raytodd.blog

23^rd May 2018

 ZTE ESTIMATES AT LEAST $3 BILLION IN LOSSES FROM US BAN

Bloomberg on 23^rd May reported that Chinese telecom company ZTE s estimating losses of at least $3.1 billion from a US technology ban that’s halted major operations as clients pull out of deals and expenses mount, people familiar with the matter said.  However, it is said to be hopeful of striking a deal soon and already has a plan in place to swing idled factories into action within hours once Washington agrees to lift its 7-year moratorium on purchases of American chips and components.

https://www.bloomberg.com/news/articles/2018-05-23/zte-is-said-to-face-at-least-3-billion-in-losses-from-u-s-ban

FINANCE DIRECTOR CONVICTED OF MONEY LAUNDERING IN NEW ZEALAND

On 10^th May, the New Zealand Herald reported that a banned director of a finance firm has also been convicted on money laundering charges, just weeks after losing a legal battle challenging a $5.3 million fine for his “calculated and contemptuous disregard” for anti-money-laundering laws.  Xiaolan Xiao, 60, the Ping An Finance director and sole shareholder, has pleaded guilty to and been convicted of a money-laundering charge.

https://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=12048926

GRENADA – IMF STATEMENT FOLLOWING INSPECTION

On 22^nd May, following an Article IV Mission inspection of Grenada, the IMF and the government issued an agreed joint statement that included the comment that “ensuring compliance with AML/CFT regulations at all levels is critical for Grenada’s continued stable access to cross-border payments.  While banks in Grenada have not had a meaningful loss of correspondent banking relationships (CBRs), there are risks that non-bank financial institutions may lose access to bank payments systems due to AML/CFT concerns. A proposed legislation to formalize the annual registration of entities for AML/CFT purposes will be helpful in capturing risks early”.

http://www.imf.org/en/News/Articles/2018/05/22/ms052218-grenada-staff-concluding-statement-of-the-2018-article-iv-mission

US ATTORNEY WHO RELOCATED TO COSTA RICA INDICTED ON FEDERAL FRAUD AND MONEY LAUNDERING CHARGES

The Costra Rica Star on 21^st May reported that Philip James Layfield, 44, a personal injury attorney and certificated public accountant (CPA), has been indicted on federal charges accused of stealing the majority of a multi-million dollar settlement, most of which should have been paid to the victim of a car accident.  He was arrested in New Jersey in late April, when he returned to the US from Costa Rica, where he relocated when his law firm Layfield & Barrett located in Los Angeles faced declining revenues and he chose to close it.  The article reports that the indictment specifically alleges that Layfield entered into an agreement to represent an individual who was struck by an automobile in Orange County in 2016 and suffered significant injuries. After negotiating a $3.9 million settlement related to the accident, Layfield allegedly misappropriated most of money due to the victim – approximately $2 million.

https://news.co.cr/u-s-attorney-philip-james-who-relocated-to-costa-rica-after-committing-fraud-was-indicted-on-federal-fraud-and-money-laundering-charges/73200/

FORMER SPANISH MINISTER ARRESTED FOR ALLEGED MONEY LAUNDERING

On 23^rd May, the Latin American Herald Tribune reported that a former Spanish minister who had served as president of the Valencia region, as well as the ruling Popular Party’s spokesperson in the lower house of parliament, has been arrested for suspected money laundering, embezzlement and diversion of funds.  It is sais that Eduardo Zaplana’s arrest was part of an ongoing probe launched by the anti-corruption prosecutor’s office in which at least 5 others have also been detained.  The reports says that also arrested was businessman Vicente Cotino, whose uncle Juan Cotino was a former Valencia regional president and ex-director of the national police.

http://www.laht.com/article.asp?ArticleId=2457171&CategoryId=12395

PARAGUAY SUSPENDS ARMS IMPORTS IN BID TO STOP ILLEGAL TRAFFICKING TO BRAZIL

On 23^rd May, the Macau News Agency carried a Reuters report saying that Paraguay has issued an open-ended suspension of arms and ammunition imports in a bid to fight illegal trafficking across the border into neighbouring Brazil.  The move followed pressure from the US, which imposed a 3-month moratorium on arms sales to Paraguay as part of a concerted effort with the Brazilian government to clamp down on arms smuggling, according to a person familiar with the matter.  Studies by police in Brazil suggest many of the heavy rifles used by criminal gangs there were made in the US and smuggled into the country via Paraguay.

http://www.macaubusiness.com/paraguay-suspends-arms-imports-in-bid-to-stop-illegal-trafficking/

HOW FENTANYL COULD ALTER GLOBAL DRUG POLICY

On 22^nd May, the Washington Post published a compelling article which begins by saying that policymakers and the public are acutely aware that the powerful opioid fentanyl has significantly worsened the opioid epidemic in the US and accounting for almost 20,000 deaths in 2016.  But few people appreciate fentanyl’s potential to permanently alter illegal drug markets and international relations along with them.  Whereas heroin, morphine, oxycodone, hydrocodone and virtually every other opioid traded on the black market depend on a plant – the opium poppy – for their raw material, fentanyl is an opioid analogue that can be created from chemicals in a laboratory.  A small gang with a single talented chemist can thus economically undercut poppy-based opioid production.  Hence, even if agriculturally based producers (such as found in Afghanistan and South America) shift some of their opioid business to fentanyl, as have a few Mexican cartels, they find themselves in a weaker position because they no longer gain the political capital they once did from providing plentiful drug-production jobs to local residents.  Smuggling is also said to be affected, as Fentanyl is so much more potent and so compact that people with no particular smuggling expertise can ship it overseas in a regular-size piece of mail with little chance of it being detected. Fentanyl producers can also simply set up small labs within consuming countries and thus avoid the smuggling altogether.  The article concludes by saying that the impact of synthetic opioids has yet to be fully unravelled, but it clearly will go beyond public health to the basic nature of drug trafficking itself.

https://www.washingtonpost.com/news/wonk/wp/2018/05/22/how-synthetic-opioids-could-alter-global-drug-policy/?utm_term=.b0842f0d4ae3

TRAMADOL BECOMES NEW DOPE FOR HUNDREDS OF LIBERIAN YOUTH

On 22^nd May, Front Page Africa reported that substance abusers in Liberia are now switching from cocaine, Italian white, Marijuana and other narcotics to overdose of a medical prescription, Tramadol, posing a serious social problem in the country.  Tramadol is the generic name for a prescription pain reliever sold under the brand names Ultram, Conzip, Rybix ODT, and Ultram ER.  It is widely considered safe and has been approved by the US FDA.

https://frontpageafricaonline.com/news/tramadol-becomes-new-dope-for-hundreds-of-liberian-youth/

CAN NEW LEADERS REVIVE WEST AFRICA’S FIGHT AGAINST ORGANISED CRIME?

On 22^nd May, the Daily Maverick republished an ENACT Africa article which says that West Africa is often portrayed as a continental hotbed for organised crime and that criminal groups fuel insecurity and violence, thriving in countries where governance systems are weak.  West Africa is known for various forms of illicit trafficking – from drugs, weapons and humans to stolen cars, cigarettes, counterfeit medicines, cultural artefacts and wildlife products. Natural resources like gold, diamonds and oil are smuggled or illegally traded, as are cash crops like cocoa and cashew nuts, and various consumer goods. Other transnational organised crimes are also rife and rising, including money laundering, cattle rustling, cybercrime and illegal activities at sea.  However, the article says that the Economic Community of West African States (Ecowas) is poised to significantly boost its role as a regional framework for policy development and action on these issues.  Ecowas also has in place several political, legal and operational instruments against specific forms of organised crime: the Protocol on the Fight against Corruption (2001); the Convention on Small Arms and Light Weapons (2006); the Counter-Terrorism Strategy and its Implementation Plan (2013); the Integrated Maritime Security Strategy and its Implementation Plan (2014); and the Drug Action Plan (2016-2020) – but unfortunately, it seems that once adopted, these instruments remain largely ineffective.  However, the article concludes, with new leadership in place Ecowas has an opportunity to invigorate its own structures and support West African countries to confront organised crime.

https://www.dailymaverick.co.za/article/2018-05-22-can-new-leaders-revive-west-africas-fight-against-organised-crime/#.WwT2LfZFx9A

TALIBAN, ISIS MAKE MILLIONS FROM MINING AFGHAN MINERALS INCLUDING TALC

On 22^nd May, the US forces’ newspaper Stars and Stripes reported that rising global demand for cosmetics, marble and stainless steel is helping Taliban and Islamic State militants in Afghanistan fund their increasingly violent insurgencies, according to an investigation by Global Witness.  The militant groups make millions of dollars annually mining talc, chromite and marble in eastern part of the war-torn nation. The international NGO in a report estimates the Taliban earns $2.5 million to $10 million a year from mining talc alone.  It is said that the vast majority of minerals from insurgent-controlled mines in Nangarhar openly goes through government-held territory on the main roads to Pakistan, and it is all but certain that individuals and companies in China, Europe and the US are effectively, if inadvertently, funding insurgent groups.

https://www.stripes.com/news/middle-east/taliban-isis-make-millions-from-mining-afghan-minerals-1.528366

https://www.khaama.com/isis-extracting-talc-worth-millions-of-dollars-from-nangarhar-mines-report-05215/

UPDATE TO AUSTRALIAN EXPORT CONTROLS FOR TANGIBLES

In an article on 9^th May, Baker McKenzie reported that Australia’s export control rules for tangibles have been amended to more closely align with the regime for intangible supplies.  The amendments are intended, so far as possible, to treat transfer of the same controlled subject-matter outside of Australia in a physical form consistently with intangible transfers (such as via email or allowing access by another intangible means).  The changes made are detailed in the article.  Meanwhile, an independent review underway aims to identify if there are any gaps in the Defence Control Act’s controls or any unintended consequences arising from the current operation of the Act.

https://www.bakermckenzie.com/en/insight/publications/2018/05/update-to-australian-export-controls

CYPRUS TO CAP ITS ‘GOLDEN VISA’ PROGRAMME

EurActiv on 23^rd May reported that, stung by criticism it has been selling European Union passports for cash, Cyprus has tightened vetting procedures in a scheme that grants Cypriot citizenship to investors, the finance minister has said.  More stringent controls on the programme and a cap at 700 on the number of passports are involved.  To be eligible for a Cypriot passport, foreigners must make at least a €2 million investment in either property, business or government bonds and base their permanent residence in Cyprus.  Estimates say the scheme has generated around €4.8 billion — up until 2016.

https://www.euractiv.com/section/justice-home-affairs/news/cyprus-to-cap-its-golden-visa-program/

AUSTRALIAN LAWMAKER CLAIMS BILLIONAIRE CONSPIRED IN UN BRIBERY SCANDAL

Deutsche Welle on 23^rd May reported that a Chinese-Australian billionaire has been accused of involvement in a UN bribery scandal and his ties China’s Communist Party have also been called into question.  Andrew Hastie, who chairs the country’s parliamentary intelligence and security committee, told parliament that Chau Chak Wing was the real estate developer codenamed CC-3 by the US FBI in an unsealed indictment. CC-3 is short for the third co-conspirator.  Chau allegedly arranged to pay €170,000 in 2013 to the-then UN General Assembly President John Ashe to attend a conference in China, plus $25,000 to cover travel expenses of those accompanying Ashe.  Hastie said US officials confirmed to him that the 63-year-old billionaire was CC-3 during his visit to the US last month.

http://www.dw.com/en/australian-lawmaker-claims-billionaire-conspired-in-un-bribery-scandal/a-43889442?src=ilaw

CRYPTOCURRENCIES: POTENTIAL FOR TERROR FINANCING?

A briefing from ETH Zurich Center for Security Studies begins by saying that given their transaction anonymity and user-friendliness, cryptocurrencies appeal to extremist groups as they offer a viable alternative to the mainstream financial system and fiat money which are perceived as ‘kafir’ (infidel) currencies.  The threat of cyber-driven terrorist financing is expected to grow.  The article concludes that authorities need to harness the potential of cryptocurrencies and understand its mechanism to facilitate earlier detection of terror financing.  Failure to do so would allow the unconstrained development of a potentially major financial apparatus waiting to be fully exploited by cyber-driven terrorism.

https://isnblog.ethz.ch/technology/cryptocurrencies-potential-for-terror-financing?src=ilaw

THE IMPACT OF THE EU-CANADA COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT (CETA) ON THE UK

On 23^rd May, the Department for International Trade published a research study used to inform the impact assessment for the UK ratification of CETA.  It shows the potential consequences of this agreement for the UK economy.

https://www.gov.uk/government/publications/the-impact-of-the-eu-canada-comprehensive-economic-and-trade-agreement-on-the-uk

see also an impact assemment –

https://www.gov.uk/government/publications/impact-assessment-of-the-comprehensive-economic-and-trade-agreement-ceta-between-the-european-union-and-canada

CROOKED BUSINESSMEN CAUGHT WITH £5 MILLION WORTH OF FAKE DRUGS INCLUDING VIAGRA AND STEROIDS ARE JAILED

On 23^rd May, the Leicester Mercury reported that 2 businessmen who were caught with more than £5m worth of counterfeit drugs including Viagra and steroids have been jailed.  Asif Patel, 42, and Naushad Gaffar, 53, specialised in importing medicines for erectile dysfunction and premature ejaculation from the Indian subcontinent.  They were arrested in April 2015 following a 9-month investigation by the MHRA.  In one of the largest ever seizures of its kind, officials confiscated more than 1.6 million doses of illicit medicines and 46,000 doses of Class C drugs from storage units in south London.

https://www.leicestermercury.co.uk/news/leicester-news/crooked-businessmen-caught-5m-worth-1596146

UK: INTRODUCTION OF IVORY BILL BOOSTS FIGHT AGAINST ELEPHANT POACHING

On 23^rd May, a news release from DEFRA reported that one of the toughest bans on ivory sales in the world is a step closer to coming into force in the UK as the Government introduced the Ivory Bill into Parliament.  The Bill covers ivory items of all ages, not only those produced after a certain date, subject to some narrow, carefully-defined exemptions. The maximum penalty for breaching the ban will be an unlimited fine or up to 5 years in jail.  The Bill provides for narrowly-defined and carefully-targeted exemptions for items which do not contribute directly or indirectly to the poaching of elephants.

https://www.gov.uk/government/news/introduction-of-ivory-bill-boosts-fight-against-elephant-poaching

£22 MILLION OF COCAINE AND FIREARM SEIZED BY JOINT NCA AND METROPOLITAN POLICE UNIT

A news release from the NCA on 23^rd May advised that a man and a woman have been charged respectively with firearms and drugs offences as investigations by a joint NCA and Metropolitan Police unit targeted organised crime and associated violence from UK ports to London streets.  The investigations are part of sustained efforts to tackle the range of threats posed by the Class A drugs trade, particularly undermining of UK border controls, and the use of violence and weapons by those controlling distribution within the UK.  The seizure of 259kg of Class A drugs smuggled into the UK from Mexico, which were hidden inside a specially-constructed, industrial fruit processing machine, was one result of the investigations.

http://www.nationalcrimeagency.gov.uk/news/1356-22-million-of-cocaine-and-firearm-seized-by-joint-nca-and-metropolitan-police-unit

PORTUGUESE POLICE SEIZE BOAT WITH 1,800 KG OF HASHISH

Xinhua on 23^rd May reported that a boat containing 1,800 kg of hashish has been seized off Portugal’s southern coast.  The police intercepted a motorboat containing 60 bundles of the drug in an estuary outside Tavira, a town 300 km south of Lisbon, near the Spanish border.  The bundles were being transferred onto a speedboat, having been brought in on the larger boat from Morocco.  3 men were arrested.

http://www.xinhuanet.com/english/2018-05/23/c_137198662.htm

PUTTING NORTH KOREA’S BOMB IN A MUSEUM: A 3D VIRTUAL TOUR

On 1^st May, NTI produced a novel 3D virtual reality tour displays the evolution of its capabilities since the 1990s.  This museum is an immersive 3D environment in which anyone can wander among models of the missiles and nuclear devices, and read about their development, using a computer, smartphone, or VR device (Google Cardboard, Oculus Rift, etc).

http://www.nti.org/analysis/articles/putting-north-koreas-bomb-museum-3d-virtual-tour/

SINGAPORE: AMENDMENTS TO THE CRIMINAL PROCEDURE CODE AND EVIDENCE ACT

Baker McKenzie on 23^rd May reported that the Singapore Parliament has approved a suite of new criminal justice reforms.  Under the previous regime, investigative agencies have the power to access, inspect and search data on computers.  The amendments seek to clarify these powers.  The amendments clarify that when investigators exercise powers of search and seizure or issue orders for production under any written law, their powers are subject to LPP unless the statute provides otherwise.  Changes have also now been made to allow for video recording of statements. This will be implemented in phases.  Deferred prosecution agreements (DPA) were part of another 6 amendments which were added to the original 50 proposed changes after discussions with the Law Society.

https://globalcompliancenews.com/singapore-criminal-procedure-20180523/#

45,000 CIGARETTES SEIZED AT DUBLIN AIRPORT

A news release on 23^rd May reported that Revenue officers at Dublin Airport seized 45,000 cigarettes when, during routine operations, they stopped and searched a passenger who had arrived from Nigeria via Frankfurt.  The passenger, a 35 year old Nigerian man, was arrested.

https://www.revenue.ie/en/corporate/press-office/press-releases/2018/pr-230518-cigarettes-dublin-airport.aspx

DOCUMENTS LINK MAGNITSKY SUSPECT KLYUEV TO FBME BANK ACCOUNTS

On 23^rd May, Business Mail in Cyprus reported that Dmitry Klyuev, the sanctioned Russian bank owner considered by the US as the mastermind of a tax fraud uncovered by Sergei Magnitsky, had indeed banked with FBME Bank, despite what its former owners claimed.  The former owners of FBME Bank Ltd said that Dmitry Klyuev and Andrei Pavlov, both key suspects in the theft of $230 million in taxes uncovered by lawyer Sergei Magnitsky and placed on a sanctions list by the US, were not customers of the bank’s Cyprus branch.

http://cyprusbusinessmail.com/?p=64164

DENMARK IN GLOBAL COURT CAMPAIGN TO RECOUP TAX FRAUD BILLIONS

Reuters reported on 23^rd May that Denmark has launched 50 court cases around the world against foreign pension funds and other investors an effort to recoup up to £1.5 billion it alleges was paid out in fraudulent tax refunds between 2012 and 2015.

https://uk.reuters.com/article/uk-malaysia-politics-mh370/malaysia-says-search-for-flight-mh370-to-end-next-week-idUKKCN1IO0IR?rpc=401&

NEW UK SANCTIONS REPORTING COMPLIANCE FORM

On 23^rd May, the European Sanctions Blog reported that OFSI had introduced a new form to help individuals and organisations to comply with the UK financial sanctions reporting requirements that came into force on 8^th August.   The posting explains that the form enables reporting of frozen assets and information about a suspected designated person an sanctions breaches, as well as giving information about the information OFSI requires in each of those areas.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/709774/COMPLIANCE_REPORTING_FORM.docx

CRIMINAL GROUP POSED AS SUPPLIERS FOR PUBLIC SECTOR ORGANISATIONS AND DUPED PRIVATE BODIES THROUGH FRAUD ONLINE

A news release from Europol on 23^rd May about Operation Valcea-Cruces which began in early 2017 when law enforcement authorities exchanged information on different fraud cases.  The crime ring, operating in different cells across Europe, was led from Romania where 5 individuals were arrested alongside 14 in Spain, resulting in 33 arrests in total during the course of the investigations.  The organisation made more than EUR 8 million and opened almost 700 bank accounts in Spain to transfer the money made from their illegal activities.  This money was later withdrawn or transferred to international bank accounts.  The group operated in 2 ways:

• Posing as suppliers for public sector organisations and claiming organisations had payments outstanding. Once contact had been established, the organisations were told to transfer money to a new bank account – in reality opened by a money mule; and
• Committing online fraud against private bodies either by phishing or copying pictures from websites and republishing them, pretending to be official rental websites.

https://www.europol.europa.eu/newsroom/news/eur-8-million-700-bank-accounts-and-money-mules-little-known-tricks-of-social-engineering-fraudsters

EU BRIEFING: MODERNISING TRADE DEFENCE INSTRUMENTS

On 23^rd May, the EU Parliament Think Tank published a briefing paper which says that dumping and subsidising of exports by third countries are unfair trade practices that may cause injury to the importing country. WTO law allows to counter such injury by imposing specific duties known as trade defence instruments (TDI).  To ensure EU TDIs are appropriate to tackle new challenges to international trade, such as raw-material distortions in exporting countries, the Commission proposed to modernise the EU’s basic anti-dumping and anti-subsidy Regulations.  Since 1994, when EU TDI were originally enacted to transpose the WTO legal framework into EU law, they have only been amended to incorporate WTO case law.  The EU now needs to address some shortcomings seen in TDI in terms of procedure and substance, to keep pace with a rapidly evolving trade environment.

http://www.europarl.europa.eu/RegData/etudes/ATAG/2018/621880/EPRS_ATA(2018)621880_EN.pdf

FOILED FRENCH TERRORIST PLOT INDICATES INTENT TO DEPLOY BIOLOGICAL WEAPON

Janes.com on 23^rd May reported that on 18^th May the French interior minister announced that a terrorist plot involving “either explosives or ricin” had been thwarted.  A 20-year-old student of Egyptian origin had been arrested in Paris in connection with the attack.  Police raiding the suspect’s flat uncovered gunpowder, manuals on the construction of improvised explosive devices (IED), as well as a video on how to make ricin-based poison.  The bio-toxin ricin can be obtained by extraction from castor beans, which can be easily and cheaply purchased in large quantities.

http://www.janes.com/article/80231/foiled-french-plot-indicates-intent-to-deploy-biological-weapon-detection-shows-advanced-capability-in-uncovering-encrypted-communications?from_rss=1

MACEDONIAN EX-PM SENTENCED IN CORRUPTION CASE

On 23^rd May, Rferl reported A Macedonian court has sentenced former conservative PM, Nikola Gruevski to 2 years in jail for unlawfully influencing officials over the purchase of a luxury bulletproof vehicle.  He remains free pending an appeal.

https://www.rferl.org/a/macedonia-s-ex-pm-sentenced-for-corruption/29245532.html

CHIEF COMPLIANCE OFFICER “AIDED AND ABETTED” AML OFFENCES

On 16^th May, Compliance Week had reported that the SEC had announced that it settled charges against broker-dealers Chardan Capital Markets and Industrial and Commercial Bank of China Financial Services for failing to report suspicious sales of billions of penny stock shares and that Chardan’s chief compliance officer was also charged.  In fact, according to the SEC, Jerard Basmagy, the chief compliance officer and AML officer for Chardan, “wilfully aided and abetted and caused” Chardan’s AML violations.  The SEC charged Chardan with failing to file SAR when it knew, suspected, or had reason to suspect that certain penny stock transactions it executed on behalf of its customers involved the use of its firm to facilitate fraudulent activity or had no business or apparent lawful purpose.

