These UK Regulations (SI 2018/861) provide for the implementation in the UK of EU Regulation 2018/1001/EU which provided a framework for imposing financial sanctions and a travel ban on those connected to the civil unrest in the Maldives. The Regulations are concerned with the financial sanctions aspects, and provides for licences, information powers, offences and penalties. To date, no-one has been listed under this new sanctions regime.
EU COMMISSION REFERS GREECE, IRELAND AND ROMANIA TO THE COURT OF JUSTICE FOR NOT IMPLEMENTING 4th AML DIRECTIVE
On 19th July, a news release notified that the Commission had referred Greece and Romania to the Court of Justice of the EU for failing to implement the 4th AML Directive into their national law. Ireland implemented only a very limited part of the rules and is therefore also referred to the Court. The Commission proposed that the Court charges a lump sum and daily penalties until the 3 countries take the necessary action. The Commission has also sent reasoned opinions to Latvia and Spain and an additional reasoned opinion to Malta for failing to transpose the Directive into national law as the assessment of the transposition laws notified by these countries has showed that the transposition is not complete.
FATF REPORT TO G20 FINANCE MINISTERS AND CENTRAL BANK GOVERNORS ON ITS ONGOING WORK TO FIGHT MONEY LAUNDERING AND TERRORIST FINANCING
On 18th July, FATF released the report it had submitted to the July 2018 G20 Finance Ministers and Central Bank Governors’ meeting. The report, in particular, concentrates on –
- FATF’s work programme on virtual currencies/crypto assets, including money laundering and terrorist financing risks of virtual currencies/crypto assets, the regulatory environment for virtual currencies/crypto assets, revision of global standards and guidance and improving operational capacity;
- Countering the financing of proliferation of WMD;
- Countering the financing of terrorism;
- Improving transparency and the availability of beneficial ownership information;
- Improving the effectiveness of the criminal justice system: FATF engagement with judges and prosecutors;
- De-risking; and
- FinTech, RegTech: digital identity.
http://www.fatf-gafi.org/publications/fatfgeneral/documents/report-g20-fm-cbg-july-2018.html
FATF REPORT: CONCEALMENT OF BENEFICIAL OWNERSHIP
On 18th July, FATF released a report from it and the Egmont Group of FIU that assesses the vulnerabilities linked to the concealment of beneficial ownership in order to support further risk analysis by governments, financial institutions and other professional service providers. The report uses over 100 case studies provided by 34 different jurisdictions and the experiences of law enforcement and other experts, private sector input the private sector as well as open-source research and intelligence reports to identify the methods that criminals use to hide beneficial ownership. Vulnerabilities associated with beneficial ownership are analysed, with a particular focus on the involvement of professional intermediaries. The report highlights the importance of the effective implementation of the FATF Recommendations on beneficial ownership to ensure that competent authorities have access to adequate, accurate and timely information on the beneficial ownership and control of legal persons, and arrangements including express trusts.
US CLAIMS 89 ILLICIT SHIP TRANSFERS INVOLVING NORTH KOREAN FUEL SMUGGLING IN 2018
Marine Link on 18th July reported that the US had submitted the complaint to the UN Security Council North Korea sanctions committee. The US said that as of May 30th, there had been 89 illicit ship-to-ship transfers of refined petroleum products this year. The US provided a list to the Security Council committee of 89 illicit North Korean transactions and photos.
https://www.marinelink.com/news/us-accuses-nkorea-fuel-smuggling-439749
OTHER THINGS YOU MAY HAVE MISSED – JULY 18
18th July 2018
PARLIAMENTARY COMMITTEE CALL FOR ARMS TRADE LOOPHOLES TO BE CLOSED
The National in Scotland on 18th July reported that a report by Westminster’s Committees on Arms Export Controls says no audits are carried out on whether or not UK companies comply with arms laws overseas, and that this must change “as soon as practically possible” to combat corruption and ensure usage does not break British law. It also said that rules for brokers are said to be “significantly more stringent” in the US and in 23 EU member states, with the Government advised to consider setting up a new “fit and proper person” test to establish whether intermediaries are right for the role.
http://www.thenational.scot/news/16360229.mps-call-for-arms-trade-loopholes-to-be-closed/
MIGRANTS IN LIBYA FACE RISING THREAT FROM ‘STRONGER’ GANGS, TRAFFICKERS
VoA on 17th July reported that migrants in Libya face the greatest danger in years of being trafficked, exploited or enslaved by armed groups and criminal gangs — which are becoming stronger — as Europe clamps down on migration, the UN and analysts said. Rising numbers of migrants trapped in Libya are prey to smugglers and traffickers and sold for labour, said the UN International Organization for Migration. It is said that many people in Libya become smugglers because the networks are well established and unlikely to be dismantled or prosecuted, as well as due to a lack of other sources of income.
https://www.voanews.com/a/migrants-libya-stronger-gangs-traffickers/4486894.html
10 BUSINESSMEN ARRESTED IN CHINA FOR SMUGGLING ACROSS THE BORDER WITH NORTH KOREA
Dong a-Ilbo in South Korea reported on 18th July that the Chinese government recently arrested 10 local businessmen, who engaged in smuggling activities across its border with North Korea. A source is quoted saying that it appears the Chinese authorities, which had condoned smuggling activities across the China-North Korea border after the bilateral relations began improving from a few months ago, have changed the guidelines on how to handle smuggling activities.
http://english.donga.com/List/3/03/26/1392007/1
FATF CONSULTS ON DRAFT RISK-BASED APPROACH GUIDANCE FOR THE SECURITIES SECTOR
Shearman & Sterling reported on 17th July about FATF having published on 6th July a consultation draft of Risk-Based Approach Guidance for the securities sector. It says that FATF is also hoping that the draft Guidance will aid the development of a common understanding of what the risk-based approach to AML/CTF entails in the context of the securities sector. FATF is seeking feedback on the draft Guidance by 17th August.
US SENATORS CALLS FOR GAO REVIEW OF FEDERAL ATTEMPTS TO STOP TRADE-BASED MONEY LAUNDERING
The Ripon Advance in Washington DC reported on 17th July that a member of the US Senate Finance Committee, has requested a US Government Accountability Office (GAO) review that evaluates the federal government’s efforts to end and prevent trade-based money laundering (TBML), described as one of the main methods by which drug traffickers, criminal organisations and terrorist financiers use a legitimate trade to disguise illegally obtained proceeds. TBML is said to have contributed significantly to the ongoing opioid crisis in the US, according to Sen. Cassidy and Sen. Sheldon Whitehouse, who serves on the Senate Judiciary Subcommittee on Crime and Terrorism. Their goal in requesting a GAO review, the members wrote, is to improve co-ordination and communication between federal agencies in fighting TBML. The senators want the GAO to assess what steps FinCEN and other federal agencies have taken to address TBML; their level of attention given to fighting the crime, such as whether the illegal method is considered a priority or just handled when agencies learn about isolated cases when going after the money, drugs or criminals and to what extent FinCEN and other federal agencies collaborate and share data and information related to detecting and deterring TBML, including with international trading partners and the role shell companies play in facilitating the process; and the existing challenges regulators and law enforcement face when trying to determine ownership of shell companies.
MOBILE GAMES MONEY LAUNDERING OPERATION
The Bleeping Computer website on 17th July carried an article saying that the US DoJ, Apple, and game maker Supercell, have been warned of a money laundering ring that uses fake Apple accounts and gaming profiles to make transactions with stolen credit/debit cards and then sells these game premiums on online sites for the group’s profit. It is said that criminals targeted mobile games such as Supercell’s Clash of Clans, Supercel’s Clash Royale, and one game by Kabam named Marvel Contest of Champions and used stolen credit card details. It is also reported that the system made use of lax verification measures for the system that adds payment card data to iOS accounts.
KENYA NAMED AMONG WORLD’S BIGGEST TAX HAVENS WHERE THE RICH HIDE WEALTH TO EVADE TAXES
Tuko in Kenya reported on 17th July that a July 2018 report by the Tax Justice Network has revealed Kenya is now one of the biggest tax havens for the rich who are seeking to keep their offshore financial activities secret to evade high taxes in their jurisdictions. Read more:
WCO PUBLISHED GLOBAL STANDARDS ON E-COMMERCE
On 18th July, BIFA reported that on the 10th July, the World Customs Organisation published the Framework of Standards on Cross-Border E-Commerce as adopted at the end of June 2018 by its Council, together with a Resolution aimed at ensuring its harmonised and effective implementation. The Framework sets out baseline global standards on cross-border e-commerce. The core is the exchange of advance electronic data for effective risk management and enhanced facilitation of growing volumes of cross-border small and low-value B2C and C2C shipments, and the adoption of simplified procedures with respect to clearance, revenue collection and return, among other things, in close partnership with e-commerce stakeholders. It also encourages the use of non-intrusive inspection (NII) equipment, data analytics and other cutting-edge technologies to support safe, secure and sustainable cross-border e-commerce. The Framework is intended for Customs administrations wishing to develop legislative and operational frameworks for cross-border e-commerce.
https://www.bifa.org/news/articles/2018/jul/wco-publishes-global-standards-on-e-commerce?l=y
CONFESSED PONZI PERP IN DENVER CHARGED WITH WIRE FRAUD
CBS Denver on 17th July reported that Dan Rudden, 71, established a business in 2000 called Financial Visions, helping finance cemeteries and funeral homes across the country. Rudden said for years, the business was a huge success yielding 12% returns for investors. In a “confession” to CBS TV, he said in about 2010, the business model decayed and morphed into a Ponzi scheme with money from new investors being used to pay dividends to old investors. Rudden said despite what some investors might suspect, there is no money to return. He says he didn’t blow the money on gambling or yachts or extravagant living, but on a business model that couldn’t be sustained. Rudden had said he believed he had taken his investors for $55 million but has subsequently said that he believed the amount was likely much less, but he wasn’t sure what it was and was still likely in the millions.
https://denver.cbslocal.com/2018/07/17/confessed-ponzi-perp-charged-wire-fraud/?src=ilaw
TUNISIA APPROVES ILLEGAL ENRICHMENT LAW TO COMBAT CORRUPTION
Middle East Eye on 17th July reported that the Tunisian parliament has approved a law to combat illicit enrichment, a step designed to strengthen the government’s fight against widespread corruption in the country. The law will force the president, ministers, senior officials in the public sector, independent bodies, banks, judges, security forces, journalists and unions to declare their property. The penalties include fines and imprisonment for 5 years. Last year, the government confiscated property and froze bank accounts of about 20 prominent businessmen arrested on suspicion of corruption in an unprecedented government campaign against graft. Tunisia’s anti-corruption committee says graft is still widespread and threatens Tunisia with billions of dollars a year in losses and that corruption had spread in all sectors including security, public tenders and health.
EX-NEW YORK SENATOR AND SON CONVICTED OF BRIBERY AND EXTORTION
ABC News Channel 20 on 17th July reported that Dean Skelos and his son, Adam, were accused of selling the once-powerful Republican’s office by pressuring wealthy businessmen into giving Skelos’ son roughly $300,000 for no-show jobs. Prosecutors said the payments were bribes intended to win support for legislation favoured by the businesses.
GUIDE FOR CHARTERED ACCOUNTANTS ON BREXIT
ICAEW and Chartered Accountants Ireland have produced a joint guide designed to help chartered accountants support businesses in the UK and Ireland to deal with the trading landscape after Brexit. The guide has a particular focus on trading between the UK and Ireland but the principles in the guide also apply to trade between the UK and the rest of the EU. It is aimed particularly at businesses with no previous experience of customs formalities.
https://www.icaew.com/en/technical/economy/brexit/taking-the-lead-chartered-accountants-and-brexit
THE ‘VIRTUAL KIDNAPPING’ SCAM THAT HAS FLEECED AUSTRALIANS OUT OF $10 MILLION
Mail Online on 18th July reported that an elaborate phone scam involving calls from the “Chinese Embassy”, arrest threats and ‘virtual kidnappings’ has fleeced countless unwitting victims out of an estimated $10 million in Australia. Hundreds of Australians have been swindled by the scam in the past year alone, willingly handing over an average $38,000 each to persuasive cyber criminals. And some people are even doing it to their own families in a desperate bid for cash.
CONCERNS OVER NUMBERS OF UK SHIPPERS SIGNED UP FOR “TRUSTED TRADER” STATUS
Loadstar on 17th July reported that supply chain concerns have arisen over its references to “trusted traders” and the UK’s apparent lack of them. Linked to post-9/11 security concerns, “trusted trader” programmes were developed to provide joined-up security and customs processes across the global supply chain – under EU (and UK) law these are called authorised economic operators (AEO). It reports that a spokesperson from the British International Freight Association (BIFA) told The Loadstar references to trusted traders meant “nothing”, as there were so many schemes available – there differing kinds under the AEO arrangements, and other schemes in different countries – for example, Australia, South Korea and the US. Without mutual recognition AEO status would be of little value, and it could only be achieved through a full agreement with the EU.
https://theloadstar.co.uk/concerns-lack-uk-shippers-signed-trusted-trader-status/
THE POWER OF THE POLICE TO ARREST INDIVIDUALS WHO ARE NOT ACTING UNLAWFULLY
The UK Police Law Blog on 15th July reported a recent High Court decision that confirms the power of the police to arrest individuals who are not acting unlawfully. It relies on the earlier case of CPS v McCann [2015] which held that an arresting officer was acting in the execution of their duty when making an arrest notwithstanding that their suspicion that that offences were being committed being mistaken. A police officer does not have to tell the person the offence for which they are being arrested – rather than telling them the act for which they are being arrested. He or she may act to prevent crime even where no unlawful act is being committed or where they have no specific and correct criminal offence in mind.
http://ukpolicelawblog.com/index.php/9-blog/177-arrest-for-lawful-acts
HOW AND WHERE ORGANISED CRIME PREYS ON MIGRANTS IN MEXICO
Insight Crime on 17th July carried an article about a new report from the University of Texas at Austin’s Robert Strauss Center for International Security and Law, titled “Organized Crime and Central American Migration in Mexico” which shows how and where organised crime groups victimize Central American migrants in Mexico. According to the report, migrants from Central America face 3 types of criminal actors: local actors, gangs and transnational criminal organisations. More sophisticated organised criminal groups like the Gulf Cartel and the Zetas charge taxes for migrants to pass while also running their own migrant kidnapping or smuggling rings, in addition to attacking those traveling through Mexico. The report found that kidnapping is the most lucrative crime committed and is predominantly carried out by transnational criminal organisations, which can earn up to $5,165 per migrant and up to $20.5 million annually from kidnapping. However, the website says that the report misses a key actor in its analysis: the Mexican state and this could be explained, in part, by the fact that the report was done “in response to a request” from the Mexican Federal Police.
https://www.insightcrime.org/news/brief/how-where-organized-crime-preys-migrants-mexico/
TRUMP ADMINISTRATION RELEASES ANNUAL LIST OF COUNTRIES RECRUITING AND USING CHILD SOLDIERS
On 17th July, the Stimson Center reported on the release on 28th June by the US State Department of its Trafficking in Persons (TIP) report which includes an updated list of states involved in child soldier recruitment and/or use by 11 governments (as required by the Child Soldiers Prevention Act or CSPA, which includes Burma (Myanmar), the Democratic Republic of Congo (DRC), Iran, Iraq, Mali, Niger, Nigeria, Somalia, South Sudan, Syria, and Yemen. Of the 11 countries identified on the 2018 CSPA list, 7 are due to receive some form of US military assistance in fiscal year 2019. Before October 1st, President Trump has to make his determinations as to whether to employ national interest waivers to exempt any of the 11 countries identified.
