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IMB PIRACY REPORT 2018: PIRACY INCREASES AND ATTACKS MULTIPLY IN THE GULF OF GUINEA

On 14th January, the International Chamber of Commerce reported that the latest annual piracy report from the International Maritime Bureau says that piracy increased on the world’s seas in 2018, with a marked rise in attacks against ships and crews around West Africa.  The IMB Piracy Reporting Centre (PRC) recorded 201 incidents of maritime piracy and armed robbery in 2018, up from 180 in 2017.  The article concentrates on Nigeria and the Gulf of Guinea, Somalia, Indonesia (where it says the position improved), Malaysia and the Philippines.

https://icc-ccs.org/index.php/1259-imb-piracy-report-2018-attacks-multiply-in-the-gulf-of-guinea

imb

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CANADA: NEW REQUIREMENTS REGARDING BENEFICIAL OWNERSHIP OF CORPORATIONS COME INTO FORCE IN JUNE

On 14th January, Borden Ladner Gervais LLP published an article which discusses key aspects of amendments to Canadian law which come into force on June 13th.  These amendments bring the CBCA closer into line with the FATF 2018 Recommendations on transparency and disclosure of beneficial ownership of assets, and follow the 2016 mutual evaluation report on the country’s AML/CFT systems.  From June 13th, federal “non-distributing” corporations (i.e. private, not public, companies and do not file documents with a securities commission and do not sell shares on a stock exchange) must identify individuals with “significant control” over the corporation.

https://blg.com/en/News-And-Publications/Publication_5531

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GUERNSEY SUBSTANCE REQUIREMENTS UPDATE – FOUNDATIONS EXCLUDED FROM THE SCOPE OF THE REQUIREMENTS

On 14th January, Carey Olsen published an update about a clarification which now expressly excludes Guernsey foundations from the new substance requirements with effect from 1st January.  he exemption also extends to equivalent bodies created under the law of any other jurisdiction (however named).

https://www.careyolsen.com/news-and-deals/guernsey-substance-requirements-update-–-foundations

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US NOT LOOKING TO GRANT FURTHER IRAN OIL SALES WAIVERS

KYC 360 on 16th January reported that the US special representative for Iran said that the US is not looking to grant more waivers for Iranian oil imports after the re-imposition of sanctions, but declined to say what the administration in Washington would do when current waivers end in May.

https://www.riskscreen.com/kyc360/news/sanctions-u-s-not-looking-to-grant-further-iran-oil-sales-waivers-u-s-official/

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IRELAND: CONSULTATION PAPER ON AML/CFT GUIDELINES FOR THE FINANCIAL SECTOR

An article from law firm Arthur Cox on 16th January said that, on 21st December, the Irish Central bank published a consultation paper containing draft guidelines that set out the expectations of the Central Bank in respect of firms’ compliance with their AML/CFT obligations following the enactment of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018, which implements elements of the EU 4th AML Directive in Irish law.  The closing date for responses is 5th April.

https://www.centralbank.ie/docs/default-source/publications/consultation-papers/cp128/cp128—anti-money-laundering-and-countering-the-financing-of-terrorism-guidelines-for-the-financial-sector.pdf?sfvrsn=2

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OTHER THINGS YOU MAY HAVE MISSED – JANUARY 15

15th January 2019

GIBRALTAR PUBLISHES RULES IMPLEMENTING EU RULES AGAINST TAX AVOIDANCE

On 14th January, Isolas in Gibraltar published an article on regulations that transposed into Gibraltar income tax law EU Directive 2016/1164 which provides for uniform legislative implementation in the EU of some of the OECD Base Erosion and Profit Shifting (BEPS) recommendations, and applying to financial periods starting on or after 1st January.

https://www.gibraltarlawyers.com/news/gibraltar-publishes-rules-implementing-eu-rules-against-tax-avoidance-practices

REPORT TO CONGRESS ON US SANCTIONS ON RUSSIA

On 14th January, USNI News published an article about, and a link to, a report to the US Congress Congressional Research Service report.  This reviewed existing sanctions regimes, including the lesser known Countering Russian Influence in Europe and Eurasia Act of 2017, which codifies Ukraine-related and cyber-related Executive Orders, strengthens existing Russia-related sanctions authorities, and identifies several new targets for sanctions.  It also establishes Congressional review of any action the President takes to ease or lift a variety of sanctions.

https://news.usni.org/2019/01/14/report-congress-u-s-sanctions-russia

ISRAEL COMPANY ADMITS SPYING ON EMIR OF QATAR

The Middle East Monitor on 14th January reported that the CEO of Israeli spyware company NSO Group has admitted that its software was used to spy on the Emir of Qatar.  Its “Pegasus” software – which can be used to remotely infect a target’s mobile phone and then relay back data accessed by the device – was used to intercept phone calls and text messages, and was seemingly undertaken at the behest of the UAE.  The Israeli Defense Export Control Agency (DECA) licensed 3 deals with the UAE, worth around $80 million, for the sale of NSO software, despite the fact that DECA is only supposed to give authorisation for the “purpose of fighting terrorism and crime”.

https://www.middleeastmonitor.com/20190114-israeli-company-admits-spying-on-emir-of-qatar/

IRELAND: SECRET CODES REVEALED SMUGGLERS’ €100 MILLION TURNOVER

Infosurhoy on 14th January reported that a secret coded ledger seized by CAB 2 years ago has revealed how one of Ireland’s biggest cross-border crime gangs turned over a staggering €100 million in 7 years.  CAB recently raided several premises linked to the crime gang, said not to be linked to Brexit but seen as a pre-emptive strike on the cross-border gangs that trade in everything from smuggled alcohol, cigarettes, fuel and even Viagra.  CAB suspects that the gang even purchased an entire “ghost estate” in the border region, part of a portfolio of distressed properties it believes the gang has purchased over the past 7 to 8 years.

http://infosurhoy.com/cocoon/saii/xhtml/en_GB/news/secret-codes-stashed-in-scorching-press-revealed-smugglers-e100m-turnover-eire/

SERBIA: COMPANIES TO REGISTER UBO BY 31ST JANUARY

Wold Theiss published an article on 14th January which says that Serbian companies, institutions, as well as branches and representative offices established by foreign investors in Serbia, are among the entities designated by the Serbian Law on Central Register as entities whose legal representatives have a duty to register their ultimate beneficial owners with the Central Register by no later than 31st January.  Once registered, any changes must be notified within 15 days.

https://www.wolftheiss.com/knowledge/client-alerts/detail/serbia-companies-to-register-ubos-by-31-january/#undefined

FCA INVESTIGATING ALLEGATIONS BANK STAFF MISTREATED AFTER COMPLAINTS OVER COMPLIANCE CULTURE

KYC 360 on 15th January reported that the FCA has reportedly launched an investigation into working culture at investment bank RBC Capital Markets following the dismissal of workers who were mistreated after they raised concerns about compliance issues at the bank.

https://www.riskscreen.com/kyc360/news/banking-rbc-staff-mistreated-over-compliance-concerns-fca-investigates/

GHANAIAN GOLD DEALER WANTED BY INTERPOL ARRESTED IN DUBAI 

The National reported on 15th January that Nana Appiah Mensah, or Nam 1, as he is known in Ghana, is the CEO of Menzgold, a gold dealership and investment company which promised customers returns of between 7% and 10% on gold bought and deposited with the company.

https://www.thenational.ae/uae/ghanaian-gold-dealer-wanted-by-interpol-arrested-in-dubai-1.813580

INDONESIA TAKES STEPS TO TRACE STOLEN ASSETS HIDDEN ABROAD

Asia Times on 15th January reported that Indonesia and Switzerland will soon ratify a Mutual Legal Assistance agreement.  Recovering stolen assets has become a top priority on Indonesia’s anti-corruption agenda.  It says that Indonesian Corruption Watch (ICW) suspects the late president Suharto hid significant illicit assets in Switzerland that have not yet been identified and therefore remain untouchable.

http://www.atimes.com/indonesia-takes-steps-to-trace-stolen-assets-hidden-abroad

EU FINES GREECE MORE THAN €200 MILLION OVER CHINESE TAX FRAUD NETWORK

Ekathimerini on 15th January reported that OLAF has issued a fine of more than €200 million to Greece for failing to stop a wide-scale tax fraud by Chinese criminal gangs importing ultra-cheap goods through the country’s largest port of Piraeus, and which dodged import duties and VAT on imported footwear and clothing items.

http://www.ekathimerini.com/236612/article/ekathimerini/news/eu-fines-greece-more-than-200-mln-euros-over-chinese-tax-fraud-network

INDIA EASES DEFENCE LICENSING REQUIREMENTS

Janes.com on 15th January, reported that a revised list of defence items published by the Ministry of Commerce and Industry has removed a requirement for local companies to require licences to produce a range of defence parts, components, and subsystems.  The 2019 rules outline licensing requirements for “defence aircraft”, “warships of all kinds”, allied electronic and armoured equipment, tanks and armoured vehicles, and arms and ammunition.

https://www.janes.com/article/85701/india-eases-defence-licencing-requirements

CHILD LABOUR – A PRIORITY FOR EU HUMAN RIGHTS ACTION

On 15th January, the EU Parliamentary Research Service published a briefing paper saying that the use of child labour persists in many areas of the world, particularly in developing countries; and in sub-Saharan-Africa, it has even increased in recent years.  It says that one needs to distinguish child labour – which entails harmful forms of work – from other forms of children’s involvement with work that are acceptable and have an educational component.  The EU protects children’s rights through both its internal and external policies.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2019/633142/EPRS_BRI(2019)633142_EN.pdf

CHINA’S REVISED CRIMINAL PROCEDURE LAW EXPANDS POWERS FOR CORRUPTION TRIALS

Baker McKenzie on 15th January reported that the revised PRC Criminal Procedure Law introduces, among other things, the “default judgment” and “immediate judgment” procedures in criminal trials.  It explains that the default judgment procedure penalises defendants who have absconded overseas in respect of bribery and corruption offences as well as activities that severely endanger national security (e.g., terrorist activities); and the immediate judgment procedure expedites prosecution of defendants who plead guilty and accept penalty proposals.

https://globalcompliancenews.com/china-revised-criminal-procedure-expands-powers-corruption-trials-20190114/

MALAYSIA: POLITICAL LEADER ARRESTED, TO BE CHARGED WITH MONEY LAUNDERING

The Straits Times on 15th January reported that a leader of the Umno political party (which ruled the country prior to the 1MDB scandal) – Umno supreme council member Abdul Azeez Abdul Rahim – has been arrested by the Malaysian Anti-Corruption Commission (MACC).  He was being investigated over allegations that he had demanded kickbacks to help interested parties secure government contracts.

https://www.straitstimes.com/asia/se-asia/umno-leader-arrested-to-be-charged-on-wednesday-for-money-laundering

FEDEX AGREES TO PAY $35 MILLION IN NEW YORK TO SETTLE CIGARETTE-SHIPMENT LAWSUITS

The Wall Street Journal on 14th January reported that FedEx’s ground-delivery unit agreed to pay New York City and state $35 million to settle lawsuits that alleged the company knowingly transported hundreds of thousands of untaxed cigarettes. throughout New York City and state over a decade.

https://www.wsj.com/articles/fedex-agrees-to-pay-35-million-to-settle-cigarette-shipment-lawsuits-11547505556?mod=searchresults&page=1&pos=2

GLENCORE GAVE LOANS TO BUSINESSES LINKED TO SUSPECT DR CONGO DEALINGS

The Wall Street Journal on 14th January reported that Swiss mining giant Glencore PLC provided nearly $1 billion in loans and advances to companies associated with an Israeli businessman accused of having corrupt ties to government officials in the Democratic Republic of Congo.  This, it says, highlights the financial ties between Glencore and Dan Gertler during their decade-long partnership in the DRC.

https://www.wsj.com/articles/glencore-gave-loans-to-businesses-linked-to-suspect-congo-dealings-11547470801?mod=searchresults&page=1&pos=2

FCA HAS DOWNGRADED PROBE INTO CREDIT SUISSE OVER MOZAMBIQUE LOANS

Reuters on 15th January reported that the FCA has dropped a criminal probe into Credit Suisse related to an alleged fraud in Mozambique, but is still checking the bank and individuals for any breaches of conduct rules.  It had launched an investigation in 2016 into around $2 billion of loans to state-owned companies that pushed the country into a debt crisis.

https://www.reuters.com/article/mozambique-creditsuisse-regulator/uk-watchdog-says-has-downgraded-probe-into-credit-suisse-over-mozambique-loans-idUSL8N1ZF3NG

NIGERIAN CHIEF JUSTICE FACING CHARGES OF FAILING TO DECLARE ASSETS

The Jurist website on 15th January reported that Nigerian Chief Justice Walter Nkanu Onnoghen is to stand trial on charges of allegedly failing to declare assets and holding foreign bank accounts.

https://www.jurist.org/news/2019/01/nigeria-chief-justice-facing-charges-of-breaching-asset-declaration-rules/

TRACE PODCAST TRANSCRIPTS NOW AVAILABLE

On 15th January, TRACE announced that transcripts of a number of its series of “Bribe, Scandal and Steal” podcasts.  It also says that additional ones will be added on a selective basis.

https://traceinternational.org/bribe_swindle_or_steal

CRIMINAL GANG RECRUITING WOMEN INTO SHAM MARRIAGES DISMANTLED

On 15th January, a news release from Eurojust said that an organised criminal group recruiting dozens of women into sham marriages was dismantled by Belgian authorities and the Portuguese Immigration and Borders Service.  17 suspects were arrested in Belgium and 3 suspects were arrested in Portugal in an international co-ordinated action.  The criminal group was involved in the facilitation of illegal immigration by organising sham marriages, predominately between Portuguese and Pakistani nationals.

http://eurojust.europa.eu/press/PressReleases/Pages/2019/2019-01-15.aspx

“SUPERSTAR” DEA AGENT SECRETLY FUELLED A LAVISH LIFESTYLE BY SKIMMING CASH FROM COLOMBIAN COCAINE TRAFFICKERS

The New York Post on 15th January reported on what it described as one of the worst scandals in the history of the DEA.  Jose Irizarry, who resigned after being recalled from his post in Colombia, was recently identified in court papers as a co-conspirator of a former DEA informant who pleaded guilty to money laundering in Florida.  The traffickers wrote off the money they lost to the scam as the cost of doing business, and Irizarry allegedly fabricated DEA seizure orders or letters from banks in order to pocket the cash.

https://nypost.com/2019/01/15/superstar-dea-agent-busted-for-making-millions-off-cocaine-traffickers

IRELAND: EXTRADITION TO UK IN MULTI-MILLION EURO VAT FRAUD CASE ‘IS OF VERY SIGNIFICANT PUBLIC INTEREST’

On 15th January, the Irish Examiner reported on an extradition hearing before the High Court in Dublin.  Daniel O’Connell, 65, was arrested in 2017 on an European Arrest Warrant.  He had been sentenced to imprisonment for non-payment of a confiscation order imposed as an integral part of a sentence for 5 offences of being knowingly concerned in the fraudulent evasion of VAT in the UK in a court case in 2000.  He has so far paid £354,407.41 of the £6 million order.  His barrister submitted there was a 17-year gap between his client’s conviction and arrest and therefore the confiscation order was invalid because of undue delay.  The hearing continues.

https://www.irishexaminer.com/breakingnews/ireland/–897793.html

INTERPOL AND AFRICAN UNION SIGN INFORMATION-SHARING AGREEMENT

On 15th January, a news release from Interpol reported that it and the African Union have signed an information-sharing agreement which provides a platform for co-operation with AFRIPOL in the fight against terrorism and organised crime.  AFRIPOL will have access to INTERPOL’s nominal, stolen motor vehicles, and stolen and lost travel documents databases.

https://www.interpol.int/News-and-media/News/2019/N2019-003

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CHILE NUCLEAR WATCHDOG WEIGHS PROBE INTO FRAUD OVER LITHIUM EXPORTS – DOCUMENTS

On 15th January, Reuters reported that Chile’s nuclear watchdog CCHEN is considering an investigation into potential fraud after an audit found that the agency for decades failed to properly record exports of ultralight battery metal lithium that is used in electric cars, mobile phones and many other consumer goods.  Chile is now the world’s number 2 producer of lithium.  Reuters says that, for years, lithium was a little-known metal supplying a niche industry.  Its use in sensitive nuclear applications is now limited, but the advent of cell phones and electric vehicles powered by lithium-ion batteries has sent demand sky-rocketing.

https://www.reuters.com/article/us-chile-lithium-exclusive/exclusive-chile-nuclear-watchdog-weighs-probe-into-fraud-over-lithium-exports-documents-idUSKCN1P91YG

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UK AND ISLE OF MAN REMOVE 3 ENTITIES FROM IRAQ SANCTIONS LIST

On 15th January, the UK and the Isle of Man both announced that the GENERAL ESTABLISHMENT FOR DESIGNS AND RESEARCH, the STATE ENTERPRISE FOR ALUMINUM SEMI PRODUCTS, and the STATE ENTERPRISE FOR CABLES AND WIRES have been removed from Iraq sanctions lists.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/771174/Notice_Iraq_Amendment_150119.pdf

https://www.gov.im/news/2019/jan/15/financial-sanctions-iraq/

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UK: 78% HIKE IN FRAUD CASES HITTING COURTS

On 15th January, Accountancy Daily reported that the number of fraud cases reaching courts in the UK rose by 78% in 2018 according to research by KPMG Forensic, which identified 453 cases with a total value of £1.2 billion in its annual survey, and warns untested customs and tax arrangements post-Brexit could see levels rise further.

https://www.accountancydaily.co/78-hike-fraud-cases-hitting-courts

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SUICIDE, MONEY LAUNDERING AND MATCH-FIXING: THE $4.2 BILLION SCOURGE OF ILLEGAL GAMBLING IN ASIA