https://www.complianceweek.com/blogs/enforcement-action/chief-compliance-officer-two-broker-dealers-charged-with-aml-offenses

GIBRALTAR SAYS IT WILL NOT YIELD AN INCH ON SOVEREIGNTY

Tax News on 23^rd May reported that Gibraltar’s Deputy Chief Minister has told a cross-party delegation of UK parliamentarians that Gibraltar “will not cede an inch of its sovereignty, jurisdiction, and control,” discussing Spanish relations amid Brexit talk.

https://www.lowtax.net/news/Gibraltar-Says-It-Will-Not-Cede-An-Inch-On-Sovereignty-76799.html

SADDAM HUSSEIN’S PRESIDENTIAL YACHT BECOMES A HOTEL

On 23^rd May, Superyacht News reported that the 82 metre motoryacht, ‘Basrah Breeze’, will now operate as a hotel and recreation facility for maritime pilots who guide ships in and out of the port of Basra, Southern Iraq’s largest city.  The vessel was built for the Iraqi dictator in 1981, although he never reportedly set foot on board.  Following a court case in 2010, Iraq recovered the yacht after it had spent 3 decades overseas, during which it changed hands a number of times, including a stint in Saudi Arabia under the ownership of King Fahd bin Abdulaziz.  The Iraqi government listed the yacht for sale at $30 million upon her return, but it never found a buyer.

http://www.superyachtnews.com/fleet/saddam-husseins-superyacht-repurposed-as-hotel

PANAMA NAMES MOSSACK FONSECA LAWYERS UNDER INVESTIGATION FOR MONEY LAUNDERING

Kenneth Rijock in his blog on 23^rd May provided the names of those which he says Panama’s Anti-corruption prosecutor has advised that it is continuing to investigate, saying that it has charged 10 of the firm’s staff with money laundering.  The case, which arose out of the Brazilian “Java Leto,” or car wash, scandal is being handled with the co-operation of Brazilian authorities.

http://rijock.blogspot.com/

 

On 23^rd May, Rferl reported that the US has given US customers of Russian van manufacturer GAZ more time to wind down business with the company in the latest softening of sanctions against GAZ owner, Oleg Deripaska.  With new licences and FAQ published, US customers of GAZ will now have until October 23^rd (instead of June 5^th) to wind down operations and contracts with GAZ.  It also said it would consider lifting the sanctions against GAZ altogether if Deripaska cedes control of the company.  GAZ declined to comment.

https://www.rferl.org/a/us-gives-russian-van-maker-gaz-more-time-comply-sanctions-rusal-deripaska-mnuchin/29244557.html

Addleshaw Goddard reported on 22^nd May that the Joint Money Laundering Steering Group had updated its AML guidance for UK financial services – the revised sectors being Section 12: Asset finance (including low-value assets to businesses) and Section17: Syndicated lending in Part II of its guidance on the prevention of money laundering and the financing of terrorism for the UK financial services industry.  This followed a consultation process begun on 8^th March.  According to the JMLSG, the amended sections do not change the substance of the guidance provisions, but seek to describe in more current terms the way the sectors work, how to assess the risks in the sector and how to identify who the customers are.

http://www.jmlsg.org.uk/news/further-amendments-to-jmlsg-guidance2

The French Minister for Europe and Foreign Affairs has released a watchlist that focuses on 48 people that France deems to have highly likely participated in the development and use of chemical weapons. France is following very closely these individuals’ activities and sharing with its partners information regarding them.  This followed a meeting of the 34 countries that comprise the International Partnership Against Impunity for the Use of Chemical Weapons on 18^th May.  The list is available at –

https://www.diplomatie.gouv.fr/IMG/pdf/liste_de_vigilance_cle8c911c.pdf

https://www.diplomatie.gouv.fr/en/french-foreign-policy/disarmament-and-non-proliferation/international-partnership-against-impunity-for-the-use-of-chemical-weapons/events/article/international-partnership-against-impunity-for-the-use-of-chemical-weapons

22^nd May 2018

US CHAMBER OF COMMERCE, OTHERS BACK CHANGES ON FOREIGN INVESTMENT IN TECH

Euronews on 21^st May reported that the US Chamber of Commerce, along with business groups which lobby for oil, tech, and other industries, said that they supported changes to draft legislation to tighten oversight of foreign investment, especially Chinese investment.  Due to concern about Chinese attempts to invest in sensitive US technologies, the Senate and House of Representatives are considering measures to expand the clout of the inter-agency Committee on Foreign Investment in the United States (CFIUS) which reviews investments to ensure they do not harm national security.  The Bills were designed to address Defense Department concerns but further draft changes address business concerns.  For example, they remove a measure that would require CFIUS to review joint ventures that could lead to technology transfer, delaying proposed transactions.  CFIUS has killed a long list of deals, including attempts to purchase semiconductor companies such as Qualcomm Inc and the proposed acquisition of US semiconductor testing company Xcerra Corp by a China state-backed investment fund.

http://www.euronews.com/2018/05/21/us-chamber-of-commerce-others-back-changes-to-foreign-investment-bill

ZIMBABWE’S CROCODILE INDUSTRY RISES AGAINST THE TIDE

Al Jazeera on 21^st May reported that Zimbabwe reptile farmers are dealing with increasing regional competition and challenges getting their products to market and are calling for government reforms to allow them to keep their lead against regional competitors.  According to a 2017 UN Environment Programme (UNEP) report, over 2 million crocodile skins are traded annually around the world and after the US, Zimbabwe ranks as the world’s second-largest exporter of the reptile products.  90% of the crocodile business is in exports.

https://www.aljazeera.com/indepth/features/zimbabwes-crocodile-industry-rises-tide-180218110312477.html

CHINA LAUNCHES FRESH CAMPAIGN AGAINST GARBAGE SMUGGLING

The Strait Times on 22^nd May reported that China has launched a fresh crackdown against rubbish smuggling from overseas in the latest move to curtail the inflow of foreign garbage and strengthen its “war on pollution”. China’s customs administration announced the effort but provided no details other than to say the campaign would be huge.  China told the WTO last year that it would stop accepting imports of 24 types of foreign waste by the end of the year and that it would phase out shipments of other waste products, including those readily available from domestic sources, by the end of 2019.  The move has thrown the global recycling industry into turmoil and left domestic recyclers to cope with raw material shortages.  Customs said in early April that it had seized 110,000 tonnes of smuggled solid waste this year and arrested 52 people.  Earlier this year, the customs announced China’s “National Sword 2018” campaign to clamp down on 5 major areas of smuggling.  The movement prioritizes the crackdown on foreign garbage smuggling as “Project No.1,” with greater significance than drugs and ivory smuggling.

https://www.straitstimes.com/asia/east-asia/china-launches-fresh-campaign-against-garbage-smuggling

http://www.globaltimes.cn/content/1103341.shtml

LIBYA TO INVESTIGATE COMPANIES SUSPECTED OF SMUGGLING HARD CURRENCY THROUGH LETTERS OF CREDIT

The Libya Herald on 21^st May reported that the Governor of the Central Bank of Libya (CBL) has instructed the CBL’s Anti Money Laundering Crimes Unit to open an urgent investigation into a number of Libyan companies accused by the Audit Bureau of smuggling hard currency through documentary letters of credit.

https://www.libyaherald.com/2018/05/21/cbl-to-investigate-companies-suspected-of-smuggling-hard-currency-through-lcs/

GREEK POLICE BUST TOBACCO SMUGGLING GANG

Ekathimerini on 21^st May reported that the financial crime unit of the Greek Police said on Monday that it had broken a criminal gang that earned profits of more than €100 million from the manufacture and distribution of illegal tobacco products.

http://www.ekathimerini.com/228887/article/ekathimerini/news/police-bust-tobacco-smuggling-gang

UN CONSIDERS SANCTIONS ON LIBYA MIGRANT SMUGGLERS

i24 News on 21^st May carried an AFP piece saying that the UN Security Council is considering imposing the first-ever sanctions on migrant smugglers in Libya, targeting 6 leaders of trafficking rings, but that Russia has requested more information.  The proposed sanctions list includes 2 Eritrean nationals described as top operators in transnational smuggling networks and 4 Libyans including the head of a regional coast guard unit.  The list was presented on 1^st May, and the Russian delay was requested on 8^th May.  On the list is Ermias Ghermay of Eritrea, described as a leader of a network responsible for “trafficking and smuggling tens of thousands of migrants” from the Horn of Africa to the coast of Libya and onwards to Europe and the US, according to the sanctions request obtained by AFP.  The other 5 are Fitiwi Abdelrazak of Eritrea, Libyan militia leader Ahmad Oumar al-Dabbashi, Libyan Musab Abu-Qarin, described as a “central actor” in migrant smuggling in the coastal area of Sabratha, Libyan Mohammed Kachlaf, head of the Shuhada al Nasr brigade in Zawiya, western Libya and Abd al Rahman al-Milad, who heads the Libyan coast guard in Zawiya.

https://www.i24news.tv/en/news/international/175256-180521-un-weighs-first-ever-sanctions-on-libya-migrant-smugglers

BITCOINS SEIZED FOR FIRST TIME IN ISRAELI FRAUD AND MONEY LAUNDERING CASE

Ethereum World News reported that Hilmi Git has been indicted by the cybercrime department of the State Attorney’s office for carrying out over 20,000 fraudulent credit card transactions and laundering money through the Bitcoin network.  This is the first time in Israeli law that Bitcoin has been seized, and the state will file to confiscate the 1,000+ Bitcoin if Git is convicted.  The indictment alleges that Git made fraudulent transactions worth $280,000 and laundered over $8 million.  The article says that Git’s indictment is a landmark case in the state of Israel which has set a precedent for Bitcoin seizure and may do the same for the confiscation of Bitcoin involved in a criminal operation.

https://ethereumworldnews.com/over-1000-bitcoins-seized-in-israeli-fraud-and-money-laundering-case/

IRISH MINISTER MADE TAX BLACKLIST PLEA TO BRAZIL

The Times on 22^nd May reported that Ireland has tried unsuccessfully to lobby for removal from Brazil’s list of nations classed as tax havens.  Brazil’s federal revenue service added Ireland in 2016 to its register of tax havens, which includes jurisdictions such as Panama, Monaco and the Isle of Man.  This meant companies based in Ireland had to pay a 25% tax rate on deals with businesses from Brazil instead of the 15% that previously applied.  The Irish government has been campaigning to be removed from the list and has consistently refuted any suggestion that the country is a tax haven.

https://www.thetimes.co.uk/article/minister-took-tax-plea-over-to-brazil-sv7z8r5b2

RAISING THE GLOBAL BAR FOR SECURITY CLEARANCE OF CROSS-BORDER MERGERS AND ACQUISITIONS

On 18^th May, White & Case published a briefing saying that a clampdown by governments across the world on potential security threats has increased the scrutiny of participants seeking clearance for cross-border mergers and acquisitions.  The article provides an update on developments in Australia, Canada, France, the EU, Japan, Russia, Italy, Germany, China, the UK and US.

https://www.whitecase.com/publications/insight/global-merger-control-crossing-finish-line?article=210341

UK HOUSE OF LORDS APPOINTS NEW SELECT COMMITTEE TO REVIEW BRIBERY ACT

On 21^st May, Addleshaw Goddard reported that the House of Lords had established a new ad hoc Select Committee that will review certain elements of the Bribery Act 2010.   It is to consider whether the Act has had the intended effect of stricter prosecution of corrupt conduct, a higher conviction rate and a reduction in such conduct and if SME are sufficiently aware of the Act and how it applies to them.  It may also consider the effect of deferred prosecution agreements (DPA) and their application beyond the scope of Bribery Act offences.  The Committee is to report on its findings by the end of March 2019.

https://clients.addleshawgoddard.com/69/454/may-2018/corporate-crime-and-investigations-e-alert-18-may-2018.asp?sid=24c8f436-4dc6-401a-9262-10b4f2224835

CONFIDENTIALITY CLUBS – A DEPARTURE FROM OPEN JUSTICE?

Mishcon de Reya on 21^st May reported on concerns arising from civil courts in the UK having to undertake a balancing exercise, weighing up unfettered access to a party’s documents with risks that arise from such access.  Those risks may relate to damage to commercial rights (such as trade secrets) or risks to the life, limb or property of third parties.  This issue came before the High Court in The Libyan Investment Authority v Société Générale SA and others.  In this case, due to the “perilous and lawless situation in war-torn Libya”, the Court imposed a “confidentiality club” on the LIA, putting strict limits on who could be given the names of certain individuals involved on the basis that not doing so would expose them to an immediate risk of loss of life or limb. This also required the use of “secure communications systems” where the individuals were anonymised, with “confidential information and material” which could only be seen by named “relevant persons”, including solicitors, counsel, forensic accountants and IT and data management teams, who had given an undertaking to the Court to preserve the confidentiality in it.  Confidentiality clubs are not all the same but at their heart they work by limiting who can see the evidence received from another party, where and how they can see it and whether they can copy or share it with others.  Strict confidentiality clubs can even prevent the parties themselves from gaining access to other party’s disclosed documents, limiting access to solicitors and counsel (and perhaps experts); although this level of lockdown almost never continues all the way to trial.

https://www.mishcon.com/news/publications/inside-disputes-8/confidentiality-clubs—a-departure-from-open-justice?publication=true

44 AFRICAN COUNTRIES SIGN AGREEMENT TO ESTABLISH AFRICAN CONTINENTAL FREE TRADE AREA

Jones Day on 21^st May reported that in March 44 African states signed the draft Agreement Establishing the African Continental Free Trade Area (CFTA) and other related protocols. 44 of the 55 Member States of the African Union signed the agreement and when 22 states have ratified, the Agreement enters into force.  The percentage of intra-African trade is only 16%, compared to 70% in the EU – said to be largely due to the former’s reliance on extractive industries.  The article considers the potential implications for foreign companies, and advantages EU companies might have over others.  Africa’s 2 largest economies — Nigeria and South Africa — did not sign the Agreement in Kigali, though both are expected to join in due course.  The article concludes with 3 key takeaways –

• The CFTA is a bold step forward. It potentially heralds transformative economic relations between African countries, as well as significant economic growth and industrialization in Africa.
• If fully implemented, the CFTA can also make Africa a much better economic partner for non-African companies. But implementation is likely to prove challenging.
• Thus far, the U.S. response has been muted. At present, European and Chinese companies are probably better positioned to take advantage of the changes likely to be brought by the CFTA.

http://www.jonesday.com/44-African-Countries-Sign-Agreement-to-Establish-African-Continental-Free-Trade-Area-05-17-2018

SHIPPER’S LETTER OF INSTRUCTION (SLI)

The usually interesting Shipping Solutions blog carried a post on 21^st May about SLI saying that by completing an SLI and sending it to the freight forwarder, you are establishing a best practice for your business.  You have a written record of who received the shipping documents, who to contact for questions, who to contact for proof of export, and who issued the export control documentation that supports the decision to send your products to your foreign customer.  It provides several reasons for completing an SLI.  It also says that the National Customs Brokers and Forwarders Association of America (NCBFAA) in the US has developed a template for the SLI.  It also says one should not continue to use the old Shipper’s Export Declaration (SED) as it does not contain all the necessary data required under the US Freight Trade Regulations.

https://www.shippingsolutions.com/blog/5-reasons-shippers-letter-of-instruction

The National Customs Brokers and Forwarders Association of America (NCBFAA) was established in 1897 and represents many of the leading freight forwarders, customs brokers, ocean transportation intermediaries (OTI), NVOCCs and air cargo agents, serving more than 250,000 importers and exporters in the US.  The website contains much useful information on such programmes as the Broker Known Importer Program (BKIP) which establishes a process for licensed, permitted US customs brokers to identify importers in connection with their import related activities.

http://www.ncbfaa.org/Scripts/4Disapi.dll/4DCGI/index.html

HOW NORTH KOREAN HACKERS BECAME THE WORLD’S GREATEST BANK ROBBERS

On 16^th May, Global Post Investigations published an article saying that the Reconnaissance General Bureau, North Korea’s equivalent to the CIA, has trained up the world’s greatest bank-robbing crews.  In just the past few years, RGB hackers have struck more than 100 banks and cryptocurrency exchanges around the world, pilfering more than $650 million.  It says that they struck an account managed by the Federal Reserve Bank of New York, an institution renowned for its security.

The feature includes a BBC World Service podcast excerpt.

https://gpinvestigations.pri.org/how-north-korean-hackers-became-the-worlds-greatest-bank-robbers-492a323732a6

EU TO SPLIT TRADE AND INVESTMENT AGREEMENTS

On 22^nd May, the EU Observer reported that EU trade ministers have given the go-ahead to the Commission’s plans to split investment and free trade agreements in the future, following a ruling by the ECJ in March saying that investment and dispute settlement arrangements cannot be established without Member States’ consent.  This opens the door for future investment deals to be ratified by the 38 national and regional parliaments.

https://euobserver.com/tickers/141873

REVISED PACE CODES C, H, E AND F

On 22^nd May, the Home Office published a news release advising that following the consultation period, revised Police and Criminal Evidence Act 1984 Codes were laid before Parliament on 21^st May, and will come into force 21 days from that date.  The Codes affected are Code C (revised code of practice for the detention, treatment and questioning of persons by police officers); Code H (the detention, treatment and questioning by police officers of persons in police detention…under Terrorism Act 2000 or Counter Terrorism Act 2008); Code E (revised code of practice on audio recording interviews with suspects); and Code F (revised code of practice on visual recording with sound of interviews with suspects).

https://www.gov.uk/government/consultations/revising-pace-codes-c-h-e-and-f

 

SWITZERLAND OPENS CRIMINAL PROBE TIED TO ANGOLA FUND

News 24 in South Africa reported on 22^nd May that Swiss authorities have raided multiple sites as part of a money laundering probe tied to Angola’s sovereign wealth fund.  The Swiss are reported to have it “opened criminal proceedings in April 2018 in response to reports of money laundering… by persons unknown connected with alleged offences involving assets held by the National Bank of Angola (BNA) and the Fondo Soberano de Angola, the Angolan sovereign wealth fund”.

https://www.news24.com/Africa/News/switzerland-opens-criminal-probe-tied-to-angola-fund-20180522?src=ilaw

UKRAINE’S POROSHENKO – WE’VE LISTENED TO FOREIGN PARTNERS ON CORRUPTION LAW

Reuters on 22^nd May reported that President Petro Poroshenko said that Ukraine had taken into account most international recommendations in the latest draft law to create an anti-corruption court.

https://uk.reuters.com/article/uk-ukraine-estonia-poroshenko/ukraines-poroshenko-weve-listened-to-foreign-partners-on-corruption-law-idUKKCN1IN1DI?src=ilaw

CYPRUS DEVELOPMENT BANK FINED FOR AML SHORTCOMINGS

The Cyprus Business Mail on 22^nd May reported that the Central Bank of Cyprus fined the Cyprus Development Bank (CDB) €715,000 for failing to comply with the provisions of legislation for the prevention and suppression of money laundering.  The CDB fine is one of the highest ever imposed by the bank supervisor and was announced days after authorities announced the launch of a campaign to improve Cyprus’s reputation tarnished by allegations that its financial system had in the past failed to prevent the laundering of illicit funds.

http://cyprusbusinessmail.com/?src=ilaw&p=64070

SFO HAS BROUGHT FRESH BRIBERY CHARGES AGAINST UNAOIL IN RELATION TO A £555MILLION CONTRACT

On 22^nd May, Energy Voice reported that the SFO has accused the Monaco-based company of using bribery to help Leighton Contractors Singapore win the half-a-billion-pound contract to build oil pipelines in southern Iraq.  Basil Al Jarah, who was the firm’s Iraq partner and lives in Hull, has been charged with 2 offences of conspiracy to give corrupt payments.  Meanwhile, Ziad Akle is also facing an offence of conspiracy to give corrupt payments.  These adds to charges already in place against the pair relating to the award of contracts to Unaoil’s client SBM Offshore, and 2 other men have also been charged,

https://www.energyvoice.com/oilandgas/172130/fresh-bribery-charges-against-unaoil-over-555million-pipeline-contract/

COMBATTING IMPORTS OF ILLEGALLY HARVESTED SEAFOOD IS AIM OF US COMMERCE DEPARTMENT INQUIRY

On 22^nd May, Sandler Travis Rosenberg reported that the Department of Commerce is seeking information regarding nations whose vessels are engaged in illegal, unreported, or unregulated (IUU) fishing, bycatch of protected living marine resources, and/or fishing activities in waters beyond any national jurisdiction that target or incidentally catch sharks.  Information that may prove useful includes trade data supporting evidence that a nation’s vessels are engaged in shark catch on the high seas; reports from off-loading facilities, port-side government officials, enforcement agents, military personnel, port inspectors, transshipment vessel workers, and fish importers; and reports from governments, international organisations, or NGO.  The deadline for information being supplied is 31^st December.

https://www.strtrade.com/news-publications-import-illegal-seafood-DOC-052218.html

JERSEY BUSINESS TENDENCY SURVEY

On 22^nd May, Jersey released the latest quarterly Jersey Business Tendency Survey (BTS) provides timely, qualitative information about the Island’s economy.

https://www.gov.je/News/2018/Pages/BusinessTendencyMar2018.aspx

GUERNSEY ECONOMIC OVERVIEW PUBLISHED

On 22^nd May, Guernsey published the report, produced by Strategy and Policy, which brings together core government data to provide an overview of current economic conditions.

https://www.gov.gg/article/165379/Economic-Overview-published

MOSCOW GOLD: FOR CITY LAWYERS, THE OLIGARCH ERA IS OVER

The Lawyer on 22^nd May reported that the changing political environment is making life harder for the London lawyers servicing Russia’s super-rich.

https://www.thelawyer.com/russian-oligarchs-english-law-uk/

MALAYSIA TO INVESTIGATE MANAGEMENT OF 1MDB DEVELOPMENT COMPANY

On 21^st May, Jurist reported that the Malaysian government announced the creation of a special task force to look into whether there were criminal acts committed by the management of 1MDB.  The task force is asked to identify and seize assets that were acquired from the illegal siphoning from the state fund.

http://www.jurist.org/paperchase/2018/05/malaysia-to-investigate-management-of-development-company.php

US CANDLE INDUSTRY – CUSTOMS DUTY ON PETROLEUM WAX CANDLES FROM CHINA UPHELD

A news release from the National Candle Association on 21^st May reported that the US Court of International Trade has upheld a customs duty on petroleum wax candles imported from China.   This ruling will continue to protect US candle manufacturers and their suppliers from the unfair dumping of inexpensive petroleum wax candle imports from China.  The Trade Associates Group Ltd., a US importer of candles, had contested the 108.3% duty that applies to all petroleum wax candles from China, regardless of the candles’ shape, with the limited exception of birthday candles, utility candles, and figurines.

