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EXPLORING THE ONSHORE NETWORKS BEHIND ILLEGAL, UNREPORTED, & UNREGULATED (IUU) FISHING

Research non-profit organisation C4ADS has published a report saying that the value generated from illegal, unreported, and unregulated (IUU) fishing is estimated to be between $10 billion and $36.4 billion annually, making it the third most lucrative natural resource crime, following timber and mining – and  continues to pose one of the greatest threats to the world’s marine ecosystems while destabilizing the food and job security of billions around the world.  It argues that effective maritime domain awareness requires both at sea and onshore scrutiny to establish a link between IUU fishing vessels and the financial activity of onshore corporations that facilitate IUU fishing.  The report contains the findings from C4ADS’ in-depth investigations into the methods used by IUU networks both at-sea and onshore to exploit a systemic lack of transparency and weak enforcement in the global fishing sector.  Amongst other things, it looks how a lack of transparency and insufficient scrutiny onshore allows opportunistic actors to exploit the fishing industry; and specifically, IUU fishing converges with a variety of crimes onshore that sustain fishing operations at sea and launder IUU catch, undermining the legitimacy of supply chains around the world.  It says that by framing IUU fishing as a problem enabled by and linked to onshore crimes and facilitators, enforcement authorities are better able to pursue the onshore networks behind vessels.

https://raytoddblog.files.wordpress.com/2019/08/59714-stringsattached.pdf

iuu

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JERSEY: THE RIGHT OF PRIVILEGE AGAINST SELF-INCRIMINATION IN TAX CASES

On 22nd August, Ogier published a briefing about a recent Privy Council case about long-running Jersey proceedings that provides clarification on the extent to which a party to an action may resist disclosure notices from authorities by utilising the right of privilege against self-incrimination.  The case involved a Jersey CSP and a Norwegian national who was the subject of criminal investigations in both Jersey and Norway for fraud and tax evasion.  The CSP resisted disclosure of requested materials on grounds that they were themselves under criminal investigation and could rely on privilege against self-incrimination.  The briefing says that the judgment sets a helpful framework on when the privilege against self-incrimination may be relied on, with such principles applicable to a great number of circumstances and the majority of criminal offences, and that the decision has left the door ajar to resist disclosure of materials on grounds of privilege against self-incrimination.

https://www.ogier.com/publications/the-right-of-privilege-against-self-incrimination-volaw-v-comptroller-of-taxes

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DEUTSCHE BANK FINED $16 MILLION BY SEC TO SETTLE FOREIGN CORRUPTION CHARGES

RTE on 23rd August reported that Deutsche Bank has agreed to pay more than $16 million to settle charges that it violated US corruption laws by hiring relatives of foreign government officials in order to win or retain business, and had hired poorly qualified relatives of foreign officials in Asia and Russia at their request between 2006 and 2014.

https://www.rte.ie/news/business/2019/0823/1070436-deutsche-bank-fined-16m-to-settle-corruption-charges

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FATF ASIA-PACIFIC GROUP PUTS PAKISTAN IN “ENHANCED BLACKLIST”

The Times of India on 23rd August reported that The Asia Pacific Group (APG) of the FATF found that Pakistan was non-compliant on 32 of the 40 AML/CFT compliance parameters.  Pakistan has to focus on avoiding the blacklist in October when the 15-month timeline ends on the FATF’s 27-point action plan.  Pakistan has been placed on the Enhanced Expedited Follow Up List (Blacklist) for its failure to meet the standards.  On the 11 AML/CFT effectiveness parameters (the “Immediate Outcomes” or IO), Pakistan was adjudged as having a “low” marking on 10.

https://timesofindia.indiatimes.com/world/pakistan/fatf-asia-pacific-group-puts-pakistan-in-enhanced-blacklist-officials/articleshow/70799953.cms

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FATF: UPDATED CONSOLIDATED AML/CFT ASSESSMENT RATINGS

Following the publication of the update report on Botswana FATF has published an updated consolidated schedule of AML/CFT ratings for all assessed countries.

http://www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf

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ECONOMIC LOSSES FROM ENDING THE WTO MORATORIUM ON TAXES AND DUTIES ELECTRONIC TRANSMISSIONS

A paper from the European Centre for International Political Economy (ECIPE) says that, since 1998, WTO member states have applied a moratorium against tariffs on international electronic transmissions (commonly referred to as the WTO ‘E-Commerce’ Moratorium).  However, some WTO member states have recently debated whether the moratorium remains in their economic interest, given the potential revenues that might be generated by imposing tariffs on electronic transmissions.  The study examines the impact on India, Indonesia, South Africa and China (and the general case for developing countries) and concludes that imposing such tariffs would be fiscally counter-productive.  It says that research shows that if countries ceased to uphold the moratorium and levied import duties on digital goods and services, they would suffer negative economic consequences in the form of higher prices and reduced consumption, which would in turn slow GDP growth and shrink tax revenues.

https://ecipe.org/wp-content/uploads/2019/08/ECI_19_PolicyBrief_3_2019_LY04.pdf

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ISLE OF MAN NAMED IN “LOAN CHARGE” ALLEGED TAX DODGING SCANDAL IN UK

The Daily Mail on 21st August carried a report saying that more than 50,000 contract workers — including nurses, teachers, and small business owners — have been hit with backdated tax demands (under the so-called “Loan Charge” clawback arrangements introduced by HMRC) for as much as hundreds of thousands of pounds.  These involved paying workers using tax-free loans from offshore trusts that did not need to be paid back.  By paying the workers a loan, it meant employers did not need to pay income tax and National Insurance contributions.  Since April, any such “loans” became taxable, meaning that freelancers who used the legal loophole face a retrospective tax bill on all their income since 1999 that was paid using the loans.  One example cited involves a man who used an “umbrella” company — based on the Isle of Man — which took around 15% of his income in fees and he missed out on pension contributions, holiday and sick pay that employees normally get.  A tax barrister is quoted as saying that many workers had to sign up to the scheme in order to get paid, and were given no indication they were doing wrong.

https://www.dailymail.co.uk/money/taxbeating/article-7376787/Self-employed-face-losing-homes-innocently-using-tax-loophole.html

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UK LOCAL COUNCILS URGED TO PROTECT THEMSELVES AGAINST MONEY LAUNDERING

On 22nd August, the Room 151 blog carried a post saying that the Chartered Institute of Public Finance and Accountancy (CIPFA) has urged councils to ensure that they have the right procedures in place to protect against sophisticated financial crime.  It is reported that in 2013 an estimated £2.1 billion of financial crime was perpetrated against local government in the UK.  Councils have been updating their procedures to ensure they are protected and are highlighting the risk to officers of unwittingly enabling cash to be legitimised.  It is said that critical issues can be signing rent contracts on housing properties where the landlord is running a front company to launder drug money.  CIPFA urged councils to be proactive and not presume money laundering is not an issue for local government.

https://www.room151.co.uk/151-news/councils-urged-to-protect-themselves-against-money-laundering/

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UK INVESTIGATES QATAR-OWNED AL RAYAN BANK OVER MONEY LAUNDERING CONTROLS

The Times and others on 22nd August reported that the probe into Al Rayan by FCA was launched last year and earlier this year the bank has been restricted on who it can open deposit accounts for.  The bank’s annual report says that its “anti-money laundering (AML) processes and controls have been placed under formal review by the Financial Conduct Authority, which has led to ongoing investment in enhanced AML processes”.  It is said that the investigation began after it was reported the bank was providing financial services to numerous organisations linked to Islamist groups, with account including groups linked to the Muslim Brotherhood, groups that promote hard-line preachers and a mosque whose trustee is a Hamas leader.  The bank, based in in Birmingham is the UK’s largest and oldest Islamic bank. It is 70% by Qatar’s Masraf Al Rayan and 30% by Qatar Holding.

http://www.arabnews.com/node/1543976/middle-east

https://www.thetimes.co.uk/article/al-rayan-bank-investigated-over-money-laundering-controls-w3pc5d08r

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CANADA’S NEW EXPORT BROKERING REGIME

On 23rd August, McMillan in Canada published an article saying that on September 17th Canada will formally become a State Party to the UN Arms Trade Treaty that regulates the international trade in conventional arms.  In preparation for this, the government has made significant amendments to the Export and Import Permits Act to broaden Canada’s export control regime.  The current regime is focused exclusively on the export and import of certain goods and technologies to and from Canada – but the new regime will also regulate the movement of these goods and technologies between 2 or more foreign countries when Canadian citizens or organisations are involved in the transaction, and when the goods or technology involved on the Brokering Control List.  The disclosure of the contents of relevant technology, such as communicating technical data or providing technical assistance, also constitutes a transaction caught by the revised rules.  The article reproduces the Brokering Control List (which appears noticeably broader than the list of that controlled under equivalent UK legislation).  Brokering licences are available, as are offences for not complying with the new rules, with a maximum fine of $250,000.

https://www.mcmillan.ca/Canadas-New-Export-Brokering-Regime

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OTHER THINGS YOU MAY HAVE MISSED – AUGUST 22

22nd August 2019

NEW POLICY ON REGISTRATION OF SHIP VESSELS IN CYPRUS REGISTRY

On 19th August, Cypriot law firm AGP published a briefing saying that in May the Deputy Ministry of Shipping updated its policy regarding the eligibility of ships registered under Cyprus law by issuing a new Circular.  This contained additional or modified requirements for ship registration, and include increased inspections for certain types of older vessels.

https://www.agplaw.com/new-policy-on-registration-of-ship-vessels-in-cyprus-registry/

GOALS 5-A-SIDE SOCCER CENTRES AND THE FCA INVESTIGATION

On 20th August, Rahman Ravelli published a short article about the FCA investigation into allegations of accounting irregularities at Goals Soccer Centres in the UK.  The operator announced earlier this month that it was to de-list from the stock market after an investigation into its accounting practices found improper behaviour.

https://www.rahmanravelli.co.uk/news/goals-soccer-centres-and-the-financial-conduct-authority/

IRISH MILITARY EXPORTS NOW WORTH MORE THAN €37 MILLION

The Irish Times reported on 21st August that the value of Irish exports of military equipment rose by 29% last year to €37.3 million, with almost two-thirds of all military components, software and technology being sold to the US.  More than €24 million worth of military equipment was exported to the US in 2018.  This included military equipment used in aircraft and unmanned aerial vehicles specially designed or modified for military use, fire control and related alerting and warning equipment.  The value of Irish exports of “dual-use” equipment increased by 11% last year to almost €3.57 billion.  It was also said that no applications to export military equipment to Saudi Arabia have been received since August 2013.

https://www.irishtimes.com/business/manufacturing/irish-military-exports-now-worth-more-than-37m-1.3993361

ROSNEFT TO SELL OIL PRODUCTS IN EUROS TO AVOID POSSIBLE NEW US SANCTIONS

Oil Price.com reported on 21st August that the largest Russian oil producer has told customers earlier this month that oil product sales in tender contracts will be priced in euros instead of US dollars.  US designation of Rosneft since 2014 do not currently prohibit Rosneft accepting US dollars as payments for the oil and oil product it sells.  Rosneft exports around half of the oil products its refineries in Russia produce.

https://oilprice.com/Latest-Energy-News/World-News/Rosneft-To-Sell-Oil-Products-In-Euros-To-Avoid-Possible-New-US-Sanctions.html

SWISS AND US EXPORT CONTROLS ALSO COVER THE TRANSFER OF INTANGIBLE TECHNOLOGY

MME Tax Compliance has published an article in the light of the Swiss authorising body, SECO, publishing a guidance document covering the topic of intangible technology transfer. It suggests that the reason for this may be the increasing number of intangible exports subject to licensing due to digitalisation of industry and emergence of new manufacturing methods such as 3D printing.  It says that all these developments raise new questions in the field of export controls, which SECO tries to clarify in their guidance document.  The article summarises the contents of the new guidance.  The article also says that often the export control know-how and processes are set up for to the export of physical dual-use goods, and the risks around the export of intangible controlled technologies does not get sufficient level of management attention.  However, a robust ICP (Internal Compliance Programme) must always include a technology control plan that ensures access protection as well as a controlled transfer of intangible technology.  The article also cautions that US export controls must be taken into account, not only for exports of goods and technology from Switzerland, but also for know-how transfer between individuals of different nationalities within Switzerland (a so-called “deemed export”).

https://www.mme.ch/en/magazine/magazine-detail/url_magazine/swiss_and_us_export_controls_also_cover_the_transfer_of_intangible_technology/

BUSINESS JET CREW ‘WAS COMPLICIT’ IN ALLEGED DRUG SMUGGLING BETWEEN EUROPE AND SOUTH AMERICA

Corporate Jet Investor claims an “exclusive” on a report on 21st August saying that members of the crew of a business jet impounded during a drugs raid in Europe in May are alleged to have been complicit in the smuggling of millions of pounds worth of cocaine between South America and Europe.  The crew of the Gulfstream V were said to be part of an international criminal gang involved in smuggling the cocaine, luxury goods and cash.  A 600 kg cocaine shipment were made at an airport in Switzerland.

https://corporatejetinvestor.com/articles/exclusive-business-jet-crew-was-complicit-in-alleged-drug-smuggling-between-europe-and-south-america-123/

See also –

https://www.swissinfo.ch/eng/international-operation_tonne-of-cocaine-seized-in-switzerland-and-hong-kong/45122188

