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THINGS YOU MAY HAVE MISSED – FEBRUARY 23

22nd February 2018

PUFF THE MAGIC DRAGON (SORT OF) COMES TO WALL STREET

On 21st February, Forbes in the US asked do Cannabis stocks belong in a sober portfolio?  It says that today the number of place where cannabis is allowed for medical use stands at 29 US states and the District of Columbia.  It looks at cannabis businesses looking to float, and notes how many are so-called “penny stocks” and vulnerable to manipulation.

https://www.forbes.com/sites/katestalter/2018/02/22/puff-the-magic-dragon-sort-of-comes-to-wall-street/#2ba3ff141f97

AFRICA: THE INFLUX OF SMALL ARMS AND LIGHT WEAPONS

All Africa carries an article claims that available data on Small Arms and Light Weapons (SALW) show that out of the 640 million circulating globally, it is estimated that 100 million are found in Africa, about 30 million in sub-Saharan Africa and 8 million in West Africa, alone.  The majority of these SALW about 59% are in the hands of civilians, 38% are owned by government armed forces, 2.8 % by police and 0.2% by armed groups.  It reflects on the damage this causes and risks it presents.  It also says that it is obvious that despite the efforts of security agencies, borders of African countries are porous, allowing illicit arms trafficking. This has resulted in the proliferation of SALW.  Events in recent years show that Nigeria is a source/origin, transit point and destination of trafficked SALW.  It reflects on recent examples of detections and what Nigeria is doing, or could do, to help combat SALW trafficking and proliferation.

http://allafrica.com/stories/201802220192.html

CBA BANK DENIES NEW AUSTRAC ALLEGATIONS

On 23rd February, Investor Daily reports that the Commonwealth Bank of Australia has denied most of the 100 charges in the Australian Transaction Reports and Analysis Centre (AUSTRAC)’s amended statement of claim filed on 14th December, only admitting 11 in part.  CBA agreed that it was late in filing 53,506 threshold transaction reports, but said it would ask the court to treat all 53,506 contraventions as a “single course of conduct”.  CBA also admitted that it did “not adequately adhere to risk assessment requirements” for its intelligent deposit machines, which were used by criminals to launder cash overseas.  AUSTRAC is alleging 230 SAR-related contraventions, the bank admitted to making errors in 98 instances – admitting that 53 SAR were filed late and a further 45 “should have been filed”.

https://www.investordaily.com.au/regulation/42621-cba-denies-new-austrac-allegations

BERMUDA ICO LEGISLATION SET TO BE TABLED NEXT MONTH

On 22nd February, the Royal Gazette in Bermuda reported that legislation related to ICO, or initial coin offerings, is in train and is expected to be presented to Parliament next month. It also said that Bermuda is preparing for an imminent FATF assessment that will look at the effectiveness of the country’s AML/CFT. With that on the horizon, warning voices have been raised.

http://mobile.royalgazette.com/international-business/article/20180222/ico-legislation-set-to-be-tabled-next-month&template=mobileart

JAPAN – 669 SAR RELATED TO CRYPTOCURRENCIES IN 2017

The Latin American Herald Tribune reports that Japan’s digital currency exchanges detected 669 cases of money laundering via cryptocurrencies between April-December 2017, according to a report by the Japanese police – the first time that a crime of this nature has been included in the annual report of the Japan Financial Intelligence Center – the police agency overseeing the country’s AML efforts – and follows the enactment of a new law authorising the use of digital currency as a method of payment.  Such transactions accounted for 0.2% of more than 400,000 money-laundering cases registered in 2017.

www.laht.com/article.asp?ArticleId=2451371&CategoryId=12396

BRITISH MAN CHARGED WITH USING BITCOIN TO LAUNDER €11.5 MILLION

News BTC on 23rd February reported that a British man has been arrested on money laundering charges in Holland. He is alleged to have been running a “money cleaning” service for clients trading on the dark web between the years 2014 and 2016.  The laundered money is thought to have come from various Dark Web dealings in illicit goods.

https://www.newsbtc.com/2018/02/23/british-man-charged-using-bitcoin-launder-11-5-million-euros/

CLAIM THAT FRANCE ‘MANIPULATING’ CASE AGAINST BUSINESSMAN SOUGHT OVER SARKOZY ALLEGATIONS

Swissinfo on 23rd February reported that the lawyer for a French businessman suspected of funnelling money from former Libyan leader Muammar Gaddafi to finance Nicolas Sarkozy’s 2007 presidential campaign accused French authorities of manipulating the case against him.  Alexandre Djouhri, 58, is fighting extradition from Britain after being arrested on a European arrest warrant (EAW) at London’s Heathrow Airport last month.

https://www.swissinfo.ch/eng/reuters/france–manipulating–case-against-businessman-sought-over-sarkozy-allegations—lawyer/43920092

BASQUE TERRORIST GROUP ETA PLANS TO DISSOLVE FULLY BY THE SUMMER

El Pais in Spain reported on 22nd February that leaders of ETA have asked members to vote on a plan to dissolve completely by the summer. In a statement released by the newspaper Gara, avoiding the use of the terms “disappear” or “dissolve,” but referring to the “end of a cycle”.

https://elpais.com/elpais/2018/02/22/inenglish/1519290861_818719.html?utm_source=POLITICO.EU&utm_campaign=76653d1b14-EMAIL_CAMPAIGN_2018_02_23&utm_medium=email&utm_term=0_10959edeb5-76653d1b14-190081609

ISLE OF MAN UPDATES ISIL/AL-QAIDA SANCTIONS ENTRY

On 22nd February, the Isle of Man confirmed that the entry for Djamel LOUNICI has been amended to reflect changes to UN and EU sanctions lists.

https://www.gov.im/news/2018/feb/22/financial-sanctions-isil-daesh-and-al-qaida/

‘AFRICA’S SATELLITE’ AVOIDED MILLIONS USING A VERY AFRICAN TAX SCHEME

ICIJ on 20th February carried an article on the New Dawn Satellite launched in 2011.  It was partly funded by local investors and promoted as a way for African schoolchildren, nurses, civil servants and businesses to access world-class internet and mobile phone networks.  The companies behind it channelled millions of dollars in payments from African companies and governments through offshore companies in Mauritius, using one kind of offshore company to avoid local taxes and another to pay as little as possible on bills paid from overseas using treaties signed between Mauritius and its African neighbours.  The primary money-making company estimated that it would pay $22,500 in taxes on $75 million in revenue – just 0.03%, and in a 17-year lifespan, the company predicted, it would earn $936 million yet never pay taxes above $300,000.  The Mauritius arrangement lasted until 2013 when Intelsat closed the companies down after unexpectedly low financial returns, and the project was cancelled.

https://www.icij.org/investigations/paradise-papers/africas-satellite-avoided-millions-using-african-tax-scheme/

REPORT: EU TO INCREASE SANCTIONS ON MYANMAR

EU Observer on 22nd February reported that EU foreign ministers at their meeting on 26th February) will call for additional sanctions against Myanmar.  Sanctions could include targeted measures against senior military officers and strengthening of the arms embargo.

https://euobserver.com/tickers/141079

RUSSIA SET TO TAX CROSS-BORDER E-COMMERCE IMPORTS FROM MAY ONWARD

HKTDC on 23rd February reported that a higher level of import duty set to be phased in over the next 2 years as online shopping free-for-all ends.  As of May, though, a new duty-declaration and customs-clearance system will see import taxes levied on any individual in receipt of goods worth more than €1,000 or weighing more than 31 kg in any one monthly period.  Under current proposals, the threshold will drop to €500 from 1st January 2019, before settling at €200 from 1st January 2020.  The regime is also set to be adopted across all of the Eurasian Economic Union member-states (Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia).

http://economists-pick-research.hktdc.com/business-news/article/Economists-Pick-International-Market-News/Russia-Set-to-Tax-Cross-border-E-commerce-Imports-from-May-Onwards/imn/en/1/1X308LSH/1X0AD4L3.htm

PRESIDENT SISI CRITIC PLACED ON EGYPT’S TERRORISM LIST

On 22nd February, Defence Web reported that an Egyptian court put former Islamist presidential candidate Abdel Moneim Abol Fotouh on a terrorism list, state news agency MENA reported, following his arrest for alleged contacts with the banned Muslim Brotherhood.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50808:sisi-critic-on-egypt-terrorism-list&catid=3:Civil%20Security&Itemid=113

UK GAMBLING COMMISSION ADDS TO THOSE WITH WHICH IT CAN SHARE INFORMATION

Gambling Act 2005 (Amendment of Schedule 6) Order 2018 (SI 2018/211) extends the range of those with which the UK Gambling Commission may share information.  Schedule 6 to the Gambling Act 2005 lists bodies to which the Gambling Commission may, under section 30 of the Act, provide information received by it in the exercise of its functions. The Order amends Part 3 of Schedule 6 to update the names of 3 existing entries and add 8 new persons and bodies.  The Explanatory Memorandum says that it is vital that intelligence can be shared between all authorities and other persons and bodies (including sport governing bodies) with an interest in sports betting integrity to help to identify suspicious betting patterns and prevent match-fixing. This flow of information is essential to the fight against sports betting corruption, which is harmful both to sport itself and to the associated sports and betting markets.  Schedule 6 to the Act specifies those persons and bodies which manage information to the necessary standard and can help maintain sports betting integrity. It adds United Kingdom Anti-Doping Limited (UKAD), Darts Regulation Authority, the Irish Rugby Football Union, the Rugby League European Federation, the Tennis Integrity Unit, Table Tennis England, Ladies European Tour (golf) and the International Paralympic Committee.

http://www.legislation.gov.uk/uksi/2018/211/contents/made

FAILURE TO DEFINE KILLER ROBOTS MEANS FAILURE TO REGULATE THEM

ETH Zurich on 23rd February published an article that reports that, in November 2017, the first formal UN meeting on lethal autonomous weapon systems (LAWS) took place in Geneva.  Disagreements on how to define ‘autonomy’ are stalling formal UN discussions on the compliance of autonomous weapons with international humanitarian law. It proposes that the most likely to succeed would be to adopt a practical approach that focuses on lethal autonomous weapon systems’ critical functions, such as target selection and firing; as a pragmatic approach that focuses on the weapon’s critical functions, such as target selection and firing, can help move discussions forward in the future.

http://www.css.ethz.ch/en/services/digital-library/articles/article.html/2034d50b-6222-4531-bd0c-164f61212d05

LORDS COMMITTEE RAISES CONCERNS ABOUT THE TAXATION (CROSS-BORDER TRADE) BILL

On 23rd February it was reported that the House of Lords Constitution Committee publishes a report on the Taxation (Cross-border Trade) Bill, which seeks to implement a new customs regime once the UK exits the EU.  The Committee highlights that the Bill is a piece of framework legislation, as it includes only limited policy detail and instead provides broad delegated powers to ministers to create a new customs regime.  The Committee raises concerns about the constitutional implications about the proposed powers, and also finds that the proposal in the Bill for legislating by public notice – with no scrutiny by Parliament – is overly broad, its potential use subjective, and thus is not constitutionally acceptable.

http://www.parliament.uk/business/committees/committees-a-z/lords-select/constitution-committee/news-parliament-2017/cross-border-trade-bill-concern/

CHINA REGULATOR SEIZES ANBANG INSURANCE COMPANY, CHAIRMAN FACES FRAUD PROSECUTION

On 23rd February, the Irish times reported that China’s government will take temporary control of Anbang Insurance Group and prosecute founder Wu Xiaohui for alleged fraud, said to cement the downfall of a politically-connected dealmaker whose aggressive global expansion came to symbolise the financial overreach of China’s debt-laden conglomerates.  It reminds one that Anbang burst onto the global scene with the purchase of New York’s iconic Waldorf Astoria hotel in 2014.

https://www.irishtimes.com/business/financial-services/china-regulator-seizes-anbang-chairman-faces-fraud-prosecution-1.3403050

POLICE EXPOSE NEW BELARUS PYRAMID SCAM FRONTED BY SCOTTISH SHELL FIRM

On 23rd February, the Herald Scotland reported that Belarussian, Vladislav Shevelenko, had been accused of duping 900 people out of their savings using a Scottish Limited Partnership (SLP) firm called New Assets Union or NAU.  He is said to have promised investors returns of between 100% and 300% a month if they put their money in to a finance firm officially based in central Glasgow.  The 24-year-old was formally accused of fraud after heading what local media in Belarus have described as a classic pyramid scam.

http://www.heraldscotland.com/news/crime_courts/16042828.Police_expose_new_overseas_pyramid_scam_fronted_by_Scottish_shell_firm/

NATIONAL CYBER SECURITY CENTRE RELEASES NIS DIRECTIVE GUIDANCE

Latham & Watkins on 22nd February published an article saying that National Cyber Security Centre (NCSC) has released principles-based guidance on cybersecurity for operators of essential services (OES) adds important detail to obligations under the EU’s Security of Network and Information Systems Directive (NIS Directive), which must be transposed into member state domestic legislation by 9th May.  The NCSC’s guidance, released on 28th January, aims to help OES improve their security infrastructure and reduce their likelihood of suffering a cyber incident.  The article says that OES will be required to use the principles to assess the robustness of their security operations and to drive continuous improvement.  The NCSC indicated that its guidance will be widely applicable and encouraged all sectors to take note of the recommendations.  It remains to be seen whether this guidance will evolve into a market practice standard.

https://www.jdsupra.com/legalnews/national-cyber-security-centre-releases-90030/

TAX CRACKDOWN IN RUSSIA BOOSTS GRAIN TRADERS’ PROFITS

Customs Today on 22nd February reported that a Russian crackdown on tax avoidance in the agriculture sector has been a boon for its grain traders, allowing them to buy directly from farmers and cut out a complex web of middlemen.  Traders include big international commodities houses and some traders said profit margins on Russian grain had turned positive since the crackdown last year and now compared favourably with much of the business conducted in the EU.

www.customstoday.com.pk/tax-crackdown-in-russia-boosts-grain-traders-profits-2/

DUBAI CUSTOMS FOILS 1,628 SMUGGLING ATTEMPTS IN 2017

Customs Today on 22nd February reported that Dubai Customs made 1,628 seizures during 2017 compared to 1,347 seizures in 2016, which means a 21% increase over 2016. The Department of Passenger Operations at the airport had the lion’s share with 859 seizures, followed by Land Customs Centers Management with 699 seizures,  Air Customs Centers Management with 58 seizures,  Jebel Ali Customs Centers with 9 seizures, and Coastal Customs Centre Management with 3 seizures.

http://www.customstoday.com.pk/dubai-customs-foils-1628-smuggling-bids-in-2017/

BANGLADESH OPPOSITION LEADER JAILED FOR 5 YEARS ON CORRUPTION CHARGES

On 23rd February, Customs Today reported that Bangladesh Nationalist Party (BNP), Khaleda Zia, was convicted and sentenced to 5 years jail after a special court found her guilty of corruption.  She was accused of embezzling nearly $250,000 in foreign donations meant for an orphanage trust established when she was prime minister from 2001 to 2006.  The trust was named after her late husband and former Bangladesh President Ziaur Rahman. Her son, Tarique Rahman, the current BNP vice-chairman, received a 10-year sentence.

http://www.customstoday.com.pk/bangladesh-opposition-leader-jailed-for-five-years-on-corruption-charges/

ITALIAN MINISTRY OF ECONOMY AND FINANCE ESTABLISHING RULES FOR VIRTUAL CURRENCY COMPANIES

Customs Today on 22nd February reported a draft of a ministerial decree on the regulation of virtual currency-related service providers.  Comments were gathered during a public consultation period, which ended February 16th.  Virtual currency is defined as “the digital representation of value, not issued by a central bank” and the decree would apply to virtual currency service providers (e.g., exchanges and lenders), and also includes “commercial operators that accept virtual currency as [payment] for … goods and services or other utilities.”

http://www.customstoday.com.pk/italian-ministry-of-economy-and-finance-establishing-rules-for-virtual-currency-companies/

EU DIGITAL TAX FRAMEWORK THREATENED BY CONFLICTING POLITICAL AGENDAS

On 22nd February, Irish law firm Matheson published an article which begins by saying that the European Commission is about to unveil its proposals for the EU’s digital tax strategy.  Major EU states like France and Germany want to take action now, but Ireland stands in their way.

https://www.matheson.com/news-and-insights/article/the-eus-digital-tax-framework-threatened-by-conflicting-political-agendas

AFTER PETRO, VENEZUELA ANNOUNCES NEW ‘PETRO GOLD’ CRYPTOCURRENCY

On 22nd February, the Santiago Times from Chile reported that Venezuela’s President Nicolás Maduro has recently announced that it is going to launch a new cryptocurrency, the Petro Gold, which, according to local news source Telesur, will be backed by precious metals.

http://santiagotimes.cl/2018/02/22/after-petro-venezuela-announces-new-petro-gold-cryptocurrency/

LARGE ROAD FUEL TANKER USED TO SMUGGLE EGGS FROM PALESTINE AUTHORITY (PA)

On 21st February, Yeshiva World reported and published a video said to show the lengths PA-based smugglers will go in order to take their produce to market in Israel.  A truck was apprehended at the Hizme Checkpoint, connecting northern Jerusalem to Shomron communities.  The tanker was used to smuggle illegal, unsupervised eggs originating in the PA, with a forged approval stamp with expiration dates and information pertaining to their point of origin are stamped on eggs in red ink.

https://www.theyeshivaworld.com/news/israel-news/1473608/watch-this-large-fuel-tanker-used-to-smuggle-eggs-from-pa.html

400 KG OF COCAINE FOUND IN RUSSIAN EMBASSY IN ARGENTINA

The Arab News on 22nd February claimed that police have seized nearly 400 kg of cocaine from the Russian embassy in Buenos Aires and arrested several members of a drug trafficking gang, Argentina’s security minister announced.  A gang of narco-criminals was trying to use the diplomatic courier service of the Russian embassy to ship the drugs to Europe, it is claimed.  Russian and Argentine police had decided to mount a sting operation after the Russian ambassador informed them of the drugs find in December 2016.  One of the 2 people arrested in Argentina is a naturalised Russian who was a member of the police force in Buenos Aires.

http://www.arabnews.com/node/1252406/world

UPDATED GUIDANCE ON THE UK MODERN SLAVERY ACT 2015

On 23rd February, law firm Ince & Co published a briefing subtitled “The Noose Tightens” and saying that it is reported that one third of businesses affected by the Act have not prepared a modern slavery statement, in spite of the legal requirement for them to do so.

http://www.incelaw.com/en/knowledge-bank/updated-guidance-on-the-modern-slavery-act-2015-the-noose-tightens?event=reloadPublications&currentPagePiD=58ef56d8c6fe1b0e9cddff00&assetType=PUBLICATION&orderBy=datedesc&take=8&skip=0&ajaxbranchid=58ef614fc6fe1b266450fe10

US SANCTIONS “STOP $3 BILLION IN RUSSIAN ARMS DEALS”

On 21st February, the Moscow Times carried an article claiming that the Russian arms industry has lost more than $3 billion in failed weapons deals with third countries over the threat of US sanctions, the State Department told reporters.

https://themoscowtimes.com/news/us-sanctions-stop-3-bln-in-russian-arms-deals-state-department-60582

JAPAN AFFIRMS MILITARY TIES WITH MYANMAR

The Myanmar Times on 9th February reported that Japan has affirmed its defence co-operation with Myanmar despite international criticism of the country’s government and military over the handling of the northern Rakhine crisis.  The claim is that Japan and its links to the Myanmar military “has an important role in consolidating democracy in Myanmar.”

https://www.mmtimes.com/news/japan-affirms-military-ties-tatmadaw.html

WCO NEWS ONLINE MAGAZINE (FEBRUARY 2018)

On 23rd February, the World Customs Organisation published online the latest edition of its magazine.  Articles include –

  • China’s AEO Joint Incentive Programme.
  • In order to develop the transport of postal items by rail, the Universal Postal Union (UPU) has set up a task force and undertaken several pilots in order to better understand how the performance of rail transport between China and Europe can be improved and how its use by shippers can be enhanced
  • Australia and New Zealand trial a ‘green lane’ for international mail.
  • Combating overvaluation: Malawi’s experience – which notably include the comment that it is high time Customs realised that overvaluation fraud is as serious as other Customs offences like undervaluation, as it deprives countries of much needed capital and may result in money laundering.
  • Customs transit procedures: insights from an operator in the EU.
  • Securing the health of Customs officers – which includes a recounting that in 2016, in Germany, 7 workers at a warehouse were hospitalised following the unpacking of 2 containers. They had inhaled toxic gases invisible to the eye and with no noticeable smell, and were suffering from severe eye irritation, respiratory distress and nausea.

http://www.wcoomd.org/-/media/wco/public/global/pdf/media/wco-news-magazines/wconews_85.pdf?la=en

US ATTORNEY GENERAL ORDERS CREATION OF CYBER-DIGITAL TASK FORCE

On 22nd February, Homeland Preparedness reported that the US DoJ will use a new Cyber-Digital Task Force to assess its current efforts to combat global cyberthreats and identify areas of improvement, Attorney General Jeff Sessions announced.  The Task Force will involve various agencies, including the FBI, DEA, US Marshals Service and others.

https://homelandprepnews.com/stories/26908-attorney-general-sessions-orders-creation-cyber-digital-task-force/

ORGANISED CRIME IN AFRICA AND THE SUSTAINABLE DEVELOPMENT GOALS

An article from ENACT Africa on 19th February explores how organised crime threatens the achievement of development goals.

https://enactafrica.org/research/continental-reports/the-crime-development-paradox-organised-crime-and-the-sdgs

BANKS, BRIBES, AND ALLEGED LATVIAN LAUNDERERS

Medium carries an article dated 23rd February detailing what we do and do not know about reports of corruption against the president of the Bank of Latvia.

https://medium.com/dfrlab/balticbrief-banks-bribes-and-alleged-latvian-launderers-3e3ca3b04b38

WHITE PAPER REVEALS CRITICAL ISSUES IN US CUSTOMS AUTOMATED ENVIRONMENT (ACE)

On 23rd February, Loadstar reported that the National Customs Brokers and Forwarders Association of America (NCBFAA), whose members process 97% of all entries filed for goods entering the US, had published a white paper that calls for action on a number of elements that need to be remedied in US Customs and Border Protection’s Automated Commercial Environment (ACE) system.  ACE is said to be more than 3 years and $1 billion over budget.  It is supposed to streamline data flow to and from CBP but is still plagued by flaws. This could have a knock-on effect for the planned Air Cargo Advanced Screening (ACAS) programme, as ACE has been regarded as the conduit for forwarders to submit their shipment information prior to moving the goods.  ACE was meant to replace the obsolescent Automated Commercial System some years ago.  After delays CBP started introducing elements of the new regime in 2015 and had targeted full implementation by the beginning of last year, but was forced to postpone some elements of the system indefinitely.

The NCBFAA paper is said to highlights 4 areas where more work is required – the release of goods, programming capabilities to support entry or entry summary, post release data issues and clarity of messages issued by the system.

https://theloadstar.co.uk/eye-opening-white-paper-reveals-critical-issues-us-customs-automated-environment/?utm_source=The+Loadstar+daily+email&utm_campaign=140c37e8cd-EMAIL_CAMPAIGN_2018_02_20&utm_medium=email&utm_term=0_c4570e43d4-140c37e8cd-153488301

BOEING 737 AIRLINER APPEARS ON PATCH OF LAND – AND NO ONE KNOWS HOW IT GOT HERE

On 23rd February, the Mirror reported on an aircraft has seemingly been left dumped on the site in Bali, Indonesia – and it appears there is not a person who can explain its random appearance.  It is not known when the Boeing 737 landed on the patch of field but from the appearance of the plane it is believed it has been there for a little while.  It is not the only abandoned Boeing 737 in Bali.  Another of the giant aircraft lies in Kedonganan next to a Dunkin’ Donuts where its wings hang over a street.  Why this plane was abandoned there is also a mystery.

https://www.msn.com/en-gb/lifestyle/travel/boeing-737-plane-appears-on-patch-of-land-and-no-one-knows-how-it-got-here/ar-BBJrXTJ?li=AAmiR2Z&ocid=spartanntp

 

DUTCH MINISTER READY TO GET TOUGH ON SHELL COMPANIES, TAX HAVEN CLAIMS

On 23rd February, Dutch News reported that the Cabinet had given its approval to junior finance minister Menno Snel’s plan to crack down on the shell company industry in the Netherlands in line with international and EU agreements.  “We are going to make serious work of tackling letter box firms”, Snel said after the weekly cabinet meeting. “Only companies which actually bring jobs will be welcomed here with open arms”.

www.dutchnews.nl/news/archives/2018/02/minister-ready-to-get-tough-on-shell-companies-tax-haven-claims/?src=ilaw

HMRC “FULFILMENT HOUSE” VAT CRACKDOWN TO REDUCE EVASION

On 23rd February, IBT Times reported on the new HMRC Fulfilment House Due Diligence Scheme (FHDDS), which is to be launched on 1st April, and will crack down on non-EU businesses which, by failing to comply with VAT regulations, are flooding the UK market with cheap, often fraudulent, online goods.  Fulfilment houses, and any company providing warehousing and distribution for goods imported from a non-EU business for sale in the UK, need to register for the scheme and ensure its clients are VAT registered.  Clamping down on the route to market for non-compliant overseas businesses will deter them from trading in the UK.  Fulfilment businesses already trading need to apply by 30th June, and if a company starts trading after 1st April, they must register by 30th September.

www.ibtimes.co.uk/hmrc-vat-fraud-crackdown-fight-counterfeit-goods-1663418

LIST OF PEOPLE BANNED FROM RUNNING AN EMPLOYMENT AGENCY OR BUSINESS  IN UK

On 23rd February, the UK Department for Business, Energy and Industrial Strategy published an updated list containing details of people who have been banned from running an employment agency or business, including the period of the ban.

https://www.gov.uk/government/publications/list-of-people-banned-from-running-an-employment-agency-or-business

PODCAST – UNDERCURRENTS: EPISODE 2 – THE CALABRIAN MAFIA AND TRANSATLANTIC RELATIONS

On 23rd February, Chatham House published the latest episode of the new podcast series, Agnes Frimston and Ben Horton interview Chatham House experts about the critical underlying issues which are shaping modern society.  Agnes speaks to Helen Fitzwilliam about a new Italian judge-led project to relocate the wives and children of the Calabrian mafia family, the ‘Ndrangheta.  Ben then interviews Xenia Wickett about her recent report on transatlantic relations.

https://www.chathamhouse.org/file/undercurrents-episode-2-calabrian-mafia-and-transatlantic-relations

NORWAY IMPLEMENTS NEW RULES CONTROLLING FOREIGN OWNERSHIP

On 23rd February, Baker McKenzie reported that the Norwegian Parliament is expected to pass a new Act on National Security under which the Norwegian Government will be able to stop foreign investments that may threaten security interests of national importance.

https://globalcompliancenews.com/norway-foreign-ownership-20180223/

THE USE OF COMPELLED TESTIMONY IN CRIMINAL PROCEEDINGS

On 23rd February, UK law firm Corker Binning published the first of 2 briefings exploring the use of compelled testimony in criminal proceedings.  This first article asks whether there are any circumstances in which compelled testimony can be lawfully admitted against the compelled person.  The second article will ask whether there is any prohibition on admitting compelled testimony against a defendant other than the compelled person.

https://www.corkerbinning.com/the-use-of-compelled-testimony-in-criminal-proceedings/

INTERDICTING NORTH KOREAN VESSELS: ANOTHER FALSE HOPE

In the light of the latest updating of US sanctions targeting North Korean shipping, 38 North recommends re-reading this article from October 2017.

https://www.38north.org/2017/10/awinner100417/

US TESTING X-RAY TRAINING SYSTEM THAT TRACKS OFFICER’S EYE MOVEMENTS DURING SEARCHES

On 23rd February, Homeland Preparedness reports that the US Transportation Security Administration is evaluating a new x-ray image analysis training system that tracks the eye movements of TSA officers as they conduct visual searches of travellers at airports across Oregon.  Known as ScreenADAPT, the technology is being developed by the Department of Homeland Security Science and Technology (S&T) Directorate and the TSA.  The goal, it is said, was to develop training methods and tools, through technology innovation, that would be relevant, challenging, intuitive and engaging to enhance transportation security officer (TSO) visual search skill.

https://homelandprepnews.com/stories/26917-tsa-testing-x-ray-training-system-tracks-eye-movements-searches/

CYBERSECURITY PROFESSIONALS FORESEE ‘CATASTROPHIC” CYBERATTACKS IN COMING YEARS

Homeland Preparedness in the US on 23rd February reported that more than 80% of cybersecurity professionals believe that their employer will experience a “catastrophic” data breach within the next 3 years, and 66% believe that it could “seriously diminish” shareholder value, according to a global study.

https://homelandprepnews.com/stories/26925-cybersecurity-professionals-foresee-catastrophic-cyberattacks-coming-years/

 

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PANAMA LISTS VESSELS DEREGISTERED DUE TO NORTH KOREAN CONNECTIONS

On 7th February, the Panama Maritime Authority, as part of its actions to improve the performance of its fleet and complying with its commitment to collaborate with the UN, has implemented the “Restricted Vessels List”, available at –

https://www.segumar.com/wp-content/uploads/2018/02/PANAMA-Nave-Canceladas-Corea-del-Norte-vesion-web-FEB-18-PDF.pdf

Andrea Berger, in her Twitter account, suggests that other states should consider doing so.