The Trafficking in Persons Report 2018 is available at –
https://www.state.gov/documents/organization/282798.pdf
YAKUZA READY TO MUSCLE IN ON CASINO BUSINESS IN JAPAN, GANGSTER REVEALS
The Asahi Shimbun on 18th July reported that Yakuza organized crime groups are plotting to infiltrate casinos if legislation to allow them passes in the Diet, a gang member has admitted to The Asahi Shimbun. The law will for the first time allow private companies to operate legalised gambling in the form of casinos, but criminal organisations are also poised to enter the lucrative markets of constructing and operating casinos at “integrated resorts”.
http://www.asahi.com/ajw/articles/AJ201807180031.html
ACQUITTAL OF FORMER SPECIAL FORCES MEMBERS IN SERBIA
Janes.com on 17th July reported that the Higher Court in Belgrade acquitted 7 former members of a disbanded special forces unit (Jedinica za specijalne operacije: JSO) of armed mutiny in 2001. JSO members had refused orders and blocked the main highway running through Belgrade in protest against a criminal procedure code that facilitated the extradition of war crimes suspects to the International Criminal Tribunal for the Former Yugoslavia (ICTY). Janes.com suggests the result is indicative of judiciary’s politicisation and corruption, which is likely preventing investigation of politicians.
IRELAND: MAN ARRESTED IN RELATION TO LAUNDERING OF OVER €1.1 MILLION
On 18th July, Breaking News reported that a 33-year-old man had been arrested in Dublin by members from the Money Laundering Investigation Unit at the Garda National Economic Crime Bureau in relation to the laundering of funds in excess of €1.1 million. The alleged laundered funds were the proceeds of an International Invoice Re-Direction Fraud perpetrated against a Danish company in 2016.
UK PENSION COMPANY LIQUIDATED OVER £4 MILLION ABUSE
Accountancy Daily reported on 18th July that a Kent pension company – Chartwell Trustee Pension Solutions Ltd, sole trustee of the Pinnacle Pension Scheme – has been ordered into liquidation at the High Court after an Insolvency Service investigation revealed it had abused over £4million of investors’ savings.
https://www.accountancydaily.co/pension-company-liquidated-over-ps4m-abuse?src=ilaw
EU CAUTIONS MALAWI OVER CORRUPTION CRISIS, DEVELOPMENT FUNDS THREATENED
The Nyasa Times on 18th July reported that the outgoing EU representative in Malawi has urged to curb corruption, warning that continuing graft could affect EU funding.
ART AND THE BRAVE NEW POST-BREXIT WORLD
A post on the Art Law & More website from Boodle Hatfield on 18th July considers the possible consequences for the arts business after withdrawal. It points out that currently the UK sits just behind the USA and ahead of China in terms of volume of art sales with a 21% share of the global art market, though this figure represents an almost 10% decline over the past year. The post raises questions about the VAT position of imports post-Brexit and the current 5% rate; freedom of movement for members of the art world; and the future of the Artists Resale Right (which is levied on the sale of works by living artists or artists who have passed away within the last 70 years) and if it could or should be dropped if/when the UK leaves the EU.
https://artlawandmore.com/2018/07/18/art-and-the-brave-new-post-brexit-world/
BANKING, LENDING, AND INSOLVENCY RESTRICTIONS RELEGATE THE LEGITIMATE CANNABIS INDUSTRY IN CALIFORNIA TO AN ALL-CASH BUSINESS, VULNERABLE TO CRIME
On 17th July, the law firm Buchalter published an article from the July/August edition of Los Angeles Lawyer which highlights the difficulties faced by marijuana-related businesses (MRB) which, even after being legally established under state law and operating under strict regulations and oversight, nonetheless cannot open a simple deposit account at a bank owing to inconsistent, conflicting federal regulations. It says that, under the current federal prohibition of marijuana many banks, fearing potential repercussions, simply refuse to do business with marijuana growers, extractors, distributors, and sellers— even ones that operate legally in their own respective states. As a result, MRB are forced to operate on a cash-only basis, making them prime targets for robberies, kidnappings, and extortion.
https://www.buchalter.com/publication/cannabis-cash-crime/
US GOVERNMENT BAN ON DEALING WITH KAPERSKY LAB
Next Gov on 16th July reported that a new procurement rule now bars the Russian anti-virus company Kaspersky Lab or any of its partners or distributors from contracts at the Pentagon, General Services Administration or NASA, despite a last-minute Kaspersky effort to halt the ban. the ban was sparked by intelligence agencies’ allegation that Kaspersky executives are too closely tied to the Kremlin and the Homeland Security conclusion that a Russian cybersecurity law might compel Kaspersky to help Russian intelligence agencies spy on the US government. Kaspersky has consistently denied any undue influence by the Kremlin and said that Homeland Security is misreading the Russian law. The article says that Congress is likely to enact similar government-wide contracting bans targeting the Chinese companies Huawei and ZTE in the 2019 version of an annual defence policy Bill that’s currently at a House-Senate conference committee.
https://www.nextgov.com/cybersecurity/2018/07/governments-kaspersky-ban-takes-effect/149758/
UAE TOPS LIST OF 84 MOST COMPLEX COUNTRIES FOR COMPLIANCE – IRELAND IS SIMPLEST
The Compliance Journal from Law.com on 18th July reported that the UAE is the most complex country for corporate compliance officers and lawyers to navigate, while Ireland is the least complicated, according to a new report from the TMF Group – which provides business advice and services to global companies. For its Compliance Complexity Index 2018 TMF surveyed compliance experts and lawyers who deal with 84 countries. The survey’s 52 questions included queries on the difficulty of opening an entity in a specific country and the complications in adopting both local and global transparency reporting requirements. Asia-Pacific had 3 countries in the top 10 list of the most complex – China, Malaysia and Vietnam; South America also had 3 in the top 10 – Argentina, Brazil and Uruguay. A copy of the report can be accessed via the article.
ARMENIA: LAW ENFORCEMENT AGENCIES LAUNCH PROBE AS FORMER POLICE CHIEF AND FORMER GOVERNOR START MUTUAL ACCUSATIONS OVER BRIBERY AND EXTORTION
On 18th July, Armenpress reported that a former Police Chief of Armenia, is claiming that the former Governor of Ararat province has extorted nearly $60,000 from him. The former Governor has claimed that in 2008 he had given the then the Police Chief, money to award a job to the son of a former employee of his in the police force but that did not provide the job nor return the cash. The Governor has not been named.
https://armenpress.am/eng/news/941212.html?src=ilaw
SWISS CLAIM SUCCESS IN INTERNATIONAL CYBERCRIME CASE
Swissinfo on 18th July reported that 2 people suspected of illegally obtaining and using the e-banking data of Swiss bank customers have been arrested in the Netherlands. The Swiss Office of the Attorney General says the suspects were arrested and premises were searched in the co-ordinated operation between Dutch and Swiss police and justice authorities.
FRAUDSTER ANTHONY KEMP JAILED OVER £8 MILLION INVESTMENT CON
On 18th July, the BBC reported that a man who played a key role in a fraud which targeted more than 350 elderly and vulnerable people has been jailed for 7 years. Anthony Kemp, 62, was part of a gang that fleeced victims over a 3-year period. The court heard Durham Police had been investigating the activities of Kemp and 2 others for 5 years. Victims who handed over large sums of money were told they would get access to high-yielding investments abroad.
https://www.bbc.co.uk/news/uk-england-tyne-44873882?src=ilaw
TRANSPARENCY INTERNATIONAL GIVES BAHAMAS ZERO RATING ON INFORMATION ACCESS LAWS
The Nassau Guardian on 18th July reported that the Bahamas had received a 0% rating on the strength of its access to information legislation. The rating is included on a scorecard, assessing Bahamas’ current anti-corruption framework, based on specific indicators that are under goal 16 of the UN Sustainable Development Goals (SDG) – in 2015, world leaders gathered at the UN to adopt 17 SDG to achieve by 2030. The 0% score on access to information legislation is based on target 16.10, which sets out to “ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements”. While a revamped version of the Freedom of Information Act has been passed in February 2017, there have long been calls for it to be fully enacted. However, a 2017 corruption index published by Transparency International showed that the Bahamas was the top-ranking country in the Caribbean for the least amount of perceived corruption – at number 24 of 176 countries on the list, ahead of Barbados, which once topped the list for least corrupt country in the Caribbean basin.
FORGER BUILT MANSION IN ZIMBABWE WHILE RAKING IN THOUSANDS FROM FAKE MARRIAGES AND BENEFITS SCAM IN UK
The Express & Star on 18th July reported that Zimbabwe-born Clemence Marijeni, 44, has been jailed up for 17 years after producing fake documents for 2 huge West Midlands fraud rackets. The master forger behind one of the West Midlands’ largest sham marriage scams and a £720,000 maternity allowance fraud has been jailed for a total of 17 years. He completed a law degree at Wolverhampton University after coming to the UK in 2006 and claimed to earn £30,000-a-year from his role in a shipping business. But the graphics expert pocketed more cash by selling forged paperwork to others involved in the 2 frauds while using 8 bank accounts under false names to collect at least £55,000 from bogus maternity allowance claims for himself. The gang made at least 165 fake maternity applications between May 2011 and August 2015. Marijeni was a key player in the bogus marriage fraud, creating fake histories in a bid to help at least 45 West Africans to stay in the country illegally through bogus weddings. Czech and Slovakian people allegedly working and living in the UK were paid to tie the knot.
FUGITIVE WANTED IN CONNECTION WITH COCAINE JET SEIZURE IN UK TRACKED DOWN IN THAILAND
On 18th July, a news release from the NCA said that Spanish national Francisco Jesus Gutierrez Marcos, 36, a man wanted in connection with an alleged plot to smuggle around half a tonne of cocaine into the UK using a private jet has been arrested in Thailand. Living in Bournemouth, he had left the UK on the day of the seizure, which took place at Farnborough Airport on 29th January. The jet had flown direct from Bogota, Colombia and the drugs were found by Border Force officers inside suitcases transported on the aircraft.
SHIPPERS WELCOME NEW LIVERPOOL CONTAINER SERVICES
Lloyds Loading List on 18th July that cargo owners have welcomed new containership services to Peel Ports’ flagship deep-water container terminal, Liverpool2, which will welcome its largest regular caller to date when 2M alliance partners Maersk and MSC introduce a new transatlantic container service to the port from 22nd July.
DANSKE BANK TO FORGO ESTONIA MONEY LAUNDERING PROFITS
Law 360 on 18th July reported that Danske Bank said that it will waive income generated from transactions linked to alleged money laundering in Estonia and will donate the money to “combating international financial crime” once the full extent of the scandal becomes clear.
https://www.law360.com/articles/1064384
JERSEY BUSINESS TENDENCY SURVEY JUNE 2018
On 18th July, Jersey published the latest quarterly Jersey Business Tendency Survey (BTS) which provides timely, qualitative information about the Island’s economy.
https://www.gov.je/News/2018/Pages/BusinessTendencyJune2018.aspx
INTERPOL SCREENS FOR TERRORISTS IN SUMMER TOURIST DESTINATIONS
OCCRP on 18th July reported that Interpol is helping local police in 8 Mediterranean seaports screen travellers and prevent potential terrorists from entering countries during the summer tourist season, the police agency said. In just the first week of “Operation Neptune”, 4 suspected foreign terrorist fighters and the location of 1 missing person were detected during 350,000 searches. The officers are checking travellers ID cards and passports against Interpol’s criminal databases which include stolen documents, often used by terrorists trying to move between countries.
DUTCH GOVERNMENT HIRES NEARLY 1,000 CUSTOMS OFFICIALS TO PREPARE FOR ‘NO DEAL’ BREXIT
The Independent on 18th July reported that the Dutch government has completed the hiring of nearly 1,000 new customs officers to prepare for a looming “no deal” Brexit, according to a senior official.
CHINA CUSTOMS INTERCEPT A MILLION TONNES OF ILLEGAL WASTE
The South China Morning Post on 18th July reported that the General Administration of Customs has made the crackdown on smuggled foreign waste one of its priorities for this year after China imposed bans on 24 types of recyclable material, including plastics. It says that it uncovered 276 cases of waste smuggling in the first half of the year, up 89% on the year and involving 987,900 tonnes of rubbish. One of the biggest cases involved the smuggling of 313,500 tonnes of steel slag by an unnamed Shanghai company, as well as a 200,000-tonne shipment of plastic and other solid waste intercepted by customs inspectors in Shantou.
