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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 26

26 February 2020

US OPIOID CRISIS: UK DRUGMAKER CONTINUED TO SHIP SUSPICIOUS ORDERS WITHOUT MAKING SURE THE DRUGS WEREN’T GOING TO BE DIVERTED TO THE BLACK MARKET

On 25 February, AP reported on the $1.6 billion settlement between UK-based company Mallinckrodt and the DoJ.  It was one of the highest-volume opioid producers in the US at the height of the nation’s prescription drug crisis, shipping 2.3 billion pills from 2006 to 2014.  The company’s potent 30 milligram pills were especially sought after by people with addiction.  However, whilst it did not promote opioids to doctors or understate the addiction risks, it was accused of continuing to ship suspicious orders without making sure the drugs weren’t going to be diverted to the black market.  In a deal similar to another major supplier, Mallinckrodt is filing for bankruptcy and will make payments for 8 years after the company emerges from the protection of the bankruptcy regime.

https://apnews.com/2b0514eaa3c85c212de930e3788d056e

https://www.jurist.org/news/2020/02/mallinckrodt-agrees-to-1-6-billion-settlement-to-resolve-us-opioid-lawsuits/

 

HOW THE NIGERIA ADMINISTRATION PLANNED TO TRANSFER $110 MILLION IN ABACHA LOOT TO ANOTHER ALLEGED MONEY LAUNDERER

On 26 February, KYC 360 carried a Preium Times story from Nigeria claiming that, despite attempts by the Buhari administration to deny the transfer of $110 million stolen from government treasury by late military tyrant, Sani Abacha (and apparently kept in a trust held in the UK), to Abacha’s associate, and current governor of Kebbi State, Abubakar Bagudu, US court papers are said to show that the administration signed 2 agreements – in 2018 and 2019 – with Bagudu, said to be a close friend of the President, that effectively sealed the transfer of the money to the governor.  The US Government is resisting a plan by the Nigerian government to transfer over $110 million to Bagudu.

https://www.riskscreen.com/kyc360/news/how-nigerias-buhari-administration-planned-to-transfer-110-million-abacha-loot-to-bagudu/

 

CYPRUS CASINO OWNER MELCO UNDER REGULATORY SCRUTINY ON 3 CONTINENTS OVER MONEY LAUNDERING AND BRIBERY CONCERNS

On 26 February, KYC 360 reported that Moneyval, said in December 2019 that it had discovered “weaknesses” in compliance at the casino at a time when the business was planning an “aggressive expansion”.  However, it is also said that Lawrence Ho’s Melco Resorts is under the scrutiny of regulators in at least 3 jurisdictions, while Japanese authorities are investigating its potential links to bribery claims and a powerful Australian probe considers its purchase of a 10% stake in Crown Casinos last year.

https://www.riskscreen.com/kyc360/news/melco-under-regulatory-scrutiny-on-three-continents/

 

NETHERLANDS: CONFIDENTIALITY OF PARTIES REPORTING POSSIBLE MONEY LAUNDERING

On 18 February, law firm NautaDutilh published an article about questions asked in the Dutch parliament about the confidentiality of SAR submitted to the national FIU by civil law notaries.  The questions essentially were concerned with asking whether it would be possible for civil-law notaries filing reports could to do so without their identity being disclosed in the criminal case file, given the potential risks (such as threats) that might then arise.  It was said that, wherever possible, the prosecution service was cautious about giving the name of a reporting party in a criminal file, but in cases where a transaction declared suspicious by the FIU was important in a criminal case, the transaction might need to be referred to in the file.  One suggestion was that an SAR could be submitted by the sector’s trade body, rather than individual notaries.  The minister involved indicated that he was prepared to consult with the notaries’ representatives to investigate whether and how improvements could be made to the reporting process.

https://www.nautadutilh.com/en/information-centre/news/questions-in-dutch-parliament-confidentiality-of-parties-reporting-possible-money-laundering

 

TURKEY: EXPORT OF NUCLEAR MATERIALS WILL BE SUBJECT TO THE LICENCE GRANTED BY NUCLEAR REGULATORY INSTITUTION

On 24 February, Herdem, a law firm in Turkey, published an article on Regulations on Nuclear Material Control designed to assist in preventing the spread of nuclear weapons. The Nuclear Regulatory Institution (NDK) regulates the procedures and principles of the export control regarding the designated and/or created materials, products, equipment, component and related technology which are deemed to be used for nuclear activities – and issues relevant export licences, which are valid for 6 months.  Under the amended regulations, the export of any nuclear material falling in scope of the Regulation will be subject to the written opinion of the Ministry of Defense and Foreign Affairs, as well as the written approval of NDK.

http://www.herdem.av.tr/legal-update-export-of-nuclear-materials-will-be-subject-to-the-license-granted-by-nuclear-regulatory-institution

 

2 BROTHERS SMUGGLED RARE CORALS AND OTHER MARINE FAUNA FROM FLORIDA TO LATIN AMERICA

The Sun Sentinel on 25 February reported that Alvaro Cortes and Olga Rodriguez were allegedly at the centre of a wider conspiracy to traffic internationally protected marine wildlife.  The case follows the 2015 seizure in Miami of a consignment to Bogota that included rare elkhorn, frogspawn, and green leather corals, alongside vulnerable giant clams, puffer fish, and damsel fish.  Recently, 2 brothers, their alleged co-conspirators, were sentenced to 6 months in federal prison in Florida for wildlife trafficking.

https://www.sun-sentinel.com/news/crime/fl-ne-rare-coral-smugglers-sentenced-six-months-in-prison-20200226-chdqks7vrjafhcxwzpzpjtcfgq-story.html

 

SWITZERLAND: BERN POLICE UNCOVER EXTENSIVE PEOPLE SMUGGLING

On 26 February, Swissinfo reported that Swiss police have charged 5 people in connection with extensive people smuggling operations.  3 men living in Bern are accused of having illegally transported or organised the smuggling of over 90 people in at least 30 cases between June 2017 and April 2019.  It is said that mostly adults from the Middle East were picked up in northern Italy and transported across the border into Switzerland, or via Switzerland to Germany or Austria, using private or company vehicles.

https://www.swissinfo.ch/eng/illegal-border-crossings_bern-police-uncover-extensive-people-smuggling-/45581010

 

KPMG ISSUES WARNING TO ISLE OF MAN BUSINESSES IN BREACH OF ECONOMIC SUBSTANCE RULES

International Investment on 26 February said that Robert Rotherham, a tax director at accounting consultancy KPMG, has said that economic substance is here to stay and with the Isle of Man Income Tax Division now having released the new company tax returns it is imperative that affected businesses understand how they should complete them and what this means for them in the context of the economic substance rules.  The Division can issue penalties of £10,000 to £50,000 for breaches of the economic substance rules.

https://www.internationalinvestment.net/news/4011397/kpmg-issues-warning-iom-firms-breach-economic-substance-rules

 

GEORGIA’S FINANCE MINISTER PRESENTS NEW INITIATIVE TO REDUCE GAMBLING-RELATED MONEY LAUNDERING

On 26 February, European Gaming published an article on a new initiative just announced to reduce money laundering risks related to gambling.  The initiative includes the implementation of a new system for the registration and verification of the identity of players.  It also aims to create a list of people addicted to gambling and to control the movement of funds through identified channels.

https://europeangaming.eu/portal/compliance-updates/2020/02/26/64979/georgias-finance-minister-presents-new-initiative-to-reduce-gambling-related-money-laundering/

 

US COURT CASE ALLEGING DELIBERATE UNDERVALUING OF FANDUEL FANTASY SPORTS COMPANY

On 25 February, the Wall Street Journal reported that FanDuel’s founders and more than 100 former employees allege the company’s board of directors and private-equity investors intentionally undervalued the sports-betting operator to shut them out of an acquisition deal.  FanDuel was a fantasy-sports giant now pursuing the US sports-betting market.  It merged with the US operations of Dublin-based Paddy Power Betfair PLC in 2018 to create FanDuel Group. The Paddy Power company was later renamed Flutter Entertainment PLC.

https://www.wsj.com/articles/fanduel-founders-former-employees-sue-over-getting-nothing-in-deal-11582663343

 

TURKEY’S STATE-OWNED HALKBANK HAS AGREED TO APPEAR IN US COURT TO CHALLENGE AN INDICTMENT OVER ALLEGED CONSPIRACY TO CIRCUMVENT US SANCTIONS AGAINST IRAN

The EU Sanctions Blog on 26 February reported that. Halkbank had previously refused to enter a plea in response to the charges relating to a $20 billion oil for gas scheme on the basis it did not accept US jurisdiction.

https://www.europeansanctions.com/2020/02/halkbank-agrees-to-appear-in-iran-sanctions-evasion-proceedings/

 

THIRD COUNTRIES AGREE TO ALIGN WITH EU TERRORISM SANCTIONS

An EU news release on 25 February advised that North Macedonia, Montenegro, Serbia, Albania, Bosnia and Herzegovina, Ukraine, and Moldova had agreed to align themselves with the terrorism sanctions first imposed in 2001 and recently renewed for a further year.

https://www.consilium.europa.eu/en/press/press-releases/2020/02/25/declaration-by-the-high-representative-on-behalf-of-the-eu-on-the-alignment-of-certain-countries-concering-the-list-of-persons-groups-and-entities-related-to-the-application-of-specific-measures-to-combat-terrorism/

 

MÉDECINS SANS FRONTIÈRES (MSF) GRANTED AN EXEMPTION FROM UN SANCTIONS ON NORTH KOREA

On 26 February, the EU Sanctions Blog reported that MSF had been granted an exemption to UN sanctions on the DPRK to assist with the diagnosis and management of coronavirus.

https://www.europeansanctions.com/2020/02/msf-granted-n-korea-sanctions-exemption-to-provide-coronavirus-support/

 

UK: CALL FOR VIEWS ON PROCESSING OF PERSONAL DATA RELATING TO CRIMINAL CONVICTIONS

On 26 February, the British International Freight Association reported that the Information Commissioner’s Office is undertaking a consultation to find out if gaps exist in controllers’ awareness and understanding of the data protection requirements for processing Article 10 data – which allows organisations to process personal data relating to criminal convictions and offences, or related security measures for many reasons.  The deadline for responses is now 13 March.

https://www.bifa.org/news/articles/2020/feb/ico-call-for-views-on-the-processing-of-personal-data-relating-to-criminal-convictions?l=y

 

EX-MP IN PAPUA NEW GUINEA FACING 6 FRAUD-RELATED CHARGES

On 26 February, Radio New Zealand reported that a former MP in Papua New Guinea is facing 6 fraud-related charges linked to an illegal transfer of company shares.  Alois Kingsley is due to appear before a Port Moresby court charged with 2 counts each of forgery, utterance and stealing.  He was a former culture minister and an MP from 2002 to 2007.

https://www.rnz.co.nz/international/pacific-news/410479/ex-mp-in-png-facing-six-fraud-related-charges

 

US: RHODE ISLAND WOMAN’S REAL ESTATE PONZI SCHEME

On 26 February, the FBIO published a report saying that Monique Brady, a Rhode Island woman, preyed on the trust of friends, family, and neighbours in a dubious investment scheme, was sentenced to 8 years in prison and ordered to pay back her victims.  She claimed her property preservation company, MNB, had contracts to rehabilitate New England properties and that she said she needed investments of $20,000 to $80,000 to pay subcontractors to perform the work.  In return, investors were promised a 50% yield once the rehabilitation work was complete.

https://www.fbi.gov/news/stories/real-estate-ponzi-scheme-022620

 

CLAIM THAT OVER US$7 BILLION STASHED OUTSIDE ZIMBABWE

Zbc IN Zimbabwe on 26 February reported that the Zimbabwe Anti-Corruption Commission (ZACC) claimed to have identified over US$7 billion in cash and properties stashed outside the country by former and current senior government officials and captains of industry.  Some of the properties and cash were reportedly identified in Switzerland, London, the US, Singapore, Hong Kong, Malaysia, Mauritius and Spain.

https://www.zbcnews.co.zw/over-us7-bln-stashed-outside-zimbabwe-zacc

 

CORRUPTION CONTINUES TO BE A MAJOR PROBLEM FOR THE BUSINESS ENVIRONMENT IN ROMANIA, SAYS EU

On 26 February, the Romania Journal reported on an European Commission report which says, inter alia, that corruption continues to be a major problem for the business environment in Romania, and that while the government currently supports actions to prevent and sanction corruption, Romania is facing important challenges to restore progress in the fight against corruption following damages done in the past years through legislative amendments and continued  pressure on judicial institutions.

https://www.romaniajournal.ro/politics/ec-corruption-continues-to-be-a-major-problem-for-the-business-environment-in-romania

 

NIGER: POLICE RESCUE 232 VICTIMS OF HUMAN TRAFFICKING

An Interpol news release on 26 February advised that police in Niger have rescued 232 victims of human trafficking, including 46 under the age of 18, during an INTERPOL-supported operation targeting organised crime groups in West Africa.

https://www.interpol.int/News-and-Events/News/2020/Niger-Police-rescue-232-victims-of-human-trafficking

 

FINLAND’S CUSTOMS SITS ON $14 MILLION WORTH OF CONFISCATED BITCOINS

On 26 February, the Crypto Potato website claimed that Finnish Customs seized 1,666 bitcoins several years ago during drug busts.

https://cryptopotato.com/finlands-customs-sit-on-14-million-worth-of-confiscated-bitcoins/

 

BLACK MARKET FOR MAYAN ARTEFACTS STILL THRIVES IN GUATEMALA

On 26 February, Insight Crime carried an article saying that Guatemalan authorities have carried out raids at a shop selling illegally sourced artefacts, renewing focus on the country’s struggles to stamp out the remains of a once-flourishing black market.  It says that raids on local store owners may not be enough to protect Guatemala’s Mayan sites from looting, or to keep antiquities stolen from them off the black market.  It is said that Mayan sites were mostly plundered between the 1960s and 80s, when a wave of pre-Colombian exhibitions in the US increased demand from museums and private collectors, and civil war forced some archaeologists to flee excavation sites, leaving them exposed.  The black market today mostly comprises small pieces like shells, jewellery and bones featuring detailed carvings and calligraphy.

https://www.insightcrime.org/news/brief/black-market-mayan-ruins/

 

CAMBODIA: NEW DEEP-WATER PORT IN SE ASIA TO HELP SHIPPERS BYPASS CHINA

On 25 February, Port technology reported that Cambodia is going to build a new multi-purpose deep-sea port alongside the Sihanoukville Autonomous Port within the Sihanoukville Port Special Economic Zone (SPEZ) to transport goods directly to the US.  It is said that it will be built with assistance from the Japan International Cooperation Agency (JICA), an organisation that looks to increase trade collaboration across Asia.

https://www.porttechnology.org/news/new-deep-water-port-in-southeast-asia-to-help-shippers-bypass-china/

 

FORMER BRITISH ALSTOM EXECUTIVE HOSKINS WIN PARTIAL ACQUITTAL ON FCPA CHARGES

The FCPA Blog on 26 February carried a post saying that a federal judge has achieved a partial acquittal for Lawrence Hoskins, the former Alstom SA executive convicted by a federal jury in November of bribing officials in Indonesia, ruling that prosecutors had failed to prove he violated the FCPA by acting as an agent of Alstom’s Connecticut subsidiary.  However, the money laundering convictions were upheld, and federal prosecutors can appeal the judge’s decision.

https://fcpablog.com/2020/02/26/hoskins-wins-acquittal-on-fcpa-counts/

 

US DEPORTS THAI MAN CONVICTED OF UNLAWFUL EXPORT OF FIREARM COMPONENTS

On 26 February, a news release from US Immigration and Customs Enforcement announced that it had removed Thai national Apichart Srivaranon, 35, to Thailand. He had pleaded guilty to charges in January and March 2019 and was sentenced to 26 months in prison.  He had been convicted of for conspiring to violate the Arms Export Control Act and for attempts to export firearms parts to Thailand and he had purchased firearms parts online from US gun manufacturers.  He also directed his co-conspirators to falsely declare the contents of these packages when shipped, listing the contents as spare parts, bicycle parts, fishing parts, or toy parts, and then ship them to Thailand via USPS and private shipping companies.  To avoid detection, he instructed his co-conspirators to alternate the frequency and addresses of shipments, as well as the estimated value of the contents of the shipments.

https://www.ice.gov/news/releases/ice-removes-man-convicted-unlawful-export-firearm-components

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PODCAST – DIPLOMATS FOR SALE

On 26 February, Al Jazeera released the first of a new podcast series, with a fascinating 4-part look at the trade in ambassadorships, and the diplomatic passports that go with them.  It involves Iranian oil, Labuan, Dominica and Grenada, and an attempt at an undercover purchase of such a passport.

https://www.aljazeera.com/podcasts/thetake/2020/02/al-jazeera-investigates-diplomats-sale-part-1-200226150658974.html

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UK: THE EXPANSION OF A DIRECTOR DUTY TO ACT IN THE INTERESTS OF THE COMPANY

On 24 February, an article from Hardwicke comments on what it says is the introduction of a new requirement that directors should have regard to a package of concerns reflecting what has been described as “enlightened shareholder value”.  When determining what is in the interests of the company, directors are required to look beyond the pursuit of profit and consider various factors and third party stakeholders who could be affected by the decision.  This has existed since section 172 of the Companies Act 2006 was enacted, but it says that it had little practical effect for reasons the article explains.  However, it says, that might change following a recent case in which the enlightened shareholder value provision was used to give employees a direct remedy against the directors of their corporate employer.

https://hardwicke.co.uk/the-expansion-of-a-director-duty-to-act-in-the-interests-of-the-company-2/