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BELARUS: EU PROLONGS ARMS EMBARGO AND SANCTIONS AGAINST 4 INDIVIDUALS FOR 1 YEAR

On 23rd February, an EU news release reported that the EU Council had decided to prolong the restrictive measures against Belarus for 1 year, until 28th February 2019.  These measures include an arms embargo, ban on the export of goods for internal repression and an asset freeze and travel ban against 4 people listed in connection with the unresolved disappearances of 2 opposition politicians, 1 businessman and 1 journalist in 1999 and in 2000.  The Council also continued the derogation to the restrictive measures to allow the export of biathlon equipment to Belarus, which remain subject to prior authorisation by national competent authorities on a case-by-case basis.  This derogation was extended to a limited number of specific-use sporting rifles and sporting pistols, subject to authorisation procedures.

www.consilium.europa.eu/en/press/press-releases/2018/02/23/belarus-eu-prolongs-arms-embargo-and-sanctions-against-4-individuals-for-one-year/

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OUTCOMES OF FATF PLENARY, 21-23 FEBRUARY 2018 – NO CHANGE FOR IRAN AND PAKISTAN

On 23rd February, FATF published a news release detailing the outcomes of the Plenary held in Paris.  The issues and documents involved included –

  • Combatting terrorist financing, including the adoption of a new counter-terrorist financing operational plan and a statement on actions taken under 2016 CFT strategy;
  • Updated FATF Guidance on Counter Proliferation Financing (CFP) – this guidance will help countries understand and implement the financial provisions of UN SCR on proliferation, to ensure that targeted financial sanctions are implemented, and each country has effective mechanisms in place to prevent breaches;
  • Amendments to Recommendation 2 on national co-operation and co-ordination – which will expand the Recommendation to include information-sharing between competent authorities, and emphasise that co-operation and co-operation should include co-ordination with the relevant authorities to ensure the compatibility of AML/CFT requirements with Data Protection and Privacy rules and other similar provisions (e.g. data security / localisation). -Improving the compatibility of AML/CFT and DPP rules will facilitate exchange of information within the private sector;
  • Discussion of the mutual evaluation report of Iceland – the report is expected to be published by April 2018 after the quality and consistency review;
  • Follow-up reports for the mutual evaluations of Spain and Norway where both countries sought technical compliance re-ratings – FATF will publish the follow-up reports which set out the actions that Spain and Norway have taken to strengthen the effectiveness of their measures;
  • Brazil’s progress in addressing the deficiencies identified in its mutual evaluation report since it agreed an action plan in November 2017;
  • 2 public documents identifying jurisdictions that may pose a risk to the international financial system:
  • AML/CFT improvements in Bosnia and Herzegovina – FATF congratulated it for the significant progress made in addressing the strategic AML/CFT deficiencies earlier identified by the FATF and included in its action plan, and it will no longer be subject to the FATF’s monitoring under its on-going global AML/CFT compliance process, and will work with MONEYVAL as it continues to further strengthen their AML/CFT regime.

www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-plenary-february-2018.html

NO MENTION OF PAKISTAN

On 23rd February, DAWN in Pakistan points out, rightly, that despite multiple reports in international media to the contrary, Pakistan has, at least for now, not been included in a list of countries with “strategic deficiencies” with respect to AML/CFT.

https://www.dawn.com/news/1391200/no-mention-of-pakistan-in-fatfs-public-announcements-following-plenary-meeting

FATF AGAIN DELAYS IRAN PENALTIES

The Wall Street Journal on 23rd February reported that FATF had said it would again extend the suspension of some penalties against Iran, but threatened action in June.

https://blogs.wsj.com/riskandcompliance/2018/02/23/anti-money-laundering-body-again-delays-iran-penalties/?src=ilaw

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NEW US SANCTIONS ON NORTH KOREA AND INTERNATIONAL SHIPPING

On 23rd February, The Hill reported on what President Trump announced what he and his administration are billing as the United States’ “largest ever” tranche of sanctions against North Korea, aimed at targeting North Korea’s ability to evade international sanctions and conduct illicit maritime activities that facilitate coal and fuel transports by designating 27 shipping and trade companies, 28 vessels and 1 individual.
The Hill reports that, in conjunction with the new sanctions, the US Treasury and State Departments and the US Coast Guard are issuing a global shipping advisory that warns of “very significant consequences” for helping North Korea evade sanctions and outlines some of the steps its ships take to do so, administration officials told reporters on a background call. It will describe efforts to conceal North Korea-flagged ships’ identities, such as the ships painting over their real names and disabling their automatic identification systems that are meant to be collision avoidance systems. The new sanctions target ships and businesses from all over the world, including North Korea, China, Singapore, Taiwan, Hong Kong, Marshall Islands, Tanzania and Panama.
https://www.msn.com/en-gb/news/world/trump-announces-new-north-korea-sanctions/ar-BBJuXj0?li=AAmiR2Z&ocid=spartandhp
US Treasury news release at –
https://home.treasury.gov/news/press-releases/sm0297

In addition to 16 North Korean shipping companies, OFAC designated the following international shipping companies –

  • Shandong, China-based Weihai World-Shipping Freight and Shanghai, China-based Shanghai Dongfeng Shipping Co Ltd;
  • Hong Kong-based shipping companies Liberty Shipping Co Ltd, Chang An Shipping & Technology, Hongxiang Marine Hong Kong Ltd, Shen Zhong International Shipping Ltd, and Huaxin Shipping HongKong Ltd;
  • Singapore-based Yuk Tung Energy Private Limited; and
  • Panama-based M.T. Koti Corporation.

OFAC also designated Taiwan citizen Tsang Yung Yuan, saying that Tsang has co-ordinated North Korean coal exports with a Russia-based North Korean broker, and he has a history of other sanctions evasion activities. OFAC also designated 2 entities, Taiwan-based Pro-Gain Group Corporation and Taiwan and Marshall Islands-based Kingly Won International Co., Ltd, for being owned or controlled by Tsang.
SANCTIONS RISKS RELATED TO NORTH KOREA’S SHIPPING PRACTICES.
The OFAC detailed list of new designations is at –
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180223.aspx
The OFAC Advisory is at –
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Documents/dprk_vessel_advisory_02232018.pdf
It deals with deceptive shipping practices employed by North Korea, such as –

  • Physically altering vessel identification
  • Ship-to-Ship (STS) transfers
  • Falsifying cargo and vessel documents
  • Disabling the ship-tracking Automatic Identification System (AIS)
  • Manipulating AIS, which can include altering vessel names, IMO numbers, Maritime Mobile Service Identities (MMSI), or other unique identifying information. This tactic could also be used to conceal a vessel’s next port of call or other information regarding its voyage.

The Advisory provides details of some risk mitigation measures that can be adopted, such as –

  • Monitoring for AIS manipulation
  • Conducting research prior to STS transfers – vessel operators should ensure that they have verified the vessel name, IMO number, and flag prior to engaging in such a transfer, and ensure there is a legitimate business purpose for the STS transfer
  • Review all applicable shipping documentation potentially involving North Korean-flagged vessels or shipments to or from North Korea
  • Clear communication with international partners (including shippers, customers, suppliers etc)- clearly communicating US and UN sanctions obligations and discussing sanctions compliance obligations with parties to a transaction can ensure more effective compliance with relevant sanctions programmes
  • Leveraging available resources – using information available from OFAC, the UN, and the US Coast Guard etc.

LIST OF PROHIBITED VESSELS
The Advisory also provides a link to a US Coast Guard page listing vessels that are prohibited from entering the navigable waters of the US or transferring cargo in the US –
https://www.nvmc.uscg.gov/nvmc/(S(crb3dm1x0dlnr4hb5b01t0uo))/CAATSA.aspx

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EX-AMAYA CEO DAVID BAAZOV HAS TRIAL DELAYED UNTIL APRIL

On 23rd February, Calvin Ayre reported that the Court of Quebec had postponed the start of Baazov’s insider trading trial until April 16th.  The trial was supposed to have got underway on 26th February but Baazov’s legal team requested more time to consider the Crown’s evidence against their client.

https://calvinayre.com/2018/02/22/business/amaya-david-baazov-trial-delay-april-16/

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ANATOMY OF THE ZTE SANCTIONS CASE

On 23rd February, The Diplomat carried an article analysing the 2017 case where Chinese telecoms manufacturer ZTE was hit by US sanctions.  It was assessed a $1.19 billion penalty for illegal exports to Iran and North Korea, amounting to the largest civil penalty ever assessed for violation of the US Export Administration Regulations (EAR). The article says that ultimately, ZTE paid $892 million dollars to US enforcement agencies, including the Bureau for Industrial Security (BIS) and the Department of Justice (DoJ). The penalty was especially harsh because ZTE was found to have attempted to obstruct the investigation.  The article asks, what are the important lessons for multinationals — other than don’t break the law and don’t obstruct justice?  It says there are 3 –

  • US sanctions and export controls have far-reaching jurisdiction and can disrupt global value chains, inflicting collateral damage on a host of innocent parties;
  • “national security” sensitivities are on the rise, and Washington is gearing up for an aggressive campaign of sanctions and stringent export licensing requirements; and
  • technology has become both an enabler and a disrupter, bringing a further expansion of “controlled item” lists — which means more penalties can be expected.

https://thediplomat.com/2018/02/why-us-sanctions-are-so-lethal/

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INTERNET OF NUCLEAR THINGS: MANAGING THE PROLIFERATION RISKS OF 3-D PRINTING TECHNOLOGY

On 21st February, the Bulletin of Atomic Scientists produced this article.  It says that, over the next decade, the spread and maturation of additive manufacturing (or AI aka 3D printing) could challenge major control mechanisms for inhibiting nuclear proliferation, and the potential for the emergence of an “Internet of Nuclear Things” – with the latter capable of being harnessed to increase the information visibility of dual-use activities in civil nuclear programmes.  However, it says, barriers stand in the way of leveraging an Internet of Nuclear Things – notably, political issues related to information access and integrity.  The article argues that, as additive manufacturing technology matures, government and industry stakeholders should adopt a strategic approach toward an evolving Internet of Nuclear Things – an approach that would include principles to encourage transparency within the Internet of Nuclear Things and ensure the integrity of the information it produces.

http://www.tandfonline.com/doi/abs/10.1080/00963402.2018.1436811?journalCode=rbul20&mkt_tok=eyJpIjoiWmpBMVlURTFNbVJtTm1VNCIsInQiOiI4Y0dva1d2RXRmdDFwUTZqNllsZTJFQ3dcL0hFaUhwRmkzek1JcFBRdHNEXC9aZnFUVEJReFpudzQ3SGg1R1lJSE9EdzhLWUtaUjJTdkd1MXBHeVkrYzY5NXVvbkVBOTU0OE5icWFyNkdSRXlGUG9zZHRhb3NneVZHVXp1YlNpWXF1In0%3D

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US REGULATOR WARNS ABOUT “PUMP & DUMP” IN INITIAL COIN OFFERINGS VIRTUAL CURRENCIES

On 22nd February, Corporate Counsel in the US reported that the CFTC had issued a customer protection warning about pump-and-dump virtual currency schemes.  It says that, for the uninitiated, the CFTC outlines in its advisory what investors need to watch out for: “Pump-and-dump schemes are mostly anonymous and are organized in public chat rooms or via mobile messaging apps. They are co-ordinated efforts to create phony demand (the pump) and then sell quickly (the dump) to profit by taking advantage of traders who are unaware of the scheme”.  The advisory goes on to say that this type of manipulation is plaguing the virtual currency space and typically occurs on platforms that offer a variety of coin pairings.

http://www.cftc.gov/PressRoom/PressReleases/pr7697-18

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DRONE SURVIVAL GUIDE

From the Netherlands, this document contains the silhouettes of the most common drone species used today and in the near future.  Each indicating nationality and whether they are used for surveillance only or for deadly force.  All drones are drawn in scale for size indication. From the smallest consumer drones measuring less than 1 metre, up to the Global Hawk measuring 39.9 metre in length.  On one sight is a birdwatcher/plane spotter-type silhouette guide, and on the other side tips of avoiding/surviving drones in various languages, all for €10…

http://dronesurvivalguide.org/#

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THINGS YOU MAY HAVE MISSED – FEBRUARY 22

22nd February 2018

BRITAIN SOLD SPYING GEAR TO PHILIPPINES DESPITE DUTERTE’S BRUTAL DRUGS WAR

The Guardian on 21st February reported that the British government sold £150,000 of hi-tech spying equipment to the Philippines.  The equipment purchased by Duterte’s government included IMSI-Catchers, which are used to eavesdrop on telephone conversations, and surveillance tools to monitor internet activity.  Duterte has admitted authorising the wiretapping of at least 2 mayors whom he accused of being “narcopoliticians”, including the Ozamiz city mayor, Reynaldo Parojinog.  Parojinog and 14 other people were killed in a police raid on his home last July.

https://www.theguardian.com/world/2018/feb/21/britain-sold-spying-gear-to-philippines-despite-dutertes-brutal-drugs-war

NATIONAL SPACE COUNCIL PUSHES FOR NEW US COMMERCIAL REGULATIONS

Satellite Today on 21st February reported that members of the Council agreed on a number of new recommendations to reform commercial space regulatory frameworks at the Departments of Transportation and Commerce.  Originally created to co-ordinate policies between NASA and other agencies involved in space, the Council had been inactive since 1993 until the Trump Administration.  The Council also said it would initiate a policy review of the current export licensing regulations affecting commercial space activity.  Council members were reported to have focused their discussion on how to make it easier for US companies to break into the space business, while also shoring up the government’s ability to protect its intergalactic assets, such as spacecraft and satellites.

http://www.satellitetoday.com/government-military/2018/02/21/national-space-council-pushes-new-commercial-regulations/

SWISS BANKS INVESTIGATED OVER VENEZUELAN ‘MONEY LAUNDERING’

Telesur on 21st February reported that an investigation has been launched into several Swiss banks following allegations that Venezuelan former officials were involved in a corruption scandal at state oil company Petroleos de Venezuela (PDVSA) and follows sanctions placed last month against 5 former officials accused of soliciting bribes to help vendors win favourable treatment from PDVSA, as well as hiding extra profits in Switzerland.  FINMA is investigating whether the Swiss banks – which have not yet been identified publicly – adhered to laws designed to combat money laundering.

https://www.telesurtv.net/english/news/Swiss-Banks-Investigated-Over-Venezuelan-Money-Laundering-20180221-0028.html

BAVARIAN APARTMENTS, RUSSIAN INVESTORS AND A SUSPECT HOUSING DEAL

Handelsblatt on 21st February reported that the 2013 €2.5 billion sale of 32,000 apartments by the Gemeinnützige Bayerische Wohnungsgesellschaft (GBW), a real estate subsidiary of Bayerische Landesbank, the 8th largest financial institution in Germany and 94% owned by Bavaria’s state government, is raising eyebrows as new details have led to allegations of Russian money laundering in connection with the deal.  It says that a joint investigation by Handelsblatt and Monitor, a news program from state broadcaster ARD, has turned up numerous indications that money laundering was involved.  The buyer was a consortium of investors led by a real estate firm called Patrizia Immobilien AG, with the involvement of a main shareholder that is an investment fund listed in Luxembourg.  Funds came from sources that included 2 companies that had received millions of euros from Russia and Cyprus.

https://global.handelsblatt.com/politics/bavarian-apartments-russian-investors-suspect-housing-deal-890362

FATF REMOVES LIBYA FROM TERROR-FINANCING WATCH LIST

Xinhua on 22nd February reported that FATF has removed Libya from the list of countries unable to fight money laundering and terrorism financing, the Central Bank of Libya said in a statement.

http://www.xinhuanet.com/english/2018-02/22/c_136991254.htm

CHINA’S TRASH BAN FORCES EUROPE TO CONFRONT ITS WASTE PROBLEM

Politico on 22nd February carried an article that says that until the beginning of this year, the EU kept itself clean by sending millions of tons of paper, cardboard, plastics and textiles on cargo ships to China.  Of the 56.4 million tons of paper EU citizens threw away in 2016, some 8 million ended up in China, purchased by recycling centres that turn it into cardboard and send it back to Europe as packaging for Chinese exports.  That same year, the EU collected 8.4 million tons of plastic waste, and sent 1.6 million tons to China.  At the end of 2017, Beijing put in place strict limits on imports of foreign waste, and after only 8 weeks Europe is struggling to deal with mountains of plastic and paper waste.

https://www.politico.eu/pro/europe-recycling-china-trash-ban-forces-europe-to-confront-its-waste-problem/?utm_source=POLITICO.EU&utm_campaign=3d3b1239eb-EMAIL_CAMPAIGN_2018_02_22&utm_medium=email&utm_term=0_10959edeb5-3d3b1239eb-190081609

NOTE TO EU BUSINESS OPERATING IN CRIMEA AND SEVASTOPOL

A reminder that on 13th February the EU reissued an updated version of its information note on restrictive measures in line with the non-recognition policy of the illegal annexation of Crimea/Sevastopol.  The update aims at providing some indication of what the de facto application of Russian legislation in Crimea and Sevastopol might entail for foreign businesses, considering that such legislation may be in contradiction with the applicable Ukrainian laws.

http://ec.europa.eu/growth/content/note-eu-business-operating-crimea-and-sevastopol_en

UNION TRANSIT: MOVING GOODS BETWEEN 2 EU TERRITORIES

HMRC has reissued updated guidance on how to use Union Transit (formerly called Community Transit or CT) to move non-EU goods within the EU and to move goods to or from the special territories.

https://www.gov.uk/guidance/transit-and-other-suspensive-regimes

POST-BREXIT PORT HEALTH BORDER DISRUPTION STILL A MAJOR CONCERN FOR BRITISH PORTS

On 22nd February, the British International Freight Association reported that the British Ports Association warned that without agreements on cross-border environmental health standards there could be major disruption at UK and EU ports. The DEFRA report ‘Brexit: Trade in Food’ suggested that changes in UK–EU trade arrangements could lead to serious disruption for food supply chains.

https://www.bifa.org/news/articles/2018/feb/post-brexit-port-health-border-disruption-still-a-major-concern-for-british-ports?l=y

COMBATING HUMAN TRAFFICKING BY THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA

On 21st February the Council of Europe reported that, in its news report, the Council anti-trafficking expert group (GRETA) welcomes positive developments in “the former Yugoslav Republic of Macedonia” and calls on the authorities to do more to lower human trafficking risks for children and migrants.  It says that there was progress in legislation and practices, more needed to lower risks for children and migrants.  Expressing concern about the low number of convictions, GRETA calls on the authorities to secure adequate funding and sufficient staff for proactive investigative work as well as to ensure successful prosecution and effective sanctions.

https://www.coe.int/en/web/portal/-/combatting-human-trafficking-by-the-former-yugoslav-republic-of-macedonia-progress-in-legislation-and-practices-more-needed-to-lower-risks-for-childre

MEPs BAR WMD AND KILLER ROBOTS FROM NEW EU ARMS FUND

EU Observer on 21st February reported that Members of the European Parliament’s industry and research committee decided on 21st February that the development of small arms for export purposes should not be excluded from a new EU fund for defence research.  They did list, however, some other weapon types that must not be supported with EU taxpayer money – projects related to WMD, as well as fully autonomous weapons (or “killer robots”).

https://euobserver.com/science/141056

SWITZERLAND ALIGNS DRC SANCTIONS WITH EU

Swissinfo on 22nd February reports that following the lead of the European Union, Switzerland has extended its sanctions against the Democratic Republic of the Congo (DRC).   The measures include financial sanctions against 14 people – who are also banned from entering Switzerland.

https://www.swissinfo.ch/eng/congo_swiss-freeze-assets-in-new-drc-sanctions/43918938?src=ilaw

PARLIAMENTARY COMMITTEE TO EXAMINE THE OPERATION AND EFFECTIVENESS OF THE UK’S ARMS EXPORT LICENSING PROCESS

The UK Parliament website reports that the Committees on Arms Export Controls (CAEC) question Amnesty International, Oxfam and Saferworld on UK arms exports during 2016 as it looks at matters contained within the Government’s 2016 Annual Report on Strategic Export Controls, including the operation and effectiveness of the UK’s arms export licensing process. The Committees will also look at international policy developments and controls on arms brokering.  CAEC is the joint meeting of the Defence, Foreign Affairs, International Development, and International Trade Select Committees to scrutinise arms exports.

https://www.parliament.uk/business/committees/committees-a-z/other-committees/committee-on-arms-export-controls/news-parliament-2017/first-session-caec-17-19/

ADANI MINING GIANT FACING RENEWED CLAIMS OF $600 MILLION FRAUD IN INDIA

The Guardian on 21st February reported that India’s customs department has revived allegations of a $600 million financial fraud against the Adani Group, challenging an order clearing the mining giant last year as “erroneous, illegal and improper”.  Adani has been fighting allegations for the past 4 years that it used a shell company in Dubai to siphon hundreds of millions of dollars from the company’s books into Adani family tax havens overseas.  The Indian conglomerate is preparing to build one of the world’s largest coal mines in Australia.

https://www.theguardian.com/business/2018/feb/22/adani-mining-giant-facing-renewed-claims-of-600m-in-india

BUSINESSMAN LINKED TO CONTROVERSIAL RUNCORN FLATS PROJECT CONVICTED OF FRAUD

The Liverpool Echo reported on 21st February that a property developer with links to a doomed Runcorn flats project has been handed a suspended prison sentence and £10,000 fine for fraud in a case brought by a disgruntled creditor.  Andrew John Camilleri, 37, who now lives in Switzerland having previously been based in Manchester, was sentenced to 12 months in prison suspended for 12 months. A jury had convicted him of making false representations and fraudulently obtaining approval from creditors connected to false representations in his individual voluntary arrangement (IVA) – a procedure used to determine how much he could repay investors when he was facing bankruptcy in 2011.

https://www.liverpoolecho.co.uk/news/liverpool-news/businessman-linked-controversial-runcorn-flats-14319199

NEW PROTECTION AGAINST IDENTITY FRAUD FOR COMPANY DIRECTORS IN UK

On 22nd February the Department for Business, Energy and Industrial Strategy published a news release saying that laws will make it easier for directors to remove personal addresses from the company register while ensuring transparency, and will enable company directors to remove their personal addresses from the UK’s official company register on Companies House. Directors must still provide their business address as a legal requirement.

https://www.gov.uk/government/news/new-protection-against-identity-fraud-for-company-directors

TENNESSEE COMPANY SKIRTS CUSTOMS OBLIGATIONS AND PAYS $500,000 FCA PENALTY

On 21st February, Bass, Berry & Sims published an article about Home Furnishings Resource Group Inc (HFRG) which had agreed to a $500,000 settlement to resolve allegations that the company violated the False Claims Act (FCA).  The DoJ contended that HFRG made false statements on customs declarations to avoid paying anti-dumping duties on wooden bedroom furniture that HFRG imported from China between 2009 and 2014, and misclassifying it.  The case was initiated by a competitor of HFRG, University Loft Company (ULC), which made the allegations under the whistleblower provisions of the FCA.

https://www.jdsupra.com/legalnews/tennessee-company-skirts-customs-74001/

COMPANIES UNPREPARED FOR LEASE ACCOUNTING STANDARD

CCH Daily on 22nd February reported that, with under a year to go, many companies are at risk of being caught unprepared for new lease accounting rules under IFRS 16, which come into force next January and require imminent action to ensure compliance and prepare comparative data.  It is pointed out that for several industries, such as retail, real estate, airline, transport and energy, this could well become one of the most material items on their balance sheets, and the airline industry will be particularly affected.

https://www.accountancylive.com/companies-unprepared-lease-accounting-standard

582 ARRESTED IN HONG KONG CUSTOMS’ LUNAR NEW YEAR ANTI-SMUGGLING OPERATION

Xinhua reported on 22nd February that total of 582 people have been arrested in Hong Kong in a 19-day special operation against cross-boundary smuggling activities before and during the Lunar New Year, the Customs of China’s Hong Kong Special Administrative Region (HKSAR) announced.  It detected a total of 655 cases with the arrest of 582 persons, resulting in the seizure of items with an estimated value of about US$6.77 million.   Most of the seized items were synthetic drugs, including cathinone (commonly known as “bath salt”), methamphetamine (commonly known as “ice”) and cannabis buds, which were seized mainly from inbound air parcels and air passengers.

www.xinhuanet.com/english/2018-02/21/c_136989396.htm

HIGH COURT ORDERS MANUAL DOCUMENT SEARCH IN $65 MILLION DAMAGES CLAIM AFTER CONCERNS OVER COMPUTER REVIEW

Litigation Futures on 22nd February reports that a UK High Court judge has ordered a manual search of 55,000 documents in a $65 million breach of warranty case because of concerns over the claimants’ approach to computer-assisted review (CAR).  He said disclosure had been “something of a running sore in this case”, which potentially involved three terabytes of data made up of 20 million electronic documents in 860,000 folders.

https://www.litigationfutures.com/news/high-court-orders-manual-document-search-65m-damages-claim-concerns-computer-review

BEYOND THE DARK WEB: ARMS TRAFFICKING IN THE DIGITAL AGE

On 16th February, Small Arms Survey published a post which says that online activities related to arms trafficking occur throughout the Internet, including on mainstream websites (i.e. not just on the Dark Web).  This activity ranges from outreach to potential clients on social media to the procurement of weapons, ammunition, and accessories from online vendors. It points out, however, that arms trafficking remains tethered to the real (physical) world in important ways.  In fact, very few illicit transfers are conducted entirely online.  Weapons are physical objects that are manufactured, stored and transported offline. Technological advancements such as 3D printing could eventually sever some of the links between the real and virtual worlds but, for now, most ‘online’ arms trafficking involves extensive offline activities and interactions. It goes on to consider matters under the headings of –

  • advertising (perhaps the most important role played by the Internet is efficiently connecting potential buyers and sellers of illicit weapons, including via social media);
  • procurement (it says that some traffickers purchase most or all of their merchandise from online vendors);
  • technology transfers (the illicit sharing of technical data on the creation, assembly and use of weapons); and
  • moving forward (the continued links between the virtual and physical worlds provide additional opportunities for authorities to detect online trafficking networks and interdict arms shipments arranged by these networks. That said, the improving quality and increasing availability of 3D-printers and other production technologies could eventually tip the scales in favour of online traffickers, with potentially dire consequences for export control regimes).

https://medium.com/@SmallArmsSurvey/beyond-the-dark-web-arms-trafficking-in-the-digital-age-56ddd806587a

SENIOR PALESTINIAN AUTHORITY OFFICIAL “EMBEZZLED EU AID MONEY”

On 21st February, Baker McKenzie reported that a top Palestinian official spent hundreds of thousands of dollars in aid money provided by the EU on personal expenses like overseas travel, electronics and landscaping, according to information obtained by i24NEWS.  Sources in Gaza, Ramallah and Europe said that Marwan Durzi, the ex-head of the UN Development Program (UNDP) in the West Bank and the current head of the Palestinian co-ordination office for Zone C (the part of the West Bank under full Israeli military control) took advantage of his position overseeing grants provided by the EU for humanitarian purposes.

http://www.riskandcompliancehub.com/senior-palestinian-authority-official-embezzled-eu-aid-money-report/

 

BIG GUNS TEAM UP FOR MARCO POLO BLOCKCHAIN TRADE FINANCE INITIATIVE

On 21st February, Fintech Futures carried an article that says that the big names are out in force for a new blockchain-fuelled trade finance initiative called Marco Polo.  Launched in September 2017, with BNP, Commerzbank and ING as core banks, the initiative has attracted interest from others, with additional banks including Standard Chartered, DNB and the OP Financial Group joining in recent months.  The aim is for the solution to enable “end-to-end, real-time, seamless connectivity between trade participants, eliminating the data silos which prevent free flow of information causing inefficiencies and discrepancies”.  Initially it is focused on 3 distinct areas: risk mitigation by provision of payment commitments based on the matching of trade data, payables finance, and receivables finance.  The ambition is to expand the initiative in 2018 to include additional banks and third party service providers, such as credit insurers, enterprise resource planning (ERP) and logistics providers.

www.bankingtech.com/2018/02/big-guns-team-up-for-marco-polo-blockchain-trade-finance-initiative/

 

MORE UK PROSECUTORS MAY BE SENT OVERSEAS TO TACKLE TRAFFICKING GANGS

On 21st February, the Guardian reported that, speaking before a 3-day international summit about the issue, the Director of Public Prosecutions said that more British prosecutors may be sent overseas to co-ordinate cases against trafficking gangs and those involved in modern-day slavery.  Last year the CPS prosecuted 295 people in England and Wales for trafficking offences.  “That was the highest number ever and we think the figure is going up,” the DPP told the Guardian.  There are currently 30 CPS staff, known as liaison magistrates or crown prosecutors, working overseas in France, Italy, Spain, Pakistan, the UAE and the US.

https://www.theguardian.com/law/2018/feb/21/more-uk-prosecutors-may-be-sent-overseas-trafficking-gangs-alison-saunders-slavery

SWISS FEDERAL SUPREME COURT: ABILITY OF THE IRS TO OBTAIN INFORMATION OF BANK EMPLOYEES AND OTHER THIRD PARTIES

Baker McKenzie on 21st February reported on the case where the Swiss Federal Supreme Court recently addressed the issue of whether the IRS is able to access information about bankers and other third parties under the exchange of information clause of the US-Swiss Double Taxation Treaty. 

https://globalcompliancenews.com/swiss-federal-supreme-court-irs-information-bank-employees-third-parties-20180222/

BEYOND THE CALIPHATE: BELGIUM

This project from the Combating Terrorism Center at West Point documents and identifies activity linked to and inspired by the Islamic State outside of the territory it claims (claimed?) as part of its physical Caliphate.  In doing so, the project seeks to provide insights into how the influence, operational reach, and capabilities of the Islamic State are changing in certain locales over time.  CTC researchers have collected open-source data regarding the Islamic State’s operational activity in select locations outside of the physical territory claimed by the group.  As collection and analysis continues, the CTC released a number of short country and regional reports that leverage the data CTC has collected.  The latest is concerned with Belgium.  Others already released cover Turkey, SE Asia and Morocco.