https://www.prnewswire.com/news-releases/us-candle-industry-prevails-in-international-trade-litigation-customs-duty-on-petroleum-wax-candles-from-china-upheld-300652065.html

ONLINE NETWORK SEEKS TO BOOST INTERNATIONAL COLLABORATION AGAINST WILDLIFE TRAFFICKING IN CENTRAL AFRICA

Mongaby on 21^st May reported that 5 countries that are home to some of the most iconic and threatened animal species in the world have joined forces in a high-tech collaboration to improve wildlife law enforcement.  Cameroon, Gabon, the Republic of Congo, the Democratic Republic of Congo and the Central African Republic have formed the Africa Trade in Wildlife Information eXchange (Africa-TWIX).   It is modelled on EU-TWIX, which consists of a mailing list and a database, both secured, to centralize and classify information relating to wildlife infractions and seizures.  The mailing list, currently sent to nearly 115 officials (out of 131 designated people) involved in wildlife and forestry law enforcement from the 5 countries, aims to enable Central Africa’s national enforcement authorities to communicate and collaborate on wildlife crime investigations.

https://news.mongabay.com/wildtech/2018/05/online-network-seeks-to-boost-international-collaboration-against-wildlife-trafficking-in-central-africa/

VIRTUAL KIDNAPPING IN THE UNITED STATES

Control Risks on 22^nd May produced a podcast about “virtual kidnapping” – a crime which is traditionally associated with Latin America, but which is also very common in the US.  This is where an extortionist claiming falsely (by phone) that someone has been kidnapped and demanding a ransom for their release.  Despite how common it is there and how much local coverage incidents get, most people still don’t know about virtual kidnapping, and so it continues to thrive.  Raising awareness of the crime is the only real impediment to it spreading.  The interviewee says it continues to thrive because of lack of knowledge of it.

https://www.controlrisks.com/our-thinking/insights/podcasts/virtual-kidnapping-in-the-united-states

SOLICITOR STRUCK OFF FOR MISCONDUCT THAT LANDED HIS FIRM RECORD FINE

Legal Futures on 22^nd May reported that Jonathan Denton, the former partner whose conduct in a dubious investment scheme led to the record £500,000 fine for US law firm Locke Lord last year has been struck off by the Solicitors Disciplinary Tribunal (SDT).

https://www.legalfutures.co.uk/latest-news/ex-locke-lord-partner-struck-off-for-misconduct-that-landed-his-firm-record-fine

US DOJ ANNOUNCES POLICY TO DISCOURAGE LAW ENFORCEMENT AGENCIES AND REGULATORS FROM “PILING ON” DUPLICATIVE AND PARALLEL PENALTIES

On 21^st May, Clifford Chance reported that on May 9^th, Deputy Attorney General Rod Rosenstein announced that the US DoJ would implement a new policy discouraging regulators and law enforcement agencies engaged in parallel investigations from “piling on” multiple penalties for the same misconduct.

https://www.cliffordchance.com/briefings/2018/05/doj_announces_policytodiscouragela.html

FUEL SMUGGLING COSTS GHANA $200 MILLION A YEAR

Modern Ghana on 20^th May reported that Ghana lost $200 million in both 2016 and 2017 as a result of the smuggling of fuel into the country, the National Petroleum Authority has revealed – with a claim that up to 300,000 metric tonnes of fuel used in the country are not recorded and no taxes paid on them.  The illegal activity which is done through depots mainly in Tema and Takoradi is one of the major challenges affecting the petroleum sector.

https://www.modernghana.com/news/855295/fuel-smuggling-costs-ghana-200m.html

EU TO REACTIVATE 1996 BLOCKING REGULATION AGAINST US SANCTIONS ON IRAN

On 22^nd May, Wilmer Hale provided a comprehensive briefing following the launch, on 18^th May, by the EU Commission of a formal process to reactivate a 1996 trade defence law in response to the US withdrawal from JCPOA with Iran.  Once reactivated, this law (the EU Blocking Regulation) would seek to prevent European companies from complying with any sanctions the US may reintroduce against Iran.

https://wilmerhalecommunications.com/26/2500/may-2018/eu-to-reactivate-1996-blocking-regulation-against-us-sanctions-on-iran.asp?sid=a51b26a8-6a24-4914-84c2-3033611cf3a6

NEW TRADE BODY FORMED IN US TO HELP SHIPPERS USE BLOCKCHAIN TECHNOLOGY IN SUPPLY CHAINS

On 22^nd May, Loadstar reported that Blockchain in Transport Alliance (BiTA), the North American association of transport and logistics companies looking to develop industry standards for the use of blockchain technology in logistics has launched a sister organisation for supply chain professionals.  Although BiTA has a substantial number of 3PL members, it is currently dominated by the vast US road freight industry.  BiTA announced the launch of the Blockchain in Supply Chain Alliance (BiSCA) which would be based around 4 key pillars of activity: procurement, planning, transport and warehousing.  Denver University and the US Air Force had joined, and shipping giant Panalpina has announced it has joined BiTA, saying it sees many advantages of blockchain technology for freight forwarding and logistics operations.

https://theloadstar.co.uk/new-group-launched-help-shippers-use-blockchain-technology-supply-chains/

SWEDEN TELLS CITIZENS HOW TO PREPARE FOR WAR – FOR FIRST TIME IN 30 YEARS

https://www.msn.com/en-gb/news/world/sweden-tells-citizens-how-to-prepare-for-war-for-first-time-in-30-years/ar-AAxDcM9?ocid=spartanntp

EU: SMUGGLING OF GLASS EELS VALUED AT €10 MILLION – 17 ARRESTS

On 22^nd May, Eurojust published a news release saying that Greek and Spanish law enforcement bodies and judicial authorities, supported by Eurojust and Europol, have dismantled an international criminal network suspected of having smuggled in the current season over 10 tonnes of eels from the EU to China, with a profit estimated at €10 million.  A co-ordinated operation carried out in Greece and Spain led to 17 arrests. In addition, approximately 2 tonnes of eels worth €2 million were seized, along with data storage devices, documents, luxury cars and approximately €1 million in cash.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2017/2017-03-08.aspx

2 IMMIGRATION OFFICIALS AT AUSTRALIAN HIGH COMMISSION IN SOUTH AFRICA SACKED FOR VISA FRAUD

ABC News on 22^nd May reported that 2 locally engaged staff at the Australian High Commission in Pretoria have been dismissed for allegedly issued illegal visas to high-risk Nigerian students.

http://www.abc.net.au/news/2018-05-23/australian-officials-at-high-commission-in-south-africa-sacked/9789918?src=ilaw

EU SANCTIONS AGAINST RUSSIA : WHAT’S NEXT?

On 22^nd May, the European Parliamentary Research Service Blog published an article following the EPRS roundtable discussion on the topic of ‘EU sanctions against Russia: What next’, held in the European Parliament library on 16^th May.

https://epthinktank.eu/2018/05/22/eu-sanctions-against-russia-whats-next/?src=ilaw

GUERNSEY SETS OUT STANCE ON PUBLIC COMPANY OWNERSHIP REGISTERS

On 22^nd May, Tax News reported that Guernsey’s Chief Minister has told the island’s parliament that Guernsey will make beneficial ownership information publicly accessible if it becomes an internationally adopted standard.

https://www.lowtax.net/news/Guernsey-Sets-Out-Stance-On-Public-Company-Ownership-Registers-76796.html

THAILAND INTRODUCES VIRTUAL CURRENCY TRADING TAX RULES

Tax News on 22^nd May reported that in a last-minute change ahead of the implementation of new tax rules for virtual currency trading, Thai lawmakers agreed that virtual currency trading on regulated exchanges should be exempt from VAT.  However, gains will be subject to a 15% capital gains tax charge, with the tax to be subject to withholding, and a 7% VAT charge will be assessed where trades take place off an approved exchange.

https://www.tax-news.com/news/Thailand_Introduces_Virtual_Currency_Trading_Tax_Rules____76791.html

IRELAND ISSUES TAX GUIDANCE ON PEER-TO-PEER LENDING

Tax News on 22^nd May reported that the Irish Revenue has published new guidelines on the withholding tax obligations of companies paying interest on finance raised through peer-to-peer lending or crowdfunding campaigns.

https://www.tax-news.com/news/Ireland_Issues_Tax_Guidance_On_PeerToPeer_Lending____76795.html

SWEDEN: WARNING TO MEDIA OUTLETS ON TAKING ADVERTS FOR FOREIGN GAMBLING SITES

Calvin Ayre on 22^nd May reported that Sweden’s gambling regulator has issued warnings to 39 digital media outlets to stop promoting international gambling sites.

https://calvinayre.com/2018/05/22/business/sweden-warns-media-outlets-gambling-adverts/

US TREASURY BOOSTS RULES AIMED AT CRACKING DOWN ON MONEY LAUNDERING IN REAL ESTATE

On 22^nd May, Baker McKenzie reported that FinCEN has released another set of rules requiring title companies to disclose the identity of all-cash buyers who purchase luxury property under the guise of an LLC – but it has instructed title companies not to disclose details of the new geographic targeting order (GTO), so we do not know where the GTO affect.

http://www.riskandcompliancehub.com/treasury-boosts-rules-aimed-at-cracking-down-on-money-laundering-in-real-estate/

TURKISH SHIP ATTACKED OFF YEMEN

Janes.com on 22^nd May reported that Iranian-backed Yemeni rebel group Ansar Allah (Houthis) was responsible for an attack on the Turkish-flagged bulk carrier Ince Inebolu.  The ship was carrying wheat from the Russian Black Sea port of Novorossiysk to Yemen via Djibouti.

http://www.janes.com/article/80239/saudi-spokesman-confirms-turkish-ship-attacked-off-yemen

US AGENTS SEIZE FAKE CHINESE GOODS WORTH $16 MILLION IN TEXAS

Illicit Trade on 22^nd May reported that officers from US Immigration and Customs Enforcement (ICE) have seized Chinese-made counterfeit luxury items estimated to be worth $16 million in the Texan city of Laredo.  They impounded 78,908 suspected fake items, including clothing and electronics products labelled as  Adidas, Apple, Hermes, Louis Vuitton, Nike, Samsung and Sony.

https://www.illicit-trade.com/2018/05/us-agents-seize-fake-chinese-goods-worth-16-million-in-texas/?utm_source=dlvr.it&utm_medium=twitter

In the blog of the UK Office of Financial Sanctions Implementation, on 22^nd May, a posting details who must report and what they must report, when and how.

https://ofsi.blog.gov.uk/2018/05/22/reporting-to-ofsi-how-working-together-helps-makes-sanctions-more-effective/

On 22^nd May, Daily News Live in Zimbabwe reported that its anti-corruption committee (ZACC) and the police had issued an arrest warrant, sent to Interpol, for Jonathan Moyo on 14 counts of fraud.

https://www.dailynews.co.zw/articles/2018/05/22/interpol-asked-to-seize-moyo?src=ilaw

On 22^nd May, OFAC listed 5 new names linked to the Islamic Revolutionary Guards Corp (IRGC).

These are Iranian officials accused of helping IRGC supply rebels in Yemen with ballistic missiles.  They are either senior officials in Iran’s Revolutionary Guard Corps or have acted to assist its ballistic missile transfers, according to the US Treasury.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180522.aspx

https://home.treasury.gov/news/press-releases/sm0392

On 22^nd May, OFAC announced new Ukraine-/Russia-related  General License 15 that authorises US persons to engage in specified transactions related to winding down or maintaining business with GAZ Group and its subsidiaries until October 23^rd; and Ukraine-/Russia-related General License 12C, which replaces and supersedes General License 12B in its entirety, and permits originating and intermediary US financial institutions to process funds transfers that they would otherwise block to an account held by a blocked US person at a US financial institution and clarifies that US financial institutions can release such funds for authorised maintenance and wind-down purposes.  Although under General License 15 all funds blocked prior to 12:01 a.m. EDT on May 22^nd, remain blocked, the licence authorises the use of these blocked funds for the maintenance and wind down activities described in the licence. OFAC has also published 6 new FAQ and revised existing FAQ to include mention of the licences.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180522_33.aspx

 

ICIJ on 22^nd May published a post on West Africa Leaks – which explores the impact of offshore secrecy in the 15 countries that make up Africa’s westernmost region, where reporters work in English, French and Portuguese and dozens of local languages.  ICIJ has spent the past 6 months working in secret with journalists from 11 West African countries and pored over 27.5 million files from recent offshore investigations.  It reveals financial secrets about some of West Africa’s most powerful politicians and business leaders.

https://www.icij.org/blog/2018/05/introducing-west-africa-leaks/

https://www.icij.org/investigations/west-africa-leaks/

The Cyprus Mail on 22^nd May reported that the Turkish Board of Investigation on Financial Crimes (MASAK) has launched an investigation into money laundering of $5 billion in 13 casinos in the north and the 20 businesses involved in their operation.  It also says that prosecutors ordered the confiscation of $100 million linked to suspects after an earlier investigation by MASAK discovered that the casinos in the breakaway regime were involved in the transfer of large amounts of foreign currency.  The transfers were said to have been made through the accounts of 7 casino managers and the personal accounts of staff at 20 companies owned by the casinos.

https://cyprus-mail.com/2018/05/22/turkish-cypriot-press-reports-probe-into-laundering-of-5-billion-in-13-casinos/?src=ilaw

EU Council Decision 2018/747/EU deals with N-(1-amino-3,3-dimethyl-1-oxobutan-2-yl)-1-(cyclohexylmethyl)-1H-indazole-3-carboxamide (ADB-CHMINACA). 

EU Council Decision 2018/748/EU deals with 1-(4-cyanobutyl)-N-(2-phenylpropan-2-yl)-1H-indazole-3-carboxamide (CUMYL-4CN-BINACA).

ADB-CHMINACA and CUMYL-4CN-BINACA are synthetic cannabinoids with similar effects to those of THC, which is responsible for the major psychoactive effects of cannabis, but they have additional life-threatening toxicity.  The Decisions follow a risk assessment report on each of the new psychoactive substances and require control measures to be put into effect across the EU, as provided for under their national legislation, in compliance with their obligations under the 1971 UN Convention on Psychotropic Substances, and by 23^rd May 2019.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.125.01.0008.01.ENG&toc=OJ:L:2018:125:TOC

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.125.01.0010.01.ENG&toc=OJ:L:2018:125:TOC

Norton Rose Fulbright on 21^st May published a briefing which says in its introduction that, according to the International Labour Organisation (ILO), at any given time an estimated 40.3 million people globally are in modern slavery, which includes 24.9 million in forced labour.  The global shipping industry has been identified as being particularly susceptible to the risk of modern slavery given seafarers are often from nations with human rights, labour rights and corruption challenges.  The fragmentation of regulatory oversight among flag states, and practical limitations on effective enforcement of basic conditions on board vessels, exacerbate the problem.  After looking at the Modern Slavery Act and its requirements in the UK, the briefing considers what are the modern slavery risks for shipping and what shipping companies can do to prepare themselves (and avoid being implicated).  The article concludes that the burden of increased regulation may also create competitive advantage for compliant operators in some trades and markets.  On the whole, it says, history suggests that the pace of change will be uneven and slow.  Nevertheless, it is clear that the power of public scrutiny has already spurred the relatively rapid rise of modern slavery, as a business risk for the shipping industry.

http://www.nortonrosefulbright.com/knowledge/events/165387/the-modern-slavery-act-2015-and-human-rights-in-the-shipping-industry

On 21^st May, law firm Volterra Fietta published a briefing providing an update in respect of the litigation and compliance risks in the rapidly-developing field of transnational human rights law, where parent companies may be held liable for alleged human rights impacts involving their subsidiaries overseas.  It notes that governments have recently adopted innovative ways to address human rights, including legislation and a new ombudsperson’s office in Canada.  The article goes on to provide a short update on legal and regulatory developments in the UK and Canada.  It is notable that the cases cited, in both countries, mostly involve mining companies, though it reports that a Canadian case involving a retailer which indirectly sourced garments from factories in Rana Plaza in Bangladesh (where a factory collapsed in 2011 causing massive casualties) failed.

http://www.volterrafietta.com/transnational-business-and-human-rights-risks-and-rewards/

21^st May 2018

FLORIDA MAN HEADED TO PRISON FOR SHIPPING GUNS IN WATER HEATERS

News 4 Jax reports 20^th May on the case of a Florida man, Frederik Barbieri, 47, who faces up to 25-years in prison for conspiring to smuggle weapons to Brazil and violating US firearm export licensing laws.  Arrested in February, he pleaded guilty to smuggling of hundreds of AR-15 and AK-47 assault rifles in water heaters to Rio de Janeiro.   Described as one of Brazil’s biggest firearm dealers, Brazilian authorities say police found 30 guns, along with ammunition magazines, all hidden in 4 38-gallon water heaters.

 

LOSSES DUE TO BINARY OPTIONS, CRYPTOCURRENCY SCAMS GROW IN 2017, AUSTRALIAN CONSUMER BODY WARNS

Finance Feeds on 21^st May reported that in Australia the average loss reported in binary options scams increased by 24% – from $32,744 to $43,085, which suggests that these scams became more effective at extracting large sums of money from victims.  The Australian Competition and Consumer Commission (ACCC) has posted its annual report on scams activity in Australia for 2017.  While binary options are not illegal in Australia, there are a number of very professional looking websites usually operated from overseas offering binary options investments that are outright scams.  Between January and September 2017, about $100,000 was reported lost per month to scams which related to cryptocurrencies.  However, in the month of December 2017, reported losses to Scamwatch exceeded $700,000 and the average reported loss had jumped from $1,885 in January to $13,205.  The list of cryptocurrency scams in 2017 includes fake ‘initial coin offerings’ (ICO), and pyramid schemes.  Analysis of investment scam reports did not reveal any particularly new techniques used by investment scammers suggesting the same tricks used in previous years remain effective.

https://financefeeds.com/losses-due-binary-options-cryptocurrency-scams-grow-2017-australian-consumer-body-warns/

BREAKING BAD TO THE PARADISE PAPERS: ALL YOU NEED TO KNOW ABOUT MONEY LAUNDERING

On 21^st May, the Guardian published a briefing claiming to provide all you need to know about money laundering.

https://www.theguardian.com/business/2018/may/21/breaking-bad-to-the-paradise-papers-all-you-need-to-know-about-money-laundering

ALL ESSENTIAL INFORMATION YOU SHOULD KNOW ABOUT THE BENEFICIAL OWNER REGISTRATION IN THE CZECH REPUBLIC

On 15^th May, Bird & Bird published a briefing on the new central Register of Beneficial Owners implementing obligations imposed on EU Member States under the 4^th Anti-Money Laundering Directive. The Register is maintained by registration courts in the Czech Republic.  Legal entities and trustees are also legally obliged to keep up-to-date records of beneficial owners, and details for verification of their identity, including the basis of beneficial ownership of such persons.  Details for identification of beneficial owners must be kept as long as a person is a beneficial owner, and 10 years after termination of such relationship.  Information about beneficial owners in the Register is not publicly available and data from the Register are not published in the online Commercial Register or otherwise.

https://www.twobirds.com/en/news/articles/2018/czech-republic/all-essential-information-you-should-know-about-the-beneficial-owner-registration

BILL TRANSPOSING 4^TH ML DIRECTIVE PUBLISHED IN IRELAND

On 18^th May, Arthur Cox in Ireland published a briefing saying that the Ministry of Justice had published a Bill transposing most of the remaining requirements of the EU 4^th Money laundering Directive into Irish law.  Parts of Article 30 (dealing with the beneficial ownership of corporates) were already transposed into Irish law in November 2016.  This Bill, together with the Criminal Justice (Corruption Offences) Bill, forms part of the Government’s white-collar crime package.  The briefing summarises the key provisions of the Bill, which reflect the targeted risk-based approach to combating money laundering/terrorist financing.

http://www.arthurcox.com/wp-content/uploads/2018/05/AML-Update-May-2018.pdf

BET365 EXPECTED TO KEEP MAIN HUB IN GIBRALTAR DESPITE MOVE TO MALTA?