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UK: CONSULTATION ON AMENDMENTS TO DISCLOSURE RULES

On 26 February, HM Attorney General’s Office launched a consultation on revisions to the Attorney General’s Guidelines on Disclosure and the CPIA Code of Practice and called for evidence.  This is said to be part of an ongoing project to identify and incorporate improvements to sources of guidance on disclosure – the process whereby relevant unused material, gathered during the course of an investigation, is provided to the defence.  The consultation closes on 22 April.  The 2 sets of guidance were revised to reflect the challenges of modern disclosure practice, including the increase of digital material and the delays this increase causes.

https://www.gov.uk/government/publications/consultation-on-revisions-to-the-attorney-generals-guidelines-on-disclosure-and-the-cpia-code-of-practice

https://www.gov.uk/government/news/attorney-general-seeking-feedback-on-new-disclosure-guidelines

 

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OFAC ADDS AN IRAQI TO TERRORISM SANCTIONS LIST

A news release from OFAC on 26 February advised that Ahmad AL-HAMIDAWI (who has several aliases) had been added to the terrorism sanctions list.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200226_44.aspx

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OFAC DESIGNATES COMPANIES AND OFFICIALS LINKED TO THE MARTYRS FOUNDATION FOR HIZBOLLAH LINKS

A news release from US Treasury on 26 February advised that OFAC has designated 3 Lebanon-based officials and 12 Lebanon-based entities linked to the Martyrs Foundation, part of Hizballah’s support network.  Specifically, OFAC has designated Atlas Holding for being owned or controlled by the Martyrs Foundation, as well as senior Atlas official Kassem Mohamad Ali Bazzi, and 10 Atlas-affiliated companies.  Individuals Jawad Nur-al-Din and Sheikh Yusuf Aasi were also designated for being leaders or officials of the Martyrs Foundation, which was itself designated in July 2007. Mirath S.A.L., which is owned or controlled by Jawad Nur-al-Din, was also designated.

https://home.treasury.gov/news/press-releases/sm917

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200226.aspx

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OFAC REMOVES 13 ENTRIES FROM SOUTH SUDAN SANCTIONS LISTS

On 26 February, OFAC announced the removal of 13 entries from the list of those subject to sanctions in respect of South Sudan, including Israel Ziv (there are various aliases) and entities linked to Ziv.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200226.aspx

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OFAC SETTLEMENT WITH SWISS-BASED SOCIÉTÉ INTERNATIONALE DE TÉLÉCOMMUNICATIONS AÉRONAUTIQUES SCRL (SITA) FOR IRAN SANCTIONS VIOLATIONS

On 26 September, OFAC announced that it had reached a settlement with SITA, which has agreed to pay $7,829,640 to settle its potential civil liability for 9,256 apparent violations of the terrorism sanctions regulations and totalling approximately $2,428,200 in 2013/2018.  The case involved SITA providing commercial services and software that were subject to US jurisdiction and benefitted certain airline customers after OFAC designated those airlines as specially designated global terrorists (SDGT).  SITA provides commercial telecommunications network and information technology services to the civilian air transportation industry, including Mahan Air, Syrian Arab Airlines, Caspian Air Meraj Air and Al-Naser Airlines.

https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20200226_sita.pdf

https://www.freightwaves.com/news/airline-systems-firm-pays-7-8-million-for-us-sanction-violations

 

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HUGE US MONEY LAUNDERING PROBE TARGETS WIDENING CIRCLE OF VENEZUELAN ELITES

The Miami Herald on 26 February reported that, after 2 years, necessary bank records have arrived, due to a major decision to release them by Switzerland’s highest court.  It is alleged that business elites are suspected of paying hefty bribes to government officials in exchange for making loans in bolivars to the national oil company, Petróleos de Venezuela SA, and then receiving repayments in US dollars — with the proceeds washed through the government’s favourable currency-exchange system to magnify profits – and then diverted to secret Swiss bank accounts between 2012 and 2014, according to US authorities.

https://www.miamiherald.com/news/local/article240482546.html

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ILLICIT TRADE NETWORKS – CONNECTING THE DOTS

The Institute for Science and International Security has published a free pdf e-book, containing a number of illustrative case studies, which explains strategic commodity trafficking, or illicit procurement, to assist in understanding what this activity is, who is involved, and how it occurs.  It explains the most basic activities of illicit trade and general structures of illicit networks.  It also discusses the international framework of and recent developments in proliferation financing.  It then goes on to explain how goods are shipped, having been illicitly acquired.  One section concentrates on the findings from a once-prominent transnational illicit network centred in China, the Cheng/Jamili network, which outfitted Iran’s nuclear, missile, military, and other sensitive programmes.  It is said that the case studies used are focused on the ordering, financing, and shipping processes, and showcase key illicit procurement methods in action.  Many of the case studies identify ways in which states and their associates seek and successfully obtain sensitive commodities. Other ones show when counter-proliferation methods have worked to thwart those efforts. These cases highlight ways in which countries can improve their detection and prevention of illicit procurement.  To conclude, the report draws together illicit procurement methods and tactics and their warning signs as potential “red flags” indicating the existence of illicit trading.  The report also recommends a range of policy steps that the US and other countries can take to more effectively detect and prevent illicit procurement today and in the future.

https://isis-online.org/uploads/isis-reports/documents/Illicit_Trade_Networks_Vol1_Connecting_the_Dots_February_2020_FINAL.pdf

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 25

25 February 2020

DIGITAL BANK REVOLUT MISTAKENLY FROZE THE ACCOUNTS OF A FRENCH COMPANY IN A BLUNDER THAT HAS RAISED QUESTIONS OVER ITS COMPLIANCE PROCESSES AS IT GROWS AT BREAKNECK SPEED

On 25 February, KYC 360 reported that the case involved a refund from a supplier unable to complete an anticipated order, returning the money paid from the Czech Republic to France.  It is said that, after realising it had made an error, Revolut blundered a second time by returning the money to the supplier.  The owner of the French company alleges that alleges that the bank’s algorithms locked the accounts without humans having “meaningful” oversight of the process.

https://www.riskscreen.com/kyc360/news/nikolay-storonskys-revolut-freezes-accounts-in-money-laundering-bungle/

 

ESG: WHAT DOES IT MEAN AND WHY IS IT IMPORTANT FOR YOU?

On 21 February, an article from Charles Russell Speechlys explains that companies operating in almost every sector are now coming under pressure to report on their ESG credentials and policies.  ESG stands for Environmental, Social and Governance and is linked to the UN’s 17 Sustainable Development Goals (SDG) adopted in September 2015.   The SDG relate to poverty, inequality, climate change, environmental degradation, peace and justice and the UN’s aim is to achieve them all by 2030.  It adds that ESG is sometimes used synonymously with such terms as corporate social responsibility; responsible investing; and sustainable investing.  It says that it is important that ESG is embedded into a company’s considerations and not something that mere lip service is paid to, and that it should matter to you as it is something that investors now and, in the future, will demand.

https://www.charlesrussellspeechlys.com/en/news-and-insights/insights/corporate/2020/esg-what-does-it-mean-and-why-is-it-important-for-you/

 

POLICE IN THE EU PLANNING PAN-EUROPE NETWORK OF FACIAL RECOGNITION DATABASES

On 21 February, The Intercept reported that a report drawn up by the national police forces of 10 EU Member States, led by Austria, calls for the introduction of EU legislation to introduce and interconnect such databases in every Member State.  It is reported that the new facial recognition network will likely be connected to similar databases in the US, creating what privacy researchers are calling a massive transatlantic consolidation of biometric data.  The report was produced as part of discussions on expanding the Prüm system, an EU-wide initiative connecting DNA, fingerprint, and vehicle registration databases for mutual searching.  The EU Commission has also funded a study to map the current situation of facial recognition in criminal investigations in all EU Member States.

https://theintercept.com/2020/02/21/eu-facial-recognition-database/

 

IRAN: SMUGGLED CIGARETTE MARKET TURNOVER AT $1 BILLION

The Finance Tribune in Iran on 24 February reported claims that the smuggled cigarette market in Iran has a turnover of over $1 billion.  The claims was made at a ceremony to mark the launch of a tracking system for cigarette packs to fight smuggling.  The Ministry of Industries, Mining and Trade estimates that 8.67 billion cigarettes were smuggled into Iran during the 9 months to 21 December.

https://financialtribune.com/articles/domestic-economy/102319/smuggled-cigarette-market-turnover-at-1b

 

G20 STATEMENT ON THE DIGITAL ECONOMY – COGNISANT OF RISKS INCLUDING MONEY LAUNDERING

Crowdfund Insider on 25 February reported on a statement issued by the G20 following its summit in Saudi Arabia, a joint communique outlining shared goals for the group of the largest 20 economies in the world.  The document said it was important to “consider the implications associated with the growing entry of Big Tech in finance”, and states that the G20 states “remain vigilant to potential risks arising from financial innovations”.  Risks are said to include money laundering, systemic concerns, macroeconomic implications and “monetary sovereignty issues”.

https://www.crowdfundinsider.com/2020/02/157907-g20-issues-joint-statement-questions-big-tech-in-fintech-urges-implementation-of-fatf-rules-for-virtual-assets/

 

AUCKLAND LAWYER AND COMANCHEROS BIKER GANG OFFICIAL SENT TO PRISON FOR MONEY LAUNDERING

On 25 February, TV Nez Zealand reported that a senior member of the Comancheros gang and an Auckland lawyer acting for them have been sentenced to jail for laundering millions of dollars.  Vice-president of the chapter Tyson Daniels and lawyer Andrew Neill Simpson pleaded guilty to the charges in November.  The pair were among 6 people charged after a sting on the organised crime group last year, where police seized millions of dollars of assets including property, luxury cars and motorbikes.

https://www.tvnz.co.nz/one-news/new-zealand/auckland-lawyer-comancheros-gang-official-sent-prison-money-laundering

 

MONEY LAUNDERING INQUIRY KICKS OFF IN VANCOUVER

City News 1130 in Canada on 25 February reported that a money laundering inquiry has started in Vancouver, in which the Cullen Commission will inquire into dirty money funnelled through British Columbia casinos, real estate, and luxury car sales.  Since 2017, the provincial government has commissioned 3 reports that raised red flags about billions of dollars in dirty money being funnelled through the province, and detailed the extent of the criminal activity – in 2018 alone, it’s believed $5 billion were laundered just through real estate in the province.

https://www.citynews1130.com/2020/02/24/money-laundering-inquiry-vancouver/

 

US: HOUSE OF REPRESENTATIVES COMMITTEE TO REPORT TO FULL HOUSE ON BILL TO EXTEND STATUE OF LIMITATIONS ON SEC CIVIL PENALTY ACTION FROM 5 TO 10 YEARS

On 24 February, Cadwalader Cabinet reported that the Financial Services Committee voted to report to the full House a Bill to establish a new statute of limitations applicable to SEC enforcement actions seeking civil monetary penalties, introduced in July by 2 Democratic members.  The Supreme Court has held that a 5-year statute of limitations applies to claims for the disgorgement of ill-gotten gains obtained through violations of federal securities laws.

https://www.findknowdo.com/news/02/24/2020/house-financial-services-committee-reports-bill-statute-limitations-certain-sec

 

FILM HIGHLIGHTS CORRUPTION AND THEFT FACED BY SEAFARERS

On 25 February, Seatrade Maritime News reported that a new video by Cardiff University and with funding support from Lloyd’s Register Foundation, and based on interviews with seafarers, highlights the level of corruption and theft faced by seafarers in carrying out their day-to-day work on board ship.

https://www.seatrade-maritime.com/ship-operations/film-highlights-corruption-and-theft-faced-seafarers

 

UN LAUNCHES NEW PROJECT TO ADDRESS LINK BETWEEN TERRORISM, ARMS AND CRIME

On 23 February, Homeland Security Today reported that cheap and easily accessible small arms are increasingly becoming the “weapon of choice” for many terrorist groups, the UN counter-terrorism chief told an event aimed to raise awareness of the nexus between terrorism, organised crime and illicit small arms trafficking.  The article says that it is widely acknowledged that the connection between terrorism and organized crime, including illicit small arms and light weapons trafficking, is a serious threat to international peace and security. It is also an obstacle to sustainable development and a menace to the rule of law.  The UN Global Counter-Terrorism Strategy underlines the connection between terrorism and the illicit small arms trafficking, conventional ammunition and explosives, and calls on Member States to strengthen coordination and cooperation to address this challenge.  It is reported that UN agencies have been working to develop a project enhancing national legislative, strategic and operational capacities to prevent, detect and counter the firearms trafficking and other illegal activities related to terrorism and organised crime in Central Asia.

https://www.hstoday.us/subject-matter-areas/counterterrorism/un-launches-new-project-to-address-link-between-terrorism-arms-and-crime/

 

ARMENIA’S OUSTED PRESIDENT SARGSYAN STANDS TRIAL ON CORRUPTION CHARGES

On 25 February, EurActiv reported that former Armenian president Serzh Sargsyan has gone on trial charged with corruption, nearly 2 years after he was ousted from power by a popular uprising following a decade in office.  He was president form 2008 until his resignation in 2018.  He was charged in December with organising an embezzlement scheme that allegedly helped enrich government officials; and was banned from leaving the country and if convicted could face up to 8 years in jail.  It is alleged that, in 2013, he helped to organise a scheme for a private company to supply diesel fuel for the government’s agricultural assistance programme at a deliberately inflated price.  He is not the only former Armenian leader being prosecuted — his predecessor Robert Kocharyan went on trial in May on charges of “overthrowing the constitutional order” for allegedly tipping 2008 presidential polls in favour of Sargsyan.

https://www.euractiv.com/section/armenia/news/armenias-ousted-president-sargsyan-stands-trial-on-corruption-charges/

 

KOSOVO WAR CRIMES PROSECUTOR FILES FIRST INDICTMENTS

On 25 February, EurActiv reported that the prosecutor for a Hague-based court has handed down the first indictments over alleged war crimes committed by Kosovo guerrillas during a 1990s conflict.  The Kosovo Specialist Chambers, was established in 2015 to investigate crimes by independence-seeking ethnic Albanian guerrillas against mainly Serb civilians during the 1998-1999 war, did not identify the suspects.

https://www.euractiv.com/section/enlargement/news/kosovo-war-crimes-prosecutor-files-first-indictments/

 

MEN BEHIND THE ‘LARGEST ILLEGAL TOBACCO FACTORY’ EVER FOUND IN THE UK JAILED FOR A TOTAL OF 30 YEARS

On 25 February, the Daily Mail reported that the masterminds behind a £10 million fraud which saw the UK’s largest illegal tobacco factory produce 140 packs of cigarettes a minute have been jailed.  They led a 12-man gang who made millions of counterfeit cigarettes which were distributed across the North of England.  The factory had more than 24 tonnes of tobacco inside, along with 500,000 cigarettes, old Imperial Tobacco machinery and products used to make the cigarettes.  HMRC also discovered caravans that were being used by the factory workforce.

https://www.dailymail.co.uk/news/article-8043435/Masterminds-UKs-largest-illegal-tobacco-factory-jailed.html

 

GUATEMALAN ANTI-GRAFT CRUSADER GRANTED ASYLUM IN US

On 25 February, OCCRP reported that the US has granted asylum to Guatemala’s former chief prosecutor, Thelma Aldana, 64, just days after her country filed an extradition request based on embezzlement, lying and tax fraud charges she claims were raised in retaliation for her anti-corruption efforts.  She prosecuted and jailed former President Otto Perez Molina and launched investigations against his successor, ex-President Jimmy Morales and members of his family.   In 2017 alone, her office won 9,358 convictions, and that same year she was named one of Time Magazine’s 100 Most Influential People.  After numerous death threats and incidents of harassment, Aldana was forced to resign.  He bid to become president herself was blocked based on a corruption indictment, and after an arrest warrant was issued against her, Aldana left the country.

https://www.occrp.org/en/daily/11689-guatemalan-anti-graft-crusader-granted-asylum-in-us

 

2 TOP FORMER UZBEK OFFICIALS CONVICTED ON CORRUPTION CHARGES

On 25 February, Rferl reported that 2 top former Uzbek officials have been convicted of corruption in a case involving more than a dozen defendants from the public sector.  Ikhtyor Abdullaev, the former chief of Uzbekistan’s State Security Service, was sentenced to 18 years in prison after being found guilty of organising a criminal group, bribe-taking, abuse of office, extortion, the theft of private property, violating customs regulations, and other crimes.  Former Prosecutor-General Otabek Murodov was found guilty of bribe-taking and sentenced to 5 years of freedom limitation – a sentence with parole-like restrictions.  7 other defendants in the case, including former subordinates of Murodov and Abdullaev, were sentenced to prison, while more than a dozen other defendants received sentences that did not include jail time.

https://www.rferl.org/a/two-top-ex-uzbek-officials-convicted-corruption/30453695.html

 

FORMER PERUVIAN PRIME MINISTER ARRESTED FOR ALLEGED CORRUPTION

On 25 February, Prensa Latina reported that ex-Prime Minister Yehude Simon was included in the list of former Peruvian presidents and politicians who have been arrested for alleged corruption.  It is alleged that, as governor of the northern region of Lambayeque, he favoured the Brazilian company Odebrecht with a contract to execute the Olmos-Tinajones irrigation project.  His right-hand man, the manager of the Olmos-Tinajones project, Pablo Salazar Torres, was also arrested.

 

HOW CORRUPT IN BELARUS?