The Belgium report’s analyses where and when attacks took place, the individual involved and/or arrested and their connections. The Belgium report is at –

https://ctc.usma.edu/app/uploads/2018/02/CTC-Beyond-the-Caliphate-Belgium.pdf

https://ctc.usma.edu/beyond-the-caliphate/

INTERNATIONAL SALE OF GOODS AND ROLE OF UN CONVENTION

On 20th February, the STA Law Firm in the UAE published what is promised to be the first of 5 articles on the subject of the international sale of goods and mechanisms to prevent or resolve disputes arising.   This first article looks at UNIDROIT, the ULF and ULIS Conventions and what it says is arguably the most successful of the various international agreements, the UN Convention concerning Contracts for the International Sale of Goods (aka the CISG Convention).

http://www.mondaq.com/article.asp?articleid=674888&email_access=on&chk=1635712&q=960824

UK FINANCE ACT 2003: UPDATES TO PART 3 – CUSTOMS POWERS

On 22nd February, HMRC released a policy paper on changes being made to customs powers in Part 3 the Finance Act 2003 to replace references to ‘the Community Customs Code (Council Regulation (EEC) 2913/92) (CCC)’ with references to the Union Customs Code (Regulation (EU) No 952/2013) (UCC).  Part 3 of the Act Part 3 gives a power for HM Treasury to prescribe where a breach of a requirement imposed by or under certain specified tax legislation makes a person liable to a civil financial penalty

https://www.gov.uk/government/publications/finance-act-2003-updates-to-part-3/finance-act-2003-updates-to-part-3

 

FINANCIAL CRIME ON THE RISE IN INDIA’S LIFE INSURANCE SECTOR

On 22nd February, the Deccan Herald carried an article saying that rising transactions with third parties, data privacy concerns and gaps in operational processes have augmented financial crime risks in the life insurance sector, according to a EY Fraud Investigation & Dispute Services’ report.  According to the report, 56% of the life insurers stated up to 30% increase in fraud over the last 2 years; 7% confirmed up to 50% increase.

www.deccanherald.com/content/660932/financial-crime-rise-indias-life.html?src=ilaw

HMRC CONSULTATION ON EXTENDED TIME LIMITS FOR OFFSHORE INVESTIGATIONS

On 22nd February, Out-Law reports on a consultation from HMRC, and it will be able to look at 12 years’ worth of back taxes in cases involving an offshore element from April 2019, if the UK government goes ahead with a proposal announced in the last Budget.  It plans to change the time limits from 4 years, or 6 years where a suspected underpayment has been brought about due to carelessness.  The time limit will remain 20 years where the taxpayer has acted deliberately or dishonestly.

https://www.out-law.com/en/articles/2018/february/hmrc-consults-on-extending-offshore-investigation-time-limit/

PROPERTY FRAUD BARRISTER DISBARRED – 9 YEARS AFTER DISCIPLINARY TRIBUNAL STRIKE OFF

On 22nd February, the Law Society Gazette reported that a dual qualified solicitor and barrister, Godwin Okri, has been disbarred, nearly 10 years after he was struck off the roll for the same conveyancing offence.   The offence relates to Okri’s time as a solicitor.  In 2004 while working on a conveyancing transaction, Okri acted for both seller and buyer where a conflict of interest existed without the written consent of both parties.  He was struck off by the Solicitors Disciplinary Tribunal in 2009.

https://www.lawgazette.co.uk/law/property-fraud-barrister-disbarred-nine-years-after-sdt-strike-off/5064942.article

UK GOVERNMENT HOSTS FIRST INTERNATIONAL PUBLIC SECTOR FRAUD SYMPOSIUM

On 22nd February, counter-fraud experts from the UK, Australia, Canada, New Zealand and the US as they attend the first ever International Public Sector Fraud Symposium in London to share experience and expertise in tackling fraud in the public sector.

https://www.gov.uk/government/news/uk-government-hosts-first-international-public-sector-fraud-symposium

LAW SOCIETY OF ENGLAND & WALES SEEKS SOLICITORS’ VIEWS ON SANCTIONS ISSUES

The European Sanctions Blog on 22nd February reported that the Law Society is consulting members on the new sanctions reporting obligation on legal professionals, and sanctions licensing issues.  The new reporting requirements are explained at –

http://www.lawsociety.org.uk/news/stories/uk-sanctions-regime/

FLORIDA OPTHALMOLOGIST GETS 17 YEARS FOR $42 MILLION MEDICARE FRAUD

Law 360 reports on 22nd February that Dr. Salomon E Melgen, a Florida ophthalmologist (who also gained notoriety as a co-defendant with US Senator Robert Menendez in an unsuccessful bribery case) has been sentenced to 17 years in prison and ordered to repay about $42 million on a conviction of massively overbilling Medicare.

https://www.law360.com/articles/1009904

US SUPREME COURT REJECTS VICTIMS’ CLAIMS TO COLLECT DAMAGES FROM IRAN

On 22nd February, the Jurist website reported that the US Supreme Court refused victims of a terrorist attack to collect damages from Iran through attaching government property present in the US. The case, Rubin v Islamic Republic of Iran, stems from a 1997 terrorist attack in Israel carried out by Iranian-backed Hamas militants.  Several of the injured were US citizens.

http://www.jurist.org/paperchase/2018/02/supreme-court-rejects-victims-claims-to-collect-damages-from-iran.php

UK INQUIRY A CHANCE TO CONSIDER DIGITAL CURRENCY POSITIVES, SAYS FINTECH LAWYER

An article from Out-Law on 22nd February reports that a new inquiry opened by a UK parliamentary committee presents an opportunity to ensure the potential benefits of cryptocurrencies are better recognised, a specialist in financial services and technology law has said.

https://www.out-law.com/en/articles/2018/february/uk-inquiry-a-chance-to-consider-digital-currency-positives-says-fintech-lawyer/

INDIA TESTS NUCLEAR-CAPABLE SHORT-RANGE MISSILE

Janes.com on 22nd February reported that India successfully conducted a night-time test-launch of its indigenously developed nuclear-capable Prithvi II short-range ballistic missile (SRBM) to a range of 350 km off the country’s east coast on 21st February.

http://www.janes.com/article/78098/india-test-fires-nuclear-capable-prithvi-ii-srbm

 

IRAN MAY WITHDRAW FROM NUCLEAR DEAL IF BANKS CONTINUE TO STAY AWAY

KYC 360 on 22nd February reported that Iran will withdraw from the 2015 JCPOA nuclear deal if there is no economic benefit and major banks continue to shun the Islamic Republic, its deputy foreign minister said.

https://kyc360.com/news/iran-says-may-withdraw-nuclear-deal-banks-continue-stay-away/

MONEY LAUNDERING: LATVIAN BANK SEEKS €480 MILLION LOAN TO RE-OPEN

KYC 360 on 22nd February reports that ABLV, one of Latvia’s largest banks, has asked for a €480 million loan from the country’s central bank as part of efforts to reopen for business after being forced to halt all payments in the face of money laundering accusations.  The request for credit from the Baltic state’s central bank comes amid frantic efforts by ABLV’s management to keep the bank afloat after US authorities singled it out for money laundering and moved to block it from doing financial deals in dollars.

https://kyc360.com/news/money-laundering-latvian-bank-seeks-e480-million-euro-loan-reopen/

REPORT TO US CONGRESS ON ARMY DIRECTED-ENERGY WEAPONS

Real Clear Defence website on 22nd February carries extracts from the report.  It says that the US military has a long and complicated history in developing directed energy (DE or laser) weapons. Many past efforts have failed for a variety of reasons and not all failures were attributed to scientific or technological challenges associated with weaponising DE.  Some believe the Army is making progress to field viable DE weapon systems designed to counter rockets, artillery, and mortars (C-RAM) and address certain types of short-range air defence (SHORAD) threats.

https://www.realcleardefense.com/2018/02/22/report_to_congress_on_army_directed_energy_weapons_300491.html

IN-FIGHTING IN MALI OPENS DOOR FOR AL-QAIDA

On 21st February, the Cipher Brief reported in an article that a 2015 peace accord between the Mali government and ethnic Tuaregs in the north of the country has failed to produce economic or security benefits for the northern tribe, with each side blaming the other for the failure of the deal.  The dispute could devolve once again into civil war, and create an opening for al-Qaida in the Islamic Maghreb (AQIM) and other terrorist groups to further fortify their continuing operations in the northern part of the country.

https://www.thecipherbrief.com/article/africa/al-qaida-aims-undermine-fragile-peace-mali

DENIABILITY AND DE-ESCALATION: RUSSIA USE OF “MILITARY CONTRACTORS” IN PROXY WARS

On 18th February, the Cipher Brief reported that Russia’s use of private military contractors in Syria lends it deniability that becomes problematic when the US tries to calculate how to retaliate against incursions again US and coalition troops by the Assad regime.  The problem arose earlier this month when the of US conducted retaliatory strikes that reportedly killed some 200 Russian contractors in what could amount to the most lethal clash between US and Russian citizens since the Cold War.

https://www.thecipherbrief.com/article/tech/deniability-de-escalation-russias-use-military-contractors-proxy-wars

 

Featured

133 SUSPECTED SANCTIONS BREACHES REPORTED IN UK IN 2017

The European Sanctions Blog on 22nd February reports on a written answer in Parliament that said that 133 suspected breaches of sanctions legislation were reported to OFSI in 2017, with a value of £1.4 billion quoted.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2018-02-05/126717

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JAPAN SUSPECTS NORTH KOREAN SHIP OF VIOLATING SANCTIONS

Janes.com on 22nd February reported that Japan spotted a North Korean-flagged tanker apparently accepting an unknown cargo from a smaller vessel of unknown nationality in the East China Sea on 16th February.  The smaller vessel had the designation Min Ning De You 078 written on it in Chinese characters.  Japan identified the North Korean-flagged tanker as Yu Jong 2, and said the 2 ships had been spotted on the high seas (around 250 km off Shanghai) by a maritime reconnaissance aircraft.

http://www.janes.com/article/78100/japan-suspects-north-korean-ship-of-violating-unsc-resolutions

Meanwhile, KYC 360 reports –

China probing possible violation of UN sanctions on North Korea

https://kyc360.com/news/china-probing-possible-violation-un-sanctions-n-korea/

Featured

MONEY LAUNDERING SUPERVISION: REVIEW OF MONEY SERVICE BUSINESSES BY HMRC

On 22nd February, HMRC released its report on the review of AML compliance in the money service businesses (MSB) sector. During 2014-15, it carried out nearly 1,500 visits and “other significant contact” and the bulk of the report is based on that activity.  It outlines both good and bad practice found.  It mentions in passing that, since the end of official exchange controls, there are no official and reliable statistics for remittances to and from the UK.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/683213/AMLS_Money_Service_Businesses.pdf

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THE UK COURTS’ DISCRETION UNDER SECTION 22, POCA 2002

On 21st February, an article from Bartfields says that The revisiting of old confiscation orders by prosecutors under section 22 of the UK’s Proceeds of Crime Act 2002 is becoming more frequent but as yet few variations made under section 22 have been appealed.  In stark contrast to the position when a confiscation order is first made, on a section 22 revision the court – in other words the judge – has discretion concerning what variation to make to the original confiscation order and even whether to refuse to make any variation at all.  The article considers the case of Mundy, where a man was convicted of drugs offences in 2008, and £163,090 was left unpaid from a confiscation order that had been obtained.  Many years later, prosecutors became aware that Mundy now had assets that could be, and were, restrained and might be used to settle the outstanding amount.  A section 22 application was made for £29,291.  Mundy claimed he could or should only pay £2,561.  The judge refused to make the order and the Crown appealed this decision.  The Court of Appeal said that the Crown Court judge had a discretion to refuse to vary (or refuse) the order and that on the facts it was properly open to him to do so in Mr Mundy’s case.  The court dismissed the prosecution’s appeal.

www.accountingevidence.com/blog/2018/02/the-courts-discretion-under-s22-poca-2002/

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SIPRI’S ARMS TRADE TREATY DATABASE NOW COVERS EAST ASIA AND SE ASIA

On 20th February, the Stockholm International Peace Research Institute said that it is pleased to announce that it has expanded and improved its online database for Mapping Arms Trade Treaty (ATT)-relevant cooperation and assistance activities to include East Asia and SE Asia. The database now contains information on over 440 co-operation and assistance activities aimed at building capacity in areas relevant to ATT implementation in Sub-Saharan Africa, Latin America and the Caribbean, East Asia, and South East Asia since 2012. It remarks that, since the entry into force of the ATT, the low level of participation among states in Asia has been a particular cause for concern.

https://www.sipri.org/news/2018/sipris-arms-trade-treaty-database-now-covers-east-asia-and-south-east-asia

For information on the UN Arms Trade Treaty see –

https://www.un.org/disarmament/att/

The landmark Arms Trade Treaty (ATT), regulating the international trade in conventional arms – from small arms to battle tanks, combat aircraft and warships – entered into force on 24th December 2014.

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COLOMBIA ARRESTS FOR MONEY LAUNDERING THE COP WHO GOT ESCOBAR

Fox WXXV25 News reported on 21st February that the Colombian cop, Colonel Hugo Aguilar, who commanded the operation that killed drug kingpin Pablo Escobar in 1993 has been arrested for laundering money on behalf of a demobilised right-wing Central Bolivar militia.  Authorities accuse Aguilar of amassing a fortune worth over $5.2 million from his ties.  It says that the investigation against Aguilar started last year when he was photographed driving a Porsche even while arguing he was too indebted to pay reparations to victims of paramilitary violence.

https://www.wxxv25.com/2018/02/21/colombia-arrests-cop-who-got-escobar-for-money-laundering/

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PROPOSED CFIUS LAW WILL IMPOSE NEW EXPORT CONTROLS ON US BUSINESSES

The National Law Review on 21st February reported that the Foreign Investment Risk Review Modernization Act of 2017 has been introduced in the US Congress to reform the national security review of foreign acquisitions of US businesses by the Committee on Foreign Investment in the United States (CFIUS).   However, the Act extends well beyond this purpose of reviewing acquisitions by giving CFIUS authority over technology transfer transactions – both export and domestic; and transfers both to an organisation outside the US and to a US organisation that is “controlled” by a non-US person.  This, it says, is troubling because it establishes a duplicate government approval process, requires review of technology transfer that the existing export control agencies have determined not to require a licence, and imposes a new level of KYC due diligence to understand the ownership of a US recipient.  Under the current CFIUS implementing statute CFIUS has authority over transactions involving the acquisition of control by a foreign person over a US business.

https://www.natlawreview.com/article/proposed-cfius-law-will-impose-new-export-controls-us-businesses

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CORRUPTION PERCEPTION INDEX 2017

 

On 21st February, Transparency International released its Corruption Perception Index 2017.  This year’s index shows that the majority of countries are making little or no progress in ending corruption.  Even worse, journalists and activists in corrupt countries are risking their lives every day in an effort to speak out.  The index ranks 180 countries using a scale of 0 to 100, where 0 is highly corrupt and 100 is very clean. This year, more than two-thirds of countries score below 50.  New Zealand and Denmark rank highest with scores of 89 and 88 respectively. Syria, South Sudan and Somalia rank lowest with scores of 14, 12 and 9 respectively. The best performing region is Western Europe with an average score of 66. The worst performing regions are Sub-Saharan Africa (average score 32) and Eastern Europe and Central Asia (average score 34).

https://www.transparency.org/news/feature/corruption_perceptions_index_2017?utm_medium=email&utm_campaign=CPI%202017%20Newsletter&utm_content=CPI%202017%20Newsletter+CID_738c2e5efa44a94aa4a36cd46b75f79e&utm_source=Email%20marketing%20software&utm_term=Corruption%20Perceptions%20Index%202017

 

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THINGS YOU MAY HAVE MISSED – FEBRUARY 21

21st February 2018

MISSILE CSI: HOW WE KNOW IRAN VIOLATED AN ARMS EMBARGO

On 20th February, Popular Mechanics in the US carried an article on the verdict of the recent UN Panel report on Yemen – saying that the UN has confirmed what Saudi Arabia suspected back then: that Iran is supplying the missiles used to attack Saudi Arabia.  It points out that, though a small regional conflict, The Houthi rebels firing the missiles are backed by Iran, who are in turn backed by Russia.  A Saudi-led coalition backs another faction, and the Saudis are backed by the US.  It says that the report opens a window on the way that missile proliferation is changing the modern battlefield in the hands of rebels and proxy armies.  The report does not say that Iran is the direct supplier of the missiles but, the article says, the report remains damning for Iran.

https://www.popularmechanics.com/military/weapons/a18298393/iran-yemen-saudi-arabia-missiles-un/

SOUTH AFRICAN LINKS IN US HEZBOLLAH TERRORISM EXPORT CASE

On 20th February, News 24 reported that South Africa has emerged as a central location in a case involving a controversial Johannesburg-based businessman who has been accused by the US of illegally exporting items to Hezbollah, which it classifies as a terrorist organisation.  The US authorities alleges that Usama Darwich Hamade, also known as “Prince Sam” and who reportedly previously claimed to be Lebanese royalty, allegedly lied, saying digital compasses for drones were needed in South Africa for anti-poaching operations.  The indictment says that “Individual A”, a South African citizen and resident, apparently unwittingly ordered components which can be used in drones and jets, some of which arrived in the country, but which were then allegedly sent to Lebanon.  Hamade, 53, and his brother Issam Hamade, 55, also known as Tony are both Lebanese citizens and were arrested in Johannesburg and are in custody there.  A third suspect, Samir Ahmed Berro, 64, who has Lebanese and British citizenship, is yet to be arrested.

https://www.news24.com/SouthAfrica/News/revealed-sa-links-in-uss-hezbollah-terrorism-export-case-20180220

AUSTRALIA: LAWYERS “BECOMING LAZIER IN CLIENT CHECKS”

On 21st February, Lawyers Weekly reported that lawyers and conveyancers are becoming worse at verifying the identities of their clients and checking sanctions lists as part of due diligence and the undertaking of such searches is becoming much more infrequent, according to new researchThe 2018 Australian Due Diligence Survey, released by technology firm InfoTrack, which examined the practice habits of multiple professional services, including lawyers, conveyancers, accountants and real estate agents.  It says that only 2% of professionals are searching sanctions lists, and just 12% undertaking AML/CFT searches, the survey found. This is compared to 18% and 28%, respectively, in 2016.  Further, only 12% are looking up international companies and just 2% are checking for PEP, in a striking contrast to the 40% and 16% respectively from 2016.  82% of survey respondents believe Australian directors are not fully aware of their duties under the AML/CTF Act.

https://www.lawyersweekly.com.au/biglaw/22774-lawyers-becoming-lazier-in-client-checks

ISRAELI POLICE CHIEF SPEAKS OUT AS FATF EVALUATION LOOMS

The Times of Israel on 21st February reports that the Police Commissioner also said that there was no chance of tackling cybercrime, terrorism without international co-operation.  His remarks come as Israel gears up for an on-site evaluation next month by FATF, and appeared to be a veiled reference to efforts to resist increased regulation to avoid ending up on “international blacklists”.  It reminds one that 18 years ago, in June 2000, FATF publicly named and shamed Israel on a blacklist — along with 14 other jurisdictions, as non-cooperative and deficient in its AML regime.

https://www.timesofisrael.com/top-cop-says-tighter-money-laundering-measures-help-expose-corrupt-politicians/

HSBC SAYS SWISS BANK TAX PROBE COULD COST MORE THAN $1.5 BILLION

Swissinfo on 20th February reported that HSBC Holdings Plc said it could face penalties exceeding $1.5 billion stemming from multiple investigations into claims that its Swiss private bank unit helped clients evade paying taxes.  Authorities in the US, Belgium, Argentina, India, Spain and elsewhere are probing allegations of tax evasion or tax fraud, money laundering and unlawful cross-border banking solicitation at the Swiss private bank, HSBC disclosed in its annual report. The bank paid the French government €300 million in November to settle allegations that it helped clients hide assets from local tax authorities.

https://www.swissinfo.ch/eng/hsbc-says-swiss-bank-tax-probe-could-cost-more-than–1.5-billion/43913834

CENTRAL COLOMBIA SUPERMARKETS LOOTED AFTER PROSECUTION CLAIMS FARC MONEY LAUNDERING LINKS

Colombia Reports on 20th February reported that looters emptied Supercundi supermarkets in 4 towns after prosecutors said that the chain had been used to launder money for FARC.

https://colombiareports.com/central-colombia-supermarkets-looted-prosecution-claims-farc-money-laundering-links/

EU MULLS RETALIATION OVER TRUMP TAX OVERHAUL

Politico on 21st February reports that some EU finance ministers expressed concern that Trump administration tax reforms breach WTO rules by making it easier for US multinationals to bring foreign earnings back to the US.   The tough rhetoric came after the ministers gathered in Brussels to discuss a response to the US reform, which many Europeans say unfairly favours American trade interests over their own.

https://www.politico.eu/article/eu-mulls-retaliation-over-trump-tax-overhaul/?utm_source=POLITICO.EU&utm_campaign=0fab5cf693-EMAIL_CAMPAIGN_2018_02_21&utm_medium=email&utm_term=0_10959edeb5-0fab5cf693-190081609

WHO WAS SERGEI MAGNITSKY AND WHY SHOULD YOU CARE?

Vinson & Elkins LP on 15th February provided a briefing for those wondering who Magnitsky was, and why several countries were now enacting “Magnitsky laws”.

https://www.velaw.com/Blogs/Labor/Who-Was-Sergei-Magnitsky-and-Why-Should-You-Care/

11 MEMBER STATES BACK EU CONTROLS ON SELLING SPYWARE

EurActiv on 21st February reported that 11 EU countries have signalled their support for draft rules that would place export restrictions on companies selling surveillance technologies, a leaked working paper shows.  The group are backing the European Commission’s proposal to introduce export controls on products that could harm human rights.  Diplomats from the 11 countries signed off on a 6-page document embracing the Commission’s plan to create “effective EU cyber-surveillance controls for the protection of human rights”.  Their paper is dated 29th January.  The Commission proposed the changes to export control restrictions after it was revealed that European companies sold software to governments that used to spy on Arab Spring protesters.

https://www.euractiv.com/section/cybersecurity/news/eleven-member-states-back-eu-controls-on-selling-spyware/

AFRICA SET FOR MAJOR ASIAN INVESTMENT SURGE AFTER A TROUBLED 2017

HK TDC on 21st February carried an article saying that, with political uncertainties and domestic issues undermining growth in several of Africa’s larger economies over the last 12 months, would-be Asian investors are looking at options in a number of the continent’s less prominent nations.  While the downside of Africa’s economic development attracted global headlines last year, less coverage was given to many of the continent’s success stories.  Over in East Africa, Kenya, Tanzania, Rwanda and Ethiopia all attracted substantial overseas investment, as did 2 of their West Africa counterparts – Côte d’Ivoire and Senegal.

http://economists-pick-research.hktdc.com/business-news/freepdfdownloadservlet?articleID=1X0AD43L&LANGUAGE=en

US MOVE TO PUT PAKISTAN ON TERROR FINANCING WATCH LIST DELAYED

Rferl on 21st February reported that a US motion to put Pakistan on a FATF terrorist financing watch list has been deferred for 3 months, Pakistani officials said., with a decision not to take action immediately on the US move to add Pakistan to the so-called “grey list” of countries which are not doing enough to comply with terrorist-funding regulations.  Although no details were available, official sources said that China, Turkey, and Russia, all of which are on the task force, opposed the motion.

https://www.rferl.org/a/us-move-put-pakistan-terror-financing-watch-list-deferred-three-months-asif-says/29052813.html?src=ilaw

https://kyc360.com/news/pakistan-given-3-month-reprieve-terrorist-financing-watchlist-minister/

INVESTORS CLAIM STANFORD PONZI DEAL WRONGLY BARS CLAIMS AGAINST BROKER

Law 360 on 20th February reported that 316 investors in Stanford certificates of deposit in the Stanford Ponzi scheme urged a US court to overturn a $120 million deal settling claims that broker Willis Ltd fraudulently induced their investments, arguing that $120 million in settlement funds inexplicably go to the Stanford receiver and the terms of the deal indefensibly bar further claims against Willis.

https://www.law360.com/articles/1014199

 

OVER 41,000 ARTEFACTS SEIZED IN GLOBAL OPERATION TARGETING TRAFFICKING OF CULTURAL GOODS

On 21st February, a news release from Interpol reported that more than 41,000 objects including coins, furniture, paintings, musical instruments, archaeological pieces and sculptures have been seized in a global operation targeting the trafficking of cultural artefacts.  The seizures were made during the first joint customs and police operation codenamed Athena organized by the WCO and INTERPOL, and the Europe-focused Operation Pandora II co-ordinated by the Spanish Guardia Civil and Europol.  Tens of thousands of checks were carried out at airports and border crossing points across 81 countries during the operations which ran from October to December 2017.  Auction houses, museums and private houses were also searched, resulting in more than 300 investigations being opened and 101 people arrested.  With the Internet becoming an important part of the chain in the illicit trade of cultural goods, law enforcement officers also monitored online market places and sales sites.  This resulted in the seizure more than 7,000 objects, nearly 20% of the total number of artefacts recovered during the operations.

https://www.interpol.int/News-and-media/News/2018/N2018-006

https://www.europol.europa.eu/newsroom/news/over-41-000-artefacts-seized-in-global-operation-targeting-illicit-trafficking-of-cultural-goods

FRONTEX PUBLISHES RISK ANALYSIS FOR 2018

FRONTEX, the EU border and coastguard agency has published its risk analysis report for 2018.  This reports that, in 2017, the total number of illegal border-crossings into the EU dropped to its lowest in 4 years, especially due to a fall in detections on the Eastern Mediterranean and Western Balkan routes.  However, in contrast with the 3 major migratory routes, the number of detections in the Western Mediterranean reached an unprecedented high, more than double the previous record from 2016.  African nationals accounted for almost two-thirds of irregular migrants arriving at the shores of the EU.  The report concludes that the sea, especially along the Mediterranean routes, will remain the most active path for illegal crossing of the EU external borders, but also one of the most dangerous for migrants.  It says that Frontex is leading the way to expand the co-operation among various authorities, contributing to combatting various cross-border crimes, as well as additional coordination in search and rescue efforts.

http://frontex.europa.eu/news/frontex-publishes-risk-analysis-for-2018-5oMOSi

INDONESIA SEIZES SECOND DRUG-LOADED BOAT FALSELY FLYING SINGAPORE FLAG

The Strait Times reported on 21st February that a fishing boat carrying a record 1.6 tonnes of crystal meth had been intercepted in the vicinity of the Riau Islands falsely flying the Singapore flag.  It had come from Taiwan and was carrying crystal methamphetamine in rice sacks.  All 4 crew members were Chinese nationals.

http://www.straitstimes.com/asia/se-asia/indonesia-seizes-second-drug-loaded-boat-falsely-flying-singapore-flag

COURT FINDS CLAIM AGAINST PARENT COMPANY FOR NIGERIA OIL LEAKS “BOUND TO FAIL”

