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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 23

23rd February 2019

EU TO AMEND UNION GENERAL EXPORT AUTHORISATION IN THE EVENT OF A NO DEAL BREXIT

On 29th January, an informative blog post on World Trade Controls about the proposal by the EU Commission to add the UK to the list of destinations covered by the Union General Export Authorization (EU001) for dual-use goods if there is a no deal Brexit on 29th March.  EU001 currently covers Australia, Canada, Japan, New Zealand, Norway, Switzerland (including Lichtenstein), and the USA.  It explains that general licences merely require timely registration, usually at least 2 weeks before actual export takes place.  They are not completely without administrative burden, however. Use of general licenses needs to be expressly stated in Box 44 of the respective customs declarations and national regulators will normally require periodical reports on the exports that have taken place under a general licence.  EU001 includes all dual-use goods listed on Annex I to EU Dual-Use Regulation 428/2009, but excludes the goods listed on its Annex IIg (e.g. certain software and technology for the design, production or use of specified nuclear-related goods; and certain pathogens and toxins hazardous for humans and animals).

http://www.worldtradecontrols.com/eu-to-amend-union-general-export-authorization-in-the-event-of-a-no-deal-brexit/

MONEY LAUNDERING CASES UP 94% IN MALTA LAST YEAR

Xinhua on 23rd February reported that the “Reported Crime Annual Report 2018” also said that the number of reported cases of fraud in Malta have increased by 31% over the past year.  The police force’s economic crimes unit would be strengthened following the rise in reported cases of financial crime.

http://www.xinhuanet.com/english/2019-02/23/c_137843463.htm

EU VISA POLICY: COMMISSION WELCOMES AGREEMENT TO STRENGTHEN EU VISA RULES

On 20th February, an EU news release advised that Member States had endorsed the agreement reached by the European Parliament and the Council on the Commission’s proposal to modernise the EU’s common visa policy, adapting the rules to evolving security concerns, challenges linked to migration and new opportunities offered by technological developments.  The agreed changes are intended to make it easier for legitimate travellers to obtain a visa to come to Europe, facilitating tourism, trade and business, whilst strengthening security and reducing irregular migration risks.

http://europa.eu/rapid/press-release_IP-19-721_en.htm

https://ec.europa.eu/home-affairs/sites/homeaffairs/files/what-we-do/policies/european-agenda-migration/20190220_eu-visa-policy_en.pdf

NIGERIA: GOVERNMENT WINS RIGHT TO PROSECUTE JP MORGAN CHASE OVER OIL FRAUD

All Africa on 23rd February reported that the High Court in London has granted Nigeria’s plea to allow it proceed with the trial involving JPMorgan Chase.  The bank is alleged to have enabled the misappropriation of state funds totalling $875 million over the Oil Prospecting Licence, OPL 245.  JPMorgan Chase had failed to halt the prosecution brought against it by the Federal Government.

https://allafrica.com/stories/201902230026.html

WIFE OF GUATEMALAN PRESIDENT INVESTIGATED FOR CASHING ILLEGAL CHEQUES

Reuters reported on 22nd February that the wife of Guatemalan President Jimmy Morales will be investigated on suspicion of cashing illicit cheques made out to her and her husband totalling more than $30,000, the country’s top prosecutor said.

https://in.reuters.com/article/guatemala-investigation/wife-of-guatemalan-president-investigated-for-cashing-illegal-checks-prosecutor-idINKCN1QB2PS

iNDIAN

fENTANYL 2

fENTANYL 1

https://www.insightcrime.org/investigations/fentanyl-trade-mexico-explained-8-graphs/

ALBANIAN MAFIA FLOODING BRITAIN WITH DRUGS AS IT GRASPS £5 BILLION COCAINE MARKET

The Mirror reported on 22nd February that violent gangs from Albania have reportedly taken control of the UK drugs trade.

https://www.mirror.co.uk/news/uk-news/albanian-mafia-flooding-britain-drugs-14038772

US DOJ CIVIL FORFEITURE COMPLAINTS SEEKING THE FORFEITURE AND RECOVERY OF APPROXIMATELY $38 MILLION IN ASSETS IN 1MDB CASE

A news release on Mondo Visione on 22nd February said that the DoJ had announced further filing of civil forfeiture complaints seeking the forfeiture and recovery of approximately $38 million in assets allegedly associated with an international conspiracy to launder funds misappropriated from 1Malaysia Development Berhad (1MDB), a Malaysian sovereign wealth fund.   They identify additional assets traceable to the 2012 and 2013 bond offerings – including luxury real estate in London, proceeds from the sale of luxury real estate in New York City, and converted equity in a facilities management company headquartered in Kentucky.    A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime.  These allegations are not proven until a court awards judgment in favour of the US.

http://www.mondovisione.com/media-and-resources/news/department-of-justice-us-seeks-to-recover-approximately-38-million-allegedly/

FATF GIVES IRAN UNTIL JUNE TO PASS MONEY LAUNDERING LAWS

Reporting on the recent FATF Plenary, Rferl reports that FATF has given Iran 4months to pass AML/CFT rules or face increased international scrutiny of its banks.

https://www.rferl.org/a/terrorism-finance-watchdog-gives-iran-until-june-to-pass-money-laundering-laws/29785642.html

IRELAND: WITHDRAWAL OF THE UNITED KINGDOM FROM THE EUROPEAN UNION (CONSEQUENTIAL PROVISIONS) BILL 2019

On 22nd February, law firm Matheson released an article about this just-published Bill in Ireland.  It deals with changes to Irish laws that will be needed in the event of the United Kingdom leaving the European Union without an agreement on 29th March.  The Bill consists of 15 different parts which fall under the remit of 9 different government ministers.  It is due before the parliament for review the week commencing 11th March.

The Bill’s Explanatory Memorandum states that a key part of Ireland’s planning and preparations is protecting and maintaining the Common Travel Area (CTA) and the associated rights and privileges.  Both the Irish and British Governments are committed to maintaining the CTA in all circumstances, and have committed to undertaking all the work necessary, including through legislative provision, to ensure that the CTA rights and privileges are protected.

https://www.matheson.com/news-and-insights/article/withdrawal-of-the-united-kingdom-from-the-european-union-consequential-prov

US CONGRESS COMMITTEE: “GRAVE CONCERNS” CONCERNING NUCLEAR TECH TRANSFERS TO SAUDI ARABIA

World ECR reported that a US House of Representatives’ committee has published a report following, it said, ‘multiple whistleblowers [having come forward] to warn about efforts inside the White House to rush the transfer of highly sensitive US nuclear technology to Saudi Arabia in potential violation of the Atomic Energy Act and without review by Congress as required by law – efforts that may be ongoing to this day’.  The report includes leaked memos, and a timeline suggesting an inner circle formed in part by retired generals who have been advancing a plan to sell nuclear power to Saudi since Donald Trump took office.

https://www.worldecr.com/news/house-committees-grave-concerns-concerning-tech-transfers-to-saudi-arabia/

https://oversight.house.gov/news/press-releases/multiple-whistleblowers-raise-grave-concerns-with-white-house-efforts-to

FORMER ENRON CEO RELEASED FROM PRISON

On 22nd February, Jurist reported that Jeffrey Skilling, founder and ex-CEO of Enron, imprisoned for his involvement in the high-profile corporate fraud scandal publicised in 2001, was released from US federal custody after serving more than 12 years in prison.  It says that more than $40 million of Skilling’s fortune, which has been frozen since his conviction in 2006, will be distributed to victims of Enron’s collapse.

https://www.jurist.org/news/2019/02/former-enron-ceo-skilling-released-from-custody/

THE COMMON FACTOR IN OFAC PENALTY ACTIONS THIS YEAR

A blog post in the Trade Sanctions Blog from Holland & Hart on 22nd February says that there is one principle similarity in the violations involved in all 4 OFAC penalties cases so far this year, and that reveals OFAC’s highest enforcement priorities.  In all 4 cases, the violating companies ignored warning signs which clearly indicated increased risk of sanctions violations.  OFAC expects companies to have compliance programmes commensurate with their overall risk.

https://www.tradesanctions.com/how-companies-should-address-increasingly-aggressive-ofac-sanctions-enforcement/#more-337

“SHISHA BARS NEED LICENSING” TO TACKLE SERIOUS CRIME AND WEAK SMOKE-FREE LAWS

The Local Government Association in the UK on 23rd February said that licensing powers are needed to help councils tackle shisha bars that repeatedly flout smoking and fire safety laws, and in the worst cases are linked to organised crime.  The number of shisha bars has more than trebled in recent years with more than half of councils now having a bar or café open in their area.

https://www.local.gov.uk/about/news/lawless-shisha-bars-need-licensing-tackle-serious-crime-and-weak-smoke-free-laws

PRIVATE EYE QUESTIONS DERIPASKA’S HONESTY, AND HENCE THE VALUE OF THE RELAXATION OF US SANCTIONS MEASURES

In its 22nd February print edition, Private Eye magazine questioned the lifting of US sanctions on Rusal and its parent, En+, after Oleg Deripaska seemingly reduced his shareholding to 44%, leaving the boards and handing voting controls to independent trustees.  It does by recalling the comments of a judge in a case before the High Court in London, where he was less than impressed by the honesty and evidence of both Deripaska and the claimant in the case, fellow Russian Vladimir Chernukhin.  The judge said that it was a “depressing fact…there is good reason to doubt the honesty of each of the principal actors in the case”.  Specifically about Deripaska, the judge said that after he gave evidence that deripaska “did not appear…to be a witness who wished to assist the court in ascertaining the truth,,,It would be wholly unsafe to rely upon his evidence save where it was not disputed…”.  The judge also referred to Deripaska making “dishonest attempt” to provide “false evidence”.  Mind you, the judge’s comments about the other party to the case lead the magazine to comment that Chernukhin is just the type of “questionable” Russian money accepted by successive UK governments.

 

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CANADA LISTS EGYPT GROUP HASAM AS TERRORIST ORGANISATION

Homeland Security Today on 23rd February reported that Canada has listed Harakat Sawa’d Misr (HASAM) as a terrorist entity under its Criminal Code – there are now 55 terrorist entities listed under the Code.  HASAM portrays itself as a nationalist movement attempting to overthrow the government of Egyptian President Abdel Fattah Al-Sisi and has generally targeted the Egyptian security apparatus, using methods such as assassinations, attacks on convoys and the detonation of IED.  HASAM does not have a known connection to Canada but its assists security, intelligence and law enforcement agencies by helping to facilitate the prosecution of perpetrators and supporters of terrorism, and plays a key role in countering terrorist financing.  It also helps obstruct assistance from sympathisers in Canada by criminalising certain support activities including those related to terrorist travel and recruitment.

https://www.hstoday.us/subject-matter-areas/counterterrorism/canada-lists-hasam-as-terrorist-organization/

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PESTICIDES AS POISONS: ANALYSIS OF THE GEBREV CASE

On 19th February, Bellingcat carried a further article about a poisoning incident in Bulgaria in April 2015, where an individual named Emilian Gebrev was poisoned.  It considers examining the various chemicals mentioned in the analysis report of the possible chemicals used, as these chemicals are poisonous and have potential for deliberate use to make people ill or even kill them.  The report includes a list of organophosphate pesticides that the testing institute believes might have been responsible for this particular poisoning, and all of which attack the human nervous system in ways similar to military nerve agents.  Any of these chemicals could have been used to poison food or drink.

https://www.bellingcat.com/resources/articles/2019/02/19/pesticides-as-poisons-analysis-of-the-debrev-case/

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US CONGRESS COMMITTEE’S ‘GRAVE CONCERNS’ CONCERNING TECH TRANSFERS TO SAUDI ARABIA

World ECR reported that a US House of Representatives’ committee has published a report following, it said, ‘multiple whistleblowers [having come forward] to warn about efforts inside the White House to rush the transfer of highly sensitive US nuclear technology to Saudi Arabia in potential violation of the Atomic Energy Act and without review by Congress as required by law – efforts that may be ongoing to this day’.  The report includes leaked memos, and a timeline suggesting an inner circle formed in part by retired generals who have been advancing a plan to sell nuclear power to Saudi since Donald Trump took office.

https://www.worldecr.com/news/house-committees-grave-concerns-concerning-tech-transfers-to-saudi-arabia/

https://oversight.house.gov/news/press-releases/multiple-whistleblowers-raise-grave-concerns-with-white-house-efforts-to

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SWITZERLAND HALTS ARMS EXPORTS TO LEBANON DUE TO MISSING WEAPONS

Swissinfo on 21st February reported that an inability to account for a Swiss shipment of weapons exported to Lebanon has resulted in a freeze of arms exports.  Exports of war materiel to Lebanon would no longer be allowed until further notice.  This decision is linked to post-shipment verification last year of 10 assault rifles and 30 sub-machine guns that were exported to Lebanon in 2016.  Swiss inspectors were only able to verify and inspect 9 of the 40 small arms.

https://www.swissinfo.ch/eng/politics/risk-of-abuse_switzerland-halts-arms-exports-to-lebanon-due-to-missing-weapons/44775366#.XHABjAsS8RU.twitter

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US PLACES TRAVEL BAN ON DR CONGO’S OFFICIALS OVER ELECTORAL FRAUD

The Nation on 23rd February reported that the US has placed travel ban on some top government officials of the Democratic Republic of the Congo over their roles in alleged electoral fraud in the December 2018 general election in the country – Corneille Nangaa, President of the DRC National Independent Electoral Commission (CENI); Norbert Basengezi Katintima, Vice President of CENI; Marcellin Mukolo Basengezi, Advisor to the President of CENI; Aubin Minaku Ndjalandjoko, President of the DRC National Assembly; and Benoit Lwamba Bindu, President of the DRC Constitutional Court.

http://thenationonlineng.net/us-places-travel-ban-on-congos-officials-over-electoral-fraud

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CAMBODIA PUT BACK ON GLOBAL MONEY LAUNDERING WATCH LIST

Radio Free Asia on 22nd February reported that Cambodia was put on a watch list by FATF after it found “significant deficiencies” that left the country vulnerable to flows of hidden illegal money.  Cambodia has a never prosecuted a money laundering case and its judicial system had “high levels of corruption”, FATF said.  NGO activists who monitor corruption in Cambodia said the reinstatement of Cambodia on the grey list suggested backsliding since 2015 and suggested that China’s huge flow of investment in the country’s casinos, real estate and banks and stock exchanges include a lot of laundered cash.

https://www.rfa.org/english/news/cambodia/money-laundering-02222019173012.html

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US “DENIED PARTIES” OR “RESTRICTED PARTIES” LISTS

On 5th February, a blog post on World Trade Controls posed the question: do I need to check all US denied parties lists?  It explains that restricted party screening is used to identify whether a party to a transaction is subject to specific export control or sanctions restrictions imposed by the US Department of Commerce, US Department of State, and/or US Treasury.  Each of these Departments maintains lists of restricted parties and imposes various restrictions on certain activities involving those listed parties (and under certain circumstances, activities involving any entity owned or controlled by such parties).  The list(s) on which a party appears determines the specific export control or sanctions restrictions concerning that party, and thereby signals the compliance risks a non-US company may face when dealing with such a listed party, it says.  A useful reference table is provided –

Agency Name Description
Commerce Denied Persons List Parties that have been denied export privileges involving items subject to the EAR
Commerce Entity List Parties that may trigger specific EAR licensing requirements
Commerce Unverified List Parties whose involvement in a transaction presents “red flags” (additional compliance risks)
State Nonproliferation Sanctions List Parties sanctioned under various non-proliferation statutes
State ITAR Debarred Parties List Parties prohibited from engaging in transactions involving ITAR-regulated activities
OFAC Specially Designated Nationals and Blocked Persons List (SDN List) Parties subject to property blocking pursuant to various US sanctions programmes
OFAC Sectoral Sanctions Identifications List (SSI List) Parties sanctioned for operating in certain sectors of the Russian economy
OFAC Foreign Sanctions Evaders List Non-US parties determined to have violated certain US sanctions programmes
OFAC Non-SDN Palestinian Legislative Council (PLC) List Individuals of the PLC associated with certain terrorist organisations
OFAC List of Foreign Financial Institutions Subject to Part 561 Foreign financial institutions subject to certain US sanctions

 

It also explains how EAR and ITAR export controls interplay with the lists.  The Export Administration Regulations (EAR) are administered by the Department of Commerce and prohibit the export, reexport, or transfer of items subject to the EAR to parties on the Entity List, the Denied Persons List, and in some cases, the OFAC SDN List.  In addition, though not subject to these prohibitions, parties on the Unverified List are subject to certain restrictions and requirements and may not receive items subject to the EAR by means of a licence exception.

