.asp?articleid=692568&email_access=on&chk=1653392&q=960824

 

POWERFUL BRAZILIAN SENATOR FACES CORRUPTION TRIAL

Baker McKenzie on 19th April reported that Aecio Neves, a Brazilian senator who narrowly lost the 2014 presidential election, will face trial for corruption and obstruction of justice.

http://www.riskandcompliancehub.com/powerful-brazilian-senator-faces-corruption-trial/

ETHICS EXPERT CALLS ON SRA TO TAKE TOUGHER APPROACH TO NON-DISCLOSURE AGREEMENTS IN UK

Legal Futures on 19th April reported that the Solicitors Regulation Authority (SRA) needs to take a tougher approach to non-disclosure agreements (NDA), a leading legal ethics expert has told MPs.  The SRA issued a warning notice on NDA last month, telling law firms not use them to prevent the reporting of misconduct, particularly sexual harassment involving other employees or clients.  However, the expert quoted said that there was room for improvement in the area of clauses that are or might be void, which were “not clearly covered” in the notice.  He says it is important is to have clear statements of what the agreement permits; stating explicitly that, for example, NDA parties may report matters covered by the agreement to the authorities (police, regulators, and so on), and that the agreements clearly and concisely state the obligations in the agreement – in English as plain as possible.

https://www.legalfutures.co.uk/latest-news/ethics-expert-calls-on-sra-to-take-tougher-approach-to-ndas

‘NDRANGHETA MONEY, JEWELS AND ARTWORK FOUND IN SWITZERLAND

The ANSA news agency reported on 19th April that a ‘Ndrangheta-linked family invested in artwork from the Caravaggio school in an attempt to launder money made from cocaine trafficking, La Spezia Carabinieri have found.  A painting was found in Switzerland, along with bank accounts and a safety box with watches and jewels worth over €700,000.

http://www.ansa.it/english/news/2018/04/19/ndrangheta-money-jewels-and-artwork-found-in-switzerland_7c6980b0-20b2-4461-9431-0191dc0843a0.html

ADOPTION BY THE EUROPEAN PARLIAMENT OF THE 5TH ANTI-MONEY LAUNDERING DIRECTIVE

On 19th April, Mondo Visone published a statement by the EU Commission welcoming new rules that are said will bring more transparency to improve the fight against money laundering and terrorist financing across the EU.  The proposal was presented by the EU Commission in July 2016 in the wake of terrorist attacks and the revelations of the Panama Papers scandal, and is part of the Commission’s Action Plan of February 2016 to strengthen the fight against terrorist financing. It sets out a series of measures to better counter the financing of terrorism and to ensure increased transparency of financial transactions.  The 5th AML Directive will:

  • enhance the powers of EU Financial Intelligence Units and facilitating their increasing transparency on who really owns companies and trusts by establishing beneficial ownership registers;
  • prevent risks associated with the use of virtual currencies for terrorist financing and limiting the use of pre-paid cards;
  • improve the safeguards for financial transactions to and from high-risk third countries;
  • enhance the access of FIU to information, including centralised bank account registers; and
  • ensure centralised national bank and payment account registers or central data retrieval systems in all Member States.

For more information see –

http://ec.europa.eu/newsroom/just/document.cfm?action=display&doc_id=48935

http://www.mondovisione.com/media-and-resources/news/european-commission-statement-by-first-vice-president-timmermans-vice-presiden/

IN ‘THE BURNING SHORES,’ LIBYA BLOSSOMS — BRIEFLY — BEFORE UNRAVELLING

Podcast: short interview (8 minutes) on the Carnegie Center website.  Speaking with US National Public radio, Carnegie’s Frederic Wehrey discussed the turmoil that Libya has experienced since the fall of dictator Muammar Qaddafi and how lawlessness, inadequate medical care, and emigration continue to plague the beleaguered nation.  Wehrey’s book, with the same name, is available now.

https://carnegieendowment.org/2018/04/13/in-burning-shores-libya-blossoms-briefly-before-unraveling-pub-76095

WHAT SYRIAN REFUGEES NEED TO RETURN HOME

On the Carnegie Center website on 16th April, an article about the report “Unheard Voices”.  As the Syrian regime regains territory, there have been growing calls in neighbouring countries for refugees to go home, but as the living conditions for Syrian refugees worsen and the risks of going home mount, the notion of a voluntary return is rapidly losing meaning.  It argues that, essentially, the notion of a voluntary return of refugees is losing meaning. Restrictive policies in Lebanon and Jordan may force refugees to return to an unsafe environment in Syria; while the regime’s policies in Syria — on housing and property rights, military conscription, and vetting procedures — may make it difficult, if not undesirable, for them to return.  The report details the measures that would be conducive to encouraging return.