REPORT TO US CONGRESS ON THE COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES (CFIUS)
On 17th July, USNI News published the 3rd July report on CFIUS, an interagency body original set up in 1975 and which comprises 9 Cabinet members, 2 ex-officio members, and other members as appointed by the President, that assists the President in overseeing the national security aspects of foreign direct investment in the US economy. The current debate over CFIUS reflects long-standing concerns about the impact of foreign investment on the economy and the role of economics as a component of national security. Some Members of Congress question CFIUS’s performance and the way the Committee reviews cases involving foreign governments, particularly with the emergence of state-owned enterprises. Changes in US foreign investment policy have potentially large economy-wide implications, since the US is the largest recipient and the largest overseas investor of foreign direct investment. The report notes that, to date, 5 investments have been blocked, although proposed transactions may have been terminated by the firms involved in lieu of having a transaction blocked. A recent example in 2018, was the blocked acquisition of Qualcomm by Broadcom. The report not only examines recent cases and discusses possible effects and changes, it also details the background and historical perspective of CFIUS, examines the foreign investment national security policies of other states, and discusses the growing importance of state-owned enterprises and economic and security concerns surrounding them.
https://news.usni.org/2018/07/17/report-congress-committee-foreign-investment-united-states-3
PHILIPPINES COULD BREACH US SANCTIONS IF RUSSIA ARMS DEAL PROCEEDS
Reuters claimed an exclusive on a story on 18th July claiming that the Philippines is at risk of breaching sanctions imposed by the US if it proceeds with the purchase of grenade launchers from a blacklisted Russian supplier – the $7.48 million purchase of 750 RPG-7B rocket-propelled grenade launchers from Russia’s state-owned Rosoboronexport. Russia has donated assault rifles and trucks to the Philippines but the grenade launchers would be its first purchase of Russian weapons. The Philippines has long relied on the US as its main source of military hardware and support.
KIDNAPPING FOR CRYPTO-RANSOM: THE LATEST FASHION OR HERE TO STAY?
An article from Control Risks on 18th July poses this question. It says that the first widely-reported kidnap for crypto-ransom occurred when kidnappers in January 2015 abducted a Canadian national living in Costa Rica and demanded $500,000 worth of Bitcoin. Control Risks has since recorded crypto-ransom kidnaps in 12 countries, as well as a gradual year-on-year increase in the number of reported cases. It warns that in most of these cases the kidnappers were able to competently exploit open source information to identify individuals whose crypto wealth had been publicly promoted and seek them out for kidnapping.
https://www.controlrisks.com/our-thinking/insights/kidnapping-for-crypto-ransom
UK ISSUES NOTICE ADVISING THAT 2 NAMES ADDED TO SOUTH SUDAN SANCTIONS LIST
On 18th July, HM Treasury issued a Notice saying that Malek Reuben Riak RENGU and Paul Malong AWAN had been added to its Consolidated List of persons and entities subject to sanctions. This follows the adoption of UN SCR 2428 on 13th July. The sanctions are imposed using the United Nations and European Union Financial Sanctions (Linking) Regulations 2017 and will lapse on 12th August unless confirmed by a EU Regulation before then.
US SEEKS RECORD $75 MILLION FROM MARKETER FOR STEERING VICTIMS TO ISRAELI BINARY SCAMS
The Times of Israel on 18th July reported that Florida-based Michael Shah allegedly sent traffic to Israeli-run binary options sites including LBinary, TraderXP, Trade Rush, Banc de Binary and OptionRally. The US government has asked a Florida court to impose some $75 million in fines and penalties – the largest the CFTC has requested so far from an alleged binary options fraudster. The alleged fraudster, Michael Shah, worked in tandem with call centres in Israel, the Commodities and Futures Trading Commission motion charges, and steered his American and other financial victims to numerous binary options websites based in Israel.
PODCAST: UN OFFICE ON DRUGS AND CRIME
In the latest TRACE podcast, Neil Walsh, Chief of Cybercrime, AML and Counter-Financing of Terrorism at the UNODC in Vienna, discusses the work that his department does to co-ordinate and advance international initiatives. In the TRACE podcast Alexandra Wrage explores the world of financial crime – corruption, fraud, money laundering and sanctions through interviews with investigative reporters, business people and prosecutors. She examines different angles of financial crime and explores what motivates people to break the law, how wrongdoers cover their tracks and what can be done to put a stop to the looting.
LONG ARM OF THE LAW: NEW POWERS TO GATHER ELECTRONIC EVIDENCE OVERSEAS USING PROPOSED OVERSEAS PRODUCTION ORDER (OPO)
On 16th July, Kingsley Napley published a briefing about the Crime (Overseas Production Orders) Bill that proposes OPO as a means to speed up the process of securing access to electronic evidence held outside the UK. The legislation is rapidly making its way through Parliament and, it says, has received little attention thus far. The article refers to a recent House of Lords briefing paper on the Bill and outlines the main points of the new law. It says that the Bill was debated in the House of Lords in a second reading on 11th July and is due to be discussed in committee stage of the House of Lords on 5th September.
EU AMENDS 2 ENTRIES ON NORTH KOREA SANCTIONS LIST
EU Regulation 2018/1009/EU amends 2 entries on the list of those subject to sanctions, with effect from 18th July, amending those for Ri Hong-sop (Former director, Yongbyon Nuclear Research Centre, and Head of Nuclear Weapons Institute) and the Munitions Industry Department (which is involved in key aspects of the DPRK’s missile programme). This follows a change made by the UN Sanctions Committee on 9th July.
See also EU Council Decision 2018/1016/CFSP.
On 18th July, HM Treasury issued a Notice advising of corresponding changes to UK sanctions lists.
UN AMENDS 2 ENTRIES ON ITS AL-QAIDA/ISIL SANCTIONS LIST
On 17th July, the relevant UN Sanctions Committee advised that it had amended the entries for Bahir Ayyub and for JEMMAH ANSHORUT TAUHID (JAT).
https://www.un.org/press/en/2018/sc13427.doc.htm
See also –
https://www.interpol.int/en/notice/search/un/5741655 and https://www.interpol.int/en/notice/search/une/5282133
The current UN Al-Qaida/ISIL list is at –
https://www.un.org/sc/suborg/en/sanctions/1267/aq_sanctions_list
and the current UN Consolidated List at –
http://www.un.org/sc/suborg/en/sanctions/un-sc-consolidated-list
UK BINARY OPTIONS CLAMPDOWN SEES ANOTHER FRAUDULENT ENTITY WOUND UP
Finance Feeds on 18th July reported that the High Court shut down Eclipse Finance Limited, incorporated in 2015 with a registered office in London. over false and misleading claims. The High Court heard that Eclipse was persuading people from Britain and all over the world to invest in a bogus binary options scheme. All investors lost significant sums, averaging over £50,000 each. Losses reported to Action Fraud totalled over £600,000. In October, the High Court wound up binary options scam firms behind magnum Options and in November, Metro Options Limited was wound up.
https://financefeeds.com/uk-binary-options-clampdown-sees-another-fraudulent-entity-wound/
HOUSE OF COMMONS COMMITTEE REPORT: UK ARMS EXPORTS IN 2016
On 18th July, this report was published. In it the Committee says –
- it is dissatisfied at the Government’s admission that no compliance audits are ever carried out in respect of UK companies’ operations overseas. The compliance-audit regime must be extended to cover such companies (where appropriate) as soon as practically possible;
- the Government should review the allocation of resources to HMRC in respect of export-control enforcement and provide data on current staff numbers and budget levels. It should also provide raw and base statistical data on numbers of investigations, reports for prosecution, prosecutions, convictions, fines, seizures, compound penalties and warnings in the last 10 years. It says that it is extremely disappointed at what it sees as a misrepresentation of data in this area in the most recent Annual Report;
- the Government should consider whether to begin end-use monitoring, which it believes would assist it in making more informed licensing decisions, as well as helping address compliance and enforcement;
- the case for an Open General Export Licence (OGEL) to cover “non-contentious” cryptographic goods merits serious attention by the Government;
- no benefit could be shown since the establishment of the Export Control Joint Unit (ECJU) – which brings together operational and policy expertise from the Department for International Trade, FCO and MoD. The Government should set out clear evidence to show the benefits brought by formation of the Joint Unit;
- the Government should address unnecessary delays and bureaucracy in the Open Individual Export Licence (OIEL) process; and it should show how they will be addressed in the design of the new Licensing for International Trade & Enterprise (LITE) online licensing system, which will replace the current SPIRE system;
- the Government should give formal consideration to DfID staff becoming part of the ECJU, given the Department’s particular role in advising on Criterion 8 (regarding sustainable development);
- the Government should set out clearly the grounds on which individual cases are selected for consideration at ministerial level and flag such cases in the Annual Report;
- the Government should review the proposal that there should be a “presumption of denial” in respect of open licences for exports to countries that have not signed the Arms Trade Treaty (ATT) or are on the FCO’s list of “Human Rights Priority Countries”, as set out in its Annual Human Rights Report;
- the Government needs to detail how it will deal with the effects of Brexit;
- the Government must provide in its Annual Reports information about where enforcement action has been taken against “brass-plate” companies engaged in brokering (trade control) activities; and keep under review its current powers to wind up such companies;
- the brokering of Category C items is only subject to trade control where it is carried on from within the UK. The application of extra-territoriality should be extended to brokerage of Category C items and the Government must set out a plan and a timetable for implementing this. Category C covers a wide range of military and paramilitary goods, explosives and explosive-related goods;
- the Government must publish in its Annual Reports the names of any individuals or companies against whom it has taken action under the provisions of the Bribery Act 2010 in relation to arms-export dealings or financing related to such dealings.; and
- the Government must also give formal consideration to the creation of an additional licensing Criterion relating to corruption.
https://publications.parliament.uk/pa/cm201719/cmselect/cmquad/666/666.pdf
OTHER THINGS YOU MAY HAVE MISSED – JULY 17
17th July 2018
US ECONOMIC SANCTIONS: MID-YEAR REVIEW
On 13th July, Bloomberg BNA published this summary highlighting –
- the US withdrawal from the JCPOA;
- new Russian and North Korean sanctions listings;
- new Venezuela sanctions;
- Magnitsky Act and Global Magnitsky sanctions for human rights abuses;
- Enforcement trends – settlement with Ericsson, ZTE; and
- Future enforcement – Media reports indicate that OFAC is in discussions with a Zimbabwean bank regarding a settlement in which the financial institution would pay hundreds of millions of dollars to resolve its potential liability.
https://www.bna.com/insight-us-economic-n73014477450/
US BLOCKS AIRCRAFT DELIVERIES TO IRAN AS EUROPEAN APPEAL FAILS
AIN Online on 16th July reported that the US government has rejected an appeal by the EU to allow some exemptions to economic sanctions against Iran that the Trump Administration announced following its withdrawal from the JCPOA. The decision, now confirmed by US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, blocks efforts by ATR and Airbus to deliver new airliners ordered by Iran Air after earlier sanctions were lifted.
$10 MILLION WORTH OF SMUGGLED BEER BUSTED IN CHINA
The Drinks Business on 16th July reported that customs officials in eastern China have broken up a beer smuggling ring leading to the discovery of $10.46 million worth of beer, the largest beer seizure in years. This happened at the same time as the World Cup when demand for beer in China saw a sharp increase from football fans watching the games. Also leading brewers in mainland China including Snow, Yanjing, and Tsingtao raised their prices for both bottled and canned beers by around 10% to 20% as a result of growing labour costs and rising cost of raw materials. A Fujian-based company in southern China has found to be deliberately under declaring imported beers including brands such as Heineken and Belgium’s Rochefort, and selling imported beers in cities in Zhejiang, Shanghai and Guangzhou. China is already the world’s biggest beer consumer by volume. Snow Beer, Tsingtao, Beijing Yanjing, Budweiser, and Carlsberg account for about 80% of China’s beer market.
https://www.thedrinksbusiness.com/2018/07/us10-million-worth-of-smuggled-beer-busted-in-china/
DEFERRED PROSECUTION AGREEMENTS: 5 YEARS ON, WHAT HAVE WE LEARNED?
On 16th July, Penningtons Manches LLP published an article reviewing the situation about DPA in the UK after the first 5 years of use, and the trends that have appeared in the, albeit few, cases to date. It concludes that it seems unlikely that DPA will proliferate throughout the English legal system as a readily available means of disposing of wrongdoing, though use may well however grow in certain areas of serious criminal conduct.
FINTECH FIRM REVOLUT REPORTS SUSPECTED MONEY LAUNDERING TO UK AUTHORITIES
WebFG on 17th July reported that Revolut, the UK’s fastest-growing financial technology company, has reported a spate of suspected money laundering to the UK authorities. It launched 3 years ago to take on the UK’s banks with prepaid cards and payment services. It then diversified into cryptocurrency and small business services.
https://uk.webfg.com/news/news-and-announcements/talktalk–3398747.html
IRELAND: 2 FRAUDSTERS TOLD THEY MUST PAY €23,000 FOR PRIVATE DETECTIVES WHO TRACKED THEM DOWN
The Journal in Ireland on 17th July reported that a judge has directed that 2 fraudsters pay the €23,000 expenses a car rental company invested in tracking them down to their own front doors. Hertz Rent-a-Car had sought to prove the 2 Lithuanians had been part of a €180,000 fraud.
VENEZUELA HAS SEIZED 16 TONS OF DRUGS IN 2018 SO FAR
Bernama.com on 17th July reported that Venezuelan authorities have seized 16 tons of illicit drugs so far this year. Venezuela has also deported several foreign drug cartel chiefs who were arrested in the country, as part of a crackdown.
http://www.bernama.com/en/world/news.php?src=ilaw&id=1480990
MYANMAR: DOZEN CUSTOMS OFFICIALS CHARGED AFTER BRIBERY COMPLAINT
The Myanmar Times on 17th July reported that a dozen customs officials have been charged with taking bribes from vehicle importers at a port in Yangon after the Anti-Corruption Commission looked into a complaint.
https://www.mmtimes.com/news/dozen-customs-officials-charged-after-bribery-complaint.html?src=ilaw
HONG KONG TRADE FINANCE TO FIGHT FRAUD WITH A BLOCKCHAIN-BASED PLATFORM
CCN.com on 17th July reported that the Hong Kong Monetary Authority (HKMA) has partnered with Chinese Ping An to release a blockchain-based trade finance platform. The joint effort is expected to speed-up the process and prevent fraud. A total of at least 21 banks involved in the enterprise, and each of them will share ownership in the platform. Although trials for the platform began in December and the announcement happened in late March, only now is the HKMA ready to finally launch it, which will occur in August. The system will automatically check the validity of all transactions, as well as all parties involved — the amount of paperwork required will drastically decrease, and the time taken to process transactions will be drastically reduced.
VENEZUELA OFFICIAL PLEADS GUILTY IN US TO ROLE IN PDVSA BRIBE SCHEME
The VoA on 16th July reported that Luis Carlos De Leon Perez, 42, a former official at a Venezuelan state-run electric company pleaded guilty to US charges that he participated in a scheme to solicit bribes in exchange for helping vendors win favourable treatment from state oil company PDVSA and conspiring to violate the Foreign Corrupt Practices Act commit money laundering. He became the 12th person to plead guilty as part of a larger investigation by the DoJ into bribery at Petroleos de Venezuela SA that became public with the arrest of 2 Venezuelan businessmen in December 2015.