The International Traffic in Arms Regulations (ITAR) prohibit the export, reexport or re-transfer of ITAR-controlled items to parties on the Debarred List, and there are restrictions on the import into the US involving, or transfer of US-origin items under certain circumstances to, parties on the various non-proliferation sanctions lists published by the Department of State.

http://www.worldtradecontrols.com/there-are-so-many-us-restricted-party-lists-do-i-really-need-to-search-them-all/

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 22

22nd February 2019

AUSTRALIA DIALS BACK ON EFFORT TO CONTROL DUAL-USE EXPORTS

On 19th February, Nature reported on a review of Australian export laws that has pushed back against the government’s effort to tighten controls on technologies and research that might have dual military and non-military uses.  Australian researchers, who were concerned that sweeping controls would restrict collaborative research, have welcomed the findings.

https://www.nature.com/articles/d41586-019-00606-y

http://www.australiandefence.com.au/news/review-rejects-defence-push-for-greater-export-control

VENEZUELA STRUGGLES TO FIND BUYERS FOR ITS OIL AFTER US SANCTIONS

Oil Price.com on 21st February reported that Venezuela’s oil inventories are said to have swelled to a 5-year high – said to be a sign that Venezuelan oil buyers are now buying and that the country is struggling to sell its oil.  Sanctions block all payments to PDVSA accounts, and buyers of Venezuelan crude are directed to deposit payments in a separate account, to which PDVSA doesn’t have access.  US sanctions also ban US exports of naphtha to Venezuela, which the country uses to dilute its thick heavy oil to make it flow; and analysts expect that a shortage of diluents could accelerate from this month the already steadily declining Venezuelan oil production and exports.   Added to this, other sources say that exports to Russia and China are said to be used to offset debt, generating no income for PDVSA.

https://oilprice.com/Latest-Energy-News/World-News/Venezuela-Struggles-To-Find-Buyers-For-Its-Oil-After-US-Sanctions.html

LUXEMBOURG TO REVIEW CONTROLS OVER SPYWARE COMPANY HUMAN RIGHTS QUESTIONS

Delano on 21st February reported that Luxembourg is considering new due diligence legislation for companies based there, after Pegasus spyware developed by NSO Group, an Israeli company headquartered there was connected with the murder of the journalist Jamal Khashoggi in Turkey.  A Canadian information and IT research lab has also linked Pegasus uses in countries with “dubious human rights records”.  NSO Group, which rebranded as Q Cyber Technologies, maintains that its products were designed for investigation and prevention of crime and terrorism.

http://delano.lu/d/detail/news/lux-review-due-diligence-over-spyware-firm-human-rights-questions/203646

SPAIN: WEAPONS WORKSHOP FOR CAMPO DE GIBRALTAR DRUG TRAFFICKERS

Euro Weekly on 21st February published photos after police officers in the south of Spain have dismantled a crime ring that was supplying modified firearms to drugs traffickers in the Campo de Gibraltar.  The Guardia Civil raided 2 clandestine workshops and arrested 10 people and seized 20 firearms, more than 12,400 cartridges, more than 100 silencers, €31,520 in cash and 2 vehicles, along with smoke grenades and night vision equipment.  It is claimed that the crime group sold the weapons with state-of-the-art silencers manufactured in a metal machining company in the province of Madrid.  More than 300 people have been arrested for arms trafficking in the Campo de Gibraltar area in the last 5 years with more than 3,150 firearms seized.

https://www.euroweeklynews.com/2019/02/21/in-pics-armed-cops-raid-weapons-workshop-for-campo-de-gibraltar-drug-traffickers/#.XG-QuHd2t9A

ZIMBABWE: 30 TONNES OF GOLD SMUGGLED TO SOUTH AFRICA IN 2018

On 21st February, Pindula reported that Zimbabwe is said to have lost over 30 tonnes of gold last year through smuggling.

https://news.pindula.co.zw/2019/02/21/30-tonnes-of-gold-smuggled-to-south-africa-in-2018/

MORE SMUGGLED ITEMS RETURNED TO EGYPT – FROM AUSTRALIA

On 21st February, Al-Bawaba reported that the fourth of 4 parts of an archaeological artefact has been returned by Australia – the other 3 parts, all illegally removed from Egypt – were recovered from Switzerland in 2017.  The part in Australia had been exhibited at the Macquarrie Museum.

https://www.albawaba.com/editorchoice/more-smuggled-items-returned-egypt-time-its-australia-1255944

SOUTH AFRICA: FORGET CIGARETTE SMUGGLING – THE BIG MONEY IS IN STEALING COAL

On 21st February, the Ground Up website reported that coal theft is “the biggest game in town”, costing billions of rand a year, highly organised and a major concern to police.  Coal theft is highly organised and backed by big money.  The gangs behind the theft have sufficient cash to invest in fleets of trucks.  The most common way of stealing coal requires the connivance of security and machine operators within the mines, and the coal is often sold back to the operator, Eskom.  Another method of coal theft involves the “cloning” of trucks, where thieves dress up their trucks to look like those of legitimate operators.

https://www.groundup.org.za/article/forget-cigarette-smuggling-big-money-stealing-coal/

CHINA STRENGTHENS AML/CFT REGIME WITH NEW GUIDANCE

On 22nd February, Regulation Asia reported that the CBIRC (China Banking and Insurance Regulatory Commission) has issued measures for financial institutions on combating money laundering, terrorism financing and tax evasion.  This comes after the PBOC (People’s Bank of China) said that it plans to scrap its approval process for opening a corporate bank account nationwide this year.  PBOC warned that some banks might allow corporate accounts to be used illegally, such as for money laundering and terrorist financing activities, and said it would rely on stronger oversight of abnormal accounts and suspicious transactions.  The new measures mostly cover improvements to internal controls at banking financial institutions, improvements in the supervision mechanism, and clarifications on market access standards.

https://www.regulationasia.com/china-strengthens-aml-cft-regime-with-new-guidance/

NEW AML GUIDELINES FOR GAMBLING IN GERMANY

DLA Piper on 20th February reported that gambling supervisory authorities of the German states have recently published new guidelines on the interpretation and implementation of the new AML Act that transposes the 4th EU AML Directive.

https://blogs.dlapiper.com/all-in/2019/02/20/new-aml-guidelines-for-gambling-in-germany/#page=1

BRAZIL PROSECUTORS OPEN MONEY LAUNDERING PROBE INTO PRESIDENT’S SON
On 22nd February, KYC 360 reported that the senator son of new Brazilian President Jair Bolsonaro is under investigation by federal authorities for money laundering in connection to unexplained increases in his net worth.

https://www.riskscreen.com/kyc360/news/brazil-prosecutors-open-money-laundering-probe-into-presidents-son/

THE ECONOMIC SUBSTANCE REQUIREMENTS

On 19th February, McDermott Will & Emery published an article saying that, in order to address concerns raised by the EU Code of Conduct Group, a number of jurisdictions have recently taken steps to meet the EU tax good governance principles by introducing “substance” rules for companies that are resident, and carrying on certain activities, in their jurisdictions.  Any companies in these jurisdictions should take urgent steps to ensure they are compliant.  Although the terminology differs slightly amongst the 6 jurisdictions involved, the respective legislation applies generally to companies that are “resident” in one of these jurisdictions and carry on a “relevant activity”. The article considers the substance and impact of the requirements.  The legislation is already in force in the jurisdictions, but there are still questions about how to interpret some of the requirements. More detailed guidance is likely to become available in each of the jurisdictions shortly.

https://www.mwe.com/it/insights/the-economic-substance-requirements/

BREXIT AND INCOTERMS: HOW 3 LETTERS CAN MAKE A BIG DIFFERENCE

On 20th February, Travers Smith published an article saying that the government’s Brexit advice urges businesses trading with the EU to review their contracts for the supply of goods – particularly those based on Incoterms – to ensure that they remain appropriate in the event of “no deal”.  The article asks: what are Incoterms, why do they matter and what changes should you make in the light of Brexit?  Incoterms are standard provisions drawn up by the International Chamber of Commerce (ICC) for use in contracts relating to international trade in goods.   They are not obligatory but they are widely used in practice.  It points out, for example, that liability to pay tariffs normally rests with the customer, not the supplier – so unless the customer contracts to have goods supplied on DDP (Delivery Duty Paid) terms (or similar), it is likely to be responsible for paying any tariffs imposed by the UK authorities, as well as carrying out any relevant customs formalities so that the goods are cleared for import.

ICC1

https://www.lexology.com/library/document.ashx?g=af5dd02e-6aaa-4b80-a2fd-285d5ed04347

For the current Incoterms 2010 see –

https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-rules-2010/

NO DEAL BREXIT & UK RESIDENT DIRECTORS OF IRISH COMPANIES

On 20th February, Beauchamps published an article saying that, with some exceptions, Irish companies are required to have at least one director who is resident in a member state of the European Economic Area (EEA).  If the UK leaves the EU without a deal, Irish companies who rely on a UK resident director to fulfil this requirement will need to take action.

https://www.beauchamps.ie/publications/697

INTERNATIONAL CRIMINAL LAW AND SPORTS BETTING: WHAT IS THE GLOBAL LOTTERY MONITORING SYSTEM (GLMS)?

On 18th February, Nyman Gibson Miralis published an article about GLMS, which signed a MoU with Europol under which the entities share information and be in constant consultation over sport competition manipulations and related organised crime investigations.  GLMS and Europol will also co-operate in running joint activities and implementing relevant projects, notably in the field of education and capacity building.  GLMS comprises a network of sports betting operators within national lotteries, establishing a global and systematic surveillance system to detect unusual or suspicious betting patterns.  By generating and facilitating alerts, it distributes and collects information to and from the members involved in the system.

https://ngm.com.au/international-criminal-law-sports-betting-glms/

http://glms-sport.org/

UK COURT PREVENTS DISCLOSURE OF DOCUMENTS TO COMPLY WITH A US SUBPOENA

Macfarlanes LLP on 18th February reported that the High Court had ruled that a company was not permitted to deliver documents that it had obtained in the course of civil proceedings in the UK in order to comply with a subpoena from the US.  The article says that this is an interesting case that sets a new precedent in the increasingly complex world on international disclosure.

https://globalinvestigationsreview.com/article/1180230/us-grand-jury-subpoenas-don’t-trump-uk-civil-discovery-rules-judge-says?gator_td=Fcz4Rmse12vKJlboVafwVc6T9fcoXssqN2TPyu2ux%2ftUnZwA3tpZ8AfwJmWy%2bhyLWMQPt%2bYKJPik35IvwXcu0zdgFoDdiMGChP%2f%2b7xguC1USigLgR85J2elWlF3jdvAI59xxflFxmQHa3aoDPums4ZnkzijHPgAs34W2NnghpJTyM22QkLy2qvKesLatSyq4NUjjxiyEtCISymrhO8ihxkp3MyyXFsrMAVbuvcG%2fuhLIs2FNa5BhzFkTQxZWNvAf37Yh03R%2bG28EvH3vvVnqUDAvYqi3buLKVqfs4pGug2hGOhLrMKgqHYk1pv61D6Qa

SFO LOOKS AT INFORMANTS

On 21st February, Greenberg Traurig published a GT Advisory following comments by the SFO Director before the House of Commons Justice Committee that getting an ‘insider’ to help the SFO understand what was going on could be helpful in presenting cases to juries.  The Advisory discusses the controversial history of ‘grassing’ (and being a “supergrass”) in the UK and describes the process of obtaining immunity and other protections.  It explains the process under the Serious and Organised Crime Act 2005 by which an individual may be given protection from prosecution or a reduced sentence for co-operating with law enforcement, or given an undertaking that certain evidence will not be used against them.

https://www.gtlaw.com/en/insights/2019/2/i-smell-a-rat-sfo-looks-to-informants-dangling-the-carrot-of-immunity

DELAY TO TAX HAVENS’ PUBLIC REGISTERS ‘RISKS NATIONAL SECURITY’

The Guardian on 21st February reported that, according to the House of Commons Foreign Affairs Select Committee, the UK government is undermining national security by delaying the introduction of publicly available share ownership registers in Britain’s major tax havens such as the BVI.  The Committee discovered that the UK had delayed implementation to 2023, 3 years later than planned.

https://www.theguardian.com/world/2019/feb/21/delay-to-tax-havens-public-registers-risks-national-security

GERMAN BILL TO GIVE CUSTOMS MORE POWER, TACKLE UNDECLARED WORK AND CHILD BENEFIT FRAUD

On 21st February, EurActiv reported that the German Finance Minister has presented a Bill for German customs to be given more employees and powers.  Customs officials will be able to support the police in cases of suspected exploitation, forced labour and human trafficking – officials will be able to more easily monitor suspects’ telecommunications and, in the case of letter-box companies, intervene when it is unclear where a company’s real workplace is.  The construction sector is also in the spotlight because those actually responsible for the workers are sometimes concealed by sub-contracting companies, used in order to evade taxes and charges.  In recent years, German customs have had an increasing number of tasks – these have included monitoring undeclared work and minimum wages, collecting road tax and fighting against money laundering, and an additional 3,500 positions will now be created.

https://www.euractiv.com/section/economy-jobs/news/gegen-schwarzarbeit-und-kindergeldmissbrauch/

CHINA RESTRICTS IMPORTS OF IRON, STEEL AND ALUMINIUM WASTE

HKTDC on 22nd February reported that several waste metals have been re-categorised as restricted in line with a recent joint directive which reassigns 8 solid waste varieties – including iron, steel and aluminium.  The change in status takes effect as of 1st July.

http://economists-pick-research.hktdc.com/business-news/article/Economists-Pick-Regulatory-Alert-China/China-Restricts-Imports-of-Iron-Steel-and-Aluminium-Waste/bacn/en/1/1X2ZLGG8/1X0AGG0O.htm

PAKISTAN REMAINS ON FATF GREY LIST, POSITION WILL BE REVIEWED LATER

India Today on 22nd February reported on the outcome of the recent FATF Plenary.  India wanted Pakistan to be placed on the ‘black list’, a move that would negatively impact the Pakistani economy.

https://www.indiatoday.in/world/story/pakistan-fatf-greylist-india-1462352-2019-02-22

MOLDOVAN POLITICIAN “SUSPECTED OF $600 MILLION MONEY LAUNDERING SCHEME”
TASS in Russia on 22nd February reported that Moldovan politician Vladimir Plahotniuc has been allegedly implicated in laundering funds from Russia to the tune of more than $564 million, Interior Ministry Spokeswoman Irina Volk told TASS.
http://tass.com/economy/1045935

COURT ORDERS FOOTBALLER JAY JAY OKOCHA’S ARREST OVER ALLEGED TAX FRAUD

On 22nd February, the Daily Post in Nigeria reported that a Lagos High Court has issued a bench warrant for the arrest of a former Super Eagles international, Austin Okocha, popularly known as Jay Jay Okocha, for failure to appear in court severally to answer questions on why he has allegedly failed to pay his income taxes.

http://dailypost.ng/2019/02/22/court-orders-jay-jay-okochas-arrest-alleged-tax-fraud/

JERSEY’S TAX LAWS ‘NO LONGER FIT FOR PURPOSE’

ITV News on 22nd February reported that Jersey’s tax laws are “no longer fit for purpose” according to a scrutiny report.  Many of the current tax laws date back to 1961 and the Government has drafted an updated law.

https://www.itv.com/news/channel/2019-02-22/jerseys-tax-laws-no-longer-fit-for-purpose/

GOV UK

https://www.gov.uk/government/news/trade-agreement-continuity

POLICE INTERCEPT CARGO SHIP SMUGGLING €100 MILLION WORTH OF COCAINE INTO SPAIN

Customs Today on 21st February reported that a ship carrying a 3.3 tonne consignment of cocaine with a €100 million street value was recently intercepted almost 288 km off the Portuguese coast.  In Spain, Guardia Civil and Policia Nacional officers, together with officials from tax authority Hacienda who planned the joint operation, were waiting for the Panama-registered ship.

http://www.customstoday.com.pk/police-intercept-cargo-ship-smuggling-e100-million-worth-of-cocaine-into-spain/

EAST LONDON HEALTH SUPPLEMENTS COMPANY SHUT DOWN

On 20th February, the Insolvency service in the UK said that an East London health supplements company that secured £128,000 from elderly and vulnerable customers has been shut down by the courts.  GoNutri Limited was wound up in the High Court on 12 February 2019 for trading with a lack of commercial probity, objectionable trading practices and improper sales techniques.  Using a call centre based abroad to push the products, sales operatives occasionally misled customers in thinking they were representing health centres in the UK or other parts of the NHS.  Products were sold at highly inflated prices and the same item could sell for different prices, ranging anywhere from £11 up to £49.99.  Some customers were told that they hadn’t paid for items and were forced to pay multiple times for a single product, while others were sent items they hadn’t requested before being hounded into paying for them.

https://www.gov.uk/government/news/unscrupulous-east-london-health-supplements-company-shut-down?platform=hootsuite

MOLDOVA: ABOUT TO GET ELECTED – AFTER A $1 BILLION BANK FRAUD

Bloomberg on 22nd February carried feature on Ilan Shor, an Israel-born businessman was sentenced to seven years and six months in jail for his alleged part in a $1 billion bank fraud in Moldova that cost its taxpayers the equivalent of 12% of the economy.  Free on bail while he appeals his conviction, Shor is now a popular city mayor.  He denies benefiting from the fraud and has named a political party after himself to run in the country’s parliamentary election.  The same fraud led to Prime Minister Vlad Filat being convicted and jailed, though he maintains his innocence.  Its alleged architect its alleged architect, Veaceslav Platon, is also accused of being a Russian agent.  Platon is a dual-national, as a Russian citizen married to a former Miss Ukraine.  He was jailed for 18 years in 2017,  and has also been named in a separate anti-corruption investigation into a $20 billion money laundering scheme known as the “Russian Laundromat”.  He too maintains his innocence.

https://www.bloomberg.com/news/articles/2019-02-22/this-man-s-about-to-get-elected-after-a-1-billion-bank-fraud

 IRAN’S OBJECTIVES AND CAPABILITIES: DETERRENCE AND SUBVERSION

An Occasional Paper from RUSI on 19th February explores Iran’s foreign policy objectives through a strategic lens, considering strengths, weaknesses, and proxy relationships.  It refers to a strong deterrence posture founded on increasingly accurate rocket and ballistic missile technology, based in Iran and in Lebanon, which in the event of war will be used to strike US bases and economic infrastructure in the Gulf, and Israeli towns and critical national infrastructure.  It also says that Iran’s support for Hamas and the Houthis is primarily an attempt to fix Israel, Saudi Arabia and the UAE in costly conflicts, which causes substantive political damage to its adversaries, reducing the strength of any potential coalition facing Iran.

https://rusi.org/publication/occasional-papers/irans-objectives-and-capabilities-deterrence-and-subversion

CASH CONTROLS (AMENDMENT) (EU EXIT) REGULATIONS 2019

Now approved by the relevant Committees, this SI amends retained EU law to ensure that it works to collect information from individuals who are carrying cash in excess of £10,000 into or out of the UK in the event that the UK leaves the EU without an agreement.