https://carnegie-mec.org/2018/04/16/unheard-voices-what-syrian-refugees-need-to-return-home-pub-76050

THE NEW KILLER PATHOGENS: COUNTERING THE COMING BIOWEAPONS THREAT

On 17th April, the Carnegie Center published an article (both fascinating and scarey) which says that recent breakthroughs in gene editing have generated massive excitement, but they have also reenergized fears about weaponised pathogens.  Using gene-editing tools, including a system known as CRISPR, scientists are now able to modify an organism’s DNA more efficiently, flexibly, and accurately than ever before.  On the one hand, as the article points out, these technologies offer vast potential for global good.  Researchers are studying the use of new gene-editing techniques to fix deadly genetic mutations, create disease-resistant crops, and treat cancer.  But it’s not hard to imagine how gene-editing technologies could be misused.  Some fear that terrorists with even moderate capabilities could develop deadlier pathogens.  One of the most worrisome questions today is whether advances in biotechnology could tempt states to revive their old biological weapons programmes or start new ones.  The article then looks back at the history of biological weapons since the 1940s.  The article then discusses various possible scenarios.  It points out that the vast majority of states (180) are parties to the 1972 Biological Weapons Convention (BWC), which bans the development, stockpiling, acquisition, retention, and production of biological agents for nonpeaceful purposes.  Although the treaty is often criticised for its lack of a meaningful enforcement mechanism, it has helped establish a global norm that using biological weapons is immoral and unacceptable.  Although such norms may not constrain the worst actors’ behaviour, they do provide the rationale and motivation for the rest of the world to punish violators.  The article suggests some ways to maintain deterrence, including beefing up the BWC.

https://carnegieendowment.org/2018/04/17/new-killer-pathogens-countering-coming-bioweapons-threat-pub-76009

STATE-SPONSORED RADIOLOGICAL WEAPONS PROGRAMMES

In this 54-minute video from the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies at Monterey, published on 9th April (the seminar itself took place on 6th April), CNS experts Sarah Bidgood, Fabian Hinz, Jeffrey Lewis, Sam Meyer, and Luisa Roemer explore the history of state radiological weapons programmes to understand why states pursue radiological weapons and how to deal with the challenges they present.

https://www.nonproliferation.org/state-sponsored-radiological-weapons-programs/

NON-EU COUNTRIES ALIGN WITH EU SANCTIONS ON EGYPT, LIBYA AND SYRIA

On 19th April, news releases from the EU announced that Macedonia, Montenegro and Albania, Iceland, Liechtenstein and Norway, EEA members, Moldova and Georgia have aligned themselves with recent decisions.

http://www.consilium.europa.eu/en/press/press-releases/2018/04/19/declaration-by-the-high-representative-on-behalf-of-the-european-union-on-the-alignment-of-certain-third-countries-concerning-restrictive-measures-against-syria/

http://www.consilium.europa.eu/en/press/press-releases/2018/04/19/declaration-by-the-high-representative-on-behalf-of-the-eu-on-the-alignment-of-certain-third-countries-concerning-restrictive-measures-in-view-of-the-situation-in-libya/

http://www.consilium.europa.eu/en/press/press-releases/2018/04/19/declaration-by-the-high-representative-on-behalf-of-the-eu-on-the-alignment-concerning-restrictive-measures-against-certain-persons-entities-and-bodies-in-view-of-the-situation-in-egypt/

NORTH KOREA: EU ADDS 4 PERSONS INVOLVED IN FINANCING OF NUCLEAR PROGRAMME TO SANCTIONS LIST

On 19th April, a news release announced that 4 persons have been added to the list of those subject to the restrictive measures against the DPRK.  These restrictive measures consist of a travel ban and an asset freeze.  The news release says that the 4 individuals have been involved in deceptive financial practices which are suspected of contributing to the DPRK’s nuclear-related, ballistic-missile-related or other WMD-related programmes.  The names and specific reasons for listing and will be published in the Official Journal of 20th April.

http://www.consilium.europa.eu/en/press/press-releases/2018/04/19/north-korea-eu-adds-four-persons-involved-in-financing-of-nuclear-programme-to-sanctions-list/