GERMAN GOVERNMENT IMPLEMENTS STRICTER AML RULES FOR REAL ESTATE SECTOR

On 21st August, US law firm Jones Day published an article saying that the German Government is about to implement stricter AML rules in line with the 4th Money Laundering Directive and, in particular, includes extended risk assessment and reporting requirements for real estate agents.

https://www.jdsupra.com/legalnews/german-government-implements-stricter-17575/

NORWEGIAN MINISTRY BACKS LOTTERY AND BINGO AML EXEMPTIONS

iGaming Business on 21st August reported that Norway’s Ministry of Finance has given its backing to a proposal from Lotteritilsynet, the national lottery authority, to make lottery and organisers of bingo tournament exempt from new AML regulations.  A consultation on the proposal continues to 1st October.  The proposal is for operators that do not rely on third-party contractors for their bingo or lottery offerings to be exempt from the country’s new money-laundering regulations.

https://www.igamingbusiness.com/news/norwegian-ministry-backs-lottery-bingo-aml-exemptions

NORWAY WATCHDOG FINDS DNB BANK FAILED TO COMPLY WITH AML RULES

KYC 360 on 22nd August reported that the Financial Supervisory Authority (FSA) found significant shortcomings in DNB’s compliance with AML regulations during a late-2018 inspection.  FSA found improvements had been made since an earlier review in 2016 by DNB, but said the lender still had significant shortcomings and had taken too long to start to rectify earlier problems.

https://www.riskscreen.com/kyc360/news/norway-watchdog-finds-dnb-failed-to-comply-with-anti-money-laundering-rules/

PRINCIPAL CHANGES IN THE REVISED AIC CODE OF CORPORATE GOVERNANCE FOR BOARDS OF DIRECTORS OF GUERNSEY AND JERSEY

On 20th August, Ogier published an article about the code of best practice in respect of the governance of investment companies published by the Association of Investment Companies (AIC) in February.  AIC represents a broad range of closed-ended investment companies, incorporating investment trusts, offshore investment companies, real estate investment trusts and venture capital trusts.  The article highlights issues that may be relevant to boards of directors of Guernsey and Jersey companies whose shares are quoted or listed on any of the London Stock Exchange markets.  Using the Code may be chosen by investment companies to meet their obligations under the UK Corporate Governance Code issued by the Financial Reporting Council.  It is endorsed by the FRC and the Guernsey FSC and is supported by the Jersey FSC.

https://www.ogier.com/publications/principal-changes-in-the-revised-aic-code-of-corporate-governance-are-relevant-for-boards-of-directo

ENGLISH HIGH COURT CONFIRMS THERE MUST BE A CREDIBLE RISK OF ASSET DISSIPATION TO JUSTIFY A FREEZING ORDER

An article in a newsletter from Buddle Findlay on 20th August was concerned with the continuing case involving a dispute between 2 Russian oligarchs over a stake in the Norebo Group, an international fishing business.  In a recent hearing, one successfully challenged a worldwide freezing order on the basis that the other party had not complied with his duty of disclosure to the Court in the without notice application.  There was no credible risk of the dissipation of assets so the application was not regranted.

https://www.buddlefindlay.com/insights/legal-update-on-litigation-and-dispute-resolution-august-2019/

MODERN SLAVERY IN THE FASHION INDUSTRY

In July, Taylor Wessing published an article saying that governments and consumers are increasingly demanding transparency into the fashion supply chain. This can be a challenge for businesses with long and complex supply chains.  It reminds one that, following the fashion industry’s Rana Plaza deadly disaster in Bangladesh, over 200 fashion brands took action to clean up their supply chains by signing a legally binding agreement to make garment factories a safe place to work – the Bangladesh Accord.  This gave workers greater protections, improved working conditions and increased accountability by setting up an international arbitration mechanism and shutting down factories that fail to address safety concerns.  It has been able to clean up some of fashion’s supply chains on an unprecedented scale due to the volume of brands and trade unions involved.  It also highlighted fashion brands power to bring about change – but more needs to be done.  The article notes that fashion items pass through a long international supply chain before purchase, making it very difficult to trace a particular component and almost impossible to work out whether a garment has or has not been produced using slavery; and rise of “fast fashion” and persistent profit drive has led to intense price and production competition between fashion brands, putting suppliers under pressure to accept declining prices and tighter deadlines.  The article details the requirements of the UK Modern Slavery Act and the consequences of non-compliance.  Saying that the globalisation of the fashion industry makes it practically difficult for fashion brands to retain control – article suggests AI (data collection) and blockchain as possible solutions.  The firm also offers a modern slavery assessment tool to assess a company’s risk profile and if the business needs to produce a statement for the purposes of the Act.

https://united-kingdom.taylorwessing.com/download/article-chain-reaction.html

SLOVAKIA: DETERMINED ACTION NEEDED TO FIGHT CORRUPTION IN EXECUTIVE GOVERNMENT AND POLICE

On 22nd August, the Council of Europe issued a news release about an evaluation report from the Council of Europe’s Group of States against Corruption (GRECO) urges the Slovak Republic to strengthen the effectiveness of its legal framework and policies to prevent corruption amongst persons with top executive functions (ministers and other senior government officials) and the police force. The report was prepared against the backdrop of repeated mass demonstrations demanding stronger integrity of politicians and the police in the wake of the murder of a journalist who was investigating corruption links between the political world and criminal networks.

https://search.coe.int/directorate_of_communications/Pages/result_details.aspx?ObjectId=090000168096d641

GEORGIA: CRIMINAL CASE LAUNCHES AGAINST AVTANDIL TSERETELI IN MONEY LAUNDERING XASE LINKED TO TBC BANK

On 22nd August, Georgia Today reported that the Prosecutor’s Office of Georgia has launched a criminal case against businessman Avtandil Tsereteli, this being said to be linked to an investigation launched into money laundering by the Chairman and the Deputy Chairman of the Supervisory Board of TBC Bank, Mamuka Khazaradze and Badri Japaridze.

http://georgiatoday.ge/news/16999/Criminal-Case-Launches-against-Businessman-Avtandil-Tsereteli

UK: RESTRICTIONS ON THE IMPORT OF FORESTRY MACHINERY

DEFRA announced on 21st August that, from 1st September, machinery or vehicles that have been used for agricultural or forestry purposes will be subject to plant health regulations when imported from any third country.  Importers must ensure that machinery or vehicles of this kind are accompanied by an official statement such as a phytosanitary certificate, detailing that they have been cleaned and are free from soil and plant debris.  The requirements do not apply to new machinery and vehicles.

https://www.gov.uk/government/news/regulations-on-the-import-of-forestry-machinery

A NEW GLOBAL REGIME FOR CROSS-BORDER ENFORCEMENT OF CIVIL AND COMMERCIAL JUDGMENTS

On 21st August, Latham & Watkins LLP published an article about the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, recently adopted by the Hague Conference on Private International Law.  It explains that the Convention aims to provide a new global regime for the recognition and enforcement of civil and commercial judgments, much like the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) does with respect to arbitral awards and the Recast Brussels Regulation does with respect to the recognition and enforcement of civil and commercial judgments within the EU.  If successful, the 2019 Hague Convention will provide a single uniform instrument pursuant to which civil and commercial judgments may be enforced worldwide.  It applies to the recognition and enforcement of judgments in civil or commercial matters, but excludes judgments given in insolvency, defamation, privacy, intellectual property, family law matters, and most anti-trust matters. The Convention also does not apply to arbitration and judgments given in arbitration-related proceedings.  As far as when (or if) it might have effect, it will only enter into force once at least 2 states have ratified it, and at present only Uruguay has signed the Convention.  While further signatories and the entry into force of the Convention are expected, its true benefit will only be realised once a large number of states become party to the Convention, and thereby expands the number of jurisdictions in which cross-border recognition and enforcement of judgments can be sought.

https://www.jdsupra.com/legalnews/a-new-global-regime-for-cross-border-40648/

“E-DOPING” IN E-SPORTS

On 22nd August, CMS Law published an article about a player who was caught cheating at the Extremesland 2018 Asia Finals and was banned from all esports-related activity for five years by the Esports Integrity Coalition (ESIC).  The article says that it is clear is that doping has many faces, and is no longer limited to traditional sports.  It points out that esports is one of the most rapidly developing sectors of entertainment, with revenues generated by game organisers predicted to reach $1.8 billion in 2022.  It says that both traditional sports and esports suffer from unfair practices.  In esports, these include “e-doping”, a manipulation of the game outcome against fair play rules that increases the chance of winning for a given player.  It explains that online users, just like regular athletes, may use pharmaceuticals to “support” their game, but that e-doping aims to affect intellectual efficiency, not just physical fitness.

https://cms.law/en/GBR/Publication/Doping-is-damaging-esports

BREXIT AND EU-UK DATA SHARING: WHERE ARE WE AFTER YELLOWHAMMER?

On 20th August, an article from Field Fisher posed this question after leaked “Operation Yellowhammer” documents reveal the UK government’s assessment that there will be “disruption” to data flows in a no-deal Brexit, if no alternative legal basis for transfer has been put in place – and show that the government considers that negotiations on an EU adequacy decision for the UK may take “many years”.  Leaving without a deal means that, overnight, the UK becomes a “third country” and the principle of the free flow of data will no longer apply.  The article says that UK legislation in place to preserve EU legislation, as it applies to the UK pre-departure. This means that the same standards will apply in the UK after exit day as they did immediately before it exited the EU.  This will provide a measure of continuity on the domestic level, but cannot mitigate the potential disruption cited in the Yellowhammer documents – because the central aim of the legislation – harmonisation, facilitating cross-border commerce and data flows – will have ended.

https://www.fieldfisher.com/publications/2019/08/brexit-and-eu-uk-data-sharing-where-are-we-after-yellowhammer

UK’S BRIBERY ACT: WHAT DOES THIS HAVE TO DO WITH HR?

On 21st August, Out-Law published an article explaining that the Bribery Act creates an obligation for organisations to prevent their employees engaging in bribery.  Organisations are responsible for that activity unless they can show that they have ‘adequate procedures’ in place to prevent it.  The article asks how does this affect human resources departments, and outlines the steps the department should take – such as a risk assessment and review current procedures to determine if they are adequate.

https://www.pinsentmasons.com/out-law/guides/the-bribery-act-what-does-this-have-to-do-with-hr

CAMEROON : 383 KG OF PANGOLIN SCALES SEIZED BY CUSTOMS

On 20th August, Business in Cameroon reported that a customs’ mobile unit of Bamenda recently seized 383 kg of giant pangolin scales.

https://www.businessincameroon.com/farming/2008-9410-cameroon-383-kg-of-pangolin-scales-seized-by-customs

SAUDI CUSTOMS THWART ATTEMPTS TO SMUGGLE MORE THAN 2.5 MILLION CAPTAGON PILLS

Arab News on 21st August reported that Saudi customs had thwarted 2 attempts to smuggle a large quantity of Captagon pills found hidden in 2 vehicles that came in to the Kingdom via a seaport.  2,579,000 Captagon pills were found hidden in 2 vehicles: a truck and a private vehicle.  Captagon is a psychostimulant which is made of a combination of amphetamine and theophylline, and a one brand name of a group of drugs known as Fenethylline.  It became notorious for its use by ISIS fighters in Iraq and Syria.  Unlike amphetamines, it does not increase the patient’s blood pressure but it is highly addictive – and became illegal in most countries in the 80s.  It keeps users awake for long periods of time, makes users feel energetic and happy – and has been dubbed “chemical courage”.

http://www.arabnews.com/node/1542931/saudi-arabia

NO-DEAL BREXIT CHECKLIST FOR CONSULTANCIES, STAFFING AND RECRUITMENT COMPANIES

On 20th August, Osborne Clarke produced an article with a checklist of what consultancies, staffing and recruitment companies may need to think about.

https://www.osborneclarke.com/insights/no-deal-brexit-checklist-consultancies-staffing-recruitment-companies-may-need-think/

FBI SEEKING INFORMATION ON CANNABIS INDUSTRY BRIBERY

On 22nd August, Baker McKenzie reported that, in its weekly podcast, the FBI announced it was aware of public corruption – including bribes – in cannabis business licensing and is seeking information into companies that may have obtained a permit illegally.

http://www.riskandcompliancehub.com/fbi-seeking-information-on-cannabis-industry-bribery/

https://www.fbi.gov/audio-repository/ftw-podcast-marijuana-industry-corruption-081519.mp3/view

EX-MAJOR LEAGUE BASEBALL PLAYERS LINKED TO DRUG TRAFFICKING, MONEY LAUNDERING RING

On 22nd August, Baker McKenzie reported that authorities in the Dominican Republic have arrested former MLB pitcher Octavio Dotel and cited ex-infielder Luis Castillo for their alleged links to a drug-trafficking and money-laundering ring.  They are linked to the “Peralta Drug Organisation”, recently made subject to sanctions by OFAC.

http://www.riskandcompliancehub.com/ex-mlb-players-arrested-in-drug-trafficking-money-laundering-ring/

COUNTERFEIT BOOKS ON AMAZON

Retail Wire on 20th August carried an article about the widespread availability of counterfeit books on Amazon.  For example, George Orwell books had typos, covers that were not the same as originals, missing pages and other inconsistencies from the originals.  Many of the counterfeits in an investigation were sold by Amazon directly and shipped from their own warehouses.  It is said that Amazon now sells more than half of all books in the US and even has an issue with counterfeit medical handbooks sold on its site, which are so poorly printed that doctors could make errors in prescribing medication because of hard to read copy.