https://www.gov.uk/eu-withdrawal-act-2018-statutory-instruments/si-the-cash-controls-amendment-eu-exit-regulations-2019#history

MEDELLIN RAZES PABLO ESCOBAR’S HOME IN SYMBOL OF REBIRTH

The Miami Herald on 22nd February reported that a 6-floor apartment building in Medellin that Pablo Escobar once called home was demolished and officials hope it will dampen some of the fervour for the notorious drug lord’s criminal life and instead showcase the city’s rebirth.

https://www.miamiherald.com/news/nation-world/article226631399.html

US BANK REGULATOR REPRIMANDS JAPAN’S MUFG OVER MONEY LAUNDERING LAPSES

Reuters reported on 22nd February that the Office of the Comptroller of the Currency (OCC) said that it had reprimanded MUFG Bank, Ltd. for lapses in its AML and other compliance issues at its New York, Chicago and Los Angeles branches and dating back to 2016.

https://uk.reuters.com/article/us-usa-occ-mufg/u-s-bank-regulator-reprimands-japans-mufg-over-money-laundering-lapses-idUKKCN1QB1SG

SFO ABANDONS ROLLS-ROYCE AND GSK INVESTIGATIONS

Reuters on 22nd February reported that the SFO has abandoned 2 of its largest and longest investigations, into alleged bribery at aero-engine maker Rolls-Royce and drugs maker GlaxoSmithKline.  Rolls-Royce paid almost £500 million under a Deferred Prosecution Agreement (DPA) with the SFO in 2017 re payments to middlemen to secure orders in countries such as Indonesia, Russia, India, China and Nigeria.  GSK had been fined £343 million in China in 2014 for paying bribes to doctors to use its drugs.

https://uk.reuters.com/article/uk-britain-sfo/british-fraud-office-abandons-rolls-royce-gsk-investigations-idUKKCN1QB1EP

FATF GIVES IRAN UNTIL JUNE TO STRENGTHEN AML RULES

In its take on the outcome of the FATF Plenary, the Tehran Times on 22nd February reported that FATF had already given Iran until February 2019 to complete an action plan of reforms that would bring it in line with global norms, or face consequences.  Now, If the shortcomings were not remedied by June, currently suspended countermeasures would automatically kick in.

https://www.tehrantimes.com/news/433269/FATF-gives-Iran-until-June-to-strengthen-anti-money-laundering

30 PEOPLE SUSPECTED IN UKRAINIAN MONEY LAUNDERING THROUGH AUSTRIAN MEINL BANK

UA Wire on 22nd February reported that the Austrian Prosecutor’s Office has identified 30 suspects in the case of Ukrainian money being laundered through Meinl Bank, and it is known that the list includes Ukrainian citizens.  It says that the case has to do with money disappearing from Ukrainian banks’ correspondent accounts in Austria – according to the Deposit Guarantee Fund, $385 million and €75 million were withdrawn illegally from the correspondent accounts at Meinl Bank.

http://uawire.org/30-people-suspected-in-ukrainian-money-laundering-through-austrian-meinl-bank

CHINA’S PEER-TO-PEER LENDERS FACE CRISIS, INVESTORS FACE RUIN

A feature in Deutsche Welle on 22nd February said that a major upheaval is underway in China’s peer-to-peer (P2P) finance sector after numerous cases of fraud and negligence.  As loans helped finance cars and property, the article asks could the crisis worsen the country’s economic slowdown?

https://www.dw.com/en/chinas-peer-to-peer-lenders-face-crisis-investors-face-ruin/a-47634861

BILLIONAIRE JAPANESE PACHINKO KING KAZUO OKADA RELEASED UNCONDITIONALLY BY HONG KONG’S ANTI-CORRUPTION AGENCY

The South China Morning Post on 22nd February reported that the tycoon had been granted bail after being arrested for unspecified offences last year.  He achieved prominence by building an empire specialising in gaming, most notably for manufacturing pachinko machines, a Japanese pinball game.  He has also been exploring the casino business in recent years.

https://www.scmp.com/news/hong-kong/law-and-crime/article/2187357/billionaire-japanese-pachinko-king-kazuo-okada-released

COMMON TRAVEL AREA GUIDANCE

On 22nd February, the Department for Exiting the EU published guidance to UK and Irish Citizens on their rights under the Common Travel Area arrangements (n.b. the CTA also applies to the Isle of Man and Channel Islands).  The CTA established cooperation between respective immigration authorities enabling British and Irish citizens to move freely between, and reside in, these islands.

https://www.gov.uk/government/publications/common-travel-area-guidance/common-travel-area-guidance

IRELAND: EXTRADITION OF ‘CONTROLLING MIND’ BEHIND £20 MILLION TAX SCAM ORDERED

The Irish Times on 22nd February reported that the High Court was told there is not ‘a snowball’s’ chance Daniel O’Connell, 65, can pay sum being sought.  Nevertheless, he is wanted in the UK for failing to pay a confiscation order amounting to almost £13 million relating to a VAT evasion case.

https://www.irishtimes.com/news/crime-and-law/courts/high-court/extraditon-of-controlling-mind-behind-20m-tax-scam-ordered-1.3802913

THE COCAINE COWBOYS

An interesting article on OCCRP on 22nd February about plans to import hundreds of kilos of cocaine into northern Italy and Slovakia, and use legal goods to disguise the drug shipments – and a drug trafficker who worked with the ‘Ndrangheta, one of the world’s most powerful organised criminal groups, to open a major new cocaine route into Europe.  This report is based on 2 indictments from courts in Venice and Milan and interviews with detectives and prosecutors.  There is also alleged co-operation from corrupt customs officials in Slovakia, as well as from the SIS, Slovakia’s intelligence agency.  Arrests were made in 2018.

https://www.occrp.org/en/unfinishedlives/the-cocaine-cowboys

ALBANIANS PROTEST AGAINST GOVERNMENT, OPPOSITION MPS RESIGN

On 22nd February, OCCRP reported that thousands have rallied against the Albanian government, claiming it is corrupt and linked to organised crime, as opposition lawmakers resigned from parliament, demanding an early election.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9272-albanians-protest-against-government-opposition-mps-resign

UK GAMBLING REGULATOR CONSULTING ON RESTRICTIONS ON USE OF CREDIT CARDS

Out-Law on 22nd February reported that online gambling operators could be restricted or even prohibited from accepting deposits from customer credit cards in future under plans being considered by the British gambling regulator.

https://www.out-law.com/en/articles/2019/february/industry-must-act-to-address-gambling-credit-concerns/

HUNGARY COURT SENTENCES EX-RULING PARTY LAWMAKER TO PRISON FOR GRAFT

On 22nd February, Baker McKenzie reported that a Hungarian court sentenced a former lawmaker, Roland Mengyi, to 3 years in prison for graft, state news agency MTI reported, marking a rare conviction for corruption against a member of Prime Minister Viktor Orban’s Fidesz party.  He was convicted of attempted misuse of public funds and abuse of office in 2015, in a case involving several others who were not public office.

http://www.riskandcompliancehub.com/hungary-court-sentences-ex-ruling-party-lawmaker-to-prison-for-graft/

ISLE OF MAN: EUROPEAN UNION AND TRADE ACT 2019 NOW ONLINE

On 22nd February, the European Union and Trade Act 2019 was added to the Isle of Man legislation website.  This Act, equivalent to the UK’s EU withdrawal Act, governs the treatment of existing EU law (that forms part of Island law) on and after exit day, and the treatment of it, and any newly applied EU law, after then.

https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/2019/2019-0002/EuropeanUnionandTradeAct2019_1.pdf

ISLE OF MAN RELEASES ITS “NO DEAL BREXIT” GUIDE

https://www.gov.im/media/1364451/190006-no-deal-brexit-guide-interactive-update.pdf

UK: GOVERNMENT DRUGS ADVISORY BODY TO REVIEW IMPACT OF MEDICAL CANNABIS RESCHEDULE

The Pharmaceutical Journal on 20th February reported that the Advisory Council for the Misuse of Drugs (ACMD) has been asked by the Home Office to begin a long-term review into cannabis-based products for medical use.  The review will assess the impact of medical cannabis being moved from Schedule 1 to Schedule 2 of the Misuse of Drugs Regulations (MDR) 2001, and will also look at whether any further legislative amendments are needed.  This follows a short-term review completed last year, and a legislative change from 1st November that relaxed some cannabis use, but recommended that synthetic cannabinoids remain in Schedule 1.  The new review is to be completed by November 2020.

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

MHRA EXPERT WORKING GROUP LAUNCHES REVIEW OF OPIOID USE

On 18th February, the Pharmaceutical Journal reported that a committee within the Medicines and Healthcare products Regulatory Agency (MHRA), has launched a review looking into the risks and benefits of opioid medicines.  It will look at data on the use of opioid-containing medicines in the UK, both prescribed and over the counter (OTC), and consider whether efforts to minimise the risks of OTC and prescription opioid use have been effective, as well as the benefits and risks of using opioid-containing medicines.

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

icc

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6 COMMON PITFALLS AND BLIND SPOTS TO AVOID WHEN CREATING A COMPLIANT ORGANISATION

A blog post on the FCPA Blog on 22nd February provided 6 common pitfalls and blind spots related to building and maintaining a compliant organisation –

  1. Failing to look at the external operating environment in your compliance risk assessment;
  2. Considering impact only in terms of compliance enforcement;
  3. Over-focus on list-based, reactive sanctions management;
  4. Failing to achieve a sustainable use of resources;
  5. Not testing, monitoring or doing on-the-ground checks; and
  6. Generic training.

http://www.fcpablog.com/blog/2019/2/21/six-common-pitfalls-and-blind-spots-to-avoid-when-creating-c.html

Featured

HAITI POLICE AND SENATOR IMPLICATED IN US ARMS TRAFFICKING CASE

Insight Crime on 22nd February reported that a Florida gun shop owner was recently convicted for trafficking firearms to Haiti with the help of a senator and several other top government officials, raising questions about government corruption in Haiti’s illegal arms trade.  The gun shop owner was found guilty of conspiring with a Haitian senator and other individuals to illegally traffic 166 semi-automatic firearms and 30,000 rounds of ammunition hidden in the back of a truck shipped to Haiti in August 2016.  The article says that cases unfolding in the US and Haiti highlight the amount of illegal weapons flooding the Caribbean nation despite the US arms embargo, and the role that political elites play in facilitating the safe passage of such arms.

https://www.insightcrime.org/news/analysis/us-haiti-arms-trafficking-case-raises-questions-answers/

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LITHUANIA DETAINS 26 PEOPLE, INCLUDING TOP JUDGES, FOR CORRUPTION

On 22nd February, OCCRP reported that Lithuanian authorities had detained 26 people, including judges and lawyers, in a large-scale anti-corruption probe of the judiciary.  The suspects are accused of large-scale bribery, trading in influence and abuse of powers.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9270-lithuania-detains-26-including-top-judges-for-corruption

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NORTHERN IRELAND: POLICE SEIZE HOME OF ALLEGED UDA MEMBER

The Belfast Telegraph on 22nd February reported that police have seized the home of an alleged senior member of the paramilitary South East Antrim UDA.  The NCA has obtained a Recovery Order by consent over a Carrickfergus property under the Proceeds of Crime Act 2002.  NCA alleged that the property was originally acquired using the proceeds of mortgage fraud, tax evasion and money laundering, before being placed into his wife’s name.

https://www.belfasttelegraph.co.uk/news/northern-ireland/police-seize-home-of-alleged-uda-member-37843766.html

http://www.nationalcrimeagency.gov.uk/news/1571-nca-seizes-property-linked-to-paramilitary-group

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OUTCOMES OF THE FATF PLENARY

On 22nd February, FATF reported on the outcomes of the Plenary held in Paris, 20th to 22nd February.  It –

  • approved 3 Risk-Based Approach Guidance papers for public consultation: for lawyers; accountants and Trust and Company Service Providers (TCSP). The guidance documents will be released for public consultation before their final adoption in June 2019;
  • issued a public statement on its activities in respect of Iran and North Korea;

http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/public-statement-february-2019.html

  • adopted a new Interpretative Note to Recommendation 15 on virtual assets, that will be formally adopted in June;

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/regulation-virtual-assets-interpretive-note.html

  • discussed the mutual evaluation reports of China and Finland, and the progress that Italy and Norway have made since their mutual evaluation reports were adopted;
  • issued a statement on current Efforts by the FATF to Monitor and Take Action against Terrorist Financing;

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

  • issued a statement on action by Brazil to remedy deficiencies identified in its mutual evaluation report;

http://www.fatf-gafi.org/publications/methodsandtrends/documents/fatf-statement-brazil-feb-2019.html

  • made amendments to the list of jurisdictions with strategic AML/CFT deficiencies, and added Cambodia as a jurisdiction with strategic AML/CFT deficiencies (noting that it has developed an action plan with the FATF to address the most serious deficiencies);
  • commented on Iran’s actions to counter deficiencies in its systems; and
  • discussed the latest report to the G20 on its work programme on preventing the misuse of virtual assets for money laundering and terrorist financing, including the adoption of revisions to define how to apply its revised requirements of the FATF Standards to virtual asset service providers and in the context of virtual assets.

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

 

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MUTUAL ASSISTANCE ON CUSTOMS AND AGRICULTURAL MATTERS (REVOCATION) (EU EXIT) REGULATIONS 2019

This SI will revoke Council Regulation (EC) 515/97 on mutual assistance if the UK leaves the EU without a deal, as this mutual assistance is based on an agreement which is limited to Member States.  The Regulation is used by HMRC to exchange information with other Member States on “customs” matters.  It provides a legislative framework on mutual assistance in matters of community customs and agricultural policy and sets out how Member States will work together to tackle significant evasion in these matters.  Furthermore, the Naples II Convention will also cease to have effect, and the UK will no longer have access to the Customs Information System.  The Explanatory Memorandum for the SI only says that HMRC is “looking to establish possible alternative methods of obtaining information”…

https://www.gov.uk/eu-withdrawal-act-2018-statutory-instruments/the-mutual-assistance-on-customs-and-agricultural-matters-revocation-eu-exit-regulations-2019

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DASKA: KEY TAKEAWAYS FROM THE LATEST US RUSSIA SANCTIONS BILL

On 20th February, Morrison Foerster published an article about the revised Defending American Security from Kremlin Aggression Act, or “DASKA” – a tough economic sanctions Bill.  It says that DASKA is intended to push the Trump Administration to confront Russia on a range of issues, including Russia’s continued interference in democratic processes in the US and abroad, malign influence in Syria, continued aggression toward Ukraine, and support of criminal organisations and other malicious actors in cyberspace.  Under DASKA, amongst other things, Congress would force the Administration to sanction billionaires (and others) linked to President Putin; and would require domestic title insurance companies to obtain, maintain, and report information on beneficial owners of entities that purchase high-value residential real estate in the US.

https://www.mofo.com/resources/publications/190220-daska-takeaways-russia-sanctions-bill.html

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STRANDED BOEING JET SHOWS REACH OF IRAN SANCTIONS

On 21st February, the Seattle Times says that a Norwegian Air Shuttle Boeing 737 Max made an emergency landing on 14th December in Shiraz in Iran after developing engine problems while en route from Dubai to Oslo.  The plane has been grounded ever since as Norwegian, Boeing and others navigate through the US sanctions on Iran.  The passengers were flown out the next day, but the stricken plane has been grounded, though Norwegian Air initially imagined it would be a straightforward matter to fly in the needed parts.  The airline found itself seeking help from OFAC in the middle of the federal government shutdown.  Boeing has now received a licence from OFAC to assist with the repair, and GEC, the US partner in engine maker CFM International, will also have needed to obtain permission to ship the replacement powerplant.

https://www.seattletimes.com/business/boeing-aerospace/boeing-jet-stuck-in-city-of-poets-shows-reach-of-iran-sanctions/

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CONVERGENCE OF IED FACILITATION AND WMD PROLIFERATION NETWORKS FOR NON-STATE ACTORS

An article in the February 2019 edition of the CTC Sentinel warns that non-state actors could employ the networks that facilitates the development of IED to gather the knowledge, people, materials, finances, and infrastructure required for WMD development and employment.  It also says that the possibility of the profit-minded suppliers within vast, transnational IED networks expanding into WMD proliferation is high due to the opportunity for profits at relatively low additional risk.  It asserts that, during the 12-months period September 2017, to the end of August 2018, there were “approximately 16,300 reported” improvised explosive device (IED) incidents worldwide, not including those within the US.  These attacks caused over 25,000 casualties.  Of these incidents, roughly 37% (approximately 6,000) occurred outside of Iraq and Afghanistan – in countries like Nepal, Colombia, and India.  The number of incidents worldwide highlights the growth of IED facilitation networks by what have been described as “profit-minded suppliers” to meet the demand.  It says that, similarly, there has been a growth in the number of WMD incidents by non-state actors; and that the increasing rate of WMD incidents associated with non-state actors demonstrates their desire to possess a WMD, whether developed internally or acquired externally.

https://ctc.usma.edu/profit-minded-suppliers-convergence-ied-facilitation-wmd-proliferation-networks-non-state-actors

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 21

21st February 2019

TRUMP’S NEW AVIATION SECURITY STRATEGY LOOKS TO COUNTER PROLIFERATION OF MANPADS

Urdu Point on 21st February reported that the Trump Administration is looking to reduce the threat of man-portable air defence systems (MANPADS) falling into the hands of terrorists, the US National Strategy for Aviation Security (NSAS) revealed.  The document also warned that unmanned aerial systems (UAS) in private hands pose a rapidly growing risk to US domestic civilian aviation – drones have been used to fly drugs and money and weapons across borders.

https://www.urdupoint.com/en/world/trumps-new-aviation-security-strategy-looks-556807.html