16 NATIONS AGREE TO TRACK VENEZUELA CORRUPTION

The Seattle Times on 19th April reported that US Treasury officials say finance ministers from several Latin American nations as well as the US and Europe have agreed to work jointly to locate and seize assets arising from corruption by Venezuelan government insiders, following a meeting in Washington on the side lines of an IMF event.

https://www.seattletimes.com/business/us-officials-16-nations-agree-to-track-venezuela-corruption/?src=ilaw

EU ANTI-FRAUD AGENCY PROBES ALLEGED MISUSE OF FUNDS IN SLOVAKIA

Politico on 19th April reported that OLAF has said that it has opened an investigation into alleged misuse of EU funds in Slovakia uncovered by journalist Ján Kuciak, who was killed earlier this year.  His, published posthumously, alleged links between the Italian mafia, Slovakian politics and fraud related to EU agricultural funds.

https://www.politico.eu/article/eu-anti-fraud-agency-probes-alleged-misuse-of-funds-in-slovakia-olaf-jan-kuciak/?src=ilaw

PATRICK HO’S LAWYERS ACCUSE US AUTHORITIES OF USING ‘ILLEGALLY’ OBTAINED EVIDENCE IN CHARGES FOR $2.9 MILLION CORRUPTION SCANDAL

The South China Morning Post on 19th April reported that his lawyers have asked a US court to suppress evidence including 35,000 pages of documents, a post-arrest statement made by Ho and contents of his mobile phone.  Ho is a former Hong Kong home affairs minister.  He faces 3 charges for money laundering and 5 for violating the Foreign Corrupt Practices Act by offering $2.9 million worth of bribes to African government officials in return for oil rights in Uganda and Chad for an unnamed Shanghai-based energy firm he represented.

http://www.scmp.com/news/hong-kong/law-crime/article/2142504/patrick-hos-lawyers-accuse-us-authorities-using-illegally?src=ilaw

BAHAMAS: DRAFT GUIDANCE NOTES ON FINANCIAL CRIME RISK MANAGEMENT ISSUED

The Nassau Guardian on 19th April reported that recently released draft guidance notes on financial crime risk management and proliferation financing are expected help demonstrate the country’s commitment to global financial crime risk management standards (and have it taken off the EU blacklist).  The financial risk management draft guidance note and a proliferation and proliferation financing guidance note were issued for consultation on 16th April.  The proliferation and proliferation financing draft guidance note was issued to raise awareness of the Bahamian jurisdiction if a regulated entity knowingly or unknowingly plays an appreciable role in proliferation financing, according to the draft note.  The consultation period on these notes ends on May 1st.

https://thenassauguardian.com/2018/04/19/draft-guidance-notes-on-financial-crime-risk-management-issued/?src=ilaw

NEW ZEALAND CONFIRMS VIRTUAL CURRENCIES ARE PROPERTY FOR TAX PURPOSES

Tax News on 19th April reported that New Zealand has joined a number of territories in confirming this month that virtual currency transactions are taxable as property, in new guidance that was issued at the beginning of the month.

https://www.tax-news.com/news/New_Zealand_Confirms_Virtual_Currencies_Are_Property_For_Tax_Purposes____76731.html

ABU DHABI FREE ZONE IMPROVES BENEFICIAL OWNERSHIP OVERSIGHT

Tax News on 19th April reported that Abu Dhabi Global Market (ADGM), the low-tax financial hub, has codified its corporate beneficial ownership and control regulations into a new regime, to harmonise the approach across all ADGM regulators and to support global efforts to combat financial crime by providing enhanced transparency.  It also brings ADGM compliance into line with FATF recommendations.

https://www.lowtax.net/news/Abu-Dhabi-Free-Zone-Improves-Beneficial-Ownership-Oversight-76730.html

INCREASED PROTECTION OF RESIDENTIAL ADDRESSES AT UK COMPANIES HOUSE

On 19th April, Dentons produced an article saying that new regulations, scheduled to come into force by the end of Summer 2018, will make it easier for directors and other individuals to remove their residential address information from the publicly searchable register at Companies House.  Originally, the Companies Act 2006 Act did not provide for the removal of any usual residential address information that was already publicly visible, and later changes did not fully address the situation as they did not affect addresses filed before 1st January 2003.  In addition, an individual whose usual residential address is on the public register will be able to apply to Companies House to make that address unavailable to public view without having to satisfy any conditions.  The rules will also apply to limited liability partnerships and align the rules for Scottish partnerships.