Gambling 911 on 21^st May reported that Bet365 says it will retain its strong presence in, and commitment to, Gibraltar despite confirming reports this weekend of a move to Malta.  The company currently employs some 1,000 employees in Gibraltar.

http://www.gambling911.com/gambling/bet365-expected-keep-main-hub-gibraltar-.html

https://calvinayre.com/2018/05/20/business/report-bet365-moving-gibraltar-ops-malta/

AUSTRALIA PLANS TO BAN CASH PAYMENTS OVER $10,000

Truth in Media on 21^st May reported that the government of Australia plans to make cash payments over A$10,000 (US$7,500) illegal starting on July 1^st 2019.  It says that, to enforce the ban, the government approved the creation of a $300 million Black Economy Standing Taskforce who is tasked with generating $3 billion of new tax revenue over the course of 4 years.

http://truthinmedia.com/australia-bans-cash-payments/?src=ilaw

PASSENGER NAME RECORD DATA AND MISCELLANEOUS AMENDMENTS REGULATIONS 2018

These UK regulations (SI 2018/598) amend the existing UK passenger name records legislation to bring it into line with the provisions of EU Directive 2016/681 on the use of passenger name record (PNR) data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime (aka the PNR Directive) which are not already provided for in existing legislation.  PNR are the electronic information, collected by airlines, that countries use to strengthen national security and prevent serious crime and the UK has had an established regime for PNR since 2008.  The UK Passenger Information Unit at the Home Office is designated as the authority competent for the prevention, detection, investigation and prosecution of terrorist offences and serious crime, and as able to process PNR data for those purposes.

http://www.legislation.gov.uk/uksi/2018/598/contents/made

DIAMOND LOOTING: ZIMBABWE PARLIAMENT SUMMONS MUGABE TO HEARING

News 24 on 21^st May reported that a Zimbabwe parliament committee has summoned former president Robert Mugabe to give evidence on 23^rd May about diamond corruption alleged to have cost billions of dollars during his rule.  Lawmakers plan to question Mugabe over his 2016 claim that the country had lost $15 billion in revenue due to corruption and foreign exploitation in the diamond sector.

https://www.news24.com/Africa/Zimbabwe/15bn-diamond-looting-zim-parliament-summons-mugabe-to-may-23-hearing-20180521?src=ilaw

UK: UNIVERSAL JURISDICTION INFORMATION NOTE

On 21^st May, the Ministry of Justice issued a news release publicising a note which summarises the UK’s approach to the investigation and prosecution of crimes of universal jurisdiction.  The concept of universal jurisdiction (i.e. jurisdiction to try a crime irrespective of where it was committed and the nationality of the accused) has been adopted in the case of certain heinous crimes (such as war crimes) to accord with customary international law and to comply with the UK’s international obligations as set out in various treaties.  Crimes of universal jurisdiction can be reported to the police in the same way as any other offence.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/709126/universal-jurisdiction-note-web.pdf

 CRYPTOCURRENCY DEBIT CARD START-UP FOUNDERS INDICTED IN US

On 21^st May, Robinson & Cole reported that the US Attorney’s Office in the Southern District of New York has announced that a federal grand jury has returned an indictment against 3 Florida men who co-founded cryptocurrency company Centra Tech, Inc. The indictment alleges that they defrauded investors $25 million through conspiracy and securities and wire fraud and that they lied to investors prior to the initial coin offering (ICO).  The article claims that the FBI seized 91,000 units of Ether, which was from the investors who participated in the ICO and although the Ether was worth $25 million at the time of the ICO, it is now reported to be worth $60 million.

https://www.jdsupra.com/legalnews/cryptocurrency-debit-card-startup-39371/

 NEW US EXPORT RULES FOR FIREARMS AND AMMUNITION – OPENING THE DOOR FOR MORE COMMERCIAL SALES

On 21^st May, Baker Donelson published an article on the changes being made to US export rules for firearms and ammunition, with the stated goals of reducing procedural burdens and costs of export compliance on the firearms industry, while allowing the Commerce and State Departments to more efficiently enforce their relevant export controls.  It says that the items subject to change are mostly commercial items widely available in retail outlets in the US and described as having commercial and other non-military characteristics.  Military-standard export controls will continue to apply to fully automatic firearms and their parts and components, including guns up to .50 calibre, as well as firearms that fire caseless ammunition, silencers, mufflers and sound suppressors.  The proposal would create 17 new Export Control Classification Numbers (ECCN) to control the items proposed for removal from the military list.

https://www.jdsupra.com/legalnews/new-export-rules-for-firearms-and-46305/

TAIWAN TO INTRODUCE CRYPTOCURRENCY REGULATIONS TO CURB MONEY LAUNDERING

Customs Today on 21^st May reported that Taiwan’s government is set to introduce a new regulatory framework for cryptocurrencies later this year, in a move to prevent money laundering.  Its Justice Minister called for the regulations to be in place by November, before the Asia Pacific Group (APG) on AML visits Taiwan to evaluate its existing AML rules.

http://www.customstoday.com.pk/taiwan-to-introduce-cryptocurrency-regulations-to-curb-money-laundering/

LAST YEAR’S RECORD OPIUM PRODUCTION IN AFGHANISTAN THREATENS SUSTAINABLE DEVELOPMENT, LATEST SURVEY REVEALS

UNODC on 21^st May reported that in 2017, opium cultivation in Afghanistan was up 63% compared with 2016.  This has led to unprecedented levels of potential heroin production. From the 2017 opium harvest, some 550-900 tons of heroin of export quality (purity between 50% and 70%) can be produced.  The report highlights that the levels of opium poppy cultivation create multiple challenges for the country, its neighbours and the many other countries that are transit for or destination of Afghan opiates.  The significant levels of opium poppy cultivation and illicit trafficking of opiates further fuel instability, insurgency and increase funding to terrorist groups in Afghanistan.

https://www.unodc.org/unodc/en/frontpage/2018/May/last-years-record-opium-production-in-afghanistan-threatens-sustainable-development–latest-survey-reveals.html?ref=fs1

HONG KONG’S FRAUD AND MONEY LAUNDERING INTELLIGENCE TASKFORCE MARKS UNIT’S UNCERTAIN FUTURE

Baker McKenzie on 21^st May reported that the task force which aims to bring Hong Kong’s fight against money laundering into the 21^st Century has been given a 6-month extension to its year-long trial status.  It was formed in response to global concern that current systems to identify, disrupt and seize the massive flow of dirty money through the international financial network are not fit for purpose, and was set up as the Fraud and Money Laundering Intelligence Taskforce (FMLIT) last May.  It put in place a new system of intelligence-sharing and alerts allowing police, banks and the Hong Kong Monetary Authority to deal more quickly and effectively with suspected financial criminality.

http://www.riskandcompliancehub.com/six-month-extension-for-hong-kongs-fraud-and-money-laundering-intelligence-taskforce-marks-units-uncertain-future/

AUSTRALIA: GUILTY PLEA IN RESERVE BANK BRIBERY CASE

On 21^st May, Baker McKenzie reported that a former Reserve Bank company executive has pleaded guilty to criminal charges in one of Australia’s most protracted corruption prosecutions over a payment to a Malaysian arms dealer to grease the wheels of a business deal.  Clifford Gerathy pleaded guilty a charge involving $79,502.  Kayum is an arms broker with connections to some of Malaysia’s most powerful political figures and has previously been suspected of involvement in the nuclear weapons black market.

http://www.riskandcompliancehub.com/australia-guilty-plea-finally-in-reserve-bank-bribery-case/

NCSC AND ICO PUBLISH CYBER SECURITY GUIDANCE ON GDPR

On 18^th May, Tech UK reported that the UK’s National Cyber Security Centre (NCSC) and the Information Commissioner’s Office (ICO) had produced guidance on what the General Data Protection Regulation (GDPR) means for cyber security.  This guidance provides an overview of what the GDPR says about security and describes a set of security related outcomes that all organisations processing personal data should seek to achieve. The approach is based on 4 top level aims: to manage security risk; protect personal data against cyber attack; detect security events; and minimise the impact.

http://www.techuk.org/insights/news/item/13138-ncsc-and-ico-publish-cyber-security-guidance-on-gdpr

‘ALARMING LEVELS’ OF METHAMPHETAMINE TRAFFICKING IN ASIA’S MEKONG, UN WARNS

UN News on 21^st May reported that organised crime groups in Asia’s Mekong region have intensified the production and trafficking of highly-addictive methamphetamine, extending the illegal trade into countries such as Australia, Japan and New Zealand, senior drug policy leaders warned at a UN-backed regional conference. 

https://news.un.org/en/story/2018/05/1010262

ISLE OF MAN REGULATOR RESPONSE TO CONSULTATION ON “FIT AND PROPER”

On 21^st May, the Financial Services Authority published its response to a consultation on changes to fitness and propriety assessments for all regulated entities, and its consultation on resulting amendments to the Financial Services Rule Book.

https://www.iomfsa.im/fsa-news/2018/may/consultation-response-fitness-propriety-assessment/

US TO IMPOSE ‘STRONGEST SANCTIONS IN HISTORY’ AGAINST IRAN

Rferl on 21^st May reported that US Secretary of State Mike Pompeo says Washington will impose “the strongest sanctions in history [on Iran] once they come into full force” and that the “sting of sanctions will only grow more painful if the regime does not change its course”.  He set 12 conditions for Iran to follow in order for the US to agree to a new nuclear deal with Tehran in a speech in Washington on May 21^st at the Heritage Foundation think tank.

https://www.rferl.org/a/iran-us-pompeo-to-outline-strategy-after-u-s-withdrawal-from-nuclear-deal/29239822.html

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

The Inter Press Service on 24^th April carried an article claiming that every year, an estimated $133 billion of fuels are illegally stolen, adulterated, or defrauded from legitimate petroleum companies.  Roughly 30% of Nigeria’s refined fuel products are smuggled into neighbouring states and pipeline fuel theft in Mexico is at record levels.  This illegal activity creates an enormous drain on the global economy, crowds out billions from the legitimate economy and dislocates hundreds of thousands of jobs. Equally significant are associated fiscal losses from tax evasion and subsidy abuses that deprive governments of revenues for vital public services and force higher burdens on taxpayers—especially in developing countries where petroleum industry royalties and tax payments finance development. For example, Philippines loses $750 million annually in tax revenue from fuel adulteration and smuggling.  Despite these severe negative effects, the global problem of oil and fuel theft so far has been largely unchecked and remains mostly hidden from international attention.  The article argues that any long-term solution will be dependent on sustained collaboration between governments and the private sector.

http://www.ipsnews.net/2018/04/illicit-trade-oil-fuel-emerging-global-policy-challenge/

PEOPLE SMUGGLERS IDENTIFIED DURING INTERPOL OPERATION IN SOUTH ASIA

The Illicit Trade website reported on 19^th May that an Interpol-led operation has resulted in the identification of a number of suspected human traffickers in South Asia.  Operation Mandala involved officials carrying out checks on travellers at 5 international airports and a land border point in Bangladesh, Bhutan, Myanmar, Nepal and Sri Lanka.  Close to 500,000 people had their personal details checked against Interpol’s nominal and Stolen Lost Travel Document (SLTD) databases during the initiative, resulting in multiple positive “hits”.  A number of individuals subject to Interpol Red and Blue Notices were identified during the checks, as were several travel documents registered on the SLTD database.

https://www.illicit-trade.com/2018/05/people-smugglers-identified-during-interpol-operation-in-south-asia/

PRESSURE GROUP TARGETING BELGIAN BANKS FOR AIDING SOUTH AFRICA APARTHEID REGIME

On 19^th April, the Daily Maverick website reported that Open Secrets and the Centre for Applied Legal Studies (CALS) will be submitting a complaint to authorities in 2 countries regarding the role of European banks in aiding and abetting the apartheid regime in South Africa.  CALS argues that it was a Belgian bank, Kredietbank (KBC), and its subsidiary, Kredietbank Luxembourg (KBL), that were at the centre of an apartheid money laundering machine that kept the war machine running and helped state-owned arms company Armscor establish a global money laundering network of secret bank accounts and shell companies in order to bust the arms embargo – referred to as the “arms money machine”.  This was said to involve machinery including over 800 secret bank accounts and over 100 front companies registered in Panama and Liberia, most of which were set up or held by the banks in question.

https://www.news24.com/Columnists/GuestColumn/book-extract-the-apartheid-arms-money-machine-20170514-2

IRISH AUTHORITIES SEIZE €60,000 CASH AT CORK AIRPORT

The Irish revenue Commissioners’ website on 21^st May reported that Revenue Officers seized €60,000 in cash when they stopped and searched a man in his fifties travelling to Gdansk in Poland, following routine profiling.  The cash was found hidden in a suitcase with the assistance of Revenue Detector Dog Eva. Revenue Officers seized the cash suspecting it to be the proceeds of, or intended for use in, criminal activity.  The authorities have been granted a 3-month detention period for the cash to allow for investigations.

https://www.revenue.ie/en/corporate/press-office/press-releases/2018/pr-210518-seize-cash-cork.aspx

ICE ABANDONS ‘EXTREME VETTING’ TECHNOLOGY

Homeland Security Today on 18^th May reported that US federal immigration officials have abandoned their pursuit of a controversial machine-learning technology that was a pillar of the Trump administration’s “extreme vetting” of foreign visitors, dealing a reality check to the goal of using artificial intelligence to predict human behaviour. What had been wanted was a system for the “Extreme Vetting Initiative” that could automatically mine Facebook, Twitter and the broader Internet to determine whether a visitor might commit criminal or terrorist acts or was a “positively contributing member of society”.  However, ICE has dropped the machine-learning requirement from its request in recent months, opting instead to hire a contractor that can provide training, management and human personnel who can do the job.

https://www.hstoday.us/uncategorized/ice-abandons-extreme-vetting/

 

On 21^st May, the US Treasury advised that President Trump has signed a new Executive Order which prohibits certain transactions with Venezuela.  The transactions affected included dealings such as –

• the purchase of any debt owed to the Government of Venezuela (including accounts receivable);
• in any debt owed to the Government of Venezuela that is pledged as collateral after the effective date of this order (including accounts receivable);
• in the sale, transfer, assignment or pledging as collateral by the Government of Venezuela of any equity interest in any entity in which the Government has a holding of 50% or more

https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_eo_20180521.pdf

Eurasia Review on 21^st May reported that illegal wood trafficking is the most profitable crime against natural resources and the world’s third most important crime, according to a report titled “Transnational crime and the developing world,” published in March 2017 by Global Financial Integrity.  The report estimates that, globally, this transnational crime generates $52 billion to $157 billion a year.  The UN Environment Program (UNEP) estimates that 30% of the wood sold in the world has been illegally obtained.  Latin American forests are the second most vulnerable in the world to illegal timber logging, after Asian forests.  In late 2012, it says, INTERPOL confiscated over 50,000 m³ of illegally obtained timber with an estimated value of $8 million as a result of an operation named Project LEAF, in which law enforcement agencies from 12 Latin American countries worked together to crack down on illegal timber logging.  Wood trafficking is linked to a series of crimes such as deforestation, labour exploitation, land invasions, tax evasion, document forgery, state corruption and even the murder of community leaders who are fighting to preserve forests.  Another report published in January 2018, sheds light on the practice known as “timber washing,” meaning the sale of illegally obtained timber with fake permits.  It also revealed that Peruvian timber — including timber that has been legally obtained — is exported to China, the Dominican Republic, the US, Mexico, France, Cuba, South Korea, Belgium, Puerto Rico, Australia, Taiwan, Spain, Chile, Ecuador, Uruguay, Canada, Israel and Japan.

http://www.eurasiareview.com/21052018-illegal-logging-an-organized-crime-that-is-destroying-latin-american-forests/

Lloyds Loading List on 21^st May reported that a new analysis by Drewry finds that while sanctions against Russia and Iran will have little direct effect on demand growth in the container segment, future growth opportunities will be stifled.  It comments that neither Russia nor Iran had regained throughput to match their pre-sanctions peaks, with Iran’s representing only 90% of its 2011 peak and Russia’s representing only 87% of its 2013 record year.  Before the imposition of sanctions, however, both countries had been growing rapidly, with Iran’s container ports recording a 5-year compound average growth rate of 18% and Russia recording a 5-year CAGR of 9% before limited sanctions were imposed in 2014.

https://www.lloydsloadinglist.com/freight-directory/news/Container-shipping-sector-shrugs-off-sanctions/71966.htm#.WwLnd_ZFx9A

On 11^th May, coinciding with the introduction of the new Customer Due Diligence Requirements for Financial Institutions” Rule issued by FinCEN, the Federal Financial Institutions Examination Council (FFIEC) issued new customer due diligence (CDD) and beneficial ownership examination procedures.  The new Rule clarifies CDD requirements and also includes a new requirement for covered financial institutions to identify and verify the identity of beneficial owners of certain legal entity customers.  The FFIEC is a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions.  The separate attachments for CDD and beneficial ownership checks state as their objectives –

• Assess the bank’s compliance with the regulatory requirements for customer due diligence; and
• Assess the bank’s written procedures and overall compliance with regulatory requirements for identifying and verifying beneficial owner(s) of legal entity customers.

The guidance explains just who the “legal entity customers” would be, record and retention requirements, identification and verification requirements (including where relying on third parties).

https://www.ffiec.gov/press/pr051118.htm

On 21^st May, HM Treasury issued a Notice saying that the entries for 2 individuals and 2 entities on the Al-Qaida/ISIL sanctions lists had been amended in line with EU Regulation 2018/733/EU.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/709182/2018.733_ISIL.pdf

On 21^st May, HM Treasury published updated information on the approach OFSI takes to financial sanctions and monetary penalties for breaches in financial sanctions.  This includes specific documents containing FAQ for the charity sector and the import/export sector.

https://www.gov.uk/government/publications/financial-sanctions-faqs#history

Reuters, and many other sources, reported on 21^st May that, according to a Parliamentary committee, Russian money hidden in British assets and laundered through City of London financial institutions damages the government’s efforts to take a tough stance against Moscow’s aggressive foreign policy.  A report by the Foreign Affairs Committee said Russian money was undermining Britain’s criticism of Russia and supporting what it called a campaign by President Vladimir Putin “to subvert the international rules-based system”.  The committee chairman is quoted as saying that “the scale of damage that this ‘dirty money’ can do to UK foreign policy interests dwarfs the benefit of Russian transactions in the City”.  The committee said that the UK should work with international allies to make it more difficult for Russia to issue sovereign bonds, which are not subject to sanctions, via banks which are subject to sanctions, and more needed to be done domestically to tighten sanctions on individuals and at an international level to close loopholes that allow Russia to issue sovereign debt with the help of sanctioned entities.

https://uk.reuters.com/article/uk-britain-russia/russian-dirty-money-flowing-through-london-damages-britain-uk-lawmakers-idUKKCN1IL0WM?src=ilaw

The report of the Committee, “Moscow Gold: Russian Corruption in the UK”, is available at –

https://www.parliament.uk/business/committees/committees-a-z/commons-select/foreign-affairs-committee/news-parliament-2017/commonwealth-summit-report-published-17-19/?src=ilaw

Amongst the evidence given to the committee is the titbit that in Russia, one of the names for a shell company — one of the words people use — is “BVI”.  They just call them “BVIs” as shorthand.  The report also notes that the BVI was the first to introduce an accessible (though not public) register of beneficial ownership.  It introduced in 2017 a secure, non-public and technologically innovative search platform called BOSS (Beneficial Ownership Secure Search System).  BOSS is a central register of all persons who directly or indirectly own 25% or more of companies registered in the BVI or under BVI law and is accessible by competent authorities in the BVI and the UK.  However, companies registered elsewhere that own more than 25% of BVI-registered companies do not have to be included in the database.  Amongst the committee recommendations are that the Government should set out its plans for assisting the governments of the Overseas Territories to establish publicly accessible beneficial ownership registers before 31^st December 2020.  It calls on the Government to provide the same level of assistance to the Crown Dependencies, and to encourage them to take steps to meet the same standard of transparency.

20^th May 2018

SPAIN SEIZES BOAT SMUGGLING 15 TONNES OF HASHISH

Focus FEN and others on 2oth May reported that the Spanish National Police and Civil Guards have intercepted and seized a fishing boat carrying an estimated 15 tonnes of hashish, the Spanish Interior Ministry said.  The fishing boat, which was illegally sailing under a Maltese flag, when it was spotted by a Spanish patrol boat 110 nautical miles off the eastern Spanish coast in a joint operation with Portuguese, Italian and Dutch authorities.

http://www.focus-fen.net/news/2018/05/20/430616/xinhua-spain-seizes-boat-smuggling-15-tonnes-of-hashish.html

LIBYA AUDIT BUREAU WANTS TO FREEZE BANK ACCOUNTS OF FIRMS ACCUSED OF MONEY SMUGGLING

The Libya Observer on 19^th May reported that the Libya Audit Bureau announced the names of figures and local and international firms involved in smuggling foreign currency, accusing them of greatly damaging Libya’s economy.  It sent a letter to the Central Bank of Libya (CBL), the Head of the Commission of Imports Budget, and the banks’ managers urging them to stop dealing with the bank accounts of the involved figures ad firms.  44 local companies and 24 foreign companies were included.  It also revealed money smuggling using letters of credit, thus damaging Libya’s economy, saying it is a form of organised crime, and said that there should be no letters of credit until the money smuggled is counted and then the file is sent to the concerned authorities.

https://www.libyaobserver.ly/economy/libya-audit-bureau-wants-freeze-bank-accounts-firms-accused-money-smuggling

 

CANADIAN JAILED IN US FOR EXCHANGING BITCOINS

Crypto Insider reported that in December 2016, Canadian citizen, Louis Ong, was targeted by the US federal authorities for posting an advertisement online to anonymously exchange bitcoin for US dollars.  Ong has now been sentenced to 20 days in US prison, 3 years of supervised release, and will likely be unable to return to the US after serving his sentence there.  He also forfeited $1.1 million in cash and bitcoin.

https://cryptoinsider.21mil.com/canadian-citizen-louis-ong-jailed-us-trading-bitcoin/

BRITISH GOVERNMENT LISTS PAKISTAN AMONG TOP 3 MONEY LAUNDERING SOURCES

The Daily Times in Pakistan on 20^th May reported that the NCA has identified Pakistan, Nigeria and Russia as the top source countries for money laundering in the UK in its annual assessment of serious and organised crime.  The assessment also mentions that one of the key mechanisms used in money laundering is trade-based money laundering (TBML), described as a complex global issue and a key method of money laundering impacting on the UK.

https://dailytimes.com.pk/242321/british-government-lists-pakistan-among-top-3-money-laundering-sources/

CHINA’S CNPC READY TO TAKE OVER IRAN PROJECT IF TOTAL LEAVES

Customs Today on 19^th May reported that China’s state-owned energy major CNPC is ready to take over Total’s stake in the giant Iranian South Pars gas project if the French company leaves amid newly announced US sanctions, industry sources said, according to Reuters.

http://www.customstoday.com.pk/chinas-cnpc-ready-to-take-over-iran-project-if-total-leaves/

NCA MOST WANTED LIST

http://nationalcrimeagency.gov.uk/most-wanted-hub/most-wanted-listings

ISLAMIC STATE CHEMICAL WEAPONS

The START website on 28^th March republished an article originally in the CTC Sentinel arguing that the Islamic State’s experiments with chemical weapons (CW) cannot predict future threats.  The article states that IS has used weaponised toxic industrial chemicals, or TIC, which shows how eager IS was to get access to these chemicals.  Some of the chemicals used for weaponized TIC are chlorine, which is most predominantly used; phosphine, a compound used in agriculture; and sulphur mustard.  These 3 chemicals were all used in between 2014 and 2016 in various attacks.  The analysis questions why IS decided to leave out their CW attacks that they deemed successful.

http://www.start.umd.edu/news/islamic-state-chemical-weapons-case-contained-its-context

SPOT THE SIGNS OF TRAFFICKING AND FORCED LABOUR

The Gangmasters and Labour Abuse Authority in the UK has published a number of indicators of trafficking and forced labour.  Not all of the indicators will apply in every case, and some may not be immediately apparent.  The indicators are grouped under several headings – restricted freedom; behaviour; working conditions; accommodation; finances; appearance.

http://www.gla.gov.uk/who-we-are/modern-slavery/who-we-are-modern-slavery-spot-the-signs/

On 18^th May the OECD Insight website published an article by the head of the OECD Public Governance Directorate arguing that the small package trade is facilitating the global trade in counterfeits, and it is also one of the reasons why the current opioid epidemic in the US has reached the proportions it has.  It says that governments now realise the serious effects the small package trade can have.  In a 2018 OECD on illicit trade, customs agencies reported that small, low-value shipments are a very real threat to national health, safety and security – small parcels do not just contain illicit narcotics, but weapons, illegal wildlife products, or indeed nearly anything that will fit in a box.  A small-package delivery system which escapes controls has combined with the democratisation of trade through e-commerce to ignite a boom in illicit trade.  The trouble is that customs agencies are geared to monitor large commercial shipments rather than a continuous flow of small parcels.  Though the institutional capacities of individual law enforcements agencies are weak, governments can co-operate with each other, and with courier services, postal administrations, e-commerce vendors and intermediaries.

http://oecdinsights.org/2018/05/18/the-dark-side-of-the-digital-economy-bad-things-come-in-small-packages/

The Cyprus Mail on 20^th May published an opinion piece saying that Cyprus was paid a visit by the US Treasury Department’s Assistant Secretary for Terrorist Financing, who met the Finance Minister, Foreign Minister and Governor of the Central Bank and discussed “the positive improvements and reforms that Cyprus has made in its anti-money laundering regulations and regulatory oversights,” with the officials and “explored areas where the US and Cyprus can continue to partner to fight threats to the international financial sector”.  A statement claimed that the US was encouraged by the commitments made by Cypriot officials today and will continue to work together to combat and corruption, money laundering and other financial threats.  The article suggested that problem was the Russian businessmen that make up the main clientele of auditing firms and law firms and are granted citizenship when they buy an expensive property.  At the same time, the Cyprus Bar Association and the Institute of Certified Public Accountants of Cyprus (ICPAC) issued circulars to their members advising them to be more diligent in scrutinising the activities of their clients, applying AML regulations properly and avoiding doing any business with individuals or businesses on the US sanctions lists.  The Cyprus Securities and Exchange Commission also issued a similar statement warning the entities it supervises to have cognisance of the US sanctions list.  The article says that it is very clear the US turned the screw on the Cyprus authorities, which are now desperate to show that they are following the US ‘advice’.  The article also comments that the citizenship by investment scheme, although a big boost to the economy, has only made matters worse as it has attracted wealthy Russians of interest to the US authorities.

https://cyprus-mail.com/2018/05/20/our-view-government-needs-to-take-us-sanctions-warning-seriously/

19^th May 2018

PUBLIC RELEASE OF 1MDB REPORT IN MALAYSIA SIGNALS IMPORTANT TURN

On 16^th May, Transparency International said that it applauds the actions of Malaysian Prime Minister Mahathir Mohamad to publicise the details of an auditor-general report into 1Malaysia Development Berhad (1MDB).  Previously classified as secret, the report’s findings on 1MDB are critical to promoting anti-corruption efforts across the country. The 1MDB scandal, which is estimated at more than $4.5 billion, involves political leaders at the highest levels of government.