SAUDI LONG-RANGE MISSILE FACTORY SPARKS PROLIFERATION FEARS

The New Arab website carried an article saying that satellite photos published in January reveal that Saudi Arabia may possess a factory capable of producing ballistic missiles.  Saudi already possesses “antiquated” Chinese-made DF-3A ballistic missiles which it acquired from Beijing in the 1980s, and in 2007 it also purchased more accurate Chinese-made DF-21 missiles.

https://www.alaraby.co.uk/english/comment/2019/2/20/saudi-long-range-missile-factory-sparks-fears-over-weapons-proliferation

ILLEGAL REFRIGERANT IMPORTS COST POLAND €7 MILLION IN 2018

Cooling Post on 20th February reported that illegal refrigerant imports – including R134a used in car air conditioning, either smuggled or imported outside of the EU quota system, are said to have cost the Polish treasury an estimated €7 million in uncollected taxes and customs fees in 2018.  The illegal material, originating in China and imported via countries on the EU borders (Ukraine and Turkey) is said to have amounted to 40% of Polish demand last year and was valued at €55 million.

https://www.coolingpost.com/world-news/illegal-imports-cost-polish-treasury-e7m-in-2018/

GREEKS £DRINK 4,000 TONS OF SMUGGLED COFFEE EACH YEAR”

The IBNA website carried a report on 20th February saying that smuggling is, according to executives of the Hellenic Coffee Association (HCA), extremely high, especially in northern Greece.  It is claimed that 10% of the coffee consumed is a smuggled product, with Bulgaria and Albania being the main gateways.  The demand of the newly established Hellenic Coffee Association, which represents 85% of the market, is the abolition of excise duty, said to have stimulated the smuggling.

https://www.balkaneu.com/greeks-drink-4000-tons-of-smuggled-coffee-each-year/

STANDARD CHARTERED FINED $133 MILLION BY FCA

KYC 360 on 21st February reported that the FCA has reportedly fined Standard Chartered of £102.2 million over issues pertaining to its financial crime controls.  The development follows remarks in the bank’s 2018 interim report, in which it said it expects to pay a ‘hefty’ fine to the FCA for violating financial crime rules in an ongoing investigation.

https://www.riskscreen.com/kyc360/news/standard-chartered-fined-133-million-by-uk-financial-regulator-fca-report/

THE PERFECT AML PROGRAMME: A 10-POINT GUIDE

On 20th February, KYC 360 carried an article from Suresh Chavali, a specialist in the risk and compliance sector.

https://www.riskscreen.com/kyc360/article/the-perfect-aml-programme-a-ten-point-guide/

EU COMPANY LAW TO BE ADAPTED TO THE DIGITAL ERA

MAMO TCV Advocates in Malta published an article on 19th February saying that the European Council has announced that it has reached a provisional agreement with the European Parliament on a draft Directive that will facilitate and promote the use of online solutions in a company’s contact with national regulatory authorities throughout its life cycle.  The draft Directive provides for the amendment of EU company law rules to allow for greater efficiency, transparency and legal certainty in company matters through the use of digital tools. The draft Directive also provides for safeguards against fraud and abuse in online procedures, including the control of the identity and legal personality of a person setting up a company, and the possibility of requiring physical presence before the competent regulatory authority.

https://www.mamotcv.com/resources/news/eu-company-law-to-be-adapted-to-the-digital-era

MALTA: ARTICLES OF THE CUSTOMS ORDINANCE AND EXCISE DUTY ACT FOUND TO CONTRAVENE HUMAN RIGHTS CONVENTION

MAMO TCV Advocates in Malta published an article on 20th February about a court case in Malta brought by a man whose vessel was seized by customs in December 2008 for alleged cigarette smuggling.  Due to the small amount of unpaid duty involved, he could have opted to pay a penalty and the criminal charges would have been dropped.  However, if he exercised this option, he would have had to renounce the bank guarantee of €45,000 he had lodged to obtain release of the vessel – 20 times the value of the duty and excise tax allegedly due and 10 times the penalties that could have been imposed.

https://www.mamotcv.com/resources/news/articles-of-the-customs-ordinance-and-excise-duty-act-declared-unconstitutional

OFAC OFFERS A TUTORIAL ON REMEDIATING SANCTIONS VIOLATIONS

On 18th February, Bradley Arant Boult Cummings LLP published an article saying that 2 recent civil penalty actions by OFAC supply guidance for how entities should address sanctions violations after they are discovered – saying that organisations that act proactively, swiftly, and decisively in response to discovery of likely sanctions will be granted greater lenience than those organisations that do not.  One example looked at involved –

  • Review –to detect any other violations; and a system for reporting future violations;
  • Control – require senior management to certify there are no sanctions-related activity, and hire outside counsel to investigate the matter;
  • Education – written and in-person training for employee’s trade compliance policies; and
  • Blocking – block the potential sanctions violating customers from future orders.

https://www.financialservicesperspectives.com/2019/02/so-you-violated-sanctions-now-what-ofac-offers-a-tutorial-on-remediating-violations/#page=1

GLENCORE WILL ‘VIGOROUSLY CONTEST’ $680 MILLION TRANSFER PRICING TAX DEMAND IN UK

On 20th February, Euronews reported that the Swiss-based but London-listed mining and trading company Glencore said it would “vigorously contest” a $680 million  tax demand linked to transfer pricing.

https://www.euronews.com/2019/02/20/glencore-will-vigorously-contest-680-million-tax-demand

EU MEASURES IN SUPPORT OF GENERIC PHARMACEUTICALS PRODUCERS

A news release on 20th February advised that the EU is adopting new rules which should boost the competitiveness of EU producers of generic medicines and biosimilar products, and introduces an exception to the protection granted to an original medicine by a supplementary protection certificate (SPC) for export purposes and/or for stockpiling.  EU-based manufacturers of generics and biosimilars will be entitled to manufacture a generic or biosimilar version of an SPC-protected medicine for the purpose of exporting to a non-EU market where protection has expired or never existed or for the purpose of creating a stock that will be put on the EU market after the SPC has expired.

https://www.consilium.europa.eu/en/press/press-releases/2019/02/20/eu-measures-in-support-of-generic-pharmaceuticals-producers/

INTERPOL ISSUES RED NOTICE AGAINST BUSINESSMAN HRANOVSKY UNDER REQUEST OF ISRAEL

Interfax Ukraine on 21st February reported that INTERPOL, upon request of judicial agencies of Israel, has issued a red notice against Ukrainian businessman Oleksandr Hranovsky (Granovskyi), who has business assets in hospitality, publishing and financial areas.

https://en.interfax.com.ua/news/general/567632.html

ILLEGAL MONEY LENDER ORDERED TO PAY BACK £230,000

Peak FM in Derbyshire on 21st February reported that an illegal money lender has been told to pay back more than £230,000 of criminal benefit he made from vulnerable customers.  Following a confiscation hearing, Andrew Gent, 50, was ordered to pay back £231,250 in proceeds of crime and was given 3 months to pay the amount or face a 6-month default prison sentence.  He must also pay £1,000 in prosecution costs.  Gent amassed a large customer base of around 170 customers and charged an average interest of 40% on each loan.

https://www.peakfm.co.uk/news/local/illegal-money-lender-from-wingerworth-ordered-to-pay-back-230000

5 COUNTRIES ACCOUNT FOR OVER 50% OF IRAN’S IMPORTS

Customs Today on 20th February reported that, apart from China, Iran mainly imported goods from the UAE ($5.45 billion), Turkey ($2.038 billion), Germany ($2.018 billion) and India ($1.928 billion).  These 5 countries together accounted for 57% of Iran’s total imports.

http://www.customstoday.com.pk/five-countries-account-for-over-50-of-irans-imports/

MORE SCHIPHOL AIRPORT WORKERS ARRESTED IN DRUG TRAFFICKING INVESTIGATION

On 21st February, Customs Today reported another 2 men worked in the baggage, catering and cleaning departments had been arrested.  12 other arrests were made in the investigation last year, with 9 of those suspects worked at Schiphol.  The suspected workers had access to the secured area of the airport, such as the area where baggage is handled.

http://www.customstoday.com.pk/schiphol-workers-arrested-in-drug-trafficking-investigation/

RUSSIA: FEDERAL CUSTOMS SERVICE INQUIRY DEPARTMENT HEAD ACCUSED OF BRIBERY

Customs Today on 20th February reported that a criminal case had been started alleging the taking a bribe of $140.000 against head of the inquiry department of the Office of Customs Investigation, Sergey Galenkov.

http://www.customstoday.com.pk/federal-customs-service-inquiry-department-head-accused-of-bribery/

FURTHER DEVELOPMENTS IN LEGAL PRIVILEGE

On 19th February, Ogier published a briefing containing advice aimed at Jersey businesses.  It says that, following the landmark judgment in SFO v. ENRC [2018], there have been 2 further significant judgments on litigation privilege, and should be noted by all litigants, including directors of trustees and companies in trust structures.  One case involved privilege of internal communications regarding settlements and the other about dual purpose when relying on litigation privilege – where documents have been created for more than one purpose, but the dominant purpose was not legal proceedings.

https://www.ogier.com/publications/further-developments-in-litigation-privilege

PODCAST: CONFLICTS OF INTEREST

In the latest TRACE podcast, Stephanie Davis, Chief Ethics & Compliance Officer for Volkswagen Group of America, discusses how to uncover and address conflicts of interest in the workplace.

https://www.traceinternational.org/bribe_swindle_or_steal

US OPENS PROBE INTO BRAZILIAN OIL BRIBERY SCHEME

Baker McKenzie on 21st February reported that The DoJ is investigating Rodrigo Garcia Berkowitz, a former US-based oil trader for Brazil’s Petrobras already charged in his home country with taking part in a corruption scheme involving commodity companies Vitol SA, Glencore PLC and Trafigura AG.  This is said to be the first confirmation that US investigators have joined a new phase of Brazil’s “Car Wash” corruption probe, which has toppled presidents in 2 countries and sent more than 130 politicians and businessmen to jail across Latin America.

http://www.riskandcompliancehub.com/u-s-opens-probe-into-brazilian-oil-bribery-scheme-2/

IRAN UNVEILS SUBMARINE THAT CAN LAUNCH CRUISE MISSILES

Real Clear Defense on 20th February reported that Iran has unveiled a Iran-built submarine that the nation says is capable of firing cruise missiles several hundred miles and staying more than 650 feet underwater for 5 weeks.

https://www.realcleardefense.com/2019/02/20/iran_unveils_submarine_that_can_launch_cruise_missiles_306707.html

BRITISH SPIN DOCTOR TO FORMER MALAYSIAN PM CHARGED WITH MONEY LAUNDERING

The Guardian on 21st February reported that Paul Stadlen, who worked for Najib Razak, says charges over $3 million linked to 1MDB scandal are politically motivated.  He worked for Najib as a public relations consultant during his 9 years in office, is facing 2 counts of money laundering of over $3 million that was allegedly proceeds from illegal activities, and is is accused of overseeing transfers of the money to different companies between June 2014 and August 2015.

https://www.theguardian.com/world/2019/feb/21/british-spin-doctor-to-former-malaysian-pm-charged-with-money-laundering

NORTH KOREA’S KIM PURGES HIS WEALTHY ELITE TO KEEP GRIP ON POWER

Nikkei Asian Review on 21st February reported that he has executed more than 70 since taking power in late 2011 for misdemeanours ranging from running illicit businesses to watching South Korean TV dramas, a new report showed.

https://asia.nikkei.com/Politics/Trump-Kim-Summit/North-Korea-s-Kim-purges-his-wealthy-elite-to-keep-grip-on-power

POLITICAL VIOLENCE AND CRIME INCIDENT REPORT

On 7th February, Control Risks published this report for Q4 2018, which analyses global incidents of war, terrorism, unrest and violent organised crime with commercial relevance in Q4 2018, as recorded within the essential risk monitoring toolkit, CORE.

https://www.controlrisks.com/our-thinking/insights/reports/political-violence-and-crime-incident-report-q4-2018

SUSPENDED SENTENCE FOR BANKRUPT WHO BURNT CASH OWED TO INSOLVENCY PRACTITIONERS

On 21st February, Accountancy Daily reported that a bankrupt, David Lowes-Bird, who claimed to have burnt nearly £70,000 in cash rather than pay insolvency practitioners has received a suspended prison term.  He Lowes-Bird had substantial debts and was unable to pay the insolvency practitioners and accepted a bankruptcy restriction undertaking lasting 9 years, after the insolvency practitioners petitioned for his bankruptcy. He then received nearly £80,000 in an insurance pay-out and this should have gone to the Official Receiver in order to pay his creditors, including the insolvency practitioners he had previously been ordered to pay costs to – but he removed the £80,000 from his account and claimed to the Official Receiver that he burned it in order to prevent the insolvency practitioners at all costs from receiving it.

https://www.accountancydaily.co/suspended-sentence-bankrupt-who-burnt-cash-owed

UN: OIL COMPANIES IN SOUTH SUDAN COULD BE COMPLICIT IN WAR CRIMES

The Wall Street Journal on 20th February reported that oil companies operating in South Sudan could be complicit in war crimes, as oil proceeds are funding the government-controlled security forces in the country’s brutal civil war, according to the UN.  A report by investigators from the UN’s Commission on Human Rights in South Sudan laid out mounting evidence of widespread atrocities that constitute war crimes under international law, including mass rapes and civilian killings, torture and recruitment of children as soldiers.

https://www.wsj.com/articles/oil-companies-in-south-sudan-could-be-complicit-in-war-crimes-u-n-says-11550682399?mod=searchresults&page=1&pos=1

ISLE OF MAN CONFIRMS UPDATES TO 2 INDIVIDUALS ON AFGHANISTAN SANCTIONS LIST

A news release on 21st February confirmed the amendment of 2 entries on the Afghanistan sanctions list, in line with recent announcements from the EU and the UK.

https://www.gov.im/news/2019/feb/21/financial-sanctions-afghanistan/

GUIDANCE ON TELLING HMRC YOUR ORGANISATION FAILED TO PREVENT THE FACILITATION OF TAX EVASION

On 21st February, HMRC issued guidance on how to self-report a company or partnership that did not prevent the facilitation of tax evasion if you are its authorised representative.  It says to use this guidance to tell HMRC on behalf of a company or partnership that they have failed to prevent a representative from criminally facilitating UK tax evasion, and that they may be guilty of a corporate failure to prevent offence under Part 3 of the Criminal Finances Act 2017.  It does caution that such self-reporting is voluntary, and says that you and the company or partnership you are acting on behalf of have a right to remain silent, and that you can give as much information in your report as you want.

https://www.gov.uk/guidance/tell-hmrc-your-organisation-failed-to-prevent-the-facilitation-of-tax-evasion

HIDDEN DEBT SCANDAL COULD ALIENATE ANGOLA FROM INVESTOR COMMUNITY

The Energy Mix Report on 21st February carried an article saying that indications of deals between Angola and global companies involved in the scandal is increasingly bringing to question the credibility of President Joao Lourenco’s already-debatable drive against corruption and presents Angola as risky for foreign investors.  It relates a number of deals, and says that Angola is struggling to control its foreign and domestic debt, which is estimated at nearly $80 billion.  An analyst is quoted as saying that the revelations of links with companies synonymous with Mozambique’s debt crisis indicate Angola might have a similar problem brewing, equivalent if not deeper than Mozambique’s.

https://www.energymixreport.com/hidden-debt-scandal-could-alienate-angola-from-investor-community

STANDARD CHARTERED TO TAKE $900 MILLION CHARGE OVER PROBES

In its 22nd February edition, the Taipei Times reported that Standard Chartered PLC is to take a $900 million charge tied to regulatory probes in its 4th Quarter results, this is for potential penalties from investigations over US sanctions contraventions, currency trading issues and financial-crime controls.  It has been bracing for a possible US fine related to past dealings with Iran, and the charge could indicate a settlement is close.

http://www.taipeitimes.com/News/biz/archives/2019/02/22/2003710173

CLARITY ON THE 25% IMPORT DUTY ON US SUPERYACHTS ENTERING FRANCE

On 21st February, Superyacht News published an article saying that French customs had clarified its position on the additional 25% duty owed on US-built vessels entering the EU.  This additional charge has been imposed in reaction to President Trump’s trade measures.  However, it will not apply to vessels operating privately under temporary admission.  Other exceptions, exemptions and options are said to be under discussion.

http://www.superyachtnews.com/business/clarity-on-the-25-import-duty-on-us-superyachts-entering-france-

ABU DHABI GLOBAL MARKET CONSULTS ON AML RULES

Out-Law on 21st February reported that Abu Dhabi’s financial free zone, the Abu Dhabi Global Market (ADGM), has begun a public consultation to 12th March on changes to its rules for tackling money laundering; terrorist financing and proliferation, and the financing of unlawful organisations.  The proposed revisions to the existing AML regime follow on from a recent review of the UAE’s federal laws on money laundering, terrorist financing and the financing of unlawful organisations.  Perhaps not coincidentally, a planned mutual evaluation by the FATF of the UAE’s compliance with its recommendations is scheduled to take place in mid-2019.

https://www.out-law.com/en/articles/2019/february/abu-dhabi-global-market-updates-anti-money-laundering-rules/

 

Featured

HECKLER & KOCH FINED €3.7 MILLION OVER ILLEGAL ARMS SALES TO MEXICO

Deutsche Welle on 21st February reported that 2 former staff members at the weapons manufacturer were given suspended sentences for violating Germany’s War Weapons Control Act for their involvement in the delivery of G36 assault rifles to Mexico.

https://www.dw.com/en/heckler-koch-fined-37-million-over-illegal-arms-sales-to-mexico/a-47610975?maca=en-Twitter-sharing

HECKLER & KOCH’S ILLEGAL ARMS DEAL WITH MEXICO

Deutsche Welle on 20th February carried a report saying that 5 H&K employees who conspired in a sale of G36 assault rifles to Mexico 2006-2009 await their sentences in Stuttgart; and the trial has offered insights into the weakness of Germany’s arms export control laws.  Some of the G36 rifles were almost certainly used in the murder of 6 Mexican students, and the probable murder of 43 others whose bodies have never been found, in 2014.  The trial turns on a loophole in Germany’s arms export controls, especially tailored for Mexico: that while selling weapons to the country, in general, was allowed, German authorities wanted to ban their use in specific Mexican states, and government authorities apparently misinterpreted the law.