https://www.jdsupra.com/legalnews/increased-protection-of-residential-27916/

CONTINUAL CIGARETTE PRICE RISES ARE LINING THE POCKETS OF ORGANISED CRIMINALS AND TERRORISTS

The Illicit Trade Network on 18th April published an article saying that lawmakers across the developed world seem to be united behind the idea that the best long-term approach to reducing levels of smoking is to keep on hiking the price of tobacco products until consumers can no longer afford them – the latest evidence coming from Canada.  As an example of the unintended effect, it says that a report published at the beginning of November by the Tax Foundation think tank revealed that New York, which levies the highest rate of state cigarette taxation in the US, is the country’s capital of illicit tobacco.  The Tax Foundation estimates that in 2015, the latest year for which data is available, 56.8% of all cigarettes smoked in New York were smuggled into the state.  In Europe, 9% of all cigarettes smoked were fake or smuggled last year, representing an overall tax loss to European governments of as much as €10.2 billion.  The article says, put simply, repeatedly raising the price of tobacco products both increases the profits organised criminals can make from the illicit cigarette trade, and makes it more likely that those who are determined to continue to smoke will seek out cheaper ways of doing so, be they legal or not.  As tobacco prices continue to rise in developed countries, more organised criminals will be drawn to the illicit cigarette trade, which is becoming all the more attractive to smugglers as potential profits soar; not least due to the fact that illicit tobacco is much less risky than drug dealing or people trafficking.

https://www.illicit-trade.com/2017/11/continual-cigarette-price-rises-lining-pockets-organised-criminals-terrorists/

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US AGENCIES NEED TO IMPROVE HOW THEY ASSESS EFFORTS TO COMBAT ILLICIT OPIOIDS

On 13th April, Homeland Security Today reported that the Government Accounting Office (GAO), the US Government watchdog akin to the NAO in the UK, found that federal agencies need to improve their efforts to assess how they are combating the spread of illicit opioids; and found that most of the agency strategies to combat opioids do not include outcome or results-orientated measures – only 1 in 5 of the strategies that GAO reviewed included such measures.  The study also found that law enforcement and public health agencies still face challenges with the timeliness, accuracy, and accessibility of the sharing of overdose data.  The GAO recommends that CBP should assess volume and risk at each port of entry to determine those with the greatest need for resources and use this information as a basis for staff allocations.

https://www.hstoday.us/briefings/government-reports-and-summaries/gao-agencies-need-to-improve-how-they-assess-efforts-to-combat-illicit-opioids/

US COMMITMENT TO PREVENTING NUCLEAR TERRORISM IS WANING

The Hill in the US on 19th April reported that the Trump administration is proposing massive cuts to vital programmes responsible for securing nuclear weapons-usable material around the world.  The National Nuclear Security Administration (NNSA), the agency primarily responsible for working with other countries to reduce nuclear terrorism risks, wants to reduce spending for nuclear security programmes by $115 million by 2019, a 26% reduction from last year, and cutting programmes to increase security at nuclear facilities by 60%.  However, the article does point out that, over the past 5 years, US funding for such efforts has dropped by nearly 50%, reducing some programmes to their lowest funding levels in more than 20 years.

http://thehill.com/opinion/national-security/383596-rhetoric-aside-the-us-commitment-to-preventing-nuclear-terrorism-is

NEW GUIDE WARNS CORPORATE LAWYERS OF ANTI-CORRUPTION COMPLIANCE CHALLENGES IN LATIN AMERICA

Corporate Counsel on 19th April reported that new anti-corruption laws are taking hold in Latin America, and general counsels (GC), even those based in the US, should take note.  It points out that the past 5 years have seen an explosion of corruption scandals in Latin America, leading to ousted presidents, investigations of government officials and a lot of new laws.  Now law firm network, Lex Mundi, has produced an anti-corruption guide for Latin America, which sets out a summary of the legal landscape in 18 jurisdictions in Latin America.

https://www.lexmundi.com/lexmundi/Anticorruption_Compliance_Guide.asp

Featured

US ARMS TRANSFER AND UNMANNED AERIAL SYSTEMS EXPORT REFORMS

On 19th April, the Trump Administration issued 2 new policy statements – on conventional arms exports and unmanned aerial systems (UAS).  Trump signed a National Security Presidential Memorandum approving a new Conventional Arms Transfer (CAT) policy, and he has also established a new Administration policy on the export of US-manufactured UAS.  The new CAT policy provides a framework under which all US Government agencies will review and evaluate proposed arms transfers and approve commercial defence sales by US companies.  The new UAS export policy replaces an overly restrictive policy established in 2015 that is said to have hindered US companies from delivering a crucial military capability to our allies and partners.