https://www.retailwire.com/discussion/counterfeit-books-vex-amazon

chartoftheday_19070_results_of_the_fragile_states_index_n

https://www.statista.com/chart/19070/results-of-the-fragile-states-index/

DRUGS

https://www.statista.com/chart/10320/drug-deaths-in-europe/

ISRAEL EASES CYBER WEAPON EXPORT CONTROL

On 22nd August, Defence Web reported that Israel is easing export rules on offensive cyber weapons, despite accusations by human rights and privacy groups its technologies are used to spy on political foes and crush dissent.  Industry specialists say the change makes a speedier approval process possible for the sale of cyber weapons, or spyware, used to break into electronic devices and monitor online communications.  The Israel defence ministry said the rule change “was made to facilitate effective service to Israeli industries while maintaining and protecting international standards of export control and supervision”.

https://www.defenceweb.co.za/cyber-defence/israel-eases-cyber-weapon-export-control/

US INDICTMENT CHARGES 80, MAINLY NIGERIAN, WITH FRAUD AND MONEY LAUNDERING

The Seattle Times on 22nd August reported that US authorities had unveiled a 252-count indictment for 80 persons allegedly involved in major fraud schemes, laundering the money through its Los Angeles network.  14 persons were arrested, mostly in the Los Angeles area.

https://www.seattletimes.com/business/us-indictment-charges-80-in-fraud-schemes-money-laundering

ALGERIA COURT DETAINS FORMER JUSTICE MINISTER OVER ALLEGED CORRUPTION

Reuters on 22nd August reported that the Supreme Court placed former justice minister Tayeb Louh in custody over alleged corruption under former president Abdelaziz Bouteflika.  The 8th ex-minister to be detained since mass protests broke out this year demanding the prosecution of people suspected of corruption and the departure of the ruling elite.

https://www.reuters.com/article/us-algeria-politics/algeria-court-detains-former-justice-minister-over-alleged-corruption-idUSKCN1VC23Z

TOWIE STAR LEWIS BLOOR ACCUSED OF £3 MILLION DIAMOND FRAUD

On 22nd August, the BBC reported that a reality TV star has appeared in court accused of conspiring to defraud investors in a £3 million scam.  The Only Way Is Essex personality Lewis Bloor, 29, appeared alongside 5 other men at Westminster Magistrates’ Court for allegedly dishonestly marketing coloured diamonds for investment purposes.

https://www.bbc.co.uk/news/uk-england-essex-49436377

 

OECD RELEASES ACTION 14 PEER REVIEWS FOR 6 COUNTRIES

On 22nd August, Tax News reported that the OECD has released follow-up reports for Belgium, Canada, the Netherlands, Switzerland, the UK, and the US on their efforts to implement BEPS recommendations on dispute resolution, which look at how the countries have responded to recommendations resulting from their stage 1 reviews, into their dispute resolution frameworks.  The reviews focus on the Mutual Agreement Procedure (MAP), which is used to settle disputes between countries and taxpayers concerning cross-border tax arrangements for trade and investment where double taxation of the same income occurs.

https://www.tax-news.com/news/OECD_Releases_Action_14_Peer_Reviews_For_Six_States____97264.html

SCOTLAND: PROPERTY DEVELOPMENT COMPANY IS TRYING TO HAVE THE LAWYER IMPRISONED IN LEGAL DISPUTE OVER THE WHEREABOUTS OF MILLIONS OF POUNDS IN MISAPPROPRIATED FUNDS

Evening Standard on 14th August reported that Stephen Jones is said to have lied to clients, the courts and the NCA about £17.5 million that had been diverted from his firm’s client account.  US developers Discovery Land Company (DLC) used his law firm Jirehouse to oversee the purchase of Taymouth Castle, but the money supplied is said to have been lent on to others, and it is alleged that Jones lied about what had happened.

https://www.standard.co.uk/business/lawyer-fights-to-avoid-jail-over-scottish-castle-deal-a4213111.html

REPORT: ADHERENCE TO/COMPLIANCE WITH ARMS CONTROL, NON-PROLIFERATION AND DISARMAMENT AGREEMENTS AND COMMITMENTS

The US State Department has released its annual report providing a detailed assessment of the adherence of the US and other nations to obligations undertaken in all arms control, non-proliferation, and disarmament agreements or commitments to which the US is a participating state.

https://www.state.gov/wp-content/uploads/2019/08/Compliance-Report-2019-August-19-Unclassified-Final.pdf

 

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NICARAGUA: AML/CFT ASSESSMENT THIRD FOLLOW-UP REPORT

On 22nd August, FATF-style regional body GAFILAT published the 2nd follow-up report on Nicaragua.  The original mutual evaluation report was adopted by GAFILAT in July 2017.  The new report says that Nicaragua has been making important progress in relation to addressing the technical compliance deficiencies identified in its MER and has been re-rated in relation to Recommendations 7 to Largely Compliant,10 to Compliant, 12 to Compliant, and 25 Largely Compliant.  Nicaragua will continue in the enhanced follow-up process and will continue to report to GAFILAT on the progress made to strengthen its implementation of AML/CFT measures.

nicaragua

 

http://www.gafilat.org/index.php/es/espanol/19-noticias/89-tercer-informe-de-seguimiento-intensificado-de-nicaragua

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PANAMA: AML/CFT ASSESSMENT SECOND FOLLOW-UP REPORT

panama 1

On 22nd August, FATF-style regional body GAFILAT published the 2nd follow-up report on Panama.  The original mutual evaluation report was adopted by GAFILAT in December 2017.  The new report says that, in general, Panama continues to make significant progress in addressing the Technical Compliance deficiencies identified in its MER and has been re-rated in FATF Recommendation 3 (from Partially Compliant to Largely Compliant), Recommendation 20 (from Partially Compliant to Compliant), Recommendation  24 (from Non-Compliant to Partially Compliant) and Recommendation 30 (from Partially Compliant to Compliant.) It also showed progress in Recommendation 25.  Panama will continue in the enhanced follow-up process and will continue to report to GAFILAT on the progress made to strengthen its implementation of AML/CFT measures.

panama 2

http://www.gafilat.org/index.php/es/espanol/19-noticias/90-segundo-informe-de-seguimiento-intensificado-de-panama

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DOMINICAN REPUBLIC: AML/CFT ASSESSMENT FOLLOW-UP REPORT

On 22nd August, FATF-style regional body GAFILAT published the 1st follow-up report on the Dominican Republic.  The mutual evaluation report was approved by GAFILAT in July 2018.  The report says that,

in general, the country has been making important progress in relation to addressing the technical compliance deficiencies identified in its MER and has been re-rated in relation to Recommendation 18 to “Largely Compliant” – but that it will continue in the enhanced follow-up process and will continue to report to GAFILAT on the progress made to strengthen its implementation of AML/CFT measures.

http://www.gafilat.org/index.php/es/espanol/19-noticias/91-primer-informe-de-seguimiento-intensificado-de-republica-dominicana

DR

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FATF: BOTSWANA AML/CFT ASSESSMENT FOLLOW-UP REPORT

On 22nd August, FATF published a follow-up report from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to the May 2017 mutual evaluation report on the country’s AML/CFT systems.

It says that Botswana has made good progress in addressing most of the technical deficiencies identified in its MER, with deficiencies under Recommendations 3, 5, 20, 27, 36 and 38 have all been addressed.  Hence, Botswana has been re-rated compliant with these Recommendations.  For Recommendations 1, 4, 11 12, 21, 23, 29, 30, 31, 32, 39 and 40, the reviewers noted that there are still minor shortcomings and therefore Botswana has been re-rated “largely compliant”.  On Recommendations 6, 7, 9, 10, 13, 15, 16, 24, 25, 26, 28, 33 and 35 Botswana was re-rated “partially compliant”. The reviewers further noted progress on 2, 8, 18, 19, 22, 34 and 37, but that this progress does not justify re-rating of these Recommendations.  Botswana will remain in enhanced follow-up and will continue to report bi-annually on its progress in improving and implementing its AML/CFT measures.

http://www.fatf-gafi.org/media/fatf/documents/reports/fur/ESSAMLG-Follow-Up-Report-Botswana-2019.pdf

Botswana

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BENEFICIAL OWNERSHIP: DO YOU REALLY KNOW WHO IS IN CONTROL?

Refinitiv (which used to be Thomson Reuters, World-Check etc) has published a paper on beneficial ownership.  It looks at the various regulatory methods of control, information gathering and enforcement (if any) in several countries, and looks at the concept of central registers.  An appendix provides a useful comparison of the definition of “beneficial owner” in the US, EU, Hong Kong and Singapore.

http://resourcehub.refinitiv.com/c/137064-WC1-UBO-Know-Who-Control

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ubo

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EGYPT: POTENTIAL REVENUE LOSSES ASSOCIATED WITH TRADE MISINVOICING

On 26th June, Global Financial Integrity published an article saying that a comprehensive study on the level of trade misinvoicing in Egypt in 2016, GFI found that the estimated potential tax revenue losses to the Egyptian government that year is approximately $1.6 billion, equivalent to 4.1% of the value of Egypt’s total government revenue collections in 2016.  Trade misinvoicing involves the deliberate falsification of the value, volume, and/or type of commodity in an international commercial transaction of goods or services by at least one party to the transaction.

https://gfintegrity.org/report/egypt-potential-revenue-losses-associated-with-trade-misinvoicing/

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FORWARDER TRADE BODY CALLS FOR DIALOGUE IN RESPONSE TO SHIPPING LINES INTRODUCING FINES FOR SHIPPERS’ MISDECLARATIONS

On 20th August, FIATA said it was calling for urgent dialogue with the top carriers, in the wake of recent moves by shipping lines to impose penalties on shippers who misdeclare cargoes.  Maersk, Hapag-Lloyd, HMM and OOCL have all confirmed to have adopted a practice of charge fines for misdeclarated cargo reaching up to $15,000 – as an attempt to improve safety and reduce delays whereby up to a quarter of all serious incidents on board containerships are attributable to misdeclared cargo as referenced by the Cargo Incident Notification System initiative.  FIATA is also seeking clarity is whether the fines apply solely to the misdeclaration of dangerous goods, or any instance in which goods are misdeclared.

https://fiata.com/media/press-releases/2019/20-august.html

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A NEW GLOBAL REGIME FOR CROSS-BORDER ENFORCEMENT OF CIVIL AND COMMERCIAL JUDGMENTS

On 21st August, Latham & Watkins LLP published an article about the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, recently adopted by the Hague Conference on Private International Law.  It explains that the Convention aims to provide a new global regime for the recognition and enforcement of civil and commercial judgments, much like the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) does with respect to arbitral awards and the Recast Brussels Regulation does with respect to the recognition and enforcement of civil and commercial judgments within the EU.  If successful, the 2019 Hague Convention will provide a single uniform instrument pursuant to which civil and commercial judgments may be enforced worldwide.  It applies to the recognition and enforcement of judgments in civil or commercial matters, but excludes judgments given in insolvency, defamation, privacy, intellectual property, family law matters, and most anti-trust matters. The Convention also does not apply to arbitration and judgments given in arbitration-related proceedings.  As far as when (or if) it might have effect, it will only enter into force once at least 2 states have ratified it, and at present only Uruguay has signed the Convention.  While further signatories and the entry into force of the Convention are expected, its true benefit will only be realised once a large number of states become party to the Convention, and thereby expands the number of jurisdictions in which cross-border recognition and enforcement of judgments can be sought.

https://www.jdsupra.com/legalnews/a-new-global-regime-for-cross-border-40648/

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UKRAINE PLACES DMYTRO VOVK, FORMER ENERGY REGULATOR CHIEF ON WANTED LIST

Rferl on 22nd August reported that the former head of Ukraine’s energy regulator, Dmytro Vovk, is being placed on a wanted list for alleged involvement in a multimillion-dollar electricity price-fixing scheme.  Vovk’s lawyer said he is currently studying at Harvard University in the US, and Vovk has stated that he is in self-imposed exile.  He and 3 current or former regulators are suspected of colluding to allegedly manipulate prices on coal-generated electricity that forced consumers to overpay $747 million in 2016-2017.  The article also reports that for more than a year until December 2014, he was the national manager in Russia for Ukrainian chocolatier Roshen owned by ex-President Petro Poroshenko; and he was a vice president of the Kyiv-based Investment Capital Ukraine investment bank in 2009-2013.

https://www.rferl.org/a/ukraine-energy-regulator-wanted-list-dmytro-vovk/30122847.html

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A BITCOIN FIRST? ASSET PRESERVATION ORDER OVER CRYPTOCURRENCY

On 20th August, law firm Stewarts said that it had obtained an order over cryptocurrency, saying that this is believed to be the first decision of its kind.  Stewarts obtained an asset preservation order (APO) over Bitcoin worth more than £1 million stolen by fraudsters.  In making the APO, it says, the court had to consider the most important unresolved legal issue about Bitcoin: is Bitcoin legal property (as opposed to mere data or information) and, if so, what kind of property is it?  The article explains that English law divides personal property (as distinct from real property, i.e. land) into 2 conventionally recognised categories: “chose in possession” and “chose in action”.  The first is a “thing” that you can take physical possession of, and the second is a property right that can only be obtained or enforced through legal action.  It would seem that Bitcoin is neither.  The decision apparently relied on a recent case in which it was held that Bitcoin are personal property that can be the subject of a trust.  The article also says that there is also a good deal of academic and regulatory commentary that takes the view that Bitcoin must be “property”.  It points out that the benefit of an APO is that requirements for a freezing order, such as apparent risk of dissipation, do not apply.  It is enough that the court is satisfied that there is a serious issue to be tried concerning a proprietary claim.  The judge also made Bankers Trust orders requiring the Bitcoin Exchange to disclose information about the cryptocurrency involved.