COLOMBIA EXTRADITES FROM US KEY WITNESS IN SUPREME COURT BRIBERY SCANDAL

On 18^th May, Colombia Reports that Colombia’s former anti-corruption chief, Luis Gustavo Moreno, who has admitted to bribing the country’s Supreme Court, was extradited after a deal with the US.  Testimonies given by Moreno resulted in the arrest of a former Supreme Court chief justice. One magistrate was removed from the court and a second former chief justice was also accused of having received bribes from politicians in what became known as the “Toga Cartel”.  More than 25 former officials from all branches of government have since been implicated in the scandal, according to local media.

https://colombiareports.com/colombia-extradites-prime-suspect-in-supreme-court-bribery-scandal/

THE PASSPORT DEALERS AND “GOLDEN VISAS” OF EUROPE

On 6^th March, Transparency International published a feature providing a non-exhaustive list of the options at your disposal in what it calls the “European Golden Visa Shop”.  The idea, it says, is simple: governments trade citizenship or residence rights for investment.  Arrangements differ from country to country, and requirements may include investment in business, real estate or government bonds.  Over 20 countries or territories currently offer Golden Visa programmes worldwide, including 13 in Europe: Austria, Belgium, Bulgaria, Cyprus, Greece, Latvia, Lithuania, Malta, Monaco, Portugal, Spain, Switzerland, and the UK. Hungary ran a controversial Golden Visa programme from 2013 to 2017 [and is reported to be restarting a modified version].

https://www.transparency.org/news/feature/navigating_european_golden_visas

UN LIBYAN SANCTIONS: IMPLEMENTATION OF UN SCR 2357

On 11^th May, the UN Secretary General published a report on the implementation of UN SCR 2357 which authorised and extended the inspection by Member States, acting nationally or through regional organisations, with appropriate consultations with the Government of National Accord in Libya, on the high seas off the coast of Libya, of vessels bound for or from Libya for which there are reasonable grounds to believe that they are carrying arms or related materiel.  These inspections constitute an important part of its ongoing efforts to reinforce the implementation of its arms embargo adopted through UN SCR 1970.  The UN Security Council had already called upon Member States to conduct inspections of cargo in their territories that was heading to and coming from Libya, which included inspections at airports and seaports, if the Member State had information that provided reasonable grounds to believe that the cargo contained prohibited items.  Moreover, and outside the scope of the arms embargo but still pertaining to Libya, the Security Council also mandated the inspection on the high seas of vessels in other circumstances – to prevent illicit exports of petroleum from Libya and human trafficking.  The seizure and disposal of prohibited items and collection of evidence appears quite limited, on the basis of what the report says.  The report makes several recommendations (such as improved training and better intelligence on smuggling methods and routes).

https://reliefweb.int/sites/reliefweb.int/files/resources/N1813324.pdf

https://www.unodc.org/unodc/en/money-laundering/laundrycycle.html

US ADDS 33 NAMES TO ITS “UNVERIFIED LIST”

On 17^th May, the US Federal Register reported that the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding 33 persons to the Unverified List (UL”) and adding an additional address for 1 person currently listed on the UVL.  The 33 persons are being added to the UVL on the basis that BIS could not verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the US Government’s control.  Although BIS has an interest in informing the public of its inability to verify the foreign party’s bona fides, there may not be sufficient information to add the foreign person at issue to its Entity List (which could amount to an export prohibition).

https://www.federalregister.gov/documents/2018/05/17/2018-10528/revisions-to-the-unverified-list-uvl

437 KG OF VIAGRA SEIZED AT SOUTH AFRICAN AIRPORT

IOL on 18^TH May reported that customs officials said that they had seized 437 kg of male sexual enhancement pills (Viagra) at OR Tambo International Airport.  This represents the biggest bust of sexual enhancement pills at the airport in the past year.

https://www.iol.co.za/ios/news/r30-million-worth-of-viagra-seized-at-or-tambo-airport-15044272

JAIL FOR MAN WHO TRIED TO SMUGGLE STUN GUNS INTO DOVER

Kent Online on 18^th May reported that Przemyslaw Dehr, 50, a company boss who tried to smuggle 199 disguised stun guns (together with CS gas canisters) into Dover has received an 8-year jail term – though he fled the UK months before his trial was due to begin at Canterbury Crown Court and has not been seen since even though he was not in court.

http://www.kentonline.co.uk/dover/news/stungun-smuggler-thought-to-have-fled-to-poland-183224/

US: MEN WHO ALLEGEDLY PUBLISHED THOUSANDS OF MUGSHOT PHOTOS ARRESTED FOR EXTORTION

On 18^th May, the Guardian and others reported that Thomas Keesee and Sahar Sarid, 2 of the alleged owners of Mugshots.com, have been arrested in Florida, following an investigation led by the Northern California Computer Crimes Task Force.  Along with the other 2 co-owners, Kishore Vidya Bhavnanie and David Usdan, they are accused of extracting more than $2 million in mugshot-removal fees from over 5,000 people in a 3-year period.  Mugshots.com isn’t the only business to have turned a profit from people’s arrest photos; it’s part of a wider and controversial industry.  There are also “mugshot tabloids” like Just Busted, for example, which make money by selling papers full of booking photos of people arrested in the local area, with captions describing the crimes they are accused of committing.  Mugshots.com made its income from people paying to get their photos removed from a central, easily searchable database.

https://www.theguardian.com/us-news/2018/may/18/mugshot-photos-arrested-extortion-just-busted

FinCEN GRANTS A 90-DAY EXEMPTION FROM THE BENEFICIAL OWNERSHIP RULE FOR CERTAIN FINANCIAL PRODUCT RENEWALS AND ROLLOVERS

Vedder Price reported on 18^th May that on 16^th May FinCEN issued an administrative ruling that provides covered financial institutions with a 90-day exemption from the beneficial ownership requirements with respect to certain financial products and services that automatically rollover or renew (e.g., CDs or loan accounts) and which were established before May 11^th.

https://www.jdsupra.com/legalnews/bsa-aml-alert-fincen-grants-a-90-day-28108/

https://www.fincen.gov/news/news-releases/administrative-ruling-beneficial-ownership-requirements-legal-entity-customers

UK GUIDANCE: CORPORATE OFFENCES FOR FAILING TO PREVENT CRIMINAL FACILITATION OF TAX EVASION

On 18^th May, HMRC issued updated guidance to help one understand laws introduced to encourage businesses to prevent their representatives helping clients evade tax.

https://www.gov.uk/government/publications/corporate-offences-for-failing-to-prevent-criminal-facilitation-of-tax-evasion

WOMAN FAILS TO RECOVER ALMOST €30,000 SEIZED BY GARDAÍ AS PROCEEDS OF CRIME

The Journal on 19^th May reported that a woman, Lydia Whelan, whose nephew is allegedly in an organised crime gang has failed in her bid to recover almost €30,000 seized by gardaí as the proceeds of crime.  The cash was seized on 14^th June 2011 during a search of a house where her nephew, James Whelan, was living at the time.

http://www.thejournal.ie/court-assets-of-crime-4021529-May2018/?src=ilaw

NEW GUERNSEY ECONOMIC DEVELOPMENT STRATEGY

On 18^th May, Guernsey published its new Economic Development Strategy which seeks to maintain the Island’s prosperity both now and in the coming decade.  The Island’s parliament will debate the Strategy in June.

https://www.gov.gg/article/165359/Economic-Development-Strategy-to-build-on-strengths-of-Guernseys-economy-and-encourage-diversification

POLITICAL VIOLENCE AND CRIME INCIDENT REPORT: Q1 2018

Control Risks has released its latest update (available as free download) which analyses global incidents of war, terrorism, unrest and violent organised crime with commercial relevance.

https://www.controlrisks.com/our-thinking/insights/reports/political-violence-and-crime-incident-report-q1-2018

MALTA RISKS BEING TAKEN OVER BY THE MAFIA, ITALIAN REPORT CLAIMS

The Times of Malta on 19^th May in article said that a report by an Italian anti-Mafia foundation has warned that Malta might be “taken over by Mafia interests” if nothing is done and if the EU keeps “closing its eyes” to what is happening on the island.  In its conclusions the Florence-based Fondazione Caponnetto said that “if no immediate action is taken, Malta risks being controlled by local and international criminal groups” connected to the Mafia.  The report claims that the attitude of foreign groups using Malta for their interests, aimed at going around international sanctions, represents “a risk factor which cannot be ignored”.

https://www.timesofmalta.com/articles/view/20180519/local/malta-risks-being-taken-over-by-the-mafia-italian-report-claims.679423

PRESIDENT BUHARI’S FIGHT TO RECOVER NIGERIA’S STOLEN ASSETS

On 19^th May, Deutsche Welle carried an article saying that, for quite some time now, Nigeria has been intensifying efforts to recover stolen state assets from abroad. President Muhammadu Buhari’s government has won some recent battles — but it is fighting a losing war.  Nigeria has even slipped on Transparency International’s Corruption Perception Index — from the 136^th place when Buhari was inaugurated to 148^th out of the 180 countries surveyed.  But there is one area in which Buhari is intensifying efforts: the recovery of embezzled and stolen assets domestically and abroad.  A major international example was in April, when his government managed a spectacular success, announcing that over $320 million had been returned by Switzerland (from the Sani Abacha case, he being the 1990s military dictator).  Much of the other recovered assets were from domestic Nigerian sources.

http://www.dw.com/en/president-buharis-fight-to-recover-nigerias-stolen-assets/a-43853588?src=ilaw

US ARM OF DUTCH RABOBANK SENTENCED FOR AML OFFENCES

On 18^th May, Mondo Visone reported that Rabobank National Association, a California subsidiary of the Netherlands-based Coöperatieve Rabobank, was sentenced for impairing, impeding and obstructing its primary regulator, the OCC, by concealing deficiencies in its AML programme and for obstructing the OCC’s examination of Rabobank.  Rabobank was sentenced to a 2-year term of probation and ordered to pay the statutory maximum fine of $500,000.   Additionally, as part of its guilty plea, Rabobank forfeited $368,701,259 as a result of allowing illicit funds to be processed through the bank.

http://www.mondovisione.com/media-and-resources/news/us-department-of-justice-rabobank-na-sentenced-for-conspiring-to-impair-impede/

DRUG TRAFFICKING, ELECTION FUNDS DEFICIT COULD DERAIL GUINEA-BISSAU’S PROGRESS

A UN news release on 16^th May reported that while small forward steps to break a languishing political impasse in Guinea‑Bissau were hopeful ahead of elections and the resumption of National Assembly plenary meetings, threats such as rampant drug trafficking and shortfalls in electoral project financing could hamper further gains, the Security Council heard from its Assistant Secretary‑General for Political Affairs.

https://www.un.org/press/en/2018/sc13343.doc.htm

PAKISTAN RACING TO MEET FATF DEMANDS BEFORE JUNE

WION in Pakistan [so not necessarily an impartial source] reported on 19^th May that Pakistan is giving finishing touches to its action plan that proposes measures for combating money laundering and terror financing to prevent itself from being placed on the FATF grey list next month, according to a media report from Dawn News.  A compliance report has been submitted to the Asia-Pacific Group (APG) – a sub-group within FATF – detailing the steps taken thus far and those that will be taken in the future to bring Pakistan’s financial, regulatory and legal landscape into compliance with the watchdog’s requirements.  A meeting was convened at the Foreign Office to review the proposed actions which are to be discussed with APG joint working group in Bangkok and this was the last in a series of meetings taking place within the government as officials race to meet the June deadline by when Pakistan will be placed on the FATF grey list.

http://www.wionews.com/south-asia/pakistan-racing-to-meet-fatf-demands-before-june-138257?src=ilaw

HE WAS COLOMBIA’S ANTI-CORRUPTION CHIEF – NOW, HE’S FACING BRIBERY CHARGES IN MIAMI

The Miami Herald on 19^th May carried an article about Colombia’s former anti-corruption chief, Luis Gustavo Moreno Rivera, and a private attorney who were extradited from Bogotá to Miami on charges of a foreign bribery scheme that US authorities say unfolded at a Miami-Dade mall and other locales.
http://www.miamiherald.com/news/nation-world/world/americas/colombia/article211461434.html#storylink=cpy

LATVIAN AML OFFICE LOOKING INTO TRANSACTIONS LINKED TO MALTA CORRUPTION SCANDAL

On 19^th May, Re Baltica in Latvia carried an article claiming that Maltese investigators have asked help of the Latvian AML office to trace the payments via the Latvian bank, ABLV, in the alleged corruption case which, coupled with a murder of Daphne Caruana Galizia, has shook Malta, but there is no formal criminal investigation opened and the probe is slow.  According to the Times of Malta, local investigators believe that the 2 payments of $1.4 million in November 2015 which came from Seychelles registered company with account in ABLV to various shell companies were allegedly meant to line the pockets of high-ranking Maltese politicians and their associates.

https://en.rebaltica.lv/2018/05/latvian-anti-money-laundering-office-looking-into-transactions-linked-to-maltas-major-corruption-scandal/?src=ilaw

US DEPORTS RUSSIAN MAN CONVICTED OF NUCLEAR BRIBERY SCHEME

On 19^th May, Rferl reported that news agencies say that US authorities have deported a former Russian executive previously convicted of arranging corrupt payments linked to the Russian state nuclear company, Rosatom.  Vadim Mikerin, 59, was sentenced to 4 years in prison in 2015, was deported by federal authorities on May 18^th.  He was an executive with a Maryland-based subsidiary of Tenex, a Rosatom-owned firm that supplies and exports uranium and enrichment services to nuclear power companies worldwide.  He was reported to have helped facilitate the payment of bribes made to win “improper business advantages” for US firms that worked with Tenex.

https://www.rferl.org/a/u-s-deports-mikerin-russian-convicted-nuclear-bribery-scheme/29236937.html?src=ilaw

ONLINE BETTING INDUSTRY VOWS TO FIGHT DUTY RISE IN LIGHT OF FOBT DECISION

The Racing Post on 18^th May reported that representatives of the online gambling industry said they would push back against plans to raise remote gaming duty to make up for lost tax receipts caused by the government’s cut in FOBT stakes.  The government announced that it was cutting FOBT stakes to £2 from £100, with the change linked to an increase in the duty paid by online gaming operators.

https://www.racingpost.com/news/latest/online-industry-to-push-back-against-duty-rise-in-light-of-fobt-decision/332027

NETHERLANDS: 4 ARRESTED IN DARK WEB DRUG BUST; COCAINE, PILLS SENT BY POST

On 19^th May, Customs Today reported that Dutch police had busted a drug network and 4 men were arrested for trading drugs on the Dark Web and sending drugs all across the world through the regular postal service.  The suspects had clients all over the world and sent drugs, mostly ecstasy, to their clients in normal postal packages and envelopes.

http://www.customstoday.com.pk/four-arrested-in-dark-web-drug-bust-cocaine-pills-sent-by-post/

JERSEY BUSINESSES LOSE £1 MILLION IN CYBER ATTACKS

The Jersey Evening Post on 19^th May reported that fraudsters have stolen more than £1 million from Jersey businesses in a wave of ‘highly sophisticated’ cyber-attacks.  They used ‘impersonation attacks’ specifically against large Jersey companies, businesses are being sent false invoices or payment requests that are identical to official versions, with the exception of the bank account details.
https://jerseyeveningpost.com/news/2018/05/19/big-firms-lose-1m-in-cyber-attacks/#wyu2lXskCttLyOy1.99

DIGITAL POLICING REVIEW – TECHNOLOGY FUTURES OPERATIONS

Vigilant Research has produced a report.  The Digital Policing Review Technology Futures Operations report examines the current resourcing and demand for technology futures operations within the UK police service.  It considers how policing can best work with industry, academia and peers to realise the ambition of effective, sustainable technology futures.  Police and “government readers” can request a free copy by providing an email address.  According to Tech UK, the research was proposed by the National Police Technology Council, and it examines the current state and resourcing of technology futures operations within the UK police service, considers operating models for the capability within comparable businesses and the technology industry, categorises and sets out policing’s technology futures requirements, reviews the external sources of technology futures insight and proposes appropriate objectives for a centralised police technology futures capability.  The paper confirms that the service has much to gain from technology futures insight which is shaped by the police technology community and suggests some proposals for improving capability by harmonizing operations to which technology futures activities are well suited.

http://vigilantresearch.com/

INFOGRAPHIC: THE EVOLUTION OF INTERNATIONAL MONEY TRANSFERS

On 18^th May, Fintech Futures produced an interesting infographic which traces the evolution of international money transfers from barter to Bitcoin, from around 3,000 BC to date.  The infographic is free to download at –

https://www.bankingtech.com/2018/05/infographic-the-evolution-of-international-money-transfers/

UK GOVERNMENT ANNOUNCES WIDE-RANGING CHANGES FOR BOTH RETAIL AND ONLINE GAMBLING IN THE UK

Paul Hastings on 18^th May published a briefing outlining planned changes to the gambling industry in the UK, changes which extend beyond those relating to FOBT stakes and balancing online gambling tax increases.

https://www.paulhastings.com/publications-items/details/?id=a7fccc6a-2334-6428-811c-ff00004cbded

THE UNTOLD STORY OF JAPAN’S SECRET SPY AGENCY

On 19^th May, The Intercept carried an interesting feature on a secret spy agency headquarters for the Directorate for Signals Intelligence, Japan’s version of the National Security Agency.  Its role is to eavesdrop on communications.  But its operations remain so highly classified that the Japanese government has disclosed little about its work – even the location of its headquarters.

https://theintercept.com/2018/05/19/japan-dfs-surveillance-agency/

ENACT Africa on 7^th May published an article saying that beyond the ‘migrant crisis’, Europe should recognise the threat posed by illicit markets in Libya.  The head of the Libyan National oil Company has called for European partners to help his country combat fuel smuggling.  The practice of smuggling heavily subsidised fuel from Libya is costing the country an estimated US$750million a year.  He urged the EU to expand the mandate of its maritime policing initiative, Operation Sophia, to also include fuel smuggling.  The most significant development in this respect has been the emergence of large-scale, sea-bound fuel smuggling to Europe and Turkey onboard fuel tankers: particularly off the west coast of Libya. Over the past 7 years, the area has seen the development of significant syndicates headed by militia leaders with various interests in the black economy: from fuel smuggling to weapons, drugs, and human smuggling.

https://enactafrica.org/enact-observer/europe-should-rethink-its-policy-on-libyas-organised-crime-problem

Baker McKenzie on 18^th May provided a further update on the proposed legislation in Russia intended to counter US and EU sanctions.  On May 17^th, the Draft Bill “On Measures (Countermeasures) in Response to Unfriendly Actions of the USA and other Foreign States” was approved by the State Duma of the Russian Federation in the 2^nd reading.  The scope of the proposed countermeasures remained unchanged.  Another draft Bill “On Amendments to the Criminal Code of the Russian Federation” envisaging criminal liability for complying with Western sanctions, was expected to be considered in its second reading on May 17^th.  The 2^nd reading was postponed because the State Duma received a lot of negative comments from the Russian business community in connection with this Draft.  The Draft is expected to be modified to satisfy these concerns.  According to preliminary information reported by the Russian media, the administrative violation at issue might be penalized with a fine of up to approximately $804,588.

http://www.internationaltradecomplianceupdate.com/2018/05/18/russia-further-update-on-russias-proposed-new-counter-sanctions/

http://www.cms-lawnow.com/ealerts/2018/05/the-bill-to-counter-us-sanctions-passes-state-dumas-second-reading

 

OCCRP on 18^th May reported that Italian authorities had seized over €20 million in assets from a group accused of managing an illegal online gambling business on behalf of the ‘Ndrangheta, police announced.  It seized a Maltese company, Centurionbet, and 7 bars and betting shops located in Calabria, where the illegal gambling activities allegedly took place.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8107-italy-seizes-millions-from-online-gambling-business

China.org on 19^th May reported that the US Treasury has imposed sanctions on an influential Venezuelan political figure, 3 persons related to him and his alleged “corruption network”, including 3 companies and 14 properties in the US.  It designated Diosdado Cabello, the first-vice president of the United Socialist Party of Venezuela, the party of Venezuelan President Nicolas Maduro, and Cabello’s wife and brother.  A businessman, Rafael Alfredo Sarria Diaz, who has been accused of acting on behalf of Cabello, was also on the blacklist.  The Treasury also blocked 3 companies and 14 properties in the US, which were believed to be owned or controlled by Sarria.

http://www.china.org.cn/world/2018-05/19/content_51413063.htm?src=ilaw

https://www.univision.com/univision-news/united-states/the-us-blacklists-diosdado-cabello-no-2-in-venezuelas-ruling-party?src=ilaw