HK Racing on 15th January carried a report about an Asian Racing Federation research paper shows that unregulated betting is growing quicker than the legal alternative throughout the region.  Its anti-illegal betting task force outlines the widespread damage as illegal gambling grows at a quicker rate than the legal market.  The report focuses on Hong Kong, Singapore, South Korea, Australia, New Zealand and South Africa, with illegal betting growing faster than legal gambling in all of those jurisdictions.

https://www.scmp.com/sport/racing/article/2182154/suicide-money-laundering-and-match-fixing-us42-billion-scourge-illegal

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NEW US DoJ STATEMENT SAYS WIRE ACT STILL APPLIES TO ONLINE GAMBLING

Calvin Ayre on 15th January reported that the DoJ has reversed its previous opinion that the Wire Act applied only to sports betting, setting up a showdown with the states that have launched intrastate online gambling markets.  In 2011, it had interpreted the 1961 Wire Act as only applying to online sports betting and this paved the way for multiple US states to launch intrastate online lottery, casino and poker operations within their borders.

https://calvinayre.com/2019/01/15/business/us-doj-wire-act-applies-all-online-gambling/

https://www.intergameonline.com/igaming/news/new-legal-opinion-could-spell-danger-for-igaming-in-us

http://www.igamingbusiness.com/news/us-doj-rules-wire-act-applies-all-forms-gambling

 

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US AND CHINA JOIN FORCES TO KEEP NUCLEAR MATERIAL FROM NIGERIA OUT OF THE HANDS OF TERRORISTS

The South China Morning Post on 15th January reported on a 6-country mission in October to move highly enriched uranium from a research reactor in the state of Kaduna that was believed to be a possible target of terrorist groups.  China had provided technical support and backing in the development of the Nigerian Research Reactor 1 in Kaduna, a miniature neutron source reactor (MNSR), designed for scientific research and training, among other activities, and which opened in 2004.  It used weapons-grade highly enriched uranium, or HEU.  The IAEA had been supervising a programme replacing HEU with lightly enriched uranium (LEU).

https://www.scmp.com/news/world/united-states-canada/article/2182064/us-and-china-collaborated-move-nuclear-material

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OTHER THINGS YOU MAY HAVE MISSED- JANUARY 14

14th January 2019

EXPORT PROCEDURES IN ASEAN COUNTRIES

On 10th January, Dezan Shira and Associates in their ASEAN Briefing provided brief details of the export procedures in the member states of ASEAN – Burma/Myanmar, Brunei, Cambodia, Thailand, Malaysia, Indonesia, Laos, Philippines, Singapore and Vietnam.

https://www.aseanbriefing.com/news/2019/01/10/export-procedures-asean.html

This is an excerpt from the firm’s e-book, available after registration at –

http://www.asiabriefing.com/store/book/export-import-procedures-asean-best-practices-7988.html

AUSTRALIA: EXPERTS SAY NOT TO REVERSE ONUS OF PROOF FOR BLACK ECONOMY CRIMES

ABC News on 13th January reported that tax experts and business lobbies have hit out against a Treasury proposal to reverse the onus of proof — that is to say that someone is guilty until they prove themselves innocent — as part of a bid to stamp out illegal cash economy activity.  A consultation paper has proposed that the government should reverse the onus of proof for serious black economy offences relating to terrorism, drugs and child sex offences.  It also proposed additional enforcement and data gathering powers to the tax commissioner – which has also been criticised.  The consultation paper also suggested imposing greater penalties on repeat offenders and the imposition of visa forfeiture and travel bans for those with outstanding tax debts.  The Australian The Federal Government’s Black Economy Taskforce had estimated that the illegal cash economy could be costing the economy about 3% of GDP, or roughly $50 billion a year.

https://www.abc.net.au/news/2019-01-14/treasury-black-economy-crackdown-proposals/10702602

GHANA: MENZGOLD SCANDAL

Ghana Web on 13th January carried an article about the fallout from the collapse of the investment scheme where some 60,000 people are thought to have lost money.  Menzgold is reported to have a client base of about 60,000, all of them promised between 7% to 10% returns.  The operation was closed by order in September 2018, and its founder, Nana Appiah Mensah, is said to have absconded, although the company’s PRO has said he has travelled abroad to look for money to pay customers.  Meanwhile, the news site says, a warrant has been issued for his arrest whiles the police has said Interpol with a presence in 194 countries will assist in apprehending the man wanted for defrauding by false pretenses’ and money laundering.

https://www.ghanaweb.com/GhanaHomePage/NewsArchive/Menzgold-s-source-of-investment-has-crashed-the-money-is-gone-NAM-1-s-colleague-claims-714787

GUERNSEY INSOLVENCY UPDATE: UNDERSTANDING AND MANAGING A DIRECTOR’S DUTIES IN TIMES OF FINANCIAL DISTRESS

On 11th January, Carey Olsen published an article saying that the importance of understanding and managing a director’s duties in times of financial distress cannot be overstated.  It explains that directors owe both fiduciary and non-fiduciary duties to the company, and what being “solvent” actually means.  It covers such things as wrongful or fraudulent trading, and says that company officers should perpetually monitor the financial state of the company, but it is especially vital that they understand the nature of their duties, and how to discharge those duties, when the company appears to be in the zone of insolvency.

https://www.careyolsen.com/briefings/guernsey-insolvency-update-understanding-and-managing-directors-duties-times-financial

COLOMBIA: MISSING FARC LEADER ACCUSES GOVERNMENT OF BETRAYING PEACE DEAL

The BBC on 13th January reported that former commander of Colombia’s FARC rebel group, Iván Márquez, has released a video 6 months after going into hiding, in which he accuses the government of betraying the terms of the historic peace agreement signed in 2016.  Recently, the UN chief, António Guterres, urged President Duque to do more to protect former rebels, saying that many of them had been killed by illegal armed groups and drug gangs.  One of FARC’s most senior leaders was arrested for extradition to the US on drug trafficking charges and, soon after that, Márquez resigned from his seat in the Colombian Senate and went into hiding.

https://www.bbc.co.uk/news/world-latin-america-46853989

SFO ANNOUNCES SENTENCES IN FH BERTLING BRIBERY INVESTIGATION

On 11th January, the Wall Street Journal reported sentencing in the case involving bribes for contracts in Angola and the North Sea.  The logistics company involved is now in liquidation, and was the UK subsidiary of the German Bertling Group.  The company and 6 former directors pleaded guilty in relation to the Angola case, and in the case involving the North Sea 3 pleaded guilty, 1 was convicted and 2 acquitted.  Custodial sentences of between 6 and 15 months were suspended for 2 years.  Fines were also imposed.  Some observers have commented on the apparent leniency involved, particularly the fact that the custodial sentences were suspended.

https://www.wsj.com/articles/sfo-announces-sentencings-in-f-h-bertling-investigation-11547255910?mod=djemRiskCompliance

 HUAWEI FIRES EXECUTIVE CHARGED IN POLAND WITH ESPIONAGE

The Wall Street Journal on 12th January reported that the Chinese telecoms company had fired a sales director recently arrested in Poland on espionage charges, saying he brought the Chinese telecom company “into disrepute”.

NUCLEAR CHIEF SAYS IRAN EXPLORING NEW URANIUM ENRICHMENT

KYC 360 on 13th January reported that the head of Iran’s nuclear programme has said that Iran has begun “preliminary activities for designing” a modern process for 20% uranium enrichment for its 50-year-old research reactor in Tehran, signalling new danger for the nuclear deal.  It says that restarting enrichment at that level would mean Iran had withdrawn the 2015 nuclear deal.

https://www.riskscreen.com/kyc360/news/sanctions-nuclear-chief-says-iran-exploring-new-uranium-enrichment/

US WARNS GERMAN COMPANIES OF POSSIBLE SANCTIONS OVER RUSSIAN PIPELINE

KYC 360 on 14th January reported warnings to German companies involved in the Russian-led Nord Stream 2 gas pipeline that they could face sanctions if they stick with the project.  The pipeline would carry gas straight to Germany under the Baltic Sea.

https://www.riskscreen.com/kyc360/news/u-s-warns-german-companies-of-possible-sanctions-over-russian-pipeline/

ORGANISED CRIME IN AFRICA: TRANSNATIONAL CRIME CONVERGING ACROSS AFRICA

On 14th December, ENACT Africa published a series of analytical reviews published by INTERPOL under the ENACT project which highlight the linkages between different types of transnational organised crime across Africa.  Amongst the conclusions were that –

  • transnational organised crime and violent extremism are increasingly interconnected;
  • traffickers are progressively diversifying and interconnecting their activities – drug trafficking, people smuggling, arms trafficking, wildlife crime, illegal logging, as well as fake medicines, and trafficking in cultural artefacts increasingly involves criminal organisations;
  • drug trafficking is a growing and cross-cutting threat across Africa – with an estimated 18 tonnes of cocaine originating from South America and destined for Europe transiting through West Africa every year;
  • migrants moving illegally across the continent are vulnerable to human trafficking and high levels of violence; and
  • Africa’s rapid technological development, including its e-commerce industry and mobile technologies, has come with a proliferation of cybercrime and illicit online activities.

https://enactafrica.org/press/press-releases/transnational-crime-converging-across-africa-undefined-interpol

US GOVERNMENT SHUTDOWN STARTS TO AFFECT AIR CARGO

Loadstar on 14th January said that the US government shutdown, entering its 24th day and the longest closure to date, has started to impact aviation.  It is not just passengers being inconvenienced.  There are also delays to aircraft registry documents and other certification paperwork, with the backlog likely to cause delays for some time.  Some 800,000 federal workers have failed to receive at least 1 pay cheque, if not 2 and the shutdown has already cost the US economy some $3.6 billion.

https://theloadstar.co.uk/us-government-shutdown-hits-24-days-and-starts-to-impact-air-cargo/

ISRAEL: LAW FOR THE REDUCTION OF CASH USE INTRODUCED

Fischer Behar Chen Well Orion & Co published an article on 11th January about the Law for the Reduction of Cash Use (5778/2018), which came into force on 1st January.  It provides details of the law which imposes certain restrictions on the use of cash and cheques that do not name the payee.  It aims to reduce cash transactions in an effort to fight financial crime and money laundering and foster the use of more modern and efficient payment methods.  It distinguishes between transactions to which a business selling products or providing services in the ordinary course of its business is party and transactions between private parties.

https://www.internationallawoffice.com/Newsletters/Banking/Israel/Fischer-Behar-Chen-Well-Orion-Co/Law-for-the-Reduction-of-Cash-Use-introduced

CAMBODIAN PRIME MINISTER BLACKMAILS EU, THREATENS TO EXTERMINATE THE OPPOSITION

EurActiv on 14th January reported that the Cambodian Prime Minister has threatened to retaliate against the opposition if the EU withdraws duty-free trading access over human rights concerns.

https://www.euractiv.com/section/global-europe/news/cambodian-pm-blackmails-eu-threatens-to-exterminate-the-opposition/

BULGARIAN REVENUE AGENCY ANNOUNCES INSPECTION OF CRYPTOCURRENCY-SELLING COMPANIES

Coin telegraph on 14th January reported that the National Revenue Agency (NRA) has announced the launch of inspections of cryptocurrency-selling companies to provide assurance compliance with tax and social security laws, as the NRA is reportedly worried about the use of crypto-assets for revenue concealment and tax evasion.  It says income from the sale of virtual currencies is declared in annual tax returns, treated as profit from the sale of a financial asset, and taxed at 10%, and companies profiting from the sale of crypto-assets are subject to taxation.

https://cointelegraph.com/news/bulgarian-revenue-agency-announces-inspection-of-cryptocurrency-selling-companies

UKRAINE: COURT OBLIGES NABU TO INVESTIGATE POSSIBLE CORRUPTION OFFENCE BY PROSECUTOR GENERAL

Interfax Ukraine on 14th January reported that a District Court has obliged the National Anti-Corruption Bureau of Ukraine (NABU) to launch a criminal investigation into a possible corruption offence by Prosecutor General Yuriy Lutsenko after it received a statement by law enforcement bodies.

https://en.interfax.com.ua/news/general/558669.html

BERMUDA SEEKS GREATER SAY IN INTERNATIONAL TAX POLICY TALKS

Tax News on 14th January reported that the Bermuda Government has set out its plans to more actively engage in discussions on tax policy internationally, including newly-establishing offices in Brussels and Washington.

https://www.lowtax.net/news/Bermuda-Seeks-Greater-Say-In-Intl-Tax-Policy-Talks-97000.html

HMRC MONEY LAUNDERING GUIDANCE UPDATED

Accountancy Magazine on 14th January reported that a webinar about the money laundering supervision “fit and proper” test and approval processes has been added to HMRC online guidance on the subject.

https://www.gov.uk/guidance/help-and-support-for-anti-money-laundering

STIFFER AML RULES FOR SINGAPORE JEWELLERS AHEAD

The Business Times on 14th January reported that some 2,500 jewellers and businesses dealing with precious stones and metals in Singapore are due to meet tighter AML/CFT rules, as called for under international standards.  Regulated dealers in precious stones and metals will have to register with the Registrar within the Ministry of Law, and carry out additional checks, with bullion traders and auctioneers also affected.  Currently, they already perform customer checks before carrying out any cash transactions more than S$20,000 and file cash transaction reports. They also already file SAR as required.  The new law will require additional ID and due diligence checks.  Pawnbrokers are exempted, as already regulated under the Pawnbrokers Act.  Ffinancial firms that deal with precious stones and metals are also exempted from nearly all requirements so long as they are regulated by MAS, e.g. regulated trading platforms that make loans backed against silver bars, or that sell tokens holding ownership rights to gold coins.

https://www.businesstimes.com.sg/government-economy/stiffer-anti-money-laundering-rules-for-singapore-jewellers-ahead

VENEZUELA FILES COMPLAINT CHALLENGING US SANCTIONS AT THE WTO

Husch Blackwell on 14th January published an article saying that Venezuela recently initiated a World Trade Organization complaint against US sanctions – on the same day that the US imposed additional sanctions on Venezuelan nationals and entities allegedly engaging in corrupt currency exchange transactions.

https://www.jdsupra.com/legalnews/venezuela-files-complaint-challenging-u-22791/

NEW LEGAL CASE IN NEW YORK – VICTIMS OF HIZBOLLAH SUE IRAN’S BANK SADERAT AND ITS UK SUBSIDIARY

In his blog on 14th January, Kenneth Rijock reported on a new civil suit filed in New York in which a number of victims of Hezbollah rocket and missile attacks upon US citizens are suing government-owned Bank Saderat Iran, and its UK subsidiary, Bank Saderat PLC.

http://rijock.blogspot.com/2019/01/american-victims-of-hezbollah-attacks.html

INDIA: 24 KG GOLD SEIZED AT CHENNAI AIRPORT, 2 SOUTH KOREANS DETAINED

Customs Today on 14th January reported that Customs officials said Hanbyoul Jung, 26, and Eunyoung Kim, 26, had arrived from Hong Kong via a Cathay Pacific flight.

http://www.customstoday.com.pk/24kg-gold-seized-at-chennai-airport-two-south-koreans-detained/

MAERSK PILOTS PHYSICAL CONTAINER INSPECTIONS AT US PORTS

Lloyds Loading List on 14th January reported that Maersk is funding and has begun random inspections, checking if import and export cargo in four US ports match descriptions and is correctly stuffed, latched and secured, with cost of any corrective action to be borne by shipper or consignee.  Where corrections are needed the cost will be charged to the shipper or consignee, depending on the direction of the container.  The intention is for the data collected will help develop procedures ensuring the accuracy of cargo descriptions and improved use of the Code of Practice for Packing of Cargo Transport Units.

https://www.lloydsloadinglist.com/freight-directory/news/Maersk-pilots-physical-container-inspections/73580.htm#.XDzIGPZ2t9A

CONVICTED FRAUDSTER FROM JERSEY CLAIMS HE CANNOT PAY £70 MILLION BILL

The Jersey Evening Press on 14th January carried a report saying that a former Jersey resident who is alleged to owe the UK government around £70 million has claimed that he is too poor to make the payment.  Gerald Smith, CEO of a former Jersey-registered company called ORB, was sentenced to 6 years in prison in 2006 after committing a £35 million fraud.  He was given a confiscation order to pay a total of £41 million to the UK government but this has since risen, due to interest, to nearly £70 million, and now facing legal action which could see him sent back to prison if he continues to refuse to pay.  The SFO has also claimed that he had taken 360 flights in the past 5 years to destinations including Vancouver, Toronto, Buenos Aires and the Maldives, but he says this travel was funded by other sources.

https://jerseyeveningpost.com/news/2019/01/14/convicted-fraudster-claims-he-cannot-pay-70-million-bill/

hsf

https://www.herbertsmithfreehills.com/latest-thinking/brexit-legal-guide-2018

FRAUD CASE SHOWS IMPORTANCE OF INTERNAL INVESTIGATIONS

On 14th January, Out-Law published an article saying that a recent High Court case demonstrates that companies will usually need to carry out their own internal investigations before being able to successfully obtain certain court orders (i.e. Norwich Pharmacal orders seeking information as to the source of allegedly privileged documents that had ended up in the hands of a counterparty) in cases of suspected employee fraud.

https://www.out-law.com/en/articles/2019/january/fraud-case-shows-importance-of-internal-investigations/

51 CONTAINERS OF GARBAGE SHIPPED BACK TO SOUTH KOREA

The Manila Bulletin on 14th January reported that 51 containers of illegal garbage languishing at a container terminal have finally been shipped back to South Korea where the assorted wastes came from several months ago.

https://news.mb.com.ph/2019/01/14/garbage-illegally-exported-to-misamis-oriental-shipped-back-to-south-korea/

CASH-TRANSPORTING HELICOPTER SHOT DOWN IN COLOMBIA

On 14th January, Janes.com reported that a helicopter transporting cash on behalf of Brink’s was set on fire and destroyed after it had been fired upon while flying over the area, forcing it to make an emergency landing.  The helicopter’s 3 crew were subsequently kidnapped and about $500,000 of cash stolen.