Osborne Clarke on 20th February reported on a UK Court of Appeal judgment handed down on 14th February, where the parent company, Royal Dutch Shell Plc was found not to be liable in relation to operations carried out by a group subsidiary, Shell Petroleum Development Company of Nigeria, Ltd (SPDC). However, the article stresses that the case highlighted the tensions that global corporations face in how they manage the risks faced across the business.  It explains how jurisdiction of the English courts was established – for the claims to be brought in England, the claims needed to have a sufficient link with England and fall within one of the jurisdictional ‘gateways’ set out in the English Civil Procedure Rules.  It also deals with the majority and the dissenting judgment of the judges hearing the case.  It warns that the corporate veil can be pierced, preventing tortious liabilities from being ring-fenced in a subsidiary.  This then requires global groups, it says, to tread a careful line, and at times make difficult decisions, between maintaining boundaries to preserve corporate separation of liabilities, and taking a more active role in order to manage risks that could affect the wider group.

http://www.osborneclarke.com/insights/dont-blame-the-parents-court-finds-claim-against-parent-company-for-nigeria-oil-leaks-bound-to-fail/

LAURI LOVE CASE: US ABANDONS EXTRADITION CASE

The BBC reported on 21st February that efforts to extradite alleged computer hacker Lauri Love, 33, have been abandoned by US authorities.  Earlier this month Mr Love., won his High Court appeal against his extradition to the US.  He was first arrested in October 2013 on suspicion of hacking into FBI, US Central Bank and NASA systems.  He is waiting to hear if he will face prosecution in the UK over claims that he stole huge amounts of data from US agencies in a spate of online attacks in 2012 and 2013.

http://www.bbc.co.uk/news/uk-england-suffolk-43119355

NEW SIPRI REPORT EXAMINES PEACE OPERATIONS AND THE CHALLENGES OF ORGANISED CRIME

On 20th February, the Stockholm International Peace Research Institute launches a new background paper exploring the role that peace operations play in preventing and combating organised crime, particularly in weak or collapsed states.  Multilateral peace operations are increasingly deployed in complex mission environments in which they are confronted with ‘non-traditional security challenges, such as organised crime, and peace operations are struggling to come to grips with the challenge in places such as Mali.  The paper looks at examples of peace operations that have engaged in combatting organised crime, potential implications and opportunities of operations venturing further into dealing with the challenge, as well as examining the space for co-operation and co-ordination between peace operations and with other actors.

https://www.sipri.org/news/2018/new-sipri-report-examines-peace-operations-and-challenges-organized-crime

ADDRESSING SOUTH ASIA’S FISSILE MATERIAL CONUNDRUM

On 20th February, Stimson (a US-based non-partisan policy research centre working to protect people, preserve the planet, and promote security & prosperity) published this essay as part of a series in the light of nuclear competition between China, India, and Pakistan which is accelerating with the introduction of new ballistic and cruise missiles.  Counterforce capabilities are growing.  China has begun to place multiple warheads on some of its ballistic missiles, and Pakistan has advertised its ability to do so, and India has demonstrated this capacity in its space programme.  The essays are intended to offer creative ideas that can help ameliorate and decelerate this dangerous triangular nuclear competition.  This essay says that fissile material production has remained a decades-old area of competition which will continue to be a key factor in determining the size, scope, and shape of Indian and Pakistani strategic force postures.  Attempts to control or ban it have so far been unsuccessful, and the essay seeks to identify the underlying causes of this impasse, and how the control could be achieved (by IAEA control of civil programmes) – and how this could of use in other regions.

https://www.stimson.org/content/addressing-south-asias-fissile-material-conundrum

MONTENEGRINS SPY GOLD ON CALIFORNIA’S CANNABIS FARMS

On 21st February, Eurasia Review carried an article saying that impoverished, indebted and disillusioned Montenegrins are heading off to California where they can earn hundreds of dollars a day on licensed marijuana plantations.  It says that many of the farms are owned by Bulgarian immigrants who moved to Humboldt County in large numbers over the previous decade.  Local American growers are present as well, and are favoured, as “true Americans” offer better pay and work conditions than the Bulgarians, it is said.

http://www.eurasiareview.com/21022018-montenegrins-spy-gold-on-californias-cannabis-farms/

ISLAMIC STATE TARGETS SOUTHERN PHILIPPINES AS ‘STRATEGIC GROUND’

Eurasia Review on 21st February reports that Islamic State (IS) has chosen Mindanao island as a “strategic ground” for recruiting fighters after being routed in its Middle Eastern strongholds last year, the leader of the largest Muslim guerrilla force in the southern Philippines (the Moro Islamic Liberation Front or MILF)  warned.  Last year, MILF helped the military go after IS-linked groups that took over the southern city of Marawi in a 5-month siege, which left more than 1,200 people dead – a majority of them militants.  The MILF leader said the chances of something like Marawi happening elsewhere cannot be overlooked.  MILF would keep helping the Philippine military go after IS-allied groups.

www.eurasiareview.com/21022018-islamic-state-targets-southern-philippines-as-strategic-ground/

RUSSIAN POLICY ACROSS THE MIDDLE EAST: MOTIVATIONS AND METHODS

Chatham House has published a research paper on 21st February which argues that the West’s previous failure to punish Russia for crossing its red lines in the Middle East was a significant factor in Russia’s ongoing, brutal and decisive interventions in the region.  Amongst its conclusions are that Russia considers better relations with Middle Eastern countries a means to avoid international isolation, to compensate for the negative effects of international sanctions and to put additional pressure on the West; and the decision to increase Russia’s presence in the Middle East was also determined by economic drivers.  The region occupies a special role in Russia’s strategy for strengthening its producers’ presence in the international oil and gas markets.

https://www.chathamhouse.org/publication/russian-policy-across-middle-east-motivations-and-methods

ALLEGED MONTREAL MAFIA LEADERS ACQUITTED

Specialist website About the Mafia reported on 20th February that Leonardo Rizzuto and Stefano Sollecito the alleged heads of the Montreal Mafia were acquitted of charges of gangsterism and conspiracy to traffic cocaine in Quebec Superior Court.

http://aboutthemafia.com/alleged-montreal-mafia-leaders-leonardo-rizzuto-and-stefano-sollecito-acquitted

PARADISE PAPERS WINS POLK AWARD

The Paradise Papers investigation of wealth stashed offshore has won a George Polk Award, the International Consortium of Investigative Journalist’s second Polk Award in as many years.  The team of more than 380 journalists from 6 continents was awarded the Financial Reporting Award, announced by the Long Island University (LIU) at a press conference in Washington, DC, on 20th February.

MONEY, MONEY EVERYWHERE AND NOT A COIN TO SEIZE

A blog from Corker Binning on 21st February reflects on the increasing digitisation of “cash” in the context of money laundering and the seizure of ill-gotten gains.  Despite such new tools as Unexplained Wealth Orders, the post says that it will ultimately be more effective for firms and individuals to develop and use more effective tools to prevent loss in the first place.

https://www.corkerbinning.com/money-money-everywhere-and-not-a-coin-to-seize/

VENEZUELA CRYPTOCURRENCY RAISES $735 MILLION WITHIN HOURS, CLAIMED PRESIDENT

KYC 360 on 21st February reported that cash-strapped Venezuela has became the first country to launch its own version of bitcoin, a move President Nicolas Maduro celebrated as putting his country on the world’s technological forefront.  In its first hours on the market, the so-called petro racked in $735 million worth in purchases, Maduro said without providing details.

https://kyc360.com/news/venezuela-cryptocurrency-raises-735-million-within-hours-says-president-maduro/

5 ARRESTS IN LATVIA AND DERBY AS PART OF LARGE MODERN SLAVERY OPERATION

On 21st February, the Derbyshire Constabulary reported that 5 people have been arrested during simultaneous warrants in Derby and Latvia as part of an ongoing, large-scale, investigation into modern slavery and human trafficking.  Those arrested in Latvia will appear before the courts and extradited to the UK over the coming weeks.  The arrests were made by Derbyshire police officers and officers from Valsts Policija (Latvian police), supported by the NCA tactical advisor.

www.derbyshire.police.uk/News-and-Appeals/News/2018/February/21-Feb-Five-arrests-in-Latvia-and-Derby-as-part-of-large-modern-slavery-operation.aspx

CREDIT SUISSE EXECUTIVES GOT ASSISTANTS TO DO THEIR E-LEARNING FOR THEM

On 14th February, The Street reported on Credit Suisse AG senior executives in New York who got their assistants to complete training exercises for them.  From 2013 through 2015, 3 leaders of the unit that packages mortgages and other loans into securities for sale to investors were forced to give back a portion of their 2015 bonuses after the firm realised they had failed to complete required “eLearning modules” – computer-based training programs designed to keep employees up-to-date on the latest rules and procedures, having given their logins to administrative assistants to complete the required courses on their behalf.  Among the modules mentioned was Understanding Money Laundering, Terrorist Financing, Sanctions and Corruption.

https://www.thestreet.com/story/14488740/1/credit-suisse-bankers-pawned-off-compliance-training-on-secretaries.html?et=editorial&bu=National%20Law%20Journal&cn=20180221&src=EMC-Email&pt=Compliance%20Review

 

SPOOFING, FRAUD CHARGES DROPPED IN EX-UBS TRADER CASE

Finance Magnates reports that a US federal judge has dropped 3 spoofing and 3 commodities fraud counts against former UBS trader, Andre Flotron, who was accused of trying to manipulate the precious metals futures market through the use of a trading tactic known as “spoofing”.  The judge blasted the authorities for mishandling the evidence.

https://www.financemagnates.com/institutional-forex/regulation/spoofing-fraud-charges-dropped-ex-ubs-trader-case%E2%80%8E/?src=ilaw

SPANISH AUTHORITIES HAND OVER RUSSIAN BUSINESSMAN LYAGIN TO FSB

RAPSI reports that Spanish authorities have handed over Russian businessman Mikhail Lyagin, charged with fraud and money laundering in Russia, to officers of the Federal Security Service (FSB), the press-release of Russia’s Prosecutor General’s Office says.  Lyagin was CEO of Invest-Victoria company and allegedly embezzled $9.7 million from state company Kavkazky VSO.

http://www.rapsinews.com/news/20180221/282016490.html?src=ilaw

PROSECUTORS UNITE AT SUMMIT TO BOLSTER GLOBAL FIGHT AGAINST SLAVERY

Thomson Reuters reported on 21st February that prosecutors from more than a dozen countries joined forces at a landmark summit in London aiming to boost the global fight against modern slavery by convicting more criminals and tracing dirty money.  The 3-day event, the first of its kind, brought together prosecutors from countries including Albania, Nigeria and Sudan.  They plan to work more closely to convict slavemasters and human traffickers, said the UK Crown Prosecution Service (CPS).  They will discuss improving efforts to confiscate illegal gains from traffickers in a trade estimated to generate $150 billion.  They will also learn how to use various tools, data and resources including Interpol and Europol.

http://news.trust.org/item/20180221154405-f7h1y/?src=ilaw

BULGARIAN PROSECUTION SERVICE OPENS PRE-TRIAL PROCEDURE FOR POSSIBLE OFFENCES INVOLVED IN CONSTRUCTION OF BORDER FENCE

BTA in Bulgaria reported on 21st February that the specialised prosecution office has opened a pre-trial procedure for an offence connected with the construction of the fence on the Bulgarian border with Turkey – the probe was opened on December 19th.  The scandal is described as “one of the biggest corruption deals of the GERB government” by a socialist politician.

http://www.bta.bg/en/c/DF/id/1750153?src=ilaw

CANADIAN EXPORT BANK SAYS IT FACES HUGE RISKS IN SOUTH AFRICA’S GUPTA AFFAIR

The Globe & Mail reports that Canada’s Export Development Canada says it is facing “enormous” risk of “serious and potentially irremediable harm” because the controversial Gupta family is refusing to return a Bombardier luxury jet valued at US$52 million.  The EDC has filed an urgent application to repossess the Bombardier Global 6000 aircraft.

https://beta.theglobeandmail.com/news/world/canadian-export-bank-says-it-faces-huge-risks-in-south-africas-gupta-affair/article38047667/?src=ilaw

OSCE – JUDICIAL SHORTCOMINGS IN PROCESSING CORRUPTION CASES IN BOSNIA AND HERZEGOVINA

On 21st February, the Organisation for Security and Co-operation in Europe reported on a report compiled by the OSCE Mission to Bosnia and Herzegovina titled Trial Monitoring of Corruption Cases in BiH: A First Assessment.  The report was developed within the framework of the project “Assessing Needs of Judicial Response to Corruption through Monitoring of Criminal Cases” and with the support of the US Department of State’s Bureau of International Narcotics and Law Enforcement Affairs.  It represents the first assessment of issues negatively impacting the quality and effectiveness of the judicial response to corruption in BiH based on trial monitoring, and is based on the observation of 67 completed corruption cases in the period between January 2010 and September 2017.  The main shortcomings identified by the report are insufficient harmonization of criminal legislation, inadequate capacity of prosecutors in drafting indictments and in gathering evidence as well inconsistencies in the interpretation of the law by courts.

https://www.osce.org/mission-to-bosnia-and-herzegovina/373276?src=ilaw

NORTH KOREA MINE STRUGGLING AS SANCTIONS SQUEEZE REGIME

On 21st February, UPI recounts a Daily NK story that UN sanctions resolutions have hit Musan mine, one of the largest iron ore reserves in the country.

https://www.upi.com/Top_News/World-News/2018/02/21/Report-North-Korea-mine-struggling-as-sanctions-squeeze-regime/1291519219560/?src=ilaw&utm_source=sec&utm_campaign=sl&utm_medium=1

UN AND OSCE EFFORTS IN CURBING THREAT POSED BY SMALL ARMS AND LIGHT WEAPONS EXPLORED

The OSCE reported on the OSCE Forum for Security Co-operation meeting in Vienna.  The UN Programme of Action to Prevent, Combat and Eradicate the Illicit Trade in Small Arms and Light Weapons (SALW) in All its Aspects, which is said to complement OSCE action in the area was described as fundamental to the security and stability of states.  The article mentions that roughly 90% of victims of armed conflicts are victims of SALW (small and light weapons), and therefore, it is said, it is important to stop the illicit trafficking of weapons and key to mobilize the international community in its entirety.  Adopted at the meeting was a report – Best Practice Guide on Deactivation of Small Arms and Light Weapons.  The chief aim of the meeting was said to be to raise awareness of the UN Programme of Action as an indispensable element in the fight against the uncontrolled and illegal spread of SALW.

https://www.osce.org/forum-for-security-cooperation/373285

EBAY TO AUTOMATICALLY DISPLAY VAT NUMBER ON LISTINGS

Tamebay reports that eBay have announced that effective immediately that if you have previously supplied them with a VAT number that it will be displayed on all of your listings. Up until now sellers could manually choose whether to display their VAT number by specifying it in their Business Seller Information in their eBay Site Preferences.

https://tamebay.com/2018/02/ebay-to-automatically-displayed-your-vat-number-on-listings.html

NEW HMRC GUIDANCE: FAST PARCEL OPERATORS RECLAIMING IMPORT VAT ON RETURNED GOODS

On 21st February, CCH Daily reported that HMRC had published new guidance for Fast Parcel Operators (FPO) claiming repayment of import VAT on goods returned under a distance-selling contract. The Union Customs Code (UCC) enables importers to claim back customs duties under specific circumstances, however, it doesn’t cover the repayment of Import VAT as this is a national tax administered under national VAT law, and the new HMRC guidance covers this scenario.

https://www.accountancylive.com/cch_uk/cln/news_005545_fast_parcel_operators_reclaiming

The HMRC Guidance is at –

https://www.gov.uk/guidance/fpos-reclaiming-import-vat-on-returned-goods-cip2

SINGAPORE CITY HARVEST MEGACHURCH LEADER ‘TRIES TO FLEE BY SEA’

The BBC on 21st February reported that Chew Eng Han from Singapore was found in a small boat heading towards Malaysia, police say, a day before he was to turn himself in after exhausting the appeals process.  Chew and 5 others were convicted of misappropriating millions of dollars from the City Harvest Church in 2015.  The scandal was the biggest corruption case Singapore had seen in years.

http://www.bbc.co.uk/news/world-asia-43146909

 

IS A CORNER FINALLY BEING TURNED IN THE UK’S FIGHT AGAINST A ‘McMAFIA’ WORLD?

On 21st February, the Royal United Services Institute published an article asks if a BBC TV drama might be the spur the UK government needs to take action on high-end money laundering.  It points out that, in a report published by RUSI last year, Australia and the Republic of Ireland’s experiences were compared, both of which hold analogous ‘reverse burden of proof mechanisms’.  In the case of Ireland, a combination of efficient information-sharing, resources and a fertile political climate has meant that the country holds an impressive civil confiscation record. Australia, conversely, has yielded patchy results.

https://rusi.org/commentary/corner-finally-being-turned-uks-fight-against-‘mcmafia’-world

TRACE PODCAST: “ILLICIT” AND THE UNDERSIDE OF GLOBALIZATION

Moisés Naím, author, public intellectual at Carnegie Endowment and former Minister of Trade and Industry for Venezuela discusses his book, “Illicit: How Smugglers, Traffickers, and Copycats are Hijacking the Global Economy”.

https://www.traceinternational.org/bribe_swindle_or_steal

INDIA: ENFORCEMENT DIRECTORATE PROBING 100 SHELL COMPANIES FOR LINKS TO BANK FRAUD CASE

Baker McKenzie on 21st February reported that the Enforcement Directorate in India is investigating more than 100 “shell companies” that are suspected to be involved in the Punjab National Bank’s near $1.8 billion fraud, a government source said.  The companies were allegedly used by Indian jewellers Nirav Modi and Gitanjali Gems’ Mehul Choksi to route funds, a source at Enforcement Directorate told Reuters.

http://www.riskandcompliancehub.com/india-enforcement-directorate-probing-100-shell-cos-for-links-to-bank-fraud-case/

EU BRIEFING: TAX TRANSPARENCY FOR INTERMEDIARIES

On 21st February, the EU Parliament Think Tank issued a briefing about the June 2017 proposal from the Commission creating an obligation to report cross-border arrangements designed by tax intermediaries or taxpayers and by including the information collected in the automatic exchange of information between tax authorities within the EU.  This would be used to combat situations highlighted by the ‘Panama papers’ and ‘Paradise papers’, where certain intermediaries and other providers of tax advice appear to have facilitated companies and individuals in avoiding taxation, often through complex cross-border schemes involving routing assets to, or through, offshore entities.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/614634/EPRS_BRI(2017)614634_EN.pdf

ARE DPRK HARD-CURRENCY RESERVES EXPECTED TO DRY UP BY OCTOBER?

38 North on 21st February reported that North Korea’s hard currency reserves are expected to dry up around October if international sanctions on the communist nation hold, the chairman of the South Korean parliamentary intelligence committee said.

https://www.38north.org/articles/affiliates/north-korean-economy-watch/14658/

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£10,000 CONFISCATION ORDER FIRST FOR SECURITY INDUSTRY AUTHORITY IN UK

On the Wight on 21st February reported that Victor and Anthony Lewis, directors of Sightguard Security Ltd, was ordered to pay over £10,000 following an order under the Proceeds of Crime Act 2002.  The order is the result of the first independent confiscation order under POCA pursued by the Security Industry Authority (SIA), following a prosecution by the (SIA) of both men on 7th December.  The case started in April 2016, when the SIA received anonymous intelligence that unlicensed security guards were working on the Isle of Wight.

https://onthewight.com/10000-confiscated-from-isle-of-wight-security-company/?src=ilaw

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ILLEGAL LANDFILLERS ‘AVOIDED £22 MILLION OF TAX’ IN NORTHERN IRELAND

The BBC reported on 21st February that 66 convictions were secured in the past decade for illegal landfill against individuals who collectively avoided more than £22 million of landfill tax.  The dumps, located in all 6 counties of Northern Ireland, contained nearly 750,000 tonnes of waste.  However, these figures do not include the cost, financial or environmental, of cleaning up the sites.  They also exclude sites which have been found, but for which no conviction has yet been secured.  Dumps were found to contain construction materials, plastics, household, skip, commercial, hazardous, metal, asbestos, municipal, oils and controlled waste, according to the NI Environment Agency; and the statistics do not relate to fly-tipping or small-scale dumps – but larger landfills containing between 525 and 56,741 tonnes.

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http://www.bbc.co.uk/news/uk-northern-ireland-43139725

 

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TELEGRAM – THE MESSAGING APP FUELLING SYRIA’S INSURGENCY

On 6th November, Foreign Policy published an article illustrating how the Telegram app, with militants in Syria trading thousands of weapons in publicly accessible black markets hosted on the app, including dozens of US military assault rifles and parts for the same kind of anti-tank missile systems distributed by the CIA to anti-Bashar al-Assad rebels.  Foreign Policy undertook an exclusive investigation to determine the scale of these arms markets, and where the weapons that ended up on them originated.

http://foreignpolicy.com/2017/11/06/the-messaging-app-fueling-syrias-insurgency-telegram-arms-weapons/

See also CNN on 20th February –

US ASSAULT RIFLES ARE BEING SOLD ON THE TELEGRAM MESSAGING APP IN SYRIA

https://edition.cnn.com/2018/02/20/middleeast/us-weapons-telegram-syria-intl/index.html

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EXPORT CONTROL (NORTH KOREA SANCTIONS) ORDER 2018 IN THE UK

In the UK, SI 2018/200 provides for enforcement of and penalties for breach of EU-wide trade sanctions regimes against North Korea, and makes provision for the grant of licences permitting for certain trade activities which would otherwise be prohibited.  In view of North Korea’s continued testing of nuclear devices and ballistic missiles, a EU Council Decision of 30th August imposed further restrictive measures which were also reflected in the sanctions regime under Council Regulation (EU) No 2017/1509.  This Order ensures that the updated and amended regime can be enforced in the UK, including extra-territorial offences committed by conduct wholly or partly outside of the UK by a “United Kingdom person”.

http://www.legislation.gov.uk/uksi/2018/200/contents/made

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CREDIT SUISSE EXECUTIVES GOT ASSISTANTS TO DO THEIR E-LEARNING FOR THEM

On 14th February, The Street reported on Credit Suisse AG senior executives in New York who got their assistants to complete training exercises for them.  From 2013 through 2015, 3 leaders of the unit that packages mortgages and other loans into securities for sale to investors were forced to give back a portion of their 2015 bonuses after the firm realised they had failed to complete required “eLearning modules” – computer-based training programs designed to keep employees up-to-date on the latest rules and procedures, having given their logins to administrative assistants to complete the required courses on their behalf.  Among the modules mentioned was Understanding Money Laundering, Terrorist Financing, Sanctions and Corruption.

https://www.thestreet.com/story/14488740/1/credit-suisse-bankers-pawned-off-compliance-training-on-secretaries.html?et=editorial&bu=National%20Law%20Journal&cn=20180221&src=EMC-Email&pt=Compliance%20Review

 

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BORIS ROTENBERG – HOW TO HIDE A RUSSIAN FORTUNE ON THE FRENCH RIVIERA

On 21st February, OCCRP produced an article that says that, as the EU is due to review its Russian sanctions blacklist, it may want to take note of a prominent individual who, thus far, has slipped through the cracks.  It reveals the extent to which one of Russia’s most infamous oligarchs — Putin’s childhood friend Boris Rotenberg — is entrenched in the French Riviera.  Brother of the listed Arkady he was not listed, supposedly thanks to the Finnish citizenship he obtained through an earlier marriage.  His assets are said to include a previously unknown multi-million-euro property containing 2 large villas — and plans for a third — in the picturesque seaside municipality of Eze. The article says that offshore holding structures of the type used by the Rotenbergs can offer certain benefits. Beyond ensuring confidentiality through opacity, the tactic of registering a real estate company in Monaco could be part of a tax savings or avoidance strategy.

https://www.occrp.org/en/28-ccwatch/cc-watch-indepth/7675-how-to-hide-a-russian-fortune-on-the-french-riviera

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THINGS YOU MAY HAVE MISSED – FEBRUARY 20

20th February 2018

AS SAUDI GOES NUCLEAR, US SEEKS EDGE

Bloomberg carried an article on 20th February about plans for Saudi Arabia’s nuclear power ambitions. It comments that the Saudis have rejected a “123 Agreement” that would mean it committing to no enrichment of spent fuel, and says that the country has access to its own uranium and wants to be wholly self-sufficient in nuclear fuel preparation in the long term. Saudis also note that the agreement between the US and others and Iran permits that country to enrich for peaceful purposes.  A complication is that the US contender to build a reactor, Westinghouse, is bankrupt and is the process of being sold by its Japanese owner to a Canadian business.  Israel also is concerned that the plan opens up at least the prospect of “slow-motion proliferation”.

https://www.bloomberg.com/news/articles/2018-02-20/as-saudis-go-nuclear-u-s-seeks-an-edge-over-great-power-rivals

TRUMP ADMINISTRATION MOVES TO BLOCK BOEING DEAL WITH IRAN

The Jerusalem Post on 20th February reported that the Trump administration appears to be executing a plan to thwart a $16.6 billion deal between Boeing and the Iranian government – a move that would critically impact a 2015 JCPOA nuclear agreement between Iran and international powers.  Officials have begun offering evidence that would provide a rational basis for denying the aircraft sale, and, on 5th February, highlighted the use of Mahan Air to supply weapons to the Assad regime in Syria.

http://www.jpost.com/Middle-East/Trump-moves-to-bar-Boeing-Iran-agreement-543092

30 POSSIBLE CASES OF MONEY LAUNDERING REFERRED TO COURTS BY ATTORNEY GENERAL IN MALTA SINCE 2010

The Times of Malta on 20th February reported that 30 cases of suspected money laundering had been reported by the FIAU to the Attorney General.  However, there was only 1 in 2017 and 4 in 2016.  The list of cases, with no names, was also released in response to a question in parliament.

https://www.timesofmalta.com/articles/view/20180219/local/30-possible-cases-of-money-laundering-referred-to-courts-by-attorney.671176

https://0d2d5d19eb0c0d8cc8c6-a655c0f6dcd98e765a68760c407565ae.ssl.cf3.rackcdn.com/84c4998c2bdd50122a60ceff87d943bad12933a4.pdf

OIL AND GAS COMPANY LAUNCHES FRAUD CLAIM AGAINST FORMER DIRECTOR

Energy Voice on 20th February reported that the oil and gas company Petroceltic International has launched a civil action against an Aberdeenshire man over claims of millions of  pounds being defrauded from the business.  It alleges that David Archer, who was managing director for its Bulgarian operations, syphoned off money through a series of fraudulent transactions, and made the claims and said that it was taking legal action in an official stock market announcement.  Petroceltic said it had been been granted a freezing order by the High Court of England and Wales in support of the Scottish proceedings against Mr Archer, preventing the dissipation of his global assets, while criminal investigations are understood to have been launched in Bulgaria.

https://www.energyvoice.com/oilandgas/163991/petroceltic-launches-fraud-claim-former-aberdeenshire-director/

UK EXPORT FINANCE EYES INDONESIA AS A PRIORITY MARKET

On 20th February a news release from the FCO said that Indonesia has become the first country in the world to have a UK Export Finance (UKEF) Country Head to be based in-country.

https://www.gov.uk/government/news/uk-export-finance-eyes-indonesia-as-a-priority-market

BEIJING E-COMMERCE DECLARATION

On 20th February, BIFA reported that the First Global Cross-Border E-Commerce Conference, co-hosted by the World Customs Organisation (WCO) and the General Administration of China Customs (GACC), concluded in Beijing on 10th February.  The Conference emphasised the need for an international standard and supported the expeditious development of the WCO Framework of Standards on Cross-Border E-Commerce. At the end of the Conference, a Beijing e-Commerce Declaration, summarising the discussions of the conference and outlining the future way forward, was adopted. It should set out a vision for boosting sound, secure, balanced and sustainable development of cross-border e-commerce.

https://www.bifa.org/news/articles/2018/feb/beijing-e-commerce-declaration?l=y

TAILOR-MADE CO-OPERATION? ARMENIA’S NEW PARTNERSHIP AGREEMENT WITH THE EU

On 15th February, the European Policy Centre published an article about the fact that Armenia and the EU signed a new Comprehensive and Enhanced Partnership Agreement (CEPA).  This represents a second chance for Armenia to deepen ties with the EU, after the 4-year relationship limbo that followed Armenia’s surprise rejection of an Association Agreement in 2013.  The article says that the new agreement is the first example of the EU’s new differentiated approach towards the EaP countries, and for Armenia, an opportunity to revive its preferred multi-vector foreign policy. While the new agreement excludes free trade provisions, which would contradict Armenia’s commitment to the Russia-led Eurasian Economic Union (EAEU), it creates opportunities to improve the investment climate, strengthen sectoral cooperation and help diversify Armenia’s economy.

http://www.epc.eu/pub_details.php?cat_id=3&pub_id=8275

 

RUSSIA CEMENTING MILITARY TIES WITH THE CENTRAL AFRICAN REPUBLIC

On 19th February, Defence Web reports that Russia is deepening its military co-operation with the Central African Republic (CAR), donating small arms to the country’s military and holding diplomatic talks with its leader as it seeks to strengthen its influence on the continent.  CAR has been struggling with serious turmoil, civil war and brutal regime shifts in the past decade.  Following conflict between government forces and the Seleka rebel coalition in 2012-2013, an arms embargo was implemented by the UN in December 2013.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50771:russia-cementing-military-ties-with-the-central-african-republic&catid=56:diplomacy-a-peace&Itemid=111

TOP ISRAELI COP RIPS INTO ‘CRIMINALS’ WHO ‘DAMAGE PUBLIC TRUST IN POLICE’

On 20th February, the Times of Israel reported that, in thinly veiled criticism of Netanyahu, Police Commissioner Roni Alsheich complains of aspersions on officers’ professionalism, social media ‘manipulations’ of facts.

https://www.timesofisrael.com/top-cop-rips-into-criminals-who-damage-public-trust-in-police/?src=ilaw

FLYING TAX FRAUDSTER GROUNDED

CCH Daily on 20th February reported that a serial fraudster, Keiran Farrer, from Carlisle, who set up a sham company called Move Leasing North East, carried out a £280,000 VAT and benefits fraud to pay for flying lessons, has been jailed for 4½ years following an investigation by HMRC and the Department for Work and Pensions (DWP).

https://www.accountancylive.com/flying-tax-fraudster-grounded

UK NATIONAL FRAUD INITIATIVE

On 19th February, the Cabinet Office issued an updated collection of reports, guidance and case studies for the National Fraud Initiative (NFI), a data-matching exercise that helps prevent and detect fraud involving information within and between public and private sector bodies.

https://www.gov.uk/government/collections/national-fraud-initiative

CARGO ON DIRECT FLIGHTS FROM BANGLADESH TO THE UK

On 19th February, the Department for Transport reported that cargo handling restrictions lifted on direct flights from Dhaka International Airport to the UK, following ongoing co-operation with the government of Bangladesh on the standards of aviation security the airport.

https://www.gov.uk/government/news/cargo-on-direct-flights-from-bangladesh-to-the-uk

TURKISH DEFENCE GIANT EYES ASIAN COUNTRIES FOR AVIATION EXPORTS

Customs Today on 19th February reports that Turkish Aerospace Industries Inc. (TAI) is in intensive contact with Asian countries for the export of air platforms that it has developed, including the T129 ATAK attack helicopter (based on the Italian A.129 Mangusta) for Pakistan and others.

www.customstoday.com.pk/turkish-defense-giant-eyes-asian-countries-for-aviation-exports/

$1.2 MILLION PENALTY FOR DISTRIBUTING IMPORTS OF UNLICENSED PESTICIDES

Sandler, Travis & Rosenberg on 20th February reported that the US Environmental Protection Agency reports that a US company will pay a $1.2 million administrative penalty as part of a consent agreement to settle charges that it sold and distributed imported pesticide products not licensed for sale in the US.  The company will also develop an online training course on pesticide regulations and policies that will be available in English, Spanish and Chinese and must be successfully completed by all entities planning to sell pesticides through the company.

https://www.strtrade.com/news-publications-penalty-pesticide-import-unlicensed-EPA-022018.html

ILLEGAL CORAL SHIPMENT SEIZED AT RIGA PORT

LSM in Latvia reported on 15th February that Latvian customs officials have made an unusual seizure – not drugs, moonshine or cigarettes but tropical coral, 14,350 kg of coral rock cargo transported through Latvia from China to Belarus without the necessary CITES permission, following a declaration filed at the Freeport of Riga Customs Control point.

https://eng.lsm.lv/article/society/crime/illegal-coral-shipment-seized-at-riga-port.a267848/

TRIAL OF THE FATHER OF BOY SMUGGLED INTO SPAIN IN SUITCASE

On 20th February, The Peninsular in Qatar reported that the start of the case involving the 8 year old boy smuggled from the Ivory Coast crammed into a suitcase.  His father goes on trial Tuesday in Ceuta, the Spanish enclave on North Africa.

https://www.thepeninsulaqatar.com/article/20/02/2018/Father-of-boy-smuggled-into-Spain-in-suitcase-on-trial

CAN ANYONE STOP BRAZIL’S PCC GANG?