https://www.stewartslaw.com/news/cryptocurrency-bitcoin-asset-preservation-order-stewarts/

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PROCEEDS OF CRIME, POCA, CBD & CANNABIS INVESTMENT

On 20th August, Bright Line Law published an article saying that cannabis-related investment is on the rise.  The market for CBD, a compound extracted from the cannabis plant, in the UK is forecast to be worth £16.5 billion over the next decade.  CBD is not a controlled drug in the UK but would-be investors should not ignore the potential for proceeds of crime legislation to be engaged.  A recent call for Home Office clarity over the amount of THC (the active and controlled ingredient in cannabis) that is permissible in CBD products highlights that, in some cases, there is scope for criminal conduct and money laundering to arise.  In the UK, cannabis importation, production and supply remains illegal under the Drugs Misuse Act 1971 but cannabis for medicinal use has been (at least theoretically and technically) available to be prescribed since November 2018.  The article says that the Home Office has been called on to clarify the position in relation to CBD oils as the 0.2% limit in the Home Office factsheet applies to plant matter and suggesting that CBD oil even with small amounts of THC would appear to be illegal.  As yet, the Home Office has not revised its factsheet or issued any further guidance.  In the absence of clarification, where CBD is mixed with a controlled substance and supplied or imported into the UK issues of ‘criminal conduct’ and consequently, ‘criminal property’ can arise.  As such, investors eyeing opportunities that appear to squarely fall in to the CBD as opposed to recreational cannabis category would be wise not to overlook the potential impact of POCA.

https://www.brightlinelaw.co.uk/bll-bulletin/proceeds-of-crime-the-weed-in-the-garden-of-cbd-cannabis-investment.html

See also the Home Office factsheet on cannabis and cannabis-related medicines –

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/825872/factsheet-cannabis-cbd-and-cannabinoids-2019.pdf

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AMERICAN BAR ASSOCIATION FIGHTING BENEFICIAL OWNERSHIP PROPOSALS

On 1st July, Quartz published an article about how the US lawyers’ trade body is opposing a proposed federal law that would force the owners of US companies to disclose their identities to the authorities – despite the Bills involved enjoying bipartisan support in Congress.  The ABA’s original complaint was that the law threatened attorney-client privilege, but lawmakers have since removed the offending provision.  The article also says that the ABA has found a surprising ally in the American Civil Liberties Union (ACLU), which argues that the definition of the beneficial owner of a company is too vague.

https://qz.com/1646365/the-american-bar-association-is-fighting-congresss-efforts-to-tackle-money-laundering/amp/

See also this post on FCPA Blog –

https://www.fcpablog.com/blog/2019/8/19/aba-resisting-law-to-prevent-money-laundering.html

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OTHER THINGS YOU MAY HAVE MISSED – AUGUST 21

21st August 2019

SUSPECTED NORTH KOREAN COAL SMUGGLER SHIPS MADE 8 PORT CALLS IN JAPAN

The Nikkei Asian Review on 21st August reported that 3 vessels banned by South Korea for illegally transporting coal from the North were found to have docked in Japan at least 8 times over the past year, raising questions as to whether DPRK is using Japanese ports to dodge UN sanctions.  The ships are thought to have sent coal via Russia to disguise its origin and evade the embargo.  The Togo-flagged Ga Hong (formerly the Belize-flagged Shinning Rich), Belize-flagged Jin Long, and Sierra Leone-flagged Rich Glory, are named.

https://asia.nikkei.com/Spotlight/N-Korea-at-crossroads/Suspected-North-Korean-coal-smugglers-made-8-port-calls-in-Japan

BRAZIL: MAJOR INTERNATIONAL HUMAN SMUGGLING RING DISRUPTED

A news release on 20th August from US Immigration and Customs Enforcement announced that an international human smuggling ring based in Brazil has been disrupted with the arrests of 3 alleged human smugglers on Brazilian federal charges, following an extensive investigation coordinated by Immigration and Customs Enforcement, the DoJ and Brazilian police.  The human smuggling organisation targeted is alleged to be responsible for the illicit smuggling of scores of individuals from East Africa and the Middle East, into Brazil, and ultimately to the US.  The 3 arrested were an Algerian, a Somali and an Iranian national.

https://www.ice.gov/news/releases/international-law-enforcement-effort-leads-brazilian-takedown-significant-human

US: MAN CHARGED OVER ATTEMPT SHIP PROHIBITED METALS-PROCESSING MACHINES TO IRAN

The Courthouse News Service on 20th August reported that Mehdi “Eddie” Hashemi, 46, a dual citizen of the US and Iran, is accused of participating in a scheme to export computer numerical control machines to Iran, which are used to convert raw materials like metals to certain standards.  It is said that Hashemi bought the machines from suppliers in the US and Canada and shipped them to the UAE using forged invoices and packing slips; and from there they were shipped to Iran.

https://www.courthousenews.com/man-charged-with-violating-us-sanctions-of-iran/

HALF OF COMPANIES EXPECTED TO BE WIPED OFF UNDER BAHAMAS REGISTER CLEAN UP

International Investment on 20th August reported that the Bahamas’ registrar general is striking thousands of companies from the register because as just 50% of companies are thought to be “active”.  Most of the companies being wiped off from the register have been inactive for over 20 years or have not complied with the rules on fees and filings for many years. There are about 80,000 companies on the registry.

https://www.internationalinvestment.net/news/4004218/half-companies-expected-wiped-bahamas-register-clean

INDIA: ACCUSED ALLEGED TO HAVE BOUGHT TENNIS CLUB IN SPAIN, UK COTTAGES WITH SCAM FUNDS
The Times of India on 21st August reported on the INX Media bribery and money laundering case.  P Chidambaram and his son Karti are to be questioned over the purchase of a tennis club in Spain, cottages in the UK and several other properties in India.  The father is also accused in the Aircel-Maxis 2G scam case.

https://timesofindia.indiatimes.com/business/india-business/tennis-club-in-spain-uk-cottages-bought-with-scam-funds-ed/articleshow/70762829.cms

For more on the INX Media case, see –

https://www.businesstoday.in/current/economy-politics/inx-media-case-p-chidambaram-karti-chidambaram-cbi-ed-money-laundering-latest-news/story/374115.html

WIFE OF EX-PRESIDENT OF HONDURAS CONVICTED IN CORRUPTION CASE

KYC 360 on 21st August reported that a Honduran court convicted the wife of former President Porfirio Lobo on graft charges, including siphoning funds from programmes designed to help poor children.  Rosa Elena Bonilla was found guilty of diverting $779,000 in public funds plus international donations that were originally earmarked for social programmes.

https://www.riskscreen.com/kyc360/news/wife-of-ex-president-of-honduras-convicted-in-corruption-case/

MEXICO PREPARES NEW CHARGES AGAINST FORMER PEMEX BOSS

On 21st August, KYC 360 reported that Mexican authorities are preparing to file more criminal charges against the former head of state oil company Petróleos Mexicanos (Pemex), Emilio Lozoya, the former CEO.  He allegedly receiving more than $12 million in bribes from Brazilian construction firm Odebrecht and Mexican steelmaker Altos Hornos de México, or Ahmsa, and he is now also alleged to have received some $2.8 million in bribes linked to Pemex’s 2015 purchase of Grupo Fertinal, a troubled fertiliser company.

https://www.riskscreen.com/kyc360/news/mexico-prepares-new-charges-against-former-pemex-boss/

UK TIER 1 INVESTOR VISA: AML PROVISIONS

On 14th August, Richmond Chambers published a briefing on the UK’s Tier 1 Investor Visa the processes involved, and the evidence required.  All Tier 1 Investor visa applicants are required to provide the Home Office with evidence of the source of their wealth.  The briefing contains a response to an allegation in a TV documentary that “overseas tycoons can exploit the so-called golden visa system to buy the right to live in Britain even if they have links to the Russian President Vladimir Putin or provide critical components to the Chinese military”, saying that the Home Office has available to it a veritable armoury of legal provisions that it can deploy to defend our shores against international money laundering.

https://immigrationbarrister.co.uk/tier-1-investor-visa-anti-money-laundering-provisions/

WORLD BANK AND THE AFRICAN DEVELOPMENT BANK (AFDB) SANCTION AND BLACKLIST MORE COMPANIES AND CONSULTANTS OPERATING IN NIGERIA

The Premium Times in Nigeria on 21st August reported that the World Bank and the African Development Bank (AfDB) have sanctioned and blacklisted more companies and consultants operating in Nigeria for various breaches of their contracting processes considered fraudulent and corrupt.  It says that similar sanctions were issued to several contracting firms and individual consultants in other jurisdictions around the world.

https://www.premiumtimesng.com/news/headlines/347711-exclusive-world-bank-afdb-blacklist-more-firms-consultants-in-nigeria-for-corruption.html

The World Bank blacklist is at –

https://www.worldbank.org/en/projects-operations/procurement/debarred-firms

US: CUSTOMS BROKERS WILL HAVE TO GET TO KNOW IMPORTERS BETTER

American Shipper on 20th August reported that the trade body for forwarders and customs brokers welcomed a recently proposed rule from US Customs that requires customs brokers to have a more complete identification of their importer clients.  The proposed rule requires customs brokers to collect more detailed information about their import clients, including non-residential importers.  It will require customs brokers to identify the client’s name and date of birth; physical address and telephone number, email and business website; government-issued photo identification; business identification number; recent credit report; copy of  client’s business registration and license with state authorities; and authorisation to carry out power of attorney on the client’s behalf.  The customs authority believes that most customs brokers already verify the identity of their prospective importer clients, but the agency estimates that about 5% of importers are “not currently verified or are only minimally verified”.  The challenge for some customs brokers with implementing the proposed rule will be the potentially time-consuming requirement of going back through their list of existing importers to update their records.  There are about 350,000 importers actively transacting customs business with the agency through about 2,090 permitted customs brokers.  Once the final rule is published, the trade association will likely create a tool kit, set up webinars to both the customs brokerage and importer communities, and prepare written guidance to assist its members with meeting the new requirements.

https://www.freightwaves.com/news/customs-brokers-will-get-to-know-importers-better

US: MILITARY SCIENTISTS HARNESS AI TO FIGHT SYNTHETIC OPIOIDS

On 20th August, Defense One carried an article saying that a Defense Intelligence Agency team is using artificial intelligence to map the shadowy production-and-distribution networks of synthetic drugs.  It is said that tracking fentanyl and other synthetic drugs, which can be made almost anywhere, is harder than tracking cocaine, which is processed by relatively few cartels in relatively few places in South America.  It says that a program, called SABLE SPEAR, ingests data from 43 million websites, 8 million of the cargo receipts dubbed “bills of lading,” a billion satellite images, and about 20 other data sources.  Algorithms help researchers to draw connections that would otherwise be invisible.

https://www.defenseone.com/technology/2019/08/military-scientists-harness-ai-fight-synthetic-opioids/159331

US: JUDGE AGREES TO DELAY BRIBERY TRIAL OF BRITISH FORMER ALSTOM EXECUTIVE BUT SAYS CONSTITUTIONAL RIGHTS HAVEN’T BEEN VIOLATED

On 20th August, the Wall Street Journal reported that Lawrence Hoskins, a former Alstom senior vice-president, failed to show that years of delays to his trial had violated his Fifth Amendment and Sixth Amendment rights as well as the Speedy Trial Act.  He was arrested in 2014, and is charged with helping organise a scheme from 2002 to 2004 to bribe Indonesian government officials to win a $118 million power contract for Alstom.  He had asked for more time to review new evidence obtained by prosecutors and the trial date has been pushed back nearly 2 months to October 28th.

https://www.wsj.com/articles/judge-agrees-to-delay-former-alstom-executives-bribery-trial-11566336133

PODCAST: THE CHINA-CANADA FINANCIAL WEB

In the latest TRACE podcast, Bob Mackin, a multimedia journalist based in Vancouver, discusses the extradition case involving Meng Wanzhou of Huawei, the proposed new beneficial ownership registry for real estate in British Columbia and the occasionally shady influence of Chinese money in Canada.

https://traceinternational.org/bribe_swindle_or_steal

US: CUSTOMS DELIGHTED WITH NEW-GENERATION SCANNING EQUIPMENT FOR TRUCKS – IMPROVED EQUIPMENT FOR AIR CARGO STILL A LONG WAY OFF

On 21st August, Loadstar reported that US Customs & Border Protection agents are delighted with new-generation scanning equipment for trucks – non-intrusive inspection equipment to scan full trucks – and is in the process of rolling out new units to replace ageing equipment at ports and border crossings.  However, the article says that similar advances for air cargo, exacerbated by the boom in e-commerce-fuelled shipments, is some way off.  Instead, in the interim at least, CBP has come to look increasingly to advance cargo data submission for air cargo, possibly processed with artificial intelligence, to identify questionable shipments for individual inspections.  Over the past year, CBP has run an advance data pilot with air, ocean and rail carriers.  The article says that canine inspections are emerging as a second major pillar of air cargo security efforts in the US, with private sector canine units involved.

https://theloadstar.com/new-us-scanning-tech-a-hit-with-trucks-but-still-pie-in-the-sky-for-air-cargo