Superyacht News on 18^th May reported that a Malta court has ruled that the 95 metre Oceanco-built motoryacht, Indian Empress, will be auctioned for sale at the Courts of Justice in Valetta on 21^st May on the application of Melita Power Diesel.  The owner of the Isle of Man-flagged superyacht, Vijay Mallya, whose business endeavours include the Force India Formula One team and Kingfisher Airlines, was arrested in London on 3^rd October at the request of the Indian government, which asked for his extradition to stand trial over an alleged debt of more than £1 billion.   The Indian Empress has been completely abandoned since September 2017, leaving the 40-person crew with months of unpaid wages.

http://www.superyachtnews.com/fleet/95m-my-indian-empress-to-be-auctioned

On 18^th May, Financial regulation News reported that the House Terrorism and Illicit Finance Subcommittee has held a hearing to discuss the implementation and enforcement of the new FinCEN new Customer Due Diligence (CDD) Rule intended to improve AML efforts and safeguard the US financial system.  It came into operation on 11^th May.   The new Rule the CDD Rule amends Bank Secrecy Act regulations and clarifies and strengthens customer due diligence requirements for US banks, mutual funds brokers or dealers in securities, futures commission merchants, and introducing brokers in commodities.  It adds a new requirement for these covered financial institutions to identify and verify the identity the natural persons (beneficial owners) of legal entity customers who own, control, and profit from companies when those companies open accounts.  The CDD Rule has 4 core requirements.  It requires covered financial institutions to establish and maintain written policies and procedures that are reasonably designed to –

• identify and verify the identity of customers;
• identify and verify the identity of the beneficial owners of companies opening accounts;
• understand the nature and purpose of customer relationships to develop customer risk profiles; and
• conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.

https://www.fincen.gov/news/news-releases/fincen-reminds-financial-institutions-cdd-rule-becomes-effective-today

https://financialregnews.com/house-examines-financial-crimes-enforcement-networks-anti-money-laundering-rule/

FINCEN GRANTS A 90-DAY EXEMPTION FROM THE BENEFICIAL OWNERSHIP RULE FOR CERTAIN FINANCIAL PRODUCT RENEWALS AND ROLLOVERS

Vedder Price reported on 18^th May that on 16^th May FinCEN issued an administrative ruling that provides covered financial institutions with a 90-day exemption from the beneficial ownership requirements with respect to certain financial products and services that automatically rollover or renew (e.g., CDs or loan accounts) and which were established before May 11^th.

https://www.jdsupra.com/legalnews/bsa-aml-alert-fincen-grants-a-90-day-28108/

https://www.fincen.gov/news/news-releases/administrative-ruling-beneficial-ownership-requirements-legal-entity-customers

 

On 6^th March, Transparency International published a feature providing a non-exhaustive list of the options at your disposal in what it calls the “European Golden Visa Shop”.  The idea, it says, is simple: governments trade citizenship or residence rights for investment.  Arrangements differ from country to country, and requirements may include investment in business, real estate or government bonds.  Over 20 countries or territories currently offer Golden Visa programmes worldwide, including 13 in Europe: Austria, Belgium, Bulgaria, Cyprus, Greece, Latvia, Lithuania, Malta, Monaco, Portugal, Spain, Switzerland, and the UK. Hungary ran a controversial Golden Visa programme from 2013 to 2017 [and is reported to be restarting a modified version].

https://www.transparency.org/news/feature/navigating_european_golden_visas

18th May 2018

MINEFIELDS IN THE US EXPORT CONTROL SYSTEM

On 14^th May, King & Wood Mallesons published the first in what is intended as a series of articles on key issues in the US export control system, the first of which seeks to review the “minefields” in US export control frequently encountered by enterprises in China.  The article uses several case studies, and includes export controls applied to activities beyond the actual export, the Transmission and Release of Controlled Items to Foreign Persons within the US, the fact that export control can apply to non-listed items, and assistance from non-US Entity on transaction applies for US export control and sanction management.  It also suggests ways to avoid the “minefield” – a comprehensive export control clearance programme, voluntary disclosure, and the Authorized Validated End User (VEU) programme operated by BIS in the US and under which authorised entities are permitted to accept certain controlled items from US by means of export, re-export and transfer without a licence.

http://www.kwm.com/en/cn/knowledge/insights/minefields-in-us-export-control-system-20180511

SOUTH KOREAN BANKS ON ALERT OVER US REGULATOR’S INSPECTION

Business Korea on 18^th May reported that South Korean banks are on alert as the New York State Department of Financial Services (DFS) is planning to start an inspection into their branches in New York in July.  The banks could be subject to punitive and remedial actions if any case of incompliance with state and federal AML regulations is found.  In the past, NongHyup Bank was ordered to pay $11 million in penalties for negligence of AML compliance by its New York branch.

http://www.businesskorea.co.kr/news/articleView.html?idxno=22375

TEXAS DOCTOR BOUGHT JET AND MASERATI WITH MONEY FROM UNNECESSARY CHEMO TREATMENTS

NDTV on 18^th May carried the story of a Texas doctor, Jorge Zamora-Quezada, who the DoJ alleges bankrolled his “lavish” lifestyle by performing unnecessary procedures and prescribing costly medication to, potentially, thousands of patients.  Investigators have said that he and co-conspirators took part in a $240 million health-care fraud scheme and international money-laundering operation funded by excessive and unwarranted medical procedures – including treatment for children and the elderly.

https://www.ndtv.com/world-news/doctor-bought-jet-masserati-with-money-from-unnecessary-chemo-treatments-1853737

FORMER EL SALVADOR PRESIDENT TO STAND TRIAL FOR MONEY LAUNDERING

Insight Crime on 17^th May reported that a former president in El Salvador is set to stand trial for allegedly embezzling hundreds of millions of dollars from the state to personal accounts, which could lead to him becoming the first former president of the Central American nation to face a criminal conviction and prison on such charges.  Elías Antonio Saca, who was president of El Salvador from 2004 to 2009, and 6 other members of his administration, will stand trial for allegedly embezzling $300 million.  Saca and his associates were arrested in October 2016.

https://www.insightcrime.org/news/brief/former-el-salvador-president-trial-money-laundering/

SWISS INVESTIGATING MONEY LAUNDERING LINKED TO ANGOLAN FUNDS

Swissinfo reported on 17^th May that the Office of the Attorney General of Switzerland (OAG) has authorised several searches in the country over possible money-laundering affecting the Angolan Sovereign Wealth Fund and the Angolan National Bank.  The Attorney General has opened criminal proceedings against unknown persons on suspicion of money laundering.

https://www.swissinfo.ch/eng/quantum-global_swiss-investigating-money-laundering-linked-to-angolan-funds/44126934

REALLY DIRTY MONEY LAUNDERED THROUGH BOOKMAKERS IN MANCHESTER

The I Hate Money laundering blog on 18^th May posted a story about a gang in Manchester which carried out robberies of cash delivery vans.  As the cash had been dye-stained by security devices during the course of the robberies, the gang had to use machines rather than people and so they visited nearly 50 betting shops, depositing the cash in fixed-odds betting (FOBT) machines and generating credit slips which they then exchanged for clean banknotes.   It worked for a while, but one day a cashier in a betting shop did not have enough cash to pay out against the credit slip and suggested that the player (aka robber) open an online account.  The player/robber started filling in an application form but then thought better of it – and left the part-completed form behind with his fingerprints and a phone number on it… The ringleader was jailed for 12 years for robbery and money laundering, and 16 other men received sentences totalling 112 years.

https://ihatemoneylaundering.wordpress.com/author/ihatemoneylaundering/

SHARP INCREASE IN REPORTED WHITE-COLLAR CRIME IN SINGAPORE

Nikkei Asian Review on 18^th May reported that a global survey conducted by PwC every 2 years showed that over a third of Singapore businesses said they were hit by fraud in the last 2 years as threats increased and detection methods improved.  The increase echoes the global trend, the survey found. The economic crime and fraud survey examined over 7,200 respondents from 123 territories, of which 118 were from Singapore.  However, while instances of bribery and corruption in Singapore were lower than the global average, incidents related to money laundering were higher.

https://asia.nikkei.com/Business/Markets/Nikkei-Markets/Sharp-increase-in-reported-white-collar-crime-in-Singapore?src=ilaw

EU SET TO REMOVE BAHAMAS, ST KITTS FROM TAX HAVEN BLACKLIST

Reuters on 18^th May reported that EU finance ministers are set to remove the Bahamas and Saint Kitts and Nevis from an EU list of tax havens, EU documents show.  The islands had been included in the blacklist in March as their tax rules and practices were deemed not in line with EU standards.

https://www.reuters.com/article/us-eu-tax-blacklist/eu-set-to-remove-bahamas-st-kitts-from-tax-haven-blacklist-idUSKCN1IJ0XK

FRENCH CYBERCRIME GANG BOSS CAUGHT IN THAILAND
On 18^th May, the Bangkok Post reported that a French cybercrime gang leader, Jonathan Verron, 25, wanted for hacking into customers’ accounts at a bank in England and demanding a ransom has been caught.  He allegedly hacked into the financial details of customers at a bank in the UK and demanded a ransom from the bank in exchange for not disclosing the information. He is one of 3 suspects, the others having already been caught.
https://www.bangkokpost.com/news/general/1468081/?src=ilaw

GREATER NATIONAL SECURITY SCRUTINY AT THE HEART OF NEW UK MERGER CONTROL REFORMS

Berwin Cave Leighton Paisner on 18^th May published an article saying that the UK has enacted legislative changes which lower the merger control thresholds under the Enterprise Act 2002, and extends the jurisdiction of Competition and Markets Authority and Secretary of State to investigate mergers in certain sensitive areas of the UK economy where there may be national security implications.  The changes take effect from 11^th June.

http://www.blplaw.com/expert-legal-insights/articles/greater-national-security-scrutiny-at-the-heart-of-new-uk-merger-control-reforms

IRISH MEN ARRESTED AFTER €3.4 MILLION CANNABIS SEIZURE IN SPAIN

Customs Today on 18^th May reported that 5 men, including 4 from Ireland, have been arrested after €3.4 million worth of cannabis herb was seized in Spain.  The drugs were discovered north-west of Malaga among pallets of lettuce in a truck that was destined for Ireland.

http://www.customstoday.com.pk/irish-men-arrested-after-e3-4m-cannabis-seizure-in-spain/

ITALY: NIGERIAN BLACK AXE NEW FOE FOR POLICE

On 18^th May, OCCRP reported that Sicilian authorities that have been fighting the Cosa Nostra for decades are facing a new type of organised crime: a Nigerian sex and drug trafficking gang called Black Axe.  After the Cosa Nostra in Palermo had been weakened by police, the Black Axe swooped in.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8095-aly-after-cosa-nostra-nigerian-black-axe-new-foe-for-police

OPCW CONCLUDES CHEMICAL WEAPONS ‘LIKELY USED’ IN SYRIA

Jurist on 18^th May reported that the Organisation for the Prohibition of Chemical Weapons has concluded that chemical weapons were “likely used” during the February attacks in Syria. According to the report, the OPCW found chlorine gas in 2 cylinders and in the environment.  The findings were also supported by eyewitness testimony and the symptoms from those in the affected area following the attack.

http://www.jurist.org/paperchase/2018/05/opcw-concludes-chemical-weapons-likely-used-in-syria.php

PODCAST: WEIGHING RED FLAGS

In the latest TRACE podcast, Carolyn Lindsey and Alexandra discuss a series of “red flags” relating to a problematic fictional agent, Tan, and the relevance of each.

https://www.traceinternational.org/bribe_swindle_or_steal

 

US FEDERAL RESERVE TERMINATES BARCLAYS 2010 ENFORCEMENT ACTION OVER SANCTIONS VIOLATIONS

On 18^th May, KYC 360 reported that the US Federal Reserve has terminated an enforcement action against Barclays Bank which was established around 8 years ago when the bank agreed to pay almost $300 million to settle charges related to sanctions – reportedly because Barclays has satisfied the requirements of the enforcement action.  As part of the deal signed in August 2010, Barclays agreed to pay almost $298 million to settle charges of facilitating transactions in violation of US sanctions.  It also agreed to submit a compliance programme, which included an annual assessment of OFAC compliance risks arising from Barclays activities and customer base.

https://kyc360.com/news/fed-terminates-barclays-2010-enforcement-action-regarding-sanctions-violation-2/

18 ACQUITTED IN MASSIVE BRUSSELS AIRPORT 2013 DIAMOND HEIST

KYC 360 reported on 18^th May that 5 years after a brazen multimillion-dollar diamond heist on the tarmac of Brussels Airport, a Belgian court has cited a lack of evidence as it acquitted 18 suspects in the case. The theft saw tens of millions worth of gems were stolen from the hold of a departing Swiss-bound plane.  One other person, suspected of being the mastermind, will hear his case in court later.

https://kyc360.com/news/18-acquitted-massive-brussels-airport-2013-diamond-heist/

 ARE US RECORDS RETENTION REQUIREMENTS ON A COLLISION COURSE WITH THE GDPR’S ‘RIGHT TO ERASURE?’

On 18^th May, Legal Tech published an article saying that US laws require companies to retain records for years, and sometimes forever, and violating US records retention laws can result in domestic fines and penalties.  But this could be an issue with the upcoming GDPR.

https://www.law.com/legaltechnews/2018/05/18/are-u-s-records-retention-requirements-on-a-collision-course-with-the-gdprs-right-to-erasure/

THIRD COUNTRIES ALIGN WITH EU SANCTIONS ON NORTH KOREA, IRAN, DRC

On 18^th May, the EU announced that Macedonia, Montenegro, Albania, Bosnia and Herzegovina, Iceland, Liechtenstein and Norway and Moldova had declared that they would align themselves with EU sanctions regimes on North Korea, Iran and the Democratic Republic of the Congo.

LUXEMBOURG SEEKS MALAYSIA TALKS OVER FROZEN 1MDB CASH

Reuters on 18^th May reported that authorities in Luxembourg hope Malaysia’s new government may offer new information on some $100 million from investment fund 1MDB that Luxembourg froze 2 years ago in a money-laundering probe – confirming for the first time that such a sum had been blocked in the Grand Duchy after Swiss private bank Edmond de Rothschild was fined 1 year ago over money-laundering.

https://uk.reuters.com/article/uk-malaysia-politics-scandal-luxembourg/luxembourg-seeks-malaysia-talks-over-frozen-1mdb-cash-sources-idUKKCN1IJ2GJ?src=ilaw

GLENCORE MAY BE SUBJECT TO FRESH SFO PROBE

Master Investor and others reported on 18^th May that rumours have circulated that investigators are seeking formal approval to look at bribery allegations involving the mining giant, the Democratic Republic of Congo, and Israeli billionaire Dan Gertler.

https://masterinvestor.co.uk/latest/glencore-may-be-subject-to-fresh-sfo-probe/?src=ilaw

UKRAINIAN PEOPLE SMUGGLERS WHO BROUGHT IN 17 ON A YACHT ARE SENTENCED

On 18^th May, an NCA news release reported that 3 Ukrainian nationals who were convicted of attempting to smuggle 19 migrants into Suffolk on a hired yacht have been jailed.  The trio were arrested after the boat – Flamingo – arrived into Southwold harbour on 15^th October, having sailed across the North Sea from the Netherlands.

http://www.nationalcrimeagency.gov.uk/news/1354-ukrainian-people-smugglers-sentenced-for-bringing-19-migrants-to-uk-on-yachthelv

 

On 18^th May, the EU published a news release confirming that the Commission intends to act to protect the interests of EU companies investing in Iran as part of the EU’s continued commitment to the Joint Comprehensive Plan of Action.  It says that the European Commission has acted on 4 fronts –

• Launched the formal process to activate the blocking statute by updating the list of US sanctions on Iran falling within its scope;
• Launched the formal process to remove obstacles for the European Investment Bank (EIB) to decide under the EU budget guarantee to finance activities outside the EU, in Iran;
• As confidence building measures, the Commission will continue and strengthen the ongoing sectoral co-operation with, and assistance to, Iran; and
• The Commission is encouraging Member States to explore the possibility of one-off bank transfers to the Central Bank of Iran.

http://europa.eu/rapid/press-release_IP-18-3861_en.htm

On 18^th May, OFAC announced the addition of 4 individuals and 3 companies (located in Florida) to its Venezuela sanctions lists.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180518.aspx

CNN and others on 18^th May reported that Malaysian police have confiscated 284 designer handbags and 72 suitcases containing cash, jewellery and other valuables as part of a corruption and money-laundering investigation into former Prime Minister Najib Razak.  The seizure was said to be part of investigations into a corruption scandal at the 1MDB state fund, which is also being probed by the US and other countries.

http://time.com/5281927/malaysia-corruption-probe-najib-razak-cash/?src=ilaw&xid=homepage

On 18^th May, EU Regulation 2018/733/EU amended 4 entries on the sanctions list following changes made by the relevant UN Sanctions Committee on 9^th May.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.123.01.0089.01.ENG&toc=OJ:L:2018:123:TOC

17^th May 2018

RETURN OF THE SANCTIONS: “BANKS SHOULD STEER CLEAR OF THE CENTRAL BANK OF IRAN”

The National Interest on 16^th May reported that the US Treasury had designated 2 networks that had “procured and transferred millions in U.S. dollar-denominated bulk cash” for the Islamic Revolutionary Guard Corps Quds Force (IRGC-QF).  The lynchpin of both schemes was the Central Bank of Iran (CBI).  Whilst coming in the wake of President Donald Trump’s decision to withdraw from the JCPOA, the actions, however, were tied to existing counterterrorism sanctions, not the nuclear sanctions affected by the agreement.  As part of the second set of sanctions, the department also took the unprecedented step of designating the head of the CBI.

http://nationalinterest.org/feature/return-the-sanctions-banks-should-steer-clear-the-central-25853

MIDDLE EAST DRONE WARS HOT UP AMID SURGE IN ARMED UAV SALES

Middle East Eye reported on 16^th May that the number of states deploying armed drones has quadrupled in the past 5 years and is set to double in the next 2 years, according to a new report.  At least 7 Middle East states now operate indigenous armed drones or have launched strikes from armed drones imported from China.  Countries that currently operate drones include Iran, Turkey, Iraq, Saudi Arabia, UAE, Israel and Egypt.  As recently as 2013 just 3 countries – UK, US and Israel – operated armed drones.  The main international agreement controlling the proliferation of drones, the Missile Technology Control Regime (MTCR), is coming under increasing pressure from the US defence industry and voices within the Trump Administration.  It reports that last month, the US State Department loosened restrictions on the marketing and the sale of armed drones by US firms, after complaints that many of Washington’s allies and top defence customers were turning to Chinese or Russian made drones due to strict US export rules.  Some non-state militant groups, including Islamic State, the PKK, Hezbollah, Hamas, Yemeni Houthis have also deployed weapons-carrying unmanned aircraft.  A drone researcher is quoted as saying that many of these drones effectively toys, yet can also be used as a very effective weapon of war, and that drones should potentially be considered dual-use items and controlled in a similar way to other defence technologies, but considering how small and cheap these drones are, it will be very difficult, if not impossible, to control their proliferation into other conflict areas.

http://www.middleeasteye.net/news/middle-east-drone-wars-hot-amid-surge-armed-uav-sales-1980204736

US EXPORT REFORM TRIGGERS GUN, AMMO CONTROL SHIFT

American Shipper on 16^th May carried a short piece highlighting the news that the US Commerce Department’s Bureau of Industry and Security (BIS) and State Department’s Directorate of Defense Trade Controls (DDTC) had posted proposed rules to transfer certain items from US Munitions List (USML) categories to the Commerce Control List (CCL).  The move would affect Categories I (firearms, close assault weapons and combat shotguns); II (guns and armament); and III (ammunition/ordnance).  Firearms and related articles inherently for military end use or that aren’t widely available in retail outlets will remain subject to State Department export licensing controls, a State Department spokesperson said.  The proposed rules would switch all non-automatic and semi-automatic firearms from the USML to the CCL, and the USML will continue to control all fully automatic firearms, including guns up to .50-calibre, guns at .50-calibre and above and shotguns, a State official said.  The USML also will still control silencers, sound suppressors and mufflers, as well as large parts and components for automatic weapons that are the functional part for the weapon itself, including barrels, receivers, bolts, bolt carriers, slides and gears, for both automatic firearms and firearms using caseless ammunition, the official said.

https://www.americanshipper.com/main/news/export-reform-triggers-gun-ammo-control-shift-71392.aspx?source=Big4

HONG KONG CUSTOMS SEIZES SUSPECTED SMUGGLED BIRD NEST

7^th Space on 16^th May reported that Hong Kong Customs had seized about 12 kg of suspected smuggled bird nest with an estimated market value of about $640,000.  Customs officers intercepted an outgoing private car and seized the batch of suspected smuggled bird nest underneath the passenger seats and in the boot of the private car.

http://7thspace.com/headlines/541391/hong_kong_customs_seizes_suspected_smuggled_bird_nest.html

THE ANTI-AVOIDANCE FRAMEWORK IN BELGIUM

On 10^th January, Loyens & Loeff published a structured guide to anti-tax avoidance legislation and regulation in Belgium.  This is available through the free Lexology website.

https://www.lexology.com/navigator#!results/616/view

CONVERTING YOUR CHARITABLE COMPANY TO A CIO

On 14^th May, Wrigleys Solicitors LLP published an article on the possible pros and cons of using the new process to convert your charitable company to a charitable incorporated organisation (CIO).  It starts by explaining that CIO were introduced in the UK in 2013 as a specially designed corporate vehicle for use by charities only.  They enjoy the benefit of limited liability, whilst only having one regulator (the Charity Commission), unlike charitable companies which report both to Companies House and the Charity Commission.  A CIO can be either a foundation CIO (the trustees are the same people as the members) or an association CIO (where the membership is wider than its trustees). In contrast to a charitable company, CIO impose a duty on their members to act in a way which furthers the interests of the CIO.

https://www.wrigleys.co.uk/news/charity-social-economy/converting-your-charitable-company-to-a-cio/

ANTI-CORRUPTION & BRIBERY IN THE UK

On 17^th April, Dechert LLP produced a structured guide to bribery and anti-corruption legislation, regulation and enforcement in the UK.  This is available through the free Lexology website.

https://www.lexology.com/library/detail.aspx?g=b4fc3f99-4168-4884-a4c3-d0ed3f7ff3f0

SINGAPORE MAN JAILED FOR FRAUD USING MINISTER’S NAME

On 17^th May, Channel News Asia reported that Reichie Chng Teck Kiam, 51, has been jailed for 8 years for various cheating, forgery and money laundering offences involving more than S$1.4 million.  He created fake WhatsApp conversations using the name of Education Minister Ong Ye Kung, to make his victims believe that the scheme they were investing in – a legal moneylending business promising monthly returns of 3% to 8% – was legitimate.  He pleaded guilty to 30 charges for offences including cheating, committing forgery to cheat others, money laundering and obtaining a personal loan while he was an undischarged bankrupt.
https://www.channelnewsasia.com/news/singapore/reichie-chng-ong-ye-kung-grassroots-volunteer-jailed-10242482