https://www.janes.com/article/85688/shootdown-of-cash-transporting-helicopter-highlights-ongoing-high-risk-to-commercial-aircraft-in-colombia-s-catatumbo-region

UK SOLICITOR RECEIVES HEFTY FINE IN CASE WITH LINK TO PANAMA PAPERS

On 14th January, Legal Futures reported that Khalid Mohammed Sharif, a partner at London firm Child & Child, a solicitor who failed to do even an internet search to check whether his clients were PEP, has been fined £45,000 in the first disciplinary matter to involve infamous offshore law firm Mossack Fonseca.

https://www.legalfutures.co.uk/latest-news/solicitor-receives-hefty-fine-in-case-with-link-to-panama-papers

FRANCE AND GERMANY AIM TO UNIFY THEIR CLASHING WEAPONS-EXPORT RULES FOR JOINT PROGRAMMES

Defense News on 12th January reported that the German Cabinet has approved a new, high-level pact with France that calls for a common approach to weapons exports in all joint programmes.  The article says that France generally is open to exporting arms to many governments willing to pay for them, whilst German leaders profess to take a more cautious approach when human rights concerns crop up, though the government has a history of making arms deals through the back door anyway.

https://www.defensenews.com/global/europe/2019/01/11/france-germany-aim-to-unify-their-clashing-weapons-export-rules/

ITALY TARGETS PUBLIC SECTOR CORRUPTION

A post on the FCPA Blog says that the Italian Parliament approved a package of measures aimed to combat public sector corruption and increase scrutiny and transparency requirements with regards to private and corporate contributions to political parties and foundations.  The so-called “bribe destroyer” (spazzacorotti) Bill was approved in the Chamber of Deputies.  It is estimated that corruption is equivalent to around 13% of Italian GDP.

http://www.fcpablog.com/blog/2019/1/14/italy-adopts-new-bribe-destroyer-law.html

6 ARRESTED IN MAJOR LAUNDERING AND EXTORTION CASE LINKED TO ISRAELI SOCCER

The Times of Israel on 14th January reported that 6 people were arrested and 6 more detained for questioning in a major money laundering and extortion case linked to Israeli soccer.  The suspects are believed to have defrauded investors in real estate transactions, among other businesses and charges in the case include aggravated fraud, criminal conspiracy, extortion, income tax crimes, and money laundering.

https://www.timesofisrael.com/six-arrested-in-major-laundering-extortion-case-linked-to-israeli-soccer/

FORMER PRESIDENT CHARGED WITH MONEY LAUNDERING IN EL SALVADOR

ICIJ reported on 14th January that the Panama Papers may have snared another former head of state as El Salvador’s Mauricio Funes was accused by the country’s Attorney General of taking bribes while in office that were routed through offshore companies created by Panamanian law firm Mossack Fonseca.

https://www.icij.org/investigations/panama-papers/former-president-charged-with-money-laundering-in-el-salvador/

FBI INVESTIGATING SUSPECTED BRIBERY IN LOS ANGELES REL ESTATE DEVELOPMENTS

On 14th January, NBC in Los Angeles reported that the FBI is seeking evidence on suspected large-scale bribery of local officials by Chinese investment companies.

https://www.nbclosangeles.com/news/local/FBI-Corruption-Probe-into-Real-Estate-Developments-Underway-504324061.html

THE IMPACT OF THE UKRAINE CONFLICT ON CO-OPERATION TO COMBAT ILLICIT TRAFFICKING IN NUCLEAR MATERIALS IN THE BLACK SEA REGION

One of a set of new papers from the Stockholm International Peace Research Institute considers the impact of the conflict on co-operation to combat illicit trafficking in nuclear materials in the region, with a rapidly shifting security environment.  It says that since the 1990s, most of the world’s identified cases of illicit trafficking of nuclear materials — fissile materials, in particular — have been located in countries around the Black Sea.  The nuclear security situation in the region is further complicated by the existence of areas with unstable governance and protracted conflicts such as in Transnistria, Abkhazia, South Ossetia and areas of Eastern Ukraine since 2014.  It assesses whether and how the conflict has changed the risk that illicit trafficking will occur, and the impact on existing regional nuclear security regimes and cooperative projects that are intended to reduce the risk of illicit trafficking.

https://www.sipri.org/research/conflict-and-peace/europe/black-sea-engaging-dialogue-and-combatting-nuclear-smuggling

PROTRACTED ARMED CONFLICTS IN THE POST-SOVIET SPACE AND THEIR IMPACT ON BLACK SEA SECURITY

Another of the SIPRI papers focussed on the Black Sea region provides background and information on ongoing conflicts in the territory of the former Soviet Union –

  • Azerbaijan: Nagorno-Karabakh;
  • Georgia: Abkhazia and South Ossetia;
  • Moldova: Trans-Dniester; and
  • Ukraine: Crimea and eastern Ukraine.

It says that they have led to an increase in military activities in the region, and that the overlapping conflict-affected areas have generated a wide zone of instability stretching from Trans-Dniester, through eastern Ukraine and the Caucasus and into Turkey and the Middle East.   The conflicts are a significant obstacle to economic development in the breakaway regions themselves and their respective states, it says.

https://www.sipri.org/sites/default/files/2018-12/sipriinsight1808_0.pdf

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CHINA: CUSTOMS SEIZES ‘WORLD’S MOST DANGEROUS FRUIT’: CANNONBALL TREE FRUIT

The Straits Times on 14th January reported that customs officers in southern China have seized a cannonball tree fruit – which they said could “potentially explode” – from a traveller who was returning from Singapore.  The 30cm-wide brown fruit, which resembles a husked coconut and weighs 3.8 kg, was tucked inside a luggage bag before it was picked up during X-ray security scanning.  To make matters worse, the stench of the fruit (i.e. the pulp inside) was once described as “a bloated 2 tonne 3-day-dead possum passed gas, causing a tequila-saturated hobo to projectile vomit into an adjacent dumpster filled with rotting cheese and mayonnaise”.

https://www.straitstimes.com/asia/east-asia/guangdong-customs-seizes-worlds-most-dangerous-fruit-from-singapore-cannonball-tree

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UN SANCTIONS GOOD PRACTICES GUIDE

5 European countries have jointly have developed a Best Practices Guide for Chairs and Members of UN Sanctions Committees and it has been issued for consultation.  It outlines the roles, interrelationship and practices of those involved (e.g. UN Security Council); and of the Chairs and Members of Sanctions Committees.  It also provides a list of sanctions currently in force, including a description of the types of sanctions, how they work, compliance obligation standards; and the activities and processes of sanctions committees.

http://www.comcapint.com/wp-content/uploads/2019/01/E-Best-Practices-Guide-1.pdf

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EU REMOVES 3 CONCERNS FROM ITS IRAQ SANCTIONS LIST

On 14th January, EU Regulation 2019/51/EU notified the removal of the GENERAL ESTABLISHMENT FOR DESIGNS AND RESEARCH, the STATE ENTERPRISE FOR ALUMINUM SEMI PRODUCTS, and the STATE ENTERPRISE FOR CABLES AND WIRES (alias STATE CABLES AND WIRES ENTERPRISE) from its Iraq sanctions list, following the decision of the relevant UN sanctions committee on 8th January.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.010.01.0060.01.ENG&toc=OJ:L:2019:010:TOC

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UK: ECONOMIC CRIME STRATEGIC BOARD TASK FORCE CREATED TO COUNTER CORRUPTION AND FRAUD

UK Finance reported on 14th January tat a joint initiative between the Home Office, HM Treasury and financial sector will see the creation of this new taskforce to battle corruption and fraud.  It is said that it will have powers to scrutinise anti-corruption efforts and allocate government resources accordingly and will feature specialists from both the public and private sector.  Members will also include bank chiefs, other government ministers, law enforcement figures and representatives from the legal, accountancy and property sectors.  It is reported that the Home Secretary will confirm that his department will commit £3.5 million in 2019/20 to support work to reform the SAR regime.

https://www.theguardian.com/business/2019/jan/14/javid-and-hammond-team-up-to-tackle-14bn-of-economic-crimes

https://www.gov.uk/government/news/new-taskforce-to-tackle-economic-crime

 

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FCA FINES FOR AML FAILINGS: IMPORTANT GUIDANCE FOR CEO AND BOARDS

On 11th January, Stephenson Harwood published an article in the light of the FCA Decision Notice in respect of Mohammed Ataur Rahman Prodhan, imposing a fine of £76,400 on the former CEO of Sonali Bank (UK) Ltd for failings in relation to AML systems and controls, and the case of John Pottage v FSA – where obligations of CEO and other senior managers as regards regulatory compliance (and the extent to which senior managers can be held liable for regulatory or compliance failings) was explored.  These emphasised that

  • AML/financial crime is a senior management responsibility;
  • delegation of responsibilities must be appropriate, monitored and challenged;
  • whilst not having to be an expert, senior management must understand the risks and key requirements pertaining to AML and financial crime;
  • FCA supervisory visits must be taken seriously and prepared for appropriately, and where feedback is provided this must be considered carefully, challenged where it is unfair or inaccurate and otherwise given effect as a matter of priority.

https://www.shlegal.com/insights/fca-fines-for-aml-failings-important-guidance-for-ceos-and-boards

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HOW CHILDREN PLAYING FORTNITE ARE HELPING TO FUEL ORGANISED CRIME

On 13th January, the Independent carried an article saying that criminals are using the hugely popular video game Fortnite to launder money through its in-game currency.  Stolen credit card details are being used to purchase V-bucks – the virtual currency used to buy items in the game – from the official Fortnite store.  By selling V-bucks at a discounted rate to players, the criminals are effectively able to “clean” the money.  Discounted V-bucks are being sold in bulk on the Dark Web.  An investigation uncovered operations being conducted around the globe in Chinese, Russian, Spanish, Arabic and English.  Fortnite has more than 200 million players worldwide.

https://www.independent.co.uk/fortnite-v-bucks-discount-price-money-dark-web-money-laundering-crime-a8717941.html

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OTHER THINGS YOU MAY HAVE MISSED – JANUARY 13

13th January 2019

ISRAELI ARRESTED IN BULGARIA OVER BRIBERY SUSPICIONS IN GUATEMALA

Y Net News on 13th January reported that Israeli national Azaria Levi, 70, a senior official in SBI Infrastructure, a subsidiary of Shikun & Binui real estate, was arrested in Bulgaria at the request of Guatemala.  Several of its employees were arrested in 2018 for suspected bribery and levi is suspected of giving $6.1 in bribes to government officials.

https://www.ynetnews.com/articles/0,7340,L-5445784,00.html

BBC PODCAST: THE HISTORY OF CHEMICAL WEAPONS

A BBC Radio 4 programme examines the motivation of chemists like Dr Fritz Haber, who first encouraged the German military to deploy chlorine gas in WW1 for the sake of “The Fatherland” and of Dr Gerhard Schrader, who, in his hunt for an effective pesticide, accidentally discovered a new class of lethal nerve agents for Nazi Germany.  It asks how science educators can prepare young chemists for the moral hazard posed by this particular class of weapon.

https://www.bbc.co.uk/sounds/play/m0001zwz

PROPERTY AGENCY BOSS ARRESTED IN HONG KONG FOR ALLEGED FRAUD IN US

Factwire on 13th January reported that Hong Kong police have arrested 5 people from one of the largest Hong Kong real estate agency specialised in overseas properties, including its managing director, after at least 28 people in Hong Kong accused the company of mislead them into buying derelict houses at inflated prices in the US.  Between 2012 and 2015 Premier Capital sold nearly 600 homes at 7 residential developments across Houston to investors in Hong Kong and mainland China, who paid around $340 million in total.  Investors were offered to buy foreclosed luxury houses at prices ‘lower than construction costs’, with the promise of guaranteed 16% rental return for the first 2 years.

https://www.factwire.org/single-post/2019/01/13/Property-agency-boss-arrested-for-alleged-fraud-in-US

INDIA: RUNAWAY DUBAI PRINCESS ‘SWAPPED’ FOR BRITISH ARMS DEALER

Stuff in New Zealand on 13th January claimed that Christian Micehl, a British arms consultant at the centre of a bribery scandal over a helicopter deal in India, was exchanged for a runaway Dubai princess in a quid pro quo extradition.  Michel was extradited from the UAE to India.  He was exchanged for Princess Sheikha Latifa bint Mohammed al-Maktoum, the daughter of Dubai’s ruler, who was intercepted by the Indian Navy during her attempt to flee the UAE in a yacht last year.

https://www.stuff.co.nz/world/middle-east/109894146/runaway-princess-swapped-for-british-arms-consultant

RUSSIA: MAMMOTH HUNTERS PROBE PERMAFROST FOR ‘ETHICAL IVORY’

On 11th January, Rferl published a video report saying that, in Russia’s remote Sakha-Yakutia region, the frozen ground is studded with the remains of prehistoric mammoths.  Their tusks are worth a fortune to traders in China, where the sale of elephant ivory was banned in late 2017.

https://www.rferl.org/a/russia-siberia-yakutia-mammoth-ivory/29703761.html

NOW A MEMBER OF AML BODY FATF, HAS ISRAEL TRULY CLEANED UP ITS ACT?

The Times of Israel carried an article on 13th January posing this question.  It says that Israel was blacklisted 16 years ago, and despite joining FATF new immigrants can bring in unreported income for 10 years and vast scams go unprosecuted.  It also mentions ghost apartments (apartments that remain empty for most of the year) in the country, sales of very high-end cars, and only mild punishment for offenders, as well as complaints from other countries over lack of co-operation.  Furthermore, up to 25% of the economy is “off the books”.  Israel, it says, also appears to continue to turn a blind eye to Israel’s semi-underground investment scam industry, which defrauded victims all over the world out of billions, and also serves as a conduit for criminals to move their money around the world under the guise of online trading.  A critic is quoted as saying that there are certain branches of large Israeli banks that have developed a reputation among newcomers for looking the other way.  It also touches on an entire “high-risk payment processing” industry that has popped up that allows criminals and shady online actors to get their ill-gotten gains into the global payments system by masking and disguising their identities so that credit card companies and banks perceive them as legitimate.

https://www.timesofisrael.com/now-a-member-of-anti-money-laundering-body-has-israel-truly-cleaned-up-its-act

FUGITIVE ITALIAN MILITANT ARRESTED IN BOLIVIA

RTE on 13th January reported that Cesare Battisti, a former Italian communist militant sought by Rome for 4 murders in the 1970s, has been arrested in Bolivia where he faces extradition to Brazil and then likely to Italy.

https://www.rte.ie/news/world/2019/0113/1022921-cesare-battisti

WE’LL HELP WITH RUSSIA SANCTIONS FALL-OUT, GERMAN MINISTER TELLS BUSINESS

Customs Today on 12th January reported that the German Foreign Minister Heiko Maas has said Germany will try to protect German and European companies from some potentially “massive collateral damage” if Washington levies further sanctions against Russia.  Maas was speaking at a new year reception of the German Committee on East European Economic Relations, an industry group.

http://www.customstoday.com.pk/well-help-with-russia-sanctions-fall-out-german-minister-tells-business/

MALAYSIA: NATIONAL FINANCIAL CRIME CENTRE TO BE FULLY OPERATIONAL BY JUNE

On 12th January, Customs Today reported that the National Financial Crime Centre (NFCC) is expected to be fully operational by June this year, said National Governance, Integrity and Anti-Corruption Centre (GIACC) director-general Tan Sri Abu Kassim Mohamed.  The NFCC, which is one of the initiatives under the National Anti-Corruption Plan 2019-2023 (NACP), will act as a task force whereby all relevant agencies will work from one place and look at the same target criminal activities.  The NFCC, will comprise several agencies including the Royal Malaysian Customs, Immigration Department, Bank Negara Malaysia, Malaysian Anti-Corruption Commission, Companies Commission of Malaysia, Inland Revenue Board and Royal Malaysian of Police.

http://www.customstoday.com.pk/national-financial-crime-centre-to-be-fully-operational-by-june/

2 ARRESTS IN NEWRY FOLLOWING HMRC RAID OVER “MULTI-MILLION POUND” FUEL FRAUD

The Newry Times on 13th January reported that a suspected fuel laundering plant was dismantled and 45,000 litres of fuel seized, along with specialised equipment thought to be being used in the laundering process.  The plant had the potential to produce in excess of 10 million litres of illicit fuel a year, with the potential loss of £6.5 million in revenue.  A HMRC spokesman is quoted as saying that HMRC now believes that criminals are now experimenting with processes that carry a risk of explosion as they seek to defeat fuel markers.

http://newrytimes.com/2019/01/13/two-arrests-in-newry-following-hmrc-fuel-fraud-raid

CONVERTING MERCHANT SHIPS TO MISSILE SHIPS FOR THE WIN

The US Naval Institute has published an article saying that the US Navy wants and needs more capability to ease the strain on its slowly growing fleet, a strain amplified by global great-power competition, and the pace of the 30-year shipbuilding plan as envisioned falls short.  The article proposes that the Navy should acquire and arm merchant ships, outfitting them with modular weapons and systems to take advantage of improving technology and shipping market conditions while providing capability more rapidly and less expensively than traditional acquisition efforts.  It could convert readily available merchant hulls into missile-armed Navy ships.  Options mentioned include IMO–compliant double-hull tankers and container ships, and either type probably could accommodate tactical ballistic missiles in addition to ship-launched cruise missiles.  Container ship conversion into a “missile merchant” would be easier and probably less costly if VLS modules were housed in special boxes or stacked in container cells.  The article says that the Navy should start experimenting with the concept immediately.

https://www.usni.org/magazines/proceedings/2019-01/converting-merchant-ships-missile-ships-win

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MALTA: BLAME THE LAW, NOT THE JUDGE OVER DISMISSAL OF PANAMA PAPERS CASE