On 25 February, independent TV channel Belsat published an article saying that the number of corruption crimes reported by the prosecutor general has been significantly growing.  It looks at its Transparency International rating – much better than that for Russia and Ukraine.  However, it says, at the same time, many spheres continue to be strongly affected by corruption.  It is said to be flourishing especially in state-owned enterprises and factories, many of which are loss-making.  Almost every year there emerges a bribery scandal, involving high-flyers working for state-run enterprises.

https://belsat.eu/en/news/how-corrupt-is-belarus

 

CORRUPT FOOTBALL OFFICIALS CORNERED IN SPAIN – €10 MILLION FROM “GHOST FOOTBALLERS” ALLEGEDLY LAUNDERED

A news release from Europol on 25 February advised that, since 2018, the Spanish Civil Guard (Guardia Civil) has been investigating 2 football agents linked to one of the most relevant player representation agencies in Europe.  They are suspected of money laundering and tax evasion.  The operation has led to 5 prosecutions and, in the following weeks, several dozen will be called for court hearings.  The investigation uncovered that the football agents were part of a criminal network which manages football clubs in several countries, among which are Belgium, Cyprus and Serbia. The ghost player transfers were first revealed through social media and the 2016 investigation on football leaks.

https://www.europol.europa.eu/newsroom/news/corrupted-football-officials-cornered-in-spain

 

OECD RECOGNISES LEGITIMACY OF CAPTIVE INSURANCE

On 24 February, Eversheds Sutherland published an article concerned with an OECD report released on 12 February on “Transfer Pricing Guidance on Financial Transactions”.  One chapter of the report, it says, deals specifically with transfer pricing issues related to captive insurance arrangements.  The article says that the OECD acknowledges valid business reasons for captive insurance, but goes on to discuss whether a captive insurance company is undertaking a genuine insurance business.  However, according to the article, the requirements for some of the indicators are unclear.  It is reported that the chapter also addresses transfer pricing issues that arise in the context of a captive insurance arrangement.  The article includes observations by the law firm on the contents of the chapter.

https://us.eversheds-sutherland.com/NewsCommentary/Legal-Alerts/229003/Legal-Alert-OECD-recognizes-legitimacy-of-captive-insurance

 

UK AND BREXIT: CARRYING OUT INTERNATIONAL ROAD HAULAGE FROM 1 JANUARY 2021

On 25 February, a news release from the Department for Transport provides information on what UK goods vehicle operators need to do to carry out international road haulage from 1 January.

https://www.gov.uk/guidance/carry-out-international-road-haulage-from-1-january-2021

At the same time, the DfT also provided other news releases –

https://www.gov.uk/guidance/driving-in-the-eu-from-1-january-2021-lorry-and-goods-vehicles-drivers

https://www.gov.uk/guidance/driving-in-the-eu-from-1-january-2021

https://www.gov.uk/guidance/driving-in-the-eu-from-1-january-2021-bus-and-coach-drivers

https://www.gov.uk/guidance/run-international-bus-or-coach-services-and-tours-from-1-january-2021

 

UK AND BREXIT: AVIATION SECURITY FROM 1 JANUARY 2021

On 25 February, a news release from the Department for Transport contained information on measures in place to ensure cargo can fly to and from the EU without disruption from 1 January.  It says that the UK intends to recognise EU cargo security rules to minimise disruption to air cargo networks. Airlines flying from airports in the EU, Switzerland, Norway, Iceland and Liechtenstein will be able to fly cargo to the UK in the same way as they do now – and the EU intends to recognise the UK cargo security regime allowing cargo to continue to fly into the EU.  Cargo will be able to fly from the UK to the EU, Switzerland, Norway, Iceland and Liechtenstein without a security designation, in the same way as it does now.  For international imports, a UK-only inbound cargo scheme will be set up and this will mirror the EU scheme and grant security designations from 1 January to allow all cargo to continue to ship smoothly while maintaining existing security standards.

https://www.gov.uk/guidance/aviation-security-for-cargo-from-1-january-2021

 

IRAN HITS BACK AS SAMSUNG AND LG PULL OUT

World ECR reported that Iran’s Foreign Ministry has hit back against South Korean tech giants Samsung and LG for pulling out of the country in response to US sanctions.  Samsung is reportedly Iran’s largest mobile phone provider, with a 2018 market share of around 55%, and both Samsung and LG had opened assembly plants in Iran, but have now closed them.  The companies stopped direct sales in the country when US sanctions came into force, but have kept up with advertising until this month.

https://www.worldecr.com/news/iran-hits-back-after-samsung-sanctions-pulls-out/

 

E-COMMERCE LOGISTICS MARKET TO EXCEED €500 BILLION BY 2024

On 25 February, Lloyds Loading List reported that logistics service providers (LSP) are unlikely to see many benefits of this growth, as retailers heap pressure onto their supply chain partners to limit costs while improving service levels at the same time.  An LSP is a company that provides management over the flow of goods and materials between points of origin to end-use destination. The provider will often handle shipping, inventory, warehousing, packaging and security functions for shipments.

https://www.lloydsloadinglist.com/freight-directory/news/E-commerce-logistics-market-to-exceed-€500bn-by-2024/76055.htm#.XlWf6m5FzIU

 

ECONOMIC SUBSTANCE UPDATE FOR BVI, CAYMAN ISLANDS AND BERMUDA

An article from Appleby on 25 February provided an update following the news that the BVI and Bermuda had been moved onto the EU “white list” after having implemented legislative changes to fit in with the tax governance requirements of the EU.  Meanwhile, the Cayman Islands (and the Seychelles) found themselves put on the EU “black list” on non-cooperative jurisdictions.

https://www.applebyglobal.com/publications/economic-substance-update-q1-2020/

 

OECD DIGITAL TAX PLANS ‘WILL RADICALLY CHANGE WHOLE INTERNATIONAL TAX SYSTEM’

An article from Out-Law on 25 February says that OECD plans to make the tax system more responsive to digital services are not really about digital taxation at all, but about radically changing the system of international taxing rights across all consumer-facing industries.  The plans involved are not, it says, restricted to digital services and apply to all multinational companies with consumer-facing businesses, something all companies should be aware of.

https://www.pinsentmasons.com/out-law/analysis/oecd-digital-tax-change-international-system

 

GIBRALTAR: RELATIVES OF ARRESTED RHIB SMUGGLING CREW ALSO ARRESTED WHEN THEY ARRIVED TO PAY THE FINE

On 22 February, the Gibraltar Chronicle reported that when 6 Spanish people arrived to pay the fine of others arrested for attempted smuggling using a RHIB were themselves arrested after they tried to pay the fine in cash and were unable to prove where the money came from.

https://www.chronicle.gi/relatives-of-rhib-crew-arrested-as-they-arrive-to-pay-fine/

 

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UN AMENDS 1 ENTRY ON DEMOCRATIC REPUBLIC OF CONGO SANCTIONS LIST

On 25 February, a UN news release advised that the sanctions list entry for IGNACE MURWANASHYAKA, who reportedly died in April 2019, had been amended accordingly.

https://www.un.org/press/en/2020/sc14123.doc.htm

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UN EXTENDS FOR ANOTHER YEAR THE 2018 SANCTIONS ON THOSE THREATENING SECURITY AND STABILITY IN YEMEN

A UN news release on 25 February advised that the Security Council had approved a one-year extension of the asset freeze and travel ban imposed in 2014 on individuals or entities threatening peace, security and stability in Yemen adopting UN SCR 2511.

https://www.un.org/press/en/2020/sc14121.doc.htm

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UN SECURITY COUNCIL COMMITTEE ON LIBYA AMENDS 5 ENTRIES ON SANCTIONS LIST

A news release on 25 February advised that the entries relating to 5 individuals had been amended.

https://www.un.org/press/en/2020/sc14124.doc.htm

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UPDATE ON THE MONEY LAUNDERING OFFENCE IN HONG KONG

On 25 February, Dentons published an article saying that the Court of Final Appeal (CFA) has recently clarified the required mental element for the money laundering offence in Hong Kong.  In finding that the Court of Appeal had erred in its interpretation, the CFA reformulated the test for determining whether a defendant ‘has reasonable grounds to believe’ that property represented the proceeds of an indictable offence.  As a result of the decision, it is the case that where a “reasonable person” who shared the knowledge of the defendant would be bound to believe that the property was tainted, and thus the defendant should be convicted.  The fact that a defendant did not himself believe that the property was tainted would not be a defence but ‘may well be a mitigating factor when he is sentenced’.  The article warns that corporations should therefore be vigilant and have rigorous AML training and due diligence mechanisms in place to protect themselves from possible money laundering charges.  The article goes on to provide more detail of the case and the legislation involved.

https://hongkong.dentons.com/en/insights/articles/2020/february/25/update-on-money-laundering-offence-in-hong-kong

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CORRUPTED FOOTBALL OFFICIALS CORNERED IN SPAIN – €10 MILLION FROM “GHOST FOOTBALLERS” ALLEGEDLY LAUNDERED

A news release from Europol on 25 February advised that, since 2018, the Spanish Civil Guard (Guardia Civil) has been investigating 2 football agents linked to one of the most relevant player representation agencies in Europe.  They are suspected of money laundering and tax evasion.  The operation has led to 5 prosecutions and, in the following weeks, several dozen will be called for court hearings.  The investigation uncovered that the football agents were part of a criminal network which manages football clubs in several countries, among which are Belgium, Cyprus and Serbia. The ghost player transfers were first revealed through social media and the 2016 investigation on football leaks.

https://www.europol.europa.eu/newsroom/news/corrupted-football-officials-cornered-in-spain

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UK ADDS SONNENKREIG DIVISION (SKD) TO PROSCRIBED TERRORIST ORGANISATION LIST AND ADDS 2 ALIASES OF THE PKK

Included in a news release from the Home Office on 24 February was the announcement that the UK was to add the SKD to the list of proscribed organisations, as well as adding the names used as aliases by the already-listed Partiya Karkeren Kurdistani (Kurdistan Worker’s Party or PKK) – Teyre Azadiye Kurdistan (TAK) and Hêzên Parastina Gel (HPG).  2 teenage members of the neo-Nazi group SKD, from Leeds and London, were jailed for terrorism offences in June last year.  The list of proscribed organisations was last issued in updated form in November – in a Notice that also details the meaning of proscription and potential offences for membership or support of a proscribed organisation.

https://www.gov.uk/government/news/government-takes-action-to-proscribe-right-wing-terrorist-groups

https://www.theguardian.com/uk-news/2020/feb/24/uk-ban-neo-nazi-sonnenkrieg-division-terrorist-group

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/849493/20191101_Proscription__SG_.pdf

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AML AND THE ART MARKET: BRITISH ART MARKET FEDERATION GUIDANCE ADDRESSES KEY ISSUES

Stephenson Harwood has published a briefing saying that on 24 January BAMF published its keenly anticipated “Guidance on Anti-Money Laundering for UK Art Market Participants”.  It provides clarity on a number of questions on how newly-regulated dealers, galleries and auction houses should apply the Money Laundering Regulations in the course of business.   The Guidance clarifies a number of points around the question of when to apply CDD and EDD, and to whom they should be applied – and situations where “double CDD” has to be applied (e.g. where the buyer acts as through an agent), as well as applying CDD at art fairs.

https://www.shlegal.com/docs/default-source/news-insights-documents/aml-and-the-art-market_bamf-guidance-addresses-key-issues—feb-2020.pdf?sfvrsn=dac8135b_0

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THE INVESTIGATION INTO MARIAN KOČNER – ONE OF THE MOST WEALTHY AND POWERFUL BUSINESSMEN IN SLOVAKIA

On 21 February, OCCRP carried an amazing article about Marian Kočner – now the main defendant in a high-profile trial that has gripped Slovakia since December. He is charged with ordering the brutal murder of a young investigative journalist who had been reporting on corrupt Slovak politicians, Italian mafiosi — and Kočner himself.  Amongst the allegations made is that Kočner has kept himself above the law by oiling the justice system of Slovakia’s fragile young democracy with cash and kompromat.

https://www.occrp.org/en/a-journalists-undying-legacy/kocners-world

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VENEZUELA: PDVSA SHIFTS OIL CARGOES TO DIFFERENT ROSNEFT UNIT AND US THREATENS ACTION

On 25 February, KYC 360 reported a Reuters report that state-owned oil company PDVSA had shifted several oil cargoes from Rosneft Trading SA, which is now subject to US sanctions, to another affiliate of the Russian oil giant, TNK Trading.

https://www.riskscreen.com/kyc360/news/pdvsa-shifts-oil-cargoes-to-different-rosneft-unit-u-s-threatens-action/

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 24

24 February 2020

FATF: LITTLE-NOTICED CLAUSE THAT GIVES THE US AND ITS ALLIES THE ABILITY TO BLOCK REMOVAL OF THE SANCTIONS ON IRAN

On 21 February, the Wall Street Journal reported that during the recent Plenary action against Iran was made more permanent by a little-noticed clause that gives the US and its allies the ability to block removal of the sanctions even if Tehran adopts new anti-terror and money laundering regulations.  Even if Iran were to adopt the required international AML/CFT standards, the country isn’t going to be automatically removed from the blacklist.  This makes it nearly impossible for FATF sanctions to be lifted unless the US and its allies are satisfied Iran has sufficiently overhauled its financial system.

https://www.wsj.com/articles/iran-faces-long-term-banking-woes-under-terror-finance-watchdog-action-11582328352

 

BRITAIN PREPARES TO REIMPOSE SANCTIONS ON GRACE MUGABE AFTER BREXIT

On 24 February, KYC 360 reported that the threat to reinstate restrictions on Ms Mugabe’s financial dealings is the clearest indication yet that the UK could change its approach to dealing with human rights abuses by overseas individuals when the Brexit transition period ends, as the UK said that it did not agree with the EU’s decision to suspend these sanctions on Grace Mugabe.

https://www.riskscreen.com/kyc360/news/britain-prepares-to-reimpose-sanctions-on-grace-mugabe-after-brexit/

 

COMPLIANCE LESSONS FROM JULIUS BAER’S ‘SERIOUS AML FAILINGS’

On 21 February, Compliance Week listed some shortcomings highlighted by the Julius Baer case.  Swiss regulator, FINMA’s in its now-concluded proceedings found Julius Baer breached its obligations to combat money laundering and failed to put in place appropriate risk management controls, “representing a serious infringement of financial market law”.

https://www.complianceweek.com/regulatory-enforcement/compliance-lessons-from-julius-baers-serious-aml-failings/28479.article

 

BULGARIA PUBLISHES FIRST ASSESSMENT ON RISKS OF MONEY LAUNDERING AND TERRORIST FINANCING

On 21 February, CMS Law published an article saying that on 9 January, the Bulgarian State Agency for National Security (SANS) issued the National Risk Assessment of Money Laundering and Terrorist Financing, which analyses the internal and external risks of money laundering and terrorist financing facing in the country.  The National Risk Assessment provides a strategy and useful measures for limiting and monitoring the risks for money laundering and terrorist financing in Bulgaria from a number of potential sources, which the article briefly mentions.

https://www.cms-lawnow.com/ealerts/2020/02/bulgaria-publishes-first-assessment-on-risks-of-money-laundering-and-terrorist-financing?cc_lang=en

 

CAN FREE PORTS OPERATE UNDER EU STATE AID AND WTO SUBSIDIES RULES?

On 21 February, TLT Solicitors in the UK published an article posing this question.  It points out that even if EU state aid rules do not remain in place, the UK will not have free reign to provide state subsidies to free ports because WTO rules will continue to apply.  While WTO rules do not contain any specific prohibition on free ports, any specific circumstances and incentives being offered must be scrutinised to make sure these do not fall foul of WTO rules, exposing the UK to a potential claim.

https://www.tltsolicitors.com/insights-and-events/insight/can-free-ports-operate-under-eu-state-aid-and-world-trade-organization-subsidies-rules/

 

7 SRI LANKANS ARRESTED IN NIGERIA FOR OIL SMUGGLING

News First in Sri Lanka on 24 February reported that the ri Lankan Ministry of Foreign Relations noted that 7 Sri Lankan crew members are currently in custody in Lagos.  The Sri Lankans are said to have denied knowledge of any smuggling.

https://www.newsfirst.lk/2020/02/24/7-sri-lankans-arrested-in-nigeria-for-oil-smuggling/

 

REPRISALS AIMED AT NICARAGUAN PROTESTERS OVER CONTROVERSIAL GOLD MINE PROJECT

In January, the Center for International Environmental Law carried an article about the intimidation, retaliation, and criminalisation targeting Nicaraguan environmental defenders and community leaders who have publicly opposed plans for a controversial gold mining project in Santa Cruz de la India, Nicaragua.  The project includes involvement of the World Bank’s International Finance Corporation (IFC) and a UK-based company called Condor Gold.

https://www.ciel.org/news/ciel-denounces-reprisals-aimed-at-nicaraguan-defenders-for-publicly-noting-ifc-divestment-from-controversial-mine-project/

 

UN SECURITY COUNCIL BRIEFED ON CLIMATE-RELATED SECURITY RISKS IN SOMALIA

On 24 February, the Stockholm International Peace Research Institute reported that the Security Council was told that floods and droughts in Somalia exacerbate conflict and displacement; thereby UN efforts and the work of the Federal Government of Somalia (FSG) in building peace risk being undermined.  The pressure of weather events is part of what challenges the current power-sharing agreement, providing recruitment opportunities for the al-Shabab terrorist organisation among others.  Extreme weather events create water and food insecurity that give al-Shabab the opportunity to act as service providers.  This allows their political narrative to gain support and decreases trust in the peacebuilding efforts of the FSG and the UN.

https://www.sipri.org/media/press-release/2020/sipri-briefs-un-security-council-climate-related-security-risks-somalia

20914

https://www.statista.com/chart/20914/share-of-european-computers-that-experienced-cyberattacks

 

ACTION AGAINST HUMAN TRAFFICKING AND PIMPING IN ROMANIA AND SPAIN

A news release from Eurojust on 24 February advised that authorities in Romania and Spain have taken action against an Organised Criminal Group suspected of human trafficking, pimping and money laundering. In parallel coordinated operations, four suspects have been arrested and 6 locations searched.  7 victims of Romanian origin were brought to safety, among them 2 minors.  The gang allegedly collected, transported and housed their victims and forced them into prostitution in Romania and Spain.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2020/2020-02-24.aspx

 

EU COMMISSION STUDY SHOWS THE NEED FOR EU-LEVEL LEGISLATION ON DUE DILIGENCE THROUGHOUT THE SUPPLY CHAIN ON HUMAN RIGHTS AND ENVIRONMENTAL IMPACTS

On 24 February, the EU reported that a new study on due diligence requirements through the supply chain shows that only 1 in 3 businesses in the EU are currently undertaking due diligence on human rights and environmental impacts.  Due diligence, in this context, means that for example a company checks their suppliers and operations to be sure it “does no harm”.  It could imply that a company needs to check if their suppliers are not using child labour, or that they do not pour waste products into the rivers.

https://ec.europa.eu/info/business-economy-euro/doing-business-eu/company-law-and-corporate-governance_en#studies

 

9 JAPANESE MEN DETAINED IN MANILA OVER PHONE SCAM DEPORTED TO JAPAN

On 24 February, Japan Today reported that 9 of 36 Japanese men detained in Manila over alleged phone scams were transferred to Japan and arrested by Tokyo police.  Police suspect that the gang operated a phone scam out of an abandoned hotel in Manila and other locations in the Philippines, targeting mainly elderly people in Japan.

https://japantoday.com/category/crime/japanese-men-detained-in-manila-over-phone-scam-brought-to-japan?