ARMENIAN SECURITY SERVICE REVEALS LARGE CORRUPTION SCHEME TO EXEMPT CONSCRIPTS FROM MILITARY SERVICE
On 16th July, the Public Radio of Armenia reported that the Armenian National Security service has revealed a corruption scheme, involving citizens, officials, doctors and staff of military commissariat. It is said that, in exchange for bribes of up to $14,000, the latter organised the release or determent of about 40 conscripts from military service on grounds of false diagnosis.
WHAT IS “SOVEREIGN IMMUNITY”?
Law firm Allen & Overy has issued a bulletin that highlights key points to consider, particularly when drafting or reviewing a sovereign immunity waiver clause, from an English law perspective. Sovereign immunity is the immunity of foreign states (and separate entities exercising sovereign authority) under English law. This affords a broad immunity to foreign states from the jurisdiction of the English courts to hear a dispute and reach a judgment; to recognise a foreign judgment or arbitral award; and to order injunctive relief, specific performance or other execution of any judgment or award against a state’s assets, unless one of the exceptions in the State Immunity Act1978 applies. In addition, the common law principle of “non-justiciability” can be applied by the English courts – such as where proceedings would require a court to consider the territorial claims of different states and where English courts would not hear these proceedings. Some international or European organisations may also have immunity and special privileges pursuant to separate legislation or treaties. The bulletin details the key exceptions to sovereign immunity.
http://www.allenovery.com/SiteCollectionDocuments/Sovereign-Immunity.pdf
THE WCO PRESENTS ITS STUDY REPORT ON ILLICIT FINANCIAL FLOWS
On 16th July, the World Customs Organisation presented its study report on illicit financial flows (IFF) to the Development Working Group (DWG) of the G20, at its 2nd meeting held in Tucumán, Argentina, on 12th July.
HOLDING COMPANIES CRIMINALLY LIABLE FOR HUMAN RIGHTS ABUSES?
Corker Bining on 17th July posted a blog item saying that the idea of holding companies criminally liable for human rights abuses committed overseas has gained traction over the past decade. In 2011, the UN Guiding Principles on Business and Human Rights (aka the Ruggie Principles) encouraged states to legislate so that companies within their jurisdiction respect human rights. In the UK, in 2017 the Joint Committee on Human Rights recommended the imposition of a duty on companies to prevent human rights abuses and the creation of a criminal offence of failing to discharge that duty, but the government in its response said it had no immediate plans to legislate further. The article asks if the government can maintain this position.
https://www.corkerbinning.com/holding-companies-criminally-liable-for-human-rights-abuses/
VIDEO OF US ARMS EXPORT FLOWS 1950-2017
This video details US weapons exports from 1950 to 2017. Data comes from the Stockholm International Peace Research Institute’s Arms Transfers Database with units are expressed in trend indicator values (TIV). Each dot on the map = 1 TIV. Visualization is by Will Geary.
https://vimeo.com/279923192?quality=1080p
THAILAND CONFIDENT TO BAN ILLEGAL FISHING AND FORCED LABOUR BY END OF YEAR, SAYS AMBASSADOR
EurActiv on 17th July reported that Thailand aims to become free from illegal fishing and forced labour by the end of this year, Virachai Plasai, the Thai ambassador and head negotiator on illegal, unreported and unregulated (IUU) fishing. In 2015, the EU had given Thailand a “yellow card” warning about IUU, meaning it risked retaliatory action. This move had been part of the policy of only allowing fisheries products that have been properly certified as legal to enter the EU, the world’s biggest fish importer. The ambassador pointed out a change in the mindset which he said was taking place in Thailand, and a new law enacted in 2015.
HOW UNSTABLE IS OIL PRODUCTION IN LIBYA AND WHAT IS ITS POTENTIAL?
On 17th July, Defence Web carried an article about difficulties affecting the production of oil in Libya. It says that, after a relatively stable spell, Libya’s oil production seesawed because of a stand-off at eastern export terminals and the abduction of 2 workers at Sharara oilfield. Military clashes forced the National Oil Corporation to close 4 terminals in June and July. The ports reopened on 11th July, and production restarted in another oilfield – but was hit in another due to the kidnapping. It says that the risk of further output shocks lingers while Libya remains politically and militarily divided. The article also poses the question: what is Libya’s potential? It says that Libya has the largest proven reserves of oil in Africa and that last year the NOC outlined plans to raise production to 2.2 million bpd by 2023 – but said this would need around $18 billion of investment. Foreign oil companies including Italy’s Eni, Total of France, Austria’s OMV and US firms ConocoPhillips and Hess have production stakes through joint ventures with the NOC.
INDIA AND US HOLD TALKS ON PROPOSED US SANCTIONS AGAINST IRAN
Livemint and others on 17th July reported that India and the US have agreed to continue consultations on the proposed US sanctions on Iran, a day after an Iranian deputy foreign minister visited New Delhi for discussions on pressing ahead with energy and connectivity co-operation. The sanctions would mean India looking for a new supplier of oil to replace its third-largest source of energy after Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil between April 2017 and January 2018. The article says that analysts in India were of the view that India would not be able to resist the impact of US sanctions but they were divided in their view on whether India would be able to insulate Chabahar Port (which it wants to develop as a gateway to the landlocked Afghanistan and Central Asia) if it cut down on oil imports.
PODCAST: A GUIDE TO THE RUSSIAN MAFIA
From blue-tattooed psychopaths to “businessmen” with a twist, Russia’s vory developed a code all their own – if you can call it that. Mark Galeotti takes us through the history of Russia’s mafia and how that history helped to shape Vladimir Putin’s state. For a more detailed look, check out his book “The Vory: Russia’s Super Mafia”. This 50-minute podcast from War College provides an interesting interview with the knowledgeable Galeotti.
https://www.acast.com/warcollege/yourhandy-dandyguidetotherussianmafia
SOUTH AFRICA: VBS BANK 101 – FROM THE MASTERMINDS TO THE MASS FRAUD
On 17th July, Fin24 in South Africa provided an article on the background to the collapse of the VBS bank, where 1.5 billion Rand is said to have been stolen leaving more than 22,000 depositors in the lurch and has revealed explosive and wide-ranging allegations against several individuals. The South African President has described the case as a shock and a travesty of trust. The bank is said to have been the victim of a large-scale fraud. VBS was founded in 1982 and originally operated as the Venda Building Society. In October 2000, it was granted a permanent bank licence and it is one of 3 mutual banks in South Africa. Vele Investments became a majority shareholder of VBS, allegedly through fraudulent means, in March 2017. 3 individuals have been named as the “controlling minds” behind the saga, one being the financial adviser to the Venda king and had founded Vele Investments with the king.
BELARUS LAUNCHES NEW EFFORT TO LEGALISE ONLINE GAMING
i-Gaming Business on 17th July reported that the Minister of Taxes and Levies in Belarus, has put forward a new Bill in the latest effort to legalise and regulate online gaming in the country. The Bill is said to make reference to a state-run online gambling portal that will oversee tax management in the gambling sector. It is estimated that Belarus could rake in as much as $6 million in tax within the first 3 years of a regulated online gaming service.
http://www.igamingbusiness.com/news/belarus-launches-new-effort-legalise-online-gaming
UK HAS 3-YEAR PLAN FOR GAMBLING INDUSTRY
On 17th July, the Intergame website reported that the UK Gambling Commission’s chairman has set out his organisation’s 3-year mission to “treat the consumer more fairly” in the just-released Annual Report. He said that there are 5 strategic priorities: protect the interests of consumers; prevent harm to consumers; raise standards; optimise returns to good causes from lotteries; and improve the manner of regulation. He also mentioned a statutory levy on the industry to fund research, education and treatment.
https://www.intergameonline.com/casino/news/uk-has-three-year-plan-for-industry
BANGLADESH DRUG WAR DEATH TOLL HITS 200
Channel News Asia reported on 17th July that a local human rights group claimed that 200 people had been killed and 25,000 alleged dealers jailed in the course of a crackdown since May on the surging trade in “yaba”, a cheap methamphetamine and caffeine pill, which authorities say has spread to almost every village and town. It says that Bangladesh has struggled to contain the trade in “yaba”, with hundreds of millions of pills entering the country from Myanmar. Authorities last year seized a record 40 million pills but said an estimated 250 million to 300 million more entered the market.
https://www.channelnewsasia.com/news/asia/bangladesh-drug-war-death-toll-hits-200-rights-group-10537600
CHINA EXPANDS SURVEILLANCE OF SEWAGE TO POLICE ILLEGAL DRUG USE
Scientific American reported on 16th July that dozens of cities across China are applying an unusual forensic technique to monitor illegal drug use: chemically analysing sewage for traces of drugs, or their telltale metabolites, excreted in urine. Illegal drug use has been monitored through wastewater-based epidemiology (WBE) in other countries, including Belgium, the Netherlands, Spain and Germany, but most studies have collected data for epidemiological research rather than for setting policies. A 2016 study in 8 European cities found a strong correlation between the amount of cocaine detected in waste water and data from drug seizures. However, in the case of metamphetamines the correlation was not as strong.
LANDMARK US LEGAL SHIFT OPENS PANDORA BOX FOR DIY GUNS
Wired.com in its 18th July edition reports on the recent decision of the DoJ to give up on the case where it had sought to argue that uploaded printable files showing how to make 3D-printed firearms and components to the Internet was the same as producing and exporting actual weapons and their parts. Lawyers for Cody Wilson had argued that by forbidding Wilson from posting his 3D-printable data, the State Department was not only violating his right to bear arms but his right to freely share information – and hence both the First and Second Amendments to the US Constitution. The article links the change to the changes in US arms exports rules for weapons of less than 0.5in calibre (with a few exceptions like fully automatic weapons and rare gun designs that use caseless ammunition) that this gives Wilson and his ilk a licence to publish data about those weapons anywhere they choose. Wired says that non-profit founded by Wilson, Defense Distributed, has relaunching its website Defcad.com as a repository of firearm blueprints created and collected, from the original one-shot 3D-printable pistol to AR-15 assault rifle frames and more exotic DIY semi-automatic weapons. The relaunched site will be open to user contributions, too; Wilson hopes it will soon serve as a searchable, user-generated database of practically any firearm imaginable.
https://www.wired.com/story/a-landmark-legal-shift-opens-pandoras-box-for-diy-guns/
KASHMIR: 70 YEARS OF DISPUTES
The EU Parliament Research Service has produced a briefing paper on the history of, and current situation in, Kashmir, the volatile border region of India and Pakistan. The dispute dates back to 1947, when the regional leader opted to join India, despite the province being Muslim-majority, and so logic would have dictated it become part of the new Pakistan. The province also borders China – which has fought India in two wars since WW2 and is a traditional ally of Pakistan. It has been the site of continual, and continuing, civil unrest and military and terrorist activity, and confrontation between India and Pakistan.
http://www.europarl.europa.eu/RegData/etudes/ATAG/2018/625135/EPRS_ATA(2018)625135_EN.pdf
ITALIAN POLICE SEARCH THE GAUDY HOMES OF MAFIA MOBSTERS AS 31 MEMBERS OF ROME’S NOTORIOUS CASAMONICA CLAN ARE ARRESTED IN HUGE CRACKDOWN
The Mail Online on 17th July published a report, complete with fascinating photos, saying that the carabinieri has arrested 31 members of the powerful Casamonica mafia in a series of raids across Italy, including one of the alleged heads of the organised crime unit: Giuseppe Casamonica. Charges relate to drug trafficking, extortion and loan sharking. Photos show officers leafing through expensive-looking goods in gaudy properties with gilded and marble furniture. The raids took place in parts of Rome, as well as Reggio Calabria and Cosenza further south in Italy. The founder, Vittorio Casamonica, died in 2015, having founded the clan in the 1980s (and at his funeral the Godfather film theme was played by an orchestra…).
GREECE POSTPONES EXTRADITION HEARING FOR ALLEGED GEORGIAN CRIME BOSS
Rferl on 17th July reported that the Greek Supreme Court has postponed to 20th July an extradition appeal hearing for Lasha Shushanashvili, 57, a Georgian citizen who is alleged to be the head of an international crime ring after the suspect complained of feeling unwell and made his court appearance in a wheelchair. Shushanashvili, suspected of leading a network that specialized in burglaries and robberies, was arrested in Thessaloniki in April along with 13 other people in co-ordination with French authorities. Another 17 suspected ring members have been arrested in France, which is seeking Shushanashvili’s extradition.
THE GLOBAL TERROR NETWORK THAT STARTED IN PONTYPRIDD, WALES
On 16th July, the BBC published an article about a terror network established in south Wales which is suspected to have been an elaborate and sophisticated operation. BBC Wales Investigates reveals the complex web which began with the arrival in Pontypridd of a “vulnerable looking” computer engineering student from Bangladesh in 2000. The network is suspected of a number of attacks in Bangladesh. The cell was started by respected south Wales businessman, Siful Sujan, who had companies based in Cardiff. The US military said he was a key figure in the so-called Islamic State, before he was killed by a US drone strike in Syria in 2015. The FBI says that a Welsh company, Ibacstel Electronics, was sending money to the US to fund plans for a bomb attack there; and it was also buying military-grade equipment which was being sent to Islamic State fighters.
CHELTENHAM-WINNING HORSE “BOUGHT WITH PROCEEDS OF CRIME”
The Irish Times on 17th July reported that the career of a Cheltenham-winning horse at the centre of a proceeds of crime case has ended due to an injury after it was raced following the freezing of its ownership by the criminal Assets Bureau (CAB). John Boylan, 32, aka John Power is contesting the CAB claim he became the 90% owner of the horse, Labaik (which won the 2017 Supreme Novices Hurdle, and a prize of €125,000), through the proceeds of crime.
EU REGULATION PROVIDING FRAMEWORK FOR SANCTIONS ON MALDIVES
EU Regulation 2018/1001/EU and Decision 2018/1006/CFSP came into force providing a framework for the imposition of sanctions that would impose the freezing of funds and economic resources of certain persons, entities or bodies responsible for undermining the rule of law or obstructing an inclusive political solution in the Maldives, as well as persons and entities responsible for serious human rights violations or abuses in the Maldives. No names were designated (any names would be listed in an Annex to the Decision if, or when, required). Though no-one was designated, the Regulation and Decision permit the rapid targeting of persons should the situation in the Maldives not improve, or should it deteriorate.