https://www.dw.com/en/heckler-kochs-illegal-arms-deal-with-mexico/a-47596609

Featured

GUIDANCE ON TELLING HMRC YOUR ORGANISATION FAILED TO PREVENT THE FACILITATION OF TAX EVASION

On 21st February, HMRC issued guidance on how to self-report a company or partnership that did not prevent the facilitation of tax evasion if you are its authorised representative.  It says to use this guidance to tell HMRC on behalf of a company or partnership that they have failed to prevent a representative from criminally facilitating UK tax evasion, and that they may be guilty of a corporate failure to prevent offence under Part 3 of the Criminal Finances Act 2017.  It does caution that such self-reporting is voluntary, and says that you and the company or partnership you are acting on behalf of have a right to remain silent, and that you can give as much information in your report as you want.

https://www.gov.uk/guidance/tell-hmrc-your-organisation-failed-to-prevent-the-facilitation-of-tax-evasion

Featured

OFAC REPORTS $500,000 PENALTIES FOR VIOLATIONS OF IRAN SANCTIONS BY CEMENT SOURCING COMPANY

On 21st February, OFAC announced that a US company, ZAG IP, LLC (formerly known as ZAG International, LLC) – a business focused on global sourcing and marketing of cement raw materials and providing strategic advisory services related to raw material selection for companies in the construction industry – had reached agreement to pay $506,250 in penalties for 5 self-reported, non-egregious apparent violations of the Iranian Transactions and Sanctions Regulations, for sourcing from Iran (via the UAE) alternative supplies to fulfil a contract.  OFAC said that, whilst ZAG did exercise limited due diligence, it acted with reckless disregard for sanctions requirements by failing to substantively address the US sanctions prohibitions in place with respect to Iran despite contemporaneous risk indicators, that senior management knew what had happened, and that there had been considerable economic benefit to Iran as a result.  Also, did not have an effective OFAC compliance programme in place at the time of the transactions commensurate with its level of risk, giving its status as an international trading company.

https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20190221_zag.pdf

Featured

CORRUPTION OF MYANMAR’S ILLEGAL TEAK TRADE ‘GOES TO THE HEART OF GOVERNMENT’

A news release on Ekklesia on 21st February reported that for 3 decades, the multi-million dollar international trade in Burmese teak has been riddled with crime and high-level corruption, driving conflict and human rights abuses in Myanmar.  Now, a 2-year undercover investigation by the London-based Environmental Investigation Agency (EIA) has unearthed and exposed a near-mythic ‘Burmese teak kingpin’ at the centre of an international network, the so-called ‘Shadow President’ who conspired with and bribed the most senior military and Government officials in Myanmar.  The report says that the late Cheng Pui Chee (in Thailand, aka Chetta Apipatana) – was able to establish a secret off-the-books system of fraudulent trade in the cream of the country’s teak logs, a trade run in parallel to, and within, the official legal trade administered by the State-owned Myanmar Timber Enterprise (MTE).

The report is at https://eia-international.org/wp-content/uploads/EIA-report-State-of-Corruption.pdf

http://www.ekklesia.co.uk/node/27772

Featured

HOW A UK COMPANY IS USING A CARIBBEAN TAX HAVEN TO CASH IN ON SCRAPPING TOXIC SHIPS IN ONE OF THE WORLD’S POOREST COUNTRIES

The Independent on 20th February reported that lucrative ship-scrapping trade sees poor Bangladeshi workers face ‘abhorrent conditions with abysmal environmental protections.  The newspaper says that the St Christopher and Nevis International Ship Registry Ltd (Skanreg), based in Romford in east London, is the official seller of shipping flags for St Kitts and Nevis.  A Panamanian corporate entity St Christopher Holdings & Investments SA owns 50% of Skanreg.  New figures from the NGO Shipbreaking Platform showed that almost half the 532 ships broken on the beaches of south Asia in 2018 flew flags of just 3 tiny offshore tax havens – the Comoros islands, Palau in the Pacific and St Kitts and Nevis (whose flag was found on 29); and all 3 flags are blacklisted by the EU due to their poor enforcement of international conventions.  In the past 3 years, 143 St Kitts and Nevis vessels have been scrapped on south Asia’s beaches.  EU rules have banned ships from being exported from European ports to south Asia since 2006; and a new Regulation was added in January 2019 so that it is now also illegal for any ship carrying a European flag to be sent to the south Asian beaches – which has been avoided by short-term re-registration through Skanreg.

https://www.independent.co.uk/news/uk/home-news/ship-scrapping-skanreg-st-kitts-nevis-maritime-investigation-a8780796.html

Featured

OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 20

20th February 2019

AEO: CUSTOMS CLEARANCE ON FAST TRACK

HKTDC on 12th February published an article about the advantages of Authorised Economic Operation (AEO) status, specifically in Hong Kong, but equally applicable to several other countries.  It describes it as a “quality mark” that lets exporters enjoy the trade clearance measures provided by different economies, with cross-border mutual recognition of the status as well as in-country benefits.  It says that the WCO has been promoting the concept of AEO to strengthen international supply chain security and facilitate movement of legitimate goods.  In Hong Kong, The 2-tiered programme requires participating companies to meet 10 or 12 preset criteria to enhance their security standards, covering cargo handling, premises control, conveyance monitoring, selection of business partners and so on – and see inspection rates fall by as much as 80%.

https://hkmb.hktdc.com/en/1X0AGFHA/market-spotlight/Customs-clearance-on-fast-track

INDIAN BILLIONAIRE ANIL AMBANI ORDERED TO PAY ERICSSON OR FACE JAIL

Nikkei Asian Review on 20th February reported that Anil Ambani, chairman of Reliance Communications, has been ordered by India’s Supreme Court to pay 4.53 billion rupees to Swedish equipment maker Ericsson within 4 weeks or go to jail, after the billionaire was found guilty of contempt of court.

https://asia.nikkei.com/Business/Companies/Indian-billionaire-Anil-Ambani-ordered-to-pay-Ericsson-or-face-jail2

SHIP AND RIG RECYLING: FAQ

On 20th February, Wikborg Rein published a briefing which says that international conventions and local regulations combine to create a complex legal regime, which is often overlooked.  The sale of a ship or rig to an intermediate buyer, which then sells the asset on to a shipbreaking facility, will not necessarily insulate the original owner from future liability or reputational damage.  Against this background, the briefing provides some advice for owners and other parties involved in cross-boundary movements of marine assets for recycling.  The international framework is under the Basel Convention 1989 – the Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal –  which was introduced to regulate (and to some extent discourage) the international movement of hazardous wastes, by subjecting each such movement to the prior informed consent of the competent regulators in the state of export of the waste, the intended state of import and any transit states.  The movement of hazardous waste undertaken without such consent constitute illegal traffic under the Convention.

https://www.internationallawoffice.com/Newsletters/Shipping-Transport/International/Wikborg-Rein/Ship-and-rig-recycling-frequently-asked-questions

ALL THAT YOU SHOULD KNOW ABOUT THE NEW AML LAW IN UAE

On 4th January, Dr Hassan Elhais published an article outlining the key points of the new AML law in UAE.

https://professionallawyer.me/legal-articles/criminal-law/Anti-Money-Laundering-Law-Amendments

EU: BETTER SECURITY FOR ID DOCUMENTS

On 20th February, an EU news release said that the EU is introducing tighter security for ID cards in order to reduce identity fraud.  The proposed new rules will improve the security of these documents by introducing minimum standards both for the information contained in them and for security features common to all Member States that issue them.  It is expected that the new rules will enter into force 2 years after adoption and, in general, existing identity cards which do not meet the requirements will stop being valid 10 years after the date of application of the new rules or at their expiry, whichever is earlier.

https://www.consilium.europa.eu/en/press/press-releases/2019/02/19/better-security-for-id-documents-council-presidency-and-european-parliament-reach-provisional-agreement/

TANZANIA: CHINESE “IVORY QUEEN” SENTENCED TO 15 YEARS FOR SMUGGLING

On 20th February, Defence Web reported that a Tanzanian court sentenced a prominent Chinese businesswoman, Yang Feng Glan, dubbed the “Ivory Queen” to 15 years in prison for smuggling the tusks of more than 350 elephants to Asia.

https://www.defenceweb.co.za/security/border-security/chinese-ivory-queen-sentenced-for-15-years-for-smuggling/

FORMER TOP CHINESE GENERAL SENTENCED TO LIFE FOR CORRUPTION

ABC News reported on 20th February that Fang Fenghui, a former top Chinese general has been given a life sentence for taking and distributing bribes and possessing a large amount of unaccounted-for property.

https://abcnews.go.com/International/wireStory/top-chinese-general-sentenced-life-corruption-61183446

SWISS BANK TURNS TABLES ON GERMAN LAWYER IN TAX EVASION CASE

Handelsblatt on 19th February reported that Eckart Seith, who helped to uncover one of Germany’s biggest tax avoidance scandals now faces prosecution in Switzerland, home to the bank he identified as an alleged culprit, on a charge of industrial espionage.  His testimony was crucial in a case involving so-called dividend stripping with €12 billion of unwarranted tax refunds – until 2011, when authorities closed the loophole.

https://www.handelsblatt.com/today/finance/dividend-stripping-swiss-bank-turns-tables-on-german-lawyer-in-tax-evasion-case/24011420.html?src=ilaw&ticket=ST-1877616-hiZQWbpWdqgFgiyOFDW4-ap3

SWEDBANK NOW LINKED TO DANSKE BANK AML CASE

On 20th February, ERR reported that the case is now linked to Swedish lender Swedbank, according to Swedish public broadcaster, SVT.  Around €3.8 billion is said to have moved between Swedbank and the Baltic units of Danske Bank, over around a 10 year period.

https://news.err.ee/912337/swedbank-now-linked-to-danske-case

MALAYSIA: FORMER MEDIA ADVISER TO PRIME MINISTER CHARGED IN ABSENTIA FOR MONEY LAUNDERING

On 20th February, Bernama reported that Paul Stadlen, who was a media advisor to former prime minister Datuk Seri Najib Razak has been charged in absentia in the Kuala Lumpur Court Complex here today with money laundering.

http://www.bernama.com/en/general/news.php

LARGE-SCALE SCAM IN KYIV: COURT RULES TO SEIZE 14 CONSTRUCTION SITES BELONGING TO UKOGROUP
UNIAN on 20th February reported that a district court has ruled to seize 14 construction sites belonging to the Ukogroup construction firm reportedly affiliated with real estate developer Anatoliy Voitsekhovsky.  The allegations include evaded taxes, arbitrarily seized land plots on which residential complexes, shopping malls and office centres were built.
https://www.unian.info/kiev/10452711-large-scale-scam-in-kyiv-court-rules-to-seize-14-construction-sites-belonging-to-ukogroup-list.html

723 NIGERIANS DEPORTED FROM GHANA OVER CYBERCRIME, PROSTITUTION 2018-19

The Sahara Reporter carried this story, alongside comments by the Nigerian High Commissioner to Ghana, describing the deportation of Nigerians by the Ghana Immigration Service as an “improper act”, and that it could strain the brotherly relationship both countries share.

http://saharareporters.com/2019/02/20/723-nigerians-deported-ghana-over-cybercrime-prostitution

BENEFICIAL OWNERSHIP OF IRISH TRUSTS – WHAT HAS HAPPENED?

On 19th February, Matheson published an article about the European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2019 in Ireland, adopted on 29th January and saying that trustees should act now to ensure that they comply with the new measures.  It says that designated persons are required to seek professional advice about their duties, to seek and obtain information from beneficial owners of trusts and to establish beneficial ownership local registers as required.

https://www.matheson.com/news-and-insights/article/beneficial-ownership-of-irish-trusts

THE BASICS: RESPONDING TO A WINDING UP PETITION

On 19th February, Gowling WLG published a briefing asking: what should your company do if faced with a statutory demand or a winding up petition?

https://gowlingwlg.com/en/insights-resources/articles/2019/how-to-respond-to-a-winding-up-petition/

EUROPEAN COMMISSION EXAMINES F1 DEALS WITH TOBACCO COMPANIES

On 19th February, TJI reported that the European Commission will be investigating the recent deals between Formula One racing teams and tobacco companies, and said to involve not advertising tobacco products but rather concentrate on science to find less harmful solutions for smoking (PMI) and “potentially reduced risk products” (BAT).

http://www.tobaccojournal.com/European_Commission_examines_F1_deals.55129.0.html

MALTA: CUSTOMS OFFICIALS SEIZE 15.3 MILLION CIGARETTES AT FREEPORT

Malta Today on 19th February reported that the cigarettes were found in 2 containers on their way to Croatia from Vietnam.

https://www.maltatoday.com.mt/news/national/93105/customs_officials_seize_153_million_cigarettes_at_freeport#.XG1IMnd2t9B

FRANCE: UBS IN COURT FOR AIDING TAX EVASION

On 19th February, Banking Tech reported that a Paris court will make a decision on whether UBS helped French clients hide billions of Euros from French tax authorities.  If found guilty, charges could see the bank face penalties of up to €5.3 billion.  The trial opened last year after 7 years of investigations, launched when former employees came forward with claims of unlawful conduct.

UBS FINED €4.5 BILLION IN FRENCH TAX FRAUD TRIAL

On 20th February, City AM reported that UBS had been fined €4.5 billion by the French court after being found guilty of laundering the proceeds of tax evasion.

https://www.bankingtech.com/2019/02/ubs-in-parisian-court-for-aiding-tax-evasion/

http://www.cityam.com/273550/ubs-fined-eur45bn-french-tax-fraud-trial-but-swiss-bank

POTENTIAL BIOTERRORIST USE OF SMALLPOX SHOULD PUT WORLD ON NOTICE, EXPERTS SAY

Homeland Preparedness News on 19th February carried this worrying article saying that smallpox, although eradicated, has joined the growing list of potential biosecurity threats, according to experts, who say preparedness for the possible return of the virus should be prioritised around the world.  Samples of the smallpox virus have been kept for research purposes, according to the clinic, which has led to concerns that smallpox could someday be used as a biological warfare agent.

https://homelandprepnews.com/countermeasures/32593-potential-bioterrorist-use-of-smallpox-should-put-world-on-notice-experts-say/

IMB LAUNCHES INITIATIVE TO CURB BILLS OF LADING FRAUD

Hellenic Shipping News on 20th February reported on the new initiative launched by the International Maritime Bureau (IMB) aimed at curbing bills of lading (B/L) fraud carried out by non-vessel owning common carriers (NVOCC).

https://www.hellenicshippingnews.com/imb-launches-initiative-to-curb-bills-of-lading-fraud/

VENEZUELA SHUTS SEA, AIR LINKS TO DUTCH ISLANDS

The Miami Herald on 20th February reported that Venezuelan officials said that the country is banning air and sea trips to and from 3 Dutch Caribbean islands – Curacao, Aruba and Bonaire – a region that has been linked to efforts to undermine President Nicolas Maduro by sending emergency aid.  Airspace in the border region was also indefinitely closed to private and commercial flights.

https://www.miamiherald.com/latest-news/article226472035.html

UK AMENDS 2 ENTRIES ON ITS AFGHANISTAN SANCTIONS LIST

On 20th February, a Notice from HM Treasury advised amendment of 2 entries on its Consolidated List.  This followed the enactment of EU Regulation 2019/279/EU.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/780401/Notice_Afghanistan_2019_279.pdf

ISLE OF MAN “SUGAR TAX”

On 20th February, a news release from the Treasury advised that, from 1st April, the Soft Drinks Industry Levy will be introduced in the Isle of Man.  It mirrors that already in place in the UK and is aimed at producers and importers on the Island of soft drinks containing added sugar.

https://www.gov.im/news/2019/feb/20/soft-drinks-industry-levy/

SANCTIONS (OVERSEAS TERRITORIES) (AMENDMENT) ORDER 2019 AND BERMUDA

This SI 2019/185 provides that UK sanctions relating to Lebanon, Syria and Libya, imposed by means of an order in council, will no longer extend to Bermuda, given that they now have the force of law in Bermuda by virtue of the International Sanctions Regulations 2013.

http://www.legislation.gov.uk/uksi/2019/185/contents/made

UK ERITREA SANCTIONS FOR BRITISH OVERSEAS TERRITORIES FORMALLY REVOKED

The Eritrea (Sanctions) (Overseas Territories) (Revocation) Order 2019 has formally revoked the UK sanctions imposed in respect of Eritrea by means of an order in council.

http://www.legislation.gov.uk/uksi/2019/184/contents/made

GERMANY SEIZES MILLIONS IN RUSSIAN MONEY LAUNDERING PROBE

ABC News on 20th February reported that German authorities say they’ve seized properties worth €40 million and millions more in cash in an investigation linked to a high-profile Russian money laundering scheme.

https://abcnews.go.com/International/wireStory/germany-seizes-millions-russian-money-laundering-probe-61189857

VICTIMS OF ALLEN STANFORD’S PONZI SCHEME SAY THEY HAVE BEEN SHORT-CHANGED

CNBC on 20th February reported that, unlike victims of Bernie Madoff, who have gotten back large chunks of their principal, 18,000 customers of fraudster R. Allen Stanford have recovered practically nothing.

https://www.cnbc.com/2019/02/20/allen-stanfords-ponzi-scheme-victims-say-they-have-been-short-changed.html

LIBYAN ANTI-CORRUPTION AUTHORITIES SAID TO BE INVESTIGATING 121 COMPANIES OPERATING IN TUNISIA

The Libyan Express on 20th February reported that the Commission has requested from its Tunisian counterpart to provide data of 121 Libyan companies operating in Tunisia, suspected to be implicated in laundering money.