 

JAMAICA: BAHAMIAN MAN ON MONEY LAUNDERING CHARGES FINED $1.3 MILLION

The Gleaner reported on 24 February that Bahamian Samuel Cummings has been fined $1,3 million or face 6 months imprisonment for breaching the Proceeds of Crime Act.  He was arrested on arrival from the Bahamas earlier this month.  During checks of his luggage, officers found US$30,000 concealed in a false compartment of his bags, and he had another US$4,771 on his person.

http://jamaica-gleaner.com/article/news/20200224/bahamian-man-money-laundering-charges-fined-13-million

 

GOLDMAN SACHS PLEADS NOT GUILTY IN MALAYSIA 1MDB CASE

The Straits Times on 24 February carried a report saying that 3 units of Goldman Sachs pleaded not guilty in Malaysia over the investment bank’s alleged role in scandal at the country’s sovereign wealth fund 1MDB.  Goldman’s role has been under scrutiny as it helped arrange a series of bond issues worth $6.5 billion for the investment vehicle.

https://www.straitstimes.com/asia/se-asia/goldman-pleads-not-guilty-in-malaysia-1mdb-case

 

CZECH REPUBLIC: POLICE RAID LABOUR MINISTRY AND ACCUSE OFFICIALS OF CORRUPTION OVER IT TENDER

On 24 February, Radio Prague reported that police have accused 2 officials at the Ministry of Labour and Social Affairs in connection with a public tender to provide IT services.

https://www.radio.cz/en/section/news/police-raid-labour-ministry-accuse-officials-of-corruption-over-it-tender

 

UK: PAIR WHO MADE MILLIONS FROM RESELLING CONCERT TICKETS ARE JAILED IN LANDMARK CASE

The Yorkshire Evening Post on 24 February reported that 2 internet touts who re-sold tickets worth millions of pounds to high profile events like Ed Sheeran and Taylor Swift concerts have been jailed.  Peter Hunter and David Smith – who traded as Ticket Wiz and BZZ – were found guilty of fraudulent trading.

https://www.yorkshireeveningpost.co.uk/news/crime/pair-who-made-millions-reselling-concert-tickets-are-jailed-landmark-case-1889759

 

IRELAND EXPECTS INTERNATIONAL BUSINESS TAX REFORMS WILL COST IT €2 BILLION A YEAR

On 24 February, the STEP Journal reported that Ireland’s Minister for Finance and Public Expenditure and Reform has said that he expects the OECD’s base erosion and profit shifting (BEPS) initiative to reduce the country’s annual corporation tax receipts by €2 billion a year by 2025, equivalent to 2.6% of Ireland’s total annual tax revenues.

https://www.step.org/news/ireland-expects-international-business-tax-reforms-will-cost-it-eur2-billion-year

 

THAI INTERIOR MINISTRY HAS NOW BANNED CLAW CRANES FOUND IN GAMING ARCADES

On 24 February, Calvin Ayre reported that the Thai authorities have banned the type of game as being a form of “gambling”.  Any machine that allows customers to pay money or tokens to use a claw to win a prize or play games on screens is now prohibited.

https://calvinayre.com/2020/02/24/business/the-claw-crane-becomes-the-latest-target-of-gambling-opponents/

 

BULGARIA: MAJOR LOCAL RETAILER TO CLOSE ITS OPERATIONS DUE TO ITS LOSS OF PRIVATE LOTTERY REVENUE

Calvin Ayre on 24 February reported that a kiosk chain operator has announced that it was shutting down its operations, around 1,100 retail locations across the country.  It said it generated revenue of $133.2 million in 2018 but much of this revenue was generated through sales of products issued by the privately-run National Lottery and Lottery Bulgaria, both of which were controlled by the now fugitive Vasil Bozhov.  New gambling laws restrict sales of lotteries to those run by the Bulgarian Sports Totalizator.

https://calvinayre.com/2020/02/24/business/bulgaria-private-lottery-ban-forces-retailer-close/

 

IRELAND: COMPLAINTS TO DATA PROTECTION REGULATOR UP 75% LAS YEAR AND THE NUMBER OF DATA BREACH NOTIFICATIONS NEARLY DOUBLED

On 24 February, Out-Law reported that there were 7,215 complaints in 2019, up 75% from the 4,113 complaints it received the year before.  The watchdog was also notified of 6,069 valid personal data breaches last year, up from 3,542 in 2018.  It is also said that there is a trend showing an increasing number of complaints being made by individuals about data breaches, with 207 such complaints submitted to its office last year. Many of the complaints concerned breaches caused by human error.

https://www.pinsentmasons.com/out-law/news/data-protection-complaints-soar-ireland

 

NEW LAW ON PREVENTION OF AND COUNTERACTION TO LAUNDERING OF PROCEEDS IN UKRAINE

On 24 February, Dentons published a briefing on this new law, saying that it updates, inter alia, the requirements of the disclosure of information regarding beneficial owners of legal entities, trusts and other similar legal structures.  The briefing provides details of the changes.

https://www.dentons.com/en/insights/alerts/2020/february/24/new-law-on-prevention-of-and-counteraction-to-laundering-of-proceeds-in-ukraine

 

PESTICIDE COMPANIES MAKING BILLIONS FROM BEE-HARMING AND HAZARDOUS CHEMICALS

On 21 February, an article on Ekklesia says that the world’s 5 largest agrochemical companies – Bayer, BASF, Syngenta, FMC and Corteva – are making billions by selling toxic pesticides posing serious threats to human health or wildlife, a joint investigation by Unearthed and the Swiss NGO Public Eye has revealed.  What is described as the first major analysis of the global trade in highly hazardous pesticides also reveals that chemical giants are selling disproportionately more highly-hazardous products to low- and middle-income countries, where regulations are weaker.

http://www.ekklesia.co.uk/node/29357

 

THEFT AND EXTORTION COMMON EXPERIENCES, SAY SEAFARERS

On 24 February, Hellenic Shipping News carried a news item about a report from Cardiff University on pressures on seafarers caused by corrupt practices when they arrive at some ports.  Interviews revealed demands for cash and provisions when their vessels enter ports. One seafarer spoke of his crew being forced to resort to food rationing between ports, while another described seeing a supervisor hand over money from his own pocket, fearing a delay to their schedule might cause him to lose his job.  Researchers have also been told of incidents where vital safety equipment on board is compromised by thefts of brass fittings.  The first-hand testimonies are a continuation of research led by Professor Helen Sampson of the Seafarers International Research Centre (SIRC) and are included in a film to raise awareness of their plight.

https://www.hellenicshippingnews.com/theft-and-extortion-common-experiences-say-seafarers/

 

WHY ARE THE NUMBER OF ACCOUNT FREEZING ORDERS SKYROCKETING IN THE UK?

A post on the FCPA Blog on 24 February seeks to answer this question, and saying that in the 3 years since the Criminal Finances Act 2018, Unexplained Wealth Orders are probably the best known – but while UWO have had far greater media coverage, it is another measure, the Account Freezing Order (AFO), which has arguably made the greater impact.  15 UWO were issued in the 2 years to April 2019, compared to a total of 670 AFO.  The post briefly explains what an AFO is and its effects, saying that it freezes a named UK-based bank or building society account for up to 2 years, preventing any money in it from being withdrawn.  They can be applied for by a wide range of bodies, not just the most obvious law enforcement ones, and they are applied for through the lower magistrates’ courts and not the more senior courts, making them probably quicker and more cost-effective to obtain.

https://fcpablog.com/2020/02/24/why-are-afo-numbers-skyrocketing-in-the-uk/

 

3-WAY FIGHT IN THE SOUTH CHINA SEAS

On 21 February, the Asia Maritime Transparency Initiative from CSIS in the US carried an article about a little-reported stand-off in the South China Sea between China, Malaysia and Vietnam.  This involves a months-long stand-off over oil and gas operations between Malaysian, Chinese, and a small number of Vietnamese vessels – though all 3 governments are keeping the episode out of the public eye.  At issue are 2 oil and gas fields that Malaysia’s state-owned Petronas is exploring on the extended continental shelf claimed by both Malaysia and Vietnam.  China has responded with a campaign of intimidation.  AMTI says it has tracked the standoff using the vessels’ automatic identification system (AIS) broadcasts along with commercial satellite imagery.  This data reveals a dangerous, ongoing game of chicken involving law enforcement, militia, and civilian vessels.

https://amti.csis.org/malaysia-picks-a-three-way-fight-in-the-south-china-sea

 

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SEA FREIGHT TRANSPORT HAS BEEN BLOWN OFF COURSE BY THE NEW CORONAVIRUS

On 24 February, Hellenic Shipping News reported on the effects of the virus on what it describes as the “lifeblood” of the world economy, saying that figures provided by cargo ship traffic paint a gloomy picture.  It comments on shipping indices showing a sharp decline.  As an example, it cites one French company which has banned its sailors from going ashore in China and stopped relieving its crews at Chinese ports, resulting in considerable disruptions.  The article comments that China does not just produce goods but is also a major consumer with a booming middle class and the world’s largest population, and that it is said to account for about 35% of all seaborne dry bulk imports in the world.

https://www.hellenicshippingnews.com/virus-hits-shipping-spreading-global-economic-strain/

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THEFT AND EXTORTION COMMON EXPERIENCES, SAY SEAFARERS

On 24 February, Hellenic Shipping News carried a news item about a report from Cardiff University on pressures on seafarers caused by corrupt practices when they arrive at some ports.  Interviews revealed demands for cash and provisions when their vessels enter ports. One seafarer spoke of his crew being forced to resort to food rationing between ports, while another described seeing a supervisor hand over money from his own pocket, fearing a delay to their schedule might cause him to lose his job.  Researchers have also been told of incidents where vital safety equipment on board is compromised by thefts of brass fittings.  The first-hand testimonies are a continuation of research led by Professor Helen Sampson of the Seafarers International Research Centre (SIRC) and are included in a film to raise awareness of their plight.

https://www.hellenicshippingnews.com/theft-and-extortion-common-experiences-say-seafarers/

 

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PAUSE: SEC UPDATES WARNING LIST OF INVESTMENT BUSINESSES USING INACCURATE INFORMATION TO SOLICIT INVESTMENTS

On 24 February, a release announced that the SEC had updated its PAUSE List, adding 25 soliciting entities and 4 fictitious regulators.   The SEC also announced enhancements to the PAUSE website, where the SEC provides the list of entities that falsely claim to be registered, licensed, and/or located in the US, as well as entities that impersonate genuine US-registered securities firms and fictitious regulators, governmental agencies, or international organisations.

https://mondovisione.com/media-and-resources/news/sec-updates-list-of-firms-using-inaccurate-information-to-solicit-investors-en/

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MONEY LAUNDERING AND TERRORIST FINANCING CONTROLS IN OVERSEAS JURISDICTIONS – UK ADVISORY NOTICE

Following last week’s FATF Plenary, HM Treasury has published an updated notice on 24 February detailing the risks posed by unsatisfactory money laundering and terrorist financing controls in a number of jurisdictions.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/867964/Advisory_notice_Feb_2020.pdf

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UK ADDS SYSTEM RESISTANCE NETWORK TO PROSCRIBED TERRORISM ORGANISATION LIST (BEING ANOTHER NAME FOR “NATIONAL ACTION”)

The Proscribed Organisations (Name Change) Order 2020 has amended the list of proscribed organisations in the UK, adding System Resistance Network as another name for the organisation listed as National Action.  It comes into force on 25 February.  Under UK law, it is a criminal offence for a person to belong to, or invite support for, a proscribed organisation. It is also a criminal offence to arrange a meeting to support a proscribed organisation; or to wear clothing or carry articles in public which arouse reasonable suspicion that an individual is a member or supporter of a proscribed organisation.

http://www.legislation.gov.uk/uksi/2020/169/contents/made

https://www.gov.uk/government/news/government-takes-action-to-proscribe-right-wing-terrorist-groups

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UN AND UK ANNOUNCE 2 NEW ENTITIES ADDED TO ISIL/AL-QAIDA SANCTIONS LISTS – ISLAMIC STATE IN THE GREATER SAHARA (ISGS) AND ISLAMIC STATE WEST AFRICA PROVINCE (ISWAP)

On 24 February, a Notice from HM Treasury advised that the relevant UN Security Council committee had added these 2 organisations to its sanctions lists.  Using UK law, the 2 organisations are listed, but this will cease to apply from 11:59 p.m. on 24 March unless the EU adds them to its sanctions lists Or when the EU does list them, if that is sooner).

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/867995/Notice_ISIL_UN_240220.pdf

https://www.un.org/press/en/2020/sc14118.doc.htm

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 23

23 February 2020

LIBERIA IMPOUNDS GHANAIAN VESSEL SMUGGLING MINING EQUIPMENT AND BEER

On 23 February, Ghana Web reported that authorities also confirmed that an assortment of mining equipment believed to have been smuggled into the West African nation for illegal mining activities were seized.  The mining equipment were reportedly bought by Liberians who paid all the required taxes in Ghana, and hired a Ghanaian-owned vessel to smuggle them to Liberia.  The country’s Immigration Service said that out of 176 entry points with its neighbouring countries, only 46 of these are guarded; and experts were said to blame porous borders for illicit trades in Liberia. These trades range from illegal arm trade, drug trafficking, human trafficking, among others.

https://www.ghanaweb.com/GhanaHomePage/business/Liberia-impounds-Ghanaian-vessel-smuggling-mining-equipment-and-beer-874600

 

POLICE SMASH MAJOR ALCOHOL SMUGGLERS NETWORK IN GREECE AND BULGARIA

On 23 February, Ekatherimini reported that 14 people were arrested as members of a suspected criminal network smuggling large quantities of alcohol from Bulgaria and reselling it in Greece.  The arrests include 10 Greek nationals and 4 foreigners, with 2 others still at large.  It is alleged that they transported the product to 2 illegal distilleries and 4 warehouses in central Athens where they then relabelled it as Greek-manufactured.

http://www.ekathimerini.com/249836/article/ekathimerini/news/police-smash-major-alcohol-smugglers-network-in-greece-bulgaria

 

MAJORCA: TOP FOOTBALL AGENT UNDER INVESTIGATION FOR MONEY LAUNDERING

On 23 February, the Majorca Daily Bulletin reported that football agent Fali Ramadani has reportedly been placed under investigation by the Audiencia Nacional in Madrid in connection with the multi-million money laundering case that started outside Spain.  Originally from Albania, Ramadani’s Berlin-based Lian Sports is reckoned to be the 5th most valuable in the world of agencies dedicated solely to football.

https://www.majorcadailybulletin.com/news/local/2020/02/23/63089/fali-ramadani-mallorcan-property-searched-money-laundering-case.html

 

FORMER MAYOR IN BRAZIL ACCUSED OF ALLEGED MONEY LAUNDERING WITH BITCOIN

Cryptocurrency Marketing on 23 February reported that the Federal Public prosecutor’s office have announced that José Edivan Felix, former mayor of Catingueira, already is serving a prison sentence for fraud and embezzlement of public funds, has been accused of being involved in an alleged money-laundering scheme using cryptocurrencies as bitcoin and megacoin.

https://currencymarket24.com/accuse-former-mayor-of-brazil-for-alleged-money-laundering-with-bitcoin/

 

EGYPT UPHOLDS SENTENCE OF TOP CUSTOMS OFFICIAL ON CORRUPTION

On 23 February, Associated Press reported that Egypt’s top appeals court has upheld a 10-year jail term for the head of the country’s customs authority, Abdel-Azim, who was arrested in June 2018 and then convicted of corruption.  The article also mentions that, amongst relatively few such corruption cases of senior officials, authorities also arrested the governor of the Nile Delta province of Menoufia in 2018.  He was sentenced to 10 years in prison for accepting bribes to award public works contracts.  The deputy governor of Alexandria was also arrested in 2017, and sentenced last year to 12 years in prison for bribery, profiteering and squandering public funds.