On 20th February, Insight Crime published an article on the First Capital Command (Primeiro Comando da Capital – PCC) which has grown in the last 25 years from a union of inmates seeking better treatment in Brazilian prisons into a multinational mafia with a global reach. Their criminal empire includes cocaine trafficking, kidnapping for ransom, ATM robberies and large-scale assaults on businesses and banks. It says that CC has alternated between moments of extreme violence and years of quiet dominance in which the group expanded its control of Brazilian prisons and made inroads into the prisons of Paraguay and Bolivia as well.  In 2017 alone, the PCC was involved in deadly prison riots in Brazil that left more than 150 dead, massive cocaine shipments from Paraguay into Brazil, and an epidemic of cargo robberies that have cost Brazilian companies more than $2 billion since the start of the decade.  PCC recruiters are now looking to recruit former guerrillas of the demobilised FARC into PCC protégés, and the PCC has cultivated a network of sympathetic politicians within Brazil and reportedly used banks in China and the US to shelter its profits.  The article maintains that PCC has become the most powerful player in Brazil’s multibillion-dollar cocaine market, which is now second in size globally to the US. But the group’s ambitions are clearly bigger than Brazil alone.

https://www.insightcrime.org/news/analysis/can-anyone-stop-brazil-pcc/

INDIAN MOD DISCLOSES SCOPE OF COMPANY BANS

Janes.com on 20th February reports that the Indian Ministry of Defence has revealed that 24 companies are currently banned, suspended, or restricted from doing defence business in the country – 6 “debarred” companies, 14 companies that have been imposed with suspension orders, and another 4 that the MoD said are imposed with “restricted procurement” orders. Debarred companies include Israel Military Industries (IMI), Singapore Technologies Kinetics (ST Kinetics), and Switzerland’s Rheinmetall Air Defence. Suspensions have been imposed on companies including Leonardo and its affiliates, Denel, Infotech Design Systems from Mauritius, Kelvin Engineering, and local firms Aeromatrix, Inter Spiro, and Offset India Solutions (OIS).

http://www.janes.com/article/78013/indian-mod-discloses-scope-of-company-bans

MILITARY BUILD-UP HEIGHTENS WAR-RISK AND INCREASES LIKELIHOOD OF DISCRIMINATION AGAINST TAIWAN AND US COMPANIES IN CHINA

Janes.com on 20th February reported in an article that Taiwan’s relations with China have deteriorated significantly since President Tsai Ing-wen assumed office, as indicated by an increase in hostile rhetoric and Chinese military activities near Taiwan’s airspace, including increased frequency and scale of Chinese military exercises near Taiwan.

http://www.janes.com/article/77997/cross-strait-military-build-up-heightens-war-risk-and-increases-likelihood-of-discrimination-against-taiwan-and-us-companies-in-china

WHERE WILL ISIS SEEK TO ESTABLISH ITS NEXT SAFE HAVEN?

The RAND Corporation has reissued this article from the Jerusalem Post which says that now that ISIS has lost its “caliphate” in the heart of the Middle East. Some scholars believe the group will seek to re-emerge right back where the group started, in Iraq and Syria, while others suggest that ISIS (or a similar group) will reappear elsewhere – there are several potential candidates for the next ISIS headquarters, including Libya, the Sinai Peninsula, Afghanistan, Yemen, the Philippines and several regions across Africa.  Libya and Egypt are identified as likely candidates.  However, it also cautions that the ISIS Sinai affiliate declared war on Hamas, sparking fears that ISIS could attempt to move into Gaza, bringing its fighters even closer to the Israeli border; and that ISIS has doubled its size in Yemen over the past year, with militants taking advantage of a power vacuum due to that country’s ongoing civil war.

https://www.rand.org/blog/2018/02/where-will-isis-seek-to-establish-its-next-safe-haven.html

WESTERN COUNTRIES’ DILEMMA: WHAT TO DO WITH CAPTURED IS FOREIGN FIGHTERS?

VoA on 17th February carried an article saying that the US and its European allies are divided over the question of what to do with hundreds of Islamic State (IS) foreign fighters who were captured on the battlefields in Syria and Iraq.  It says that while an agreement on how to handle the issue has yet to be made, experts warn of unprecedented challenges as some countries refuse to accept these fighters back into their home countries or are unprepared to deal with them in their criminal justice systems.  An estimated 40,000 fighters from more than 120 countries are believed to have travelled to join the fighting in Iraq and Syria over the years.  While thousands died on the battlefield, Western officials say many more thousands have escaped or were captured.  However, returning fighters to home countries in the Middle East may be influenced by the mass execution last December of 38 prisoners in Iraq on terrorism-related charges and the UN called for an immediate halt to executions, citing flaws in the country’s criminal justice system.

https://www.voanews.com/a/western-dilemma-what-to-do-with-foreign-islamic-fighters/4259525.html

THE KARABAKH CONFLICT

On 20th February, the Carnegie Moscow Center published an article on the forgotten (in the West) conflict, reminding one that February 2018 marks the sad 30th anniversary of the crisis in a remote corner of the Soviet Caucasus named the Nagorno-Karabakh Autonomous Region, which precipitated the conflict that persists to this day; and which began when the Armenian-majority Regional Soviet (Oblsoviet) of Nagorny Karabakh mad its resolution in 1988.  It says that the conflict is now an international confrontation between Armenia and Azerbaijan in which 2 well-equipped armies face each other against the line of trenches known as the Line of Contact.  It has mutated from being a dispute about the status of one small region in one country to an interstate contestation between 2 independent states, fought in world capitals and social media.  The articles says that Russia’s strategy and the article says that Russia is not “pulling the strings” in the situation) — manage the conflict, keep up good relations with both Baku and Yerevan, strive to maintain the ceasefire — sets the tone for overall international engagement with a conflict universally perceived as being intractable.  It can be described as “Project Minimum”.  The article says that the hope for the Karabakh conflict as it enters its 4th ruinous decade is that it will come to be resolved because the actors in it rethink their strategic priority.

http://carnegie.ru/commentary/75584

 

RUSSIAN DRONE ORLAN-10 CONSISTS OF PARTS PRODUCED IN THE USA AND OTHER COUNTRIES – PHOTO EVIDENCE

On 6th February InformNapalm carried an article which says that multirole UAV Orlan-10 is actively used by the Russian Army in combat operations against Ukraine in the Donbas, and the system was developed by the Russian company Special Technology Center based in St Petersburg.  However, the article claims that Russians manufactured only the hull of the drone and the navigation receiver MNP-M7.  Even the receiver is based on the ADSP-BF534 chip produced by the American company Analog Devices.  Other components, i.e. GPS tracker, starter generator, engine, ignition module, flight controller, telemetry transmission module and GPS module were produced in the USA, Germany, Japan, China and other countries.  These components are dual-use goods, which Russia purchases to apply for military purposes.

https://informnapalm.org/en/russian-drone-orlan-10-consists-of-parts-produced-in-the-usa-and-other-countries-photo-evidence/

VENEZUELA LAUNCHES THE ‘PETRO,’ ITS CRYPTOCURRENCY

On 20th February, the Washington Post reported that crisis-ridden Venezuela is launching an oil-backed cryptocurrency on 20th February that it hopes will help circumvent US financial sanctions and resurrect the country’s moribund economy.   The pre-sale of the “petro,” which will represent a barrel of crude from a specific division in the country’s Orinoco oil belt, started on 20th February.  Investors were offered $60 “tokens” at discounted rates that they can exchange for petros during what is being dubbed an “initial coin offering,” or ICO, in March.

https://www.washingtonpost.com/news/worldviews/wp/2018/02/20/venezuela-launches-the-petro-its-cryptocurrency/?src=ilaw&utm_term=.6bc184e0ce07

FCA’S INCOMING CHAIR CHARLES RANDELL GRILLED OVER TAX AVOIDANCE SCHEME

City AM reported on 20th February that the FCA’s incoming chair Charles Randell has been grilled over his involvement in a tax avoidance scheme, telling MPs it was “an error of judgement”.  Randell was this afternoon quizzed by the Treasury Select Committee, with chair Nicky Morgan asking him to explain how he came to take part in Ingenious Film Partners 2.

www.cityam.com/280944/fcas-incoming-chair-charles-randell-grilled-over-tax

MALTA CONSULTS ON ADDITIONAL CRYPTOCURRENCY AND BLOCKCHAIN LAW

Tax News on 20th February reported that Malta’s Government has released a consultation document proposing 3 new Bills to regulate the cryptocurrency and distributed ledger technology sect.  Responses are required by 9th March.

https://www.lowtax.net/news/Malta-Outlines-More-Virtual-Currency-Regulation-76410.html

UNPAID VAT CATCHES UP WITH BRIATORE

Superyacht News on 20th February reported that the Italian tycoon, Flavio Briatore, former boss of the Benetton and Renault F1 racing teams, receives a prison sentence for tax evasion 8 years after the seizure of ‘Force Blue‘.  The case dates back to May 2010, when the expedition yacht was seized by the Italian authorities off the coast of La Spezia.  Briatore, and four other defendants, were charged with using the yacht, commercially registered under the Cayman flag, for recreational proposes in Italian territorial waters from July 2006 to May 2010 without paying outstanding VAT worth €3.6 million. They also unlawfully declared the yacht’s fuel exempt from duty worth €800,000.

http://www.superyachtnews.com/business/vat-catches-up-with-briatore

UK AND ISLE OF MAN RENEW TERRORISM SANCTIONS DESIGNATIONS

On 20th February both HM Treasury and the Isle of Man published news releases advising that the designations of Abdelkarim Hussein Mohamed Al-Nasser; Ibrahim Salih Mohammed Al-Yacoub; and  Hasan Izz-Al-Din have been renewed.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/682494/TAFA_Renewal_Notice_20.02.18-_Al-Nasser_Al-_Yacoub_Izz-Al-Din_PDF.pdf

https://www.gov.im/news/2018/feb/20/financial-sanctions-terrorism-and-terrorist-financing/

 APRIL 15 – AML CERTIFICATION COMPLIANCE DAY IN NEW YORK

K2 Intelligence Investigations in the US reminds New York businesses that on April 15th the New York Department of Financial Services’ (NYDFS’s ) new AML Part 504 regulations go into effect.  And it’s also the deadline for bank-regulated institutions (BRI) and non-bank-regulated institutions (NRI) to submit to the NYDFS their first in a series of annually recurring determinations — akin to a “board resolution” or “compliance finding” — certifying compliance with the NYDFS AML regulation.  They must state that the institution’s board of directors or designated senior officer(s) reviewed the documents, reports, certifications, and opinions necessary to make such a certification; that they took all necessary steps to confirm the regulated institution is in compliance with the NYDFS AML regulations; and that, to the best of their knowledge, their institution’s transaction monitoring and filtering program is in compliance with Section 504.3.  And the requirement does not end there, as the article does on to elaborate.

https://www.jdsupra.com/legalnews/april-15-isn-t-just-tax-day-it-s-also-41187/

 

AUSTRALIAN GAMBLING REGULATOR WARNS OPERATORS

Calvin Ayre on 20th February reported that Australia’s online gambling watchdog has uncovered 19 breaches of that country‘s new gambling law in its first investigation since the new rules took effect.  It says that some of the affected companies almost certainly were offering online poker products to Australians, which remains popular despite the ban.  A new ban on credit betting took effect on February 17th, although telephone betting services with annual turnover of less than A$30 million and an on-course Aussie racetrack presence were granted a carve-out.

https://calvinayre.com/2018/02/20/business/australia-online-gambling-watchdog-warns-intl-operators/

 

EU COURT BACKS EUROPEAN COMMISSION 2014 GAMBLING GUIDELINES

On 20th February, Calvin Ayre reported that the European Court of Justice (CJEU) has thrown out a petition from the government of Belgium seeking to annul online gambling guidelines set by the European Commission.  The Belgian government had earlier asked the CJEU to strike down the guidelines that aim to develop a high degree of consumer protection, claiming that the Commission has overstepped its Treaty-based competences by issuing the guidelines.  The European Gaming and Betting Association is reported to have called upon the Commission to evaluate the implementation of its guidelines by Member States and identify any gaps and corrective action needed to encourage Member States to achieve a high level of consumer protection.

https://calvinayre.com/2018/02/20/business/eu-court-affirms-online-gambling-guidelines/

 

PAKISTAN REJECTS PROSECUTOR’S REQUEST FOR TRAVEL BAN FOR SHARIF

OCCRP reports on 20th February that Pakistan’s Interior Ministry rejected  a request by anti-corruption authorities to impose a travel ban on former Prime Minister Nawaz Sharif and his family members.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7672-pakistan-reject-prosecutor-s-request-for-travel-ban-for-sharif

 

NO SINGLE MEANS OF REGULATING ICO, SAYS FINMA IN SWITZERLAND

On 20th February, law news site Out-Law reported that ‘initial coin offerings’ (ICO) will not be regulated in a uniform way in Switzerland, the country’s financial regulator has confirmed.  The Financial Market Supervisory Authority (FINMA) said that the way in which ICO are regulated will be determined on a case-by-case basis and will depend on what function the tokens being offered perform and their “transferability”.

https://www.out-law.com/en/articles/2018/february/no-single-means-of-regulating-icos-says-finma/

 

PHILIPPINE FORCES ARREST ALLEGED EX-ISLAMIC STATE COMMANDER

The Herald Courier on 19th February reported that Philippine police and army troops have arrested an Arab man, Fehmi Lassoued, who is reportedly from Egypt (together with his Filipina companion, Anabel Moncera Salipada), they believe was a former commander of the Islamic State group along the Syria and Turkey border in a raid on a Manila apartment, where they found bomb-making materials and an IS-style flag, the national police chief said.  Investigators were looking into possible links between the 2 suspects and local and foreign militant groups, and whether they were involved in any terrorist activity.

http://www.heraldcourier.com/news/philippine-forces-arrest-alleged-ex-islamic-state-commander/article_83eed6c5-cfe2-5fea-8f5b-6642e7121392.html

 

THE KIDNAP AND SECURITY THREAT IN SYRIA

On 20th February, Control Risks published this podcast which looks at whether IS losses of territory translate into a decrease in the kidnap-for-ransom threat?  What does the kidnap-for-ransom threat mean for organisations and companies seeking to operate in Syria?  Beyond kidnap-for-ransom, what is the general security situation?  Outside the security issues, what else should organisations be considering if they want to operate in Syria?

https://www.controlrisks.com/our-thinking/insights/podcasts/syria-kidnap-risk

 

ARMS SHIPMENT TO BOSNIAN SERBS STOKES EU FEARS OF RUSSIAN INFLUENCE AND SEPARATISTS

On 13th February, the Guardian reported that the purchase of thousands of new guns by the Bosnian Serb police has raised concerns over the intentions of the separatist-led regional government and deepening Russian influence in a divided and economically depressed nation.  A shipment of 2,500 automatic rifles from Serbia is due to arrive in the Serb-run half of Bosnia in March, weeks before the scheduled opening of a new training centre where Russian advisers have been expected to play a role under an agreement signed more than 2 years ago.

https://www.theguardian.com/world/2018/feb/13/bosnian-serb-police-arms-purchase-stokes-eu-fears?CMP=share_btn_tw

 

US DESIGNATES BURKINA FASO-BASED TERRORIST GROUP

On 20th February, the US Department of State has designated Ansarul Islam as a Specially Designated Global Terrorist (SDGT).  It says that Ansarul Islam is a terrorist group based in Burkina Faso. The group has launched numerous attacks in northern Burkina Faso near the border with Mali, including a December 2016 attack against an army squad that killed a dozen soldiers, one of the deadliest ever attacks against Burkina Faso’s military. Ansarul Islam also carried out a February 2017 strike on 2 police stations in the country and is believed to be responsible for the March 2017 murder of a school director and another man in Kourfayel, Burkina Faso.

https://www.state.gov/r/pa/prs/ps/2018/02/278481.htm

ANSARUL ISLAM (a.k.a. ANSAR AL-ISLAM; a.k.a. ANSAR UL ISLAM OF MALAM BOUREIMA DICKO; a.k.a. ANSAROUR ISLAM; a.k.a. ANSAR-UL-ISLAM LIL-ICHAD WAL JIHAD; a.k.a. DEFENDERS OF ISLAM; a.k.a. “IRSAD”), Douna, Mali; Soum Province, Burkina Faso; Burkina Faso; Selba, Mali [SDGT].

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180220.aspx

 

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US DESIGNATES BURKINA FASO-BASED TERRORIST GROUP – ANSARUL ISLAM

On 20th February, the US Department of State has designated Ansarul Islam as a Specially Designated Global Terrorist (SDGT).  It says that Ansarul Islam is a terrorist group based in Burkina Faso. The group has launched numerous attacks in northern Burkina Faso near the border with Mali, including a December 2016 attack against an army squad that killed a dozen soldiers, one of the deadliest ever attacks against Burkina Faso’s military. Ansarul Islam also carried out a February 2017 strike on 2 police stations in the country and is believed to be responsible for the March 2017 murder of a school director and another man in Kourfayel, Burkina Faso.

The OFAC listing provides additional information – ANSARUL ISLAM (a.k.a. ANSAR AL-ISLAM; a.k.a. ANSAR UL ISLAM OF MALAM BOUREIMA DICKO; a.k.a. ANSAROUR ISLAM; a.k.a. ANSAR-UL-ISLAM LIL-ICHAD WAL JIHAD; a.k.a. DEFENDERS OF ISLAM; a.k.a. “IRSAD”), Douna, Mali; Soum Province, Burkina Faso; Burkina Faso; Selba, Mali [SDGT].

https://www.state.gov/r/pa/prs/ps/2018/02/278481.htm

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180220.aspx

 

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UK AND ISLE OF MAN RENEW TERRORISM SANCTIONS DESIGNATIONS

On 20th February both HM Treasury and the Isle of Man published news releases advising that the designations of Abdelkarim Hussein Mohamed Al-Nasser; Ibrahim Salih Mohammed Al-Yacoub; and  Hasan Izz-Al-Din have been renewed.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/682494/TAFA_Renewal_Notice_20.02.18-_Al-Nasser_Al-_Yacoub_Izz-Al-Din_PDF.pdf

https://www.gov.im/news/2018/feb/20/financial-sanctions-terrorism-and-terrorist-financing/

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CNS NEW TOOLS COURSEWARE PORTFOLIO

This website contains courses hosted on this website were developed by researchers at the James Martin Center for Nonproliferation Studies with support from the Skoll Global Threats Fund.  It hosts free online learning courses designed to help you understand new media tools and apply them to non-proliferation challenges.  The courses include both interactive and hands-on activities and are arranged in manageable segments.  Currently on offer are: Advanced Tools for Searching the Internet; Satellite Imagery Analysis (Parts 1 and 2); Geographic Information Systems (Parts 1 and 2); 3D Modelling; Photo Analysis; Video Analysis; Virtual Reality Simulation; and Data Analysis.

https://learn-new-tools.org/

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UK BOOKMAKER WILLIAM HILL FINED FOR MONEY LAUNDERING FAILURES

On 20th February, RTE reported that William Hill will pay £6.2 million as a penalty for breaching AML and social responsibility regulations, the UK’s Gambling Commission said.  Failure in the company’s checks resulted in 10 customers depositing large sums linked to criminal offences, resulting in gains for William Hill of around £1.2 million, it said, with a systemic failing at William Hill which went on for nearly 2 years.

https://www.rte.ie/news/business/2018/0220/942031-william-hill-fined/?src=ilaw

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TUNISIA SEIZES SHIPLOAD OF WEAPONS

On 19th February, Defence Web reported that Tunisian officials have seized a vessel loaded with undeclared weapons, including armoured vehicles. The vessel, called the Ural and registered under the Panamanian flag, was intercepted on 16th February off the port of Sfax and found to be carrying trucks, armoured personnel carriers and equipment for military camps. According to ship tracking websites, the vessel was on its way from Novorossiysk in Russia to Douala, Cameroon, when it was forced to call on Sfax due to mechanical failure.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50782:tunisia-seizes-shipload-of-weapons&catid=87:border-security&Itemid=188

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THINGS YOU MAY HAVE MISSED – FEBRUARY 19

19th February 2018

YALE BUSINESS SCHOOL HOSTS CANNABIS CONFERENCE

Yale News on 19th February reports on a single-day conference was entirely student-run and brought together participants from all sectors of the legal cannabis industry to comprehensively analyze how the industry has performed in the infancy of its legality and where it is headed.  Exchanging business cards decorated with marijuana leaves, venture capitalists, entrepreneurs, legal experts and cannabis enthusiasts alike descended on the Yale School of Management for the first cannabis-oriented conference organized by a US business school.

https://yaledailynews.com/blog/2018/02/19/som-hosts-first-ever-cannabis-conference/

 

EUROPEAN CENTRAL BANK STOPS ALL ABLV BANK PAYMENTS AMID US SANCTIONS PROBE

Reuters on 19th February reported that the European Central Bank stopped all payments by Latvian lender ABLV Bank as its liquidity position has deteriorated after accusations by US authorities of breaching sanctions against North Korea.

https://uk.reuters.com/article/uk-ablvbank-sanctions-ecb/ecb-stops-all-ablv-bank-payments-amid-u-s-corruption-probe-idUKKCN1G30CR?src=ilaw

TAX EVASION STILL CAUSES PROBLEMS IN SLOVAKIA

The Slovak Spectator reports that without tax evasion, Slovakia might have collected more than €2 billion in taxes, according to the VAT Gap report published by the European Commission in late September 2017, assessing the data for 2015.  Though the country improved its gap from the previous year by 1.13 percentage points to 29.39%, it still belongs among the countries with the largest gaps. The only country with a larger gap is Romania at 37.18%.

https://spectator.sme.sk/c/20763511/tax-evasion-still-causes-problems.html

THE WORLD’S MOST TRAFFICKED MAMMAL

A blog post from the Foreign & Commonwealth Office concerns World Pangolin Day on 17th February, about the small, scaly anteaters which may be the world’s most trafficked animal, and the position in Laos, which is home to 2 of the 8 varieties.

https://blogs.fco.gov.uk/hughdevans/2018/02/15/the-worlds-most-trafficked-mammal/

AUSTRALIAN DIRECTOR BANNED FROM FINANCIAL SERVICES FOR 5 YEARS

On 16th February, International Adviser reported that The Australian Securities & Investments Commission (Asic) said that it has accepted an “Enforceable Undertaking” from the director of a financial services firm, Real Wealth, David Orth that requires him to cease to provide financial services for 5 years and has agreed to pay £225,786, after his business failed to give appropriate advice to its clients..  In addition, Orth will make a community benefit payment in the amount of A$400,000 to Financial Literacy Australia to support the financial capability of vulnerable people.

https://international-adviser.com/financial-services-director-banned-five-years/

PORT OF DOVER: CIGARETTES SEIZED BY BORDER FORCE

Kent Online on 16th February reported that Around 5.8 million cigarettes were discovered as an attempt to smuggle them into the UK was foiled by the Border Force at Dover’s Eastern Docks.  The discovery was made after officers stopped a Polish lorry on a ferry from Calais.  The paperwork for the vehicle’s load declared it as being laden with pallets of insulation and “eco wood”.  On closer inspection officers found only six pallets of insulation and 24 pallets of cigarettes.

http://www.kentonline.co.uk/dover/news/millions-cigarettes-seized-dover-160250/

EU REGULATION IMPOSING ADDITIONAL DUTIES ON CERTAIN US PRODUCTS AS A RESULT OF THE BYRD AMENDMENT (CDSOA)

On 16th February, Baker McKenzie reported on the imposition of additional duties against certain products originating in the US as a result of the Continued Dumping and Subsidy Offset Act (CDSOA – also known as the ‘Byrd Amendment).  The WTO had found the CDSOA incompatible with various US obligations under the WTO agreements, and the WTO permitted the EU to impose additional duties in retaliation. The new EU Regulation in 2018/196/EU and it revises and codifies the arrangements.

http://www.internationaltradecomplianceupdate.com/2018/02/16/eu-codifies-regulation-imposing-additional-duties-on-certain-us-products-as-a-result-of-the-byrd-amendment-cdsoa/

AUSTRALIA: CBA BLOCKS CREDIT CARD PURCHASES OF VIRTUAL CURRENCIES

On 16th February, Banking Tech reported that The Commonwealth Bank of Australia (CBA) is following in the wake of other banks by stopping credit card purchases of virtual currencies.  Lloyds, Bank of Scotland, Halifax, MBNA, Bank of America, Citigroup, Capital One, Discover and JP Morgan, as well as Virgin Money, have all taken similar action.

http://www.bankingtech.com/2018/02/cba-blocks-credit-card-purchases-of-virtual-currencies/

COURT OF APPEAL UPHOLDS POCA CONFISCATION ORDER SOUGHT BY LOCAL AUTHORITY FOR PLANNING OFFENCE

Local Government Lawyer on 19th February reported that the UK Court of Appeal has rejected claims that a fine of £3,500 and a confiscation order of £59,000 for breach of planning laws were excessive.  Following enforcement action by West Lancashire Borough Council Timothy Edwards was ordered in February 2016 at Preston Crown Court to pay the confiscation order under the Proceeds of Crime Act2002 – the first time West Lancashire had sought such an order.  He was also hit with the £3,500 fine and ordered to pay prosecution costs £6,000. Edwards’ wife Susan was also fined £500 for illegally storing a large number of caravans on 2 fields at their property.