UK GOVERNMENT LAUNCHES CONSULTATION ON OPEN JUSTICE
Out-Law on 16th July reports that a consultation paper issued by the MoJ is seeking to clarify the rules governing when litigation should be heard in private, in a bid to safeguard the principles of open justice. The changes are designed to clarify open justice requirements in relation to hearings in private, as well as reporting restrictions. The revised rule makes it clear that hearings should be held in public unless the court is satisfied that one of several conditions is met, such as in matters of national security. The MoJ is proposing to introduce a duty on the court to make a copy of the order directing the hearing to be heard in private available online. The consultation closes on 23rd August.
https://www.out-law.com/en/articles/2018/july/uk-government-launches-consultation-on-open-justice/
The consultation, launched on 12th July, is available at –
GERMAN CASTLE EXPROPRIATED FROM RUSSIAN OWNER
Deutsche Welle on 16th July reported that a wealthy Russian owner suspected of money laundering left the medieval property in disrepair, so Thuringia, a state in east-central Germany, used a historical preservation ordinance to take charge of the historic Reinhardsbrunn castle. BOB Consult GmbH purchased the castle for €25,000 in 2006. 2 years later, the company – along with the castle – was acquired by Russian investors with plans to transform the building into a luxury hotel. In 2009, Igor Chartshenko, owner of a Russian construction company, bought BOB Consult for €12 million. But authorities suspected the investment was made to launder money and Russia’s commercial register showed that in 2008 Chartshenko’s company had posted zero revenue. Where the money was sourced from raised eyebrows. Chartshenko secured a huge loan in the name of BOB Consult Gmbh itself from a Belize company, Albany Property SA, which was under the ownership of another Russian family. German authorities told Deutsche Welle that both the buyer and seller of the site were investigated for money laundering but that the case was shelved and there was no cooperation with Russian authorities on the investigation, the German state prosecutor added.
https://www.dw.com/en/german-castle-expropriated-from-russian-owner/a-44701607
SEC “STOPS KODAK BITCOIN MINING MACHINE SCAM”
On 16th July, the Investopedia blog reported that a Kodak-branded Bitcoin mining computer was labelled as Kodak and shown at the Consumer Electronics Show (CES) in Las Vegas earlier this year was described as a “scam” and SEC prevented its sale. The programme was never officially licensed to use the brand name. To mine the cryptocurrency, the computer solves complicated mathematical problems that work to verify crypto transactions. It was said that you could use for 2 years for a rental fee that equipment cost, air freight, export licence, customs clearance and customs duties. However, critics, after doing the maths involved, determined that one could not actually make it pay. Now the company behind a Kodak-branded crypto-currency mining scheme has confirmed the plan has collapsed, reports the BBC.
https://www.investopedia.com/news/sec-stops-kodak-bitcoin-mining-scam/
OTHER THINGS YOU MAY HAVE MISSED – JULY 16
16th July 2018
US SANCTIONS WOULD BAR USE OF LLOYDS OF LONDON IT PLATFORM FOR IRAN TRADE
KYC 360 on 16th July reported that new US sanctions are likely to prevent the use of a Lloyd’s of London IT platform (partly owned since last year by US company, DXC) for any Iran insurance, adding to difficulties for European insurers providing cover for the country.
https://kyc360.com/news/u-s-sanctions-seen-barring-platform-insurer-lloyds-iran-trade/
TRANSNATIONAL ORGANISED CRIME AND ILLEGAL FISHING HIGHLIGHTED ON THE INTERNATIONAL DAY AGAINST IUU FISHING
ENACT Africa on 5th June reported on the first International Day for the Fight against Illegal, Unregulated and Unreported fishing (IUU fishing), saying that IUU fishing is affecting livelihoods and fuelling transnational organised crime at sea and that over 1 billion people worldwide depend directly on fisheries for their livelihoods and protein intake. It says that, beyond its ecological and developmental implications, however, a much-overlooked consequence of IUU fishing is the increasing transnational criminality it attracts. Unemployed or impoverished fishermen, in particular, are easily recruited to use their skills and equipment for maritime-based crimes. Many voluntarily join transnational criminal networks to transport drugs or arms by sea, while others are forcefully sent on fishing expeditions on the high seas and used as slaves on trawlers, particularly across SE Asia.
UK GOVERNMENT POLICY ON VISAS FOR NON-EEA WORKERS ON INSHORE FISHING VESSELS
The House of Commons Library produced a briefing paper on 13th July in anticipation of a Westminster hall debate. It outlines the position on visas in general transit visas for crew entering the UK to join a vessel and shore leave.
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CDP-2018-0184
TIME TO EASE SANCTIONS ON RUSSIA?
On 16th July, ETH Zurich issued a paper suggesting that Western sanctions imposed against Russia following Crimea’s annexation have been a partial success. They displayed Western unity and somewhat constrained Russian action in Eastern Ukraine. However, the sanctions have also alienated the Russian population, strengthened President Putin domestically and failed to bring Russia to the negotiating table. As a result, the authors argue it’s time for Europe to alter its strategy and allow for an easing of sanctions, if Russia first takes de escalatory steps in Ukraine.
EU LEVY ON CHINESE TYRES FUELS UK RETREAD MARKET
Commercial Motor on 13th July reported that the demand for retreaded tyres is soaring after the European Commission introduced a levy on tyres imported from China on 7th May that equates to €52.85 or €82.17 per tyre. Bridgestone is said to be scaling up production at its Bulldog retread factory in Lincolnshire by 25% to meet the increased demand.
https://www.commercialmotor.com/news/product/eu-levy-chinese-tyres-fuels-uk-retread-market
US SECONDARY SANCTIONS DEVELOPMENT
An article from White & Case on 13th July on how US export control and sanctions can affect Taiwanese companies includes an interesting diagram that shows the development of so-called US secondary sanctions. The article explains that secondary sanctions target “sanctionable activities” by non-US persons outside the US, such as trade with North Korea or dealings with designated Iranian parties. Direct civil or criminal monetary penalties for violations of secondary sanctions are not the point, because the violation, by definition, lacks a connection to the US or US persons. However, other enforcement measures can be just as serious, if not more so, as the US authorities can blacklist the foreign violator, thereby closing or restricting the violator’s access to US commercial and financial markets. Secondary sanctions thus operate as a powerful deterrent against dealings by non-US persons with US-sanctioned countries or blocked parties. It says that since 2010 US secondary sanctions have increased both in scope and frequency of enforcement.
UK: REPORTING RESTRICTIONS ‘PREVENT SCRUTINY’ OF ECONOMIC CRIMES
The Guardian on 16th July carried an article reporting that excessive court reporting restrictions, inadequate listing information and difficulties in obtaining documents are preventing scrutiny of economic crimes and bribery cases, according to a report by Corruption Watch UK. A high proportion of hearings are effectively being heard in private because of tight legal controls, and fraud trials are disproportionately affected by such court orders, the study said. It claims that the SFO is currently unable to publicise 2 major corporate guilty pleas because of blanket reporting restrictions.
UK: THE SCALE AND NATURE OF FRAUD: A REVIEW OF THE EVIDENCE
On 16th July, the Home Office released a set of slides which detail findings from an evidence review undertaken by Home Office Analysis and Insight to bring together what is known about the scale and nature of fraud affecting individuals and businesses in the UK. The aim of the review was to help establish the current state of the evidence base on fraud and identify new areas for research. It draws upon literature from academia and industry, and data from official sources including new data from the Crime Survey for England and Wales.
IRISH COMPANY DIRECTOR GETS 10 YEARS FOR ARSON AND ATTEMPTED FRAUD
The Irish Times on 16th July reported that David Healy, 47, from Cork has been given a 10-year suspended jail sentence for arson and attempted fraud. He set fire to his business after increasing his insurance cover. He had denied a charge of arson that caused €200,000 worth of damage at Munster Air Compressors – a company of which he was a director, in 2014.
FORMER SPANISH KING’S EX-MISTRESS SAYS HE LAUNDERED MONEY
The Digital Journal in Canada on 16th July carried a story saying that Corinna zu Sayn-Wittgenstein, the former mistress of Spain’s former king Juan Carlos claimed he was involved in money laundering, sparking calls for an investigation.
http://www.digitaljournal.com/news/world/former-spanish-king-s-ex-mistress-says-he-laundered-money/article/527218#ixzz5LRp3bsNT
MONTENEGRO: EX PRESIDENT MAROVIC HAD MILLIONS ON SECRET SWISS ACCOUNT
OCCRP on 16th July reported that Swiss authorities have confirmed to Montenegro’s Prosecution Office that the wife of former President Svetozar Marovic had millions in an HSBC account in Switzerland at the time when he denied the family even had an account and offered the money alleged to be on it to anyone who proves it exists. It tells us that Marovic and his son were jailed during an investigation in 2015 into a corruption case and Marovic was suspected of having led an organised criminal group that stole tens of millions of euro from the municipality of Budva. Both were released pending trial but the family moved to Belgrade and remain out of the reach of Montenegrin authorities.
BROCHURE: UK SPACEFLIGHT PROGRAMME
On 16th July, the UK Space Agency, CAA and DfT published this brochure which says it is a guide to the UK spaceflight programme which aims to enable commercial markets for regular, reliable and responsible access to space from UK spaceports; and explains how the UK Space Agency, Department for Transport and Civil Aviation Authority are working together to deliver the UK Spaceflight Programme, which will enable the growth of this market in the UK.
https://www.gov.uk/government/publications/brochure-uk-spaceflight-programme
FRAUDSTER MADE MORE THAN £750,000 SELLING KODI BOXES PROVIDING ILLEGAL ACCESS TO PREMIER LEAGUE FOOTBALL AND MOVIES: JAILED FOR MORE THAN 3 YEARS
The Mail Online on 15th July reported that John Haggerty, also known as Gilfillan, was the prime mover in a husband and wife scam lasting 2 years. Haggerty had multiple passports in different names and set up an offshore ‘dummy company’ in Nevis to hide the true purpose of his business and, in collusion with his wife, supplied the Immigration Service with false documents to sponsor an Egyptian national who maintained the illegal streaming service for the company. He ran the scam through a business called Evolution Trading. He has been jailed for 5 years and 3 months for conspiracy to defraud, and his wife, Mary Gilfillan, was given a suspended prison sentence for her lesser role.
THE 2017 LIFTING OF US SANCTIONS ON SUDAN: RATIONALE AND REALITY
In October 2017, the US lifted 3 of the most significant components of its sanctions regime against Sudan as part of a shift in bilateral relations. A report from HSBA describes the specific sanctions changes, their stated rationales, and their documented and likely future effects on Sudan’s internal conflicts, particularly in Darfur. HSBA is the Human Security Baseline Assessment for Sudan and South Sudan, a multi- year project administered by the Small Arms Survey. It was developed in cooperation with the Canadian government, the UN Mission in Sudan, the UN Development Programme, and a wide array of international and Sudanese partners. The report finds that although the sanctions themselves had a broad impact on Sudan’s economy, they did not consistently hinder key regime functions, including government institutions’ ability to transact in US dollars, obtain US-origin goods and services, and acquire military and dual-use materiel. It also says that the easing of sanctions effectively reflects international acceptance of Sudan’s longstanding strategy of seeking militarised counter-insurgency solutions. It comments on the government’s neglect of formal peace processes in favour of moving directly to ‘post-conflict’ civilian disarmament—which is being implemented by a militia, in violation of the UN arms embargo, and being used as a counter-insurgency instrument—and placing pressure on internally displaced persons to return home. The easing of sanctions is likely to legitimate these tactics.
http://www.smallarmssurveysudan.org/fileadmin/docs/reports/HSBA-Report-Sudan-Sanctions.pdf
BLOCKCHAIN IN INTERNATIONAL TRADE
A briefing paper from the EU Parliament Research Service on 16th July says that whilst initially used for digital currencies, most research into blockchain technology has been carried out for the finance industry. In recent years, however, research and development on supply chains and trade-related business processes have also gained ground. Start-ups and large companies have already exploited a wide range of blockchain-based applications in these areas, but the opportunities generated by this technology in international trade have yet to be fully exploited. It examines blockchain opportunities in trade-related areas, and examples of blockchain-empowered applications in trade, as well as challenges presented by blockchain technology – including data protection issues, cross-border data movements, the legal validity and enforcement of contracts, and there is a need for a harmonised regulatory approach.
http://www.europarl.europa.eu/RegData/etudes/ATAG/2018/625130/EPRS_ATA(2018)625130_EN.pdf
US REGULATOR CFTC ISSUES NEW CUSTOMER ADVISORY ON DIGITAL TOKENS – USE CAUTION AND RESEARCH BEFORE BUYING
Mondo Visione carried a new advisory from the Commodity Futures Trading Commission (CFTC) in the US which warns customers to use caution and do extensive research before purchasing virtual coins or tokens, including those that are self-described as “utility coins,” or “consumption coins”. This is the 4th advisory about virtual currencies the CFTC has issued to give customers a greater understanding of virtual currencies. The other 3 advisories are –
- Beware virtual currency pump and dump schemes
- Beware of “IRS approved” virtual currency IRAs
- Customer Advisory: understanding the risks of virtual currency trading
The latest advisory is available at –
https://www.cftc.gov/sites/default/files/2018-07/customeradvisory_tokens0718.pdf
RUSSIAN BUSINESSMAN “BEHIND UNREST IN MACEDONIA”
OCCRP on 16th July carried an article claiming that a Russian billionaire living in Greece has given hundreds of thousands of euros to Macedonian opponents of the country’s proposed name change. The recipients include football hooligans who have rioted in the capital. Evidence appears to show that at least €300,000 was given to opponents of the renaming by Ivan Savvidi, a Russian billionaire living in Greece who was formerly a member of the Russian parliament. Georgian-born Savvidi, also known as Savvidis, made his fortune in the privatisation of what would become Russia’s largest tobacco company and is one of Russia’s wealthiest businessman, with an estimated wealth of $2 billion. After moving to Greece in the mid-2000s, he purchased the PAOK football club and various media outlets, and his business empire now dominates the country’s second city of Thessaloniki. Russia has also been implicated in protests in Greece over Macedonia’s name change, and Greece has expelled 2 Russian diplomats for paying opponents of the name deal and encouraging rallies against it. It also banned 2 other Russian diplomats from entering the country. Moscow has denied the claims.