https://apnews.com/6a27f95d8784a1896f4207a2b539a204

 

VAST ILLEGAL RIDE-SHARING NETWORK DISMANTLED IN FRANCE

The Connexion on 23 February reported that 5 men have been arrested in western Paris on suspicion of running a vast ride-sharing network that exploited illegal workers as drivers.  They are said to have run 2 companies, through which they employed hundreds of illegally-working drivers.

https://www.connexionfrance.com/French-news/Vast-illegal-ride-sharing-taxi-worker-network-dismantled-in-Paris-France

 

BOEING MANOEUVRES TO HEAD OFF WTO SANCTIONS

On 20 February, AIN Online reported that Boeing has asked Washington State lawmakers to draft legislation that would rescind tax breaks to the company introduced more than a decade-and-a-half ago, in a move designed to head off retaliatory tariffs planned by the EU on Boeing aircraft and other goods from Washington, that would effectively counter tariffs placed on Airbus products by the US.  This is the latest development in the (very) long-running US-EU dispute over alleged subsidies given by both sides to their respective aircraft manufacturers.

https://www.ainonline.com/aviation-news/air-transport/2020-02-20/boeing-maneuvers-head-wto-sanctions

 

PROSECUTIONS OF INTERNATIONAL TERRORIST SUPPORTERS IN THE US CONTINUE: WINTER 2019 UPDATE

On 21 February, Lawfare published an article which provides an update on recent international terrorism prosecutions in the US and highlight new and ongoing cases, both of individuals allegedly associated with the Islamic State and of those with ties to other groups.

https://www.lawfareblog.com/prosecutions-international-terrorist-supporters-continue-winter-2019-update

 

CIVIL DAMAGE ACTIONS FOR CORRUPTION: POSSIBILITIES OFFERED BY THE MOZAMBICAN HIDDEN DEBT SCANDAL

A post on the Global Anticorruption Blog on 18 February was concerned with the consequences of the April 2016 disclosure that Mozambican officials accepted large bribes to secretly guarantee hundreds of millions of dollars in loans.  The Mozambique government has brought a criminal action against a number of the alleged perpetrators in its own courts and has filed a civil suit for damages against others in London.  The author of the article says he has published a paper in which he considers who in Mozambique might be able to bring a damage action, for what and where, and the additional legal and factual research required before one or more suits are filed.

https://anticorruptionblog.files.wordpress.com/2020/02/civil-suits-for-damages-by-mozambicans-harmed-by-the-hidden-debt-scandal.docx

 

FORMER FRENCH PRESIDENTIAL CANDIDATE FRANCOIS FILLON ACCUSED OF MISUSING MORE THAN €1M TO EMPLOY WIFE IN ALLEGEDLY NON-EXISTENT ROLE

On 23 February, the Guardian reported that Fillon, 65, who was on track to become President in 2017, will appear in court with his Welsh-born wife, Penelope.

https://www.theguardian.com/world/2020/feb/23/francois-fillon-goes-on-trial-for-embezzlement-of-public-funds

 

BULGARIAN PM BORISSOV REPORTEDLY TARGETED BY SPANISH MONEY LAUNDERING PROBE

On 23 February, BNE Intellinews reported that police in Catalonia is investigating whether Bulgaria’s Prime Minister Boyko Borissov is involved in a money laundering case related to a luxury house purchased in Spain.  This is the latest scandal to affect his time as PM, he has been forced to replace 9 ministers so far after various corruption scandals.

https://intellinews.com/bulgarian-pm-borissov-reportedly-targeted-by-spanish-money-laundering-probe-177128/

 

IRAQ’S OFFICIAL ANTI-CORRUPTION AGENCY SAY THAT IT RESTORED $2.38 BILLION TO THE TREASURY IN 2019

In its 24 February edition, Iraq Business News carried an article saying that Iraq’s official anti-corruption agency, the Federal Commission of Integrity, stated in its latest annual report that it restored 2.84 trillion Iraqi dinars ($2.38 billion) to the Treasury in 2019; with 10,143 persons accused of corruption – including 50 officials who were government ministers or holding equivalent positions.

https://www.iraq-businessnews.com/2020/02/24/integrity-commission-restored-2bn-to-iraqi-treasury

 

“MORE MONEY THAN DRUGS”: A DEEP DIVE INTO AD FRAUD

An article in Forbes magazine claims that the average individual ad fraudster makes $5 to $20 million dollars a year.  It is said that Ad fraud ranges from app install farms, which feature hundreds or thousands of smartphones on which people click ads and install apps endlessly, to electronic simulated versions of the same thing, to sophisticated spoofing of ad measurement platforms.  The article refers to the methods used, including malware, “cookie stuffing” and “ad stacking”, as well as the use of bots.

https://www.forbes.com/sites/johnkoetsier/2020/02/23/more-money-than-drugs-a-deep-dive-into-ad-fraud

 

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US SUPREME COURT TAKES ON SEC DISGORGEMENT

On 23 February, a post on the Compliance and Enforcement blog from the New York University School of Law says that for 50 years the SEC has sought “disgorgement” of the proceeds of unlawful activity as one of its main remedies in federal court, even though there is no explicit statutory authority for doing so.  Disgorgement is described as being justified as an exercise of courts’ inherent equitable powers to deprive a defendant of unjust enrichment via a restitution-style remedy.  It is defined by the online dictionary Investopedia as “a repayment of ill-gotten gains that is imposed on wrongdoers by the courts. Funds that were received through illegal or unethical business transactions are disgorged, or paid back, with interest to those affected by the action. Disgorgement is a remedial civil action, rather than punitive civil action”.  On 3 March, the Supreme Court will hear oral argument in a case in which the Justices have agreed to consider whether courts can order disgorgement as an “equitable remedy” for a violation of the securities laws.  The post discusses the case’s legal backdrop, some of the ways the Court could decide it, and some of its potential consequences.

https://wp.nyu.edu/compliance_enforcement/2020/02/22/the-supreme-court-takes-on-sec-disgorgement/

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 22

22 February 2020

ALBANIA UNDER SPECIAL FATF MONITORING

On 22 February, Albania Daily News reported on the increased monitoring regime imposed this week on Albania, and the steps made already by the country to improve its AML/CFT regime.

https://www.albaniandailynews.com/index.php?idm=39709&mod=2

 

US COAST GUARD COMMANDANT: ILLEGAL CHINESE FISHING A ‘NATIONAL SECURITY CHALLENGE’ THAT WARRANTS US RESPONSE

On 21 February, Sea Power (the official publication of the Navy League) reported on the State of the Coast Guard address given by the Commandant.  He said that near-peer adversaries (i.e. China) are actively exploiting other nations’ natural resources, including fish stocks. In many cases [they are] challenging the sovereignty of smaller or less-developed nations.  He identified China, which has the world’s largest distant-water fishing fleet, as “one of the worst predatory fishing offenders,” engaging in Illegal, unreported, unregulated fishing (IUU).  He identified the Indo-Pacific as the epicentre of global maritime trade and geostrategic influence, and that many Pacific Island countries — even US island territories — lack the capability to fully police their sovereign waters.

https://seapowermagazine.org/coast-guard-commandant-illegal-chinese-fishing-a-national-security-challenge-that-warrants-u-s-response/

 

SHIPPING INDUSTRY FACES $370 MILLION HIT FROM NEW PANAMA CANAL CHARGE

On 22 February, Hellenic Shipping News reported on the new “freshwater” charge that came in this month to help the Panama Canal cope with climate change, as the Canal has been hit by drought which affects water levels.

https://www.hellenicshippingnews.com/shipping-industry-faces-370-million-hit-from-new-panama-canal-charge/

 

HOW DO YOU CALCULATE FCPA SETTLEMENT AMOUNTS?

On 21 February, a post on the FCPA Blog was concerned with how the recent Airbus settlement was calculated, saying that the starting point is DOJ Order + SEC Order = Total FCPA Settlement – but the total FCPA settlement amount is not the same as the amount actually paid to the US Treasury.  The amount paid over to the US government may be considerably smaller.

https://fcpablog.com/2020/02/21/how-do-you-calculate-fcpa-settlement-amounts/

 

US STATE DEPARTMENT SANCTIONS 13 SUSPECTED IN 1989 SLAYING OF JESUITS IN EL SALVADOR. WHY NOW?

America: the Jesuit Review has published an article on 21 February about the 29 January State Department designating 13 military personnel for involvement in gross violations of human rights or significant corruption.  They and their families are banned from entering the US.  In particular, the designation mentioned the extrajudicial killings of 6 Jesuit priests and 2 others taking refuge at the Jesuit pastoral centre in 1989 on the campus of the José Simeón Cañas] Central American University in El Salvador.  It has been confirmed that the bans were triggered by a routine investigation after “an individual connected to this incident sought to travel to the United States”.

https://www.americamagazine.org/politics-society/2020/02/21/state-department-sanctions-13-suspected-1989-slaying-jesuits-el

https://www.state.gov/public-designation-of-thirteen-former-salvadoran-military-officials-due-to-involvement-in-gross-violations-of-human-rights/

 

ROMANIAN COASTGUARD SEIZES RUBBISH ‘SMUGGLED’ FROM THE UK

On 22 February, CGTN reported that 17 shipping containers, some bearing the brand of Maersk Sealand, the waste  – and believed to be of British origin, were intercepted in the Romanian port of Constanța.  Sources close to the investigation say they believe the waste started its journey in Sheffield in northern England in December, before being shipped to Turkey and then to Romania.  It is described as the latest in a tide of rubbish that has been flooding Romania in recent years, where storage of waste costs a fraction of what it would in richer countries, that have stricter legislation.

https://newseu.cgtn.com/news/2020-02-22/Romania-seizes-17-container-loads-of-smuggled-rubbish-from-UK-OgUaSBG0qQ/index.html

 

MAJORCA MILLIONAIRE INVESTIGATED

The Majorca Daily Bulletin on 22 February reported that an unnamed millionaire in Majorca is under investigation after police assisted by the EU Europol agency raided the suspect’s home and office in connection with the sale of property.

https://www.majorcadailybulletin.com/news/local/2020/02/22/63059/majorca-money-laundering-allegations.html

 

CROATIA’S HONORARY CONSUL IN BARCELONA (AND OTHER HONORARY CONSULS) “UNDER INVESTIGATION FOR MONEY LAUNDERING”

On 22 February, Total Croatia News reported that Catalan police are investigating Croatia’s honorary consul in Barcelona over possible money laundering for a local criminal gang.  It says that also under investigation are the honorary consuls of Albania and Mali.

https://www.total-croatia-news.com/politics/41661-barcelona

 

EGYPT COURT ACQUITS FORMER PRESIDENT’S SONS OF CORRUPTION

On 22 February, AP reported that an Egyptian court has acquitted the 2 sons of ousted President Hosni Mubarak – wealthy businessman Alaa and Mubarak’s one-time heir apparent Gamal – on charges of stock market manipulation, the latest in a series of trials of Mubarak’s family since the 2011.

https://apnews.com/0fa43fa85c0f8874fe6d048b2fa3ef7a

 

UK BASIC PASSPORT CHECKS GUIDANCE

On 22 February, HM Passport Office published an updated colour booklet containing important information of what to expect, plus additional notes for the 1988, 1998, 2006, 2010 and 2015 versions of the UK passport.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/867550/Basic_passport_checks_1988_-2019_02.20.pdf

 

THE FEDERAL CASE AGAINST THE IRANIAN NATIONAL WHO OWNED AND OPERATED MALTA’S PILATUS BANK, AI SADR HASHEMI NEJAD, HAS BEEN SET TO BEGIN ON 2 MARCH

On 22 February, Kenneth Rijock in his blog reported that the case will open in the US after preliminary motions were resolved.

http://rijock.blogspot.com/2020/02/ali-sadr-hashemi-nejad-trial-set-for.html

 

IN “FAKE FRENCH DEFENCE MINISTER” CASE TRADE-BASED MONEY LAUNDERING EMPLOYED
On 22 February, in his blog, Kenneth Rijock reported (and provided a complex illustrative diagram) that Gilbert Chikli, leader of a French gang that defrauded wealthy individuals of a reported €73 million, by impersonating the Minister of Defence, and asking for ransom money to free purported kidnap victims in Syria, used trade-based money laundering techniques to clean the criminal proceeds.  He refers to one method, a variant known as Chinese Flying Money, and the diagram illustrates this method.

http://rijock.blogspot.com/2020/02/french-fake-defense-minister.html

 

VESSELS CALLING AT CHINESE PORTS – DELAYS IN DISCHARGING BECAUSE ORIGINAL BILLS OF LADING HAVE NOT REACHED THE DISCHARGE PORT ON TIME DUE TO DIFFICULTIES WITH LOCAL COURIER SERVICES DUE TO CORONAVIRUS

On 19 February, a briefing from HFW says that in such cases, when vessels are voyage chartered, delays may result in large demurrage liabilities – costs which may or may not be capable of being passed on, and that the shipping industry will be keen to find a solution to prolonged document delays.  It says that the use of letters of indemnity (LOIs) is a well-established solution to the problem of discharging a vessel without production of an original bill of lading – but these are not without risk, which it goes into.

https://www.hfw.com/Coronavirus-and-documentary-delays-Feb-2020

 

FIRST RUSSIAN ONLINE RETAIL GIANT TO TARGET EU BUYERS

On 21 February, HKTDC carried an article about Wildberries, Russia’s largest online retailer, opening its first EU-specific sales point; and with dispatch from Poland using a new, dedicated site that features the merchandise on offer from 13,500 Russian and overseas brands, including a wide range of clothing, footwear, accessories and toys.  In September, it announced a 300,000 sq m warehouse facility in Slovakia.

http://economists-pick-research.hktdc.com/business-news/article/Economists-Pick-International-Market-News/Wildberries-Becomes-First-Russian-Online-Giant-to-Target-EU-Buyers/imn/en/1/1X308LSH/1X0AJZRC.htm

 

DEA AGENT ACCUSED OF CONSPIRING WITH DRUGS CARTEL

Newsweek and others on 22 February that a once-standout US federal narcotics agent, Jose Irizarry, and his wife, were arrested, having become known for spending lavishly on luxury cars and Tiffany jewellery.  He faces charges of conspiring to launder money with the same Colombian drug cartel he was supposed to be fighting.

https://www.stripes.com/news/americas/dea-agent-accused-of-conspiring-with-cartel-1.619895

https://www.newsweek.com/jose-irizarry-drug-enforcement-money-laundering-1488591

 

NAMIBIA: NEW CHARGES FOR THE FISHROT ACCUSED

All Africa on 19 February reported that suspended Fishcor CEO Mike Nghipunya has been joined by 5 other co-accused in court in Windhoek in the unfolding international fishing bribery scandal.  He is facing 3 charges, including fraud, contravening the Anti-Corruption Act and corruptly using office for gratification as well as money laundering.  The other accused included former fisheries minister Bernhard Esau and ex-justice minister Sacky Shanghala, The 5 were in court to face new charges, with regards to the alleged corruption at the State-owned fishing company Fishcor.  The accused were arrested last year following reports that an Icelandic fishing company Samherji secured access to horse mackerel quotas in Namibia by allegedly paying bribes to politicians and businessmen between 2012 and 2018, according to the Fishrot Files of WikiLeaks.

https://allafrica.com/stories/202002220209.html

 

IRELAND: GARDAI INVESTIGATING VIOLENCE AGAINST A COMPANY UNCOVERED A NETWORK OF FRONT COMPANIES AND BANK ACCOUNTS USED TO LAUNDER MONIES PAID TO A SENIOR CRIMINAL

On 22 February, the Belfast Telegraph reported that police in the Republic investigating violence against Quinn Industrial Holdings (QIH) have uncovered a network of front companies, ostensibly set up to buy and sell plant machinery, and bank accounts used to launder monies paid to senior criminal Cyril McGuinness.

https://www.belfasttelegraph.co.uk/news/northern-ireland/quinn-attacks-probe-uncovers-cash-laundering-money-trail-38979940.html

 

SPAIN: NEW RULES WILL PROHIBIT 80% OF ONLINE GAMBLING ADVERTS

On 21 February, Calvin Ayre reported that Spain’s online gambling operators have learned of over 100 new restrictions on their ability to promote their services.  The new rules would likely prohibit around 80% of current online gambling ads, and a minister justified the curbs due to the gambling sector having “an impact on public health”.  Other restrictions on advertising are proposed, although they will apparently be permitted to run in print media and via legitimate news media websites, provided that they adhere to all the other rules.

https://calvinayre.com/2020/02/21/business/spain-new-rules-prohibit-online-gambling-advertising/

 

IRELAND: NEW FILING/DISCLOSURE OBLIGATIONS FOR PARTNERSHIPS AND LIMITED PARTNERSHIPS

On 10 February, Matheson published a briefing about changes to existing disclosure obligations that apply to partnerships and limited partnerships in Ireland needed to align Irish with EU law.  It says that this change will be particularly important for certain partnerships whose partners are incorporated or established outside of the EU (e.g. in the Isle of Man or Jersey) that were not previously required to file annual returns or accounts.

https://www.matheson.com/news-and-insights/article/new-filing-disclosure-obligations-for-partnerships-and-limited-partnerships

 

US TO RELAX NORTH KOREAN SANCTIONS TO ALLOW CORONAVIRUS AID

World ECR reports that the US State Department has said that the US will allow aid organisations working in North Korea to sidestep sanctions in order to fight the Covid-19 coronavirus.  The State Department announcement came after the International Federation of Red Cross and Red Crescent Societies called for a sanctions exemption that would allow it to transfer funds to its North Korea office.

https://www.worldecr.com/news/us-to-relax-north-korea-sanctions-to-allow-coronavirus-aid/

 

AS THE UK HAS OFFICIALLY LEFT THE EU WHAT DOES THIS MEAN FOR DATA TRANSFERS?