www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=34222%3A2018-02-18-19-16-49&catid=63&Itemid=31

STAFFORDSHIRE TRADING STANDARDS SECURE £567,000 CONFISCATION FOR SALE OF COUNTERFEIT DVD

On 19th February, Local Government Lawyer reported that Staffordshire Trading Standards has secured its largest-ever confiscation order at £567,000, against a defendant convicted of selling counterfeit DVD on eBay.  Paul Michael Foster, 53, had pleaded guilty to one offence of fraudulent trading and 9 offences infringing the Trade Marks Act 1994 in November 2015.  At a confiscation hearing on 12th February at Stafford Crown Court, Foster was ordered to pay back £567,000 and prosecution costs of £36,858.72.

http://www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=34233%3A2018-02-18-20-59-41&catid=190&Itemid=122

ERDOGAN’S FATAL BLIND SPOT” OVER ISLAMIC STATE

On 16th February, the RAND Blog carried an article saying that countering the growing terrorist threat appears to be low on Erdogan’s agenda. Turkey has been accused of recruiting thousands of former Islamic State fighters to help fight the Kurds.  But it warns that Turkey could serve as a logistics hub to plot future attacks.  It says that in early February, more than 10 high-profile Islamic State members — including militants who had been involved in bombing attacks in Turkey itself — were abruptly released by judges.  In many cases, Turkish intelligence officials who did not see the group as the primary threat pressured the judiciary to let dangerous suspects go despite the fact that prosecutors had sought extremely long prison sentences for them.  Since Turkey has been accused of recruiting thousands of former Islamic State fighters to attack Kurds in Syria, some speculate that the release of Islamic State members without explanation could be the result of a backdoor deal with the Turkish intelligence service.

https://www.rand.org/blog/2018/02/erdogans-fatal-blind-spot.html

VENEZUELA CRYPTOCURRENCY “TO DRAW INVESTMENT FROM ABROAD”

KYC 360 on 19th February reported claims that Venezuela’s new “petro” cryptocurrency will attract investments from Turkey, Qatar, the US and Europe, the country’s cryptocurrency regulator has said.

https://kyc360.com/news/venezuela-cryptocurrency-draw-investment-turkey-qatar-official/

INTERNATIONAL COUNTER ISIS FINANCE GROUP LEADERS MEETING

On 15th February, the US Treasury issued a news release saying that, on February 11th, the Counter ISIS Finance Group (CIFG) convened its 49 member states and observers to discuss the future of ISIS financing.   The CIFG, which the US, Italy, and Saudi Arabia co-chair, was established in January 2015 as one of the 5 working groups within the Global Coalition to Counter ISIS, a broad international group formed to degrade and ultimately defeat ISIS.  This meeting marks the 3-year anniversary of the creation of the CIFG and the 9th meeting of this group.  A joint statement had been issued which noted that while the coalition has successfully retaken over 98% of the territory ISIS once controlled in Iraq and Syria, the fight is not over, and that ISIS’s revenues have significantly declined, but so have its expenses, making the work of the CIFG more important than ever.

https://home.treasury.gov/news/press-release/sm0294

HMRC CONSULTATION ON TIME LIMITS FOR OFFSHORE TAX ASSESSMENTS ETC

On 19th February, HMRC launched a consultation asking for views on the design principles for legislation to implement a new minimum tax assessment time limit of 12 years for HMRC to make assessments or notices of determination in cases involving offshore income, gains or chargeable transfers.  HMRC is extending the time limit because it can take much longer to establish the facts about offshore transactions, particularly if they involve complex offshore structures. More time is needed to address situations where the current assessment time limits of 4 and 6 years for offshore non-compliance are not long enough to establish the facts, and determine and assess the amount of tax due.  The consultation runs to 14th May.

https://www.gov.uk/government/consultations/extension-of-offshore-time-limits

LATVIA’S BANKING SECTOR ROCKED BY US PROBE, CENTRAL BANK CHIEF’S DETENTION

On 19th February, Reuters reported on how one of Latvia biggest banks, ABLV, was forced to seek emergency help after it was destabilised by money laundering allegations, hours after the separate detention of the central bank governor on suspicion of soliciting bribes.

https://uk.reuters.com/article/us-latvia-banking/latvias-banking-sector-rocked-by-u-s-probe-central-bank-chiefs-detention-idUKKCN1G30ZP

POLICE SAY TO PROSECUTE SLOVAK BUSINESSMAN

The Slovak Spectator reports that police have concluded their investigation into suspected tax fraud by the highly publicised businessman Ladislav Bašternák, recommending that a special prosecutor press charges.  It reports that Bašternák, who is linked to Real Forum Invest, the company which constructed the Bonaparte residential building in which Prime Minister Robert Fico lives, paid almost €2 million to the tax office a few days ago in an attempt to invoke the so-called “active repentance” provision (i.e. an additional payment of tax with the aim of securing impunity).

https://spectator.sme.sk/c/20764136/police-recommend-that-basternak-faces-charges.html

IMF – UKRAINE SHOULD IMMEDIATELY PASS LAW ON ANTI-CORRUPTION COURT

112 UA in Ukraine on 19th February reported that the IMF has urged the Ukrainian government to pass the bill about the anti-corruption court as soon as possible, and continue the other delayed reforms.

https://112.international/politics/ukraine-should-immedieately-pass-law-on-anti-corruption-court-imf-25779.html?src=ilaw

UK NUCLEAR SAFEGUARDS BILL: FACTSHEETS

On 19th February, the Department of Business, Energy and Industrial Strategy released factsheets on the main topics related to the Nuclear Safeguards Bill.

https://www.gov.uk/government/publications/nuclear-safeguards-bill-factsheets

SHISHA FIRM BOSS IN COURT AFTER TRYING TO PASS TOBACCO OFF AS YOGURT AND INCENSE TO DODGE TAX

Leeds Live on 19th February carries a report about the boss of a Shisha firm based in Leeds has been given a suspended prison sentence after dodging tax on hundreds of kilos of the tobacco.  Mehdi Jahani, 35, ran a business called Rose Supply UK which sold the flavoured tobacco.  However, during a raid by HMRC at his home and storage unit 629 kg of Shisha tobacco was hidden in containers labelled as yogurt, sports goods and incense.  Packaging equipment was also found at the storage unit.  He admitted buying illegally imported Shisha tobacco for which he should have paid £65,233 in duty and tax.

https://www.leeds-live.co.uk/news/leeds-news/shisha-firm-boss-court-after-14308448

BVI REVAMPS LIMITED PARTNERSHIP REGIME

On 19th February, CCH Daily reported that the BVI has launched a new limited partnership regime in a bid to increase the jurisdiction’s attractions for investment funds, particularly private equity funds and joint ventures.

https://www.accountancylive.com/bvi-revamps-limited-partnership-regime

COUNTERFEIT DRUGS ARE A BILLION-DOLLAR INDUSTRY. COULD BLOCKCHAIN – THE TECHNOLOGY BEHIND BITCOIN – BE THE ANSWER?

In its March 2018 edition, Pharma Times asks this question.  It says that the market for fake drugs is booming – estimates suggest global sales in the realm of a couple of hundred billion dollars a year, where about 1% of all drugs in circulation in Western markets (and about 10% on average globally) are believed to be fake; and that the US and EU have both introduced legislation that requires an electronic system to trace and authenticate medicines as they move through the distribution network- but some critics have claimed that these supply chain solutions aren’t interoperable and will, in fact, do little to prevent counterfeits and protect patients.  The article says that whether counterfeit medicines could become a thing of the past if blockchain transforms pharma’s supply chain is still one for debate.

http://www.pharmatimes.com/magazine/2018/march_2018/securing_the_supply_chain

CHICAGO TRADER CHARGED WITH CRYPTOCURRENCY THEFT

Joseph Kim, a 24-year-old Chicago-based trader, was charged by US authorities on 15th February with stealing over $2 million worth of bitcoin and litecoin from his employer, Consolidated Trading LLC.  He held the position of an assistant trader at the firm and was responsible for handling cryptocurrency trades on behalf of the firm’s clients. He is said to be the first person to be taken to court in Chicago on account of trading in cryptocurrency.

https://btcmanager.com/chicago-trader-faces-jail-time-bitcoin-litecoin-theft/

COMPANIES WARNED ON INTERNAL INVESTIGATIONS AFTER UK COURT OF APPEAL REJECTS PRIVILEGE CLAIM

On 19th February, Out-Law reported that statements made by an employee in the context of an internal investigation did not attract litigation privilege, and therefore could be referred to by the UK Health and Safety Executive (HSE) in a subsequent prosecution, the Court of Appeal has ruled in a case involving waste company, Gaskells NW Ltd.

https://www.out-law.com/en/articles/2018/february/companies-warned-on-internal-investigations-after-court-of-appeal-rejects-privilege-claim/

UK GOVERNMENT RULES OUT GRANTING MEDICAL CANNABIS LICENCE TO BOY, 6, WITH ‘DEATH SENTENCE’ EPILEPSY CONDITION

On 18th February, the Telegraph reported that the government has ruled out issuing a medical cannabis licence to a 6-year-old boy whose rare form of epilepsy improved after taking the drug abroad. Only 9 boys have been diagnosed worldwide and at one point he had 3,000 seizures and 48 hospital visits in a year.  Some forms of cannabis oil treatments are allowed in the UK with a special licence from the Home office. But not if they contain the compound tetrahydrocannabinol (THC), which is the element of cannabis that creates the high. Whilst in the Netherlands the boy was prescribed the drugs Bedica and Bendrolite, which contain small amounts of THC.  The Home Office can issue licences for drugs containing THC to enable clinical trials, and will amend regulations if trial drugs are approved.

http://www.telegraph.co.uk/news/2018/02/18/home-office-rejects-mps-call-grant-medical-cannabis-licence/

 

2,000 ILLEGAL WEAPONS CROSS US-MEXICO BORDER PER DAY, CLAIMS REPORT

On 22nd January, Insight Crime carried an article saying that according to a recent report on arms trafficking by Mexico’s governmental research service, known as the CESOP, an estimated 2,000 weapons illegally enter Mexico from the US every day. The report says 85% of the approximately 15 million weapons that were in circulation in Mexico in 2012 were illegal.  The report identifies straw purchasing — in which individuals legally buy weapons in the US, before smuggling them into Mexico and selling them on the black market — as the most common form of arms trafficking.  It says that the report does not, however, mention Mexican security forces, which Insight Crime had found in 2011 to be a large source of black market weapons.   However, the article questions the 2,000 figure, saying that a 2013 study by the University of San Diego and the Igarape Institute in Brazil (and a follow-up in 2014) estimated that, on average, 212,887 firearms were bought in the US every year between 2010 and 2012, by purchasers who intended to traffic them.  This represents some 580 weapons a day — just 29% of the figure provided by the new report.

https://www.insightcrime.org/news/analysis/2000-illegal-weapons-cross-us-mexico-border-every-day/

SINGAPORE’S NEW CYBERSECURITY ACT – A RELIEF AND LEADING THE WAY FOR OTHERS?

On 19th February, Baker McKenzie carried an article which focuses on the amendments that have since found their way into the Cybersecurity Act as passed by Parliament and that address quite a number of concerns raised during the public consultation exercise.  Summarising the main changes, it says that it will be interesting to watch whether these jurisdictions take a similar approach to Singapore and narrow down their Cybersecurity legislation to cover just critical information infrastructure (CII) owners and not any network operators.

https://globalcompliancenews.com/singapore-cybersecurity-act-20180219/

NORTH KOREA’S LARGEST OVERSEAS RESTAURANT CLOSED DOWN

38 North on 16th February carried an article. The article by a researcher says that these restaurants are (or were?) an interesting phenomenon, and existed I such places as Vietnam, Cambodia, and China.  The article referred to a story in the Daily NK about the recently-closed North Korean restaurant called Pyongyang Koryo Pavilion in the Chinese border city of Dandong, said to have been the largest of North Korea’s overseas restaurants, and originally employing 200 people. The restaurant shut down in November due to intensifying international sanctions targeting North Korea for its nuclear and missile development. Its employees have continued to return to North Korea in groups.

https://www.38north.org/articles/affiliates/north-korean-economy-watch/14626/

RUSSIAN LAWMAKER REZNIK CLAIMS INNOCENCE AS MAFIA TRIAL OPENS IN SPAIN

Rferl on 19th February reports that Russian lawmaker Vladislav Reznik and 17 other suspects have gone on trial in Spain accused of money laundering for 2 Russian organised-crime groups.  Prosecutors believe more that €50 million of Russian mafia money was laundered by the Tambov and Malyshev gangs – 2 of Russia’s largest and best-known criminal organisations.  Reznik is a member of the ruling United Russia party, and previously was the first deputy chairman of the Finance Committee in the lower house of Russia’s parliament, the State Duma.  His wife, Diana Gindin, also went on trial, but the alleged gang bosses, Gennady Petrov and Aleksandr Malyshev, are still at large.  The case dates back to 2008, when Spanish police detained 20 Russian suspects.

https://www.rferl.org/a/russia-spain-lawmaker-reznik-denies-charges-mafia-trial/29049099.html?src=ilaw

IRAQI PM PROMISES CORRUPTION CRACKDOWN TO REASSURE FOREIGN INVESTORS

Shafaaq on 19th February reports that the PM gave the undertaking at a Kuwaiti-sponsored conference that drew representatives from more than 70 countries, 51 international aid organizations, and several hundred businesses.

http://www.shafaaq.com/en/En_NewsReader/f65b15f4-6811-49c0-97e9-a6e81301de02?src=ilaw

FRANCE URGES UN COURT TO DROP EQUATORIAL GUINEA CASE

News 24 on 19th February reported that France accused Equatorial Guinea of wanting to “paralyse” French criminal procedure in a top-level corruption probe, as it urged judges to throw out a case against it before the UN’s International Court of Justice.  In a bitter diplomatic row, Equatorial Guinea is accusing France of violating the diplomatic immunity of its vice president Teodorin Obiang, 48, the son of the long-time president, and who has been prosecuted by a French court on charges of embezzling $180 million of public funds to finance his jet-set lifestyle. He was tried in absentia and sentenced in October to a 3-year suspended sentence for corruption, and was also given a suspended fine of $35 million for money laundering, corruption and abuse.

https://www.news24.com/Africa/News/france-urges-un-top-court-to-dump-e-guinea-case-20180219?src=ilaw

GUPTA BROTHERS ARE IN DUBAI NOW

The Hindu newspaper reported on 19th February that the Gupta brothers, accused of corruption in South Africa, are now in Dubai after a brief visit to India, and it is said that they will continue to fight the legal case from there.

http://www.thehindu.com/news/national/gupta-brothers-arein-dubai-now/article22801134.ece?src=ilaw

ISRAEL CONFIRMS IT WILL TAX BITCOIN AS PROPERTY

Coindesk on 19th February reported that Israel’s government confirmed that it would treat bitcoin and other cryptocurrencies as a kind of property for tax purposes.  This confirms past indications that the Tax Authority will regard cryptocurrencies as “a property, not a currency”, making it therefore taxable as such, and this was detailed in a draft circular issued in January 2018 of this year.  Profits from cryptocurrencies will be subject to capital gains tax, while individuals mining or trading cryptocurrencies in connection with businesses must pay VAT in addition to capital gains tax.

https://www.coindesk.com/israel-confirms-will-tax-bitcoin-property/

IF IRS WANTS TO OBTAIN RECORDS HELD IN ANOTHER COUNTRY, DON’T IGNORE ITS REQUEST

Foodman CPA & Advisers published an article on 19th February saying that, at a certain point during an income tax examination, if the IRS determines that it needs documents or items located outside the US, it may issue a Formal Document Request (FDR).  The article details the consequences and says that taxpayers that make a decision to not respond to an FDR should to understand the consequences of litigating against the IRS without documentation that could be instrumental to a positive and beneficial outcome.

https://www.jdsupra.com/legalnews/if-irs-wants-to-obtain-records-held-in-47333/

 

LITHUANIAN LAWMAKER FACES IMPEACHMENT

OCCRP on 19th February reported that a Lithuanian lawmaker is facing impeachment after a parliamentarian investigation confirmed media reports claiming he was financially benefiting from renewable energy businesses whose interests he was protecting as a legislator.  Investigations showed that the family of Arturas Skardzius – a veteran in Lithuanian politics – has been renting out land to a wind farm for much more money than the owners of neighbouring plots were getting. And this even though the wind farm only used 1% of the Skardzius plot.  At the same time, he was blocking amendments that may have prevented the business group his family rented the land to from building a major offshore wind farm in the Lithuanian part of the Baltic Sea.  Skardzius‘ wife co-owns a solar energy business in Belarus, together with Sergey Beliy, the former CEO of Belenergo, the Belarus state-owned energy company.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7668-lithuanian-lawmaker-faces-impeachment-after-occrp-probe

COUNTERFEIT EURO PRINT SHOP DISMANTLED IN PORTUGAL WITH SUPPORT FROM EUROPOL

Europol on 19th February reported that Portuguese Judiciary Police, in co-operation with the Spanish National Police and Europol, detained 2 men and 1 woman suspected of producing counterfeit euro currency responsible for producing thousands of banknotes, mainly €20 and €50, with the distribution particularly affecting Portugal and Spain.  These counterfeits were detected in 8 other European countries: Germany, France, Italy, Austria, Belgium, Estonia, the Netherlands and Switzerland.  A complete illegal print shop was dismantled which included the seizure of guillotines, press dies, holographic tape rolls, computer and printers. Computer files related to this illegal activity were also identified.

https://www.europol.europa.eu/newsroom/news/counterfeit-euro-print-shop-dismantled-in-portugal-support-of-europol

SANCTIONED IRANIAN AIRLINE BOUGHT ENGINES AND PARTS THROUGH TURKISH FRONT COMPANIES

On 19th February, the Wall Street Journal reported that an Iranian airline, Mahan Air, under sanctions by the US for ferrying weapons and fighters into Syria repeatedly bought US-made jet engines and parts through Turkish front companies over the past several years, most recently in December 2017, federal investigators said in a new US government filing.  This could cause complication for plans to sell Boeings to Iranian airlines.

https://www.wsj.com/articles/iranian-airline-under-sanctions-bought-u-s-jet-parts-through-front-firms-1519041600?mod=e2tw

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FINAL REPORT OF THE UN PANEL OF EXPERTS ON YEMEN – IRAN ACCUSED OF BREAKING ARMS EMBARGO

This was published on 26th January.  It says that, after nearly 3 years of conflict, Yemen, as a State, has all but ceased to exist. Instead of a single State there are warring statelets, and no one side has either the political support or the military strength to reunite the country or to achieve victory on the battlefield.  It also says that battlefield dynamics are further complicated by the terrorist groups Al-Qaida in the Arabian Peninsula (AQAP) and Islamic State in Iraq and the Levant (ISIL) (Da’esh), both of which routinely carry out strikes against the Houthis, the Government and Saudi Arabia-led coalition targets.  The launch of short-range ballistic missiles, first by forces of the Houthi-Saleh alliance and subsequently, following the end of the alliance, by Houthi forces against Saudi Arabia, changed the tenor of the conflict and has the potential to turn a local conflict into a broader regional one.   Missile and UAV and parts seems to have been brought into the country after the imposition of the targeted arms embargo.

It finds that  Iran is in non-compliance with UN SCR 2216 (2015) in that it failed to take the necessary measures to prevent the direct or indirect supply, sale or transfer of Borkan-2H short-range ballistic missiles, field storage tanks for liquid bipropellant oxidizer for missiles and Ababil-T (Qasef-1) unmanned aerial vehicles to the then Houthi-Saleh alliance.

It notes that Houthis have also deployed improvised sea mines in the Red Sea, which represent a hazard for commercial shipping and sea lines of communication that could remain for as long as 6 to 10 years, threatening imports to Yemen and access for humanitarian assistance through the Red Sea ports.  Throughout 2017, there have been widespread violations of international humanitarian law and international human rights law by all parties to the conflict.

http://www.un.org/en/ga/search/view_doc.asp?symbol=S/2018/68

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DISGUISED, MISDESCRIBED COAL EXPORTS FROM SEPARATIST AREAS OF UKRAINE

DONBASS-ABKHAZIA COAL EXPORT SCHEME, IF IMPLEMENTED, TO PROVIDE SEPARATIST ENTITIES IN UKRAINE AND GEORGIA WITH ADDITIONAL REVENUES

On 19th February, Janes.com reported that on 9th February, the Ukrainian investigative online platform InformNapalm published a detailed report on the Russian government’s alleged plans to start exporting coal from the separatist-controlled areas in eastern Ukraine (the self-proclaimed Luhansk People’s Republic (LPR) and Donetsk People’s Republic (DPR) in eastern Ukraine), via Russia and Georgia’s breakaway region of Abkhazia to Turkey.  Janes.com warns that any exports from Donbass via Abkhazia are likely to be mislabelled as Russian-produced, thus elevating corruption risks in the Russian coal sector by increasing risks for prospective foreign buyers and that, for its own reasons, Georgia is unlikely to intercept trade vessels engaged in illicit trade.  If the coal export scheme succeeds, Russia will likely encourage the Donbass separatist entities to export other commodities, including metals, chemicals and grains, via Abkhazia.

InformNapalm also refers to another coal supply scheme from the occupied Donbas to EU countries, said to have been uncovered by journalists in Poland, and was said to have been organised by the former “Deputy Minister of Fuel and Energy” of the LPR Alexander Melnichuk.

www.janes.com/article/78000/donbass-abkhazia-coal-export-scheme-if-implemented-to-provide-separatist-entities-in-ukraine-and-georgia-with-additional-revenues

https://informnapalm.org/en/russia-plans-supply-coal-ukrainian-donbas-abkhazia-turkey/

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TRACE PODCAST: SPOTLIGHT ON INDIA AND ITS BRIBERY CHALLENGES

In the latest TRACE podcast, Vasu Muthyala of Kobre & Kim discusses some of the challenges facing companies doing business in India, and some recent improvements there.  TRACE also produces a single-page summary in its Bribery Risk Matrix, showing India to be a “Medium” risk.

https://www.traceinternational.org/bribe_swindle_or_steal

http://traceinternational.org/Uploads/MatrixFiles/2017/Reports/India-TRACE%20Matrix%20Individual%20Countries.pdf

In the updated edition of the TRACE Matrix, Sweden, New Zealand and Norway continue to place among the 5 least risky countries, along with newcomers Finland and the UK.  The 5 riskiest countries for bribery are Somalia, ranked last among 200 countries, Venezuela, Turkmenistan, North Korea and South Sudan respectively.

https://www.traceinternational.org/trace-matrix

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UK MODERN SLAVERY ACT: HOW IS THE TECH SECTOR RESPONDING?

On 6th February, Tech UK published a new report which explores how tech firms are responding to rules on modern slavery and provides recommendations for Government to help improve business reporting. The Modern Slavery Act 2015 is one of the world’s first national laws for combatting modern slavery. Section 54 of the Act introduced a new requirement that all UK firms turning over £36 million publish a Modern Slavery Statement.  The report analyses a number of statements from tech companies. Overall there is a high level of compliance, but major variances in the quality and detail of reports. Several recommendations to improve the quality of reporting across the sector are made in the report.

http://www.techuk.org/insights/reports/item/12236-techuk-modern-slavery-act-report

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CALL TO BAN SIDE BETS ON IRISH NATIONAL LOTTERY

On 18th February, the Irish Sun reported that the operator of the Irish National Lottery is pushing Government to outlaw ‘parasitic activities’ of unregulated, offshore companies who offer odds on outcome of draw.  While they are primarily worried about online activities, bookie shops face being impacted by any legislation — in a similar fashion as has applied across the water in Britain.  This comes after the growth in online businesses — such as Lottoland, MyLotto 24 and MultiLotto — which offer people the chance to wager on the outcomes of draws.

Unlike the national game, these companies don’t have to make a donation to sports clubs or charities

https://www.thesun.ie/news/2198178/operator-of-national-lottery-pushing-government-to-outlaw-parasitic-activities-of-unregulated-offshore-companies-who-offer-odds-on-outcome-of-draw/

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THINGS YOU MAY HAVE MISSED – FEBRUARY 18

18th February 2018

NEW EARTH LIQUIDATORS ASSESSING LEGAL OPTIONS

International Adviser on 16th February reported that liquidators of the failed New Earth Recycling and Renewables (NERR) fund now have more than 200,000 documents in their possession and want to establish if there is a case to take legal action against any party deemed liable for the collapse. The article reminds one that The fund collapsed in 2016 after the High Court of Justice of the Isle of Man granted a wind-up application for the 3 unregulated funds, known collectively as the New Earth Group of Funds, which had 3,249 investors and were collectively valued at $292.22 million, though at the time of winding up, the value of its investments was close to zero.  The funds invested in three UK-based companies involved in recycling and waste management. Isle of Man taxpayers have been paying for the liquidation through the Financial Services Authority (FSA).

https://international-adviser.com/new-earth-liquidators-assessing-legal-options/

MUNICH SECURITY REPORT 2018

This report was issued for the Munich Security Conference in February 2018.  Entitled “To the Brink and Back”, provides an overview of major security policy issues and features data, analyses, maps and infographics. As a companion and impulse for the 54th edition of the Munich Security Conference, the Munich Security Report serves as background reading for conference participants, but is also made available to the general public.  This year’s main topics include the crisis of the liberal international order and the impact of the first year of Donald Trump’s presidency. The report also covers the new momentum in European defense policy and the potential impact of Brexit. In addition, the report analyses regional developments in Central and Eastern Europe, Africa, and the Middle East. It also provides insights into the state of global nuclear disarmament and non-proliferation efforts, the issue of environmental and climate security as well as cyber security.  Highlights include –

  • Previously unpublished data by the International Institute for Strategic Studies show the military expenditures and procurement priorities of select African countries. The data show that patrol boats and helicopters, for example, are in demand, whereas there is no procurement contract for systems like submarines, cruisers, destroyers, frigates or corvettes;
  • The James Martin Center for Nonproliferation Studies and the Nuclear Threat Initiative provide an assessment of the state of the North Korean nuclear program and an analysis of what a cancellation of the Iranian nuclear deal would mean; and
  • Unpublished projections by UNEP show the correlation between drought and low intensity conflicts in a world map.

http://www.report.securityconference.de/

 DWK-DODUMAAny3A

TERROR RISKS IN EUROPE TO INCREASE IN 2018 AS ISLAMIC STATE’S FOREIGN FIGHTERS RETURN

On 13th February, Janes.com announced a new report from Jane’s Terrorism & Insurgency Centre (JTIC), and a quote says that in the 5- to 10-year outlook, European countries will face an elevated terrorism threat posed by radicalized convicts, returned foreign fighters and other returnees who have direct ties to the legacy of the Islamic State.  Key findings of the report

  • Islamist militancy will remain the primary terrorism threat in Europe, with international operations becoming increasingly important for the Islamic State as it seeks to maintain its relevance among supporters globally.
  • Returning foreign fighters will drive an increase in the terrorism threat, particularly via the potential transformation of radical Islamist support networks into operational structures directly involved with attack plots;
  • Though low-capability methods will remain prominent, it is likely that new and more destructive methods will emerge in the next 2 years in Europe, including the use of car bombs and the adoption of new technologies such as drones;
  • JTIC’s analysis of European prison sentencing reveals that between 2019 and 2023, a substantial number of terrorism convicts who have been active supporters of Islamist militant groups are likely to be released into the general population; and
  • Security services will struggle to monitor adequately a combination of returning militants, an increased number of radical Islamist networks involved in the propagation of terrorism, and the radicalisation risks associated with a substantially increasing Islamist prison population.

https://ihsmarkit.com/research-analysis/Terror-Risks-in-Europe-to-Increase-in-2018-as-Islamic-States-Foreign-Fighters-Return.html?utm_content=bufferb9d1d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

FOREX BANKS UNEARTHED PNB SCAM, NOT ANY WHISTLEBLOWER: SOURCES TELL INDIA TODAY

On 18th February, India Today claims that the scandal at the PNB Bank was detected by other forex banks, and not by PNB or a whistleblower.

https://www.indiatoday.in/india/story/forex-banks-unearthed-pnb-scam-not-any-whistleblower-sources-tell-india-today-1172147-2018-02-18?src=ilaw

2 NETANYAHU CONFIDANTS ARRESTED IN ISRAELI TELECOM GIANT GRAFT CASE

On 18th February, Haaretz in Israel reported that police have arrested several senior officials at Bezeq, the Israeli telecommunications giant, as part of the ongoing corruption investigation involving the company and its possible relationship with Netanyahu.  It says that among those arrested were 2 close associates of Netanyahu. A gag order has been placed on all of the details of the arrests, including the identity of those arrested.

https://www.haaretz.com/israel-news/two-netanyahu-confidants-arrested-in-israeli-telecom-giant-graft-case-1.5825999?src=ilaw