US AIR FORCE STARTS USING FIRST CERTIFIED 3D-PRINTED AIRCRAFT PARTS

Defence Web on 21st August reported that the USAF 60th Maintenance Squadron has become the first field unit in the Air Force to be certified with an industrial-sized 3D printer that is authorised to produce non-structural aircraft parts.  It is using a Stratasys F900 3D printer, which is capable of printing plastic parts and uses a material called Ultem 9085 that is more flexible, dense and stronger than typical plastic.

https://www.defenceweb.co.za/joint/science-a-defence-technology/us-air-force-starts-using-first-certified-3d-printed-aircraft-parts/

INDIA’S FORMER FINANCE MINISTER ARRESTED

The BBC and others reported on 21st August that a former Indian finance minister Palaniappan Chidambaram, 73, has been arrested on charges of corruption and money laundering.  He is being investigated over allegations that he cleared foreign investments in exchange for bribes while he was finance minister.  He is accused of clearing foreign direct investment worth tens of millions of dollars to the INX Group in 2007 when he was finance minister.

https://www.bbc.co.uk/news/world-asia-india-49421255

CYPRUS: STATE-OWNED COMPANY TOLD – AGAIN – TO COME CLEAN OVER LOANS TO PEP

On 21st August, the Cyprus Mail reported that the Attorney  Ggeneral has reaffirmed a state-owned asset management company’s obligation to hand over information as part of a probe into the possibility of the former co-op bank affording favourable treatment to politically exposed persons (PEP) in terms of loan restructuring – information concerning loans belonging to PEPs that were taken over by Hellenic Bank in 2018 after a decision to shutter the co-op.

https://cyprus-mail.com/2019/08/21/state-owned-company-told-again-to-come-clean-over-loans-to-politically-exposed-persons

HIDING A SUPERTANKER IS EASIER THAN YOU THINK

On 21st August, Rferl carried an article saying that experts have warned in the past of Iranian efforts to hide shipping activities to evade notice, including stepping up those tactics ahead of the re-imposition last year of unilateral US sanctions.  They also say that following the precise movements of even a massive tanker like the Adrian Darya 1 (the former Grace 1 detained in Gibraltar) is more difficult than people might think.

https://www.rferl.org/a/hiding-a-supertanker-like-irans-adrian-darya-is-easier-than-you-think/30122016.html

RFE

https://www.rferl.org/a/30121494.html

chartoftheday_14435_how_productive_is_an_hour_of_work_n

https://www.statista.com/chart/14435/how-productive-is-an-hour-of-work/

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GERMAN GOVERNMENT ORDERS PAYPAL TO STOP SUPPORTING UNAUTHORISED ONLINE CASINO ACTIVITY

Calvin Ayre on 21st August reported that from 21st October Paypal will cease offering its services (in line with its revised terms and conditions) after the government ordered the payment processor to stop facilitating unauthorised online casino activity.  Schleswig-Holstein is the only German state to have issued online casino licences – but even these have now expired.

https://calvinayre.com/2019/08/21/business/paypal-halts-german-online-casino-payments/

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UK: NEW OPEN GENERAL IMPORT LICENCE (OGIL)

The Department for International Trade has announced that, on 2nd August, a new OGIL was published, replacing the previous version.  In effect, the OGIL allows the import into the UK of any goods unless they are covered by one of the many exceptions – when they may require a specific licence or be prohibited or restricted in some way.  These prohibitions and restrictions may be under UK or EU law.  However, it should be noted that just because goods are covered by the OGIL, this does not mean that there may not be other importation, taxation or legal restrictions, including under relevant EU laws, that may be involved.  Whilst most import controls are contained in EU law (at least until the effects of Brexit are felt),  EU law does allow that Member States may maintain or impose some national controls in some circumstances and the OGIL is about these national controls.  Member States can, for example, impose restrictions on the movements of firearms including (on public security grounds) firearms from elsewhere in the EU.  The advantage of the OGIL model is that national measures can be immediately implemented – by adding to the OGIL an exception to the general permission to import.  The amendments being made in the new OGIL relate to changes in the control of so-called bumpstocks and rifles with a chamber from which empty cartridge cases are extracted using energy from propellant gas or energy imparted to a spring or other energy storage device by propellant gas.  A bumpstock is an attachment that allows a semi-automatic rifle to mimic a fully automatic weapon’s rate of fire.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/826687/notice-to-importers-2924-ogil-update-dated-2-august-2019.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/824334/explanatory-note-ogil-dated-2-august-2019.pdf

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FAKE CIGARETTE RING EXPOSES JORDAN’S CORRUPTION WOES

OCCRP on 21st August carried an article saying that a high-profile trial against businessmen, a former minister, and 2 dozen accomplices shines a spotlight on illicit cigarette production, widespread smuggling, and the government’s struggle to hold its officials accountable.  Well-connected businessman, Awni Mutee, is charged with tax evasion, bribery, trademark imitation, smuggling, and money laundering.  Prosecutors say Mutee produced counterfeit cigarettes in Jordan’s low-tax, free trade zones, which are designed exclusively for goods manufactured for export, then used his government connections to smuggle them onto the domestic market and sell them throughout the country.  The case is described as a rare case involving the prosecution of high-level corruption.  Among the defendants are Wadah Al-Hamoud, Jordan’s former general director of Customs, and Mounir Aweys, a former Minister of Water and Irrigation.

https://www.occrp.org/en/blog/10533-fake-cigarette-ring-exposes-jordan-s-corruption-woes

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FinCEN ADVISORY ALERTS FINANCIAL SECTOR TO FENTANYL TRAFFICKING SCHEMES

On 21st August, FinCEN issued a new Advisory intended to alert financial institutions to financial schemes related to the trafficking of fentanyl and other synthetic opioids. Information in the advisory will assist them in detecting and reporting related criminal activity.  It includes Red Flags that should alert one to the risks.

https://www.fincen.gov/sites/default/files/advisory/2019-08-21/Fentanyl%20Advisory%20FINAL%20508.pdf

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US: MILITARY SCIENTISTS HARNESS AI TO FIGHT SYNTHETIC OPIOIDS

On 20th August, Defense One carried an article saying that a Defense Intelligence Agency team is using artificial intelligence to map the shadowy production-and-distribution networks of synthetic drugs.  It is said that tracking fentanyl and other synthetic drugs, which can be made almost anywhere, is harder than tracking cocaine, which is processed by relatively few cartels in relatively few places in South America.  It says that a program, called SABLE SPEAR, ingests data from 43 million websites, 8 million of the cargo receipts dubbed “bills of lading,” a billion satellite images, and about 20 other data sources.  Algorithms help researchers to draw connections that would otherwise be invisible.

https://www.defenseone.com/technology/2019/08/military-scientists-harness-ai-fight-synthetic-opioids/159331

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OFAC ADDS 3 CHINESE INDIVIDUALS AND A CHINESE COMPANY AND DRUGS ORGANISATION TO ITS DRUGS KINGPIN SANCTIONS LIST – SAID TO BE CHINESE DRUG KINGPINS FUELLING AMERICA’S DEADLY OPIOID CRISIS

On 21st August, OFAC announced the adding of 3 Chinese individuals, plus the QINSHENG PHARMACEUTICAL TECHNOLOGY CO LTD and the ZHENG DRUG TRAFFICKING ORGANIZATION (said to be a vendor of “research chemicals”).

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190821.aspx

https://home.treasury.gov/news/press-releases/sm756

ofac

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UK (AND ISLE OF MAN) ADD 2 NAMES TO ISIL/AL-QAIDA SANCTIONS LIST

On 21st August, HM Treasury announced the addition of 2 names to the Consolidated List of those subject to sanctions, following the UN and EU listing Ali MAYCHOU and Bah AG MOUSSA.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/826749/Notice_ISIL_2019_1353.pdf

https://www.gov.im/news/2019/aug/21/financial-sanctions-isil-daesh-and-al-qaida/

 

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ST KITTS & NEVIS WITHDRAWS FLAG FROM TANKER HEADING FOR SYRIA

On 20th August, Kenneth Rijock in his blog reported that St Kitts & Nevis has reportedly abruptly cancelled the vessel registration of the BONITA QUEEN, an Iranian crude oil tanker, which has taken on a cargo of crude at the terminal at Kharg island in Iran, and has sailed for Syria.

http://rijock.blogspot.com/2019/08/st-kitts-pulls-its-flag-from-yet.html

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AUTOMATIC REGISTRATION FOR COMPANIES TO CONTINUE TRADING AFTER BREXIT

The Times on 21st August reported that, with many companies said to have not applied for the requisite registration number from HMRC for exporting after Brexit (an EORI number), it has been announced by the Chancellor that says that 88,000 British businesses will be automatically authorised to trade in the EU to minimise the disruption.  In the following 2 weeks businesses registered for VAT will be given an Economic Operators Registration and Identification number.  Those without a number after Brexit will be unable to trade with counterparts in the EU.  It says that about 240,000 British companies trading solely with the EU will require the code to carry on importing and exporting, but only 72,000 have applied.

https://www.thetimes.co.uk/edition/news/automatic-registration-for-firms-to-continue-trading-after-brexit-qb2hng95b

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LIBERIA: GOVERNMENT REARRESTS AND DETAINS FORMER GOVERNOR OF THE CENTRAL BANK OF LIBERIA, THE SUSPENDED DEPUTY GOVERNOR FOR OPERATIONS AND 3 OTHER STAFF OF THE CENTRAL BANK

Front Page Africa on 21st August reported that the government has levelled a new charge against Milton Weeks, former Governor of the Central Bank of Liberia, Charles E. Sireaf, suspended Deputy Governor for Operations and 3 other staff of the Central Bank.  This is the second time the 5 have been arrested and detained following the release of reports on the printing of Liberian dollar banknotes.  They were accused of printing excess banknotes without the approval of the Legislature as required by law, and were initially charged with economic sabotage, theft of property, criminal conspiracy, facilitation and solicitation.

https://frontpageafricaonline.com/news/liberia-government-rearrests-and-detains-charles-sirleaf-milton-weeks-as-indictment-surfaces/

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US: ARMS TRAFFICKER CONVICTED FOR OFFENCES INCLUDING AN ANTI-AIRCRAFT MISSILES SCHEME SENTENCED TO 30 YEARS IN PRISON

A news release from US Immigration and Customs Enforcement announced that Rami Najm Asad-Ghanem, 53, (aka Rami Ghanem), a naturalised US citizen who was living in Egypt at the time of the offences, has been sentenced to 30 years in federal prison.  He is described as a black-market arms dealer with a long history of brokering machine guns, rocket-propelled grenades and anti-tank armaments – and who was found guilty last year in a scheme to sell and use surface-to-air missiles.  He had pleaded guilty to 6 other federal crimes stemming from his arms-trafficking activities, including the unlicensed export of weapons and ammunition, smuggling, money laundering, and unlicensed arms brokering in connection to a militant faction in Libya.  The news release also mentions attempts to buy and sell combat jets and helicopter gunships; and his apparent role in the trafficking of counterfeit currency, looted antiquities and black-market diamonds.

https://www.ice.gov/news/releases/arms-trafficker-convicted-anti-aircraft-missiles-scheme-and-other-arms-offenses

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OTHER THINGS YOU MAY HAVE MISSED – AUGUST 20

20th August 2019

US: THE McDONNELL “OFFICIAL ACT” REQUIREMENT DOESN’T APPLY TO FCPA VIOLATIONS

On 13th August, DLA Piper published an article saying that a recent case in the US had shown that the “high bar” for corruption cases set by the US Supreme Court in McDonnell v. United States does not apply to prosecutions under the Foreign Corrupt Practices Act (FCPA) and prosecutors need not satisfy the heightened “official act” requirement established by the Supreme Court in McDonnell in order to prove an FCPA violation.  This means that the Supreme Court’s McDonnell decision – which arose from the bribery conviction of former Virginia Governor Bob McDonnell – and which requires prosecutors prove that bribes were paid in exchange for an “official act” does not apply in FCPA cases.

https://www.dlapiper.com/en/us/insights/publications/2019/08/second-circuit-mcdonnell-official-act-requirement/

https://www.gtlaw.com/en/insights/2019/8/second-circuit-finds-mcdonnell-official-acts-standard-inapplicable-to-fcpa

UK: CONFISCATION AND WHAT TO DO WHEN THE PROSECUTOR COMES BACK FOR MORE

In July, BCL Solicitors LLP published an article about section 22 of the Proceeds of Crime Act 2002 which provides that a prosecutor may invite a ‘reconsideration of the available amount’, i.e. a review of the amount available for confiscation from the defendant in the light of new circumstances or information.  The article explains that the idea of section 22 is that, where the amount then available for confiscation was lower than the benefit assessed of being what the defendant obtained from the crime, it should be possible to go back and recoup the rest (or at least, as much as might become available) at some point in the future.  The article points out that, unlike other elements of the Act, section 22 allows for judicial discretion and the Court of Appeal will rarely interfere with the judge’s discretion, though they may have a role where complex legal issues are at stake.

https://www.bcl.com/confiscation-revisited-what-to-do-when-the-prosecutor-comes-back-for-more/