An article from law firm Field Fisher on 20 February addresses this question.  Of course, during the transition until 31 December nothing changes and personal data can continue to flow freely from the EEA to the UK.   At the end of the transition period the UK will become a “third country” for the purposes of the GDPR and, to ensure that data flows from the EEA to the UK are not disrupted, the UK will need to secure an adequacy decision from the European Commission.  The law firm takes a look at how the Commission determines adequacy and the UK’s prospects of securing that haloed status.

https://www.fieldfisher.com/en/services/technology-outsourcing-and-privacy/privacy-security-and-information/privacy-security-and-information-law-blog/the-united-kingdom-–-this-sceptred-(and-adequate)

 

ITAR FIREARMS AMENDMENTS – 6 IMPORTANT POINTS YOU NEED TO KNOW

On 6 February, a briefing from Williams Mullen provided a list of 6 important points about the January transfer of certain firearms, ammunition, components and accessories from controls under the International Traffic in Arms Regulations (ITAR) to the Export Administration Regulations (EAR).

https://www.williamsmullen.com/news/itar-firearms-amendments-six-important-points-you-need-know

 

PREVENTING ILLICIT TRAFFICKING BY TRANSNATIONAL CRIMINAL ORGANISATIONS

The Stimson Center in the US has produced this brief as part of ongoing series examining the international challenges that will face the next US presidential administration and providing concrete recommendations for presidential action.  The brief says that existing efforts to address trafficking are disaggregated and fail to involve legitimate industry as partners in prevention.  The US President should, it says, catalogue the threat, better target government resources, and incentivise legitimate business to do more to help prevent illicit trafficking at home and abroad.  It argues that although both the Obama and Trump administrations prioritised federal efforts to meet the growing spectre of illicit trafficking, both failed to go beyond government-oriented solutions to what has become a far more complex challenge.  Beyond lip service and intermittent efforts to build “public private partnerships,” the US has fundamentally failed to alter the calculus of both legitimate and illicit actors operating in the global supply chain.  It says that government must do its part to change the current ‘low-risk high-rewards calculus’ for those operating in the illicit space, and do more to incentivise legitimate companies to partner in countering illicit trade.  It makes a number of policy recommendations –

  • Comprehensively chart the global grey market to identify common choke points;
  • Dedicate a greater share of intelligence and interagency resources to identifying and disrupting factors that enable illicit middlemen in the global supply chain; and
  • Enlist support of the legitimate supply chain companies.

https://www.stimson.org/wp-content/uploads/2019/11/Finlay-Trafficking.pdf

 

THE FRENCH LIST OF NON-COOPERATIVE STATES AND TERRITORIES IS COMPLETELY OVERHAULED

On 13 February, Baker McKenzie published a briefing on the list which has been extensively overhauled: with the exception of Panama, all the jurisdictions have been withdrawn from the list, while 12 new states or territories have been added.  It explains the criteria and the restrictive tax measures applied.

https://globalcompliancenews.com/the-french-list-of-non-cooperative-states-and-territories-is-completely-overhauled/

 

GEORGIA: MINISTRY OF FINANCE PRESENTS NEW INITIATIVE TO REDUCE MONEY LAUNDERING RISKS RELATED TO GAMBLING

On 20 February, Agenda GE reported that the initiative includes the implementation of a new system for the registration and verification of the identity of players; and it aims to create a list of people addicted to gambling and to control the movement of funds through identified channels.

https://agenda.ge/en/news/2020/531

 

ITALY ARRESTS SHIP’S CAPTAIN OVER ALLEGED LIBYA ARMS TRAFFICKING

On 21 February, Reuters reported that Italian authorities have arrested the captain of a Lebanese-flagged cargo ship, the Bana, which was seized on 3 February in the port of Genoa on suspicion of trafficking arms to Libya, including tanks and artillery,  It is said that a ship’s officer told Italian authorities that weapons had been loaded onto the ship at the Turkish port of Mersin then transported to the Libyan capital Tripoli.

https://www.reuters.com/article/us-italy-libya-smuggling-idUSKBN20F2OI

 

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ITALY ARRESTS SHIP’S CAPTAIN OVER ALLEGED LIBYA ARMS TRAFFICKING

On 21 February, Reuters reported that Italian authorities have arrested the captain of a Lebanese-flagged cargo ship, the Bana, which was seized on 3 February in the port of Genoa on suspicion of trafficking arms to Libya, including tanks and artillery,  It is said that a ship’s officer told Italian authorities that weapons had been loaded onto the ship at the Turkish port of Mersin then transported to the Libyan capital Tripoli.

https://www.reuters.com/article/us-italy-libya-smuggling-idUSKBN20F2OI

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PREVENTING ILLICIT TRAFFICKING BY TRANSNATIONAL CRIMINAL ORGANISATIONS

The Stimson Center in the US has produced this brief as part of ongoing series examining the international challenges that will face the next US presidential administration and providing concrete recommendations for presidential action.  The brief says that existing efforts to address trafficking are disaggregated and fail to involve legitimate industry as partners in prevention.  The US President should, it says, catalogue the threat, better target government resources, and incentivise legitimate business to do more to help prevent illicit trafficking at home and abroad.  It argues that although both the Obama and Trump administrations prioritised federal efforts to meet the growing spectre of illicit trafficking, both failed to go beyond government-oriented solutions to what has become a far more complex challenge.  Beyond lip service and intermittent efforts to build “public private partnerships,” the US has fundamentally failed to alter the calculus of both legitimate and illicit actors operating in the global supply chain.  It says that government must do its part to change the current ‘low-risk high-rewards calculus’ for those operating in the illicit space, and do more to incentivise legitimate companies to partner in countering illicit trade.  It makes a number of policy recommendations –

  • Comprehensively chart the global grey market to identify common choke points;
  • Dedicate a greater share of intelligence and interagency resources to identifying and disrupting factors that enable illicit middlemen in the global supply chain; and
  • Enlist support of the legitimate supply chain companies.

https://www.stimson.org/wp-content/uploads/2019/11/Finlay-Trafficking.pdf

 

If you’d like me buy that (badly needed new laptop or, even, better a new desktop to replace the one now 5,000 miles away – https://www.buymeacoffee.com/KoIvM842y

 

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SPAIN: NEW RULES WILL PROHIBIT 80% OF ONLINE GAMBLING ADVERTS

On 21 February, Calvin Ayre reported that Spain’s online gambling operators have learned of over 100 new restrictions on their ability to promote their services.  The new rules would likely prohibit around 80% of current online gambling ads, and a minister justified the curbs due to the gambling sector having “an impact on public health”.  Other restrictions on advertising are proposed, although they will apparently be permitted to run in print media and via legitimate news media websites, provided that they adhere to all the other rules.

https://calvinayre.com/2020/02/21/business/spain-new-rules-prohibit-online-gambling-advertising/

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 21

21 February 2020

 CHAIRMAN OF PARIS SAINT-GERMAIN AND HEAD OF THE BEIN MEDIA GROUP INDICTED IN SWITZERLAND

On 20 February, the Wall Street Journal reported that, after a 3-year investigation into the sale of Wolrd Cup TV rights, Nasser al-Khelaifi was indicted for inciting former FIFA No. 2 Jérôme Valcke (who was also indicted) “to commit aggravated criminal mismanagement”.  However, a more serious charge of bribery was dropped after soccer authorities withdrew their complaint against him.

https://www.wsj.com/articles/paris-saint-germain-chief-and-a-former-fifa-executive-charged-by-swiss-prosecutors-11582215599

 

ROSNEFT TO CONTINUE WITH VENEZUELA CONNECTION

On 21 February, EU Sanctions Blog reported that Rosneft has said that it will continue to carry out its work in Venezuela within the framework of contracts signed before the sanctions were imposed, despite US sanctions against its Swiss-based trading subsidiary.

https://www.europeansanctions.com/2020/02/rosneft-to-continue-venezuela-related-transactions-despite-sanctions/

 

9 SEAFARERS KIDNAPPED FROM TANKER BY PIRATES OFF BENIN

On 21 February, Seatrade Maritime News reported that they were taken from the 74,400 dwt tanker Alpine Penelope, which was attacked 76 nm south-west of Cotonou while on transit to Lagos, Nigeria.

https://www.seatrade-maritime.com/piracy/nine-seafarers-kidnapped-tanker-pirates-benin

 

HUAWEI HAS ALLEGED US PROSECUTORS OVERLOOKED HSBC SANCTIONS VIOLATIONS BY HSBC

On 21 February, EU Sanctions Blog reported that Huawei has written to a US court alleging that US prosecutors overlooked sanctions violations by HSBC in exchange for cooperation in the Huawei investigation.

https://www.europeansanctions.com/2020/02/huawei-accuses-us-prosecutors-of-overlooking-hsbc-sanctions-violations/

 

GERMANY RELEASES IRANIAN ACCUSED OF US SANCTIONS EVASION

On 21 February, EU Sanctions Blog reported that Germany had released Ahmad Khalili, who had been arrested in 2018 and accused of acquiring plans from aircraft company Cessna, and was the subject of a US extradition request.  He was exchanged with Iran for a German national imprisoned in Iran.

https://www.europeansanctions.com/2020/02/germany-releases-iranian-national-accused-of-us-sanctions-evasion/

 

FORMER DANISH SOCIAL WORKER CONVICTED OF MASSIVE FRAUD

On 21 February, KYC 360 reported that Britta Nielsen, 65, was accused of diverting €15.7 million between 1993 and 2018 from the social services to her personal bank accounts by creating fictitious projects.  She was jailed for 6½ years.

https://www.riskscreen.com/kyc360/news/former-danish-social-worker-convicted-of-massive-fraud/

 

KOREA’S EX-PRESIDENT LEE BACK IN JAIL

On 21 February, KYC 360 reported that Lee Myung-bak, former chairman of Hyundai Engineering and Construction, centrepiece of the Hyundai empire back in jail for the second time in a corruption scandal that caught up with him after his 5-year presidential term ended in 2013.  An appeals court added 2 years to the 15-year sentence that Lee had already received and ordered that he return to prison after he had been freed on bail, and he also received a fine of nearly $11 million for accepting bribes from the Samsung group.

https://www.riskscreen.com/kyc360/news/koreas-ex-president-lee-one-time-hyundai-chairman-back-in-jail-in-scandal-involving-samsung/

 

US Court sides with importer in not paying import duties on royalties

On 8 January, Arent Fox published an article saying that an importer of Giorgio Armani apparel has secured a victory in the Court of International Trade in its dispute with US Customs and Border Protection (CBP).  The case considered whether the importer was required under US customs laws to pay duties on advertising and trademark royalty fees as part of the value of the goods declared to CBP.  It says that the case is instructive because these fees must be a condition of sale to be subject to import duty.  Therefore, it says, importers must review the specific circumstances of their import transactions before including or excluding fees, such as royalty payments, from the value of imported goods on which duties must be paid.

https://www.arentfox.com/perspectives/fashion-counsel/court-sides-importer-not-paying-duties-royalties

 

US – IMPORT RESTRICTIONS IMPOSED ON ARCHAEOLOGICAL MATERIAL FROM ECUADOR

On 19 February, Baker McKenzie reported on an amendment to the US Customs regulations to reflect the imposition of import restrictions on certain archaeological and ethnological material from Ecuador, adding Ecuador to the list of countries which have a bilateral agreement with the US that imposes cultural property import restrictions.

https://www.internationaltradecomplianceupdate.com/2020/02/19/us-import-restrictions-imposed-on-archaeological-material-from-ecuador/#page=1

 

FREEPORTS IN THE UK

On 14 February, Addleshaw Goddard explained what a “Freeport” is, in the context of the UK consultation on the expansion (or rather, the reintroduction, in a new, modified form) of freeports (free zones in EU parlance).  It also explains briefly what the new UK version might include.

https://www.addleshawgoddard.com/en/insights/insights-briefings/2020/transport/freeports-in-the-uk/

On 21 February, the House of Commons Library published a briefing paper which sets out the background to the UK Government policy on freeports.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8823

 

ISLE OF MAN NOTIFIES AMENDMENT TO ZIMBABWE AND ISIL/AL-QAIDA SANCTIONS

2 news releases on 20 February notified confirmation of amendment of the 2 sanctions regimes, following such changes made to the regimes of the UK and EU.

https://www.gov.im/news/2020/feb/20/financial-sanctions-zimbabwe/

https://www.gov.im/news/2020/feb/20/financial-sanctions-isil-daesh-and-al-qaida/

 

INDIA SEIZES MISSILE AUTOCLAVE FROM CHINESE SHIP AND ALLOWS SHIP TO LEAVE FOR PAKISTAN

On 21 February, the Hindustan Times reported that Indian Customs had detained the Chinese ship on 3 February for misdeclaring a “dual use” industrial autoclave, which can be used in the manufacture of ballistic missiles, as an industrial dryer.  The Da Cui Yun was allowed to leave for final destination Port Qasim after signing guarantees with Customs, though Indian authorities have decided to charge the ship under the Customs Act for wrong declaration of goods.

https://www.hindustantimes.com/india-news/drdo-experts-to-study-chinese-vessel-s-cargo/story-tmOktwvGIjFCOmQZe7xalI.html

 

Australia and International Sanctions: An overview of the key measures

An article from Australian law firm, Nyman Gibson Miralis follows a recent report from the Department of Foreign Affairs & Trade, and also provides a snapshot of the country’s sanctions regime.  This includes autonomous Australian sanctions imposed in respect of Myanmar, the former Yugoslavia, Russia/Ukraine and Zimbabwe, which are additional to UN sanctions.

https://ngm.com.au/australia-and-international-sanctions/

https://ngm.com.au/wp-content/uploads/2019/09/Snapshots-Sanctions-August-2019-4.pdf

 

SINGAPORE: SEMBMARINE EX-CONSULTANT convicted IN BRAZIL FOR MONEY LAUNDERING AND CORRUPTION

On 21 February, Singapore Business Review reported that Sembcorp Marine’s subsidiaries’ ex-consultant Guilherme Esteves de Jesus has been convicted of corruption, money laundering and participation in a criminal organization, in Brazil – partly related to contracts that de Jesus entered into Brazil by subsidiaries of Sembmarine, a leading global marine and offshore engineering group.  He was sentenced to 19 years and 4 months in prison and was also fined with an undisclosed amount.

https://sbr.com.sg/shipping-marine/news/sembmarine-ex-consultant-charged-in-brazil-money-laundering-corruption

 

BULGARIA PUBLISHES FIRST ASSESSMENT ON RISKS OF MONEY LAUNDERING AND TERRORIST FINANCING

On 21 February, CMS Law reported that, on 9 January, the Bulgarian State Agency for National Security (SANS) issued the National Risk Assessment of Money Laundering and Terrorist Financing, which analyses the internal and external risks of money laundering and terrorist financing facing in the country.  The article details briefly the contents of the assessment.

https://www.cms-lawnow.com/ealerts/2020/02/bulgaria-publishes-first-assessment-on-risks-of-money-laundering-and-terrorist-financing?cc_lang=en

 

POKERSTARS FOUNDER ISAI SCHEINBERG RECEIVES OCTOBER TRIAL DATE

On 20 February, Inner City Press reported that Isai Scheinberg, indicted in 2011 with charges relating to the activities of Pokerstars in the US and recently extradited from Switzerland, has received a trial date set for October.  Scheinberg spent years living on the Isle of Man, but US authorities began extradition proceedings during a visit he made to Switzerland.  He was released on $1 million bail.

http://www.innercitypress.com/sdny1scheinbergicp022020.html

 

UK: MONEY SERVICE BUSINESSES TARGETED BY NATIONAL ECONOMIC CRIME CENTRE

On 20 February, an article from Bird & Bird was concerned with the “day of action” conducted by the National Economic Crime Centre partners to target money service businesses at risk of being exploited by criminals.  It explains that the NECC was launched in 2018 and sits within the NCA, but also includes representatives of the SFO, the FCA, City of London Police, HMRC, CPS and the Home Office.  The MSB industry is also viewed by the NECC as being vulnerable to exploitation by organised crime groups who may use MSB to, for example, launder money generated from the sale of illegal substances or to fund terrorism.  The article explains what MSB should expect from the day of action, and what they should do.

https://www.twobirds.com/en/news/articles/2020/uk/money-service-businesses-targeted-by-the-national-economic-crime-centre

 

BULGARIAN PM INVESTIGATED IN SPAIN OVER ‘MONEY LAUNDERING’

On 21 February, EU Observer reported that the Spanish media is saying that Catalan police and the anti-corruption prosecutor’s office are investigating Bulgarian prime minister Boyko Borissov for alleged involvement in money laundering and organised crime.  However, speaking to journalists at the EU summit, he rejected the allegations, saying that Russia and Bulgarian President Rumen Radev are behind what he called a “putsch” attempt.

https://euobserver.com/tickers/147527

https://www.euractiv.com/section/justice-home-affairs/news/at-eu-summit-bulgarias-borissov-fends-off-accusations-of-money-laundering/

 

MIAMI TYRE IMPORTERS INDICTED FOR EXCISE TAX CONSPIRACY AND TAX EVASION

A news release from the DoJ on 21 February reported that, according to the indictment, Marco Parra and Eira Luces-Parra, a married couple, owned and operated Road Tire Plus Corp (Road Tire), a tyre importer located in Miami, and, from 2013 through 2016, they allegedly conspired with others in the industry to evade paying federal excise taxes on truck tyres.