CYBERLAUNDERING FUNDS TERROR AND FLOODS INTERNET WITH FAKE TRANSACTIONS

On 17^th May, the Guardian carried an article saying that digital laundering is expected to double by 2020 with rise of cashless society and UN anti-crime chief says it must be tackled.  It mentions such examples as £2,000 fake e-books on Amazon and phony listings on Airbnb, as well as ghost journeys on Uber and in-game currencies on video games.  It says that around £200 billion, 10% of the estimated $2 trillion laundered annually, is cyberlaundered today.  By 2020 the proportion laundered digitally v traditional cash methods is expected to double, as economies become increasingly cashless.  It mentions that “microlaundering” is the most obvious way to circumvent PayPal’s payment limits, saying that you just run thousands of payments through various accounts and thus it’s almost impossible to detect.

https://www.theguardian.com/technology/2018/may/17/cyberlaundering-funds-terror-internet-fake-transactions-cashless-society

UK LAW FIRM ACCUSED OF FAILINGS OVER AZERBAIJAN LEADER’S DAUGHTERS’ OFFSHORE ASSETS

The Guardian on 16^th May claimed that solicitors Child & Child set up secret company in BVI and claimed Leyla and Arzu Aliyev had no political connections.  The Solicitors Regulation Authority (SRA) said it had referred Child & Child’s senior partner, Khalid Sharif, to the Solicitors Disciplinary Tribunal Sharif re allegations that he failed to ascertain whether the 2 sisters were “reportedly linked with the proceeds of crime” or were “politically exposed persons (PEP)”.  This is the first time the SRA has taken action against a firm implicated in the Panama Papers.

https://www.theguardian.com/world/2018/may/16/uk-law-firm-accused-of-failings-over-azerbaijan-leaders-daughters-offshore-assets

US REGULATORS FINE CHINA’S ICBC BANK $6.1 MILLION FOR AML OVERSIGHT FAILURES

On 16^th May, Reuters reported that the Industrial and Commercial Bank of China Financial Services agreed to pay $5.3 million to settle charges by the Financial Industry Regulatory Authority that it did not have adequate AML systems in place to monitor and detect suspicious transactions.  Separately, the SEC said that ICBC’s financial services unit agreed to pay an $860,000 fine for problems also related to its AML policies, including failing to file suspicious activity reports.  This is the latest in a string of regulatory probes or fines by US and European regulators over AML and KYC controls by Chinese banks.

https://www.reuters.com/article/usa-icbc-finra/us-regulators-fine-chinas-icbc-61-mln-for-oversight-failures-idUSL2N1SN130

FORMER HONG KONG MINISTER PATRICK HO’S ATTEMPT TO FEND OFF BRIBERY CHARGES FACES REBUTTAL IN US COURT

The South China Morning Post on 16^th May reported on the ongoing trial, saying that lawyers for defence say their client was not read his rights and prosecutors were taking too long sifting through emails. The prosecutors disagree.  Hong Kong’s home affairs secretary from 2002 to 2007, was arrested at John F Kennedy International Airport last November and a month later was charged on 8 counts – 3 of money laundering and 5 of violating the Foreign Corrupt Practices Act (FCPA) by offering US$2.9 million worth of kickbacks to government officials in Africa.  The kickbacks, it is alleged, were intended to help secure oil rights in Uganda and Chad for a Shanghai-based energy firm he represented.

http://www.scmp.com/news/hong-kong/hong-kong-law-and-crime/article/2146455/former-hong-kong-minister-patrick-hos-attempt

INCOMPLETE DATA OF 50,000 UK BUSINESSES COULD LAND DIRECTORS IN PRISON

Business Matters on 16^th May reported that 57,2271 UK businesses are not yet compliant with new regulations that mean they must declare those people with significant control (PSC) over each business.  The rules surrounding PSC were tightened in June last year following their introduction in April 2016, with every UK company now legally obliged to maintain a register of PSC and to record this information with Companies House within 14 days.  PSC are those who own at least 25% of a company’s shares or finances, who control at least 25% of its voting rights, or have control over appointments to the board of directors.

http://www.bmmagazine.co.uk/news/incomplete-data-of-50000-uk-businesses-could-land-directors-in-prison/

CRACKDOWN BEGINS ON ESTATE AGENTS WHO IGNORE BRIBERY, CORRUPTION AND MONEY LAUNDERING

The Negotiator on 16^th May reported that the Royal Institute of Chartered Surveyors (RICS) to require agents to adopt ‘personal statement’ including promise to report fellow agents breaking law, and sporting donations.  The ‘professional statement’ they will need to sign up to which will now be consulted on until the end of July.  It will require estate agents to report any breaches by other agents of anti-bribery and corruption laws and to say if they receive charity sponsorship donations from suppliers that could be construed as a bribe.  Once the consultation is finished, the new ‘Professional Statement’ will be adopted by member agents and branches to minimise their exposure to the risk of bribery, corruption, money laundering and terrorist financing during their day-to-day activities.

https://thenegotiator.co.uk/crackdown-agents-ignore-money-laundering/

WHAT IS A “ROUTED EXPORT TRANSACTION”?

An article from Shipping Solutions poses this question.  It appears that a routed export transaction occurs when the foreign buyer of the goods (and not the seller) contracts with a freight forwarder or other agent to export the merchandise from the US.  Why is this important?  Because it impacts who is required to file the electronic export information (EEI) through the Automated Export System (AES) when required by the US Foreign Trade Regulations.  The website offers more details and a free downloadable white paper to explain the background and reasons for care.

https://www.shippingsolutions.com/blog/what-the-heck-is-a-routed-export-transaction

LEGAL PRIVILEGE IN TAX AVOIDANCE DISPUTES

Out-Law on 9^th May published an article saying that in UK tax avoidance disputes there are practical difficulties in asserting legal privilege to prevent legal advice being disclosed to HMRC where the taxpayer has to explain the motivations behind a transaction, but properly asserting privilege should never be seen as being ‘unco-operative’.  It warns that if care is not taken the taxpayer may inadvertently waive privilege through its conduct, and HMRC may become entitled to see the privileged advice despite a taxpayer’s objection to disclosing it.  Legal advice privilege (LAP) applies to confidential communications between client and lawyer concerning the seeking or giving of advice.  Material covered by LAP does not have to be disclosed to HMRC.  It is fair to say that HMRC does not always look favourably on a taxpayer asserting LAP in alleged avoidance cases and it is common for HMRC to ask the taxpayer to agree to waive privilege, in the ‘spirit of co-operation’.  The article cautions that, thilst the tribunal will not be entitled to draw an adverse inference where a taxpayer properly asserts LAP, if non-disclosure leaves the taxpayer with an evidential gap regarding its intentions, its case may be placed on a considerably weaker footing.

https://www.out-law.com/en/articles/2018/may/privilege-in-tax-avoidance-disputes/

THE UK SHOULD PROACTIVELY TACKLE CORRUPTION IN CENTRAL GOVERNMENT, SAYS INTERNATIONAL WATCHDOG

The Council of Europe on 17^th May reported that the UK has a wide range of standards and procedures to help tackle corruption in central government and law enforcement agencies, according to the Council of Europe’s Group of States against Corruption (GRECO), but a number of shortcomings remain.  GRECO notably encourages the UK authorities to be more proactive in tackling corruption in central government, rather than reacting to problems as they arise.

https://www.coe.int/en/web/portal/-/the-uk-should-proactively-tackle-corruption-in-central-government-says-international-watchdog

https://www.gov.uk/government/news/greco-uk-5th-round-evaluation-report-published

NUCLEAR WASTE: EU COMMISSION REFERS AUSTRIA, CROATIA AND ITALY TO COURT FOR FAILING TO NOTIFY NATIONAL PROGRAMMES

On 17^th May, an EU news release advised that the European Commission has decided to refer Austria, Croatia and Italy to the Court of Justice of the EU for failure to notify their final national programmes for the management of the spent fuel and radioactive waste, as required under the Spent Fuel and Radioactive Waste Directive.  This type of waste is also the by-product of the non-power use of nuclear and radiation technologies, such as research in science and various medical applications.  It is a priority for the Commission to ensure that the highest safety standards for radioactive waste and spent fuel management are in place.

http://europa.eu/rapid/press-release_IP-18-3448_en.htm

ONLINE GAMBLING TAX RISE TO OFFSET FOBT STAKE CUT

On 17^th Accountancy Daily reported that the UK government’s decision to cut the maximum stakes on fixed odds betting terminals (FOBT) from £100 to £2 is likely to result in a hit to the estimated £450 million tax take from the machines each year, with HM Treasury looking to increase taxes on online gambling to address the shortfall.  There are over 33,600 FOBT in use in the UK, each of which take more than £53,000 from gamblers per year.  HM Treasury takes an estimated £450 million a year in machine gaming duty from FOBT, with a 25% levy on the total of £1.8 billion a year that goes through the machines.  In a statement the government said that to cover any negative impact on the public finances, and to protect funding for vital public services, this change will be linked to an increase in remote gaming duty, paid by online gaming operators, at the relevant Budget.

https://www.accountancydaily.co/online-gambling-tax-rise-offset-betting-terminal-stake-cut

http://www.igamingbusiness.com/news/uk-cut-fobt-stake-2-and-raise-remote-tax

https://www.gov.uk/government/news/government-to-cut-fixed-odds-betting-terminals-maximum-stake-from-100-to-2

The Government response to the consultation on proposals for changes to Gaming Machines and Social Responsibility Measures is also available –

https://www.gov.uk/government/consultations/consultation-on-proposals-for-changes-to-gaming-machines-and-social-responsibility-measures

UK – EMBARGOES AND SANCTIONS ON IRAN

On 15^th May, the FCO and others published further updated guidance.

https://www.gov.uk/guidance/sanctions-on-iran

CANADA: EXCISE DUTY GUIDANCE AND LICENCE APPLICATIONS FOR CANNABIS PRODUCERS

On 17^th May, Blake Cassels and Graydon published an article saying that on May 14^th the Canada Revenue Agency (CRA) published its first guidance for cultivators, producers and packagers of cannabis products, as well as the application forms for excise duty licences and the cannabis excise stamping regime.  The CRA has also committed to publishing at least one additional excise duty notice to explain how the proposed additional cannabis duty, which is imposed on behalf of the provinces, would be administered.

https://www.jdsupra.com/legalnews/cra-publishes-excise-duty-guidance-and-36314/

ITALY: LIVE VAT INVOICING UPDATE

On 14^th May, VAT Live reported that the Italian tax authorities have issued further details on the real-time VAT invoicing regime in Italy to be introduced from 1^st January 2019.  Known as SdI, this will require all resident and non-resident VAT payers to electronically submit sales invoice to the authorities before they are then sent to customers.

https://www.vatlive.com/vat-news/italy-sdi-live-vat-invoicing-update/?CampaignID=70133000001QHPk&lsmr=Paid%20Digital&lso=Paid%20Digital&referrer=&lastReferrer=www.vatlive.com&sessionId=1526560038715&_bk=vat%20live&_bt=154074534363&_bm=e&_bn=g&gclid=CN_6ufbqstECFVAQ0wodfmcISw

TURKISH BANKER WHO FACILITATED IRAN OIL-FOR-GOLD SANCTIONS EVASION RECEIVES SHORT SENTENCE IN US

On 17^th May, Kenneth Rijock in his blog reported that Mehmet Atilla, the number 2 at Turkey’s state-run Halkbank, who aided Reza Zarrab’s in moving $4 billion in illegal iranian oil profits, has been sentenced to 32 months by a US District Judge in New York.  Federal prosecutors had recommended 15 to 20 years, as Atilla was a major player in the massive oil-for-gold sanctions evasion scheme.

http://rijock.blogspot.com/

https://kyc360.com/news/turkish-banker-gets-32-month-sentence-iran-sanctions-case/

ALLIANZ PULLS BACK FROM IRAN AMID US SANCTIONS THREAT

On 17^th May, Law 360 reported that Europe’s largest insurer, Allianz SE from Germany, is preparing to withdraw from Iran after the US government abandoned an international nuclear deal and warned that it could impose sanctions on companies trading with Tehran.

https://www.law360.com/articles/1044577

OECD: SWITZERLAND MUST ‘URGENTLY’ DO MORE TO TACKLE BRIBERY AND PROTECT WHISTLEBLOWERS

On 17^th May, Customs Today reported that Switzerland must urgently do more to protect whistleblowers and stop money laundering and bribery, according to the OECD.  After a year-long investigation, the OECD said companies, lawyers and trustees operating in Switzerland must face tougher penalties for perpetrating or facilitating bribery taking place abroad.

http://www.customstoday.com.pk/switzerland-must-urgently-do-more-to-tackle-bribery-and-protect-whistleblowers-oecd-says/

US THREATENS SANCTIONS AGAINST EU IN LONG-RUNNING AIRCRAFT SUBSIDY DISPUTE

On 17^th May, Sandler Travis Rosenberg reported that the Trump administration said that it “will have to move forward with countermeasures” on EU products if the EU does not end subsidies to large aircraft manufacturer Airbus.  The US Trade Representative office has said that a report from the WTO Appellate Body confirmed that “billions of dollars in launch aid to the [Airbus] A350 XWB is causing significant lost sales of Boeing 787 aircraft” and that “subsidies to the [Airbus] A380 continue to cause significant lost sales of Boeing 747 aircraft, as well as impedance of exports of Boeing very large aircraft to the EU, Australia, China, Korea, Singapore, and UAE markets”.

https://www.strtrade.com/news-publications-WTO-Airbus-subsidies-retaliation-051718.html

HUNGARY: GOLDEN VISAS TAKE NEW FORM IN ORBAN’S GOVERNMENT

OCCRP on 17^th May reported that a Hong Kong-based company is advertising a new, even cheaper immigration programme than the one suspended last year, promising Hungarian residency permits to those who invest $92,000 in real estate and pay almost $60,000 in fees.  The former “Golden Visa” system launched in 2013, was suspended due to allegations of corruption.  More than 24,000 foreign nationals, mostly from China, obtained permanent or temporary residency permits between 2013 and 2017.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8088-hungary-golden-visas-take-new-form-in-orban-s-government

PROTECTION AGAINST IDENTITY FRAUD FOR COMPANY DIRECTORS – REMOVAL OF RESIDENTIAL ADDRESS FROM THE COMPANY REGISTER

On 15^th May, Field Fisher reported that new regulations, which came into force on 26^th April, will allow directors to remove their residential address from the register of companies held by the Registrar, whilst still ensuring transparency at Companies House.  The new regulations remove the requirement that a director must show a serious risk of violence or intimidation arising from a company’s activities; and allow applications in respect of information filed before 1^st January 2003.

https://www.fieldfisher.com/publications/2018/05/protection-against-identity-fraud-for-company-directors

DELAYED SERVICE SUFFICIENT TO STRIKE OUT FREEZING ORDERS

Out-Law on 16^th May published an article saying that the Court of Appeal has upheld a decision to strike out freezing orders granted on behalf of French bank Société Générale (SocGen), after finding that the bank had taken too long to issue the relevant claim forms.  An expert is quoted as saying that the court will not grant such orders lightly and will expect compliance with the myriad of undertakings that a court can order in return for exercising its discretion to freeze assets.

https://www.out-law.com/en/articles/2018/may/delayed-service-strike-out-freezing-orders/

JAPAN BUSINESS POURS CASH INTO MYANMAR DESPITE ROHINGYA CRISIS

The Nikkei Asian Review on 17^th May reported that real estate leads record investments of $1.4 billion that aim to capture emerging market.  It says that Japanese companies are investing aggressively in Myanmar with help from Tokyo, even as their European and American counterparts shy away while hundreds of thousands of Rohingya Muslims flee the country to escape persecution.  Japan is one of the biggest investors in Myanmar for 2017 – roughly half of the Japanese investment went into property development.

https://asia.nikkei.com/Business/Business-Trends/Japan-Inc.-pours-cash-into-Myanmar-despite-Rohingya-crisis

BOSNIAN PARTY LEADER CLEARED OF CHARGES HE OBSTRUCTED DRUG CASE

Rferl on 17^th May reported that Fahrudin Radoncic, Bosnian tycoon and a former owner of Bosnia’s largest newspaper, Dnevni Avaz, as well as leader of the Union for a Better Future (SBB) party in the ruling coalition, has been cleared of charges he organised a criminal group and interfered in a high-profile court case in Kosovo against Balkan drug boss Naser Kelmendi.  He had said the case brought against him in 2016 was “politically fabricated”.

https://www.rferl.org/a/bosnian-political-leader-radoncic-cleared-charges-obstructed-case-drug-lord-kelmendi/29231315.html

COMMONWEALTH GAMES VISA OVERSTAYERS IN AUSTRALIA

On 16^th May, a news release from the Australian Border Force says that while the vast majority of individuals who came to Australia for the Commonwealth Games have already departed, the ABF is aware that some individuals have remained in Australia.  It has set up a dedicated operation to ensure those that should depart Australia do so.  Those who are removed may also face a 3-year re-entry ban from Australia and may owe a debt to the Australian Government for the cost of their removal.

http://newsroom.border.gov.au/channels/NEWS/releases/commonwealth-games-visa-overstayers

80 DETAINED FOLLOWING BIG ROMANIAN ANTI-ORGANISED CRIME OPERATION

Romania Insider on 17^th May reported that prosecutors from the Directorate for Combatting Organized Crime and Terrorism (DIICOT) have taken preventive measures against 102 people following the 238 house searches carried out on May 16^th, as part of Operation Z Day (Ziua Z).  The operation was aimed at combating organised crime and the searches were carried out simultaneously in 28 counties and the capital Bucharest.  It targeted 227 suspects.

https://www.romania-insider.com/big-operation-diicot-prosecutors/

THE MIDDLE EAST’S NEW BATTLE LINES

On 16^th May, the European Council on Foreign Relations released a new report saying that 2 opposing coalitions in the Middle East define a rivalry that threatens to tear the region apart.  As competition for dominance intensifies, the confrontation between Iran’s network of state and non-state actors, and a counter-front of traditional Western allies – centred on Saudi Arabia, the UAE, and Israel – has become the region’s central battle line.

http://www.ecfr.eu/mena/battle_lines/

THOUSANDS OF UNSAFE FIDGET SPINNERS SEIZED DURING RAID IN MANCHESTER

The Manchester Evening News on 12^th May reported that thousands of unsafe fidget spinners and hundreds of fake designer goods were seized during raids at a business in north Manchester.  Himalaya Fashion Enterprises Ltd has been ordered to pay thousands of pounds after the illegal goods were found by Trading Standards.  A total of 2,136 incorrectly labelled fidget spinners were found on the premises during a raid in May 2017.  The toys were tested and deemed to be dangerous as the battery was easily accessible without a tool, meaning a child could take it out and digest it, council bosses warned.  Fake Chanel, Vivienne Westwood and Dior jewellery was also found at the premises during another raid last year.  Himalaya Fashion Enterprises Ltd and company director Mohamad Hakimi pleaded guilty to a number of trademark and safety offences on April 12^th.  The company was ordered to pay £3,000, costs of £2,433, and a victim surcharge of £300.  Mohamad Hakimi was ordered to undertake 150 hours of unpaid work and to pay costs of £1,000 with a surcharge of £85.

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/thousands-unsafe-fidget-spinners-found-14648056

POLICE RAID HOME OF EX-MALAYSIAN PM OVER 1MDB CORRUPTION SCANDAL

The Guardian on 16^th May reported that 5 locations linked to Najib Razak searched for evidence relating to 1MDB affair, which saw $3.2 billion in funds go missing.  Mahathir Mohamad, the newly elected prime minister, has pledged that all those who are found to have committed any wrongdoing as part of 1MDB will be brought to justice.

https://www.theguardian.com/world/2018/may/16/police-raid-home-ex-malaysian-pm-corruption-scandal

LATVIA’S AML CHIEF WANTS MORE HELP FROM BANKS

On 17^th May, Reuters reported that Latvia’s new AML chief pledged to improve control of financial crime, urging the Baltic state’s banks to become more hands on in spotting and preventing it.  Ilze Znotina, who will lead Latvia’s AML agency from June, said she wanted to change the tendency of local banks to share ‘low quality’ information with the authority about suspect transactions.  The appointment is the latest step by the country to tighten control of its banks, after some were accused of laundering hundreds of millions of euros for wealthy Russians and others from former Soviet states.

https://www.reuters.com/article/latvia-banks/latvias-anti-money-laundering-chief-wants-more-help-from-banks-idUSL5N1SO46L?src=ilaw

IRELAND RELEASES VIRTUAL CURRENCY TAX AND VAT GUIDANCE

Tax News on 17^th May reported that on 15^th May the Irish Revenue has issued an eBrief to clarify how “normal tax rules” apply to transactions involving cryptocurrencies.