https://www.libyanexpress.com/libyas-nac-investigates-121-companies-operating-in-tunisia

EU EXTENDS BELARUS ARMS EMBARGO AND SANCTIONS FOR ANOTHER YEAR

Rferl on 20th February reported that the EU had extended for another year an arms embargo against Belarus and sanctions on 4 Belarusian citizens.

https://www.rferl.org/a/eu-extends-belarus-arms-embargo/29780722.html

ITALY: 5 BANKS INVESTIGATED AND €700 MILLION SEIZED OVER DIAMOND SCAM

The Corriere della Sera reported that savers, who bought precious stones on the advice and encouragement of bank staff, little knowing that if they then tried to sell them, they would lose up to 50% of their investment. Investigations into the scam by prosecutors in Milan are focusing on 75 suspects, 5 banks and 2 companies, and have led to the seizure of over €700 million, with alleged victims including celebrities such as singer Vasco Rossi.  It says that the major players in this market were Intermarket Diamond Business Spa in Milan, which operated through UniCredit, Banco BPM and Banca Aletti, and Diamond Private Investment di Roma Spa, which relied on MPS and Banca Intesa Sanpaolo.

https://www.corriere.it/english/19_febbraio_20/five-banks-investigated-and-700m-seized-over-diamond-scam-5612cb6a-351e-11e9-9316-3a96070c5354.shtml?refresh_ce-cp

BAHRAIN: 90% OF JEWELLERS ‘COMPLIED WITH DIRECTIVE TO FIGHT MONEY LAUNDERING’

GDN Online on 20th February reported that nearly 90% of Bahrain’s jewellers have complied with a government directive to fight money laundering and terrorism financing, it has emerged.  That is the equivalent of almost 900 firms, said Industry, Commerce and Tourism Ministry assistant under-secretary for commercial registration and companies Ali Makki. Of course, the figures suggest 10% did not follow the Directive…

http://www.gdnonline.com/Details/496070/90pc-jewellers-complied-with-directive-to-fight-money-laundering

 

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OFAC SANCTIONS INDIAN NARCOTICS TRAFFICKER JASMEET HAKIMZADA AND HIS NETWORK

On 20th February, the US Treasury reported that OFAC had identified Indian national Jasmeet Hakimzada as a Significant Foreign Narcotics Trafficker.  OFAC also designated 2 Indian nationals –  Harmohan Hakimzada, Jasmeet’s father, is his primary partner in the drug trafficking and money laundering operation; and Eljeet Kaur, Jasmeet’s mother, who serves as an officer in 2 front companies in India.  4 entities registered in India or the UAE that form part of the narcotics trafficking organization run by Jasmeet Hakimzada were also designated.

https://home.treasury.gov/news/press-releases/sm614

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190220.aspx

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APPLICATION OF US SANCTIONS TARGETING VENEZUELA TO PDVSA SUBSIDIARIES

On 20th February, a Client Alert from Baker McKenzie clarifies and summarises the US sanctions that apply to CITGO Holding Inc (and its subsidiaries), PDV Holding Inc (and its subsidiaries), Nynas AB (and its subsidiaries) and all other PdVSA subsidiaries.  It points out that the designation of PDVSA as an SDN added to an already complex sanctions compliance landscape where entities owned by the Government of Venezuela or by PdVSA are concerned.  Although entities 50% or more owned by PdVSA would normally be subject to the same SDN restrictions as PdVSA itself, the current US restrictions on dealings with direct and indirect PdVSA subsidiaries are not so straightforward due to the various Executive Orders, authorisations, general licences, and published guidance from OFAC.

http://bakerxchange.com/rv/ff00476b5f4b67d1ca78b3b72f44b26325bc3f75

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DRIVING CHANGE IN THE UK’S POST-FATF EVALUATION AML REGIME

On 20th February, RUSI issued a report which considers how the UK AML regime should develop after the conclusion of the 2018 FATF Mutual Evaluation report (MER) of the UK, to drive forward an approach that genuinely protects the UK’s financial integrity in practice (rather than in theory).  It starts by suggesting that a cynic may have thought the surge of activity in the UK’s AML regime between 2015 and 2018 was notable, but mainly due to the imminent FATF evaluation.  However, the government’s efforts seem to have paid off, with the UK receiving the highest aggregate scorings under the revised FATF evaluation methodology to date. The Report examines specific elements of the UK’s AML response and seek to challenge the intimation that the AML regime can be judged largely effective in real terms as the 2018 MER appears to suggest.  The report aims to focus post-evaluation efforts by making a series of 12 recommendations for the government’s AML efforts in the post-MER policy cycle –

  • 1: Refresh and publish the AML and Asset Recovery Action Plans and provide annual reports to Parliament setting out progress.
  • 2: Appoint an Independent Commissioner for Economic Crime to drive progress across government.
  • 3: Prioritise funding of human and technological intelligence capabilities within the National Economic Crime Centre (NECC) – based at the NCA, it includes officers from the NCA, HMRC, the City of London Police, SFO, FCA, CPS and the Home Office; plus representatives from government and the private sector.
  • 4: Prioritise addressing deficiencies in the AML supervisory regime and use of financial intelligence over the next three years to improve systemic effectiveness overall.
  • 5: Provide an independent assessment of HMRC’s AML supervisory activities, alongside work the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) – set up by the UK government to strengthen the AML supervisory regime and ensure the professional body AML supervisors provide consistently high standards of AML supervision – is undertaking in relation to professional body supervisors.
  • 6: Review the legislative information-sharing pathways between Joint Money Laundering Intelligence Taskforce (JMLIT) – set up in 2016 to bring together law enforcement, regulators and private sector – members and consider building fit-for-purpose gateways to support the operating model.
  • 7: Support FATF efforts to champion a conversation, at the global level, regarding the balance to be had between data privacy and financial crime policy objectives.
  • 8: On bringing the virtual asset economy under the purview of the AML regime, ensure that provisions are tailored to the new regime, rather than simply extending existing provisions.
  • 9: Provide training to prosecutors and financial investigators on the use of Part 5 (civil confiscation) POCA powers in furtherance of their objective to expand use of UWO.
  • 10: Increase UKFIU headcount to 200 as promised during the 2007 FATF evaluation.
  • 11: Expedite plans to update or replace the ELMER database used by UKFIU to log SAR.
  • 12: Establish proactive SAR data-mining capabilities within the Regional Organised Crime Unit (ROCU) network.

https://rusi.org/sites/default/files/20190219_fatf_uk_evaluation_web.pdf

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SANCTIONS: INTERCEPTION AND MONITORING PROHIBITIONS: TECHNICAL GUIDANCE

On 20th February, the UK Export Control Joint Unit published guidance that provides further information on the meaning of specific terms used in the schedules to certain regulations. If in doubt, the ECJU says, exporters should ensure that they seek appropriate technical and legal advice on whether their activity is prohibited.  UK sanctions on Burma, Iran, Syria and Venezuela include prohibitions in relation to items that could be used to intercept communications, as well as related services.

https://www.gov.uk/government/publications/interception-and-monitoring-prohibitions-in-sanctions-technical-guidance/interception-and-monitoring-prohibitions-in-sanctions-made-under-the-sanctions-and-anti-money-laundering-act-2018-technical-guidance

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LARGE-SCALE SCAM IN KYIV: COURT RULES TO SEIZE 14 CONSTRUCTION SITES BELONGING TO UKOGROUP

UNIAN on 20th February reported that a district court has ruled to seize 14 construction sites belonging to the Ukogroup construction firm reportedly affiliated with real estate developer Anatoliy Voitsekhovsky.  The allegations include evaded taxes, arbitrarily seized land plots on which residential complexes, shopping malls and office centres were built.
https://www.unian.info/kiev/10452711-large-scale-scam-in-kyiv-court-rules-to-seize-14-construction-sites-belonging-to-ukogroup-list.html

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CANADIAN PRIME MINISTER AIDE RESIGNS FOR ROLE IN CORRUPTION SCANDAL IN LIBYA

Libya Observer on 20th February reported that chief adviser to the Canadian Prime Minister, Gerald Butts has tendered his resignation to answer charges of intervening to prevent the prosecution of a Canadian engineering firm, SNC Lavalin, involved in a corruption scandal in Libya.

https://www.libyaobserver.ly/inbrief/canadian-prime-minister-aide-resigns-role-corruption-scandal-libya

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 19

19th February 2019

 GERMANY WARNS IT WILL STOP EXTRADITION OF ITS CITIZENS TO UK AFTER BREXIT

KYC 360 on 19th February reported a Financial Times story saying that will stop extraditing Germans to Britain immediately after Brexit even if it leaves the EU with a deal.

https://www.riskscreen.com/kyc360/news/germany-warns-it-will-stop-extradition-of-its-citizens-to-uk-after-brexit-ft/

THE PANAMA PAPERS AND MADURO REGIME INVESTMENTS IN PANAMA

On 18th February, the Guardian carried an article saying that in the wake of the Panama Papers it became harder to launder money through investment in Panamanian real estate for Venezuelans who grew rich on the back of their political connections.  Panamanian real estate was a favourite investment of the boliburgues, those associated with Chavez and Maduro.

https://www.theguardian.com/world/2019/feb/18/panama-papers-tightened-the-noose-on-offshore-assets-of-maduros-inner-circle

CHINESE DRUG MONEY “MASS LAUNDERED IN AUSTRALIAN PROPERTY”

Macrobusiness on 19th February carried an article saying that revelations about Chinese asset recovery agents operating covertly in Australia will put pressure on the Department of Home Affairs to introduce law reforms ahead of the May general election.  The federal government will be under pressure to be seen to act FATF before an assessment visit later this year, and FATF will want to see evidence Australia has acted upon the weaknesses set out in its 2015 mutual evaluation report, including a failure to regulate lawyers, accountants and real estate agents.

https://www.macrobusiness.com.au/2019/02/chinese-drug-money-mass-laundered-aussie-property/

COMMERZBANK SPENDS €600 MILLION ON COMPLIANCE SINCE 2015, DRIVEN BY US MONITOR

On 19th February, Reuters reported that the framework had also resulted in a reduction in both products and customer reach.  The framework includes a AML and sanctions compliance programme, monitoring and sanctions screening, and the definition and roll-out of international KYC processes.

https://www.reuters.com/article/bc-finreg-commerzbank-compliance-spendin/commerzbank-spends-600-million-euros-on-compliance-driven-by-us-monitor-q4-results-idUSKCN1Q8028

SOUTH KOREAN NONGHYUP BANK FOCUSES ON AML ISSUES

Korea News Plus on 19th February reported that the bank, aka NH Bank, is trying to deal with AML issues, which left its New York branch facing an $11 million fine in 2017.  Although not the largest fine imposed by New York regulators – which was very negative about the lender’s practices after conducting 3 examinations following the branch’s launch in 2013 – the $11 million was almost twice as much as the net income of the NH New York branch in 2016.

https://newsarticleinsiders.com/nonghyup-focuses-on-anti-money-laundering-issues

SON OF FORMER ARMENIAN PRESIDENT CONFIRMS MONEY LAUNDERING CHARGE

Hetq on 18th February reported that Sedrak Kocharyan, the eldest son of Armenia’s former President Robert Kocharyan verified rumours that Armenia’s National Security Service (NSS) has charged him with money laundering and evasion of taxes but argues that the charges are a fabrication.

https://hetq.am/en/article/100998

WHEN DO DIRECTORS’ DUTIES AT LAW SWITCH TO BEING OWED TO THE COMPANY’S CREDITORS?

On 18th February, CMS Cameron McKenna Nabarro Olswang LLP published an article saying that the risk of insolvency is not necessarily enough for the duties of a board of directors to switch from being owed to its shareholders to being owed to its creditors.  A Court of Appeal case confirmed that the duty to creditors arises when the directors know or should know that the company is or is likely to become insolvent – similar to the caution for wrongful trading.  It also confirmed that it was possible for a dividend to be lawful (i.e. paid in accordance with the Companies Act) and yet be found to be a transaction defrauding a creditor or creditors under the Insolvency Act.

http://www.cms-lawnow.com/ealerts/2019/02/when-do-directors-duties-at-law-switch-to-being-owed-to-the-companys-creditors?cc_lang=en

NEW CAYMAN CASE LAW ON THE CAYMAN ISLANDS INFORMATION DISCLOSURE LAW (CIDL) REGIME

On 14th February, Carey Olsen reported that recent cases before the courts in the Cayman Islands have had the result of providing guidance on the regime, and how businesses can or should react when faced with a Norwich Pharmacal court order – described as a form of pre-action disclosure order designed to compel disclosure from third parties who have (typically innocently), become mixed up in the underlying wrongdoing which is being alleged in the pending proceedings.  The article says that the net effect of the guidance set out in the judgment is that the circumstances in which a direction under CIDL is required before the responding to an order compelling disclosure of information will be much less frequent than practitioners may have hitherto assumed.

CIDL came into force in 2016.  The law it replaced had applied the common law duty of confidentiality that already existed between banks and their customers to the widest range of professional relationships dealing with confidential information across the financial services industry in the Cayman Islands – with criminal sanctions for any breach of its provisions.  In contrast, CIDL provided for the disclosure of confidential information in a wider range of  specific circumstances both without the sanction  of the courts and without the threat of criminal sanctions.

https://www.careyolsen.com/briefings/open-secrets-new-cayman-case-law-cidl-regime

PP

https://www.ais-cpa.com/tax-avoidance-by-the-numbers-the-paradise-papers/

ISLE OF MAN CONFIRMS LISTING OF 3 NEW NAMES FOR AL-QAIDA/ISIL SANCTIONS, PLUS 1 AMENDED ENTRY

On 18th February, a news release advised that the Isle of Man had followed the UK and EU and that 3 new names were subject to sanctions, with one other entry being amended.

https://www.gov.im/news/2019/feb/18/financial-sanctions-isil-daesh-and-al-qaida/

ESMA RENEWS BINARY OPTIONS PROHIBITION FOR FURTHER 3 MONTHS FROM 2nd APRIL

On 18th February, the European Securities and Markets Authority (ESMA) has agreed to renew the prohibition of the marketing, distribution or sale of binary options to retail clients, in effect since 2nd July 2018, for a further 3-month period.

https://www.esma.europa.eu/press-news/esma-news/esma-renews-binary-options-prohibition-further-three-months-2-april-2019

CHINA STEPS UP ACTION ON COUNTERFEIT GOODS

HKTDC on 18th February reported that counterfeit, substandard and passing off goods are to face tighter control under a range of new measures set to be introduced by the State Administration for Market Regulation – with a particular focus on the medical, food and financial sectors (especially with regard to rural areas, schools and e-commerce sales).

http://economists-pick-research.hktdc.com/business-news/article/Economists-Pick-Regulatory-Alert-China/China-Steps-Up-Action-on-Counterfeit-Goods/bacn/en/1/1X2ZLGG8/1X0AGE8M.htm

SOUTH AFRICAN COMPANY ACCUSED OF CORRUPTION PLACED INTO LIQUIDATION

The Irish Times on 19th February reported that Dublin-based African Global Operations, known as Bosasa, a facilities management company that has been implicated in a massive public sector corruption scandal has gone into voluntary liquidation because local banks have closed all its accounts.

https://www.irishtimes.com/business/energy-and-resources/south-african-company-accused-of-corruption-placed-into-liquidation-1.3798307

GUERNSEY INTRODUCES REVISED AML/CFT HANDBOOK

On 12th February, Carey Olsen published a briefing saying that on 12th November the Guernsey FSC issued a revised Handbook on Countering Financial Crime and Terrorist Financing.  The revised rules in the Handbook are due to take effect from on 31st March, by way of a new Schedule 3 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 which imposes the revised statutory duties on all Specified Businesses.  The briefing outlines the details and changes contained in the revised Handbook.

https://www.careyolsen.com/briefings/guernsey-introduces-revised-handbook-countering-financial-crime-and-terrorist-financing

COMPARISON OF LAWS IN BERMUDA, THE CAYMAN ISLANDS AND THE BVI RELATING TO LIMITED PARTNERSHIPS

A briefing from Conyers Dill Pearman on 18th February which the firm says was prepared for the assistance of those who are considering the formation of an exempted (or international) limited partnership in an offshore jurisdiction such as Bermuda, the Cayman Islands or the BVI for the conduct of business outside such jurisdiction.  It deals in broad terms with the requirements of each jurisdiction for the establishment and operation of exempted or international limited partnerships.

https://www.thelawyer.com/knowledge-bank/white-paper/comparison-of-laws-in-bermuda-the-cayman-islands-and-the-british-virgin-islands-relating-to-limited-partnerships/

NEW DECRYPTION TOOL RELEASED FOR LATEST VERSION OF GANDCRAB RANSOMWARE

On 19th February, Europol announced that a new decryption tool has been released for free on the No More ransom depository for the latest strand of GandCrab, one of the world’s most prolific ransomware to date.  This tool was developed by the Romanian Police in close collaboration with the internet security company Bitdefender and Europol, together with the support of law enforcement authorities from Austria, Belgium, Cyprus, France, Germany, Italy, the Netherlands, UK, Canada and the FBI.

https://www.europol.europa.eu/newsroom/news/no-more-ransom-to-rescue-new-decryption-tool-released-for-latest-version-of-gandcrab-ransomware

THE COST OF CORRUPTION FOR CORPORATIONS IN INDONESIA: RECENT ENFORCEMENT

On 15th February, Control Risks published a short article saying that the successful implementation of corporate criminal liability in the case against PT Nusa Konstruksi Enjiniring paves the way for subsequent indictments and sentencing of corporations for criminal actions.  In 2018 alone, KPK named 4 corporations as suspects in a number of corruption cases, which include a state-owned entity.  It says that the successful implementation of corporate criminal liability in the NKE case paves the way for subsequent indictments and sentencing of corporations for criminal actions.

https://globalcompliancenews.com/cost-corruption-corporations-indonesia-takeaway-recent-enforcement-corporate-criminal-liability-20190122/