SAUDI ARABIA’S NEW BALLISTIC MISSILE PROGRAMME WILL HEIGHTEN TENSIONS WITH IRAN

On 19th August, International Policy Digest reported that Saudi Arabia is said to be developing a domestic ballistic missile programme with the direct support from China, with a factory is situated at an existing missile base 230 km west of Riyadh.  A military base deep inside Saudi Arabia appears to be testing and possibly manufacturing ballistic missiles.  However, Saudi Arabia rejects all accusations of running a secret ballistic missile base on its soil.  The article says that developing a local ballistic missile system is also a preventive measure taken by Saudi Arabia due to the frequent rocket attacks carried out by Iranian-backed Houthi rebels in Yemen.

https://intpolicydigest.org/2019/08/19/saudi-arabias-new-ballistic-missile-program-will-heighten-tensions-with-iran/

US: ‘CODFATHER’ SETTLEMENT MEANS FISHING MAGNATE WILL NEVER FISH AGAIN

On 19th August, an AP report said that a fishing magnate, Carlos Rafael of Carlos Seafood, known as the “Codfather”, will never be allowed to return to US fisheries, the federal government said, in announcing it has settled its civil case against a man whose arrest for shirking quotas and smuggling profits overseas shocked the East Coast industry, and was once the owner of one of the largest fishing fleets in the US.  He has been ordered to pay the National Oceanic and Atmospheric Administration (NOAA) a $3,010,633 civil penalty, and permanently cease all fishing.  Rafael was based out of New Bedford, Massachusetts, and was sentenced to nearly 4 years in prison in 2017.  He was owner of the one of the largest commercial fishing operations in the country.  17 of Rafael’s former fishing vessel captains also face penalties under the settlement.  Rafael pleaded guilty to false labelling and other charges after federal authorities charged he was operating an elaborate fish fraud.  They said his vessels claimed to catch haddock or pollock when they had actually brought species to shore that are subject to stricter quotas.  He then smuggled proceeds to Portugal.  In 2018, a federal judge ordered the seizure of 4 of his fishing vessels and their fishing permits as part of a plea deal

https://www.wthr.com/article/codfather-settlement-means-magnate-will-never-fish-again

https://www.intrafish.com/news/1838902/carlos-rafael-ordered-to-pay-noaa-usd-3-million-to-settle-smuggling-case

THE US EXPORT CONTROL REFORM ACT AND “EMERGING TECHNOLOGIES”

On 16th August, an article from Braumiller Law Group PLLC says that the intention of the Export Control Reform initiative, which began in 2009, was to simplify the export of controlled items while refocusing on critical national security policies, and the Export Control Reform Act became law in August 2018.  It says that the impact of future controls on emerging and foundational technologies could have far-reaching implications and hurdles for the commercial technology industry.  It considers the 2018 Act, in particular how it creates a regular process by which Bureau of Industry and security is obliged to continuously review, in conjunction with other agencies, emerging and foundational technologies that may need to be added to the Commerce Control List (CCL).  In November, BIS sought public comment on 14 categories of technologies it could consider “emerging”, and these categories are listed in the article.  BIS will determine the appropriate level of controls to give certain technologies and, in the interim, BIS has broad authority to control technology exports in specific circumstances or on case-by-case bases.  The article goes on to consider the effects of the Act on the US agencies involved and on exporters, saying that the goal for the agencies is to ensure that those considering the new technologies are as informed as possible before creating controls that will be difficult to administer or that will stifle commercial industry and domestic advancement.  The article uses the treatment of commercial satellites in the late 1990s as an example of what export controls can do to the domestic industry.  At the time, it says, BIS imposed export controls on commercial satellites after sensitive data was illegally transferred to China.  Subsequently, the domestic commercial satellite industry declined, possibly due to the added regulatory burden of the export controls.  It is said that a recent study explored the effect proposed export controls would have on the advanced technology industry and found that US technology firms could lose between $14 billion and $56 billion in export sales over a 5-year period, and that missed export opportunities could threaten between 18,000 and 74,000 jobs in the technology industry.

https://www.braumillerlaw.com/united-states-export-control-reform-act-and-emerging-technologies/#more-6864

THE CHARGES AGAINST A NOTORIOUS SUSPECTED SMUGGLER OF INDIAN ARTEFACTS

An article in Hyperallergic on 19th August says that Subhash Kapoor has been charged in the US with 86 felony counts for allegedly looting $145 million in antiquities over the last 50 years.  Art dealer Subhash Kapoor was one of Manhattan’s premier dealers of Indian antiques, selling his stock to some of the world’s most renowned museums, and with a gallery called Art of the Past on Madison Avenue.  However, he is not currently facing a trial in the US – as in 2011, Interpol agents arrested him in Frankfurt and he was extradited to India, where he currently awaits trial for allegedly running an international smuggling racket.  The US complaint alleges that Kapoor worked a smuggling ring that encompassed Afghanistan, Cambodia, India, Nepal, Pakistan, and Thailand.  He was charged alongside 7 co-conspirators, most of them overseas.

https://hyperallergic.com/513872/subhash-kapoor-charges-clients/

https://www.artforum.com/news/the-met-investigates-provenance-of-artworks-acquired-from-dealer-suspected-of-smuggling-80526

SINGAPORE: NEW CODE OF CONDUCT ADDRESSES CONCERNS OVER CRYPTOCURRENCIES, MONEY LAUNDERING AND TERRORISM FINANCING

On 19th August, the Global Legal Post reported on the introduction by the Association of Cryptocurrency Enterprises and Start-ups Singapore (ACESS), said to be facilitated by the Monetary Authority of Singapore, of a new code of practice under its SPICE initiative.  The code is said to address AML/CFT concerns re the anonymity associated with the technologies and promotes best practice to strengthen compliance by companies involved.

http://www.globallegalpost.com/big-stories/singapore-adds-mas-spice-28919646/

AUSTRALIA: PAYING MORE THAN $10,000 IN CASH COULD MAKE YOU A CRIMINAL UNDER PROPOSED LAW

ABC News on 20th August reported that a number of stakeholders have called on the Federal Government to withdraw the proposed laws, which were first announced in the 2018-19 budget as part of measures to fight the so-called black economy.  The Government’s Black Economy Taskforce had argued a $10,000 cash limit for transactions between businesses and individuals would help fight the cash economy by stamping out tax evasion, money laundering and other crimes – but would not apply to individual-to-individual transactions.  The laws, if passed, would take force on January 1st, and for certain AUSTRAC reporting entities a year later, from January 1st 2021.

https://www.abc.net.au/news/2019-08-20/transacting-$10,000-or-more-in-cash-could-make-you-a-criminal/11429230

STATE SUPPORT AND CHINA’S BELT AND ROAD TO HELP EXPAND ISLAMIC FINANCE IN KAZAKHSTAN, KYRGYZSTAN, TAJIKISTAN AND UZBEKISTAN

On 15th August, Zawya carried an article saying that the prospects are good for Islamic finance in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan thanks to government support, large Muslim populations as well as China’s Belt and Road Initiatives in the region.  This is said to be according to a recent report by Moody’s Investor Service.  The article says that the region is home to large, young and economically active Muslim populations, and other segments of the Islamic economy, from food to fashion, are relatively well established.  The impact of China’s Belt and Road initiative is considered of utmost importance, with the majority of the countries’ participating in the Initiative, and this is expected to provide an impetus for the development of Islamic finance for infrastructure projects – and cites the Angren–Pap electrified railway line that connects Tashkent with eastern Uzbekistan, though the most high-profile project in Kazakhstan, a light railway system worth $1.9 billion, has hit a wall.  However, it says, Islamic banking remains underdeveloped in the region and Islamic banking assets account for negligible shares in total banking assets.

https://www.zawya.com/mena/en/business/story/State_support_Chinas_Belt_and_Road_to_help_expand_Islamic_finance-ZAWYA20190815115932/

IRS CLARIFIES US TAX TREATMENT OF CROSS-BORDER CLOUD AND OTHER ONLINE TRANSACTIONS

On 19th August, Greenberg Traurig published a briefing saying that the IRS had published draft regulations addressing the US federal income tax treatment of cross-border cloud transactions – noting that the last time the IRS meaningfully addressed the taxation of cross-border digital content transfers was in October 1998, which applied to software transfers.  The article provides some detail of what the regulations would cover, oif or when implemented.

https://www.gtlaw.com/en/insights/2019/8/irs-clarifies-us-tax-treatment-of-cross-border-cloud-and-other-online-transactions

ARGENTINA RELEASES BUSINESSMAN WANTED IN MEXICO FOR TAX EVASION

On 20th August, OCCRP reported that Argentine authorities have released a businessman with dual citizenship who was briefly detained on charges of tax evasion, despite Mexico’s appeal for extradition.  Carlos Ahumada Kurtz, a Mexican-Argentine entrepreneur, had been arrested in Buenos Aires for his alleged failure to pay roughly $75,000 in income taxes in Mexico.

https://www.occrp.org/en/daily/10516-argentina-releases-businessman-wanted-in-mexico

NETHERLANDS: RABOBANK DROPS FOOTBALL CLUBS AS CLIENTS DUE TO CORRUPTION RISK

Dutch News reported on 20th August that the bank had decided not to take on any more professional football clubs due to the perceived risk of corruption, fraud and other issues.  This is according to a leaked internal memo which refers to unacceptable risks.  However, the bank handles banking for 80% of professional clubs in the country and sponsors several.  Whilst declining to comment on the leak, the bank is quoted as saying that it “very reticent” to take on new clubs.

https://www.dutchnews.nl/news/2019/08/rabobank-ditches-football-clubs-as-clients-because-of-corruption-risk

6 CHINESE COMPANIES OPERATING IN NIGERIA BLACKLISTED BY THE WORLD BANK OVER ALLEGED CORRUPTION

The Ripples news site in Nigeria reported on 20th August that the Bank’s website listed CCECC Nigeria Railway Company Limited, CRCC Petroleum and Gas Company Limited and CCECC Nigeria Company Limited, China Railway Construction (International) Nigeria Company Limited, China Railway 18th Bureau Nigeria Engineering Company Limited and CCECC Nigeria Lekki (FTA) Company Limited.  It is said that they would not eligible to bid for Bank contracts until March 2020.

https://www.ripplesnigeria.com/six-chinese-companies-operating-in-nigeria-blacklisted-by-the-world-bank-over-alleged-corruption

PARAGUAY DESIGNATES HIZBOLLAH, HAMAS, AL-QAIDA AND ISIS

On 19th August, in his blog Kenneth Rijock reported that Paraguay has designated Hezbollah and Hamas as an international terrorist organisation, and has named Al-Qaeda and ISIS as global terrorists.  He says that, coming on the heels of Argentina’s anti-terrorist designation of Hezbollah, it indicates a movement towards recognition of the threats posed by global terrorist organizations operating in Latin America.

http://rijock.blogspot.com/2019/08/paraguay-designates-hezbollah-hamas.html

INF

https://media.nti.org/documents/inf_fact_sheet_june2019.pdf

WHAT AMERICA’S USERS SPENT ON ILLEGAL DRUGS, 2006–2016

A report from the RAND Corporation on 20th August updates and extends estimates of the number of users, retail expenditures, and amount consumed from 2006 to 2016 for cocaine (including crack), heroin, marijuana, and methamphetamine in the US.  It lso includes a discussion of what additional types of data would help quantify the scale of these markets in the future, including the new types of information produced by the legalisation of marijuana at the state level.  The report found that people who use drugs in the USspent on the order of $150 billion on cocaine, heroin, marijuana, and methamphetamine in 2016.  The marijuana market is roughly the size of the cocaine and methamphetamine markets combined, and the size of the retail heroin market is now closer to the size of the marijuana market than it is to the other drugs.  Heroin consumption increased 10% per year between 2010 and 2016 and the introduction of fentanyl into heroin markets has increased the risk of using heroin.

https://www.rand.org/pubs/research_reports/RR3140.html

US COMMERCE DEPARTMENT ADDS 46 HUAWEI AFFILIATES TO restricted “ENTITY LIST” BUT GRANTS 90-DAY EXTENSION TO ENFORCEMENT OF HUAWEI BAN

On 19th August, Tech Crunch reported that 46 Huawei affiliates had been added to the Commerce Department Entity List, joining more than 100 entries listed and subject to specific licence requirements for the export of certain items over connections to the embattled Chinese consumer electronics giant, as being engaged in activities that are contrary to US national security or foreign policy interests.  Also announced was a further 90-day temporary licence, intended to allow businesses to wean themselves off use of Huawei equipment.

https://techcrunch.com/2019/08/19/us-commerce-department-adds-46-huawei-affiliates-to-entity-list

RUSSIA CALLS FOR URGENT ACTION BY NORTH KOREA TO CURB ILLEGAL FISHING

NK News on 20th August reported that, as the DPRK vice-minister for fishing headed for Moscow for talks on fisheries co-operation, Russia has called on North Korea to take steps to curb illegal fishing by its vessels in Russian waters.  The news site reports that North Korean illegal, unreported, and unregulated (IUU) fishing (IUU) has become a major issue in the Far Eastern Primorsky region and a source of contention between the countries.  Quotas for catches of various seafood products are negotiated each year, too, with each side allocated permits to fish the other’s waters.  Recently, a Russian vessel and crew were detained in North Korea.  The FSB has also commented that DPRK vessels interfere with the fishing of Russian vessels, including the theft of catches and tools used by Russian ships.

https://www.nknews.org/2019/08/russia-expects-urgent-action-from-north-korea-to-curb-illegal-fishing-embassy/

THE IMPACT OF SANCTIONS ON NORTH KOREA

In a podcast from NK News, the Asan Institute’s Go Myong-hyun discusses “maximum pressure” and its impact on the ground, and about the impact that sanctions are having for the government in Pyongyang, the North Korean people, and whether they are effective in the way outsiders imagine.