https://www.justice.gov/opa/pr/miami-tire-importers-indicted-excise-tax-conspiracy-and-tax-evasion

 

ENI/SHELL OPL 245 CORRUPTION CASE: ITALIAN JUDGE ORDERS NIGERIAN BUSINESSMAN TO STAND TRIAL

On 21 February, Sahara Reporters reported that an Italian judge has ordered that Nigerian businessman, Alhai Aliyu Abubakar, should stand trial for alleged involvement international corruption relating to an oil graft case involving Eni and Shell and the Nigerian oil industry.  Italian prosecutors alleged that Eni and Shell bought the oilfield in 2011 knowing that most of the purchase price (i.e. the $1.3 billion licence fee) would be siphoned off to middlemen and local politician.

http://saharareporters.com/2020/02/21/enishell-italian-judge-orders-nigerian-businessman-stand-trial-opl-245-case

 

IRELAND: CAB UNABLE TO ACCESS €52 MILLION IN DRUGS PROFITS AS BITCOIN CODES LOST

On 21 February, the Irish Examiner reported that the Criminal Assets Bureau (CAB) is not yet able to access the €52 million in Bitcoin seized as part of a recent drugs investigation as the codes to access the cryptocurrency are missing.  A freezing order has been obtained in respect of the funds, in what is believed to be the largest single-value asset ever seized by CAB.  It is believed that the codes were hidden in fishing rods which were thrown away after the house of the owner of the Bitcoins was cleared out during his time in prison.

https://www.irishexaminer.com/breakingnews/ireland/–983224.html

 

UK: PLANS FOR MAJOR EXPANSION OF DORMANT ASSETS SCHEME

On 21 February, the Department for Digital, Culture, Media & Sport issued a news release proposing that the dormant assets scheme could be expanded to include a range of financial assets – expanding the scheme from dormant bank and building society accounts to also cover insurance, investment and wealth management, and securities products.  The news release says that, since its launch in 2011, 30 firms – including all major high street banks – have voluntarily transferred dormant funds into the scheme, and so far over £600 million has been redistributed to good causes.

https://www.gov.uk/government/news/plans-for-major-expansion-of-dormant-assets-scheme-to-benefit-good-causes

 

PROPOSED IRS RULES FOR DIGITAL AND CLOUD TRANSACTIONS

On 21 February, Snell & Willmer published an article saying that the Internal Revenue Service (IRS) has finally issued regulations addressing the tax treatment of cloud transactions.  It says that, until now, there was no guidance specifically addressing the tax treatment of cloud computing transactions, and as a result, taxpayers were forced to rely upon analogous authorities, not knowing with any certainty whether they were complying with applicable law.  The article then goes on to explain the new rules.

https://www.jdsupra.com/legalnews/what-s-in-the-cloud-proposed-irs-rules-17044/

 

US “BEATS” SWITZERLAND AS A PERCEIVED GLOBAL HAVEN FOR MONEY LAUNDERING AND TAX EVASION

An article from Ballard & Spahr on 21 February reported that the US has overtaken Switzerland as a financial secrecy haven, according to the latest rankings in the Financial Secrecy Index 2020, published by the Tax Justice Network – though the Cayman Islands has first place, with the US and Switzerland 2nd and 3rd.  The article goes on to examine the Index and how it was compiled.

https://www.jdsupra.com/legalnews/united-states-beats-switzerland-as-a-23773/

 

CERTAIN US EXPORTS TO RUSSIA AND YEMEN WILL BE TOUGHENED UNDER A NEW RULE

Sandler Travis Rosenberg in an article dated 24 February reported that, effective from 24 February, a new Bureau of Industry and Security final rule is the first step in a larger effort to restructure and realign country groups for export controls.  The article explains what the changes mean.

https://www.strtrade.com/news-publications-export-EAR-Russia-Yemen-022420.html

 

FORCE MAJEURE: SHIPPING COMPANIES FACING POTENTIAL PROBLEMS FROM CLIENTS AND SUPPLIERS

On 21 February, Lloyds Loading List reported that, with production and logistics operations across China gradually resuming, supply chain managers across industries like automotive, machinery, and chemicals may soon face a new risk dimension pertaining to the coronavirus: suppliers or buyers invoking force majeure to defend decisions – saying that the China Council for the Promotion of International Trade (CCPIT) has already issued force majeure certificates to 1,615 companies.  It explains that these certificates shield companies from legal and financial damages arising from not performing or only partially performing contractual duties, such as delivering, transporting, or taking cargo, by proving that they are experiencing circumstances beyond their control.

https://www.lloydsloadinglist.com/freight-directory/news/Force-majeure-a-new-dimension-to-the-coronavirus-outbreak/76040.htm#.XlBBY25FzIU

 

AIRBNB EXPANDS US ANTI-HUMAN TRAFFICKING PARTNERSHIP WITH US NGO POLARIS

On 21 February, Illicit Trade reported that Airbnb has stepped up efforts to prevent rental properties being used by human traffickers by expanding its partnership with US anti-trafficking charity Polaris.  In 2018, it was announced that Airbnb would work with Polaris to stop its properties being used as “pop-up brothels”, and train members of its staff on how to spot the signs of modern slavery and human trafficking.  Now, having been faced with repeated criticism for failing to tackle human trafficking, Airbnb has announced that the partnership between the organisations will be strengthened as they endeavour to eradicate trafficking crimes across the world.  Under the arrangement, Airbnb and Polaris offer enhanced training to Airbnb employees, property owners and guests, which will be provided both physically and online.

https://www.illicit-trade.com/2020/02/airbnb-expands-anti-human-trafficking-partnership-with-us-ngo-polaris

 

DENMARK: AUTHORITIES ARREST 27 FOR COCAINE SMUGGLING NEAR GEDSER AND SEIZE 5 TONNES OF DRUGS

On 21 February, the Hellenic Shipping News reported that the drugs were hidden in a shipping container containing a consignment of flowers headed for the Netherlands.  It was the largest ever seizure of illegal drugs in the country’s history.

https://www.hellenicshippingnews.com/protection-vessels-international-weekly-maritime-security-report-12/

 

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UK BASIC PASSPORT CHECKS GUIDANCE

On 22 February, HM Passport Office published an updated colour booklet containing important information of what to expect, plus additional notes for the 1988, 1998, 2006, 2010 and 2015 versions of the UK passport.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/867550/Basic_passport_checks_1988_-2019_02.20.pdf

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IRELAND: CAB UNABLE TO ACCESS €52 MILLION IN DRUGS PROFITS AS BITCOIN CODES LOST

On 21 February, the Irish Examiner reported that the Criminal Assets Bureau (CAB) is not yet able to access the €52 million in Bitcoin seized as part of a recent drugs investigation as the codes to access the cryptocurrency are missing.  A freezing order has been obtained in respect of the funds, in what is believed to be the largest single-value asset ever seized by CAB.  It is believed that the codes were hidden in fishing rods which were thrown away after the house of the owner of the Bitcoins was cleared out during his time in prison.

https://www.irishexaminer.com/breakingnews/ireland/–983224.html

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FREEPORTS IN THE UK

On 14 February, Addleshaw Goddard explained what a “Freeport” is, in the context of the UK consultation on the expansion (or rather, the reintroduction, in a new, modified form) of freeports (free zones in EU parlance).  It also explains briefly what the new UK version might include.

https://www.addleshawgoddard.com/en/insights/insights-briefings/2020/transport/freeports-in-the-uk/

On 21 February, the House of Commons Library published a briefing paper which sets out the background to the UK Government policy on freeports.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8823

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OUTCOMES FROM THE FATF PLENARY – INCLUDING PAKISTAN GIVEN MORE TIME, BUT COUNTERMEASURES REINSTATED AGAINST IRAN

On 21 February, FATF reported on the week-long Plenary held in Paris.  The Plenary discussed the general matters of understanding and leveraging the use of digital identity, and mitigating the money laundering and terrorist financing risks of virtual assets.

It considered mutual evaluation reports on the UAE and South Korea – due to be published in April, and a follow-up report on the US with 1 FATF Recommendation on technical compliance to be re-rated.

Re jurisdictions under increased monitoring to address strategic AML/CFTCPF deficiencies –

  • Trinidad & Tobago was removed from such monitoring, due to the significant progress it has made in addressing the strategic AML/CFT deficiencies identified earlier by the FATF and included in its action plan;
  • but Albania, Barbados, Jamaica, Mauritius, Myanmar, Nicaragua and Uganda were added – although FATF welcomed their high-level political commitment to their action plans.; and
  • the Plenary also considered Pakistan’s actions in addressing its deficiencies. It noted that, to date, Pakistan has largely addressed 14 of 27 action items, with varying levels of progress made on the rest of the action plan; and FATF strongly urges Pakistan to swiftly complete its full action plan by June 2020.

For these countries subject to increased monitoring (and the other 10 also subject to increased monitoring), see –

http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2020.html

Re “high-risk” jurisdictions – Iran will remain on the FATF statement on High Risk Jurisdictions Subject to a Call for Action until the full Action Plan has been completed.  Given Iran’s failure to enact the Palermo and Terrorist Financing Conventions in line with the FATF Standards, FATF fully lifted the suspension of counter-measures and called on its members and urges all jurisdictions to apply effective counter-measures against Iran.  For more information on the “high-risk” jurisdictions, i.e. Iran and North Korea, see – http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2020.html

Other business –

  • the Plenary discussed progress on one of its priorities under the Chinese FATF Presidency: to tackle the financial flows linked to the illegal wildlife trade;
  • FATF will develop guidance on risk-based AML/CFT supervision. This guidance will set out how supervisors in member countries can assess ML/TF risks to their sectors and how they can develop supervision programmes based on these risks; and
  • the Plenary discussed progress in the strategic review of its mutual evaluation and follow-up processes.

http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-fatf-plenary-february-2020.html

 

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POKERSTARS FOUNDER ISAI SCHEINBERG RECEIVES OCTOBER TRIAL DATE

On 20 February, Inner City Press reported that Isai Scheinberg, indicted in 2011 with charges relating to the activities of Pokerstars in the US and recently extradited from Switzerland, has received a trial date set for October.  Scheinberg spent years living on the Isle of Man, but US authorities began extradition proceedings during a visit he made to Switzerland.  He was released on $1 million bail.

http://www.innercitypress.com/sdny1scheinbergicp022020.html

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INDIA SEIZES MISSILE AUTOCLAVE FROM CHINESE SHIP AND ALLOWS SHIP TO LEAVE FOR PAKISTAN

On 21 February, the Hindustan Times reported that Indian Customs had detained the Chinese ship on 3 February for misdeclaring a “dual use” industrial autoclave, which can be used in the manufacture of ballistic missiles, as an industrial dryer.  The Da Cui Yun was allowed to leave for final destination Port Qasim after signing guarantees with Customs, though Indian authorities have decided to charge the ship under the Customs Act for wrong declaration of goods.

https://www.hindustantimes.com/india-news/drdo-experts-to-study-chinese-vessel-s-cargo/story-tmOktwvGIjFCOmQZe7xalI.html

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OTHER THINGS YOU MAY HAVE MISSED – FEBRUARY 20

20 February 2020

 EU COURT DISMISSED 15 APPLICATIONS BY OFFICIALS OF DEMOCRATIC REPUBLIC OF CONGO TO ANNUL EU TARGETED SANCTIONS RE-LISTINGS

On 20 February, the EU Sanctions Blog reported that the EU General Court has rejected claims by 15 persons that that the 2017 renewal of their listings were not based on a sufficiently precise and concrete factual basis to justify the allegations of human rights violations.

https://www.europeansanctions.com/2020/02/eu-court-rejects-15-drc-officials-cases-challenging-re-listing/

 

FURTHER ACCUSED SOUGHT AFTER FIRST PANAMA PAPERS CONVICTION IN THE US

On 20 February, Newsroom Panama reported that, following the conviction in New York of Harald Joachim von der Goltz in a federal court, the next step would be prosecution of Dirk Brauer and Richard Gaffey, accused of having participated in the conspiracies with Von der Goltz, and Panamanian lawyer Ramses Owens.  Under house arrest in Panama, it is argued that he has not been able to appear before the US courts to defend himself against the accusations because of this.

https://www.newsroompanama.com/news/fugitive-lawyer-sought-as-first-panama-papers-sentence-could-mean-life-1

 

MYANMAR SET TO BE PUT ON FATF AML/CFT GREY LIST

On 20 February, KYC 360 reported that Myanmar is set to be placed on a watchlist by FATF, meeting for its Plenary in Paris, amid concerns of money-laundering by transnational drug traffickers and weak regulation of its financial system.

https://www.riskscreen.com/kyc360/news/myanmar-set-to-be-placed-on-global-money-laundering-watchlist/

 

EU BLACKLIST: IMPACT ON CAYMAN ISLANDS

On 18 February, there appeared a number of articles about the effects of the Cayman Islands being placed on the EU list of non-cooperative tax jurisdictions as a result of a failure to introduce new laws relating to private funds within the necessary timescale.  It is said that the Islands already contacted EU officials to begin the process of being removed from the EU list, which is expected to be October 2020.

A Ropes & Gray article focused on the effects for asset managers.

An article from Fried Frank contained a Q&A on the effect of the blacklist on the Islands.

https://www.ropesgray.com/en/newsroom/alerts/2020/02/EU-Blacklist-Cayman-Islands?utm_source=alert&utm_medium=email&utm_campaign=EU-Blacklist-Cayman-Islands

https://www.friedfrank.com/index.cfm?pageID=25&itemID=8458

 

ANTI-BRIBERY AUDITS ARE NOW KEY IN M&A TRANSACTIONS IN FRANCE

On 17 February, Hogan Lovells published an article saying that, following the Sapin II law, more and more businesses have implemented compliance programs. These include measures to prevent risks within their organisations, as well as in their supply chain and distribution channel relationships.  It says that, over the past months, the focus in France has been increasingly put on corruption risks in mergers and acquisitions.  On 17 January, the French Anti-Corruption Agency (AFA) issued a practical guide on anti-corruption audits in the context of mergers and acquisitions.

https://ehoganlovells.com/rv/ff0059276aed020fe77216acf845b481aeea3eda

 

CANADA EXPANDS ECONOMIC SANCTIONS LIST AGAINST UKRAINE

On 18 February, Tereposky & DeRose LLP published an article saying that on 29 January Canada amended the list of designated persons under the Special Economic Measures (Ukraine) Regulations adding 6 individuals.  As a result, Canada now imposes an asset freeze and dealings prohibition on 202 individuals under the updated Ukraine Regulations.

https://tradeisds.com/canada-expands-sanctions-against-ukraine/

 

PANAMA DETAINS SUBMARINE WITH 5 TONS OF COCAINE

On 20 February, Salt Wire carried a Reuters report saying that police in Panama have seized 5 tons of drugs that were transported aboard a semi-submersible boat in the north-west of the country.  They arrested 4 Colombians aboard the “homemade device”.

https://www.saltwire.com/news/world/panama-police-seize-homemade-semi-submersible-boat-carrying-five-tons-of-drugs-413171/

 

SWISS REGULATOR HITS JULIUS BAER WITH SANCTIONS

On 20 February, Finews reported that the private bank is prohibited from any major acquisitions, improve its internal controls and will get an monitor following a nearly 3-year investigation after Julius Baer was implicated in 2 major money laundering scandals, PDVSA and FIFA.

https://www.finews.com/news/english-news/40026-julius-baer-money-laundering-pdsva-finma-sanctions-venezuela-criminal

 

UK: PRESSURE ON ACCOUNTANTS INTENSIFIES AS MONEY LAUNDERING CRACKDOWN HEATS UP

On 20 February, Accountancy Age reported that fines for UK firms failing to comply with money laundering regulations totalled nearly £300 million in 2019, and that, combined with the introduction of new rules under the 5th AML Directive, which took effect in January, it’s clear that accountants must pay close to attention to AML – or face some serious repercussions.  However, the article mentions a poll undertaken in the days leading up to implementation and found the majority (71% of 148 surveyed) did not know about the new rules.

https://www.accountancyage.com/2020/02/20/pressure-on-accountants-intensifies-as-money-laundering-crackdown-heats-up/

 

SPAIN: FIRST FEMALE MAYOR OF MANILVA ARRESTED FOR MONEY LAUNDERING FOR ITALIAN MAFIA

On 19 February, the Olive Press reported that a former mayor of the town of Manilva has been arrested for her alleged role in helping launder money for an Italian mafia.  Antonia Munoz was arrested together with 12 others following a lengthy investigation by Policia Nacional and Malaga’s Money Laundering Unit.  She was the first female councillor in Manilva in 1987 before becoming the first female mayor in 1999, left the role between 2003 before being re-elected in 2007.  However, it says, she came into trouble in 2013 after being accused of violation of labour laws, eventually resigning in 2014.

https://www.theolivepress.es/spain-news/2020/02/19/ex-far-left-and-first-female-mayor-of-manilva-arrested-for-money-laundering-for-italian-mafia-on-spains-costa-del-sol-and-handing-out-900-jobs-to-pals-and-allies/

 

87% OF ALL CARGO THEFT IN THE SUPPLY CHAIN TAKES PLACE IN THE ROAD TRANSPORT SECTOR

On 20 February, Loadstar carried a piece about a report for TT Club, whose annual cargo theft report, compiled with supply chain intelligence firm BSI, says road freight – either in transit or parked – accounts for 87% of all cargo thefts in the supply chain – compared to 10% were from facilities, 1% from sea freight and 2% listed as “other”.

https://theloadstar.com/road-freight-still-the-mode-most-vulnerable-to-crime-parking-must-be-safer