On 13th January, an article in the Times of Malta in which the Dean of the Faculty of Law is quoted as saying that the judgment handed down by the court makes good law; it is the law itself which makes bad law.  A “Catch 22” situation is said to exist where you need an in genere inquiry (where anyone, and not just the police or Attorney General, can request a magisterial investigation) to investigate, find and confirm the existence of proof that may be used for a future prosecution of a crime; but, in order to get an inquiry going you need to provide the type of proof that would normally be found and obtained by the in genere inquiry itself.

https://www.timesofmalta.com/articles/view/20190113/local/blame-the-law-not-the-judge-dean-of-faculty-of-laws.699081

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HOW THE ALBANIAN MAFIA SEIZED CONTROL OF THE UK DRUGS TRADE

The Observer on 13th January published an article which says that Albanian organised criminal syndicates who, according to the NCA, are consolidating power within the UK criminal underworld and on their way to a near total takeover of the country’s £5 billion cocaine trade.  It says that the story of how Albanians came to conquer the UK’s cocaine market is a lesson in criminal savvy; the value of making friends with the world’s most dangerous mafias (particularly the ‘Ndrangheta and the absolute threat of violence.  The article says that Liverpool as the only part of England not routinely selling Albanian-sourced cocaine – saying not only has the Merseyside port its own direct access to South America, but its turf is jealously guarded by the city’s own criminal gangs.

https://www.theguardian.com/world/2019/jan/13/kings-of-cocaine-albanian-mafia-uk-drugs-crime

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CHAD AND CENTRAL AFRICAN REPUBLIC THREATEN TO ABANDON CAMEROON PORT BLAMING CORRUPTION

VoA on 13th January reported that landlocked Chad and the Central African Republic have dispatched senior customs officials to Cameroon to look into allegations of corruption in the Atlantic Coast port of Douala.  Importers complain of high levels of corruption, red tape and overpriced services are driving them away from one of Africa’s largest harbours.  An example is quoted where, to take a car out, an importer needs no fewer than 25 stamps before paying $2,000 to customs officials for a 5- to 10-year-old car. Removing a car from the port at times takes 2 to 3 weeks.  More than 2,000 containers are said to have been stuck in Douala for the past 2 months.

https://www.voanews.com/a/chad-car-threaten-to-abandon-cameroon-port-blame-corruption/4740780.html

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SUSPICIONS OF INTERFERENCE IN LIBYA FUEL HOSTILITY TOWARDS TURKEY

The Arab Weekly on 13th January reported that the discovery of 2 attempts, less than a month apart, to smuggle Turkish-made guns into Libya triggered hostile reactions over suspicions of Ankara’s support to extremists.  On December 18th, Libyan customs officers discovered 3,000 Turkish-made 9mm Beretta-style handguns and 2.3 million rounds of ammunition in 2 containers that had been delivered on a cargo ship from Turkey, said to contain building materials and flooring.  On January 7th, customs officials found more than 20,000 8mm Turkish handguns hidden in a container delivered from Turkey said to contain children’s toys and household goods.  The article says that even without these 2 incidents, hostility to Turkey (and Qatar) is growing.  Turkey has, with Qatar, become a sanctuary for numerous Libyan Islamist or quasi-Islamist political figures also fuelled hostility, including Abdulhakim Belhaj, the head of Libya’s al-Watan Party and owner of its pro-Islamist TV station Al Nabaa, which operates out of Turkey.  Perception of Libya’s history as a neo-Ottoman province, also appears to be building public suspicion and antagonism towards Turkey.

https://thearabweekly.com/suspicions-interference-libya-fuel-hostility-towards-turkey

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OTHER THINGS YOU MAY HAVE MISSED – JANUARY 12

11th January 2019

USE NATURAL ACIDS ON HUMANS TO DETECT TRAFFICKING, SMUGGLING VICTIMS IN CARGO

On 4th January, Homeland Security Today carried an article about a research study which examined the use of specific organic acids emitted from humans being monitored as an effective method to discover the presence of hidden people in enclosures like containers and trucks.  The method involves sampling the air from the inside of the enclosure through the air vent and enriching the collected vapor trace on a nano-carbon-coated sample card.  The enriched sampled is immediately analysed for the specific acid metabolites lactic and pyruvic acids and the results reported in a span of 1-2 minutes.

https://www.hstoday.us/subject-matter-areas/customs-immigration/perspective-use-natural-acids-on-humans-to-detect-trafficking-smuggling-victims-in-containers/

ECONOMIC SUBSTANCE CHANGES – BVI AND CAYMAN LAWS IN FORCE

On 11th January, law firm Harneys published 2 articles, one each for the BVI and Cayman Islands changes.

https://www.harneys.com/insights/

CALCULATING THE FATAL DOSE OF NOVEL PSYCHOACTIVE SUBSTANCES

On 10th January, the Pharmaceutical Journal published an article following on from an earlier article about the use of so-called “legal highs”, or New/Novel Psychoactive Substances (NPS), saying that one problem is that many of these NPS have very limited or no data on which to base assessments of their toxicity.  The article claims to provide a method to measure such toxicity.

https://www.pharmaceutical-journal.com/opinion/correspondence/calculating-the-fatal-dose-of-novel-psychoactive-substances/20205940.article

See also –

NEW PSYCHOACTIVE SUBSTANCES – QUICK REFERENCE GUIDE

Issued by the Royal Pharmaceutical Society, a summary factsheet of the guide is available to non-members –

https://www.rpharms.com/Portals/0/RPS%20document%20library/Open%20access/Science/RPS%20NPS%20Fact%20sheet.pdf?ver=2018-06-18-141822-160

 

12th January 2019

US PROBES BOEING SATELLITE DEAL BACKED BY CHINA

On 11th January, the Wall Street Journal reported that SEC and the Department of Commerce are investigating Boeing’s relationship with a satellite start-up company, Global IP, backed by a Chinese government-owned firm.  The SEC requested that the company retain all documents about its work with Boeing and a number of other individuals and entities, including state-owned Chinese lender, the China Orient Asset Management Company.  In December, Boeing cancelled an order for a geostationary satellite, ordered in 2016 and designed to provide internet services across Africa from this year, citing Global IP’s inability to pay.  Global IP was said to be funded, and allegedly controlled, by the Chinese state-owned entity. Global IP’s founders, who had left the company, had said in a lawsuit filed last year that they were concerned the Chinese government could gain access to sensitive, export-controlled technologies through the Boeing contract.

https://www.wsj.com/articles/u-s-probes-failed-boeing-satellite-deal-backed-by-china-11547248296

ISRAEL SELLS “SUICIDE DRONE” TO AZERBAIJAN

On 11th January, the Jerusalem Post reported that Israeli defence company, Elbit Systems, had sold Azerbaijan its latest combat UAV, SkyStriker, said to be capable of long-range “kamikaze strikes”.  The very quiet UAV has an electric motor, can loiter for 2 hours, and has a warhead of up to 10 kg.  Azerbaijan is the first international customer for the UAV.  In 2018, another Israeli company, Aeronautics, was said to have engaged in a “live firing” demonstration of another UAV in Azerbaijan against an Armenian target.  Azerbaijan was also reported to have used “suicide drones” against Armenian targets in 2016.  Azerbaijan and Armenia are involved in the disputed territory of Nagorno-Karabakh, and Azerbaijan is reported to have doubled its military expenditure since 2016.

https://www.jpost.com/Israel-News/Israels-Elbit-Systems-sells-Azerbaijan-SkyStriker-suicide-drone-577053

KENYA AT CENTRE OF DONKEY SMUGGLING RACKET

All Africa on 11th January reported that Kenya has been identified as a conduit for smuggling donkeys from neighbouring countries.  It says that demand for donkey skin, which is used in China for making traditional medicine, has been blamed for halving Kenya’s donkey population, but that donkeys remain crucial to rural economies.  In China, they are used in production of ejiao, a traditional medicine made from gelatine extracted from boiled donkey hides.

https://allafrica.com/stories/201901110587.html

GOLD SMUGGLING INTO INDIA FROM REFINERIES IN MYANMAR BY JEWELLERS

The Times of India on 11th January reported that the arrest of 2 jewellers in Hyderabad, said to be behind the use of “mules”, with 3.3 kg of gold seized.

https://timesofindia.indiatimes.com/city/hyderabad/jewellers-arrest-reveals-hyderabads-golden-nexus-with-myanmar/articleshow/67480567.cms

gold

MEXICAN NARCOS ARE USING CHINESE CRYPTO MONEY LAUNDERING SYNDICATES

Coin Central on 11th January reported that a US Senate Judiciary Sub-Committee has heard that Mexican drug cartels are now more than ever relying on Chinese cryptocurrency money laundering networks.  It says that the co-operation in obtaining precursor chemicals used to process drugs such as methamphetamine (meth).  It says that China is a major supplier of controlled substances such as ephedrine and pseudoephedrine, which are vital ingredients in the production of methamphetamine.  It is also a major exporter of Fentanyl.  The Chinese Underground Banking Systems (CUBS) is an intricate network of money and cryptocurrency brokers who move currencies in and of the economy while sidestepping the country’s banking system – and is estimated to have over 10,000 clients and believed to launder over $100 billion every year.  As a result, cash seizures are said to be in decline, with a 90% drop on the Arizona-Mexico border since 2011 cited as an example.

https://coincentral.com/mexican-narcos-are-using-chinese-crypto-money-laundering-syndicates/

MPs ATTACK MINISTERS OVER DELAY TO TAX HAVENS’ PUBLIC REGISTERS

The Guardian on 11th January reported that the UK Government has been accused of defying parliament by delaying plans to require British tax havens such as the BVI to bring in beneficial ownership public registers.  The FCO has told the Overseas Territories that they did not need to introduce compulsory public registers until 2023 – 3 years after the date MPs had thought they had set by law.  It says that ministers appear to have backtracked after the 2020 deadline caused outrage in the overseas territories, which are reportedly worried that this timetable for disclosure requirements would lead to a flood of business decamping to other more secretive tax havens.

https://www.theguardian.com/world/2019/jan/11/mps-attack-ministers-over-delay-to-tax-havens-public-registers

ETHIOPIA CHARGES FORMER MILITARY FIRM BOSS WITH CORRUPTION

Defence Web on 11th January reported that Ethiopia has charged Kinfe Dagnew, the former head of military-run industrial conglomerate METEC, with corruption almost two months after he was arrested.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=54180:ethiopia-charges-former-military-firm-boss&catid=49:National%20Security&Itemid=115

NEW ZEALAND FRAUDSTER WHO RIPPED OFF $1.3 MILLION FROM VICTIMS DECLINED PAROLE IN FRANCE

Stuff in New Zealand in its 13th January edition reported that Ian Ludwig, who fleeced 7 people of $1.3 million will remain in jail for now after he appeared before the Parole Board in December.  Ludwig, a New Zealand Homes Loans franchisee, convinced friends to invest in his business but took the money and spent it on lifestyle-gambling, buying properties, and taking holidays.  He is now acting as a problem gambling counsellor in jail.

https://www.stuff.co.nz/national/109860179/fraudster-who-ripped-off-13m-from-victims-declined-parole

RUSSIA: COMPANY OF PUTIN-CONNECTED OLIGARCH WINS STATE ANTI-CORRUPTION TENDER

Rferl on 12th January reported that Granat, a company owned by Russian billionaire oligarch Arkady Rotenberg, has been awarded a state grant to conduct training on civil-society development and combating corruption.  Rotenberg is a childhood friend and former judo partner of Russian President Vladimir Putin.

https://www.rferl.org/a/company-of-putin-connected-oligarch-rotenberg-wins-state-anticorruption-tender/29705966.html?src=ilaw

HIZBOLLAH IN SOUTH AMERICA

A report from Infobae on 11th January is concerned with Hizbollah links to drugs gangs in the tri-border area of Brazil, Argentina and Paraguay, where it is said to be raising funds to finance terrorism, with Lebanese families said to control much of the trade.

https://www.infobae.com/america/america-docs/2019/01/11/hezbollah-en-la-triple-frontera-cocaina-para-la-revolucion/

sa2
INTERNATIONAL HACKER-FOR-HIRE JAILED FOR CYBER ATTACK ON LIBERIAN TELECOMS

On 12th January, an NCA news release advised that Daniel Kaye, a British cyber criminal has been sentenced to 2 years and 8 months for conducting attacks that disrupted a Liberian telecommunications provider, resulting in losses estimated at tens of millions of US dollars.  He had pleaded guilty to creating and using a botnet and possessing criminal property.  He was living in Cyprus when he began carrying out intermittent Distributed Denial of Service (DDoS) attacks on the Liberian telecommunications provider Lonestar MTN in October 2015 using rented botnets and stressors.  The company spent some $600,000 as a result of the attacks.  A European Arrest Warrant was issued for Kaye and when he returned to the UK in February 2017, he was arrested by NCA.

http://www.nationalcrimeagency.gov.uk/news/1542-international-hacker-for-hire-jailed-for-cyber-attacks-on-liberian-telecommunications-provider

5 REASONS WHY LATIN AMERICAN ORGANISED CRIME WILL STRENGTHEN IN 2019

An article in Insight Crime on 11th January reports on what it says are the 5 reasons why organised crime in Latin America will get stronger this year – There is no no integrated or transnational response to organised crime; repetitive and tired responses by national governments to organised crime threats; Top-level corruption (the number of current or former Latin American presidents under investigation, or condemned, on charges of corruption it describes as “staggering”); Booming criminal economies (cocaine production is at a record high and the US is in the grip of its deadliest drug crisis with opioids); and Agile and increasingly clandestine transnational organised crime.

https://www.insightcrime.org/news/analysis/reasons-latam-organized-crime-strengthen-2019/

Featured

ISLE OF MAN AND SANCTIONS AFTER BREXIT

Introduction

When (or if?) the UK exits the EU, the Isle of Man (which had no vote or say in the matter) will be bound to follow.  Although, like the Channel Islands, not a Member State or part of a Member State, its close ties to the UK, as well as the need to ensure it met its international commitments, meant that where sanctions and export controls were concerned, its policies and procedures were largely governed by EU legislation and policies.  For sound practical reasons too, it made sense for the Island to make use of EU legislation to give effect to such things as sanctions prohibitions and restrictions, even where, strictly speaking, the relevant EU Regulations had no effect in themselves in the Island.

As with the UK, the Island faces the problem of continuing to have a satisfactory and effective sanctions regime after withdrawal, and to replace the current structures with something at least as effective for the future.

Leaving aside export controls and counter-proliferation measures, the Customs and Excise[1] pages on the Isle of Man Government website currently list 25 separate sanctions regimes.  Furthermore, and again like the UK, the Island has spent 45 years where EU law has increasingly become entwined with, influenced, complemented or even replaced domestic legislation.

What does the Island have to do with its sanctions regimes, and how will they, or could they, be maintained and replaced?

 The position as I see it

There appear to be three aspects to consider –

  1. There would need to be an interim, temporary measure to retain, with such modifications as considered necessary, existing sanction measures imposed using EU instruments after the withdrawal date (or the final withdrawal date, should there be a transit period);
  2. There would be a need to impose or reimpose existing (and new) sanctions after the date of withdrawal – using powers contained in domestic or applied UK law;
  3. The export control legislation, where impacted by sanctions measures (such as reference to EU sanctions in any orders imposing prohibitions or restrictions[2]), would require amendment to remove or amend reference to the EU measures, where relevant.

On the face of it, section 63 of the Sanctions and Anti-Money Laundering Act 2018 (see below) would appear to meet the requirements of, at least, a and b above.  An order-in-council (or even orders-in-council) could deal with the matters involved, and would likely delegate the powers and responsibilities of the “appropriate minister” in the 2019 Act to the Treasury in the Isle of Man (which currently has responsibility for sanctions matters, financial and trade-based, in the Island).

Such an order or orders may also be the means by which any changes to export control legislation is given effect[3].

To date, no such order-in-council has been published by HMSO in the UK.

In addition, the European Union and Trade Act (see below) provides for dealing with existing orders and regulations in any interim or transit period.  Indeed, section 6 of that Act explicitly provides that any statutory document made under section 2A or 2B (again, see below) of the European Communities (Isle of Man) Act 1973, as it has effect immediately before “exit day”, continues to have effect in Island law on and after exit day[4].

A further housekeeping requirement would be to amend or revoke as necessary all the existing orders-in-council implementing UN sanctions measures[5], orders applying relevant EU Regulations creating or amending sanctions regimes, and regulations made in the Island to implement such sanctions by providing for powers, offences, penalties etc.

The European Union and Trade Act

This Act will be the equivalent, broadly speaking, to the European Union (Withdrawal) Act 2018 of the UK[6].  One of its main purposes One purpose is to save any statutory documents (the term used in the Island for what are called stator instruments, such as orders and regulations) made under sections 2A or 2B of the European Communities (Isle of Man) Act 1973[7] so that they will continue to have effect in Island law on and after exit day following the repeal of the 1973 Act.   These saved statutory documents will form part of a new category of law which will be called “retained EU law”.  Normally, such a a statutory document would automatically lapse when the primary legislation under which it was made is repealed, unless the statutory document is expressly saved by the repealing legislation.  However, under the European Union and Trade Act any saved statutory documents will have effect as if made as regulations under that Act.

It is important to note that, aside from some trade measures that might be construed as having direct effect in the Island under the terms of Protocol 3[8], sanctions measures (like AML/CFT controls, such as the EU’s 3rd and 4th Money Laundering Directives, nor even the VAT Directives) do not have effect in the Island[9].  This is why such sanctions measures had to be given effect by means of Island law, whereas they could have automatic effect in the UK.  Such applied sanctions measures thus became part of Island law, not EU law, despite their obvious origin, and any changes made by the EU to the underlying instruments were not, unlike in the UK, carried over in the Island but had to be legislated for by means of amending orders or regulations[10] .  It was the aforementioned section 2A of the 1973 Act that was used to apply EU Regulations in the Island, and section 2B that was used to make the domestic regulations necessary to implement and enforce them.