https://www.nknews.org/2019/08/much-ado-about-north-korea-sanctions-nknews-podcast-ep-92/

PIRATES KIDNAP CREW MEMBERS FROM 2 SHIPS OFF CAMEROON

The Wall Street Journal on 19th August reported that armed attackers have kidnapped 17 crew members from German and Greek vessels in piracy-troubled waters off the coast of Cameroon in 2 incidents and are seeking “huge sums” for their release.  The pirates boarded the ships, forced the crew members on speed boats and fled, in both incidents, so it is said that “the villains are probably the same”.  The South Atlantic Ocean region off the West African coast has become a notorious region for piracy, illegal fishing, oil theft and drug trafficking, and the International Maritime Bureau has issued a warning to all ships sailing off Cameroon to take extra precautions against attacks as more than 80% of all piracy attacks in the first half of this year have taken place in the sea area off West Africa.

https://www.wsj.com/articles/pirates-kidnap-crew-members-from-two-ships-off-cameroon-11566228121

GERMAN POLICE SHUT DOWN WEBSITE SELLING EXPLOSIVES AND TIPS ON SYNTHETIC DRUGS

Reuters on 20th August reported that about a thousand police officers launched raids in Germany, Lithuania and Croatia as part of a cybercrime investigation into a website (www.xplosives.net) that provided details on how to produce explosives and synthetic drugs.  Police in Germany searched 34 buildings, questioned 22 suspects and seized 127 kg of chemicals used for making explosives, as well as fuses and detonators, weapons, ammunition and chemicals for making synthetic drugs.

https://uk.reuters.com/article/uk-germany-cyber/german-police-shut-down-website-selling-explosives-idUKKCN1VA1M4

NORTH MACEDONIA’S PROSECUTOR QUESTIONED OVER EXTORTION SCHEME

On 20th August, Reuters reported that North Macedonia’s special prosecutor in charge of investigating organised crime cases has been questioned as part of an investigation into an extortion case.  She offered her resignation last month after local papers reported her alleged involvement in a scheme to take money from a businessman charged by her office over corruption allegations.

https://uk.reuters.com/article/uk-north-macedonia-investigation/north-macedonias-prosecutor-questioned-over-extortion-scheme-idUKKCN1VA1LA

FORMER KANSAS BANK EXECUTIVE FOUND GUILTY IN $15 MILLION CONSTRUCTION LOAN FRAUD SCHEME

A DoJ news release on 20th August advised that a former Kansas bank executive, Troy A Gregory, 52, was found guilty by a federal jury yesterday for his participation in a bank fraud scheme to obtain a $15 million construction loan for certain bank customers based upon false and fraudulent representations.   The loan was shared among 26 Kansas banks. https://www.justice.gov/opa/pr/former-bank-executive-found-guilty-15-million-construction-loan-fraud-scheme

ZIMBABWE FORMER VICE PRESIDENT TO FACE CORRUPTION CHARGES AND “ON THE RUN”

Bloomberg on 20th August reported that Zimbabwe’s former vice president, Phelekezela Mphoko, is now a “fugitive of justice,” the state-controlled newspaper Chronicle reported, citing a Zimbabwe Anti-Corruption Commission spokesman.  He ost his job when former President Robert Mugabe was ousted in November 2017.

https://www.bnnbloomberg.ca/zimbabwe-former-vice-president-to-face-corruption-charges-1.1304070

SEAFOOD DNA TESTING IN THE US – WHAT WAS FOUND – ILLEGAL FISHING AND MISREPRESENTATION

On 20th August, an article from the World Economic Forum reported that a US non-profit organisation sampled 449 fish purchased from shops and restaurants in 24 US states and the District of Columbia. DNA testing was used to establish the true identity of the samples.  One-third of all shops and restaurants checked sold mislabelled seafood. Fish was most often misdescribed on restaurant menus (26%) and at smaller markets (24%). An eighth (12%) of samples from supermarkets was found to be mislabelled.  The most commonly mislabelled species were sea bass (55%) and snapper (42%).  It also found imported seafood was sometimes marketed as locally-caught, while vulnerable species like the Atlantic halibut were falsely advertised as a more sustainable catch.  The non-profit says such fish fraud that s a worldwide problem, covering up illegal fishing and misleading customers trying to buy sustainable seafood.  A report from the Forum earlier this year reported that illegal fishing accounted for a third of the fish taken from the oceans at an annual cost to the global economy of up to $23.5 billion.

https://www.weforum.org/agenda/2019/08/a-seafood-fraud-investigation-dna-tested-fish-sold-in-the-us-here-s-what-they-found/

The World Economic Forum white paper is at –

http://www3.weforum.org/docs/WEF_Ending_Illegal_Fishing_Report_2019.pdf

IUU

NORWAY: COURTS UPHOLDS GOVERNMENT’S PAYMENT BLOCKING PLAN FOR ONLINE GAMBLING

On 20th August, Calvin Ayre reported that a court in Norway upheld a proposal to compel financial institutions to block payments to and from internationally licensed online gambling operators who compete with the Norsk Tipping and Norsk Rikstoto state-owned gambling monopolies.  However, the article notes that the Court has yet to rule on a separate aspect of the case, which is whether the payment-blocking is consistent with the rules regarding the freedom of movement of services within the EEA.

https://calvinayre.com/2019/08/20/business/norway-court-upholds-online-gambling-payment-blocking/

ISRAEL: MINISTER IN NETANYAHU’S GOVERNMENT FACES CORRUPTION CHARGES

OCCRP reported on 20th August that Attorney General Avichai Mendelblit has announced that he intends to charge Haim Katz Minister of Labor, Social Affairs and Social Services, with fraud and corruption, accusing him of benefiting from government contracts granted to a businessman.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/10525-minister-in-netanyahu-s-government-faces-corruption-charges

SON OF AZERI LAWMAKER ARRESTED FOR ATTACKING TAX OFFICIALS WHO CAME TO SEE WHY HIS RECREATIONAL CENTRE HAD SUDDENLY DRASTICALLY REDUCED ITS TAX

OCCRP on 20th August reported that authorities detained the son of a lawmaker and 5 of his relatives for getting into a fight with tax inspectors who came to see why the recreational centre the son was running in the south of Azerbaijan has suddenly drastically reduced its tax contributions.  Mirhamid Narimanli and his relatives prevented the inspectors from entering, attacked them and threw stones at their cars.  The recreational centre called Relax consists of a hotel and dozens of villas with 142 rooms and offers visitors a giant aquapark with artificial waterfalls, shows at an open-air amphitheatre, horseback riding, paintball and other amenities and activities.  It is managed by Narimanli, the son of Azerbaijan’s lawmaker Igbal Mammadov.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/10522-son-of-azeri-lawmaker-arrested-for-attacking-tax-officials

EGYPT TO SIGN MUTUAL ASSISTANCE CUSTOMS AGREEMENT WITH EU, US AND BELARUS

On 19th August, Egypt Today reported that the Ministry of Finance has announced signing a number of agreements related to mutual assistance in customs matters with countries including the US, Belarus, and EU.  It adds that an Egyptian-European dialogue aims to reduce the time of release and the cost of import, which includes the adoption of commercial invoices for goods from the Chamber of Commerce in the country of export, and to verify all the information and data provided, especially in light of the goods received from the Egyptian – European Partnership.

https://www.egypttoday.com/Article/3/73992/Egypt-to-sign-customs-agreements-with-US-European-Union-Belarus

US BILL WOULD ALLOW FOR INDICTMENT OF FOREIGN OFFICIALS FOR BRIBERY UNDER FCPA

On 20th August, Baker McKenzie reported on a Bill introduced into Congress, saying that the Foreign Corrupt Practices Act currently cannot be used against a foreign official who demands or takes a bribe for helping a company win a contract or retain business.  The Act’s prohibition on paying bribes abroad is limited to companies in the US and those acting in that country.  It has always excluded the foreign official who takes the bribe, and courts over the years have reaffirmed that.

http://www.riskandcompliancehub.com/a-push-to-let-the-u-s-charge-foreign-officials-with-bribery/

CLAIM THAT A QUARTER OF ALL CD ‘FULFILLED BY AMAZON’ IN US ARE COUNTERFEIT

Illicit Trade on 19th August reported a claim by the Recording Industry Association of America (RIAA) that 25% of all CDs “fulfilled by Amazon” in the US are counterfeit.  This followed a recent sample purchase programme conducted by the RIAA, which represents major labels, which revealed that 11% of new CDs offered for sale on Amazon were fake, and 16% of new CD sold on eBay were bogus.  Included were “best of” or “greatest hits” CD or vinyl that purport to be from major record label artists on these platforms, even when the labels in question had never released such albums.

https://www.illicit-trade.com/2019/08/a-quarter-of-all-cds-fulfilled-by-amazon-in-the-us-are-counterfeit-riaa-warns/

WHY DRUG TRAFFICKING CARTELS FAVOUR SMUGGLING THEIR ILLICIT CARGO IN CONSIGNMENTS OF FRUIT

On 20th August, Illicit Trade says that alongside the need for constant innovation, South American drug cartels have a small number of tried and tested smuggling methods they have stuck with through thick and thin over recent years; and perhaps one of the most popular of these is smuggling drugs concealed inside shipments of perishable goods such as fruit and vegetables, which recent seizures suggest remains a favourite among South American drug gangs.  One of the main reasons drug traffickers favour concealing their illicit cargo inside shipments of perishable goods is because items such as fruit and vegetables are often fast-tracked through customs checks on account of their short shelf life.  South America is also a major producer of several exotic fruits that are exported in large quantities to the markets the cartels want to reach.

https://www.illicit-trade.com/2019/08/why-drug-trafficking-cartels-favour-smuggling-their-illicit-cargo-in-consignments-of-fruit/

FILLING THE GAPS IN THE DETECTION OF HOMEMADE EXPLOSIVE (HME) DEVICES

An interesting article on Homeland Security Today on 20th August says that the terrorism threat has largely changed to smaller, domestic, less-sophisticated groups and lone wolves making bombs in their garages.  In the past, policy and technology in the US were developed and targeted toward events like the World Trade Center bombing in 1993, when an al-Qaeda-backed group set off a 1,300 lb bomb made of sophisticated and powerful nitrate-based explosives.  However, 20 years later, 2 self-radicalised brothers, not connected to a major terrorist group, set off homemade bombs at the finish line of the Boston Marathon.  The potential for death and injury was significantly less than a WTC attack, but the effect on Americans’ sense of safety was the same.  Devices and systems have high success rates when detecting commercial and industrial explosive material, like C4 plastic explosive and dynamite and thanks in part to regulation, commercial and industrial explosive materials are not easy to procure.  So terrorists and criminal have switched to commercially available Explosive Precursor Chemicals (EPC) and household items, to develop less sophisticated, but equally threatening Home Made Explosives (HME) for use in Improvised Explosive Devices (IED).  Hence, lone wolves and smaller, less-organized groups are able to use materials like fertiliser, paint remover, car batteries, and airbag initiators to create pipe bombs, pressure cooker bombs, and suicide vests that can be easily concealed under clothing or in an everyday item like a backpack.  It is far more likely that HME would be used in an attack than commercial or military explosives.  However, a recent survey found that many US government officials were unaware that their existing technology was incapable of identifying certain elements of an HME.  The article says that companies are beginning to emerge on the market with innovative solutions, such as an ability to detect inorganic explosive materials such as chlorates, perchlorates, nitrates – elements found in household items like fertiliser.  The article concludes that it is imperative that attention stays focused on HME detection and protection and ensure security professionals have the tools to defeat this threat.

https://www.hstoday.us/subject-matter-areas/terrorism-study/filling-the-gaps-in-the-detection-of-homemade-explosive-devices/

OFAC DESIGNATES DOMINICAN NATIONAL CESAR EMILIO PERALTA AND DOMINICAN REPUBLIC-BASED PERALTA DRUG TRAFFICKING ORGANISATION

On 20th August, a news release from US Treasury announced that OFAC had identified Dominican national Cesar Emilio Peralta and the Peralta Drug Trafficking Organisation as significant foreign narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act.   OFAC designated 8 additional Dominican nationals for providing material support to, or acting for or on behalf of, Cesar Emilio Peralta and the Peralta DTO.   OFAC also designated 6 entities in Santo Domingo, Dominican Republic, including a number of nightclubs owned or controlled by Cesar Emilio Peralta.

https://home.treasury.gov/news/press-releases/sm755

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190820.aspx

ofac

WARRANT TO SEIZE MONEY LINKED TO GRACE 1 REVEALS THE INVESTIGATIVE WORK BY US SPECIAL AGENTS BASED IN COLORADO

A news release from US Immigration and Customs Enforcement on 19th August advised that a warrant to seize the oil tanker Grace 1, the petroleum aboard it, and $995,000, reveals the investigative work by special agents based in Colorado.  The investigation revealed an alleged plan to unlawfully access the US financial system to support illicit shipments from Iran to Syria by the Islamic Revolutionary Guard Corps (IRGC), a designated foreign terrorist organisation in the US.  A network of front companies allegedly laundered millions of dollars in support of such shipments.

https://www.ice.gov/news/releases/colorado-agents-behind-iranian-oil-tanker-grace-1-investigation

 

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OFAC DESIGNATES DOMINICAN NATIONAL CESAR EMILIO PERALTA AND DOMINICAN REPUBLIC-BASED PERALTA DRUG TRAFFICKING ORGANISATION