IMMIGRATION GUIDANCE FOR UK COMMON TRAVEL AREA (CTA)
On 16th July, the Home Office published UK Visas and Immigration guidance for staff on the CTA, including its legal basis, instructions and requirements for people travelling to and within the CTA and in-country encounters. It explains that the CTA is an administrative arrangement between the UK, Ireland and the Crown Dependencies (Isle of Man, Guernsey and Jersey) which is implemented in UK domestic law in statute. The Crown Dependencies are not part of the UK but are self-governing dependencies of the Crown. This means they have their own directly elected legislative assemblies, administrative, financial and legal systems and their own courts of law. The CTA was developed to facilitate the principle of free movement for British and Irish citizens between the UK, Ireland and the islands. It ensured that British and Irish citizens continued to benefit from a mutual enjoyment of rights. There are no routine passport controls on routes from within the CTA to the UK. The UK approach, based on the UK legal framework, is for border checks to be undertaken at the first point of entry to the CTA.
https://www.gov.uk/government/publications/common-travel-area
NEW DRC ARMY CHIEF IS ON SANCTIONS LISTS
Defence Web on 16th July reported that President Joseph Kabila of the Democratic Republic of Congo has appointed a new army chief, General John Numbi, who is under international sanctions for violent repression of dissent, raising fears of a crackdown. The new inspector general of the Congolese Armed Forces is under sanctions by the US, EU and Switzerland for alleged killings of scores of civilians by forces controlled by him over several years. At the same time, a General Gabriel Amisi, also under sanctions for abuses and selling weapons to rebel groups responsible for massacring civilians, was promoted to army deputy chief of staff. The changes come as elections are due for 23rd December.
EU PREPARES FOR POSSIBLE SANCTIONS ON MALDIVES
On 16th July, a news release from the EU Council said that the Foreign Affairs Council adopted a framework for targeted restrictive measures against persons and entities responsible for undermining the rule of law or obstructing an inclusive political solution in the Maldives as well as persons and entities responsible for serious human rights violations. This decision makes it possible, if the situation does not improve, to impose a travel ban and an asset freeze on relevant individuals and entities. In other words, the EU is ready to impose sanctions if things in the Maldives do not improve. In February, the EU had expressed concern about developments in the Maldives and had called for a lifting of the state of emergency, which had been imposed after the Supreme Court had overturned criminal convictions against 9 of the President Abdulla Yameen’s opponents (including a former president). The President ordered the arrest of 2 judges of the court and an aide on terrorism charges. The state of emergency was lifted in March but tension remains. Following the crackdown on dissent by the government.
EU ADDS 1 NAME TO ITS AL-QAIDA/ISIL SANCTIONS LIST
On 16th July, EU Regulation 2018/999/EU added Rabah TAHARI (a.k.a. Abu Musab), an Algerian national, to its sanctions list with effect from 16th July.
On 16th July, HM Treasury also published a Notice advised that the name had been added to the UK Consolidated List.
GIBRALTAR WELCOMES RHIB BAN BY SPANISH GOVERNMENT
A news release from the Gibraltar Government on13th July reported that Gibraltar welcomes the decision of the Spanish Cabinet to ban Rigid Hull Inflatable Boats (RHIB). These types of boats (commonly referred to as RHIBs) are of the type frequently used by drug smugglers. RHIBs were banned in Gibraltar in 1995 and have been prohibited imports since then. Spanish authorities have also pledged to increase co-operation with their Gibraltarian and Moroccan counterparts to track criminals evading working between the 3 territories.
https://www.gibraltar.gov.gi/new/sites/default/files/press/2018/Press%20Releases/420-2018.pdf
HAULIERS WHOSE TRUCKS ARE SEIZED BY BORDER FORCE FACE EVEN GREATER COSTS IF THEY ARE LEASED, WARNS LAWYER
Commercial Motor on 16th July reported that the warning follows a case in which a Dover business had its leased Mercedes-Benz truck seized by Border Force officials at the Port of Dover in December last year and has yet to have it returned. While the lease company involved waived its fees after 6 months, and is currently helping the company in its attempts to have the truck returned, a road transport lawyer has warned that not all leasing firms are so understanding, and that more finance agreements contain provisions allowing the lessee to require the return of financed vehicles or require lessors to pay up all money owed immediately – and this can sometimes be applied to all of the vehicles it hires, even if only one has been seized.
ENRC: HOW MINING TYCOONS ARE TRYING TO FOIL A BIG UK BRIBERY PROBE
On 16th July, Mining Weekly carried a report alleging that a “last ditch effort” by a trio of Kazakh oligarchs – Alexander Machkevitch, Alijan Ibragimov, and Patokh Chodiev – to derail the UK’s biggest bribery investigation into Eurasian Natural Resources (ENRC, now renamed ERG), suspected of paying bribes to secure mines in Kazakhstan and in Africa. They are reported as claiming that their own lawyer conspired with British police to incriminate them so he could fleece them for millions of pounds. This could frustrate attempts to bring criminal charges against them and drag out proceedings for months. They allege that a lawyer hired to investigate a whistleblower leaked details to the media to get the SFO to begin an investigation.
BRIBERY: IRELAND HAS ADOPTED ITS LATEST CORRUPTION ACT
On 13th July, McCann Fitzgerald published an article saying that the new Act, as well as updating the existing bribery offences, provides for several new corruption offences. Perhaps most significantly it also provides that, in certain circumstances, bodies corporate will be held liable for corruption offences committed by their staff, agents or subsidiaries, where they failed to take reasonable steps to avoid the commission of the relevant offence. The Criminal Justice (Corruption Offences) Act 2018 was signed into law on 5th June and is intended to modernise and consolidate the law on bribery and corruption. New offences include active and passive trading in influence; corruption in office involving the use of confidential information; facilitating the commission of a corruption offence; and intimidation. The article provides a summary of these new offences, as well as a background to the new Act. Its main conclusion is that, from a corporate perspective, the most significant development is the introduction of the new “failure to supervise” type of offence, reminiscent of the offence of failing to prevent bribery set out in section 7 of the UK Bribery Act 2010.
OTHER THINGS YOU MAY HAVE MISSED – JULY 15
15th July 2018
ZTE LIVES ON: US COMMERCE DEPARTMENT LIFTS BAN
ZD Net reported that the US Commerce Department has announced it has lifted its ban on exports to the US by ZTE, after the Chinese telecom company deposited the final tranche of a $1.4 billion penalty. The ban was imposed after the US government determined that ZTE violated terms of a 2017 settlement, reached after ZTE shipped US equipment to Iran and North Korea.
https://www.zdnet.com/article/zte-lives-on-us-commerce-dept-lifts-ban/
GREEK COURT RULES TO EXTRADITE ALEXANDER VINNIK, ACCUSED OF LAUNDERING $4 BILLION IN BITCOIN
Coin Telegraph on 14th July reported that the alleged former operator of crypto exchange BTC-e, who was indicted in the US for fraud and money laundering, to France. An appeal against the court’s decision in the Greek Supreme Court is expected. His lawyer said he feared eventual extradition from France to the US.
UAE SAYS MEASURES AGAINST EXCHANGE HOUSES NOT LINKED TO IRAN CRACKDOWN
On 15th July, Reuters reported that the UAE central bank had said that the decision to punish 7 currency exchange houses is unrelated to a crackdown on a network funnelling illicit funds to Iran, which the US and UAE reported having busted the previous week. A statement said that exchange houses had their licenses downgraded because they were found to be in violation of central bank regulations, including AML regulations, and then failed to regularise matters during a grace period.
IRELAND: CRACKDOWN LEADS TO JUMP IN GAMING MACHINE LICENCES
The Irish Independent on 15th July reported that there has been a big jump in the number of slot machine licences issued by the Irish Revenue Commissioners following a tax crackdown. New figures show that in 2017 there were 9,612 licences issued, compared to 6,088 the previous year. Gaming machines which are made available for play in a public place must have a valid excise licence. The newspaper says that the issue has become controversial in recent times with reports that many machines were being operated without a valid licence.
FRAUDSTER SET UP 46 FAKE BUSINESSES TO STEAL £2.4 MILLION THROUGH ALMOST 300 VAT REPAYMENT CLAIMS
Leicestershire Live on 15th July reported on the case of David Handley, 43, who headed a 19-strong gang in a 7-year long VAT fraud. HMRC said that Handley posed as a legitimate businessman and used details of his accomplices to register companies such as courier firms, air conditioning suppliers and fast food outlets and then submitted false tax repayment claims on behalf of other gang members to whom he later gave a cut.
https://www.leicestermercury.co.uk/news/business/fraudster-set-up-46-fake-1784168
US COMPANY PRODUCING NON-FIRING PLASTIC 3D-PRINTED REPLICA FIREARMS
On 13th July, the Firearms Blog reported on a US company, Noble Empire Corporation, which has an app database of detailed 3D firearm models which you can disassemble, learn the mechanisms of operation etc. Now a subsidiary company called printed Firearms replicas has announced the start of sales of polymer 3D-printed non-firing firearm replicas. Made from PLA plastic, they are said to allow studying of the mechanisms of different firearms where real versions are either rare and hard to obtain or impossible.
OTHER THINGS YOU MAY HAVE MISSED – JULY 14
14th July 2018
REFORM OF FOREIGN INVESTMENT IN THE US – FRANCE AND OTHER ALLIED COUNTRIES MIGHT BE EXEMPT
The National Law Review on 13th July reported on a US Bill a bill expanding and increasing the powers of the Committee on Foreign Investment in the United States (CFIUS). The Bill is called the Foreign Investment Risk Review Modernization Act (FIRRMA). It says that there is overwhelming bipartisan momentum behind FIRRMA and the Bill is likely to be on the President’s desk for signature as soon as the House and Senate reconcile their versions. One feature of the Bill not emphasised as much is that it authorises CFIUS to exempt from its review transactions in which all foreign persons involved are from a country identified by the Committee as having processes which effectively safeguard national security interests the country shares with the US; is a NATO member country or is a major non-NATO ally; or as adhering to non-proliferation control regimes. FIRRMA will significantly expand CFIUS’s authority to review inbound foreign investments, particularly in technology, even where those investments do not result in control of the US company by a foreign entity. The article points out that FIRRMA would also require the update and enhance US controls on exporting leading-edge technologies, as current US export controls lag behind emerging technology.
IRS SPENT $380 MILLION BUT TOOK ‘LIMITED OR NO ACTION’ TO ENFORCE FATCA
CNS News on 10th July reported that the IRS spent nearly $380 million to be in line with foreign tax-compliance rules according to a new report by the Treasury Inspector General for Tax Administration (TIGTA), which oversees the IRS. The article says that the Inspector General’s office made 6 recommendations to the IRS to improve the situation and to help ensure the IRS is following FATCA. According to TIGTA, the IRS agreed with 4 of the 6 recommendations. An IRS Commissioner is quoted as disputing the report’s findings, saying that the narrow focus of the report should not be used to draw conclusions about the entirety of the IRS’s enforcement efforts in this area.
JERSEY PUBLISHES ICO GUIDANCE NOTE
Law firm Carey Olsen on 13th July published an article saying that the Jersey Financial Services Commission has published its final guidance note in relation to Initial Coin Offerings (ICO). It says that the guidance note formalises the road map for approval previously developed by the JFSC in consultation with Carey Olsen who have advised on all Jersey ICO to date. It is said to adopt a pragmatic approach, focusing on consumer protection and AML. The chief features of the guidance is provided in the article.
https://www.careyolsen.com/briefings/jersey-publishes-ico-guidance-note
The guidance note itself is available at –
https://www.jerseyfsc.org/media/1999/gn-ico-july-2018.pdf
NEW YORK’S AUTHORITIES DIRECT UBL BANK OF PAKISTAN TO STRENGTHEN AML POLICIES
On 13th July, Business Recorder reported that the Federal Reserve Bank of New York has directed Pakistan’s United Bank Limited (UBL) and its New York branch to strengthen its AML policies.
JAPANESE PROSECUTORS REACH FIRST-EVER PLEA BARGAIN AGREEMENT IN FOREIGN BRIBERY CASE
The Japan Times on 14th July reported that Tokyo prosecutors and a power plant manufacturer have reached the first plea bargain in Japan since the option was introduced in June. Mitsubishi Hitachi Power Systems Ltd entered the plea bargain over the alleged bribery by one of its employees of a Thai public servant in relation to a local power plant project. The article mentions that there have been only 4 cases in Japan in which companies or individuals have been prosecuted on bribery charges involving foreign public officials since 1998 when the country prohibited giving bribes to and receiving them from such officials.
AUSTRALIA: NEW SALES TAX ON INTERNATIONAL RETAILERS
On 14th July, Customs Today reported that the tax applies to international retailers if they have a GST turnover of A$75,000 or more in a 12-month period and on all products sold valued at $1,000 or less, It is designed to provide “fairer trading for all retailers” and to ensure that low-value goods purchased by consumers in Australia will have the same tax treatment, no matter where they are purchased from. Retailers using the system will only need to report total taxable sales and GST and pay once each quarter. However, on 10th July the Sydney Morning Herald reported that UK giant Marks & Spencer, US electronics warehouse B&H and fashion retailer J Crew are among those who have failed to add GST to their invoices, saving their Australian customers 10% in tax while not disclosing their own tax obligations. Up until July 1st, GST was only paid on international purchases worth more than $1,000, but that has now been extended to all online products following years of lobbying from local bricks and mortar retailers struggling against the tide of online sales.
http://www.customstoday.com.pk/australia-imposes-new-sales-tax-on-international-retailers/
EUROPEAN PRODUCTION AND PRESERVATION ORDERS AND THE APPOINTMENT OF LEGAL REPRESENTATIVES FOR GATHERING ELECTRONIC EVIDENCE
A briefing from the EU Parliament Research Service published on 13th July providing an initial analysis of an Impact assessment accompanying a Commission proposal for an EU Regulation on European Production and Preservation Orders for Electronic Evidence in Criminal Matters and a proposal for an EU Directive laying down harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings. The 2 legislative proposals are part of an initiative seeking to address obstacles in cross-border access to electronic evidence (electronically stored data) in criminal investigations.
A European Production Order would allow a judicial authority in one Member State to request electronic evidence directly from a service provider offering services in the EU and established or represented in another Member State, regardless of the location of the data.
A European Preservation Order would oblige a service provider to preserve specific data, which the authority could request later. Service providers offering services in the EU would be required to appoint a legal representative for the purposes of gathering electronic evidence.