The previous situation in the Island

As far as financial sanctions are concerned, the latest and current guidance issued by the Isle of Man Treasury on the implementation of financial sanctions in the Island is contained in a Notice issued in September 2018[11].  This describes them as prohibitions and restrictions put in place by the UN, EU, UK and Isle of Man, with the aim of maintaining or restoring international peace and security.  They can limit the provision of certain financial services; and/or restrict access to financial markets, funds and economic resources.

It explains that in the Island financial sanctions legislation is generally made under –

  • the United Nations Act 1946 (an Act of Parliament) – now rarely used[12], though some orders remain in force; and
  • the European Communities (Isle of Man) Act 1973 (an Act of Tynwald). – the favoured method in recent years. Application orders apply the relevant EU Regulation, with the necessary modifications, and regulations are then made under the Act to provide for enforcement powers, penalties for infringements, licensing arrangements etc.

As the Notice goes on to explain, in certain circumstances, the UK can impose its own financial sanctions and restrictions under other domestic legislation – the Terrorist Asset-Freezing etc. Act 2010 (TAFA 2010); the Counter Terrorism Act 2008 (CTA 2008); and the Anti-Terrorism, Crime and Security Act 2001 (ATCSA 2001).  As explained in the Notice, the policy of the Island is to maintain its sanctions regime so that they correspond to those in the UK, and so it will ensure that any such “domestic” or national sanctions measures are replicated.

The Notice also explains that, in certain circumstances, the Island can impose its own financial sanctions and restrictions under the Terrorism and Other Crime (Financial Restrictions) Act 2014 (TOCFRA 2014).   This Act also ensures that –

  • when a person or entity is listed/delisted under UN sanctions that relate to terrorism (i.e. Al-Qaida, ISIL and the Taliban) this has automatic effect in the Island; and
  • anyone designated by UK under its terrorism sanctions[13] is also automatically deemed to be a designated person under Island law as well[14].

Proscribed (i.e. terrorist) organisations in the UK are also automatically proscribed in the Island, under provisions found in section 2 of the Anti-Terrorism and Crime Act 2003 (an Act of Tynwald)[15].

Section 2 of the Notice explains that the Isle of Man Government’s policy with regard to financial sanctions is to maintain the lists of those affected so that they correspond to those adopted by the UK; this being said to be for both constitutional and practical reasons.

One also has to be aware of trade and other sanctions measures (such as travel restrictions – including visa bans – where UK action would also be replicated in the Island under the terms of the immigration law arrangements), as well as export controls, including those for anti-terrorism and counter-proliferation purposes.

Arms and other trade embargoes and controls may also be part of UN or EU measures, or stem from a UK national decision.  In any case, these too would be replicated in the Island as would the financial sanctions.  This may be by inclusion of the relevant provisions in the applied UN or EU instrument (with the necessary implementing regulations in the case of the latter), or by an order made under export control legislation – where once again the Island policy to have its controls correspond to those in the UK, and for same basic reasons as mentioned above.

Since May 2004, the main legislation concerned with export licensing controls is to be found in various orders made under the Export Control Act 2002 (an Act of Parliament), which have been made a part of Island law[16].

Changes made to UK sanctions law

In the UK, the Sanctions and Anti-Money Laundering Act 2018 has been enacted to enable the UK to continue to implement UN sanctions regimes and to use sanctions to meet national security and foreign policy objectives when (or if) the UK is unable to rely on EU-derived measures implemented through the European Communities Act 1972 or through other legislation made under that Act (which will be repealed on leaving the EU).  By November 2018 the bulk of the Act was in force.

The Act is also intended to enable the UK to keep its AML/CFT measures to be kept up to date, to protect the security and prosperity of the UK and meet international standards (such as those laid down by FATF)[17].

The Act provides powers to both create new sanctions regimes and contains procedures relating to the review of sanctions.  It also includes temporary powers to enable the addition or removal of names from sanctions lists made under EU law that are retained as of the date of withdrawal from the EU.

The Act also provides powers to create AML/CFT regulations, and contains provisions relating to registers of beneficial owners of overseas entities and beneficial owners of companies registered in British Overseas Territories[18].

Travel bans are also provided for by means of an amendment to the Immigration Act, allowing the Government to impose them as part of its sanctions controls.  Those controls can also extend to ships and aircraft, as well as trade sanctions.

Hence the new Act seeks to deal with several varieties of sanctions – financial sanctions (including asset freezes, as well as prohibitions on the provision of financial services and on asset transfers), immigration (i.e. UK travel and visa bans), trade (including real property as well as in goods and services) and transportation including by sea and by air.  It also provides for the so-called “Magnitsky sanctions”, named after the Russian lawyer of that name who died in prison in Russia in 2009, and which are intended for use as a deterrent to gross violations of human rights, to promote respect for human rights and ensure compliance with international human rights law.

A new aspect introduced by the Act if that a “designated person” can not only be an identified, named person but also an individual who is an “involved person” will falls into a certain category or person[19].   This is said to be the first time that UK law has allowed for unnamed persons to be designated by description or category in this way.

Another aspect of the Act that has been highlighted is also said to represent a significant change in policy and procedure.  The Act provides for a form of automatic listing[20], saying that implementing listings by the UN Security Council, the UK is obliged to designate persons listed by the UN even if the UK minister regards those designations as being, for example, based on mistaken identity.  This has been described aa a form of “rubber stamping”.

The Act also borrows the term “United Kingdom person” from export control law for situations involving extraterritorial controls[21].  In such cases, the sanctions measures may extend not only to the territory of the UK and its territorial sea[22], but also to conduct elsewhere if it is by such ‘a United Kingdom person’.  Such a provision is clearly necessary to effectively enforce certain trade-based sanctions measures (as they have proven necessary in enforcing trafficking and brokering trade control measures under export control law).

On 7th January 2019, the Sanctions Review Procedure (EU Exit) Regulations 2018 came into force[23].  Made under the 2019 Act, these Regulation dealt with procedures whereby a person could request a review, variation or revocation of a designation or ship specification that has been made under the Act.

Section 63 of the 2019 Act allows that an order-in-council may extend (with or without modifications) to the Isle of Man[24] and of the provision contained in –

  • Part 1 of the Act (which deals with sanctions – the power to impose them, review procedures, temporary powers re existing EU sanctions lists, court reviews using a judicial review procedure, and other miscellaneous matters);
  • section 51 (which is concerned with the public registers of beneficial ownership in the Overseas Territories); and
  • Part 3 of the Act (which contains definitions and other general matters, such as the requirement for reports. It also allows for “transitory” arrangements to cover any hiatus or interim following withdrawal from the EU).

 

Ray Todd

12th January 2019

—————————————————————————————————————————————–

[1]  In the Island, the Customs and Excise Division of the Treasury is responsible for the implementation and administration of trade and financial sanctions measures.

[2]  And which would have been applied, with necessary modifications, using Island law to become themselves part of Island law.

[3]  Although more specific instruments could be employed.  Such as happened when the Export of Objects of Cultural Interest (Control) (Amendment etc.) (EU Exit) Regulations 2018 amended the existing 2003 Order to change the definition of what an “EU licence” meant for the purposes of the export of cultural objects.

[4]  This “exit day” is also defined in the Act as being 29th March 2019 (more specifically 11 am on the 29th), though the Act also make provision for this date to change, if required, to cover any transit period.

[5]  This would be the responsibility of the UK authorities.

[6]  http://www.legislation.gov.uk/ukpga/2018/16/contents

[7]  https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/1973/1973-0014/EuropeanCommunitiesIsleofManAct1973_4.pdf

[8]  The Protocol to the UK Act of Accession to the then EEC, and which governs the relationship of the Isle of Man and Channel Islands with the EU.

[9]  The Island not being a part of the EU or of an EU Member State.  It was often found that only some parts of an EU Regulation or other instrument would apply to the Island under Protocol 3, whilst other parts did not – thus requiring a dual approach.

[10]  With the exception of the lists of designated persons and entities, which the application order would allow to apply as changed from time to time (as long as the enabling power covering the designation(s) had been applied – if it was a new power added to an existing Regulation, a further order applying the amendment had to be made before the new listing could have effect).

[11]  https://www.gov.im/media/1362741/financial-sanctions-guidance-september-2018-final.pdf

[12]  Chiefly because it relied on the UK authorities to take action and make the appropriate order-in-council, something that was significantly delayed, or even overlooked, in the past.  This led the responsible bodies in the Island to instead use the EU legislation, which would mirror the UN measures and which the Island could implement using its own domestic powers.

[13]  Such as the Terrorist Asset-Freezing etc Act 2010.

[14]  Section 24, TOCFR 2014 refers.

[15]  https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/2003/2003-0006/Anti-TerrorismandCrimeAct2003_11.pdf

[16]  For more detailed information on export controls, and trade controls (on trafficking and brokering activities), see Notice 279MAN: https://www.gov.im/media/88875/notice-279-man-export-licensing-controls-2-jul-18.pdf

[17]  Will this also be used to enable the UK to meet developing EU AML/CFT requirements under its 5th, 6th etc money laundering Directives?

[18]  The implementation of such registers is to be deferred until 2023, it was recently announced.

[19]  Section 12, Sanctions and Anti-Money Laundering Act 2018 refers.

[20]  Section 13, Sanctions and Anti-Money Laundering Act 2018 refers.

[21]  A UK national or a body incorporated or constituted under the law of any part of the UK.  A similar term exists in the Isle of Man’s export control legislation as “an Island person”, with broadly similar purpose.

[22]  And to UK-registered ships and aircraft.

[23]  http://www.legislation.gov.uk/uksi/2018/1269/contents/made

[24]  And the other Crown Dependencies and the Overseas Territories.

Featured

2019 GOVERNMENT SHUTDOWN: THE EXPORT CONTROLS, INTERNATIONAL TRADE, AND CFIUS

On 10th January, McCarter & English published an article which details the effect of the US Government shutdown on the key international trade-related agencies impacted by the shutdown, with suggestions on how industry should properly respond – OFAC (limited capacity), the Department of Commerce including its Bureau of Industry and Security (BIS), CFIUS controls (will continue to perform certain national security functions), and the State Department.

https://www.mccarter.com/2019-Government-Shutdown-The-Export-Controls-International-Trade-and-CFIUS-Edition-01-10-2019/

Featured

OTHER THINGS YOU MAY HAVE MISSED – JANUARY 11

11th January 2019

BREXIT COULD MAKE THE UK THE MONEY LAUNDERING CAPITAL OF THE WORLD

On 10th January, The Independent online newspaper website carried a guest article which argues that the most effective response to money laundering has been co-operative action, commonly organised at the European level, but that Brexit moves the UK in the opposite direction, isolating it from neighbouring states and, as such, weakening its defences against illicit transactions.  This weakness will attract criminals, and the UK risks becoming the preferred locale for such criminal activity.  It is likely to leave Europol and lose access to the Europol Information System (EIS), which collates the national databases of all Member States, making them searchable by all Europol members.  It also argues that the UK’s proximity to the EU and its existing financial relationships suggests that the UK may have to adopt EU standards, as European-wide compliance will be necessary for post-Brexit interaction. However, as with most other EU-related matters, the UK will no longer be in a position to influence them.

https://www.independent.co.uk/voices/brexit-europol-money-laundering-crime-terrorism-trafficking-a8720551.html

UK COMPANY AUDITS: PROBLEMS AND SOLUTIONS

On 10th January, the House of Commons Library published a briefing which explains how audit works, the problems the industry faces and how it is being reformed.  Accounting and audit failures periodically turn the spotlight on a range of problems with the industry, and the audit of large companies in particular, and momentum for reform has gathered pace.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8385

UK HAULAGE COMPANY BOSS GETS 18 MONTHS FOR TOBACCO SMUGGLING

Commercial Motor on 10th January reported that a haulage company boss who was caught smuggling 2,000 kg of hand-rolling tobacco into the UK, evading £442,360 in duty, has been jailed for 18 months.  Attila Tanko is owner of the Hungary-based Chariots of Fire KFT haulage company.

https://www.commercialmotor.com/news/compliance/haulage-company-boss-gets-18-months

GOOGLE IN RUSSIA BLOCKING UNDESIRABLE MATERIAL — INCLUDING INTERNATIONALLY LICENSED ONLINE GAMBLING SITES — FROM SEARCH ENGINE RESULTS

On 11th January, Calvin Ayre reported that Google has begun complying with Russian rules on blocking undesirable material — including internationally licensed online gambling sites — from its search engine results.  Russian law requires internet giants like Google to connect to the federal state information system (FGIS) to monitor the Unified Register of Prohibited Information, so that blacklisted domains will be automatically blocked from appearing in Russian search results.

https://calvinayre.com/2019/01/11/business/google-caves-russia-online-gambling-blacklist/

PORTUGAL URGED TO RELEASE INFORMATION ON GOLDEN VISAS

Ekklesia on 11th January reported that Transparency International Portugal is calling on the Ministry of Home Affairs of Portugal to immediately release information on its controversial residency-by-investment, the so-called ‘Golden Visa’ programme – as the parliament discusses a Bill which, if adopted, would terminate the Golden Visa scheme, and the Government has committed to review the Golden Visa programme but has not yet begun to do so.

http://www.ekklesia.co.uk/node/27519

US BLOCKS SOME EXPORTS FROM HUAWEI’S SILICON VALLEY UNIT

On 10th January, the Wall Street Journal reported that Huawei’s R&D unit, Futurewei, is no longer able to send home some technologies developed in US.  It is unable to send home certain technologies from after the Commerce Department reportedly signalled it would not renew a Futurewei export licence.

https://www.wsj.com/articles/u-s-blocks-some-exports-from-huaweis-silicon-valley-unit-11547119803

HOW GOVERNMENT AND OPPOSITION MEDIA HAVE REPRESENTED THE SANCTIONS REGIME IMPOSED ON RUSSIA IN RECENT YEARS

On 17th December, ETH Zurich published an edition of its Russian Analytical Digest, in which the author examines Russian public narratives about foreign policy – and highlighting a shift in 2004, after which China has been depicted more positively and the US more negatively.  She also investigates how government and opposition media have represented the sanctions regime imposed on Russia in recent years.

http://www.css.ethz.ch/en/services/digital-library/publications/publication.html/cce88f1d-d83c-41eb-8ecc-b0125f1fc033

EU BLEEDING UNTOLD BILLIONS TO FRAUD

EU Observer on 11th January reported that over €6 billion of EU taxpayers’ money was stolen by criminals in recent years and over €130 million is still being lost each year, the EU Court of Auditors have warned.

https://www.eca.europa.eu/Lists/ECADocuments/SR19_01/SR_FRAUD_RISKS_EN.pdf

TOKYO 2020: JAPANESE OLYMPIC CHIEF INVESTIGATED FOR CORRUPTION

CNN on 11th January reported that the head of the Japanese Olympic Committee (JOC) Tsunekazu Takeda was placed under formal investigation in Paris in December for corruption.  The investigation relates to the bidding process and a suspect payment of €1.8 million that was made around the announcement that Tokyo was to host the 2020 Olympics.

https://edition.cnn.com/2019/01/11/sport/tokyo-2020-olympics-corruption-tsunekazu-takeda-spt-intl/index.html

https://www.bbc.co.uk/news/world-asia-46836001

EUROPE AND IRAN: THE ECONOMIC AND COMMERCIAL DIMENSIONS OF A STRAINED RELATIONSHIP

On 11th January, ETH Zurich published a briefing which asks to what extents has the EU delivered on the economic side of the nuclear deal with Ira, and it be able to shield the nuclear deal and future business with Iran from the impact of Washington’s re-imposed and strengthened sanctions?  It says the situation poses an enormous challenge for the EU, which had intended to use the 2015 JCPOA agreement as a stepping stone to promote regional cooperation and, ultimately, a more comprehensive relationship with Iran.

http://www.css.ethz.ch/en/services/digital-library/articles/article.html/772d3103-9083-40e0-84a1-d95c6f125c5d

CYPRUS COULD BECOME AN OLD CAR DUMPING GROUND, IMPORTERS WARN

The Cyprus Mail on 11th January carried a report saying that new car importers warned that Cyprus risked becoming the dumping ground of old, polluting vehicles from abroad, as they backed a Bill imposing higher road tax on used imports.  Their association warned that Cyprus risked becoming the dumping ground of ageing vehicles that other countries did not want.

https://cyprus-mail.com/2019/01/11/cyprus-could-become-an-old-car-dumping-ground-importers-warn/

STOLEN NEW ZEALAND, AUSTRALIA CARS SEIZED IN FIJI

Customs Today reported on 10th January that stolen vehicles from Australia and New Zealand have been seized in what it describes as “a big car racket”.  The Fiji Revenue and Customs Service intercepted the vehicles imported by agents here to be resold.  They were misdescribed under the guise of spare parts and furniture.  Similar interceptions of Australian cars were made in 2018.

http://www.customstoday.com.pk/stolen-new-zealand-australia-cars-seized-here/

DANSKE BANK BRACES FOR FORMAL AML PROBE IN FRANCE

Law 360 on 11th January reported that French judges are preparing to launch a formal investigation into scandal-hit Danske Bank over approximately €28 million of transactions that potentially violated France’s AML legislation.

https://www.law360.com/articles/1117737

SECURITY TOKEN OFFERINGS (STO) IN THE CAYMAN ISLANDS

An article from Ogier on 11th January says that an increasing number of businesses are concluding that a security token offering (STO) is now the preferred approach to raise funds for their project, product or platform, and which typically links tokens to either profits, assets or both.  An STO therefore offers a token with the promise of a return as opposed to the promise of utility, it says.  The article considers a few of the common questions facing Security Token issuers incorporated or established in the Cayman Islands.

https://www.ogier.com/publications/security-token-offerings-stos-in-the-cayman-islands

INDIA: CUSTOMS FINDS 4 KG GOLD HIDDEN IN WASHBASIN OF FLIGHT FROM DUBAI

The Times of India on 11th January reported that the gold was found on a Spice Jet flight, a journey that continues on as a domestic, internal flight from its first port of call in India (so less likely to face checks after the first stop).