https://www.whitehouse.gov/briefings-statements/statement-press-secretary-arms-transfer-unmanned-aerial-systems-export-reforms/

A briefing on the new UAS policy is at –

https://www.state.gov/r/pa/prs/ps/2018/04/280613.htm

A State Department outlining the US Policy on the Export of UAS is at –

https://www.state.gov/r/pa/prs/ps/2018/04/280619.htm

A White House memo on the new CAT policy is at –

https://www.state.gov/r/pa/prs/ps/2018/04/280619.htm

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SPAIN’S HIGH COURT INVESTIGATES CAIXABANK FOR ALLEGED MONEY LAUNDERING

Reuters in more than one article on 19th April reported that Spain’s High Court said that it had placed Spanish lender Caixabank under formal investigation on suspicion of money laundering, resulting from its business dealings with China’s ICBC, which the court is already investigating.  It was alleged that Caixabank employees and directors at 10 branches had helped suspected Chinese criminals in Spain transfer €99 million to China and Hong Kong between 2013 and 2015.  Caixabank has denied any collaboration or participation in money laundering activities

https://af.reuters.com/article/worldNews/idAFKBN1HQ215?feedType=RSS&feedName=worldNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FAFRICAWorldNews+%28News+%2F+AFRICA+%2F+World+News%29&src=ilaw

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MILITARY GRADE FIREARMS AND CONVERTED WEAPONS INCREASINGLY AVAILABLE TO TERRORISTS IN EUROPE – REPORTS

On 18th April, the Guardian reported that a new survey co-ordinated by the Flemish Peace Institute, an independent research institute, says that long-standing barriers to obtaining firearms have broken down in recent years owing to the emergence of the internet, cross-border smuggling of military-grade assault rifles into the EU, the conversion of large numbers of blank-firing guns and the widespread reactivation of weapons previously rendered unusable to be sold to collectors.  The report concluded that terrorists generally rely on previously established criminal connections to obtain firearms on illicit markets.  It identified prisons as places that offered new opportunities for extremists who did “not yet have the necessary criminal connections to acquire firearms”.  The situation in the UK is different, researchers found, but the report said there were growing fears of smuggling of powerful automatic weapons to the UK.  Meanwhile, according to a separate report, released on the same day, by analysts at the Geneva-based Small Arms Survey, criminal and terrorist networks on the continent obtain firearms from 2 major sources: weapons smuggled from south-east Europe after the Yugoslav wars of the 1990s, and the more recent trade in converted firearms, some of which originate in EU Member States.

https://www.theguardian.com/world/2018/apr/18/arms-race-criminal-gangs-helping-terrorists-get-weapons-report-warns?CMP=share_btn_tw

One example of near-Europe arms supply sources from the Flemish Peace institute study is detailed in the following –

ILLICIT FIREARMS PROLIFERATION IN THE EU PERIPHERY: THE CASE OF UKRAINE

This says that, as the second-largest country in Europe, with a history of firearms stockpiles and an active conflict zone, Ukraine presents one of the most complex firearms proliferation cases in Europe.  While much of the firearms trafficking in Ukraine currently takes place within its borders, fears of criminal cross-border smuggling and of terrorists accessing weapons from Ukraine to commit terrorist attacks in the EU were fanned in 2016 when a French national was arrested for trying to bring 5 Kalashnikov-type assault rifles, 5,000 bullets, 2 anti-tank grenade launchers, detonators, and 125 kg of TNT across the Polish border.  This study details the history and distribution of seizures across Ukraine, its historical legacy of surplus weapons, political transfers to non-state actors (again, within Ukraine), craft production and conversion of firearms, and those who are or may be involved.  There is a section on trafficking routes, within and without the country.  The report concludes that Ukraine’s illicit firearm’s market can be characterised as a relatively accessible environment for individuals with the opportunity and willingness to participate in the market.  The illicit proliferation of firearms observed in Ukraine also gives individuals with malign intentions access to these weapons and the possibility of smuggling them into the EU.  In addition to firearms, the weapons seized by Ukrainian authorities include everything from firearms to anti-tank weapons, heavy anti-personnel weapons and explosives.  The potential availability of these weapons makes the threat of proliferation all the more conspicuous and relevant, especially in light of the increased terrorist threat in the EU.

http://www.flemishpeaceinstitute.eu/sites/vlaamsvredesinstituut.eu/files/wysiwyg/project_safte_eu_neighbourhood_ukraine.pdf