AUSTRALIA: ABF SMASHES ILLEGAL TOBACCO SMUGGLING SYNDICATE AFTER 12 TONNE DETECTION

On 13th February, a news release from Australia Border Force reported that investigators had smashed an organised criminal syndicate involved in both the importation and domestic distribution of illicit tobacco in Sydney.  On 3rd February, ABF officers located 1.87 million cigarettes and 12 tonnes of loose leaf tobacco, which represents a total evaded duty of $15.9 million.

https://newsroom.abf.gov.au/releases/280afdce-f927-49b0-a8b3-60f48cbbee2c

ANALYSIS OF RECENT WIDESPREAD DNS HIJACKING ATTEMPTS

The Krebbs on Security blog on 18th February carried a post saying that  the US government and a number of leading security companies recently warned about a series of highly complex and widespread attacks that allowed suspected Iranian hackers to siphon huge volumes of email passwords and other sensitive data from multiple governments and private companies – but to date, the specifics of exactly how that attack went down and who was hit have remained shrouded in secrecy.  This post seeks to document the extent of those attacks, and traces the origins of this overwhelmingly successful cyber espionage campaign back to a cascading series of breaches at key Internet infrastructure providers.

https://krebsonsecurity.com/

EBA OPENS FORMAL INVESTIGATION INTO POSSIBLE BREACH OF EU LAW BY THE ESTONIAN AND DANISH COMPETENT AUTHORITIES REGARDING MONEY LAUNDERING ACTIVITIES LINKED TO DANSKE BANK

On 19th February, a news release from the European Banking Authority said that it had initiated a formal investigation into a possible breach of Union law by the Estonian Financial Services Authority (Finantsinspektsioon) and the Danish Financial Services Authority (Finanstilsynet) in connection with money laundering activities linked to Danske Bank and its Estonian branch in particular. 

https://eba.europa.eu/-/eba-opens-formal-investigation-into-possible-breach-of-union-law-by-the-estonian-and-danish-competent-authorities-regarding-money-laundering-activitie

WATCHDOG CLOSES DANSKE BANK’S ESTONIAN BRANCH OVER SCANDAL

RTE reported on 19th February that FSA, Estonia’s banking watchdog, has ordered Denmark’s largest lender Danske Bank to close its local branch within 8 months, following a money laundering scandal.

https://www.rte.ie/news/business/2019/0219/1031504-danske-bank-estonia

RECEIVER APPOINTED TO HOUSES OWNED BY KINAHAN GANG ASSOCIATES

On 19th February, the Irish Independent reported that a receiver has been appointed over 2 properties belonging to associates of the Kinahan cartel.  The Dublin homes, owned by Liam Byrne and Sean McGovern, were previously ruled as being the proceeds of crime.

https://www.independent.ie/irish-news/courts/receiver-appointed-to-houses-owned-by-kinahan-associates-37829958.html

ZIMBABWE: CIVIL AVIATION AUTHORITY BOSS ARRESTED

On 19th February, Pundula reported that Civil Aviation Authority (CAAZ) CEO David Chawota has been arrested on corruption allegations.

https://news.pindula.co.zw/2019/02/19/civil-aviation-authority-boss-david-chawota-arrested/

UK: PRECURSOR CHEMICALS WALLCHART FOR DOMESTIC LICENSING

On 19th February, the Home Office published updated guidance which contains information on the domestic licensing and registration requirements for 3 categories of chemical substances.  It also provides information on domestic licensing requirements when using these drugs in the UK or trading them within the EU and beyond.

https://www.gov.uk/government/publications/precursor-chemicals-wallchart-for-domestic-licensing

IRAN: BILLIONAIRE OIL FUNDS THIEF TO HANG (AFTER HE HAS RETURNS STOLEN FUNDS)

Kenneth Rijock in his blog on 19th February reported that billionaire thief Babak Zanjani will be executed, and that he will be hanged after he returns the more than $3 billion he stole from the Oil-for-Gold Iran sanctions evasion programme.  He and his partners are said to have diverted billions of dollars they received while operating a massive  global oil sanctions evasion sales scheme.

http://rijock.blogspot.com/

BANGLADESH BLOCKS GAMBLING AND ADULT WEBSITES ACCESS

On 19th February, Calvin Ayre reported that the Bangladesh Telecommunications Regulatory Commission (BTRC) had blocked over 2,200 gambling websites and over 15,000 “adult” websites, plus 2 popular video sharing apps for smartphones – Tik Tok and Bigo.  This was in addition to a large number of websites to which access has been blocked since 7th February.  It is said that the blocking of the apps appears to be purely for political reasons, after users queried anomalies in election results.  All Internet use is completely controlled by the International Internet Gateway.

https://calvinayre.com/2019/02/19/business/bangladesh-commission-blocks-gambling-pornography-websites/

SHANGHAI CUSTOMS DETAIN 18 SUSPECTS WHO ALLEGEDLY SMUGGLED MORE THAN 1,500 LUXURY WATCHES

The Shine website on 19th February reported that Shanghai Customs officers have apprehended 18 suspects who allegedly smuggled more than 1,500 luxury watches worth over US$30 million.

https://www.shine.cn/news/metro/1902199813/

 

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VIRTUAL CURRENCY IN SANCTIONED JURISDICTIONS

King & Spalding on 19th February published a briefing which says that as Iran, Russia, Venezuela, and other sanctioned jurisdictions warm to cryptocurrency this raises a question: could sanctioned countries use cryptocurrencies to avoid regulatory systems designed to keep them from participating in the global marketplace?  It reminds one that OFAC has explicitly stated that compliance obligations are the same, regardless of whether a transaction is denominated in cryptocurrency or traditional fiat currency, and has also issued specific guidance on compliance obligations.  The article says that it would be wise to align compliance procedures now to avoid running foul of regulators down the line.

https://www.kslaw.com/news-and-insights/virtual-currency-in-sanctioned-jurisdictions#_edn21

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EU TIGHTENS RULES TO PREVENT BOMB-MAKING AS RADICALS RETURN HOME

Politico on 19th February reported that the EU has agreed to update its laws restricting household chemicals that can be turned into explosives.  Agreement has been reached to toughen up a 2013 EU Regulation by ending national schemes that allowed people to buy chemicals that could be used to make bombs simply by showing an ID card.  The rules, which should go into effect around the end of 2020, will now require businesses to report “suspicious” sales of some substances within 24 hours — and the change expands them to include online sales platforms like Amazon and eBay.  Most of the substances – “explosive precursors” – also have legitimate industrial uses.  Ammonium nitrate, which can easily be turned into an explosive, is also an important ingredient in many fertilisers, for example.  Hydrogen peroxide, acetone and sulfuric acid, which when combined make TATP — a deadly and volatile mixture that was used in the bombs in Manchester, Brussels and Paris — are also key ingredients in industrial bleach, nail polish and fertilisers.

https://www.politico.eu/article/eu-tightens-bomb-making-rules-as-radicals-return-home/

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EU RENEWS AND AMENDS ZIMBABWE SANCTIONS

On 18th February, EU Council Decision 2019/284/CFSP announced that the EU had decided to renew its sanctions involving Zimbabwe until 20th February 2020, with 5 persons and 1 entity remaining subject to sanctions – with 2 others removed from the lists, and the suspension of sanctions for 3 individuals also being renewed.  EU Regulation 2019/478/EU listed the 3 people affected by the suspension.  EU Regulation 2019/478/EU listed the 3 people affected by the suspension and EU regulation 2019/283/EU those still subject to sanctions.

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019D0284&from=EN

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.047.01.0001.01.ENG&toc=OJ:L:2019:047:TOC

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.047.01.0036.01.ENG&toc=OJ:L:2019:047:TOC

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THE WORLD BANK’S SANCTIONS SYSTEM

On 15th February, Bass, Berry & Sims PLC published an article saying that the World Bank aggressively pursues sanctions against entities and individuals for misconduct in connection with World Bank-funded projects.  Such sanctions can also lead to cross-debarment by other multilateral development banks and investigations by national regulators.  The article says that enterprises also should be (or remain) mindful of the increasingly active World Bank Group sanctions process.  Any party to a Bank-funded project must ensure it clearly understands its compliance obligations.  The article provides a guide to the sanctions-making process.  It also details recent sanctions action undertaken by the World Bank.  Between 1996 and 2002, only 18 cases were concluded, with 74 entities debarred.  However, in fiscal year 2018, INT 68 new investigations were initiated and 71 ongoing investigations completed, of which 48 triggered the formal sanctions or settlement process.  Then in 2019, it banned the Brazilian construction company, Odebrecht and a Nigerian waste company.

https://www.bassberry.com/news/forget-me-not-the-world-banks-sanctions-system/

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 18

18th February 2019

AIRBUS CEO TELLS GERMANY TO REFORM ARMS POLICY FOR GOOD OF EUROPE

NASDAQ on 16th February reported that the Airbus CEO urged Germany to press ahead with plans to create common European regulations on arms exports, saying the issue posed a litmus test for Berlin’s ambitions to foster a European defence policy, and said that without a common European approach Airbus could consider manufacturing German-free products.  For example, after Germany decided to suspend arms sales to Saudi Arabia the decision has blocked the export licence for the sale of the Meteor long-range air-to-air missile, which is supposed to equip the Saudi Air Force Eurofigher Typhoon.

https://www.nasdaq.com/article/airbus-ceo-tells-germany-to-reform-arms-policy-for-good-of-europe-20190216-00018

INDONESIA: BAUXITE MINING ACTIVITIES CONTINUE ON ISLANDS DESPITE BAN

On 17th February, Antara News reported that bauxite mining on the islands of Angkut, Dendang and Bukit Batu in Bintan District, Riau Islands Province, still continue despite a ban on mining activities on small islands after serious environmental damage.

https://en.antaranews.com/news/122317/bauxite-mining-activities-continue-despite-ban

NORWEGIAN TAX ADMINISTRATION AND DEN NORSKE BANK (DNB) JOIN FORCES WITH UNIVERSITY OF OSLO AND THE NORWEGIAN COMPUTING CENTER TO OUTMANOEUVRE FINANCIAL CRIMINALS

On 18th February, Science Nordic carried an article saying that the underground economy in Norway is flourishing, with each year, at least NOK 150 billion in direct and indirect taxes is lost to evasion.  The Norwegian Tax Administration, Gjensidige Forsikring and Den norske Bank (DnB) have now joined forces with researchers at the University of Oslo and the Norwegian Computing Center to outmanoeuvre financial criminals.  Their project has been called “Personalised Fraud Detection”.  Thanks to new digital capabilities, they will have access to far more information than in the past.  One of the Tax Administration’s main issues is to find new ways to expose those who cheat on reporting VAT.  The project is part of BigInsight, a centre for research-based innovation at UiO. The centre’s speciality is developing all-new statistical methods to uncover irregular patterns in enormous amounts of data.

http://sciencenordic.com/uncertain-future-fraudsters

AUSTRALIA: FEDERAL GOVERNMENT PROBED OVER AWARDING OF MANUS ISLAND SECURITY CONTRACTS

ABC News reported on 17th February that more than $420 million over nearly 2 years is going to a relatively unknown company, the Paladin Group, that was registered to a beach shack on Kangaroo Island and a PO box in Singapore.  Manus Island in Papua New Guinea is one of 2 offshore places (the other is Nauru) where Australia houses would-be asylum-seekers.

https://www.abc.net.au/news/2019-02-18/government-to-be-grilled-over-manus-island-security-contracts/10820268

LOBBY GROUPS SAY EQUATORIAL GUINEA ON REVENGE MISSION

On 17th February, The East African reported that lobby groups are accusing Equatorial Guinea of waging a vendetta war against anti-corruption crusaders.  The accusations come as warrants were issued for 16 individuals accused of money laundering and financing terrorism.  Those wanted include a French anti-corruption lawyer, Mr William Bourdon, and 9 human rights and anti-corruption advocates.  Amnesty International said in a statement that the arrest warrants were in apparent retaliation for the trial against President Teodoro Obiang’ Nguema’s eldest son for his involvement in money laundering.

https://www.theeastafrican.co.ke/news/africa/Groups-say-Malabo-on-revenge-mission/4552902-4986202-13j95prz/index.html

MALDIVES: FORMER LEGAL DIRECTOR MINISTER CHARGED WITH AIDING MONEY LAUNDERING AND GIVING FALSE INFORMATION TO STATE AUTHORITIES

On 17th February, Rajje reported that former legal director minister Azima Shakoor has been charged with aiding former President Abdulla Yameen with money laundering and giving false information to state authorities.  Yameen has been charged over his illegal financial transactions when he was president.

https://raajje.mv/en/news/50618

SOUTH AFRICA: BUSHIRI’S LAWYERS WILL FIGHT FOR HIM TO KEEP HIS LUXURY JET

Times Live on 17th February reported that self-proclaimed prophet Shepherd Bushiri’s private jet is subject to an application of attachment by the Asset Forfeiture Unit.    The founder of the Enlightened Christian Gathering Church and his wife are currently facing fraud and money laundering charges.

https://www.timeslive.co.za/news/south-africa/2019-02-17-bushiris-lawyers-will-fight-for-him-to-keep-his-luxury-jet/

RUSSIA’S GAZPROMBANK “FREEZES ACCOUNTS OF VENEZUELA’S PDVSA”

KYC 360 on 18th February carried a report claiming that Gazprombank has decided to freeze the accounts of Venezuelan state oil company PDVSA and halted transactions with the firm to reduce the risk of the bank falling under US sanctions.

https://www.riskscreen.com/kyc360/news/russias-gazprombank-freezes-accounts-of-venezuelas-pdvsa-source/

FBI RAIDS PUERTO RICO BANK AMID VENEZUELA SANCTION PROBE

On 18th February, KYC 360 reported that FBI agents raided BSJI bank in Puerto Rico amid allegations over violations of US sanctions imposed on those who do business with Venezuela’s government.

https://www.riskscreen.com/kyc360/news/fbi-raids-puerto-rico-bank-amid-venezuela-sanction-probe/

ENGLISH COURT PROVIDES GUIDANCE FOR COMMENCING PROCEEDINGS ON FOREIGN DEFENDANTS

On 14th February, Lathams published an article saying that in Punjab National Bank (International) Limited v Ravi Srinivasan and others the English Court has set aside permission to bring proceedings against foreign defendants based on non-disclosures and subsequent conduct.  It provides guidance on the proper conduct of an application for service out of the jurisdiction and highlights the potential pitfalls an applicant may encounter.  It recalls need for full and frank disclosure, particularly of related foreign proceedings or when new material facts arise, and plead fraud with care and precision.

https://www.latham.london/2019/02/english-court-provides-guidance-for-commencing-proceedings-on-foreign-defendants/#page=1

UN SECURITY COUNCIL RESOLUTION 1540 (2004) 

The UN Office for Disarmament Affairs has produced a factsheet on UN SCR 1540, which established a programme of action to prevent non-state actors, in particular terrorists, from proliferating nuclear, chemical and biological weapons.  It is, for example, one of the requirements taken into account by FATF and FATF-style regional bodies during assessments.  The Security Council decided that all States shall refrain from providing any form of support to non-state actors that attempt to develop, acquire, manufacture, possess, transport, transfer or use nuclear, chemical or biological weapons and their means of delivery, and requires all states to adopt and enforce appropriate effective laws to this effect.  The Resolution also requires all states to establish various types of domestic controls to prevent the proliferation of such weapons and their related materials.

https://s3.amazonaws.com/unoda-web/wp-content/uploads/2019/01/1540-Fact-Sheet-Jan2019.pdf

 CHINA SEIZES $1.5 BILLION IN ONLINE LENDING CRACKDOWN

On 18th February, Associated Press reported that China’s policy ministry says it investigated 380 online lenders and froze $1.5 billion in assets in a crackdown following an avalanche of scandals in the huge but lightly regulated industry.  Regulators have steadily tightened control over Chinese online lenders following a string of failures and fraud cases that prompted protests and complaints of official indifference to small investors.

https://apnews.com/bb7b5031c7f7480d8b9aa0a69d07944b

FATF ASIA PACIFIC GROUP “SATISFIED WITH PAKISTAN PERFORMANCE”

On 18th February, the News International in Pakistan reported that the Asia Pacific Group (APG) – the regional FATF-style body – has presented its report to the International Country Risk Guide (ICRG) expressing satisfaction over the measures taken by Pakistan to curb terror financing and money laundering, The News reports.

https://www.thenews.com.pk/print/433235-fatf-asia-pacific-group-satisfied-with-pak-performance

VANUATU OFFICIALS ACCUSED OF ABUSE OF POWER AMID CORRUPTION CLAIMS

Radio New Zealand on 18th February reported that an anti-corruption activist in Vanuatu alleges that the country’s Public Service Commissioner abused her power while investigating corruption allegations.  The Commissioner was one of 2 officials to push for criminal charges against people who alleged her recruitment process was unfair.

https://www.radionz.co.nz/international/pacific-news/382741/vanuatu-officials-accused-of-abuse-of-power-amid-corruption-claims

SHIPPING RADIOACTIVE WASTE AND SPENT FUEL AFTER A NO-DEAL BREXIT

On 18th February, the UK Department of Business, Energy and Industrial Strategy published a news release which outlines what operators need to do to move radioactive waste and spent fuel to and from EU countries if the UK leaves without a deal.  It will still be a criminal offence to ship radioactive waste and spent fuel without valid authorisation and documentation, and if the UK leaves the EU without a deal, operators may need to get new authorisations to ship radioactive waste or spent fuel.

https://www.gov.uk/government/publications/shipping-radioactive-waste-and-spent-fuel-after-a-no-deal-brexit