india

https://timesofindia.indiatimes.com/city/pune/customs-finds-4kg-gold-hidden-in-washbasin-of-flight-from-dubai/articleshow/67480753.cms

MALTA: CUSTOMS FINDS 7.7 MILLION CONTRABAND CIGARETTES IN FREEPORT CONTAINER

The Malta Independent on 11th January reported that 7.73 million contraband cigarettes were found hidden in a container at the Freeport.  It had arrived from Rotterdam en route for Tunisia.

http://www.independent.com.mt/articles/2018-12-28/local-news/Customs-officers-find-7-7-million-contraband-cigarettes-in-Freeport-container-6736201379

SOUTH AFRICA SNIFFER DOG INTERCEPTS 116 KG OF RHINO HORN DESTINED FOR DUBAI

The BBC reported on 10th January that the haul of 36 horns and horn fragments, worth about $1.3 million, is believed to be one of the biggest seized in the country in recent years.  The 8 boxes were already ready to be shipped to Dubai.

https://www.bbc.co.uk/news/world-africa-46823797

GEORGIA’S SECOND-LARGEST BANK UNDER INVESTIGATION FOR MONEY LAUNDERING

Baker McKenzie on 11th January reported that Georgia’s Chief Prosecutor’s Office has launched a criminal investigation of the country’s second-largest bank, TBC Bank, for alleged money laundering – which the opposition calls an attack on unwanted business institutions.  The case dates back to 2008.

http://www.riskandcompliancehub.com/georgias-second-largest-bank-under-investigation-for-money-laundering/

US GOVERNMENT SHUTDOWN HAMPERING EXPORT LICENSING AND SDN LIST REMOVALS

World ECR reported that there are ‘curtailed’ services for licence requests, advisory opinions and commodity classifications ‘except for those that provide direct support to the military, humanitarian aid, or other similar emergencies’; with US and non-US companies are adversely impacted due to OFAC, BIS and DDTC not processing export/reexport license applications and requests for removals from SDN and Entity Lists.

https://www.worldecr.com/news/us-government-shutdown-hampering-export-licensing-and-sdn-list-removals/

ROYAL NAVY TO DEPLOY FRIGATE TO JAPAN TO ENFORCE NORTH KOREA SANCTIONS

Janes.com on 11th January reported that the Royal Navy will deploy Type 23 frigate HMS Montrose to Japan in early 2019.

https://www.janes.com/article/85656/uk-royal-navy-to-deploy-type-23-frigate-to-japan

UK: LAWYERS MAKING FEWER SUSPICIOUS ACTIVITY REPORTS

Legal Futures on 11th January reported that efforts to encourage lawyers to make more suspicious activity reports (SAR) are not succeeding – the NCA report showing they are 12% down.  Lawyers made just 2,660 of the 463,938 SAR made in 2018.  The vast majority of the legal SAR came from solicitors, with 77 from licensed conveyancers, 9 from barristers and 181 from other legal professionals.  Solicitors made 30 SAR involving terrorist finance.

https://www.legalfutures.co.uk/latest-news/lawyers-making-fewer-suspicious-activity-reports

RELAXING BRAZIL’S GUN LAWS COULD MAKE A MURDEROUS COUNTRY EVEN DEADLIER

An opinion piece from US National Public Radio on 10th January claimed that a proposal by the newly elected President to dismantle national gun laws is precisely the wrong way to go about reducing gun violence in Brazil.  On paper at least, Brazil has comprehensive gun legislation, but the law was never fully enforced, with instead Brazilian authorities adopting a fragmented approach to controlling firearms.  Now a core goal of President Bolsonaro and the lobbyists is to liberalise gun laws and expand citizens’ right to carry firearms on the street.

https://www.npr.org/2019/01/10/684079625/opinion-relaxing-brazils-gun-laws-could-make-a-murderous-country-even-deadlier

ILLUMINATING THE SOUTH CHINA SEA’S DARK FISHING FLEETS

On 9th January, a report from the Center for Strategic and International Studies which, in co-operation with Vulcan, Inc, unveils a worrying narrative about the impact fishers and their fleets have in the region – has emerged as one of the most dangerous flashpoints in the Indo-Pacific over the last decade; and with China’s expansion and militarization of its holdings in the disputed Spratly Islands from late 2013, tensions have escalated rapidly.  China, Taiwan, Brunei, Malaysia, the Philippines, and Vietnam claim various islands, rocks, and reefs – with a further dispute between these countries and Indonesia, with claimants assert rights to overlapping maritime zones under international law.  The South China Sea accounted for 12% of global fish catch in 2015, and more than half of the fishing vessels in the world are estimated to operate there- but overfishing means stocks have been depleted by up to 95% since the 1950s, and catch rates declined by up to 75% over the last 20 years.  It says that the number of fishing vessels operating in the disputed Spratly Islands is exponentially higher than AIS transmissions suggest (vessels, particularly Chinese, usually switch off AIS, and the report was compiled using other sources of data as well). Improving the monitoring of these fleets will be critical if the claimants hope to save the South China Sea fisheries and reduce the frequency of unlooked-for incidents between vessels.  However, the article also highlights that a different kind of fishing fleet, one engaged in paramilitary work on behalf of the state rather than the commercial enterprise of fishing, has emerged as the largest force in the Spratly Islands.

https://ocean.csis.org/spotlights/illuminating-the-south-china-seas-dark-fishing-fleets/

SWISS GOVERNMENT INVESTIGATION INTO PILATUS’ MAINTENANCE DEAL WITH SAUDI ARABIA

Alert 5 reported a Swissinfo story from 10th January that, because of Saudi’s involvement in the Yemen conflict, the Swiss contract to maintain turboprop trainer aircraft could put into question the country’s neutrality obligations, and may broken Swiss law.  The Swiss foreign affairs ministry is said to have begun a deeper investigation.

http://alert5.com/2019/01/11/swiss-government-running-deeper-investigation-into-pilatus-maintenance-deal-with-saudi-arabia/

https://www.swissinfo.ch/eng/business/foreign-trade_swiss-government-ups-probe-into-pilatus-saudi-deal/44670278

Featured

TIME TO SEEK ADVICE OVER SUBSTANCE AS NEW LAWS TAKE EFFECT IN CHANNEL ISLANDS, CAYMAN AND BVI

On 11th January, Ogier published an article, with links, about changes made to address the concerns of the EU Code of Conduct Group, with new legislation requiring certain entities to demonstrate economic substance in the jurisdictions.

https://www.ogier.com/news/time-to-seek-advice-over-substance

Featured

UNEXPLAINED STRATEGY: PUTTING UNEXPLAINED WEALTH ORDERS TO WORK

An article from RUSI on 11th January argues that the UK government should use unexplained wealth orders to reduce harm, not reap headlines.  It says that Transparency International UK claims to have identified £4.4 billion-worth of UK properties bought with suspicious wealth and has even offered a handy list of targets for the police to consider.  The author argues that prioritising the deployment of scarce resources and funding against the unexplained wealth of organised crime groups (that cause real problems in communities such as through the supply of illegal drugs) not only makes political sense; it also makes strategic, tactical and economic sense.  He says that voters on the whole are not directly affected by oligarchs and kleptocrats, whilst the threat posed and harm inflicted by organised crime is real.  Taking property and other assets off organised crime groups has a real impact.  However, he says one should not turn a blind eye to those corrupt PEP that take advantage of the financial and investment services that London has to offer.  But, he says, the strategy promoted by the government should empower and support police forces across the country to do just that, in particular by building expertise in civil confiscation in wider UK policing beyond the NCA where the focus is confined to the high-end, multi-million targets.

https://rusi.org/commentary/unexplained-strategy-putting-unexplained-wealth-orders-work

 

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ANTI-BRIBERY – WHAT BUSINESSES NEED TO KNOW FOR THEIR OPERATIONS AND INVESTMENTS IN MALAYSIA

On 11th January, Bird & Bird published a briefing saying that an amendment to the law in Malaysia introduces corporate liability for corruption, and also imposes personal liability on directors, controller and management – described as “a new dawn in Malaysia in the fight against corruption”.  It is said to further than the UK Bribery Act, pinning responsibility squarely on directors, controllers and management for the commercial organisation’s corrupt acts, and beyond the law of Singapore in its reach and the size of penalties.  Crucially, when the new provisions are brought formally into effect, once an offence is committed by a commercial organisation, a director, controller or person concerned with management is deemed to have committed that offence unless that person proves that the offence was committed without his consent or connivance and that he exercised due diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his function in that capacity and to the circumstances.

https://www.twobirds.com/en/news/articles/2019/singapore/anti-bribery-what-businesses-needs-to-know-for-their-operations-and-investments-in-malaysia

Featured

CHINESE HUAWEI EXECUTIVE IS CHARGED WITH ESPIONAGE IN POLAND

On 11th January, the Wall Street Journal reported that Polish authorities have detained and charged the local sales director of Huawei Technologies, a Chinese national, with conducting high-level espionage on behalf of China, amid widening global scrutiny by Washington and its allies of the technology giant.

https://www.wsj.com/articles/chinese-huawei-executive-is-charged-with-espionage-in-poland-11547201100

Featured

OTHER THINGS YOU MAY HAVE MISSED – JANUARY 10

10th January 2019

 JAPAN TO OFFER CO-OPERATION WITH “FIVE EYES” TO TARGET NORTH KOREAN SMUGGLING

The Nikkei Asian Review on 10th January reported that Prime Minister Abe is to offer another opportunity to deepen intelligence co-operation with Five Eyes members (UK, US, Australia, New Zealand, Canada) in the digital and telecommunications fields and to prevent cargo smuggling by North Korean ships on the sea.

CANADA: TAX EVASION, MONEY LAUNDERING AND ‘PROCEEDS-OF-CRIME’ COLLECTION

On 8th January, Rotfleisch & Samulovitch published an article which sought to provide a tax lawyer’s perspective to the arrangements in Canada for the use of its powers by the revenue authority where tax evasion and money laundering are involved, explaining that Canada has followed the international lead in making tax evasion a predicate crime for a charge of money laundering.

http://www.mondaq.com/canada/x/769874/Income+Tax/Tax+Evasion+Money+Laundering+And+The+CRAs+Use+Of+The+ProceedsOfCrime+Method+Of+Collection+A+Canadian+Tax+Lawyer+Analysis

TO WHAT EXTENT CAN A CLAIM FOR DISHONEST ASSISTANCE BE MADE AGAINST BANKS WHEN RECEIVING FRAUDULENT BANK PAYMENTS?

Dentons published an article on 3rd January saying that, although claims for dishonest assistance are rare, as fraudulent bank payments have become increasingly common, is this now an area about which financial institutions need to be more savvy?  It says a recent English High Court decision shows that the bar is set high if one is trying to prove one’s case, but nevertheless considers the factors necessary to bring a claim for dishonest assistance.  It explains that “dishonest assistance” in this context is an indirect liability, where a party assumes legal responsibility for the acts carried out by another party, and where there is the existence of a trust (actual or constructive), breach of that trust (and the fiduciary responsibility of acting in the best interests of one’s client or customer), assistance rendered by a third party, dishonesty on the part of the person providing that assistance.

https://www.dentons.com/en/insights/alerts/2019/january/3/claims-for-dishonest-assistance

US FIREARMS EXPORT CONTROLS: THE RULES ARE ABOUT TO CHANGE

On 9th January, Ammoland in the US warned its readers about changes due to be implemented to the rules on the export and temporary import of guns, ammunition and other items that should be controlled under the US Military List (USML).  Whilst the new or revised rules have yet to be published, the article provides advice on what companies can do to prepare for the changes.

https://www.ammoland.com/2019/01/export-controls-alert-the-rules-are-about-to-change/#ixzz5cBPtVMEy

FCA SURVEY OF ANNUAL FINANCIAL CRIME RETURNS

On 9th January, KYC  360 reported on the annual Financial Crime Return which contains information garnered from some 2,000 largest UK firms.  The Return looks at the number of high-risk clients firms have, the number of internal external suspicious activity reports (SAR) submitted as well as the most common types of fraud.  It also reveals which are considered the highest risk countries – Iran, Panama and Russia are deemed to be the highest risk whilst the US, Sweden and Norway are believed to represent the lowest risk.

https://www.riskscreen.com/kyc360/article/anti-money-laundering-analysis-uk-fca-and-eu-blacklists-update-high-risk-countries/

IRELAND: MORE INFORMATION ON CAB AML RAIDS IN IRISH BORDER AREA

On 9th January, the Irish Times carried an article providing more information on recent raids carried out by CAB and garda in the cross-border area, saying that an unnamed, but well-known former member of the Provisional IRA has been targeted.  He is said to have been one of the most influential players in the cross-border illegal cigarette market for 2 decades.  Gardaí believe the former IRA member has continued for private gain the criminal activities that the terrorist group used to fund their terror campaigns for decades.  Regarded as a dissident Republican who did not commit to the peace process, gardaí believe he was a prominent member of the Real IRA.

https://www.irishtimes.com/news/crime-and-law/cab-seizes-viagra-in-raids-targeting-leading-former-ira-man-1.3752365

IRELAND: TERROR FINANCE UNIT ONLY HAS 2 STAFF

The Irish Examiner on 10th January reported that the Terrorist Financing Intelligence Unit, a specialist Garda unit tasked with assessing intelligence on the financing of terrorism only has 2 members attached to it, despite external calls on the State to boost its resources and “more actively” pursue prosecutions, and handling some 880 SAR a year.  This has not changed since an analysis of Ireland’s AML/CFT record was undertaken by FATF, and the report published in September 2017.  FATF had said additional resources should have been allocated to both the FIU as a whole and the TFIU.

https://www.irishexaminer.com/breakingnews/ireland/terror-finance-unit-only-has-two-staff-896655.html

DANSKE BANK BOSSES SUED IN US OVER MONEY LAUNDERING

On 10th January, the EU Observer reported that a US pension fund is suing the bank and 4 former CEO for inflating the price of its shares artificially by hiding and failing to stop widespread money laundering at its Estonian branch.

https://euobserver.com/tickers/143861

PHILIPPINES: EX-BANKER GETS JAIL AND $109 MILLION FINE OVER BANGLADESH CYBERHEIST

France 24 and others on 10th January reported on the first conviction over one of the biggest ever cyberheists which saw $81 million stolen from Bangladesh’s central bank in 2016.  Hackers transferred the cash in 2016 from Bangladesh’s US accounts to Philippine bank Rizal Commercial Banking Corp (RCBC), and it then vanished.  Maia Deguito was a branch manager where the money landed.  A North Korean hacker is also wanted by the US in connection with the alleged state-sponsored operation.  Only $15 million of the money was recovered, and much is said to have disappeared into Manila casinos, which were at the time exempt from rules aimed at preventing money laundering.

https://www.france24.com/en/20190110-manila-ex-banker-gets-jail-109-mn-fine-over-bangladesh-cyberheist

US PROSECUTORS PAINT NEW ZEALAND BANKER AS RINGLEADER IN $3 BILLION MOZAMBIQUE CORRUPTION SCANDAL

Stuff in New Zealand on 10th January reported on the 47-page indictment against Andrew Pearse, arrested in London last month, which is said to involve a French billionaire’s ship-building business, corrupt Mozambique officials, hundreds of millions of dollars in international wire transfers and allegations of money laundering, bribery, conspiracy and fraud against the small group of former Credit Suisse employees.

https://www.stuff.co.nz/business/industries/109814849/us-prosecutors-paint-kiwi-banker-andrew-pearse-as-ringleader-in-3b-mozambique-corruption-scandal

Worth reading, the indictment is available at –

https://assets.documentcloud.org/documents/5674459/Boustani-Et-Al-Tuna-Bonds-Indictment-EDNY-Redacted.pdf

CANADA: CROWN MISTAKENLY EXPOSED POLICE INFORMANT, KILLING MASSIVE BRITISH COLUMBIA MONEY LAUNDERING PROBE

On 9th January, Global News in Canada reported that a RCMP investigation of alleged underground bankers, estimated to be laundering over $1 billion per year collapsed in November because federal prosecutors mistakenly exposed the identity of a police informant who they feared could have been killed if the case proceeded.  It targeted Richmond-based Silver International, an alleged illegal money services business, and involved the seizure of cash and casino chips.  It was alleged that it took in about $1.5 million in criminal cash deposits per day, and distributed funds to about 600 bank accounts in China, as well as using cash from Vancouver drug dealers and casino loan sharks to fund Chinese high-rollers in British Columbia casinos – using legal and illegal casinos to help gamblers from China move money to and from Canada, and in some cases cash out chips for a casino cheque to deposit into Canadian banks and buy Vancouver real estate.

https://globalnews.ca/news/4816822/exclusive-epirate-crown-exposing-police-informant-killed-b-c-money-laundering-probe/

ALIBABA PURGES 200,000 TAX-AVOIDING VENDORS

Bloomberg on 9th January reported that the China-based online marketplace has blocked 200,000 vendors globally since September in response to pressure from governments to crack down on tax avoiders using its platform.  VAT fraud in the UK is estimated to involve a tax loss from VAT fraud and error on online marketplaces of between £1 billion and £1.5 billion in 2016-2017, or 10% to 12% of the overall UK VAT gap.

https://news.bloombergtax.com/daily-tax-report-international/alibaba-purges-200-000-tax-avoiding-vendors-as-nations-crack-down

SOUTH AFRICA: HUGE COCAINE BUST

Defence Web on 9th January reported that the Directorate of Priority Crime, also known as the Hawks, have seized a massive haul of 706 kg of cocaine in the port of Ngqura.  The cocaine was on its way from Brazil in 1 kg bags when it was seized. The ship was destined for India with a stop in Singapore.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=54147:huge-cocaine-bust-in-port-of-ngqura&catid=87:border-security&Itemid=188