FURTHER INFORMATION ON CYBER ATTACK ON UNION BANK’S SWIFT SYSTEM

On 18th February, the Union Bank issued a news release providing a little more details of the theft via the SWIFT system, and reassuring that the bank’s SWIFT payment system is back to normal after ensuring adequate enhanced security is in place.

www.mondovisione.com/media-and-resources/news/cyber-attack-on-city-union-banks-swift-system/

See previous posting –

INDIA’S CITY UNION BANK SAYS HIT BY FRAUDULENT REMITTANCES VIA SWIFT SYSTEM

Reuters on 17th February reported that India’s City Union Bank said it had suffered 3 “fraudulent remittances” of nearly $2 million that had been pushed through the SWIFT financial platform.  It said the transfers had been made through correspondent banks even though the Indian lender had not requested the transfers. The Indian lender said it had been able to block one remittance of $500,000.  One for €300,000 was routed through a Standard Chartered Bank account in Frankfurt to a Turkish account, while a third totalling $1 million was sent through a Bank of America account in New York to a China-based bank.

https://uk.reuters.com/article/city-union-bank-swift/indias-city-union-says-hit-by-fraudulent-remittances-via-swift-system-idUKL4N1Q707X?rpc=401&

US SEEKS TO DOUBLE AK-47 SUPPLY TO SYRIAN PARTNERS

Al-Monitor via Real Clear Defense on 17th February reported that the Donald Trump administration is seeking to more than double the number of assault rifles it provides to Syrian Kurds and other US-backed fighters despite rising anger from NATO ally Turkey.  It claims that the Pentagon plans to give its Syrian partners — including the Syrian Democratic Forces (SDF) — more than 25,000 AK-47.  The low cost and accessibility of the Kalashnikovs make them easy for US-backed troops to sustain.  It says that the request more than doubles the 12,000 assault rifles the DoD requested for Syrian forces in the current fiscal year, even as the US plans to dole out fewer machine guns, mortars and sniper rifles.  Many of the US-supplied weapons used in Syria, including AK-47s, are sourced from Eastern European countries such as Bulgaria, Bosnia and the Czech Republic.

pentagon_counter_is_weapons_requests_for_syria
https://www.realcleardefense.com/2018/02/17/us_seeks_to_double_ak-47_supply_to_syrian_partners_300373.html

 

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THINGS YOU MAY HAVE MISSED – FEBRUARY 17

17th February 2018

MAJOR PROS AND CONS OF THORIUM NUCLEAR POWER REACTORS

On 16th February, the Nuclear Energy Business Review carried an article that starts by saying that to generate power, a nuclear reactor uses some fissile isotopes that include uranium-235, plutonium-239, and uranium-233.  Low-enriched uranium (LEU) is used widely in the nuclear power generation.  However, discovered in 1828 by the Swedish chemist Jons Jakob Berzelius, Thorium is a naturally-occurring nuclear fuel source.  The isotope uranium-233 produced from thorium is used to generate nuclear fission in a thorium-based nuclear power.  Due to its huge potential, thorium as fuel to generate nuclear power has attracted considerable attention.  The article claims that, as well as being abundant and producing less waste than other fuels, the risk of proliferation is reduced considerably.  This is because thorium-based power reactor fuel is a poor source for fissile material that can be used to make an explosive device illegally, U-233, which is present in the used thorium fuel.  It contains U-232 that can lead to a formation a strong gamma radiation field.  The creation of such a field enhance the traceability and ability to safeguard the material, thereby addressing proliferation issues.

http://nuclear.energy-business-review.com/news/major-pros-and-cons-of-thorium-nuclear-power-reactor-6058445

THE PLAYBOY WHO GOT AWAY WITH $242 MILLION – USING ‘BLACK MAGIC’

My Joy Online recounts a story from the BBC about Foutanga Babani Sissoko, colourful and mysterious businessman from a remote village in Mali, who managed to defraud the Dubai Islamic Bank by claiming black magic powers.  It says that Sissoko could soonfulfil his dream of opening an airline for West Africa. He bought a used Hawker Siddeley 125 and a pair of old Boeing 727.  This was the birth of Air Dabia, named after his village in Mali.  Then in July 1996, Sissoko made a serious mistake as he tried to buy 2 Huey helicopters dating from the Vietnam War, for reasons that remain unclear.  Because they could be refitted as gunships, the helicopters needed a special export licence, and a $30,000 bribe was offered to a customs officer. Interpol issued a warrant for Sissoko’s arrest too, and he was caught in Geneva, where he’d gone to open another bank account.  He was extradited to Miami and released on $20 million bail, then pleaded guilty and fined and served 20 days in jail.  Then a Dubai court sentenced him to 3 years for fraud and practising magic (!). Interpol issued an arrest warrant and he remains a wanted man.  Never brought to justice for his frauds, a BBC reporter tracked him down in Mali, surrounded by armed guards, and perhaps 70 years old, and he agreed to an interview.

http://myjoyonline.com/opinion/2018/February-16th/the-playboy-who-got-away-with-242m-using-black-magic.php

http://www.bbc.co.uk/news/stories-42878021

DRONE PARTS FROM US COMPANY ILLEGALLY EXPORTED TO HIZBALLAH

Fox 9 News in the US reports that 2 men have been arrested for allegedly illegally exporting parts used for unmanned aerial vehicles (UAV) and technology from the US to the terrorist group Hizballah in Lebanon.  Usama Hamade and Issam Hamade, both of Lebanon, are in custody in South Africa. Another man, Samir Ahmed Berro of Lebanon, has also been charged, but is not in custody.  In 2009-13 they conspired to export and attempt to export items and technology from unnamed companies in the US to Lebanon and Hizballah, including a jet engine, piston engines, recording binoculars and devices usable for UAV, including digital compasses. A digital compass can be used with another device, an inertial measurement unit or IMU, to make a usable guidance system for UAV.

http://www.fox9.com/news/charges-drone-parts-from-mn-company-illegally-exported-to-hizballah

OECD SUPPLY CHAIN GUIDANCE MOVES TOWARDS IMPLEMENTATION

The Just Style website on 16th February reports that clothing and textile companies are grappling with supply chain management guidance for the garment and footwear industries published by OECD in May 2017.  In January, the OECD Forum on Due Diligence in the Garment and Footwear Sector was held in Paris.  It was attended by governments, businesses, trade unions and NGO.  One NGO expressed the concern that some countries of concern, such as Bangladesh and Cambodia, are not OECD members.

https://www.just-style.com/analysis/oecd-supply-chain-guidance-moves-towards-implementation_id132867.aspx

See also the Corporate Human Rights Benchmark (CHRB) (CHRB) released its results at an event in London in March 2017.   The Benchmark ranks 98 of the world’s largest publicly traded companies on human rights performance.

https://business-humanrights.org/en/chrb

The OECD Due Diligence Guidance for Responsible Business Conduct: Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector.

http://mneguidelines.oecd.org/OECD-Due-Diligence-Guidance-Garment-Footwear.pdf

SRI LANKA IS SETTING OUT FRAMEWORK TO BE REMOVED FROM BLACKLISTS

Colombo Page on 17th February reported that the Sri Lanka Central bank claims to have set out a sound framework to bring the commitment and coordination of all the stakeholders in the country to enhance the AML/CFT standards in order to improve its compliance and the country rating.  In July 2015 FATF recommended Sri Lanka to initiate a number of actions to rectify the AML/CFT deficiencies identified during a mutual evaluation review, and this year the EU added Sri Lanka to its blacklist.  It had been added to the FATF “grey list” in October 2017 as a jurisdiction with strategic AML/CFT deficiencies.

http://www.colombopage.com/archive_18A/Feb17_1518851961CH.php

FORMER WATFORD CHAIRMAN TO APPEAR IN SPANISH COURT AFTER ALLEGED INVOLVEMENT IN MONEY LAUNDERING CASE

First Post on 17th February reported that the ex-chairman of Premier League club Watford has been charged and called to appear in court in Spain in relation to tax fraud involving second-tier club Granada.  The Italian Raffaele Riva is suspected of involvement in “presumed irregularities” committed by former Granada president Enrique Pina and ex-club owner Gino Pozzo “as well as the companies and clubs linked to them).

www.firstpost.com/sports/former-watford-chairman-to-appear-in-spanish-court-after-alleged-involvement-in-money-laundering-case-4355219.html

‘CURTIS WARREN’S SUCCESSOR’ WALKS FREE AFTER ADMITTING £69,000 OF MONEY LAUNDERING

On 16th February, the Liverpool Echo reported that a “drugs baron” once described as the successor to Curtis Warren walked free from court after admitting a £69,000 money laundering charge.  John Parry became a millionaire after stepping into the shoes of Merseyside’s most infamous drug dealer when Warren was locked up in 1997 and was jailed for 17 years in 2002.

https://www.liverpoolecho.co.uk/news/liverpool-news/curtis-warrens-successor-walks-free-14300899

NIGERIAN UAV (DRONE) UNVEILED

On 16th February, Defence Web reported that the Nigerian Air Force has unveiled a new indigenously produced unmanned aerial vehicle (UAV), the Tsaigumi, which will be used to enhance its Intelligence, Surveillance and Reconnaissance (ISR) capabilities.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50755:nigerian-air-force-unveils-new-indigenous-uav&catid=35:Aerospace&Itemid=107

http://www.janes.com/article/77980/nigerian-air-force-to-develop-armed-uav

SOUTH AFRICA – AJAY GUPTA HAS LEFT COUNTRY

Defence Web on 16th February reported that Ajay Gupta, one of the 3 Gupta brothers under investigation over accusations of corrupt links to ousted South African president Jacob Zuma, left the country for Dubai 10 days previously, a Johannesburg airport spokeswoman said.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50766:ajay-gupta-left-safrica-on-dubai-bound-flight-on-feb-6&catid=49:National%20Security&Itemid=115

PNB SCANDAL IN INDIA: NIRAV MODI FRAUD INVESTIGATION MAKES FIRST ARRESTS

On 17th February, the BBC carried a report saying that 3 people have been arrested on suspicion of helping a billionaire jeweller to defraud one of India’s largest banks of millions.  Nirav Modi, a diamond broker and luxury jeweller to celebrities, is being investigated in a $44m fraud case at Punjab National Bank (PNB).  India’s federal police arrested 2 bank officials and a business associate of Mr Modi’s.  Mr Modi has not yet commented on the case, and no charges have been filed.

http://www.bbc.co.uk/news/world-asia-india-43098228?src=ilaw

PAPERLESS JUSTICE EXPANDS TO TAX BILL APPEALS IN UK

On 17th February, the Law Society Gazette reported that the MoJ is going ahead with its £1 billion court modernisation plans by allowing online appeals to the First-tier Tax Tribunal (FTT).  People unhappy with their bill will no longer have to print out, manually fill in and post their forms, it said.  The ministry says more than 2,000 people have already benefitted from the ‘quicker, streamlined’ system, with almost a third of appeals being made online since the initiative was introduced in June last year.  The new system allows people to appeal decisions made by HMRC in relation to all appeals to the FTT.  In some circumstances, applicants must already have lodged an appeal with HMRC.  A judge will consider the appeal and, if necessary, proceed the case to a hearing. The forms spell out what steps applicants must have already taken.

https://www.lawgazette.co.uk/law/paperless-justice-expands-to-tax-bill-appeals/5064867.article

https://www.gov.uk/government/news/appeal-your-tax-bill-online

INDIA’S CITY UNION BANK SAYS HIT BY FRAUDULENT REMITTANCES VIA SWIFT SYSTEM

Reuters on 17th February reported that India’s City Union Bank said it had suffered 3 “fraudulent remittances” of nearly $2 million that had been pushed through the SWIFT financial platform.  It said the transfers had been made through correspondent banks even though the Indian lender had not requested the transfers. The Indian lender said it had been able to block one remittance of $500,000.  One for €300,000 was routed through a Standard Chartered Bank account in Frankfurt to a Turkish account, while a third totalling $1 million was sent through a Bank of America account in New York to a China-based bank.

https://uk.reuters.com/article/city-union-bank-swift/indias-city-union-says-hit-by-fraudulent-remittances-via-swift-system-idUKL4N1Q707X?rpc=401&

GIBRALTAR MARKS 25TH YEAR OF HNWI RESIDENCY SCHEME

Tax News on 17th February reported that Gibraltar is marking the 25th year of its special tax residency program for high-net-worth individuals, known officially as Category 2 status, which limits taxation on worldwide income to a maximum of £30,000 per year.  Individuals with net assets in excess of £2 million are able to establish residency in Gibraltar under the scheme provided they have not been resident in the past 5 years.  They are free to choose whether to rent or purchase a residence.

https://www.lowtax.net/news/Gibraltar-Marks-25th-Year-of-HNWI-Residency-Scheme_76407.html

 

LUXEMBOURG: A JURISDICTION OF CHOICE FOR THE MARITIME INDUSTRY

On 15th February, law firm Loyens and Loeff published an article saying that Luxembourg has always been on the shortlist as a jurisdiction of choice for the maritime industry.  The proximity to the harbours of Antwerp, Zeebrugge and Rotterdam plays an important role in Luxembourg attractiveness.  Many important ship-owners, classification companies and maritime suppliers are located in Luxembourg.

https://www.loyensloeff.com/en-us/news-events/brochures/luxembourg-a-jurisdiction-of-choice-for-the-maritime-industry

SHIFTING LEGAL PARADIGMS IN THE REGULATION OF MEDICAL MARIJUANA IN THE US

An article in Jurist on 17th February discusses the recent reversal of US federal legal guidance on the enforcement of federal law in respect of marijuana.

http://www.jurist.org/forum/2018/02/Hodge-Piatt-Wetter-Hess-Medical-Marijuana.php

LATVIAN MEDIA SAY CENTRAL BANK CHIEF’S OFFICE RAIDED

The Seattle Times on 17th February reported that Latvia’s state broadcaster says the national anti-corruption agency (KNAB) has raided the office and a property of the head of the country’s central bank, Ilmars Rimsevics.

https://www.seattletimes.com/business/latvian-media-say-central-bank-chiefs-office-raided?src=ilaw

DIAMONDS TO DUST: HERE ARE THE DIAMOND TYCOONS WHO GOT EMBROILED IN CONTROVERSIES
The Economic Times in India has an interesting feature providing summaries of various “diamond tycoons” who became embroiled in controversies – Nirav Modi (re the current PNB bank scandal); Alejandro Mendieta; Jatin Mehta; Hanan Abramovich; Michel Desaedeleer; Barry Steinmetz; Bharat Shah.  Worth a read.

https://economictimes.indiatimes.com/articleshow/62963911.cms?src=ilaw&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ANALYSING A SCAM COIN AND INITIAL COIN OFFERING (ICO)

BTC Manager on 17th February produced an interesting article which begins by saying that scams are unfortunately commonplace in the cryptocurrency world and can be attributed to the lack of regulation that has plagued the sector for the last 9 years.  This article will serve as a how-to approach for analysing a coin while also implementing this approach on a specific coin, Skycoin is one of many currencies with little purpose with definite red flags that scream “SCAM!” to conscientious investors. It asks:

  • Why are scams prevalent in cryptocurrency?
  • What is “hard forking” and “soft forking”?
  • What are token releasing platforms?

The article says that, with minimal consumer protections and initial coin offerings (ICO) coming from across the world, investors need to proceed cautiously, and it then goes on to analyse Skycoin to demonstrate how easy it is to stumble onto a scam coin, the use (misuse) of social media.

https://btcmanager.com/analyzing-scam-coin-skycoin-scam-not/

Meanwhile –

SWITZERLAND SETS OUT GUIDELINES TO SUPPORT INITIAL COIN OFFERINGS (ICO)

Customs Today on 17th February reports that Switzerland’s financial supervisor has bucked the trend of global regulators cracking down on cryptocurrencies by announcing guidelines that should help local initial coin offerings, where start-up companies sell digital tokens to investors.

http://www.customstoday.com.pk/switzerland-sets-out-guidelines-to-support-initial-coin-offerings/

UK WASTE EXPORTERS IN CRISIS BECAUSE OF CHINA BAN

Customs Today on 17th February reported that China’s ban on the import of recyclable material has pitched exporters in the UK into a desperate scramble to find new markets for an estimated 80,000 TEU a year in what UK Recycling Association CEO Simon Ellin has labelled a crisis.  Finding and developing supply lines to these new markets is urgent as they can accommodate far less volume than China and are fast filling up with major exporters from the world’s top 3 supplying countries — the US, UK, and Japan — all trying to source alternative destinations for their recycled waste.

www.customstoday.com.pk/uk-waste-exporters-in-crisis-because-of-china-ban/

THAILAND IRIS SCANNING EFFORT TO COMBAT SLAVE LABOUR IN FISHING

On 17th February, Customs Today reported that Thailand has been using optical scanning technology on workers in its fishing industry since October to help it combat slave labour and human trafficking, with optical scanning to 70,000 people who work on fishing boats so that authorities can track their identity.

http://www.customstoday.com.pk/thailand-iris-scanning-effort-to-combat-slave-labor-in-fishing/

NEW ZEALAND TAX FRAUDSTER GRANTED PAROLE ON FIFTH ATTEMPT

Customs Today on 17th February reports that a Wellington accountant who received the country’s longest sentence for tax fraud, has been granted parole on his fifth attempt.  In 2012, Barrie Skinner was convicted of 80 counts of dishonesty using a document, 7 charges of attempting to pervert the course of justice and 5 of providing false information to Inland Revenue, having run a false invoicing scam.  Skinner was jailed for 8½ years, and a co-accused David Rowley for 8 years in August 2012.  At the time they were the longest sentences ever imposed for such offending.

http://www.customstoday.com.pk/tax-fraudster-granted-parole-on-fifth-attempt/

US BIPARTISAN EXPORT CONTROL REFORM BILL

The US House of Representatives Foreign Affairs Committee released a news release on 15th February which reports that Foreign Affairs Committee Chairman Ed Royce (R-CA) had introduced bipartisan legislation to modernize US export control regulations of dual-use items.  The Export Control Reform Act 2018 will help ensure the US maintains its technological advantage in science, engineering, manufacturing and other industries critical to our national and economic security.  This Bill is said to represent the first real push to establish permanent export controls since the Cold War-era Export Administration Act of 1979 (EAA) lapsed in 2001.  The Bill –

  • Repeals the lapsed EAA and replaces it with a modern, permanent statutory authority to better regulate US dual-use and Department of Commerce-licensed military exports.
  • Requires that export controls ensure continued US leadership in science, technology, engineering, manufacturing and other sectors.
  • Provides new authority to identify and appropriately control critical emerging technologies.
  • Supports US diplomatic efforts to promote greater international coordination and cooperation on export controls.

https://foreignaffairs.house.gov/press-release/royce-introduces-bipartisan-export-control-reform-bill/

A detailed breakdown of the Bill is at –

https://foreignaffairs.house.gov/wp-content/uploads/2018/02/HR-5040-Section-by-Section.pdf

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HOW A FRENCH FRAUDSTER CLIMBED THE WORLD OF INTERNATIONAL ARMS DEALING

OCCRP carried an article saying that Pierre Konrad Dadak rose from a small-time Parisian fraudster to become a top representative for one of Central Europe’s biggest arms companies, a state-owned Polish concern, Burmar – now known as Polski Holding Obronny (Polish Defense Holding), which employs roughly 17,000 people in more than 60 companies that produce weapons, including tanks and ammunition, as well as industrial equipment. His own companies were the Polietica network of companies, supposedly involved in plastics.  The Spanish police who arrested Dadak in 2016 believed he is a global arms trafficker, in bed with the French gangsters, and engaged in sanctions-busting, with arms deals arranged (whether or not fulfilled) for such places as South Sudan.  His former business partners say his arms deals were fakes, designed to defraud them of money (Polish Defense Holding said that Dadak did not complete any sales in the nearly 3 years he worked as a contractor for the company, and reporters were unable to independently find any instances in which Dadak had successfully made a sale).  Either way, high-level connections in his ancestral Poland appear to have protected him. Although Spanish authorities continue to investigate him for crimes including fraud and money laundering, Dadak was released on bail late last year.  He is barred from leaving the country.  A separate arms trafficking case is languishing, this being said to be due to distrust between European law enforcement agencies.  He was released on a €30,000 bail in December 2017.  He is currently living in Ibiza, his passport confiscated, while investigators continue putting together the case for a likely future trial.

A fascinating article, with documents obtained under freedom of information requests, samples contracts, Dadak’s passport etc.

https://www.occrp.org/en/theatreofwar/

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PACNET – MILLIONS SOUGHT FROM VANCOUVER COMPANY ACCUSED OF PROCESSING MAIL FRAUD PAYMENTS

Yahoo News and CBC report on 16th February that, months after the US Treasury lifted a label placing Vancouver’s PacNet Services alongside some of the world’s most violent criminal organisations, the payments processor is facing a lawsuit from British Columbia’s Director of Civil Forfeiture.  The documents specifically cite an international scheme which saw victims send money to psychic ‘Maria Duval’ in exchange for promises of good fortune.  The lawsuit against PacNet, founder Rosanne Day and 5 other people is the latest twist in a situation that made international headlines in September 2016.  But last October 2017, the Treasury lifted the designation.  Paul Davis, the company’s general counsel, told an Isle of Man radio station that the business was “utterly destroyed”.  The director of civil forfeiture claims Day and the others have used unlawfully gained money to purchase properties in Vancouver, Gibsons, West Vancouver, Keats Island and Delta.

https://ca.news.yahoo.com/millions-sought-vancouver-company-accused-141500681.html

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20171004.aspx

https://www.treasury.gov/press-center/press-releases/Pages/jl5055.aspx

 

Featured

THINGS YOU MAY HAVE MISSED – FEBRUARY 16

EYES ON THE PRIZE: INDIA’S PURSUIT OF MEMBERSHIP IN THE NUCLEAR SUPPLIERS GROUP

On 13th February, the Carnegie Center published an article asking what does India expect to attain by joining the Nuclear Suppliers Group (NSG), the world’s most important multilateral nuclear export control arrangement?  It argues that, unlike all the NSG participants, India is not a party to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT); and for the greater part of the NSG’s history, India deplored proliferation trade controls as a neo-colonialist, even racist, tool of humiliation and discrimination used by other, mostly Western states, to hinder India’s technological development.  Indeed, the article goes on to say, 4 decades ago the nuclear technology-holding countries formed the NSG in direct response to India having detonated a nuclear explosive device.  It was only in 2008 that the NSG lifted its embargo on nuclear trade with India (under pressure from the US). The article mentions concerns about nuclear-armed Pakistan and China, both regional rivals, as well as India’s aspirations for its civilian nuclear power programme and the desire for a heightened international status.

http://carnegieendowment.org/2018/02/13/eyes-on-prize-india-s-pursuit-of-membership-in-nuclear-suppliers-group-pub-75535?mkt_tok=eyJpIjoiTldZMU9UUm1NMkl3WlRObCIsInQiOiJ3dGJVWWY4bVZmdDdOY2lmWDZCWERaUlwvXC9LWWxENlM5c2o1QmJ6d1dlaXh0UnFiRGxqMXM3NmlROEd0OEFKb3pvR3Z1aFd3TzZNN0MrZ1NydW8xbnR4K1pacVdRR2wrSWpuYyt2NUduSytmMnRac2VYQ1dwTm1RcjlucFwveGV5YyJ9

INDIA’S NUCLEAR PROGRAMME AND NON-PROLIFERATION REGIME

Meanwhile, an opinion piece in Eurasia Review begins by saying that the Indian nuclear programme is taking full advantage of the 2008 NSG decision under the US initiative to exempt India from the restrictions on the supply of nuclear fuel and equipment to non-NPT countries; and that the Indo-US civil nuclear agreement is an active exemplar in this regard that undermines the global non-proliferation regime.  The article repeats allegations that that India’s first nuclear test was actually a device derived from Canadian and US exports, designated purely for peaceful purposes.  As the Carnegie article had said, that test had prompted the creation of the NSG and to more severely restrict global nuclear trade. India’s nuclear programme is largely plutonium based, the article says, its uranium reserves are apparently shown to be low for civil nuclear usage, and are actually low for military usage.  The article argues that India does ot meet the criteria for full NSG membership, not being party to the NPT, nor having satisfactory separation between its civil and military nuclear programmes.

https://www.eurasiareview.com/15022018-indias-nuclear-program-and-non-proliferation-regime-oped/

THE NIGERIAN FIU CONTROVERSY

This Day Live in Nigeria on 15th February reported that the suspension in July 2017 of Nigeria from the Egmont group of FIU, following failure to grant operational autonomy to the Nigerian Financial Intelligence Unit (NFIU) was bad news for the financial sector.  Nigeria had been fully admitted into Egmont in 2007, and membership paved the path for the removal of Nigerian banks from the blacklist of international finance.  The article refers to the risk of other agencies like FATF blacklisting and categorising Nigeria as a non-cooperative territory which will further put the country under intense financial pressure.  The authorities, it says, must intervene quickly to resolve whatever the problems are so that Nigeria is not suspended.  Expulsion from Egmont could happen at the next meeting of the group in March, and the news that the Senate and House Committees on Anti-Corruption are unable to harmonise their different versions of the NFIU Bill that would grant NFIU independence is a concern.

https://www.thisdaylive.com/index.php/2018/02/16/the-nfiu-controversy/

UKRAINE INTRODUCES E-LICENSING IN STATE EXPORT CONTROL SYSTEM

112 in Ukraine reports on 15th February on the Stratlink electronic licensing system for Ukraine’s state export control, introduced thanks to the support provided by the US government, under the Export Control and Related Border Security (EXBS) Programme.

https://112.international/finance/ukraine-introduces-e-licensing-in-state-export-control-system-25655.html

NEW US REQUIREMENTS FOR PROTECTING SENSITIVE GOVERNMENT DATA ADOPTED FOR GOVERNMENT CONTRACTORS

On 15th February, Troutman Sanders published an article that reports that, with effect from 31st December, the US government has implemented new DFARS regulations requiring that its contractors take enhanced measures to protect sensitive government information stored on non-governmental systems and networks, including information stored, accessed, or sent outside the US, and that government contractors handling sensitive federal government information must comply with cybersecurity requirements in this regard.  Under DFARS contractors must provide adequate security to safeguard covered defence information that resides in or transmits through their internal, unclassified systems from any unauthorised access and disclosure; and must rapidly report cyber incidents and cooperate with the Department of Defense to respond to these security incidents.  Specific requirements have also been imposed in respect of 14 areas of security and control.  Contractors should take these steps even when supplying DoD or the intelligence community with non-classified commercial off the self (COTS) products.

http://www.mondaq.com/unitedstates/x/673818/Government+Contracts+Procurement+PPP/New+Requirements+For+Protecting+Sensitive+Government+Data+Adopted+For+Government+Contractors+Is+Your+Company+In+Compliance

THE CHINESE STUDENT THREAT?