On 20th August, a news release from US Treasury announced that OFAC had identified Dominican national Cesar Emilio Peralta and the Peralta Drug Trafficking Organisation as significant foreign narcotics traffickers pursuant to the Foreign Narcotics Kingpin Designation Act.   OFAC designated 8 additional Dominican nationals for providing material support to, or acting for or on behalf of, Cesar Emilio Peralta and the Peralta DTO.   OFAC also designated 6 entities in Santo Domingo, Dominican Republic, including a number of nightclubs owned or controlled by Cesar Emilio Peralta.

https://home.treasury.gov/news/press-releases/sm755

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190820.aspx

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CLAIM THAT A QUARTER OF ALL CD ‘FULFILLED BY AMAZON’ IN US ARE COUNTERFEIT

Illicit Trade on 19th August reported a claim by the Recording Industry Association of America (RIAA) that 25% of all CDs “fulfilled by Amazon” in the US are counterfeit.  This followed a recent sample purchase programme conducted by the RIAA, which represents major labels, which revealed that 11% of new CDs offered for sale on Amazon were fake, and 16% of new CD sold on eBay were bogus.  Included were “best of” or “greatest hits” CD or vinyl that purport to be from major record label artists on these platforms, even when the labels in question had never released such albums.

https://www.illicit-trade.com/2019/08/a-quarter-of-all-cds-fulfilled-by-amazon-in-the-us-are-counterfeit-riaa-warns/

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ISRAEL: MINISTER IN NETANYAHU’S GOVERNMENT FACES CORRUPTION CHARGES

OCCRP reported on 20th August that Attorney General Avichai Mendelblit has announced that he intends to charge Haim Katz Minister of Labor, Social Affairs and Social Services, with fraud and corruption, accusing him of benefiting from government contracts granted to a businessman.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/10525-minister-in-netanyahu-s-government-faces-corruption-charges

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CHINA’S BELT AND ROAD CARGO TO EUROPE UNDER SCRUTINY AS OPERATOR ADMITS TO MOVING EMPTY CONTAINERS

The South China Morning Post on 20th August reported that widespread waste and fraud associated with China’s Belt and Road Initiative has been unearthed after the country’s state railway group was forced to admit this month that a significant amount of cargo containers shuttling between Chinese factories and European cities were empty.  In one extreme case only 1 of 41 containers on a particular train actually carried goods.  It says that China Railway admitted the existence of the problem in an interview with the state-run Global Times, but insisted that it had largely been eradicated in 2018 after new rules were introduced limiting the number of empty containers allowed to just 10% per train.  Cities and provinces were looking to benefit from subsidies offered by both the local and national government, but these have been reduced or dropped altogether.  This system of generous state subsidies for the cargo traffic routes, as well as praise from Chinese state media, combined to encourage the exaggeration and fraud.  Last year, rail only carried 1.3% of trade between China and the EU by volume and 2.6% by value despite being usually cheaper than air and faster than sea transport, according to European Commission.

https://www.scmp.com/print/economy/china-economy/article/3023574/chinas-belt-and-road-cargo-europe-under-scrutiny-operator

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INDIA: WHAT IS THE AGUSTAWESTLAND SCAM CASE ALL ABOUT?

On 20th August, Business Today in India published an infographic which sets out to explain the alleged corruption case which dates back to 2010 and a deal to buy 12 very-VIP helicopters from the Anglo-Italian company for €552 million.

https://www.businesstoday.in/current/economy-politics/agustawestland-scam-air-force-politician-ratul-puri/story/373925.html

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WHAT SUPPLY CHAIN TRANSPARENCY REALLY MEANS

An article in the Havard Business Review on 20th August said that the concept of supply chain transparency was virtually unknown 15 years ago, yet today it commands the attention of mid- and senior-level managers across a broad spectrum of companies and industries.  Companies are under pressure from governments, consumers, NGO, and other stakeholders to divulge more information about their supply chains, and the reputational cost of failing to meet these demands can be high.  The article sets out to offer some clarity on the meaning of supply chain transparency and guidelines to map and extend progress.  To start with it explains that supply chain transparency requires companies to know what is happening upstream in the supply chain and to communicate this knowledge both internally and externally, and that a raft of new laws exist pertaining to transparency.  It also explains that transparency can be measured along 2 dimensions: supply chain scope (the depth of interaction in the supply chain) and milestones on the path to complete transparency.

https://hbr.org/2019/08/what-supply-chain-transparency-really-means

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FRANCE AND PANAMA TO LAUNCH BILATERAL BODY TO FIGHT TAX EVASION

Rfi reported on 20th August that France and Panama have signed a bilateral agreement to create a group designed to curb tax fraud.  The agreement includes creating a special group that will meet twice a year to improve the exchange of fiscal information.  While France and Panama already implement double taxation agreements, Paris is not satisfied with the information exchange.  Panama is considered a tax haven by France, and is included on its list of tax-dodging countries.

http://en.rfi.fr/france/20190820-tax-evasion-bilateral-group-created-france-and-panama-minister

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FATF: CONSOLIDATED SCHEDULE OF AML/CFT ASSESSMENT RATINGS

On 20th August, following the publication of follow-up reports on Myanmar, Fiji, Cambodia and Bangladesh, FATF published an updated consolidated schedule of AML/CFT assessment ratings.

http://www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf

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FATF: ASSESSMENT FOLLOW-UP REPORTS ON MYANMAR, FIJI, CAMBODIA AND BANGLADESH

On 20th August, FATF published follow-up reports for 4 countries which have been subject to mutual evaluation reports on their AML/CFT systems –

Note that the reports deal with technical compliance and NOT effectiveness ratings.

Myanmar – 1st follow-up report from the Asia/Pacific Group on Money Laundering (APG) on Myanmar, which was placed in enhanced follow-up following its MER of October 2018.  Myanmar requested re-ratings of Recommendations: 7, 14, 19 and 24 (which were rated NC); and 1, 10, 13, 26, 36 and 37 (which were rated PC).   APG has welcomed the steps that Myanmar has taken to improve its technical compliance with 1, 7, 10, 13, 14, 19, 24, 26, 36 and 37; and, as a result of this progress, Myanmar has been re-rated on Recommendations 1 and 19.  However, insufficient progress has been made to justify a re-rating of 7, 10, 13, 14, 24, 26, 36 and 37.  Myanmar will remain on enhanced (expedited) follow-up, and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures.

myanmar

Fiji – 3rd follow-up report from the Asia/Pacific Group on Money Laundering (APG) on Fiji, which had its MER published in September 2016.  Fiji requested re-rating of Recommendation 33, which was rated PC in the MER.   The APG has welcomed the steps that Fiji has taken to improve its technical compliance with R.33 and, as a result of this progress, Fiji has been re-rated to “Compliant” with R.33.  Fiji will remain on enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures.

fiji1

fiji 2

Cambodia – 2nd (enhanced and expedited) follow-up report from the Asia/Pacific Group on Money Laundering (APG) on Cambodia followed the MER of July 2017 and given the results of the MER, Cambodia was placed in enhanced (expedited) follow-up.  Cambodia requested re-ratings of 14 Recommendations: Recommendation 7 (which was rated NC); Recommendations 1, 2, 8, 16, 19, 22, 26, 28, 33, 34 and 37 (which were rated PC); and Recommendations 6 and 30 (which were rated LC).   The review team concluded that progress to LC had been made on 2 of the 12 Recommendations rated NC or PC (Recommendations 19 and 34), but that insufficient progress had been made to justify re-ratings on the other Recommendations.  Cambodia will remain on enhanced (expedited) follow-up, and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures.

cambodia

Bangladesh – 3rd follow-up report from the Asia/Pacific Group on Money Laundering (APG) on Bangladesh followed the MER of September 2016, following which Bangladesh was placed on enhanced follow-up.  Bangladesh requested re-ratings in 2018 for 5 Recommendations (Recommendations: 16, 18, 19, 26 and 34).  However, the July 2018 APG Annual meeting concluded that insufficient progress was made to justify a re-rating of these Recommendations.  This year Bangladesh requested re-ratings of the following Recommendations: 9, 16, 18, 26 and 34 (which were rated PC).  APG has welcomed the steps that Bangladesh has taken to improve its technical compliance with 9, 16, 18, 26 and 34 and as a result of this progress Bangladesh has been re-rated on all of these Recommendations.  Bangladesh will remain on enhanced follow-up, and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures.

bangladesh

http://www.fatf-gafi.org/media/fatf/documents/reports/fur/APG-Follow-Up-Report-Myanmar-2019.pdf

http://www.fatf-gafi.org/media/fatf/content/images/APG-Follow-Up-Report-Fiji-2019.pdf

http://www.fatf-gafi.org/media/fatf/documents/reports/fur/APG-Follow-Up-Report-Cambodia-2019.pdf

http://www.fatf-gafi.org/media/fatf/content/images/APG-Follow-Up-Report-Bangladesh-2019.pdf

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EU ADDS 2 NAMES TO ISIL/AL-QAIDA SANCTIONS LIST

EU Regulation 2019/1353/EU of 20th August formally added ALI MAYCHOU and BAH AG MOUSSA to its ISIL/Al-Qaida sanctions list, following the decision of the relevant UN sanctions committee on 14th August.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.217.01.0001.01.ENG&toc=OJ:L:2019:217:TOC

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FATF BUSINESS BULLETIN – COMMENT ON GREECE AND HONG KONG EVALUATIONS AND ICELAND FOLLOW-UP REPORT

On 19th August, FATF released its latest Business Bulletin.  In it it says that –

Greece – the June Plenary concluded that Greece has a sound legal framework to support effective action against money laundering and terrorist financing, but that the country needs to improve its prosecution of these crimes, the supervision of its designated non-financial professions and businesses and NPO sector, and the confiscation of proceeds of crime.

Hong Kong – the June Plenary discussed the joint APG-FATF assessment of Hong Kong and concluded that the jurisdiction has a strong legal foundation to underpin its AML/CFT regime.  It understands its risks, has effective measures in place to combat terrorist financing and to confiscate the proceeds of crime, and actively cooperates with international partners.  However, it needs to prioritise efforts to prosecute ML linked to foreign predicates, increase risk understanding and AML/CFT implementation by smaller institutions, and strengthen supervisory measures for some sectors.

The evaluation reports on Greece and Hong Kong are due in September.

Iceland – the June Plenary discussed the progress that Iceland has made since its mutual evaluation report was adopted last year.  It agreed to re-rate Iceland on a number of FATF Recommendations to reflect the country’s current level of technical compliance.  After a quality and consistency review, FATF will publish the follow-up report which sets out the actions that Iceland has taken to strengthen the effectiveness of its measures to combat money laundering and the financing of terrorism and proliferation.

http://www.fatf-gafi.org/media/fatf/documents/bulletin/FATF-Business-Bulletin-July-2019.pdf

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ISO 37002 – BEST PRACTICES IN WHISTLEBLOWING MANAGEMENT SYSTEMS

On 14th August, WhistleB published an article saying that, since 2018, an international group of experts has been working together to develop ISO 37002, a new global standard with best practices for developing and implementing an effective and responsive whistleblowing management system.  The article sets out to answer some of the questions most commonly asked in relation to ISO 37002 – without getting into the details of the standard itself.

https://whistleb.com/blog-news/iso-37002-best-practices-in-whistleblowing-management-systems/

See also the firm’s blog post from February providing more detail on ISO 37002 –

https://whistleb.com/blog-news/iso-37002-whistleblowing-management-systems-the-new-global-standard-on-organisational-whistleblowing/

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

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SYNTHETIC DRUGS WILL CHANGE THE GLOBAL DRUG TRADE FOREVER

An excellent article on the Vice website on 20th August says that a new era of toxic, man-made highs could “dissolve” national boundaries and transform the global drug trade.  It says that much of the fight against illegal drugs involves the idea of keeping drugs “out” of a country, entirely built around how drugs have traditionally been produced and sold, with much of the global drug economy is truly global – needing opium from Afghanistan, cocaine from South America etc.  Most drugs seized by national authorities are interdicted at the border, not by police on the streets.  However, the article warns, the whole concept that underpins the global drug trade — authorities tighten the border, traffickers find new ways around it — is being challenged by a new way of doing things.  Drug policy experts and law enforcement have all recorded a boom time for synthetic drugs, which are made entirely in labs that often mimic the effects of plant-based drugs, but which are being mass-produced in chemical factories, marketed online, and often smuggled undercover via the global postal system.  Manufactured anywhere, from DIY bathroom labs to huge chemical factories, synthetic drugs are cheaper and easier to make than cocaine and heroin because there is no reliance on the cultivation of plants.  It provides examples from many parts of the world, then looks at the biggest source – China – and the impact in the US, particularly the synthetic opioid Fentanyl.  One thing the article highlights is that banning synthetic drugs means banning specific chemical formulas, which has produced a toxic game of “whack-a-mole” where a drug’s chemistry has been tweaked to sidestep the law, making the resulting product increasingly toxic and unpredictable.  The article concludes that if current trends continue, the production, sale, and consumption of synthetic drugs could eclipse that of plant-based drugs.  Borders would become even less relevant to traffickers and their profits while compromising law enforcement’s ability to monitor or regulate drug supply via seizures at borders.

https://www.vice.com/en_in/article/gyzx57/synthetic-drugs-could-change-the-global-drug-trade-forever-v26n3

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y