VIETNAM: FORMER BANKER ARRESTED AMID CORRUPTION CRACKDOWN

VN Express on 10th January reported that police have arrested Doan Anh Sang, former deputy CEO of BIDV, a bank that has come under scrutiny amid national anti-graft campaign, for “violations of regulations on banking operations”.  Police also arrested 4 executives of the bank for similar allegations and a businessman accused of property appropriation.  The bank’s former chairman and 2 other executives were arrested in November.

https://e.vnexpress.net/news/news/former-banker-arrested-amid-corruption-crackdown-3866412.html

CHINESE GROUP SWINDLED $18.5 MILLION FROM INDIAN ARM OF ITALIAN COMPANY

Reuters on 10th January reported a story from Indian media saying that Chinese hackers robbed £14 million from the Indian unit of Tecnimont SpA through an elaborate cyber fraud that included impersonating the Italian engineering company’s CEO.

https://uk.reuters.com/article/uk-mairetecnimont-india-fraud/chinese-group-swindles-18-5-million-from-indian-arm-of-italian-company-economic-times-idUKKCN1P40JY

UK: GREYHOUND WELFARE BOOSTED THROUGH MULTI-MILLION POUND DEAL WITH GAMBLING INDUSTRY

On 10th January, a news release from the Department for Digital, Culture, Media and Sport said that bookmakers have agrees additional payments worth up to £3 million in what is described as a positive step which will ensure a fair return to the sport from industry giants.  The extra money will also go towards improving safety across the nation’s 21 licensed racetracks, kennel improvements and the provision of air-conditioning for trainers’ vehicles to improve welfare standards.

https://www.gov.uk/government/news/greyhound-welfare-boosted-through-multi-million-pound-deal-with-gambling-industry

US TREASURY PUBLISHES IMAGES OF VENEZUELA’S GORRIN NETWORK PRINCIPALS

Kenneth Rijock in his blog on 10th January reported that US Treasury, as part of a bundle of information about the network of a large number of sanctioned Venezuelan individuals and companies involved in a significant corruption scheme designed to take advantage of Venezuela’s currency exchange practices, generating more than $2.4 billion in corrupt proceeds.

ofac

https://home.treasury.gov/news/press-releases/sm583

rferl

BRITISH OVERSEAS TERRITORIES GIVEN 5 YEARS TO ESTABLISH PUBLIC REGISTERS OF BENEFICIAL OWNERS

On 10th January, Kenneth Rijock in his blog reported that the requirement to create public registers of the beneficial owners of corporations by the end of 2020, has been softened and extended until 2023.

http://rijock.blogspot.com/2019/01/uk-government-folds-under-pressure-from.html

FRAUD ON THE TENNIS COURT: CRIMINAL NETWORK GAINED MILLIONS FIXING PROFESSIONAL MATCHES

A Europol news release on 10th January said that an organised crime group involved in manipulating professional tennis competitions has been dismantled in an operation led by the Spanish Civil Guard.  In total 83 suspects were arrested, 28 of them are professional players.  In 2017 the Tennis Integrity Unit (TIU) denounced irregular activities related to pre-arranged matches in the ITF Futures and Challenger tournaments.

https://www.europol.europa.eu/newsroom/news/fraud-tennis-court-criminal-network-gained-millions-fixing-professional-matches

RUSSIANS ARE DOWNSIZING IN CYPRUS

On 10th January, Ekathimerini reported a Bloomberg story that new Cypriot AML regulations together with the effects of US sanctions against Russia and its high-profile businessmen are driving money away from Cyprus.  The value of bank accounts at Cypriot banks held by foreign nationals from outside the euro area has fallen to €7.1 billion from €21.5 billion at the end of 2012.  Bloomberg also says that reports that the En+ Group plc plans to move to Russia from Jersey rather than to Cyprus as previously planned.

http://www.ekathimerini.com/236431/article/ekathimerini/business/bloomberg-russians-are-downsizing-in-cyprus

https://themoscowtimes.com/news/cyprus-no-longer-mediterranean-haven-for-russian-businesses-64097

GERMAN REGULATOR SADDLES DEUTSCHE BANK WITH ONEROUS MONEY LAUNDERING REVIEWS

Handelsblatt on 10th January reported that BaFin is imposing 8 new requirements on the Bank, including a review of 20,000 customer accounts deemed high-risk for possible money laundering.  It says that the regulator is not happy with the bank’s controls for detecting suspicious activity and is ready to levy fines if the Bank does not meet the timetable for the new measures, i.e. by the end of June (and the least risky clients by summer 2021).

https://www.handelsblatt.com/today/finance/know-your-customer-german-regulator-saddles-deutsche-bank-with-onerous-money-laundering-reviews/23849666.html?src=ilaw&ticket=ST-1838753-2xNjUdTMOlV43cIc202x-ap2

UK: WILDLIFE CRIMINAL JAILED FOR RARE BIRD EGGS IMPORT ATTEMPT

On 10th January, a NCA news release said that Jeffrey Lendrum, 57, who tried to smuggle 19 rare and endangered bird eggs into the UK strapped to his body has today, 10 January, been jailed for 3 years and 1 month.

http://www.nationalcrimeagency.gov.uk/news/1541-wildlife-criminal-jailed-for-rare-bird-eggs-importation-attempt

CHINA-EUROPE RAIL: SURGE IN EASTBOUND TRAFFIC, WITH RAIL TRAFFIC FROM EUROPE INTO CHONGQING EXCEEDING WESTBOUND TRAFFIC IN 2018

Loadstar on 10th January reported a Railfreight article saying that total volume-growth between the Chinese city and Europe grew 117% year-on-year.  The number of trains traveling back to Chongqing surpassed the number of outbound trains for the first time in 2018.  Currently, trains originating from Chongqing reach over 30 European countries, and the goods brought back are transferred to other Chinese cities and destinations in SE Asia.  Chongqing was also connected to the UK with a new service, with the most western destination being Barking in the UK.

https://www.railfreight.com/specials/2019/01/08/europe-bound-traffic-from-chongqing-china-booms-in-2018/

ISLAMIST MILITANCY IN THE SAHEL: 4 KEY TRENDS

On 10th January, Control Risks published a briefing saying that, by analysing data from Control Risks’ risk monitoring platform CORE, it has noted 4 concerning trends –

  1. The number of attacks has consistently grown in the region since 2015;
  2. Islamist militancy has spread rapidly across the Sahel in recent years;
  3. Attacks have become increasingly deadly; and
  4. Private organisations and business personnel are increasingly attractive targets.

It also highlights accusations of the “looting” of local resources. Al-Qaida in the Islamic Maghreb (AQIM) in May explicitly threatened Western companies operating in the Sahel for the first time, there being many mining operations in the Sahel and West Africa.  However, Chinese contractors in Mali have also been targeted, suggesting that the perpetrators do not clearly distinguish between target nationalities.

sahel

https://www.controlrisks.com/our-thinking/insights/islamist-militancy-in-the-sahel

ILLEGAL LOGGING IN CHIHUAHUA IS NOW MEXICO CARTEL TERRITORY

Insight Crime on 10th January carried an article saying that among the most vibrant criminal markets in Mexico is for illegal timber, and in the northern state of Chihuahua, there is increasing alarm that drug trafficking organizations are fighting for control of the trade.

https://www.insightcrime.org/news/analysis/illegal-logging-chihuahua-mexico-cartel/

BRAZIL: AUTHORITIES SEIZE 760 KG OF COCAINE DESTINED FOR BELGIUM

On 10th January, Hellenic Shipping Report said that, on 5th January, customs officials seized 760 kg of cocaine hidden in a frozen poultry container during a routine operation at the port. The narcotics were bound for Belgium, according to local authorities.

https://www.hellenicshippingnews.com/weekly-maritime-security-report-18/

LIBYA: CUSTOMS SEIZE 20,000 PISTOLS IN CONTAINER FROM TURKEY AND 8 TONNES OF CANNABIS

On 10th January, Hellenic Shipping Report said that, at the start of January, Misrata port saw a container seized containing some 20,000 pistols from a ship that had arrived from Turkey, reportedly hidden behind boxes containing household items and toys, and in defiance of a UN arms embargo.  Earlier, customs officials had seized 8 tonnes of cannabis from 2 containers shipped from Malta.

https://www.hellenicshippingnews.com/weekly-maritime-security-report-18/

SHIPPING OFFICIAL SAYS MANY PORTS DO NOT ALLOW IRANIAN VESSELS TO DOCK

On 10th January, Hellenic Shipping Report said that an official from Iran’s Shipping Society says that a significant number of ports across the world do not permit Iranian-registered vessels to enter and dock, and that 20 international shipping companies have closed down their offices at Iranian ports.

https://www.hellenicshippingnews.com/shipping-official-says-many-ports-do-not-allow-iranian-vessels-to-dock/

MURDERED LIMERICK CRIMINAL ACQUIRED HOUSES THROUGH PROCEEDS OF CRIME, COURT RULES

The Journal in Ireland on 10th January reported that the High Court has ruled that 2 houses in Limerick City linked to murdered criminal Kieran Keane, leading member of the Keane gang, were acquired with the proceeds of crime.  He was kidnapped and murdered in 2003 by members of a rival Limerick-based crime gang.  CAB had claimed that 2 houses were acquired by Keane, whose widow Sophie became the beneficial owner.

https://www.thejournal.ie/kieran-keane-limerick-criminal-assets-bureau-4434039-Jan2019

https://www.independent.ie/irish-news/courts/two-houses-linked-to-murdered-criminal-kieran-keane-acquired-with-proceeds-of-crime-high-court-37700184.html

INDIAN GOVERNMENT REMOVES HEAD OF CBI INVESTIGATIVE AGENCY

The Miami Herald on 10th January reported that Alok Verma, the chief of India’s Central Bureau of Investigation was removed by the government on corruption charges, days after being reinstated by the Supreme Court.  He and his deputy, Rakesh Asthana, both face corruption charges which are being investigated by an anti-corruption body that recommended both Verma and Asthana be transferred out of the agency.

https://www.miamiherald.com/news/nation-world/article224226640.html#navlink=SecList

TIFFANY WILL NOW DISCLOSE THE ORIGIN OF DIAMONDS

OCCRP on 10th January reported that the US luxury jewellery retailer announced that it will begin disclosing the origins of its diamonds as part of an unprecedented transparency initiative in what it describes as a traditionally opaque industry.  Tiffany will provide the country or region of provenance for individually registered diamonds that are 0.18 carats and larger in an effort to assure customers their jewels are responsibly sourced.  However, the article cautions that diamonds may be tainted by abuses ranging from slavery and displacement to environmental harm, and rough diamonds from Zimbabwe and Angola are accepted under Kimberley Process standards, for example, even though the diamond trade in Zimbabwe is linked to torture and forced relocation, and to child labour and slavery in Angola.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9097-tiffany-will-now-disclose-the-origin-of-diamonds

KUWAIT LAUNCHES INVESTIGATION INTO TYPHOON AND HELICOPTER PROCUREMENT

On 10th January, Janes.com reported that the Kuwaiti Defence Minister has decided to set up a committee of inquiry into certain military procurement contracts.

https://www.janes.com/article/85634/kuwait-launches-investigation-into-typhoon-and-h225m-procurement

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MALTESE COURT REJECTS PANAMA PAPERS INVESTIGATION INTO GOVERNMENT OFFICIALS

OCCRP on 10th January reported that Malta’s Court of Appeals has revoked a magistrate’s order for an inquiry into allegations of money laundering by government officials revealed in the Panama Papers, claiming “hacked” documents cannot be used as evidence, and dismissed claims as unproven “speculation”.  The decision overturns a magistrate’s decision in July 2017 ordering an inquiry into possible money laundering by Prime Minister Joseph Muscat, former energy minister Konrad Mizzi, chief of staff Keith Schembri, and 4 businessmen.

https://www.occrp.org/en/daily/9098-maltese-court-rejects-panama-papers-investigation

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UK COMPANIES HOUSE TO CARRY OUT EXTRA CHECKS ON INCORPORATION APPLICATIONS

On 9th January, Filed Fisher published an article saying that from 12th December Companies House is said to be carrying out extra checks on applications to register corporate bodies to ascertain that they are compliant with the UN financial sanctions.  The change is intended to stop persons designated under the sanctions using ‘economic resources’ (including companies) for those types of activities.  If anyone forms a corporate body with a designated person in its corporate structure, it would constitute making an economic resource available. It could potentially also expose Companies House to prosecution due to its role in the registration process.  Checks of the details of proposed directors, secretaries, members and people with significant control will be made of all new applications, including for LLP and Scottish Limited Partnerships.

https://www.fieldfisher.com/publications/2019/01/companies-house-to-carry-out-extra-checks-on-incorporation-applications

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US TREASURY PUBLISHES IMAGES OF VENEZUELA’S GORRIN NETWORK PRINCIPALS

Kenneth Rijock in his blog on 10th January reported that US Treasury, as part of a bundle of information about the network of a large number of sanctioned Venezuelan individuals and companies involved in a significant corruption scheme designed to take advantage of Venezuela’s currency exchange practices, generating more than $2.4 billion in corrupt proceeds.

https://home.treasury.gov/news/press-releases/sm583

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UK AND ISLE OF MAN UPDATED EU TERRORISM SANCTIONS LIST

On 9th January, a Notice from HM Treasury contained the updated list of those subject to sanctions pursuant to EU Regulation 2580/2001/EC.

The Isle of Man followed suit with a news release on 10th January.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/770096/Notice_Terrorism_2019_24.pdf

https://www.gov.im/news/2019/jan/10/financial-sanctions-terrorism-and-terrorist-financing/

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ISLE OF MAN AND UK ADVISE REMOVAL OF RAYON STATE ESTABLISHMENT (AKA RAYON STATE COMPANY) FROM IRAQ SANCTIONS LIST

A news release on 10th January advised that the company had been removed from the Iraq sanctions list, following the decision of the relevant UN sanctions committee in December.  This followed a Notice from HM Treasury on 9th January advising of a similar change in the UK.

https://www.gov.im/news/2019/jan/10/financial-sanctions-iraq/

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EU NAMES 3 PERSONS SUBJECT TO TRAVEL BANS UNDER MALI SANCTIONS REGIME

EU Council Decision 2019/29/CFSP lists 3 persons subject to a travel ban under Council Decision 2017/1775/CFSP and following the decision of the relevant UN sanctions committee on 20th December.

At the same time, HM Treasury issued a Notice to say that adding of the 3 names to the UK Consolidated List on 21st December was an error and the 3 persons were not, and never had been, subject to financial sanctions.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.008.01.0030.01.ENG&toc=OJ:L:2019:008:TOC

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/770405/Notice_Mali_10012019.pdf

 

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NEW DOCUMENTS LINK HUAWEI TO SUSPECTED FRONT COMPANIES IN IRAN, SYRIA

On 9th January, KYC 360 reported that the US case against the chief financial officer of China’s Huawei Technologies centres on the company’s suspected ties to a telecom equipment seller that operated in Iran (Skycom Tech) and a holding company registered in Mauritius (Canicula Holdings Ltd) which controlled the Iranian one.  The US alleges that Meng Wanzhou deceived banks into clearing transactions with Iran by claiming the companies were independent of Huawei, when in fact Huawei controlled them.

https://www.riskscreen.com/kyc360/news/new-documents-link-huawei-to-suspected-front-companies-in-iran-syria/

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OTHER THINGS YOU MAY HAVE MISSED – JANUARY 9

9th January 2019

NIGERIA LOST $2.8 BILLION TO OIL-RELATED CRIMES IN 2018

Pulse in Nigeria on 8th January said that a UN report says that Nigeria lost an estimated $2.8 billion in revenues in 2018, mainly due to oil-related crimes.  It also is quoted as saying that maritime crime and piracy off the coast of West Africa continued to pose a threat to peace, security and development in the region, and that between January 1st and November 23rd, there were 82 reported incidents of maritime crime and piracy in the Gulf of Guinea.

https://www.pulse.ng/news/local/nigeria-lost-dollar28bn-to-oil-related-crimes-in-2018-un-report/914b3k0

WHY BECOMING A NATIONAL TREASURE CAN LOWER AN ARTWORK’S VALUE

On 2nd January, Artsy,net carried an article that said that laws increasingly categorise works by the artist as cultural property subject to export restrictions and limitations on sale. Originally designed to protect antiquities and Old Masters, it says that these rules and regulations are starting to ensnare art made in the 20th Century.  Because they restrain trade, these laws lower the value of art that must remain in the local country.   It then gives examples from Italy and Germany – commenting how the imminent imposition of such restrictions had left to a rush to get artwork out before they were imposed.

https://www.artsy.net/article/artsy-editorial-national-treasure-lower-artworks-value

EGYPT REPATRIATES SMUGGLED ANCIENT ARTEFACT FROM UK

News AM on 8th January reported that Egypt’s Antiquities Ministry says it has repatriated an illegally smuggled artefact from the UK.  The relief with cartouche of King Amenhotep I from the 18th dynasty had been on display at a London auction house.  The article says that Egypt has drastically stepped up efforts in recent years to stop the trafficking of its antiquities, and has warned foreign museums that it will not help them mount exhibits on ancient Egyptian sites unless they return smuggled artefacts.

https://news.am/eng/news/489628.html

POKERSTARS ONLINE POKER PLAYERS DON’T HAVE TO PAY TAX ON WINNINGS IN NETHERLANDS

Dutch News on 8th January reported an appeal court ruling in the Netherlands in a case where the tax office had gone to court demanding that players pay 29% tax on winnings earned via the Pokerstars.eu website, arguing that as the company is based on the Isle of Man, and this is not an EU country, the players are liable for tax.  It had been counter-argued that the company is based in Malta, and the court has agreed with this.  Gamblers are not liable for income tax on winnings earned within the EU.

https://www.dutchnews.nl/news/2019/01/online-poker-players-dont-have-to-pay-tax-on-winnings-appeal-court-rules/

GERMANY: BAFIN PROVIDES GUIDANCE ON THE GERMAN MONEY LAUNDERING ACT

On 7th January, CMS Germany published an article saying that in December the German Federal Financial Supervisory Authority (BaFin) has published its Guidance on the construction and application of the German Money Laundering Act (GwG).  It is updated to take account of the 4th EU AML Directive.

http://www.cms-lawnow.com/regzone/articles/2019/january/germany-bafin-provides-guidance-on-the-german-money-laundering-act?cc_lang=en

FRANCE: LIFTING OF CURRENCY RESTRICTIONS AND THE IMPACT ON THE AVIATION INDUSTRY

On 19th December, an article from Odi-se Avocats said that since the 1930s, French regulation has made it clear that parties to domestic contracts must make payments using French currency.  While there was an exception to this rule for international payments, the criteria for making international payments were unclear.  However, amendments made mean that an agreement for the sale and purchase of an aircraft between a French seller and buyer which provides that the purchase price must be paid in US dollars is now clearly permitted under the law.

https://www.internationallawoffice.com/Newsletters/Aviation/France/Odi-se-Avocats/Lifting-of-currency-restrictions-impact-on-aviation-industry

DUTCH LEGISLATOR PROPOSES LICENCE REQUIREMENT FOR CRYPTO CURRENCY EXCHANGES AND CRYPTO WALLET PROVIDERS UNDER ANTI-MONEY LAUNDERING LEGISLATION

Bird & Bird on 7th January published an article saying that the Netherlands has published a draft legislative proposal implementing the 5th EU AML Directive into Dutch law for consultation, with views sought by 15th January.  One aspect of the proposal is expected to impact the crypto currency market in the Netherlands significantly, it says.  The article asks if the Dutch proposal is a balanced and proportional proposition.

https://www.twobirds.com/en/news/articles/2018/denmark/dutch-legislator-proposes-licence-requirement-for-crypto-currency-exchanges

IRELAND AND THE WTO – HOW WILL CROSS BORDER SERVICES PROVIDED TO THE UK BE TREATED IN A NO-BREXIT DEAL SCENARIO?