The initiative is to address a problem that some crimes cannot be effectively investigated and prosecuted in the EU because of challenges in cross-border access to electronic evidence. The paper notes that judicial co-operation between public authorities is often too slow, and administrative procedures and different legal standards may present obstacles to judicial co-operation. However, the paper does conclude that the Impact Assessment provides a comprehensive description of the problem, supported by an extensive stakeholder consultation, reports and literature. The options are clearly linked to the objectives and the problem definition.
http://www.europarl.europa.eu/RegData/etudes/BRIE/2018/621844/EPRS_BRI(2018)621844_EN.pdf
NCA: 2 CYBER CRIMINALS JAILED FOR ATTEMPTS TO HACK NATIONAL LOTTERY
On 13th July, the NCA announced in a news release that 2 cyber criminals have been sentenced for committing offences against the National Lottery. Daniel Thompson, 27, and Idris Kayode Akinwunmi, 21, were jailed for 8 months and 4 months respectively at Birmingham Crown Court in relation to the 2016 attack. The men used an online application to bombard the victim’s web domain with thousands of attempts to log in to customer accounts.
MAN JAILED FOR £2.1 MILLION INTERNATIONAL FILM INDUSTRY FRAUD SPANNING 8 COUNTRIES
Get West London on 14th July reported that London man Michael Banfield, 36, attempted to steal expensive equipment from 9 different companies across 8 countries over 6 months in 2014. He is said to have used a complex network of shell companies as well as fraudulently adopting a legitimate company’s details to get filming equipment but never return it. He operated the scam in the UK, South Africa, Canada and the USA as well as others and at least 15 items were advertised online for sale by Banfield and his associates under the company name World Wide Broadcast Solutions Ltd (WWBS).
https://www.getwestlondon.co.uk/news/west-london-news/brent-man-jailed-21million-complex-14907502
ARGENTINA FREEZES ASSETS OF TRANSNATIONAL CRIMINAL ORGANISATIONS LINKED TO HEZBOLLAH
On 14th July, the Director of FinCEN in the US congratulated the Argentine FIU (UIF-AR) for taking decisive action to freeze assets belonging to a transnational criminal organization linked to Hezbollah and its global terror network. The organisation is Clan Barakat, is a criminal organization led by Assad Ahmad Barakat, who is tied to Hezbollah leadership, and has long been known to operate in the tri-border area between Argentina, Paraguay, and Brazil. He is also designated by OFAC. The FinCEN Director says that it is infamous for its suspected involvement in smuggling, counterfeiting, extortion, drug trafficking, arms trafficking, money laundering, and terrorist financing.
UN IMPOSES SANCTIONS ON 2 INDIVIDUALS IN SOUTH SUDAN AND EXTENDS SANCTIONS REGIME TO MAY 2019
On 13th July, a UN news release advised that the Security Council, condemning what it called the continued and flagrant violations of the Agreement on the Resolution of the Conflict in South Sudan and related ceasefires, had adopted UN SCR 2428 which renews sanctions on South Sudan to 31st May 2019. It also imposed a travel ban and assets freeze on 2 high-ranking individuals – Lieutenant-General Malek Ruben Riak and General Paul Malong Awan. The sanctions involve an embargo on the supply of arms and related material, and the supply of training, technical and financial assistance related to military activities or materials. In addition, it lays out several exemptions to the country’s arms embargo — including for material and activities related to humanitarian activities — and lists details related to the inspection of shipments and cargo bound for South Sudan. The sanctions also impose travel bans and asset freezes on designated individuals.
UN REMOVES 2 FURTHER ENTITIES FROM IRAQ SANCTIONS LIST
On 13th July, a news release advised that the relevant UN Sanctions Committee had removed 2 entities from its sanctions list – the IRAQI LIFE INSURANCE COMPANY and the NATIONAL INSURANCE COMPANY.
CIVIL FORFEITURE ORDERS IN JERSEY
A briefing from law firm Ogier on 12th July outlined the introduction of a civil forfeiture process following MONEYVAL’s inspection of Jersey’s AML regime in 2015 and its subsequent report issued in May 2016. The new Draft Law replaces and extends the current Proceeds of Crime (Cash Seizure) (Jersey) Law 2008 and applies to both cash and property held in bank accounts. It also introduces the concept of a “civil forfeiture investigation” and the grant of investigative powers to the Attorney General or an authorised officer acting with the Attorney General’s consent. The briefing says that the Draft Law provides a broad and powerful tool to financial crime investigators and prosecutors in Jersey.
https://www.ogier.com/publications/reform-of-civil-forfeiture-orders-in-jersey
OTHER THINGS YOU MAY HAVE MISSED – JULY 13
13th July 2018
AUSTRALIAN LIVE SHEEP EXPORT TRADE IN TURMOIL WITH EXPORT LICENCES SUSPENDED
The Australian and other Australian media reported on 12th July the ongoing discussions and disputes about whether or not to authorise the export of live sheep. In the latest report, the live export company behind the disastrous Awassi Express voyage in which thousands of sheep died says it is confident about the ongoing welfare of around 60,000 sheep held for weeks in pre-export quarantine pens with nowhere to go. The destination of such traffic is the Persian Gulf, with transport conditions on the entire journey very hot, uncomfortable for the animals and potentially lethal.
https://www.maritime-executive.com/article/government-considers-sheep-export-application#gs.jaIb7X0
LINKING BENEFICIAL OWNERSHIP TRANSPARENCY TO IMPROVED TAX REVENUE COLLECTION IN DEVELOPING COUNTRIES
A report from the International Centre for Tax and Development at the Institute of Development Studies, funded by Bill & Melinda Gates Foundation. It poses the question: to what extent are current efforts to expand access to information on beneficial ownership likely, in practice, to enhance the ability of low-income countries to increase tax collection? It concludes that there has been quietly mounting concern that for low-income countries the successful implementation of new transparency rules may be comparatively costly, and the benefits comparatively limited. There is also, it says, a striking absence of systematic and publicly available research evidence with which to assess the likely benefits (and costs) of these initiatives for low-income countries.
THE POTENTIALLY MORE SINISTER THREAT IN BOKO HARAM’S SPLIT
Defence Web on 12th July carried an article about a report from the Institute for Strategic Studies that Boko Haram’s split in the Lake Chad region in 2016 saw the emergence of 2 distinct jihadist movements – ISIS-WA (Islamic State – West Africa) and Jama’atu Ahlis Sunna Lidda’awati wal-Jihad (JAS), with divergent operating methods, and one of the groups appears to be positioning itself as a long-term threat in a way that the other is not. The primary disagreement between JAS and ISIS-WA was an ideological one about targeting Muslim civilians. JAS continues to view the local populace as enemy combatants, predicated on a perception that they don’t support the movement. JAS is responsible for the continued wave of punitive and indiscriminate violence against civilians. This includes most suicide attacks (especially by female bombers). ISIS-WA’s dominant attack profile is designed to simultaneously weaken security forces and increase its own strength. However, the group remains capable of extreme violence against those who don’t follow its stipulations.
HIGHER EDUCATION EXPORTS AND THEIR VALUE TO THE UK ECONOMY
On 12th July, the House of Lords Library produced a briefing which has been prepared in advance of the debate in the House of Lords on the motion scheduled to be moved by Lord Norton of Louth on 19th July “that this House takes note of the value to the United Kingdom of higher education as an export”. This briefing considers what higher education exports are and their value to the UK economy. In addition, it considers how these figures have changed over time and any factors which may influence the value of Higher Education exports.
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/LLN-2018-0079
ITALIAN POLICE ARREST PANAMA PAPERS “FIXER”
OCCRP on 13th July reported that financial police in Romehave said that they have Gian Luca Apolloni, a purported top-level “fixer” named in the Panama Papers, as well as entrepreneur Roberto Lagana on charges of aggravated tax fraud. According to the accusations, Lagana’s company, RTS, counterfeited financial records to claim various unearned tax credits and exemptions, faking investments in disadvantaged areas of Southern Italy to take advantage of programs in the tax code meant to stimulate development in economically and socially distressed neighbourhoods. Apolloni, an Italian accountant with operations worldwide, was allegedly a middleman in the creation of over 200 offshore front companies in Panama. The shell companies were linked to entities based in Samoa, the Bahamas, Anguilla, BVI, and Cyprus.
https://www.occrp.org/en/daily/8317-italian-police-arrest-panama-papers-fixer?src=ilaw
LATVIA’S CORRUPTION SCANDAL IS GETTING EVEN WEIRDER
Bloomberg on 13th July published a helpful summary of the situation in Latvia where Ilmars Rimsevics, who’s been in charge of Latvia’s central bank as governor or deputy since 1992, is facing corruption accusations linked to Trasta Kommercbanka AS, a small lender that was shut in 2016 after being implicated in a $20 billion money laundering scheme. Martins Bunkus, a Latvian lawyer who’d been working on Trasta’s insolvency, was murdered while driving in Riga. Latvian banks are accused of handling some of the $1 billion stolen in 2015 from Moldova’s financial system and helping shift as much as $20 billion in illicit cash from Russia between 2010 and 2014. The Latvian branch of Privatbank AS paid a €2 million fine for handling money from the Moldovan fraud, and last year, 5 Latvian banks agreed to fines for failing to gather sufficient information on transactions and beneficiaries in deals linked to North Korea.
INTERPOL OFFICERS AT 8 MEDITERRANEAN SEAPORTS TO ASSIST LOCAL AUTHORITIES SCREEN TRAVELLERS AND DETECT POTENTIAL TERRORISTS DURING THE SUMMER TOURIST SEASON
Interpol on 13th July issued a news release saying that Operation Neptune, the counter-terrorism sea border operation addresses the threats posed by the travel of foreign terrorist fighters using Mediterranean maritime routes between North Africa and Southern Europe, as well as by people, drugs, or firearms traffickers. In the first week of Operation Neptune, more than 350,000 searches of INTERPOL databases resulted in the detection of 4 suspected foreign terrorist fighters and the localization of a missing person.
https://www.interpol.int/News-and-media/News/2018/N2018-072
IS HONDURAS LOSING THE FIGHT AGAINST AERIAL DRUG TRAFFICKING?
Insight Crime on 12th July carried an article saying that Honduras authorities recently seized 5 aircraft thought to have been used to transport drugs through a remote region of the country where dozens of clandestine landing strips have been destroyed this year. Authorities also seized more than 30 containers of airplane fuel at a makeshift camp site and located a clandestine landing strip. But the long-running strategy of seizures and demolitions has done little to identify suspects, routes and suppliers, allowing the so-called “narco flights” to continue. Drug flights are expected to account for a relatively small proportion of trafficking into Honduras. In 2014 Honduras acquired radar systems and passed a law permitting the shooting down of planes suspected of transporting drugs. While Honduras has scaled up its destruction of clandestine landing strips, the practice is unlikely to have any significant impact on traffickers, who can easily and quickly rebuild them or construct new sites.
https://www.insightcrime.org/news/brief/honduras-losing-fight-aerial-drug-trafficking/
UK PARENT COMPANY LIABILITY FOR ABUSES IN AFRICA: UPDATE
On 11th July, MacFarlanes published an update article on 2 cases (involving Shell and Unilever case) in which claimants sought to pursue UK-domiciled parent entities in the English Courts for the acts or omissions of their overseas subsidiaries. An appeal in the Unilever case has now been heard and the claimants’ appeal has been dismissed, with the Court of Appeal unanimously finding that no duty of care was owed by Unilever to the claimants. As a result, the claimants will not be able to pursue their claims here as there is no “anchor defendant” to bring the claims within the jurisdiction of the English Courts – but the reasoning given which differs to that of the first instance judgment. However, the Court of Appeal did provide what the firm says is helpful guidance about the circumstances in which a duty of care may be found to be owed by a UK-domiciled parent company in respect of the actions of its subsidiary, these loosely being where the parent has in substance taken over the management of the relevant activity of the subsidiary, or where the parent has given relevant advice to the subsidiary about how it should manage a particular risk.
https://www.macfarlanes.com/insights/2018/update-african-insights-uk-parent-company-liability/
US CONTINUES IMPORT RESTRICTIONS FOR ARCHAEOLOGICAL AND ETHNOLOGICAL MATERIAL FROM LIBYA
Baker McKenzie on 10th July reported that US customs regulations continue the import restrictions on archaeological and ethnological material from Libya previously imposed on an emergency basis in a final rule published on December 5th 2017. Libya is on a list of countries for which an agreement has been entered into for imposing import restrictions. Import restrictions are being imposed for a 5-year period to February 23rd 2023.
PODCAST: NORD STREAM 2 GAS PIPLEINE FROM RUSSIA TO EUROPE
This podcast from US-based Center for European Policy Analysis (CEPA) in the “Power Vertical” series on how or why the pipeline may be a threat to European security, and even why it might not even be necessary. How will it stand if those involved are affected by US sanctions (given that some one the Russian end are, or may be, already affected by US and EU sanctions.
See also a 11th July article in the Guardian which says that politicians and energy experts say Nord Stream 2 will make Europe reliant on Russian gas. Like the podcast, it argues that the new pipeline is more political than commercial, for example by bypassing Ukraine (where an existing pipeline flows) and thus being able to deny Ukraine funds and gas. Sweden, Denmark and Finland have expressed ecological reservations about a second natural gas pipeline at the bottom of the Baltic, and the European Commission has objected on the basis that the project will undermine its plans for an energy union, including a greater diversity of supply.
https://www.cepa.org/trouble-in-the-pipeline
SWISS RELEASE SOME ANGOLA FUNDS
On 13th July, The Oil & Gas Year website reported that the Swiss Office of the Attorney General (OAG) has unblocked about $60 million of funds seized in an investigation into money laundering at Angola’s sovereign wealth fund. OAG initially froze around $210 million of assets but has already unfrozen $60 million held by the Angolan sovereign wealth fund because their use by unauthorised third parties could be ruled out. Swissinfo has also reported that senior justice ministry officials from Switzerland and Angola have discussed closer co-operation in the major international case of suspected corruption amid ongoing criminal proceedings involving an Angolan-Swiss businessman, Jean-Claude Bastos, 50, a top manager of the Swiss-based Quantum Global Fund, who is suspected of corruption and money laundering with cases opened in both Angola and Switzerland. Described as an “entrepreneur”, he lives in Angola and is banned from leaving that country.
https://www.theoilandgasyear.com/news/swiss-release-some-angola-swf-funds/?src=ilaw
1MDB: JHO LOW ‘NOT IN CHINA’
The South China Morning Post on 13th July reported that China, having received multiple tip offs that the fugitive was in China, says he has not been found.