CHINESE REPORTS OF ARREST OF 6 INDIVIDUALS BUYING AND SELLING LUXURY GOODS TO LAUNDER THE PROCEEDS OF NARCOTICS CRIME

Kenneth Rijock in his blog posted on 17th February that an English translation of a Chinese website reported that law enforcement authorities in Paris have arrested 6 Chinese nationals, all engaged in the local purchase and resale in China of high-end luxury goods, for the purpose of laundering the proceeds of narcotics crime.  The individuals allegedly were involved in more than the equivalent of more than $5 million in purchases.

http://rijock.blogspot.com/

GUERNSEY TO GROW MEDICINAL CANNABIS

The Jersey Evening Post on 18th February reported that a Guernsey company has been given the green light to grow medicinal cannabis and work with a UK-based team to cultivate the plant for use in the health-and-wellbeing market.

https://jerseyeveningpost.com/news/2019/02/18/guernsey-to-grow-medicinal-cannabis/

MALTA HAS SUSPENDED THE GAMING LICENCE OF WORLD-OF-BETS.EU

On 18th February, Intergame reported that the Malta Gaming Authority has suspended the gaming licence of World-of-bets.eu with effect from 15th February.

https://www.intergameonline.com/igaming/news/mga-clamps-down

UK TRADE FINANCE CHALLENGER BANK DIASPORA PREPARES

On 15th February, Banking Tech reported that London-based Diaspora is getting ready to spread its wings with the launch of its trade finance challenger bank.  The idea is apparently to build a trade finance ecosystem where sellers, buyers, and funders can transact international trade and commodity finance deals over the blockchain.  Diaspora plans to offer SME “bespoke” funding solutions, including invoice factoring.

https://www.bankingtech.com/2019/02/uk-trade-finance-challenger-bank-diaspora-preps-for-flight/

KALASHNIKOV UNVEILS SUICIDE DRONE

The Alert 5 website showed on 18th February a short video, saying that Russia’s Kalashnikov Group has unveiled its suicide drone dubbed KUB-BLA at the IDEX-2019 arms exhibition in the UAE.

http://alert5.com/2019/02/18/kalashnikov-unveils-suicide-drone/

UK: HIGH COURT TO HEAR MODERN SLAVERY CLAIMS ON BEHALF OF LITHUANIAN WORKERS

Ekklesia on 18th February carried an article about a 4-day trial in the High Court which will hear the claims of 11 Lithuanian workers who allege they were trafficked to the UK and put to work in gruelling conditions catching chickens at farms all over the UK.  The farms supplied chickens and eggs for brands such as ‘Happy Eggs’, available in supermarkets across Britain.  The claimants allege they were beaten by supervisors, housed in filthy and overcrowded conditions, deprived of rest, and that a Lithuanian ‘middle-man’ threatened them with eviction, violence and aggressive Rottweiler dogs.

http://www.ekklesia.co.uk/node/27749

UK: ESTATE AGENTS MUST STEP UP TO MARK ON MONEY LAUNDERING, SAYS SENIOR GOVERNMENT CRIME EXPERT

The Negotiator on 18th February reported that the number of estate agents filing SAR has increased by 30% over the past 12 months but still only represents a tiny minority of the total number submitted.  The Director for Economic Crime, Cyber Crime and Corruption Richard Riley revealed that estate agents filed 710 SAR last year, an improvement on previous efforts but representing just 0.15% of the national total.

https://thenegotiator.co.uk/estate-agents-must-step-up-to-mark-on-money-laundering-says-senior-government-crime-expert/

HONG KONG WATCHDOG ISSUES RECORD FINE TO CHINESE BROKER OVER FAILURE TO REPORT MONEY LAUNDERING

The South China Morning Post reported on 18th February that the SFC had fined mainland Chinese state-owned firm Guosen Securities (HK) Brokerage a record HK$15.2 million (US$1.9 million) for failure to report money laundering activity.  The fine surpasses the previous highest one of HK$6 million in 2014.

https://www.scmp.com/business/companies/article/2186679/hong-kong-watchdog-issues-record-hk152-million-fine-chinese

https://www.financemagnates.com/institutional-forex/regulation/sfc-fines-guosen-securities-hk15-2m-for-violating-aml-rules/

UK: DEDICATED CARD AND PAYMENT CRIME UNIT PREVENTS RECORD £94 MILLION OF LOSSES

On 18th February, UK Finance reported on the work of the DCPCU, a specialist anti-fraud police unit sponsored by the finance industry – bringing the unit’s total estimated savings from reduced fraud activity to £600 million since it was established in April 2002.  It also secured 48 convictions and disrupted 11 organised crime groups in 2018.

https://www.ukfinance.org.uk/press/press-releases/finance-industry-sponsored-police-unit-prevents-record-£94m-losses-2018

UK NOTICE TO EXPORTERS 2019/04 – SOFTWARE OPEN EXPORT LICENCES UPDATED

On 18th February, the Department of International Trade announced the publication of the new Notice about changes to 3 Open General Export Licences (OGEL) for military goods and software.  The changes made reflect a review of the software entries in Schedule 2 of the Export Control (Order) 2008 – ML21.b.4, which refers to software that is both specially designed for military use and specially designed for command, communications, control and intelligence (C3I) applications, or command, communications, control, computer and intelligence (C4I) applications.

https://www.gov.uk/government/publications/notice-to-exporters-201904-software-control-list-entry-added-to-3-military-ogels/notice-to-exporters-201904-software-control-list-entry-added-to-3-military-ogels

UK RENEWS 3 TERRORISM SANCTIONS DESIGNATIONS

On 18th February, HM Treasury published a Notice saying that the designation of 3 persons under the Terrorist Asset-Freezing etc. Act 2010 (TAFA) had been renewed – Hasan IZZ-AL-DIN, Abdelkarim AL-NASSER and Ibrahim AL-YACOUB.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/779689/TAFA_Renewal_Notice_-_Hizballah_x3_-_18-02-2019.pdf

INTERNATIONAL JOINT INVESTIGATION TEAMS (INTERNATIONAL AGREEMENTS) (EU EXIT) ORDER 2019

This UK SI (SI 2019/274) will ensure that, following its exit from the EU, the UK can continue lawfully to participate in JIT with EU Member States that have not incorporated into domestic law the Second Protocol to the Council of Europe Convention on Mutual Assistance in Criminal Matters 1959, but which have adopted certain relevant UN Conventions, and which this Order will designate into UK law.  Currently, the Convention on Mutual Assistance in Criminal Matters between the Member States of the European Union and the Council Framework Decision on joint investigation teams together provide the legal bases in EU law on which competent authorities of 2 or more Member States may set up a JIT.  Following the UK’s exit, the legal basis for JIT with EU Member States will be provided, in most cases, by the Second Protocol to the Council of Europe Convention on Mutual Assistance in Criminal Matters 1959 – with gaps in coverage provided by the designation of 3 UN Conventions by this SI – the United Nations Convention against Transnational Organised Crime 2000; the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988; and the United Nations Convention against Corruption 2003.

http://www.legislation.gov.uk/uksi/2019/274/contents/made

IRELAND: COMMUNITY SERVICE FOR DEVELOPER WHO OWES €1 MILLION TO REVENUE

On 18th February, the Irish Times reported that James Jordan, a property developer who owed more than €1 million in unpaid taxes and penalties has received 240 hours of community service.  He pleaded guilty to knowingly and wilfully submitting 16 incorrect VAT returns, 6 incorrect income tax returns, 4 incorrect invoices and 3 false claims of income tax relief.

https://www.irishtimes.com/news/crime-and-law/courts/circuit-court/community-service-for-developer-who-owes-1m-to-revenue-1.3797887

MONEY LAUNDERER CAUGHT AFTER CHRISTIE’S AUCTION HOUSE REPORTED FRAUD ATTEMPT

On 18th February, a news release from the NCA said that a prolific money launderer who processed more than £6 million has been convicted after a NCA investigation.  Kazeem Akinwale, 43, was caught after Christie’s auction house reported an attempted diversion fraud.  In March 2016, the auction house informed the NCA that hackers had spoofed an employee’s email address, trying to divert the payment for a customer invoice into a new bank account.

http://www.nationalcrimeagency.gov.uk/news/1569-prolific-money-launderer-caught-after-auction-house-fraud-attempt

MAN USED LAUNDERED MONEY TO PAY OFF £96,000 COURT ORDER FOR FRAUD

The Metro on 18th February reported that a criminal used laundered money to pay cash he owed to the government after being jailed for running a counterfeiting operation.  John Farrell, 61, used £75,000 in VAT repayments to pay back most of a £96,000 confiscation order.  The order had been imposed after a jail sentence for running a counterfeiting operation at a factory in East Kilbride producing fake banknotes.

https://metro.co.uk/2019/02/18/man-used-laundered-money-pay-off-96000-court-order-fraud-8663241/

IRELAND: FSAI DEVELOPS NEW DNA FOOD SCANNING TOOL TO CLAMP DOWN ON FOOD FRAUD

The Journal on 18th February reported that the Food Safety Authority of Ireland has developed a new scanning tool to identify the entire DNA content of food in a bid to clamp down on misleading labelling and food fraud.  The analytical tool, which can identify all the ingredients and biological sources in a food, will help the FSAI to protect consumers.

https://www.thejournal.ie/fsai-dna-food-scanning-tool-to-clamp-down-on-food-fraud-4499959-Feb2019/

ITALIAN INTERIOR MINISTER FACES KIDNAP CHARGES FOR CONFINING MIGRANTS ON SHIP FOR 5 DAYS

Reuters reported on 18th February that Italian interior minister and senator Matteo Salvini could lose his legal immunity if his own party decides he should face trial on kidnapping charges.  In August he ordered 150 migrants aboard an Italian coast guard ship held for 5 days.  His party says that never in the past has the judiciary asked parliament to authorise a trial for a minister who had acted in the performance of his duties.

https://www.upi.com/Top_News/World-News/2019/02/18/Italian-interior-minister-faces-kidnap-charges-for-refusing-migrant-ship/8961550502672/

FORMER INTERNATIONAL CRICKETER AND 2 OTHER MEN DENY CONSPIRING TO OFFER BRIBES TO CRICKET PLAYERS IN THE PAKISTAN SUPER LEAGUE

The BBC on 18th February reported that Nasir Jamshed, an ex-opening batsman for Pakistan, Yousef Anwar and Mohammed Ijaz were arrested after an inquiry into alleged spot-fixing by the NCA.  All 3 defendants entered not guilty pleas at Manchester Crown Court.

https://www.bbc.co.uk/news/uk-england-47283422

FORMER MALDIVES PRESIDENT JAILED UNTIL END OF MONEY LAUNDERING TRIAL

UPI reported on 18th February that Abdulla Yameen, former president of the Maldives has been taken into custody until his money laundering trial is completed.

https://www.upi.com/Top_News/World-News/2019/02/18/Former-Maldives-president-jailed-until-end-of-money-laundering-trial/4211550498689/

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ILLEGAL, UNREPORTED AND UNREGULATED (IUU) FISHING

On 18th February, the EU Parliament Research Service produced a briefing paper about the IUU Regulation (1005/2008), which is the core of EU’s legal framework for action against global IUU fishing.  Its primary objective is to prevent, deter and eliminate the trade of IUU-caught products into the EU.  One of its key components is a multiple-step procedure for dealing with non-EU countries considered unco-operative in the fight against IUU fishing

EPRS

http://www.europarl.europa.eu/RegData/etudes/ATAG/2017/614599/EPRS_ATA(2017)614599_EN.pdf

rferl

https://www.rferl.org/a/29776883.html

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EU AND UK ADDS 1 NAME TO ITS ISIL/AL-QAIDA SANCTIONS LIST

On 18th February, HM Treasury published a Notice announcing that Brahim EL KHAYARI had been added to its Consolidated List of sanctions targets.  This followed the publication of EU Regulation 2019/270, adding the name to the EU lists.

See also Council Decision 2019/271/CFSP.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/779695/Notice_ISIL_2019_270.pdf

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MONEYVAL ISSUES FOLLOW-UP REPORT ON SERBIA

Also on 18th February, the Council of Europe published a follow-up on Serbia.  This has followed the mutual evaluation report of April 2016, and sees MONEYVAL re-rating the jurisdiction on 10 FATF Recommendations, 9 of which were originally rated “partially compliant” or “non-compliant”.  This 2nd follow-up report analyses Serbia’s progress in addressing the technical compliance deficiencies (i.e. not the “effectiveness” of measures) identified in the mutual evaluation report.  MONEYVAL has re-rated Serbia to “largely compliant” on Recommendations 1 (assessing risks and applying a risk-based approach), 7 (targeted financial sanctions related to proliferation), 10 (CDD), 13 (correspondent banking), 19 (higher-risk countries), 16 (wire transfers), 25 (transparency and beneficial ownership of legal arrangements), 26 (regulation and supervision of financial institutions) and 35 (sanctions); and to “compliant” with Recommendation 12 (PEP).

The new technical compliance ratings are as follows –

serbia

https://rm.coe.int/committee-of-experts-on-the-evaluation-of-anti-money-laundering-measur/168092dce7

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MONEYVAL PUBLISHES FOLLOW-UP REPORT ON SLOVENIA

On 18th February, MONEYVAL published a follow-up report on Slovenia, following the 2017 mutual evaluation, and saying that it has re-rated the jurisdiction on 1 FATF Recommendation – Recommendation 16 (wire transfers) – originally rated “partially compliant”.  Slovenia has been in an enhanced follow-up process, following the adoption of its mutual evaluation report, which assessed the effectiveness of Slovenia’s AML/CFT measures and their compliance with the 40 FATF recommendations.  This follow-up report analyses Slovenia’s progress in addressing the technical compliance deficiencies (i.e. not the “effectiveness” ratings) identified in the mutual evaluation report.

The new Technical Compliance ratings are as follows –

slovenia

https://rm.coe.int/committee-of-experts-on-the-evaluation-of-anti-money-laundering-measur/168092dce1

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SWITZERLAND: ANOTHER CHEMICALS TO SYRIA CASE

In his blog, Nils Duquet, a senior researcher at the Flemish Peace Institute on 17th February reported another case of chemicals export to Syria revealed by journalists, this time from Switzerland and in the Tribune de Geneve.  The company named, Brenntag, resulted from a merger with the Schweizerhall Chemie AG Swiss chemical giant, and is one of the leaders on the market of the export of chemicals.  The Swiss subsidiary is owned by the German company.  The chemical involved is isopropanol, an alcohol that is fundamental to manufacture sarin (though it does have other, legitimate uses), as well as diethylamine, which also has dual-use status.  The orders were apparently intended for Mediterranean Pharmaceutical Industries (MPI), which produces the pain relief gel Voltaren Emulgel under its contract with Novartis.  However, the Director of MPI, now dead, was on the sanctions lists.

https://www.tdg.ch/lematindimanche/firme-bloise-exporte-composants-chimiques-dangereux-syrie/story/23578933#overlay

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HOW MILITARY EQUIPMENT CAN BE DIVERTED TO THE “WRONG” END-USER

The Small Arms Survey has produced useful (and large) infographic on how arms may be diverted – before during and after the transfer of the arms themselves – and how to counter it.  Some samples from the infographic are shown below.

http://www.smallarmssurvey.org/fileadmin/docs/Regulations_and_Controls/Levels_of_action/International/Diversion%20infographics.pdf

Before delivery

before

During transfer

during

During delivery

during delivery

After delivery

after

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WERE THE COURTS ACTING CORRECTLY IN HEARINGS ABOUT A VARIATION OF CONFISCATION ORDER?

On 17th February, Bartfields Forensic Accounts, in the latest of their excellent series of occasional articles on the Proceeds of Crime Act 2002, considered a recent Court of Appeal hearing.  It says that the nub of the case presented to the Court of Appeal concerned the Crown Court judge’s interventions in the cross-examination of a defence witness – it being suggested that the judge had gone too far and had effectively become a second prosecution counsel.  However, the author of the article says that he thinks that the more interesting features lie elsewhere.

Under section 22 of POCA 2002, the prosecution or a receiver can ask for a variation of a confiscation order already made.  The original confiscation order was for only £851, but then the prosecution claimed to have found evidence of interest in a property valued at £65,000.  However, it was claimed that a good part of this value was in fact owed to the convicted person’s (claimed) employer, who had loaned money to purchase the property.  The Crown Court had rejected this proposition.

The chief problem that the author appears to have with the case was the manner in which the Crown Court had handled the calculations of what was actually liable for confiscation and how – not the behaviour of the judge in the hearing.  The author says that the Court did not appear to follow properly the process laid down in POCA to assess liability.

http://www.accountingevidence.com/blog/2019/02/were-the-court-of-appeal-right-a-s22-poca-variation-case/

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IRELAND: AIRPORT CUSTOMS SEIZE €1 MILLION A YEAR SUSPECTED TO BE PROCEEDS OF CRIME

The Irish Times on 18th February reported that an average of €1 million in cash that is suspected to be the proceeds of crime has been seized in each of the last 10 years by customs officials at Dublin Airport, the Minister for Finance has said.  More than half the €9.5 million in cash confiscated in the past decade subject to appeal.  More than €1 million of the €9.58 million total confiscated since 2009 has been returned after those involved lodged appeals and some €5.7 million is the subject of ongoing appeals.

https://www.irishtimes.com/news/politics/airport-customs-seize-1m-a-year-suspected-to-be-proceeds-of-crime-1.3797037

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THE TRADE IN SMALL ARMS AND LIGHT WEAPONS ON THE DARK WEB: A STUDY

The UN Office for Disarmament Affairs published in October this Occasional Paper summarises the main findings and implications of the first empirical study investigating the scale and scope of arms trafficking on the Dark Web.  The findings of this study shed light on the scale and scope of arms trafficking on the dark web, illustrating the range of weapons traded, their market price and most common transit routes.  In addition, this Occasional Paper discusses the implications of this growing phenomenon for law enforcement agencies and policy makers, highlighting the key role that firearms control measures continue to play in the presence of new forms of trafficking.

https://www.un.org/disarmament/publications/occasionalpapers/unoda-occasional-papers-no-32-october-2018