An article from Irish law firm, A & L Goodbody on 3rd January says that the effect of a no-Brexit deal scenario on trade in services between Ireland (as well as the rest of the EU) and the UK would also be marked and potentially be more restrictive.

https://www.algoodbody.com/insights-publications/ireland-and-the-wto-how-will-cross-border-services-provided-to-the-uk-be-tr

EU ISSUES CORRECTED LIST OF ENTITIES SUBJECT TO SANCTIONS RELATED TO LIBYA

On 9th January, the EU published a corrected list of entities subject to sanctions under EU Regulation 2016/44/EU.

Note that the list includes an Isle of Man company –

16. Baroque Investments Limited c/o ILS Fiduciaries (IOM) Ltd, First Floor, Millennium House, Victoria Road, Douglas, Isle of Man

Other info: Reg no 59058C (IOM)

IOM-incorporated subsidiary of the Libyan Investment Authority.

Closely associated with the former regime of Muammar Qadhafi.

12.4.2011

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.006.01.0010.01.ENG&toc=OJ:L:2019:006:TOC

COUP-OUSTED, SELF-EXILED THAI EX-PM YINGLUCK SHINAWATRA APPOINTED AS CHAIRWOMAN OF CHINESE PORT FACILITY

The Asia Times on 9th January reported that she fled Thailand when facing an official corruption charge in 2016.  It is reported that she has now been appointed chairwoman and legal representative of the Shantou International Container Terminal in China’s southern Guangdong province.  The Shinawatra family is known to maintain private residences in the UK in London and Birmingham.  The article says that Yingluck is not known to have any private professional experience in the transport sector, sparking speculation about what may be behind the appointment – such as China’s position if the coup-toppled, Shinawatra-aligned Peua Thai party is returned to power at polls expected this year.  Neither her brother Thaksin nor Yingluck are permitted under Thai law to have any influence over Peua Thai.  Thaksin is known to have obtained Montenegrin citizenship after his Thai passport was cancelled over his criminal conviction and flight into exile.

http://www.atimes.com/article/thailands-exiled-shinawatras-making-waves-abroad

NEW EU FOREIGN DIRECT INVESTMENT REGULATION

On 8th January, White & Case published an article saying that 3 main EU institutions have agreed on a compromise for a new Regulation that gives the EU a largely procedural and co-ordinating function in connection with foreign direct investment reviews conducted by EU Member States – a response to increased foreign direct investments into European technology and infrastructure assets, in particular, from the People’s Republic of China.  The Regulation will be formally implemented from early 1919, and take full effect in 2020.

https://www.whitecase.com/publications/alert/new-eu-foreign-direct-investment-regulation-initial-steps-towards-harmonized

TRAFFICKING CONVICTIONS FALL 25% DESPITE RISING NUMBER OF VICTIMS IN EUROPE

The Guardian on 8th January reported that a report by the UN found that 742 people in Europe were convicted for trafficking offences in 2016, the latest year for which there is available data, compared with 988 in 2011.  The number of identified victims increased from 4,248 to 4,429 over the same period.  It is said that the fall in convictions could reflect the hardening of border controls across Europe, and a failure to recognise victims of abuse.  The drop may also be due to continued difficulties authorities face when building cases under modern slavery laws, which are still relatively new, it says.

https://www.theguardian.com/global-development/2019/jan/08/trafficking-convictions-fall-25-despite-rising-number-of-victims-in-europe

CHINESE RESTAURANT OWNER MADE MILLIONS, DECLARED JUST £2,000 INCOME

KYC 360 on 9th January reported that a North London man who falsely claimed his business was a small pottery unit when it was in fact a profitable cash-generating Chinese restaurant has been jailed.  He failed to declare cash payments, fraudulently pocketing £1,018,508 in tax.

https://www.riskscreen.com/kyc360/news/london-fraud-chinese-restaurant-owner-made-millions-declared-just-2000-income/

HOUSE COMMITTEE LEADERS HAVE CALLED ON US TREASURY SECRETARY TO OUTLINE REASONS WHY THE US IS EASING SANCTIONS ON ENTITIES CONNECTED TO OLEG DERIPASKA

On 9th January, Rferl reported that 7 House of representative Democrats wrote to the Secretary on January 8th to inquire about a December announcement that the US would lift sanctions on the aluminium manufacturing giant Rusal and 2 other companies linked to Deripaska.

https://www.rferl.org/a/russia-deripaska-us-democrats-demand-briefing-sanctions/29698996.html

VENEZUELAN TV COMPANY GLOBOVISION CAN GET OFF OFAC SANCTIONS LIST IF IT SHEDS OWNER

On 9th January, the Wall Street Journal reported that Globovisión, and a related Florida company, have been added to the US sanctions list because they are owned by Raúl Gorrín, who the US accuses of profiting from illicit access to the country’s broken currency market.  An OFAC licence issued alongside allows the news network to continue for a year certain operations that the sanctions would have normally prohibited.  OFAC also said in a statement that the path to sanctions relief is through divestment and relinquishment of control by anyone on the sanctions list, directly naming Mr. Gorrín.

EU: ADVICE ON INITIAL COIN OFFERINGS (ICO) AND CRYPTO-ASSETS

On 9th January, the European Securities and Markets Authority published a 49-page booklet of advice, including risks and issues for regulators.

https://www.esma.europa.eu/file/49978/download?token=56LqdNMN

Crypto-assets need common EU-wide approach to ensure investor protection

ESMA has called for the establishment of an EU-wide approach to the regulation of crypto assets and initial coin offerings (ICO), without which it believes investors are “exposed to substantial risks”.

https://www.esma.europa.eu/press-news/esma-news/crypto-assets-need-common-eu-wide-approach-ensure-investor-protection

https://www.investmentweek.co.uk/investment-week/news/3069037/crypto-assets-set-for-eu-wide-regulation

https://eba.europa.eu/-/eba-reports-on-crypto-assets?src=ilaw

YEMENI GROUPS CALL ON WFP TO REVEAL AID ‘CORRUPTION’

On 9th January, the Miami Herald reported that Yemeni non-governmental groups are voicing concern over a threat by the UN food agency (the World Food Program) to suspend some aid shipments to Yemen if the Houthi rebels do not investigate and stop theft and fraud in food distribution.

https://www.miamiherald.com/news/nation-world/article224123275.html#navlink=SecList

UK GAMBLING COMMISSION AML GUIDANCE PLACES HIGH RESPONSIBILITY ON INDUSTRY OFFICERS

SBC News on 9th January reported that the Gambling Commission had published the 4th edition of its guidance on AML/CFT.  It says that it wants its licensed incumbents to have in place the policies, procedures and controls, covering the risks they may face from money laundering and terrorist financing.  Detailing the role of licensed operators in combating money laundering and corruption, the Commission reiterates that operators must uphold the 3 licensing principals set out by the Gambling Act 2005: to prevent gambling from becoming a source of crime or disorder; that no operator can be associated with criminal activities; and ensuring that no operator’s business structures or products can become a mechanism for supporting crime.

https://www.sbcnews.co.uk/europe/2019/01/09/ukgcs-aml-guidance-places-high-responsibility-on-industry-officers/

MOZAMBIQUE CHARGES 18 IN “TUNA BONDS” SCANDAL LINKED TO UBS ARRESTS

OCCRP on 9th January reported that Mozambique had announced the indictment of 18 individuals in connection to the $2 billion “tuna bonds” scandal that plunged the country into its worst financial crisis since independence.  One suspect is former finance minister Manuel Chang who was arrested in South Africa and awaits extradition to the US.

https://www.occrp.org/en/daily/9090-mozambique-charges-18-in-tuna-bonds-scandal

FIRST CONVICTION IN COLOMBIA FOR TRAFFICKING IN PERSONS FOR DOMESTIC SERVITUDE

UNODC on 9th January reported that the first conviction for Trafficking in Persons for domestic servitude was handed down in Colombia in September 2018.  A Colombian woman was found guilty and sentenced to 13 years and 2 months for trafficking in persons for domestic servitude.  The victim was an 18-year-old indigenous woman from the Carapana community and was promised domestic work and a salary of $77.  When she arrived in Bogota she was warned that she would not receive a salary for 2 months because she had to pay for the tickets from her home town to the city.  The decision has been hailed by organisations dedicated to the defence of the rights of indigenous people as an important precedent in the country for the elimination of forms of violence and exploitation based on ethnicity.

https://www.unodc.org/unodc/en/frontpage/2019/January/first-conviction-in-colombia-for-trafficking-in-persons-for-domestic-servitude.html?ref=fs1

2018 WAS A RECORD-BREAKING YEAR FOR MALTA CUSTOMS IN TERMS OF DRUG HAULS

The Malta Independent reported on 9th January that 2018 had seen 15,922.5 kg of cannabis; 184.7 kg of cocaine; 100 kg of cocaine (in a control delivery to Croatia); 2 kg of heroin; and 8 g of ketamine.

http://www.independent.com.mt/articles/2019-01-09/local-news/2018-A-record-breaking-year-for-Malta-Customs-in-terms-of-drug-hauls-6736201786

POLICE OFFICERS CAN DO ANYTHING THAT A CITIZEN CAN

A post in the UK Police Blog is concerned with a case before the Court of Appeal in which the claimant contended that the police could not lawfully ask arrested persons about their immigration status in order to provide this information to the Home Office because a police officer did not have the same power as a member of the public to approach and ask someone questions on any topic for any purpose.  Rather, they argued, a police officer’s powers had to be used to fulfil their duties and obligations as a police officer.  The court’s decision, the post says, would fit with the historic nature of police officers in England and Wales – that they are ordinary citizens with no more powers than other ordinary citizens, save where they are specifically granted by common-law or statute.  To that end, the Court of Appeal has affirmed that police officers may lawfully do anything an ordinary citizen can do, subject to principles of public law.

http://ukpolicelawblog.com/index.php/9-blog/189-police-officers-can-do-anything-that-a-citizen-can

IRISH CRIMINAL ASSETS BUREAU CLAMPS DOWN ON BORDER CRIME GANG

The Belfast Telegraph on 9th January reported that CAB has moved to clamp down on an organised crime gang operating in the border region with Northern Ireland, and CAB and officers from the Garda Emergency Response Unit carried out a series of raids in Co Monaghan targeting the gang.

https://www.belfasttelegraph.co.uk/news/northern-ireland/irish-criminal-assets-bureau-clamps-down-on-border-crime-gang-37695803.html

FISHING VESSELS ARE INCREASINGLY BEING USED AS INSTRUMENTS IN TRANSNATIONAL ORGANISED-CRIME ACTIVITIES.

On 7th January, Global Initiative published an article saying that, as is the case with legal global trade, a significant amount of illicit trade relies on modes of maritime transport.  Vessels – ranging from small wooden dhows to major container ships – participate either willingly or unwittingly in the worldwide transfer of anything from weapons and drugs to humans, wildlife and counterfeit goods.  But of specific concern is the increasing role played by fishing vessels in the global illicit infrastructure – with about 4.6 million fishing vessels worldwide, operated by an estimated 27 million mariners.  It warns that, as fish stocks become depleted, out-of-work fishermen are looking to the shadowy world of transnational organised crime to secure a livelihood.  Other types of smuggling are illustrated by the example that fishermen from Venezuela are using their vessels to smuggle guns to Trinidad, and diapers and baby formula back to Venezuela.  Fishing boats can also be used by terrorists, such as the effort by Shia rebels to arm several fishing vessels with RPG and carry out attacks in the Red Sea shipping channel.  There is also growing awareness of the use of slave labour on fishing vessels, but it is less known that vessels are also used to smuggle people into and out of countries.

https://globalinitiative.net/whats-happening-below-deck/

PODCAST: 2018 US FOREIGN CORRUPT PRACTICE ACT YEAR IN REVIEW

In the latest TRACE podcast, Kara Brockmeyer, former Chief of the SEC’s FCPA Unit and now with Debevoise & Plimpton, discusses key enforcement actions, the shifting legal landscape and compliance trends from 2018, together with a few predictions for 2019.

https://traceinternational.org/bribe_swindle_or_steal

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FISHING VESSELS ARE INCREASINGLY BEING USED AS INSTRUMENTS IN TRANSNATIONAL ORGANISED CRIME ACTIVITIES.

On 7th January, Global Initiative published an article saying that, as is the case with legal global trade, a significant amount of illicit trade relies on modes of maritime transport.  Vessels – ranging from small wooden dhows to major container ships – participate either willingly or unwittingly in the worldwide transfer of anything from weapons and drugs to humans, wildlife and counterfeit goods.  But of specific concern is the increasing role played by fishing vessels in the global illicit infrastructure – with about 4.6 million fishing vessels worldwide, operated by an estimated 27 million mariners.  It warns that, as fish stocks become depleted, out-of-work fishermen are looking to the shadowy world of transnational organised crime to secure a livelihood.  Other types of smuggling are illustrated by the example that fishermen from Venezuela are using their vessels to smuggle guns to Trinidad, and diapers and baby formula back to Venezuela.  Fishing boats can also be used by terrorists, such as the effort by Shia rebels to arm several fishing vessels with RPG and carry out attacks in the Red Sea shipping channel.  There is also growing awareness of the use of slave labour on fishing vessels, but it is less known that vessels are also used to smuggle people into and out of countries.

https://globalinitiative.net/whats-happening-below-deck/

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GIBRALTAR FIU LAUNCHES ONLINE REPORTING SYSTEM FOR SUSPICIOUS ACTIVITY REPORTS (SAR)

On 9th January, a news release from the Gibraltar Government advised that the system called Themis consists of 2 separate parts – an online ‘portal’ for use by Money Laundering Reporting Officers (MLRO) and a system visible only to the FIU.

https://www.gibraltar.gov.gi/new/sites/default/files/press/2019/Press%20Releases/9-2019.pdf

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UN REMOVES 3 ENTITIES FROM ITS IRAQ SANCTIONS LIST

On 8th January, the UN advised that the GENERAL ESTABLISHMENT FOR DESIGNS AND RESEARCH, the STATE ENTERPRISE FOR ALUMINIUM SEMI PRODUCTS, and the STATE ENTERPRISE FOR CABLES AND WIRES have all been removed from the Iraq sanctions list on the recommendation of the relevant sanctions committee.

https://www.un.org/press/en/2019/sc13658.doc.htm

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THE ECONOMICS OF CRYPTOCURRENCY PUMP AND DUMP SCHEMES

An article on VOX, the website of the European-based Centre for Economic Policy Research, and published on 9th January says that the surge of interest in cryptocurrencies has been accompanied by a proliferation of fraud, largely in the form of “pump and dump” schemes. The article provides the first measure of the scope of such schemes across cryptocurrencies.  Research results suggest that the phenomenon is widespread and often quite profitable, and highlight the need for concerted efforts from industry and regulators to fight cryptocurrency price manipulation

https://voxeu.org/article/economics-cryptocurrency-pump-and-dump-schemes

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SAUDI PRIVATE JET INDUSTRY STALLS AFTER CORRUPTION CRACKDOWN

Reuters on 9th January carried an exclusive article saying that a crackdown on corruption in Saudi Arabia has severely dented the kingdom’s private jet industry.  Dozens of planes, owned by individuals and charter companies and worth hundreds of millions of dollars, are said to be stranded at airports.  Some were handed over to the state in settlements reached after the crackdown was launched in late 2017.

https://uk.reuters.com/article/us-saudi-crackdown-planes-exclusive/exclusive-saudi-private-jet-industry-stalls-after-corruption-crackdown-idUKKCN1P30JN

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EU REISSUES TERRORISM SANCTIONS LIST

EU Regulation 2019/24/EU was published on 9th January and contains the list of persons and entities subject to sanctions measures under EU Regulation 2580/2001/EC, with 2 persons and 1 entity added.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.006.01.0002.01.ENG&toc=OJ:L:2019:006:TOC

https://www.consilium.europa.eu/en/press/press-releases/2019/01/09/fight-against-terrorism-council-renews-the-designations-on-the-eu-terrorist-list-and-adds-two-iranian-individuals-and-one-iranian-entity-in-response-to-recent-foiled-attacks-on-european-soil/