 

NEW US CLOUD-BASED DEFENCE EXPORT CONTROL AND COMPLIANCE SYSTEM FOR EXPORT AND OTHER APPLICATIONS

The Directorate of Defense Trade Controls (DDTC) has introduced a new online system, the Defense Export Control and Compliance System (DECCS). DECCS will replace DETRA, DTRADE, EFS, ELLIE, and MARY, providing users access to a number of DDTC business applications through a single, Cloud-based portal.  As a result, users will have access to all registration, licensing, advisory and disclosure applications through the portal.

https://www.pmddtc.state.gov/deccs

 

OFAC ISSUES FAQ ON THE REPORTING, PROCEDURES AND PENALTIES REGULATIONS (RPPR)

On 20 June 2019, OFAC had announced amendment of the RPPR, which deal with standard reporting and recordkeeping requirements and licence application and other procedures relevant to the economic sanctions programmes administered by OFAC.   It has now issued new FAQ 819 and 820 about the effect of the changes made by the amendment.

https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_compliance.aspx#819

https://content.govdelivery.com/accounts/USTREAS/bulletins/27ceae6

 

US CUSTOMS FINDS HUMAN BRAIN WITHOUT PAPERS IN SHIPMENT FROM CANADA

On 19 February, Homeland Security Today reported that US Customs and Border Protection (CBP) officers seized a human brain in international mail at Blue Water Bridge in Port Huron.  In a routine mail operation, a shipment manifested as an “Antique Teaching Specimen” was targeted for inspection and officers found the package to contain a human brain specimen inside of a clear glass mason jar without any paperwork or documentation in support of its lawful entry into the US.

https://www.hstoday.us/subject-matter-areas/customs-immigration/cbp-officers-find-human-brain-without-papers-in-shipment-from-canada/

 

ILLEGAL SALE OF DANGEROUS STEROIDS IN FRANCE HALTED WITH 24 ARRESTS

A news release from Eurojust on 20 February announced that, with the support of Eurojust, authorities in France, Slovakia, Poland and Ukraine have dismantled a criminal network, which sold large quantities of illegal and dangerous anabolic steroids, mainly on the French market.  During an action day, 24 suspects have been arrested in Slovakia, including the leader of the criminal network.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2020/2020-02-20a.aspx

 

MALTA TOLD TO AMEND VAT RULES FOR YACHT LEASING

On 20 February, Tax News reported that the European Commission has sent an additional letter of formal notice to Malta, following an initial request in 2018, again asking Malta to amend its method for calculating VAT on yacht leasing.  The Commission says that Maltese legislation uses a distance-based method when calculating the effective use and enjoyment of a yacht outside the EU. However, EU rules do not allow such a method to be used, instead requiring the use of a time-based method.

https://www.tax-news.com/news/Malta_Told_To_Amend_VAT_Rules_For_Yacht_Leasing____97550.html

 

ON-THE-RUN BRIT HELD AFTER RAID ON UNDERGROUND FACTORY TURNING OUT 3,500 CIGARETTES AN HOUR IN SPAIN

On 20 February, Birmingham Live reported that escaped British convict Daniel Dobbs, 31, from Yorkshire, was allegedly involved in operation which was generating profits of half a million pounds a week.  He had been sentenced to 13½ years in prison in January 2014, after he was convicted of trafficking heroin and amphetamines, but escaped from an open prison in 2018.

https://www.birminghammail.co.uk/news/world-news/run-brit-held-after-raid-17785914

https://www.nationalcrimeagency.gov.uk/news/fugitive-drug-smuggler-dobbo-arrested-in-spain

https://www.europol.europa.eu/newsroom/news/four-metres-underground-illegal-cigarette-factory-uncovered-in-bunker-in-spain

 

PHILIPPINE LEADER FIRES OFFICIALS OVER IMMIGRATION SCANDAL INVOLVING CHINESE NATIONALS

Radio Free Asia on 20 February reported that President Duterte has fired a group of immigration officials linked to a bribery scheme where border control officers allegedly allowed Chinese nationals working in the booming online gaming industry to enter the Philippines illegally, taking bribes of up to 10,000 pesos (US $185) rolled up in bond paper to allow the Chinese in.

https://www.rfa.org/english/news/china/philippines-immigration-02202020140338.html

 

AIRCRAFT ENGINE LEASING, THE FUNDAMENTALS – LEGAL RISKS AND THE CAPE TOWN CONVENTION

On 20 February, Bryan Cave Leighton Paisner published a briefing continuing its 4-part series of articles that set out to explain a large and important, but probably little understood, industry sector.  The second part considers the legal risks associated with engine leasing and the mitigating impact that the Cape Town Convention has had on those risks 9by creating a recognised register for the engines, separate from the aircraft they are fitted to).  It explains that spare aircraft engines are highly mobile assets, leased for the sole purpose of coming off and going on aircraft, both within the immediate operator’s fleet and (if permitted) to certain affiliates within their group (via pooling arrangements or subleasing) and/or other airlines via permitted subleasing arrangements.

https://www.jdsupra.com/legalnews/engine-leasing-the-fundamentals-legal-32306/

The first article, which considers the appeal of engine leasing to investors (as lessor owners and financiers) and the economic considerations which influence decisions made by investors in this asset class, is available at –

https://www.jdsupra.com/legalnews/engine-leasing-and-financing-the-35378/

 

FRENCH COURT RULES ON CORPORATE LIABILITY FOR CRIMINAL ACTS COMMITTED BY EXECUTIVE

On 20 February, Jones Day published an article about a case in which a CEO was convicted of misusing corporate assets, and required to pay damages plus interest to the victim of his offence, and he sued to force the company to reimburse him for this amount, on the grounds that, in committing the offence, he was acting within the scope of his official duties.  However, the court held that his intentional criminal acts were separate from his official corporate duties and that the company therefore was not liable for the criminal penalties attributable to those acts.  The article argues that companies and their executives will need to be mindful of established and emerging legal principles in this area.

https://www.jdsupra.com/legalnews/french-court-rules-on-corporate-77296/

 

MEXICO’S 2020 SET TO BE A CHALLENGING YEAR FOR COMPANIES AND INVESTORS

On 20 February, Control Risks published an article saying that 2020 is likely to be another challenging year for companies and investors in Latin America’s second-largest economy as President Andrés Manuel López Obrador (AMLO) continues his ‘Fourth Transformation’.  It says that the security situation is bad and getting worse, and the article examines why and the misconceptions involved, with organised crime involved in a wide range of illegal activities, not only drugs.  The there is what the article describes as economic malaise.  The article concludes that the perception of Mexico will likely take a hit (again), but this does not presage some sort of ‘AMLOgeddon’ scenario whereby the economic (and political) situation in Mexico deteriorates to the extent that the country becomes ‘the next Venezuela’ and/or regarded as a pariah among international investors.  However, it then highlights things that companies and investors can do to prepare.

https://www.controlrisks.com/our-thinking/insights/mexicos-2020-set-to-be-a-challenging-year

 

PROPOSED UK IMMIGRATION POINTS-BASED SYSTEM

On 20 February, Eversheds Sutherland published an article explaining how the proposed post-Brexit UK immigration system would work.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Employment_and_labour_law/immigration-whats-the-point

 

THE NEW CFIUS REGULATIONS: HOW WILL THIS ACTUALLY WORK? FAQ WE WISH THE US TREASURY WOULD ANSWER

In 2 articles on its website, Paul Hastings poses a number of questions about the new Committee on Foreign Investment in the United States rules, which came into effect on 13 February.  In one the firm sets out a number of FAQ it would like answered in the hope of clarifying how the new provisions actually work.

https://www.paulhastings.com/docs/default-source/default-document-library/the-new-cfius-regulations—faqs-we-wish-treasury-would-answer.pdf

The other article is: How Investment Funds Can React and Take Advantage –

https://www.paulhastings.com/publications-items/details/?id=750dcc6e-2334-6428-811c-ff00004cbded

 

TOURISM RISES IN RUSSIA

8527C196-5AC2-4063-94A7-E5480E827B3A_w1300_r0

https://www.rferl.org/a/welcome-to-russia/30444903.html

 

US CUSTOMS WORKERS FIND COUNTERFEIT LED SCREENS WORTH MORE THAN $1.5 MILLION IN RAIL FREIGHT

On 20 February, Illicit Trade reported that they were discovered during an inspection of rail containers at the International Falls port of entry, where goods pass into the US from Canada.  They were in 2 40-foot containers and were destined for delivery in Minnesota, and were said to have originated from China.

https://www.illicit-trade.com/2020/02/us-customs-workers-find-counterfeit-led-screens-worth-more-than-1-5-million-in-rail-freight

 

SPANISH JUDGE SUMMONS VENEZUELAN GLOBOVISION TV OWNER IN PDVSA PROBE

KSL.com on 20 February reported that a Spanish judge has named Raúl Gorrín, the owner of a Venezuelan TV network, in an investigation of alleged corruption and money laundering by Venezuela’s state-owned oil company PDVSA.  Gorrín is also said to be wanted in the US for corruption and money laundering.

https://www.ksl.com/article/46719996/spanish-judge-summons-venezuelan-tv-owner-in-pdvsa-probe

 

INDIA SEIZES COSCO VESSEL CARRYING PARTS FOR NUCLEAR MISSILE

On 18 February, Port Strategy reported on the seizure by Indian authorities of a Hong Kong flag vessel, Da Cui Yun, a specialised cargo vessel, said to be carrying materials of use in production of strategic missiles powered by solid fuel.

https://www.porttechnology.org/news/reports-india-seizes-cosco-vessel-carrying-parts-for-nuclear-missile/

 

HISTORIC MOMENT CLAIMED AS CARGOX BECOMES FIRST PROVIDER TO USE PUBLIC BLOCKCHAIN ETHEREUM NETWORK FOR ITS PLATFORM AFTER GAINING APPROVAL FROM THE INTERNATIONAL GROUP OF P&I CLUBS

On 19 February, Port Strategy reported that CargoX, the provider of the CargoX blockchain document transfer (BDT) platform, has described the approval as a “historic milestone”.  The article also explains that the International Group of P&I Clubs is an unincorporated association of the 13 principal underwriting Protection & Indemnity (P&I) Associations and their Affiliated Associations and Reinsured Entity and provide liability cover (protection and indemnity) for approximately 90% of the world’s ocean-going tonnage.

https://www.porttechnology.org/news/cargox-achieves-historic-moment-for-blockchain-trade/

 

DEA TARGETS NATION’S METH ‘TRANSPORTATION HUBS’

On 20 February, American Shipper reported a DoJ claim that 8 US cities account for 75% of the methamphetamine seized by the DEA; and the DEA will dedicate resources to target “transportation hubs” throughout the country which are known hotspots for trafficking in methamphetamine.  The project is named Operation Crystal Shield.

DEA-Operation-Crystal-Shield

https://www.freightwaves.com/news/dea-targets-nations-meth-transportation-hubs

 

US STATE DEPARTMENT BANS EXPORTS TO 13 WEAPONS PROLIFERATORS

On 20 February, American Shipper reported on the revocation of export licences (and other restrictions) linked to violators of the Iran, North Korea and Syria Nonproliferation Act.  Most of the enterprises and individuals are located in China, including Baoding Shimaotong Enterprises Services Co. Ltd., Dandong Zhensheng Trade Co. Ltd., Gaobeidian Kaituo Precise Instrument Co. Ltd., Luo Dingwen, Shenzhen Tojoin Communications Technology Co. Ltd., Shenzhen Xiangu High-Tech Co. Ltd., Wong Myong Son, and Wuhan Snajiang Import and Export Co. Ltd.  Russian companies Kumertau Aviation Production Enterprise, Instrument Building Design Bureau, and Scientific Production Association Mashinostroyeniya, in addition to Kata’ib Sayyid al-Shuhada of Iraq and Eren Carbon Graphite Industrial Trading Co. Ltd. of Turkey, were also added to the export ban.

https://www.freightwaves.com/news/state-department-bans-exports-to-13-weapons-proliferators

 

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WEBSITE FOR LATIN AMERICAN WHISTLEBLOWERS LAUNCHED

On 20 February, the Buenos Aires Times reported that a secure Internet site designed to facilitate anonymous complaints of corruption and damage to the environment in Latin America has been launched by 3 NGO.  The website was created by 2 civil society groups – Chile’s Ciudadania Inteligente and Proyecto PODER which is based in the US – and Spain’s International Baltasar Garzon Foundation.

https://www.batimes.com.ar/news/latin-america/website-for-latin-american-whistleblowers-launched.phtml

The secure website is at –

http://latamleaks.lat/

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HM TREASURY: AMENDMENT OF 1 ENTRY ON ISIL/AL-QAIDA SANCTIONS LIST

On 20 February, a Notice from HM Treasury advised of an amendment to the entry relating to Abdul HAQ following EU Regulation 2020/218/EU.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/867272/Notice_ISIL_2020_218_Correction.pdf

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OFAC ADDS 5 NEW NAMES TO IRAN SANCTIONS LIST

On 20 February, OFAC added 5 new names of individuals to its Iran sanctions lists.  Those named are 5 members of Iran’s Guardian Council and its Elections Supervision Committee, who are appointed by Iran’s Supreme Leader or his appointees.  The Guardian Council, which is responsible for “vetting” candidates, uses its power to disqualify Iranians from competing in elections – and the US alleges that the power was used to deprive the Iranian people of free and fair elections by blocking candidates that do not mirror the views of the Supreme Leader.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20200220.aspx

https://home.treasury.gov/news/press-releases/sm912

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WHY ARE TRADE DEALS SO HARD TO DO?

A BBC World Service radio documentary broadcast on 19 February poses this question, an interesting piece, it says that, as the UK is attempting to make multiple trade deals following Brexit – some such negotiations between countries have taken years.  It comments on the breakdown of the WTO, lack of trust between countries, the “special cases” and need to satisfy domestic demands.

https://www.bbc.co.uk/programmes/w3csythd

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BILLIONS OF FOREIGN AID DISAPPEARS INTO TAX HAVENS

On 20 February, The Times carried an article claiming that, according to World Bank economists, billions of pounds of aid meant for the most dependent nations ends up in tax havens.  A study, “Elite Capture of Foreign Aid”, tracked aid payments to 22 nations and found that as much as a sixth flowed into havens and that the “leakage” was worst in the most dependent countries, where aid accounts for as much as 3% of GDP.  The report found that that aid disbursements to highly aid-dependent countries coincide with sharp increases in bank deposits in offshore financial centres known for bank secrecy and private wealth management.

https://www.thetimes.co.uk/article/billions-of-foreign-aid-disappears-into-tax-havens-5p0chghct

The report is at –

http://documents.worldbank.org/curated/en/493201582052636710/pdf/Elite-Capture-of-Foreign-Aid-Evidence-from-Offshore-Bank-Accounts.pdf

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VENEZUELA CRUDE EXPORTS GOING ‘DARK’ AS US IMPOSES SANCTIONS ON ROSNEFT SUBSIDIARY

On 19 February, Lloyds List reported that now-sanctioned Rosneft Trading had taken over most of the marketing of Venezuelan crude over the last 9 months with oil supplied in return for loan repayments, and subsequent sales brokered with India and China.  The article reports on what has been done to hide or disguise shipments, and says that Rosneft and PdVSA had established hub and spoke operations via Malaysia and Singapore to distribute crude, and briefly had floating storage at anchorage off Lome, in West Africa, over January which was then transferred to China-bound very large crude carriers.  It says that vessels chartered by Rosneft have been borrowing the subterfuge shipping tactics that Iranian sellers and buyers use to disguise the destination and origin of sanctioned crude, masking conventional tanker-tracking using AIS technology.

https://lloydslist.maritimeintelligence.informa.com/LL1131092/Venezuela-crude-exports-going-dark-as-US-imposes-sanctions-on-Rosneft

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THE WORST US STATES FOR CORRUPTION

A new report from the University of Chicago highlights public sector corruption in the US.  It reports that there were 19,634 public corruption convictions across the US over the past decade with 695 public official, federal employees and government contractors convicted in 2018 alone.

https://www.statista.com/chart/20877/federal-corruption-convictions-per-10000-inhabitants

20877

The report is at –

https://pols.uic.edu/chicago-politics/anti-corruption-reports/

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MODERN SLAVERY LEGISLATION INTRODUCED IN CANADIAN PARLIAMENT (AGAIN)

On 18 February, Gowling WLG published an article about a Bill introduced into parliament on 5 February which proposes mandatory modern slavery disclosure by companies in Canada or doing business in Canada, and an amendment to the Customs Tariff to prohibit the importation of forced labour and child labour-made goods.  It points out, perhaps surprisingly, that Canada currently has no modern slavery disclosure legislation. Nor is there any general restriction on the importation into Canada of goods produced by forced or child labour — or any law barring the procurement by Canadian governments of goods or services produced by forced or child labour.  The new Bill replaces one lost in 2019 when a General Election was called.

https://gowlingwlg.com/en/insights-resources/articles/2020/modern-slavery-legislation-canadian-parliament/

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MEXICO SAID TO BE INVESTIGATING EX-PRESIDENT ENRIQUE PEÑA NIETO IN PETRÓLEOS MEXICANOS CASE

On 19 February, the Wall Street Journal reported that the ex-President has been mentioned in the case against Emilio Lozoya, the former head of state-run oil company Petróleos Mexicanos, recently arrested in Spain and accused of receiving millions of dollars in bribes from Brazilian construction firm Odebrecht SA and Mexican steelmaker Altos Hornos de México SAB.

https://www.wsj.com/articles/mexico-is-investigating-ex-president-enrique-pena-nieto-top-official-says-11582152342