Inside Higher Ed in the US on 15th February posed this question in an article that begins by saying that the FBI director has told Senate panel that US academe is naïve about the intelligence risks posed by Chinese students and scholars. Some worry his testimony risks tarring a big group of students as a security threat.

https://www.insidehighered.com/news/2018/02/15/fbi-director-testifies-chinese-students-and-intelligence-threats

UK CUSTOMS AND EXCISE NEWSLETTER, FEBRUARY 2018

On 13th February, RPC published the latest edition of its Customs and Excise Newsletter.  In this it mentioned –

  • on 14th December, HMRC published its single departmental plan setting out its objectives and how they will be achieved, including making greater use of criminal prosecutions to tackle tax evasion. HMRC plans to increase the number of criminal investigations into serious and complex tax crime, focusing particularly on wealthy individuals and corporates, with the aim of increasing prosecutions in this area;
  • In November 2017, HMRC announced that it intends to update its Import Fraud Strategy, which was first released in 2015. HMRC is working with members of the Joint Customs Consultative Committee to gain input from trade into its strategy. It intends to finalise its strategy by March 2018; and
  • Smart Price Midlands and Hare Wines – HMRC must disclose documents relating to its decisions that certain companies were not “fit and proper” for registration as wholesalers of alcohol.

https://www.rpc.co.uk/perspectives/tax-take/customs-and-excise-quarterly-update-february-2018#page=1

SRI LANKA HOPES TO GET OFF FATF GREY LIST BY OCTOBER 2018

Economy Next on 16th February reports that the Sri Lanka Central Bank governor has said that it is hoped that the country’s action plan will remove the threat of FATF blacklisting, being currently under monitoring (or “grey list”).  It is said to be working on a time bound action plan to bring laws and supervision of non-bank firms like casinos and the gem industries, and has until March 2019 to puts its house in order.  The IMF warned in October 2017 that Sri Lanka was falling behind in complying with the FATF requirements.  The EU recently added Sri Lanka to its blacklist, and it is thought that the US may be anticipating doing the same.

http://economynext.com/Sri_Lanka_hopes_to_get_out_of_FATF_red_flag_by_October__CB_Governor-3-9891.html

BANK OF LITHUANIA ISSUES INSPECTION FINDINGS ON SWEDBANK

On 15th February, the Chicago Evening Post reported that, during autumn 2017, the Bank of Lithuania carried out an inspection related to Swedbank’s activities in the area of AML/CTF for the period January 2016 until March 2017.  The findings include deficiencies in internal control systems for money laundering prevention, processes and documentation.  Based on the results, Bank of Lithuania issued a warning to Swedbank and obliged to remedy identified deficiencies.  It is reported that Swedbank has already initiated actions to implement a series of measures aiming to improve its internal control systems, to ensure relevant CDD data and to enhance processes and routines.

http://chicagoeveningpost.com/2018/02/15/bank-of-lithuania-issues-inspection-findings-on-swedbank/

CANADA’S LAX LAWS LEAVE DOOR OPEN FOR MONEY LAUNDERING BY LATIN AMERICAN GROUPS

Insight Crime on 15th February carries an article that says that recent reports highlight a loophole in Canada’s laws on corporate registrations that could facilitate money laundering by Latin American crime groups, particularly if the US and other countries take action to close similar gaps in their own financial regulations.  As in many other countries, private corporations and trusts are not required to disclose the “beneficial owner”.  The article warns that Canada’s clean image on the international stage and its lax laws surrounding anonymous shell companies may be making the country an increasingly appealing haven for financial crime.

https://www.insightcrime.org/news/brief/canada-lax-laws-money-laundering/

ISLE OF MAN £4.3 MILLION VAT FRAUD CASE

On 16th February, Isle of Man Today reported that a local man had been charged with evasion of £4.3 million in VAT 2010-15.

http://www.iomtoday.co.im/article.cfm?id=38667&headline=%C3%82%C2%A34%2E3m%20VAT%20evasion%20case&sectionIs=news&searchyear=2018

SLOVENIA: NEW REPORT ON COMBATTING HUMAN TRAFFICKING

A report from GRETA, the Council of Europe’s anti-trafficking expert group notes improvements in legislation and practices to combat human trafficking in Slovenia since the publication of the first report in January 2014, and said that more should be done to help victims.  GRETA calls on the authorities to ensure that access to assistance for victims is not made conditional on their co-operation in the investigation, to pay increased attention to detecting victims of trafficking among asylum seekers and foreign workers, and to adopt measures to facilitate and guarantee access to compensation for victims of trafficking.

https://www.coe.int/en/web/portal/-/slovenia-improvements-in-legislation-and-practices-to-combat-human-trafficking-more-should-be-done-to-help-victims

EU AMENDS ZIMBABWE SANCTIONS ENTRY FOR ROBERT MUGABE

EU Regulation 2018/223/EU from 16th February has updated the entry relating to Robert Mugabe to reflect his resignation.  See also Council Decision 2018/227/CFSP.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.043.01.0010.01.ENG&toc=OJ:L:2018:043:TOC

USTR REPORT BLASTS MAINLAND CHINA’S COMPLIANCE WITH WTO OBLIGATIONS

HKTDC on 15th February reports that Mainland China and Russia have failed to embrace the market-oriented economic policies championed by the WTO and are not living up to key commitments they made when they joined the WTO, according to the Office of the US Trade Representative’s annual reports on each economy’s compliance with WTO rules.

http://economists-pick-research.hktdc.com/business-news/freepdfdownloadservlet?articleID=1X0AD3Q1&LANGUAGE=en

MAINLAND CHINESE COMPANY CONVICTED OF TRADE SECRET THEFT

HKTDC on 15th February reports on the recent case where a manufacturer and exporter of wind turbines based in mainland China has been convicted in the US of conspiracy to commit trade secret theft, theft of trade secrets and wire fraud.  Sentencing is scheduled for 4th June.  It conspired with others to obtain the U.S. company’s proprietary wind turbine technology to produce its own turbines (and retrofit existing turbines) powered by the stolen technology.

http://economists-pick-research.hktdc.com/business-news/freepdfdownloadservlet?articleID=1X0AD3J8&LANGUAGE=en

US IMPORTS OF ALL REMAINING FENTANYL-RELATED SUBSTANCES RESTRICTED, CONTROLS ON SYNTHETIC CANNABINOID EXTENDED

On 15th February, HKTDC reported that the DEA has issued an order covering all fentanyl-related substances that are not currently listed, including those that have not yet been introduced into the US market, along with their isomers, esters, ethers, salts and salts of isomers, esters and ethers.  It covers import, export, manufacture, distribution, reverse distribution and possession.  Separately, the DEA has issued a final rule relating to synthetic cannabinoid N-(1-amino-3-methyl-1-oxobutan-2-yl)-1-(cyclohexylmethyl)-1H-indazole-3-carboxamide (MAB-CHMINACA), including its optical, positional and geometric isomers, salts and salts of isomers.

http://economists-pick-research.hktdc.com/business-news/freepdfdownloadservlet?articleID=1X0AD3I9&LANGUAGE=en

UKRAINIAN “MERCENARIES” USING SCOTTISH “TAX HAVEN” FIRM AS FRONT

The Herald reported on 16th February that “mercenaries” from the former Soviet Union are using an Edinburgh shell firm as a front, The Herald can reveal.  Unidentified individuals who appear to be based in Ukraine have set up a Scottish limited partnership or SLP to hire armed guards for merchant ships in the world’s most dangerous waters.  The firm, Sea Force Group, late last year advertised in Russian for former soldiers and police officers willing to take to the high seas to fight pirates for just £650 a month.  Its owners have failed to comply with AML beneficial ownership rules under which they had until August to identify themselves or face daily fines of up to £500.  It reports that Sea Force Group LP was set up in 2016. Its website, registered in Ukraine in that same year, says the business has been trading since 2011.  The site claims Sea Force Group is a maritime security company based in the UK with ‘hubs’ in the Middle East and Africa.

www.heraldscotland.com/news/crime_courts/15998656.Ukrainian_mercenaries_are_using_Scottish____tax_haven____firm_as_front/

MANY UK BUSINESSES ARE STILL AT RISK FROM TAX CORPORATE CRIMINAL OFFENCE

Out-Law on 15th February reports that 4 months after it became a criminal offence for a business to have an employee or other ‘associated person’ who facilitates tax evasion, many businesses have still not got the policies and procedures in place that could protect them.

https://www.out-law.com/en/articles/2018/february/many-businesses-are-still-at-risk-from-tax-corporate-criminal-offence/

SEC CYBER UNIT TARGETS PLEXCOIN

On 15th February, Proskauer published an article about how the SEC’s new Cyber Unit announced it obtained an emergency asset freeze to halt the initial coin offering (ICO) of PlexCoin.  According to the SEC, the Plexcoin ICO had raised up to $15 million to date through the fraudulent sale of unregistered securities.

https://www.jdsupra.com/legalnews/sec-cyber-unit-targets-plexcoin-37942/

SEC BLOCKS SALE OF CHICAGO EXCHANGE TO CHINESE INVESTORS

Law 360 on 15th February reported that the SEC rejected the politically sensitive sale of the Chicago Stock Exchange to a group of Chinese investors, citing “unresolved questions” over the proposed ownership structure and concerns for the regulatory agency’s ability to maintain oversight of the exchange after the sale.

https://www.law360.com/articles/1013307/sec-nixes-sale-of-chicago-exchange-to-chinese-investors

HEDGE FUND OWNER CONVICTED OF $4 MILLION FRAUD

On 15th February, Law 360 reported that Nicholas Lattanzio, a hedge fund owner and manager of Black Diamond Capital Appreciation Fund LP, has been found guilty in New Jersey federal court of defrauding 2 investors out of about $4 million and spending most of those funds on what prosecutors said was a lavish lifestyle that included a $1 million home and a roughly $100,000 diamond ring.

https://www.law360.com/articles/1013094

CONVOY FREEZES FORMER DIRECTORS’ BVI ASSETS

International Adviser on 16th February reported that the former director of troubled Convoy Global has had his assets on the BVI frozen, with the firm also filing a writ against him and 12 others, demanding they pay £16 million in compensation. The writ claims compensation is owed by former director Cho Kwai-chee and 12 others, and follows 2 others that were filed in late December against Cho, former chairman Quincy Wong-Lee Man and 26 others for transferring assets from Convoy to their related parties and companies.

https://international-adviser.com/convoy-freezes-former-directors-virgin-islands-assets/

FINCEN PENALISES US BANK FOR VIOLATIONS OF AML LAWS

On 15th February, FinCEN announced a $185 million civil money penalty against US Bank for wilful violations of several provisions of the Bank Secrecy Act (BSA).  Allegedly, US Bank capped the number of alerts its automated transaction monitoring system would generate to identify only a predetermined number of transactions for further investigation, without regard for the legitimate alerts that would be lost due to the cap, systemically and continually devoted an inadequate amount of resources to its AML programme, and also had an inadequate process to handle high-risk customers.

https://www.fincen.gov/news/news-releases/fincen-penalizes-us-bank-national-association-violations-anti-money-laundering

SINGAPORE: REGULATOR TO LAUNCH REVIEW INTO BANKING CULTURE AND CONDUCT

KYC 360 on 15th February reported that the Monetary Authority of Singapore (MAS) is to launch a review into the behaviour of financial intuitions and fund managers, as part of efforts ‘to try to better understand how workers embed culture into their everyday lives.’

https://kyc360.com/news/singapore-regulator-launch-review-banking-culture-conduct/

EU COUNTER-TERRORISM CO-OPERATION WITH TUNISIA AND MOROCCO

The European Council on Foreign Relations on 15th February published a briefing on how European countries have worked closely with Morocco and Tunisia on security, providing training and equipment for counter-terrorism and conducting some joint operations with Morocco.  It argues that both countries face problems in handling radicalised individuals – and they have failed to develop systematic approaches to curbing radicalisation and addressing conditions that facilitate it, and that European states should devote more effort to joint programmes to fight radicalisation.

http://www.ecfr.eu/publications/summary/the_southern_front_line_eu_counter_terrorism_cooperation#intro

There is also a Youtube video about the report –

https://youtu.be/5omvUVUTaeg

US SENATE HEARING ENTITLED “EXAMINING DE-RISKING AND ITS EFFECT ON ACCESS TO FINANCIAL SERVICES”

On 15th February the Senate Financial Services Committee held a hearing and this is available as a video on the website

https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=402991

YOU TUBE AND INSTAGRAM THREATENED IN RUSSIA

On 16th February, Medium published an article on how a scandal involving an oligarch, a politician, and an escort provider caused a social media censorship call linked to a requirement to delete photos and videos of Russian businessman Oleg Deripaska on a yacht cruise with Deputy Prime Minister Sergei Prikhodko and escort provider Nastya Rybka (Anastasia Vashukevich).  In an unprecedented move, he Russian government’s media and telecommunications watchdog agency Roskomnadzor threatened to shut down the platforms in Russia all together if 14 posts and 7 videos were not deleted.

https://medium.com/dfrlab/influenceforsale-youtube-and-instagram-threatened-in-russia-3b9f9c584444

TIMELINE: HOW LIBYA’S REVOLUTION CAME UNDONE

On 15th February, the Atlantic Council published an article providing a chronological listing of events since 2011.

http://www.atlanticcouncil.org/blogs/new-atlanticist/timeline-how-libya-s-revolution-came-undone

AN ABUNDANCE OF SANCTIONS BILLS MAY BE CONSTRAINING FOREIGN POLICY

On 14th February, an article from the Center for New American Security starts by pointing out the growth in sanctions lists in the US – the list of government-imposed sanctions against people, businesses and countries had grown by over 2,250 to 4,600 by the time George W Bush left office. In 8 years, Obama saw the number grow by more than 1,000 and Trump — in just his first year — has already added about 500 to the list.  However, it warns that US Treasury staff dedicated to maintaining and updating this blacklist, as well as co-ordinating sanctions policy with other US agencies and foreign governments, have not been able to keep up.  The article warns that sanctions that are rushed through Congress without proper legal grounding could be overturned in US courts, and those that are so tightly imposed by Congress run the risk of stripping US foreign policy of the nuance, nimbleness, and flexibility it needs to be successful.

https://www.cnas.org/press/in-the-news/an-abundance-of-sanctions-bills-may-be-constraining-foreign-policy

OBSCURE DEALS AND DEAD-ENDS: THE DARK SIDE OF HUNGARIAN PUBLIC PROCUREMENT

On 16th February Transparency International in Hungary carries a short piece saying that Hungary has been all over the international press in the last few days for allegations of cronyism amongst the ruling elite. Millions of euro in public funds have allegedly ended up in the pockets of friends and family of Prime Minister Viktor Orbán.

https://voices.transparency.org/obscure-deals-and-dead-ends-the-dark-side-of-hungarian-public-procurement-e06e930c7177

HEAD OF OAS ANTI-CORRUPTION MISSION IN HONDURAS RESIGNS

Reuters on 16th February reported that the head of the Organization of American States’ anti-corruption mission in Honduras said on 15th February that he would resign over a lack of support from authorities in the Central American country and clashes with OAS leadership.  The Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH) was created by the OAS in 2016 at the request of the Honduran government.  The request followed months of popular marches demanding investigation of corruption.

https://www.reuters.com/article/us-honduras-corruption/head-of-oas-anti-corruption-mission-in-honduras-resigns-idUSKCN1G00A2

NORWEGIAN $1 TRILLION SOVEREIGN WEALTH FUND CRACKS DOWN ON CORRUPTION IN ITS PORTFOLIO

On 13th February, Bloomberg reported that the world’s biggest sovereign wealth fund has signalled it will get tougher in weeding out companies from its portfolio that don’t live up to a set of anti-corruption standards it has set.  Norway’s $1 trillion fund owns 1.4% of all listed companies and actively pushes for higher environmental, social and governance standards for its vast portfolio.  The fund said it expects companies to establish clear policies on anti-corruption, integrate measures into their operations and report and engage on anti-corruption programmes.

https://www.bloomberg.com/news/articles/2018-02-13/world-s-largest-wealth-fund-to-push-companies-on-anti-corruption

EU STATES STAY MUTE ON IMPLEMENTATION OF MERCURY CONTROLS

EU Observer on 16th February reported that 25 of the EU’s 28 Member States have neglected to inform the European Commission how they would punish breaches of a new EU Regulation, which aims to limit the use of mercury, despite legal deadlines having passed.  Only Denmark, Germany, and the UK have sent the Commission documents outlining the penalties related to the mercury Regulation.

https://euobserver.com/environment/141003

GAMBLING-ADDICTED TRADER CHARGED WITH STEALING $2 MILLION IN BITCOIN FROM EMPLOYER

Gambling 911 on 16th February reported that a Chicago-based trader, Joseph Kim, 24, claims he intended to return approximately $2 million worth of Bitcoin after covering his own trading losses.  He was found out before that could happen.  The trader at Consolidated Trading LLC, was charged by the US federal authorities with wire fraud for the theft of $2.06 million in Bitcoin and Litecoin from his employer in a 2-month period in 2017.

http://www.gambling911.com/video/gambling-addicted-trader-charged-stealing-2-million-bitcoin-employer-.html

FORMER ALBANIA PROSECUTOR DENIES CORRUPTION ALLEGATIONS

On 16th February, Top Channel TV reported that the former Albanian Prosecutor General, Adriatik Llalla, recently banned from entering the US, has denied the accusations of corruption saying that he has never been investigated by Albanian authorities.  According to Llalla, the decision for banning him and his family from the USA comes after a conflict with the US Ambassador to Tirana, Donald Lu.

http://top-channel.tv/english/llalla-us-ban-based-on-my-conflict-with-ambassador-donald-lu/?src=ilaw

US DOJ CHARGES 13 RUSSIANS, 3 GROUPS WITH INTERFERING IN 2016 ELECTION

UPI on 16th February announced that the DoJ had issued indictments against 13 Russian nationals and 3 Russian groups that charges them with criminally interfering in the 2016 US presidential election.  The charges, announced by Deputy US Attorney General Rod Rosenstein, include conspiracy to defraud the US, conspiracy to commit wire and bank fraud and aggravated identity theft.

https://www.upi.com/Top_News/US/2018/02/16/Justice-Dept-charges-13-Russians-3-groups-with-interfering-in-2016-election/8391518805324/?src=ilaw&utm_source=sec&utm_campaign=sl&utm_medium=3

For the text of the 13 indictments see –

https://www.theatlantic.com/politics/archive/2018/02/rosenstein-mueller-indictment-russia/553601/?src=ilaw

CALIFORNIA WEED ENTREPRENEURS WILL MAKE $5.2 BILLION IN 2018 WITH ALMOST NO BANKS TO PUT IT IN

On 26th November, Forbes had published this article (by Julie Weed – no, really) saying that California cannabis entrepreneurs will earn $5.2 billion in revenue in 2018 as recreational use becomes legal.  However, she writes that financial institutions need to go on record with FinCen when they establish a relationship with a known Marijuana Related Business, and Karnes estimates that just 5% of all banks have done that.

https://www.forbes.com/sites/julieweed/2017/11/26/california-weed-entrepreneurs-will-make-5-2b-in-2018-with-almost-no-banks-to-put-it-in/#771733c14e52

UK AMENDS ZIMBABWE SANCTIONS TO REFLECT RESIGNATION OF MUGABE

On 16th February, HM Treasury issued a news release announcing that the details of Robert Mugabe had been changed in line with EU Regulation 2018/223/EU.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/682157/2018.223_zimbabwe.pdf

The Isle of Man followed suit the same day –

https://www.gov.im/news/2018/feb/16/financial-sanctions-zimbabwe/

LEEDS BUSINESSMAN DODGED £65,000 TAX DUTY ON HALF A TON OF SHISHA TOBACCO

The Yorkshire Post on 16th February reported that a Leeds businessman avoided paying more than £65,000 of duty on half a ton of flavoured shisha tobacco. Officers from HMRC in 2016 found a container full of the product when they went to a storage warehouse in Leeds that belonged to Mehdi Jahani. Officers discovered a further 83 kg of shisha tobacco at his home.
https://www.yorkshirepost.co.uk/news/leeds-businessman-dodged-65-000-tax-duty-on-half-a-ton-of-shisha-tobacco-1-9021080

CROATIAN SOJOURN TAX

On 16th February, Superyacht News published an article explaining this tax that every yacht that enters Croatia and berths in a marina will have to pay before they are free to cruise in Croatian waters.  It explains that there are 2 criteria that determine the amount that is owed by private vessel.  Firstly, the rate is dependent on the size of the vessel.  Secondly, the rate will vary depending on the length of stay of the persons on board the vessel.

www.superyachtnews.com/business/italian-sojourn-tax-clarification

UK GOVERNMENT RESPONSE TO THE COMMISSION ON DORMANT ASSETS’ REPORT

On 16th February, the UK Government published its response to the March 2017 report of the Independent Commission on Dormant Assets that had been set up in 2016.  The Commission had been asked to report to government on which additional dormant assets could be brought into an expanded dormant assets scheme.  The Dormant Bank and Building Societies Accounts Act 2008 means that, at present, only assets from the banking sector can be transferred into the scheme.  The 2017 report found that there were potentially significant values of dormant assets in a range of financial services sectors which could be included in an expanded dormant assets scheme.  The Government response confirms its commitment to:

  • support industry to expand the dormant assets scheme to include a wider range of financial assets, potentially including the insurance and pensions, investment and wealth management, and securities sectors;
  • appoint senior industry champions to drive forward this industry-led initiative, and to report to Government on the details of implementation;
  • retain the main principles of the scheme, including that customers should be able to reclaim dormant money at any time and that firms’ participation in the scheme should be voluntary;
  • ensure that, where appropriate, certain assets remain outside the scope of the scheme; and
  • engage with Co-Operative Banking Group about the appropriate future governance structure for Reclaim Fund Ltd https://www.reclaimfund.co.uk/ whose role is to distribute surplus monies for the benefit of good causes across the UK and always hold sufficient funds to meet reclaims in perpetuity.

https://www.gov.uk/government/publications/government-response-to-the-commission-on-dormant-assets-report

CANADA IMPOSES SANCTIONS ON MYANMAR MILITARY CHIEF

On 16th February, the European Sanctions Blog reported that the Canadian Government has imposed targeted sanctions (asset freeze) against Burma’s former Major-General Maung Maung Soe under its Magnitsky law.  OFAC had already added Maung Maung Soe to its Global Magnitsky sanctions list on 21st December

https://europeansanctions.com/

VENEZUELA OIL COMPANY REPLACES EXECUTIVE OVER FEAR OF US SANCTIONS

The European Sanctions Blog on 16th February also reported that Venezuela’s state-owned oil and natural gas company PDVSA has replaced its Vice President of Finance, Simon Zerpa Delgado, reportedly over concerns that US sanctions on him had led to certain oil exports to the US being blocked.

https://europeansanctions.com/

US ACCUSES RUSSIAN FREIGHT FORWARDER OF SHIPPING ARMS

Loadstar on 16th February reported that a Russian freight forwarder, Instar Logistics, has denied allegations by the US Department of Commerce that it broke sanctions by shipping Kalashnikov weapons, and that Kalashnikov said it currently had a major focus on exporting, which could see other forwarders caught up in US regulations.  The latest OFAC designations, as well as the Bureau of Industry and Security entity list, named the forwarder and its customer service manager on its sanctions lists.

https://theloadstar.co.uk/us-accuses-russian-forwarder-instar-breaking-weapons-sanctions/

KENYA: ANTI-GRAFT COMMISSION ACTIVELY RECOVERING STOLEN CASH

OCCRP on 16th February reported that Kenya’s anti-corruption authorities say they will retrieve close to $3.7million that was taken illegally by former Kenya Power officials.  The Chief Executive of the Ethics and Anti-Corruption Commission made the announcement after the Commission received a framework for repatriating Kenyan corruption assets from Switzerland.  Some $2.2 million were frozen this year in Switzerland from another corruption related case pending in Kenya. The identities and details of the accounts still remain secret.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7651-kenya-anti-graft-commission-actively-recovering-stolen-cash

INDIA: SCAM INVOLVING DIAMOND-DEALER LEAVES STATE BANK REELING

OCCRP on 16th February carried an article about Punjabi National Bank (PNB), India’s second largest state-run lender, losing $1.41 billion — almost a quarter of its current market value — after disclosing an investigation into a $1.8 billion scam involving a powerful jewel merchant, Nirav Modi (no relation to India’s Prime Minister, Narendra Modi).

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7650-india-scam-involving-diamond-dealer-leaves-state-bank-reeling

PAKISTAN’S PROSECUTORS REQUEST TRAVEL BAN FOR THE SHARIFS

OCCRP reported on 16th February that Pakistan’s anti-corruption watchdog (NAB) has asked the interior ministry to make sure ousted premier Nawaz Sharif, his daughter and his son-in-law can’t leave the country since their trial is about to end and they could consider fleeing.  In July last year the Supreme Court ousted prime minister Nawaz Sharif after an investigation – prompted by the Panama Papers leaks – showed his daughter and 2 sons owned offshore companies registered in the BVI and used them to buy flats in London.  Sharif also failed to declare a monthly salary, equivalent to around $2,700, from a company owned by his son. He denies receiving the salary.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/7647-pakistan-s-prosecutors-request-travel-ban-for-the-sharifs

AEROMEXICO BECOMES FIRST AIRLINE TO JOIN BLUE HEART CAMPAIGN ON HUMAN TRAFFICKING

The UN Office on Drugs and Crime announced on 16th February that Aeromexico has joined the Blue Heart Campaign: #AquiEstoy contra la trata de personas (#HereIAm against trafficking in persons), becoming the first airline to promote this new awareness raising initiative.  #AQUIESTOY was launched by UNODC and the Government of Mexico as a national campaign in July 2017.  It aims to inform the public on human trafficking, to give a voice to victims, and to promote the national hot line. The campaign shows people’s outrage against human trafficking and encourages the public to think about their responsibility as consumers of goods and services.

https://www.unodc.org/unodc/en/frontpage/2018/February/aeromexico–primera-aerolnea-en-el-mundo-en-sumarse-a-la-campaa-corazn-azul.html?ref=fs2

US CUSTOMS INTERCEPTS ANCIENT ARTEFACTS AT MIAMI INTERNATIONAL AIRPORT

On 16th February, US Customs and Border Protection published a news release that said that officers and agriculture specialists at Miami International Airport recently intercepted 2 separate shipments containing ancient artefacts from Europe and Central America.  One of the shipments sent from the UK.  An expert appraiser was consulted and determined the item to be an authentic “Corinthian Helmet” dating back to 100-500 BC.  The second shipment was sent from El Salvador found to contain 13 individual pieces of pottery and figurines. The shipment manifest listed the contents as “Handicrafts”.  The items appeared to be pre-Columbian and CBP detained the shipment for appraisal and authentication. An expert appraiser recently concluded the items are of Mayan origin. Some of the items date back to 300 AD while others date back to 1200 AD.

https://www.cbp.gov/newsroom/local-media-release/cbp-intercepts-ancient-artifacts-miami-international-airport

AUSTRALIA: HUNDREDS OF IMITATION FIREARMS SEIZED AT THE BORDER

On 16th February, a news release from Australian Border Force warns online shoppers and firearms enthusiasts to be very clear about Australian laws after an increase of gel ball blasters seized at the border.  In the last 4 weeks alone, almost 200 gel ball blasters have been detected in air cargo consignments without import permission and seized by ABF officers.  Despite often being marketed online as toys, the devices are incredibly realistic, are able to fire projectiles and can be very dangerous. They are controlled as Imitation Firearms under customs laws.  Importers must obtain permission from their state or territory police before importing them into Australia.

http://newsroom.border.gov.au/channels/NEWS/releases/hundreds-of-imitation-firearms-seized-at-the-border

PALM OIL: ECONOMIC AND ENVIRONMENTAL IMPACTS

The EU Parliament Research Service has issued a briefing that starts by saying that, economical and versatile, palm oil has become the world’s most widely used vegetable oil.  However, its production comes at a heavy environmental cost, especially in Indonesia and Malaysia, the 2 main producers.  Efforts to make its production more sustainable still have a long way to go.

http://www.europarl.europa.eu/RegData/etudes/ATAG/2018/614706/EPRS_ATA(2018)614706_EN.pdf

BARCLAYS DOES NOT HAVE TO REPAY APARTHEID-ERA MONEY BACK TO SOUTH AFRICAN GOVERNMENT

KYC 360 on 16th February reported that a South African court has ruled that Absa, a subsidiary of Barclays Africa, will not need to repay loans taken from the apartheid government in the 1980s and 1990s.  South Africa’s anti-corruption watchdog, the Public Protector, had argued that the then government illegally issued bailouts to Bankorp, which was later acquired by Absa, and sought a repayment of around $83 million.

https://kyc360.com/news/barclays-africa-unit-wins-case-83m-s-africa-government-bailout/

IN US, FINRA WARNS OF SCAMMERS POSING AS REGULATORS

On 16th February, the Financial Industry Regulatory Authority (FINRA) in the US issued an Investor Alert warning investors to beware of financial scams in which con artists are posing as regulators to make fraudulent investment pitches.  It reports that financial fraudsters used FINRA’s name and logo in correspondence – including a fake signature from FINRA President and Chief Executive Officer Robert W. Cook – to create the false impression that FINRA provided guarantees related to an investment opportunity that was, in fact, an advance-fee scam.

imposter-scam-letter-example-large_1

http://www.finra.org/investors/alerts/imposter-scams-dont-be-fooled-guarantees-or-money-making-pitches-regulators

SEC ACTS AGAINST ISRAELI INDIVIDUALS, AND US-BASED ATTORNEY AND ACCOUNTING FIRM IN SHELL FACTORY SCHEME

On 16th February, Monde Visione reported that the SEC had announced charges against 3 Israeli residents, a Washington, DC attorney, and an Israeli auditor and his Maryland-based accounting firm for their roles in a fraudulent scheme in the creation of numerous public shell companies. The SEC alleged that they created at least 15 shell companies by filing false and misleading registration statements and periodic reports with the SEC, creating phony business plans, and appointing nominal officers and directors, who also acted as straw-man shareholders for the shell companies.   The defendants also conducted putative initial public offerings (IPO) of certain shell companies, but in reality, the defendants continued to control the companies’ shares and the defendants subsequently sold certain shell companies at a profit of more than $1.8 million.

www.mondovisione.com/media-and-resources/news/sec-obtains-bars-and-suspensions-against-individuals-and-accounting-firm-in-shel/

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THE KURDISH CHALLENGE THAT IS BEDEVILING THE US-TURKISH RELATIONSHIP

On 16th February, the Atlantic Council published a background article saying that US support for a Kurdish militia in Syria has become a point of contention in the US-Turkey relationship, and asking who are the Kurds and why is US support so contentious?  It explains a plethora of initials – explaining that the PKK used the US war on terrorism to branch out in the region and beyond.  In Syria, it created the Democratic Union Party (PYD) and its armed wing known as the People’s Protection Units (YPG). These organisations reside under the umbrella of the KCK — bringing it under direct command-and-control system of the PKK.  They seek to establish an autonomous democratic confederation along Turkey’s border with Syria.

http://www.atlanticcouncil.org/blogs/new-atlanticist/the-kurdish-challenge-that-is-bedeviling-the-us-turkish-relationship