MOSCOW COURT DISMISSES APPEALS AGAINST CONFISCATION OF $145.3 MILLION FROM FORMER RUSSIAN ANTI-CORRUPTION OFFICIAL
RAPSI in Russia on 13th July reported that the Moscow City Court has dismissed 4 appeals against a decision confiscating $145.3 million from the former Russian anti-corruption official Dmitry Zakharchenko charged with corruption crimes, as well as his relatives. He was arrested in September 2016.
http://www.rapsinews.com/judicial_news/20180713/284716088.html?src=ilaw
31 PEOPLE, INCLUDING 10 WOMEN, ARRESTED OVER GOLD TRADING SCAM IN HONG KONG
EJI Insight on 13th July reported that 31 people have been arrested in relation to an investment fraud where victims were lured into thinking they were trading gold on the London markets. Officers raided 27 residential units and 8 commercial units in Hong Kong. It is said that the women looked for victims through the WeChat messaging app, pretending to be interested in making friends with them and then ensnaring them gradually into parting with their cash.
PODCAST: MAFIA UNDER THE SPOTLIGHT – THE ‘NDRANGHETA
A BBC World Service Radio documentary from 12th July about the most powerful Mafia organisation in the world – which few people have heard of. The ‘Ndrangheta crime syndicate has used the enormous wealth derived from its control of cocaine smuggling to spread its tentacles far and wide around the world. The crime organisation began as bandits in the late 19th Century in Calabria in southern Italy and is now thought to be operating in 50 countries. The ‘Ndrangheta shuns the limelight but earlier this year a brutal murder brought it unwelcome attention when Investigative reporter Jan Kuciak was shot dead while investigating possible links between the ‘Ndrangheta and the government in his native Slovakia. Suddenly the Mafia was in the news. For Assignment Andrew Hosken travels to Slovakia and Italy to investigate the killing and the ‘Ndrangheta’s global reach and power.
https://www.bbc.co.uk/programmes/p06dk6yw#play
BARAK ABRAMOV, OWNER OF AN ISRAELI PREMIER LEAGUE SOCCER CLUB, ACCUSED OF MONEY LAUNDERING, TAX FRAUD
The Standard in Hong Kong on 13th July reported that Barak Abramov, 39, owner of an Israeli Premier League soccer club (Bnei Yehuda Tel Aviv) and a local popular restaurant chain, has recently been arrested on suspicion of a huge tax fraud involving food outlets at sports stadiums and elsewhere in Israel.
http://www.thestandard.com.hk/breaking-news.php?src=ilaw&id=110412&sid=2
ALWAYS SOMETHING IN “PRIVATE EYE” #1 – UK DISCOVERS VISA REQUIREMENT FOR MUSICIANS ENTERING THE UK VIA IRELAND
In Issue 1474 (13th-23rd July), Private Eye reports that the recent focus on Northern Ireland border issues has brought to light a 1972 control order that has not been enforced for decades – but is now. Whereas musicians from non-EU entering the UK to perform have a visa-waiver system, this does not apply if they enter the UK via Ireland – though no-one appears to know this.
ALWAYS SOMETHING IN “PRIVATE EYE” #2 – WAS THE ORDER REQUIRING OVERSEAS TERRITORIES TO HAVE A PUBLIC BENEFICIAL OWNERSHIP REGISTER DELIBERATELY FLAWED?
In the same issue, it is claimed that the order requiring the BVI, Cayman Islands etc to have such registers is flawed, and that ministers were warned that it was and that it needed amendment. The allegation is that it was allowed to go on, knowing that the territories could appeal it (and presumably win, or at least delay it), thus appearing to get the UK Government off the hook, appearing to do the right thing but providing the territories with a potential loophole.
US-UK AGREEMENT JOINT WORK ON INTERNATIONAL CRIME
As President Trump visits the UK, on 13th July the Home Office published a news release announcing agreements to tackle the global threat posed by transnational criminal organisations – including illegal opioid traffickers. The measures include –
- A joint UK-US ministerial taskforce on synthetic opioids, led by a Home Office minister, focused on sharing expertise in detection and tracking, specialist law enforcement intelligence capabilities and prevention and treatment;
- A joint UK-US Strategic Dialogue on illicit finance, led by senior officials to tackle shared threats and work with other countries to maintain and strengthen implementation of global standards, scheduled to meet for the first time in September 2018; and
- An informal, ad-hoc dialogue between law enforcement officials which will assess the work of current initiatives and groups, such as the Five Eyes Law Enforcement Group.
https://www.gov.uk/government/news/government-agrees-joint-work-on-international-crime
US INDICTMENT AGAINST RUSSIAN GRU OFFICERS FOR ALLEGED INVOLVEMENT IN CYBER OPERATIONS AGAINST THE US
They are 12 Russian Main Intelligence Directorate (GRU) officers accused of hacking the emails of employees and volunteers of Hillary Clinton’s campaign, including that of campaign chairman John Podesta. The indictment says that the officers created a fake security alert email from Google that instructed recipients to change their passwords on a GRU-created website, thereby giving the officers access to the recipients’ passwords as well as exploited security vulnerabilities on the Democratic Congressional Campaign Committee and Democratic National Committee’s computer networks.
http://cdn.cnn.com/cnn/2018/images/07/13/gru.indictment.pdf
HOW THE SALE OF STOLEN ANTIQUITIES FUNDS ORGANISED CRIME
On 13th July, CNN published an article following the recent major police operation against an operation in the Caltanisetta region in Sicily, where local members of an organised crime group had been illicitly excavating archaeological material, as well as producing forgeries. These goods were smuggled out of Italy and assigned false provenances to suggest they were legally excavated and exported. They were then sold to collectors through German auction houses. It says that international crime syndicates first turned their attention to art crime in the early 1960s, when the Corsican Mafia was linked to a string of heists. However, illegally excavated antiquities provide a far easier way for crime syndicates to profit.
http://us.cnn.com/style/article/europol-illegal-antiquities-organized-crime/index.html
THE INTERNATIONAL CRIMINAL COURT – ACHIEVEMENTS AND CHALLENGES 20 YEARS AFTER THE ADOPTION OF THE ROME STATUTE
On 13th July, the EU Parliament Research Service published a briefing marking the 1998 Statute of Rome, the founding treaty of the International Criminal Court, which was set up to deal with the most serious crimes of international concern, namely genocide, crimes against humanity and war crimes. It began operations in 2003.
http://www.europarl.europa.eu/RegData/etudes/BRIE/2018/625127/EPRS_BRI(2018)625127_EN.pdf
SEC CHARGES STOCK PROMOTER AND 4 OTHERS INVOLVED IN AN ALLEGED SERIES OF MICROCAP FRAUD SCHEMES
Mondo Visione on 13th July carried a report saying that the charges related to the accused having hijacked companies and manipulated the market to enrich themselves at the expense of the investing public. They took control of a purported medical device company and, with a Cayman Islands-based broker, then allegedly engaged in a matched trading scheme that caused the company’s share price to rise from zero to $1.20 per share. They were caught after the involvement of an undercover FBI agent.
http://www.mondovisione.com/media-and-resources/news/sec-files-charges-in-busted-microcap-schemes/
WORKPLACE AUTOMATION AND ROBOT MANUFACTURING “WILL PUSH SOUTH-EAST ASIAN WORKERS INTO MODERN SLAVERY”
Illicit Trade on 13th July carried a post saying that increasing workplace automation will result in rising numbers of SE Asia workers being pushed into modern slavery, according to a new report from risk consultancy firm Verisk Maplecroft. The UN International Labour Organisation has estimated that 56% of workers in major manufacturing centres in Thailand, Cambodia, Indonesia, the Philippines and Vietnam could lose their jobs over the next 2 decades.
UK AMENDS IRAQ SANCTIONS LIST TO REMOVE GENERAL ESTABLISHMENT FOR GRAIN TRADING
On 13th July, a Notice from HM Treasury advised that, following UN and EU changes, the Consolidated List of sanctions targets in the UK no longer includes the GENERAL ESTABLISHMENT FOR GRAIN TRADING following the coming into force of EU Regulation 2018/979/EU.
TESTIMONY BEFORE THE US HOUSE COMMITTEE ON FINANCIAL SERVICES SUBCOMMITTEE ON TERRORISM AND ILLICIT FINANCE – PROLIFERATION FINANCE
The Royal United Services Institute has published the testimony given by Tom Keatinge, Director of the Centre for Financial Crime and Security Studies at RUSI in which he details the research and reports from RUSI assessing the awareness and effectiveness of governments and their private sectors in implementing proliferation finance controls. He traced the origins of co-ordinated counter-proliferation financing (CPF) efforts to 2012, when FATF broadened its recommendations to include measures relating to countering the financing of WMD, their delivery vehicles, and related goods and activities. The move to include this subject alongside terrorist financing and money laundering was seen by many of FATF’s member states as a vital next step. He goes on to review the current international position, saying that FATF is currently undertaking a global evaluation of countries’ compliance with its 40 Recommendations for combatting financial crime, and the effectiveness of such compliance and as of mid-May, 50 countries have been reviewed in the current round, running since 2014 (the US review was published in December 2016). Recommendation 7 and Immediate Outcome 11 address CPF. He provided a snapshot of the results to date –
He then goes on to deal with securing the financial system against abuse by proliferators and vulnerabilities across the supply chain. In conclusion he makes recommendations for the private sector, the international community and the US Government.
https://financialservices.house.gov/uploadedfiles/hhrg-115-ba01-wstate-tkeatinge-20180712.pdf
TRADE FRAUD: THE ‘WILD NEW FRONTIER OF WHITE COLLAR CRIME’ IN US
Baker McKenzie reported an article on the Crime Report website on 13th July saying that US federal prosecutions of shady importers have increased 900% over the past 16 years. Borders are too vast, the volume of imports too great, global customs inspections too porous, and law enforcement resources too few for effective monitoring or deterrence, says a recently issued report. The report concluded that the only way to tame the “wild, new frontier of white-collar crime” in the US was to develop interagency teams that focused on bringing cases under the False Claims Act, a law originally enacted in 1863 at the height of the Civil War to combat suppliers of fraudulent goods to the Union Army.
https://thecrimereport.org/2018/07/13/trade-fraud-the-wild-new-frontier-of-white-collar-crime/
The report is available at –
UK: £12 BILLION OF LIBYAN ASSETS FROZEN
In answer to a question asked in the House of Commons on 26th June, HM Treasury revealed that, up to 29th September 2017, the UK had frozen £12.061 billion in Libyan funds under applicable EU sanctions.
SFO ISSUES ARREST WARRANT FOR CEO OF KAZAKH MINER EURASIAN RESOURCES (ENRC)
Reuters on 13th July reported that the SFO SFO has issued an arrest warrant for Benedikt Sobotka, 37, the CEO of Kazakh mining company Eurasian Resources Group (ERG) – formerly known as ENRC – which it is investigating for fraud, bribery and corruption on its acquisition of some mineral assets. The Luxembourg-registered company has ferrochrome, aluminium, iron ore and energy operations in Kazakhstan, copper and cobalt assets in Africa and iron ore mines in Brazil.
ILLEGAL LOGGING: AN ORGANISED CRIME THAT IS DESTROYING LATIN AMERICAN FORESTS AND “TIMBER LAUNDERING”
Eurasia Review on 13th July carried an article saying that illegal wood trafficking allows other crimes to flourish, including deforestation, labour exploitation, land invasions, tax evasion, document forgery and state corruption. Illegal wood trafficking is the most profitable crime against natural resources and the world’s third most important crime, according to a report: “Transnational crime and the developing world,” published in March 2017 by Global Financial Integrity. The report estimates that, globally, this transnational crime generates $52 billion to $157 billion a year. The UN Environment Program (UNEP) estimates that 30% of the wood sold in the world has been illegally obtained. Latin American forests are the second most vulnerable in the world to illegal timber logging, after Asian forests, says UNEP. A report from EIA, a US-based NGO: “Moment of Truth: Promise or Peril for the Amazon as Peru Confronts its Illegal Timber Trade,” published in January 2018, sheds light on “timber laundering”, a practice known as “timber washing,” meaning the sale of illegally obtained timber with fake permits; by providing the authorities with lists of trees to be logged that don’t actually exist.
The EIA report is at –
NEW RESTRICTIONS TO BE PLACED ON ACCESS TO COMMUNICATIONS DATA IN UK
On 12th July, Out-Law published an article saying that new restrictions are to be placed on accessing communications data in the UK after the government moved to implement an EU court ruling applicable to surveillance laws in place in the country. The changes will, among other things, cut the number of cases in which communications data can be accessed by UK authorities for the purposes of fighting serious crime. They will also require the authorities to seek the approval of an independent body for the right to continue accessing communications data three days after they were given the right to do so through an ‘urgent’ internal sign-off process. It explains that currently the Investigatory Powers Act governs when UK authorities can obtain access to the data from communication providers and for what purposes they can use it. However, the government admitted to failings in the legislation and opened a consultation on proposed reforms last year. That exercise was prompted by a December 2016 ruling of the Court of Justice of the EU.
https://www.out-law.com/en/articles/2018/july/restrictions-accessing-communications-data-uk/
1MDB: JHO LOW USED ST KITTS & NEXIS PASSPORT TO FLEE HONG KONG
Kenneth Rijock in his blog on 12th July alleged that Low Taek Jho, also known as Jho Low, a Malaysian financier alleged to have siphoned off billions of dollars from 1MDB, the Malaysian development fund, who is now said to be in Macau, has a CBI (Citizenship by Investment) passport from St Kitts & Nevis – his own Malaysian one having been cancelled.
US HAS ASKED THE UN SECURITY COUNCIL TO ORDER AN IMMEDIATE HALT TO ALL DELIVERIES OF REFINED OIL PRODUCTS TO NORTH KOREA
Malaysia Digest on 13th July reported that a confidential US report sent to UN Security Council and seen by AFP news agency, estimated that at least 759,793 barrels of oil products had been delivered to North Korea between January 1st and May 30th, well above the annual quota set at 500,000 barrels. The illegal supplies were provided through ship-to-ship transfers at sea using North Korean tankers that have called in port at least 89 times “likely to deliver” the shipments, according to the report. China and Russia are expected to block and, in the report, the US pointed the finger at China and Russia for continuing to sell refined petroleum products to North Korea.