The eBrief 88/18 is available at –

https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0882018.aspx

https://www.tax-news.com/news/Ireland_Releases_Virtual_Currency_Tax_Guidance____76786.html

EU COUNCIL ADOPTS DIRECTIVE TO MAKE COMPANY OWNERSHIP DATA PUBLIC

On 17^th May, Tax News reported that the European Council has approved a new package of rules which include allowing the public access to information on the beneficial ownership of companies.  Amendments to Directive 2015/849 are intended to close down criminal finance without hindering the normal functioning of payment systems.  The changes were approved at a meeting of the General Affairs Council following agreement with the European Parliament in December 2017 and Parliament’s approval of the agreed text in April.  The new Directive will provide for enhanced access to beneficial ownership registers, with the aim of improving transparency on the ownership of companies and trusts.

https://www.tax-news.com/news/EU_Council_Adopts_Directive_To_Make_Company_Ownership_Data_Public____76789.html

 

DOCUMENT DISTRIBUTOR HAD DOZENS OF FAKE ID

An NCA news release on 17^th May reported that a man who was at the centre of a fake identity document distribution ring has been jailed for more than 5 years.  Albanian national, Arsen Baculi, 23, was arrested by the NCA in east London in February after picking up a consignment of counterfeit documents, including a Greek passport and ID card with his picture on.  A search of his flat led to the discovery of a hoard of other ready-to-go documents, including a false passport, a number of driving licences, residency permits and construction industry cards bearing different names and images.  A small quantity of bagged up cocaine and electronic scales were also found.  Baculi pleaded guilty to charges of possessing false documents and class A drugs and was sentenced to 5 years and 2 months years in prison.  He will also face deportation after serving his sentence.

http://www.nationalcrimeagency.gov.uk/news/1350-document-distributor-had-dozens-of-fake-ids

On 17^th May, BTC Manager reported that in the US the SEC has created a fake Initial Coin Offering (ICO) to teach would-be investors what they should look out for before investing in such projects.  The regulator has launched a fake coin offering website dubbed “Howey,” all in the effort of warning investors about fraudulent cryptocurrencies.

https://btcmanager.com/sec-unveils-fraud-ico-to-educate-investors/

The website is at –

https://www.howeycoins.com/index.html

But also see the SEC comments at –

https://www.investor.gov/howeycoins

https://www.jdsupra.com/legalnews/the-sec-has-an-opportunity-you-won-t-13603/ 

On 17^th May, OFAC added a further 2 Lebanese passport-holders and 5 companies – 3 in Lebanon, 1 in Antwerp and 1 in Banjul, The Gambia to its Specially Designated Nationals (SDN) lists.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180517.aspx

https://home.treasury.gov/news/press-releases/sm0388

 

On 15^th May, Frankfurt Kurnit Klein & Selz published an article warning that with the introduction of the GDPR in the EU with effect from 25^th May, it appears increasingly likely that the WHOIS system, which makes the contact details of domain name registrants publicly available, will soon enter a months-long blackout period, since the publication of certain WHOIS data runs afoul of GDPR and any interim compliance model will not be fully operational by May 25^th [another victim of the law of unintended consequences?]  It explains that the WHOIS system, which contains information including the name, address, email, phone number, and administrative and technical contacts for domain name registrants, is maintained by the Internet’s global domain name organization, the Internet Corporation for Assigned Names and Numbers (ICANN) and that ICANN is now racing to devise a solution that will balance data protection considerations and GDPR compliance against the desire to maintain the existing WHOIS system to the greatest extent possible.

https://whois.icann.org/en

http://fkks.com/news/impending-whois-data-blackout-is-likely-to-impede-ip-enforcement

On 14^th May, Herbert Smith Freehills published an article reporting that the Hong Kong government has published a report detailing the money laundering and terrorist financing national risk assessment for Hong Kong.  This follows the recommendations of FATF that jurisdictions identify and assess their ML/TF risks and apply mitigating measures and is a pre-cursor to the FATF’s onsite evaluation of Hong Kong’s ML/TF safeguards, scheduled to take place this Autumn.

The report is available at –

https://www.fstb.gov.hk/fsb/aml/en/doc/hk-risk-assessment-report_e.pdf

https://hsfnotes.com/fsrandcorpcrime/2018/05/14/money-laundering-and-terrorist-financing-risks-facing-hong-kongs-financial-institutions-and-payment-systems/#page=1

On 14^th May, Clyde & Co published an article explaining why the EU will find it difficult to counter US sanctions imposed following the withdrawal of the US from the JCPOA with Iran by the use of so-called “blocking” legislation (which would forbid EU companies from complying with US laws) – which were employed in the past, during the Reagan era and in 1996 over Cuba.  One seemingly obvious fact it points out is that most major financial institutions outside the US are much more intimately connected to or reliant upon the US financial system and the ability to clear US dollars than they were 20 years ago – hence the sensitivity to the effect of OFAC sanctions, even where they have no legal effect in the home jurisdiction.  It concludes that the reality today is that many EU (and non-EU) firms refrain from business with Iran not because of any legal prohibitions, but because of the contractual restrictions imposed on them and that was simply not the case in 1996.  Furthermore, it points out that the general AML/CFT compliance obligations of financial institutions are vastly more complex and onerous to comply with now than they were 20 years ago.  It would sit uneasily with these obligations to force EU financial institutions to support business with Iran. It should not be forgotten that the EU still maintains its own – admittedly more limited (and human rights abuses-based) – sanctions programme against Iran, designating a number of entities still for asset freezes.  Finally, the article reminds one that the other tactic pursued by the EU in 1996 was to refer the matter to the WTO, alleging that the US sanctions breached obligations to other WTO members.  The US response at the time was to threaten the use of the rarely used tool of the national security exception, and one should surely expect the Trump Administration to follow suit.

https://www.clydeco.com/insight/article/blocked-out-why-the-eu-will-struggle-to-counter-us-sanctions-with-blocking

Meanwhile, on 17^th May the Guardian reported –

EU SETS COURSE FOR US CLASH WITH LAW BLOCKING IRAN SANCTIONS

The EU has put itself on a collision course with the US over Donald Trump’s decision to withdraw from the nuclear deal with Iran, as major European firms started to pull out of the country to avoid being hit by sanctions.  In an attempt to shield EU companies doing business with Iran, the European commission president, Jean-Claude Juncker, said he would turn to a plan last used to protect businesses working in Cuba before a US trade embargo was lifted on the Latin American country.

https://www.theguardian.com/world/2018/may/17/maersk-tankers-pull-out-of-iran-in-blow-to-nuclear-deal

On 16^th May, the Asahi Tribune reported that police suspect the surge in gold-smuggling incidents is partly being orchestrated by “semi-organised” crime syndicates that operate loosely and can avoid the restrictive laws imposed on traditional yakuza groups.  Authorities have little information about the numbers and activities of the “jun-boryokudan” semi-organized syndicates, which are also called “hangure” (half-astray), but recent arrests indicate that the multibillion-yen gold-smuggling industry is a key source of income for these groups.  Hangure do not operate as fixed units. But members gather together through personal networks each time they plan a crime.  A source said gold smuggling from Hong Kong is “highly profitable”.  Smugglers buy the gold in Hong Kong, which has no consumption tax.  If they can get around customs officials and sell the gold in Japan, their profit is the amount they avoided paying in Japanese taxes, the source said.  The number of gold smuggling cases uncovered in 2017 was 1,347, an increase of 536 from the previous year, according to Finance Ministry.  Hong Kong was the origin of the gold in 25% of the smuggling cases.

http://www.asahi.com/ajw/articles/AJ201805160051.html

16^th May 2018

GERMAN ARMS FIRM H&K’S EX-STAFF ON TRIAL OVER MEXICO GUN DEAL

Brinkwire on 16^th May reported that 6 ex-employees of Heckler & Koch have gone on trial in Stuttgart for selling assault rifles to Mexico. They are accused of violating Germany’s War Weapons Control Act and its Foreign Trade Act by selling thousands of G36 assault rifles to Mexico — while knowing that they would be used in 4 violence-ridden Mexican states.

http://en.brinkwire.com/329681/german-arms-firm-hks-ex-staff-on-trial-over-mexico-gun-deal/

US EASING OF GUN EXPORT CONTROLS COULD SEND NEW WAVE OF ARMS EXPORTS

On 15^th May, Insight Crime reported that a new reform that would ease firearm export controls for US weapons manufacturers, could increase the already high number of US-sourced firearms used in criminal activities in Latin America.  Finally published on May 14^th the proposals would shift authority to regulate exports of certain firearms and related products from the State Department to the Commerce Department.  The rule would apply to “commercial items widely available in [US] retail outlets and less sensitive military items,” the proposal states.  That definition would cover products like assault-type rifles, military-grade sniper scopes, armour-piercing ammunition and most handguns.

https://www.insightcrime.org/news/analysis/easing-us-firearm-export-controls-exacerbate-violence-mexico/

KOREAN AIR HEADQUARTERS RAIDED OVER LUXURY GOODS SMUGGLING

On 16^th May, The Standard in Korea reported that South Korea’s customs authorities said its officials had raided the headquarters of Korean Air Lines Company over allegations that it had violated foreign exchange laws in a widening inquiry into the chairman’s family. The customs office has been looking into allegations Chairman Cho Yang Ho’s family smuggled luxury goods into the country without paying due taxes.

http://www.thestandard.com.hk/breaking-news.php?id=107498&sid=2

MAN SEARCHED AT BELFAST INTERNATIONAL HAD €180,000 IN LUGGAGE

Belfast Live on 15^th May reported that a 39-year-old man has been arrested by Border Force officers at Belfast International Airport on suspicion of money laundering.  The man, an Irish national, had been at the airport with a ticket to fly to Alicante in Spain.  His baggage was searched and officers found €180,000.

https://www.belfastlive.co.uk/news/belfast-news/man-searched-belfast-international-180000-14662590

HEZBOLLAH SAID TO BE LAUNDERING MONEY IN SOUTH AMERICAN TRI-BORDER REGION

The Wall Street Journal on 15^th May reported that Hezbollah is using a money laundering mini-state in Latin America that poses an escalating risk to US national security, according to a report.  The illicit activities in the so-called tri-border region linking Brazil, Argentina and Paraguay have long been a source of concern for US security officials.

https://www.wsj.com/articles/hezbollah-said-to-be-laundering-money-in-south-american-tri-border-region-1526389849

FRENCH COURT UPHOLDS EX-BUDGET MINISTER’S TAX FRAUD CONVICTION

The Guardian on 15^th May reported that Jérôme Cahzuac, the former French budget minister who led a crackdown on tax avoidance while secretly hiding millions of euros of his own money from authorities, has had his conviction for tax fraud upheld by an appeals court.  Cahuzac and his ex-wife, Patricia Ménard, who was also convicted of tax fraud, had jointly run a lucrative hair-transplant business treating some of France’s biggest celebrities.  They hid millions of euros from the tax authorities for two decades, moving their money across the world from Switzerland to Singapore and the Isle of Man.

https://www.theguardian.com/world/2018/may/15/french-court-upholds-ex-budget-minister-jerome-cahuzac-tax-conviction

NO LIMITATION PERIOD IN BREACH OF DUTY CLAIM AGAINST DIRECTOR

On 15^th May, Hogan Lovells published an article saying that a recent UK Supreme Court decision establishes that where a director unlawfully transfers property to a company he controls, a subsequent breach of duty claim will not be subject to a limitation period.  It says that liquidators should be aware that there may be no limitation period for breach of duty and misfeasance claims where property is transferred by directors to companies in which they have an interest.

http://www.hoganlovells.com/en/publications/no-limitation-period-in-breach-of-duty-claim-against-director

THE IMPORTANCE OF COMPLYING WITH THE DUTY OF FULL AND FRANK DISCLOSURE WHEN APPLYING FOR A FREEZING INJUNCTION

On 11^th May, Mayer Brown, and on 14^th May, Lewis Silkin, both published articles on the recent UK court case of Banca Turco Romana S.A. (in liquidation) v Cortuk and Others.  This underlined the need for applicants to give full and frank disclosure when seeking relief at ex parte (without notice) hearings.  As a result of substantial and serious failings, some apparently deliberate, the judge set aside an earlier freezing order he had made in favour of a liquidator and declined to continue it.  The background was that Çörtük had perpetrated a substantial fraud against Banca Turco Romana (BTR) which had ultimately led to its insolvency.  Criminal and civil proceedings followed in Romania and Çörtük was convicted of fraud and sentenced to 13 years imprisonment.  He was also held liable to pay BTR a sum in excess of US$70 million together with interest.  The judgment remained unsatisfied and Çörtük evaded arrest and absconded.  Criminal proceedings followed in Switzerland – where a limited recovery was achieved of c.US$2.8 million – along with an action in New Jersey where Mr Çörtük now resides.

http://www.lewissilkin.com/Insights/Liquidator-loses-protection-of-a-freezing-order-following-serious-failings

https://www.mayerbrown.com/frozen-out-the-importance-of-complying-with-the-duty-of-full-and-frank-disclosure-when-applying-for-a-freezing-injunction-05-11-2018/

SANCTIONS AND IRAN: PRESIDENT TRUMP’S ANNOUNCEMENT AND WHAT THIS MEANS FOR NON-US SHIPPING

On 15^th May, Reed Smith produced a briefing on the implications of the Trump Administration decision to withdraw the US from the Joint Comprehensive Plan of Action (JCPOA) and to reimpose on Iran a multitude of sanctions that were lifted in January 2016 under the JCPOA.  It emphasises that the 180-day wind-down period is most relevant to the shipping industry.  After this period, which ends on 4^th November, the US will reimpose, among other things, the following secondary sanctions –

• Sanctions on Iran’s port operators and shipping sectors
• Sanctions on petroleum-related transactions, including petroleum products from Iran. Note also that certain entities will be redesignated, including NIOC and IRISL
• Sanctions on transactions by foreign financial institutions with the Central Bank of Iran and other designated Iranian financial institutions
• Sanctions on Iran’s energy sector

The briefing goes on to discuss, briefly, calling in Iran after 4^th November, voyage and time charters.

https://www.reedsmith.com/en/perspectives/2018/05/sanctions-iran-president-trump-8-may-2018-announ-means-for-nonus-shipping

TERRORISM AND THE FUTURE LONE WOLF THREAT IN AMERICA

On 16^th May Cipher Brief commented on a Washington Post report in March that the TSA (which is responsible for transportation security in the US) is adjusting its methods as terrorists turn increasingly toward lone wolf terror attacks.  It carried an interview with a former Associate Director at the CIA National Counterterrorism Center, who said that the US has fortunately not had to deal with the large number of ISIS returnees. ISIS has found France, in particular, to be a fruitful recruiting ground because of the large Muslim French-speaking diaspora, many of whom are French citizens but still not fully integrated into the French society and economy.

https://www.thecipherbrief.com/column/expert-view/terrorism-future-lone-wolf-threat-america

In the Washington Post article from 7^th March the new chief of the Transportation Security Administration is quoted as saying that adapting his agency to grapple with solo operators who may claim allegiance to a cause without having genuine connections to a terrorist group has been his focus since taking over as head of the TSA in August.  The public face of the 60,000-member TSA is at airport security checkpoints, but the agency’s mandate is to protect all modes of transportation against attacks, monitoring rail stations, transit systems and bus terminals.

https://www.washingtonpost.com/local/trafficandcommuting/as-terrorists-turn-to-lone-wolf-attacks-tsa-adjusts-its-tactics/2018/03/06/555f74bc-213c-11e8-94da-ebf9d112159c_story.html

INDEPENDENT ANALYSIS OF UN COUNTER-TERRORISM EFFORTS IN ADVANCE OF THE SIXTH REVIEW OF THE UN GLOBAL COUNTER-TERRORISM STRATEGY IN 2018

On 16^th May, the Global Center on Cooperative Security released “Blue Sky IV: Clouds Dispersing”.  The report and its recommendations focus on ways to improve the development, coordination, delivery, and impact of UN efforts in countering terrorism and preventing violent extremism (PVE).

http://www.globalcenter.org/wp-content/uploads/2018/05/GC_2018-May_Blue-Sky.pdf

EU AMENDS ITS NORTH KOREAN SANCTIONS LISTS

On 16^th May, the EU published EU Regulation 2018/714/EU, which made amendments to Regulation 2017/1509/EU following the moving of 6 persons to Annex III to Council Decision 2016/849/CFSP from Annex II.  They remain designated.

See also Council Decision 2018/715/CFSP

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.120.01.0004.01.ENG&toc=OJ:L:2018:120:TOC

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.120.01.0001.01.ENG&toc=OJ:L:2018:120:TOC

LANDMARK UK PROPERTY FRAUD APPEAL CASE DECISION ROCKS CONVEYANCING WORLD

The Negotiator on 16^th May carried an article saying that the Judges’ decision to allow some elements of the Dreamvar and P&P Properties’ appeals is likely to spark a wholesale reform of the house selling process.  It says that solicitors acting for vendors can no longer hope to pin the blame for a property fraud on other parties in the sale, the Court of Appeal has so indicated in a decision that will have far-reaching effects on the whole property industry.  The 2 negligence cases, which concerned frauds completed in 2013 and 2014, were originally brought by unrelated London developers ripped off by different criminals posing as the vendors of properties they did not own.  During the appeal process both vendors’ solicitors were highlighted by the judges for their weak identity checks.

https://thenegotiator.co.uk/landmark-property-fraud-appeal-case-decision/

AN INTRODUCTION TO UK ARMS EXPORTS

On 16^th May, a House of Commons Library briefing explains what arms exports are, what controls are in place and the process for granting licenses. It briefly looks at some of the most commonly raised concerns about UK arms exports.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8312

UK DEFENCE INDUSTRY EXPORTS

On 15^th May, the Library published another briefing which provides an overview of UK defence industry exports covering the 3 main sources of data on the subject.  The paper looks at trends over time, the regions of the world where UK defence exports are going, and the type of goods that are being exported.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8310

NO CHANGES TO US INTERNATIONAL BOYCOTT COUNTRY LIST

Sandler Travis Rosenberg on 16^th May reported that the US Treasury has published its quarterly list of countries that require or may require participation in, or co-operation with, an international boycott – Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, UAE, and Yemen and is unchanged from the previous list.  US law prohibits US companies and their foreign affiliates from participating in foreign boycotts that the US does not sanction.  The Arab League boycott of Israel is the principal foreign economic boycott that US companies must be concerned with, but the anti-boycott laws apply to all boycotts imposed by foreign countries that are unsanctioned by the US.

https://www.strtrade.com/news-publications-boycott-list-Treasury-051618.html

THE STRANGE EVOLUTION OF HUNGARY’S GOLDEN VISA PROGRAMME

On 16^th May, OCCRP carried an article that says that from 2013 an investor from outside the EU wanting to live in Hungary had to buy a special state bond from one of 8 companies with exclusive rights to sell them on behalf of the government.  The bonds initially cost €250,000; later €300,000.  The programme was suspended in 2017 after public criticism.  Nobody knew who owned most of the companies — 7 of the 8 were anonymously registered in offshore tax havens, making it impossible to know who pocketed the profits.  The 8 companies pulled in at least $600 million in fees during the 4 years the program was in operation.  Now an investigation reveals that the way those companies were chosen may have violated Hungarian law.  The intermediary that sold the most bonds was the Hungary State Special Debt Fund (HSSDF), which was established in the Cayman Islands in 2012 and owned by 3 enterprises registered in the BVI.

https://www.occrp.org/en/goldforvisas/the-strange-evolution-of-hungarys-golden-visa-program

BANK INDONESIA RE-REGULATES E-MONEY

Allen & Overy reported on 15^th May that Bank Indonesia has issued a new Electronic Money Regulation.  The foreign ownership limits introduced by the Regulation are arguably the most crucial point in the Regulation.  It revokes the previous regulations on the same subject and is effective from 4^th May.

https://www.aohub.com/aohub/publications/bank-indonesia-re-regulates-e-money?nav=FRbANEucS95NMLRN47z%2BeeOgEFCt8EGQ71hKXzqW2Ec%3D&key=BcJlhLtdCv6%2FJTDZxvL23TQa3JHL2AIGr93BnQjo2SkGJpG9xDX7S2thDpAQsCconWHAwe6cJTni8E5raS8k6KoOPiGX4nYV

COURT CLARIFIES SINGAPORE’S APPROACH TO TAX INFORMATION EXCHANGE

Out-Law on 16^th May reported that a legal challenge to the Comptroller of Income Tax’s decision to share information about certain taxpayers with the Korean tax authorities in response to an exchange of information (EOI) request has been dismissed by the Court of Appeal in Singapore.  The decision helps shed light on the manner in which the Singapore tax authorities deal with EOI requests from foreign governments, particularly where the EOI process was executed ‘covertly’ without notice to the subject of the EOI request.

https://www.out-law.com/en/articles/2018/may/singapore-tax-information-exchange/

MASS TRIAL OF ALLEGED JIHADISTS INDICATES HIGH ATTACK RISK FOR WESTERN TARGETS IN SENEGAL FROM RETURNING FIGHTERS

Janes.com on 16^th May reported that suspected jihadists were allegedly planning to attack French targets in Senegal and to spread Islamist influence into neighbouring countries.  Senegal remains a likely top target for Al-Qaeda-linked groups due to its strong connections with France.  The most likely perpetrators would be Mali-based coalition Jamaat Nasrat al-Islam wal Muslimin, using some experienced Senegalese militants to target the capital, Dakar, or tourist sites to the south.

http://www.janes.com/article/80118/mass-trial-of-alleged-jihadists-indicates-high-attack-risk-for-western-targets-in-senegal-from-returning-fighters

 THE ABC OF INTERNAL INVESTIGATIONS FROM THE XYZ DEFERRED PROSECUTION AGREEMENT (DPA)

On 16^th May, law firm Corker Binning published an article on the situation where the High Court in England handed down a decision heavily criticising the SFO approach to a prosecution which followed the second deferred prosecution agreement (DPA) secured under the Crime and Courts Act 2013 (CCA).  It says that there remain some very serious questions about the SFO’s approach to investigating large corporate defendants and the individuals who work for them.  The article says that this was the first case of judicial scrutiny of the processes leading to a DPA from the perspective of an individual who is not party to it.  The article says that the case highlights the importance of giving careful consideration to the rights of the potential individual defendants when determining what steps to take in an investigation and self-report.

https://www.corkerbinning.com/the-abc-of-internal-investigations-from-the-xyz-deferred-prosecution-agreement/

SEC CHARGES BROKERAGE FIRM AND AML OFFICER

Mondo Visione on 16^th May reported the SEC announced settled charges against broker-dealers Chardan Capital Markets LLC and Industrial and Commercial Bank of China Financial Services LLC (ICBCFS) for failing to report suspicious sales of billions of penny stock shares.

http://www.mondovisione.com/media-and-resources/news/sec-charges-brokerage-firms-and-aml-officer-with-anti-money-laundering-violation/

 

On 16^th May, OFAC announced the addition of 5 individuals linked to Hizbollah, together with ISIS IN THE GREATER SAHARA.  At the same time the entry for Hasan NASRALLAH was amended.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180516.aspx

On 16^th May, Loadstar reported that MSC has became the first major container shipping line to announce that it plans to cease direct services into Iran.  The Geneva-headquartered line cited the US decision to withdraw from the JCPOA as the reason for the change.

https://theloadstar.co.uk/msc-first-carrier-cancel-iran-services-us-gets-set-reimpose-sanctions/

Illicit Trade reported on 16^th May that the Nigerian government has banned the production and importation of codeine-based cough syrup after a BBC investigation revealed teenagers were abusing the medicine and becoming addicted.  The BB found that dealers were selling the opioid-based medication illegally on the streets of Lagos, where children as young as 14 were becoming hooked on it with devastating effect.  The investigation revealed that abuse of codeine-based cough syrup has become a major problem in a number of African countries, including Chad, Ghana, Kenya and Niger, and that more than 20 Nigerian pharmaceutical firms were manufacturing the medicine.  While codeine is legal in Nigeria, the drug cannot be sold without a prescription from a doctor.

https://www.illicit-trade.com/2018/05/nigeria-bans-codeine-based-cough-syrup-after-investigation-reveals-epidemic-of-abuse-among-young-people/

Baker McKenzie on 16^th May reported that the Russian government is preparing to introduce new countermeasures in response to US and EU sanctions. and filed a draft Bill envisaging criminal liability for complying with Western sanctions.

https://globalcompliancenews.com/russia-counter-sanctions-20180515/