MORE THINGS YOU MAY HAVE MISSED BY 4th DECEMBER…

1st DECEMBER 2017

 

US FCPA ENFORCEMENT POLICY

The US DoJ on 29th November released its new policy on Foreign Corrupt Practices Act (FCPA) enforcement.  The new Policy has 4 sections: Introduction; Policy concerning criminal investigations and prosecutions of the FCPA; FCPA corporate enforcement policy; Civil injunctive actions.  It takes effect immediately and incorporates the Obama Administration pilot programme for FCPA enforcement that, from April 2016, allowed for reduced penalties for self-reporting.

 

5 YEAR SENTENCE FOR CANADIAN PONZI FRAUDSTER

Canadian law firm Borden Ladner Gervais reports that Lino Matteo, former CEO of Mount Real Corporation has been sentenced to 5 years imprisonment, as well as a C$4.91 million fine.  He had been found guilty in September.  Mount Real was based in Montreal and was closed down by the regulator in 2006.  The Ponzi scheme had affected more than 1,200 investors with C$130 million outstanding.

 

FINANCE BILL 2017-18: LEGISLATION AND EXPLANATORY NOTES

On 1st December HM Treasury and HMRC released the Explanatory Notes to the Finance Bill 2017-18, the Bill itself is also available.  The Bill includes enhanced customs powers to examine premises and vehicles or vessels – which would no doubt assist post-Brexit.

https://www.gov.uk/government/publications/finance-bill-2017-18-legislation-and-explanatory-notes

 

UK OVERSEAS TERRITORIES TALKS IN LONDON

The UK Minister of State for the Overseas Territories joined leaders and representatives of the Overseas Territories for talks on hurricane recovery, Brexit, climate change, and tax transparency at the end of November.

https://www.gov.uk/government/news/overseas-territories-joint-ministerial-council-28-and-29-november-2017

 

$31 MILLION REPORTED STOLEN FROM CRYPTOCURRENCY USDT

It has been reported that Tether, which operates USDT, a cryptocurrency backed by the US dollar, announced that almost $31 million of USDT was stolen from its core treasury wallet by an external attacker.  Tether is tracking the tokens stolen, so that they cannot be sold or exchanged – meaning that the thief should not be able to profit from the theft.

 

UN HUMAN RIGHTS DUE DILIGENCE REFEREMDUM TO BE HELD IN SWITZERLAND

Hogan Lovells reports on proposals being considered to amend the Swiss constitution to require mandatory human rights due diligence for companies based in Switzerland, so as to meet the UN Guiding Principles (aka Ruggie Principles).  This follows the Responsible Business Initiative launched in 2015 by civil society NGO.  However, in September the Federal Council had proposed rejection, but a national referendum is to be held next year or 2019.

 

AUTHORISED PUSH PAYMENT (APP) SCAMS

Osborne Clarke reports on a BBC interview about authorised push payment (APP) scams, described as a growing problem.  It reports that statistics recently released by UK Finance, just over £100 million was lost to transfer scams in first 6 months of 2017.  There were 19,370 reported cases – with an average loss of £3,027 for consumers and £21,477 for businesses.

APP payments are those authorised but made as a result of fraud.  Such as where someone is tricked into authorising a credit transfer to a fraudster, or they have paid a fake invoice, or paid money to a fake charity.

http://www.osborneclarke.com/insights/authorised-push-payment-fraud-who-pays/

On 7th December the Payment Systems Regulator released a report on progress to tackle APP scams.

https://www.psr.org.uk/psr-publications/news-announcements/PSR-sets-out-progress-on-tackling-scams

 

MONEY LAUNDERING CASE AGAINST FORMER ARGENTINE PRESIDENT

The Risk & Compliance Hub reports that courts have rejected an appeal filed by Cristina Kirchner to dismiss money laundering charges. She old faces charges including money laundering, bribery and criminal conspiracy in a case linked to a family hotel business in Patagonia.  The appeal had also applied to 2 children.

 

EU REGULATION AMENDS RUSSIA SANCTIONS

EU Regulation 2017/2212 amends Regulation 833/2014 with effect from 2nd December, to permit certain operations (import/export) involving hydrazine (CAS 302-01-2) in concentrations of 70% or more, which is included in the Common Military List of the EU.  Hydrazine has been used as fuel for many rockets and spacecraft, including the space shuttle.  It is considered necessary for the flight of the ExoMars carrier module and tests and flight of the ExoMars descent module in the framework of the ExoMars 2020 mission.

Council Decision 2017/2214/CFSP makes equivalent changes.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2017.316.01.0015.01.ENG&toc=OJ:L:2017:316:TOC

 

EU REPORTS NEW INFORMATION ABOUT AL-AQSA MARTYR’S BRIGADE

On 1st December the European Council said it had been provided with new information relevant to the listing of the group. Having considered this new information, the Council has amended the statements of reasons accordingly.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2017.409.01.0002.01.ENG&toc=OJ:C:2017:409:TOC

 

SENIOR MILITARY OFFICERS APPOINTED TO CABINET IN ZIMBABWE

Defence Web reports that Emmerson Mnangagwa appointed senior military officials to top posts in his new cabinet and chose a veteran cabinet minister to head the finance ministry. Patrick Chinamasa is to be finance minister, Air Marshal Perrance Shiri land minister and Major General Sibusiso Moyo foreign minister.  He also brought back faces from the Mugabe era.

 

US MILITARY TO DELAY BAN ON CLUSTER MUNITIONS

Defence Web on 1st December reported that the Pentagon is to delay a ban on the use of older types of cluster bombs which was due to take effect on January 1st, saying that safety improvements in munitions technology failed to advance enough to replace older stockpiles.  The US military had hoped to transition to cluster munitions that explode at least 99% of time, greatly reducing the risks.

The 2008 Convention on Cluster Munitions (CCM) was ratified and came into force in August 2010, with states joining the convention committing to destroy their cluster munitions stocks within 10 years.  Also in 2010, the then Secretary of Defense declared that the US military, led by the US Army, would replace its cluster munitions with more reliable warheads.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50072:us-military-to-indefinitely-delay-ban-on-cluster-bombs&catid=113:international-news&Itemid=248

As the New York Times says, “US will keep older cluster munitions, a weapon banned by 102 nations”, which also mentions that most American cluster munitions held abroad appear to be positioned for a possible war with North Korea. Under a 2008 agreement, the Pentagon maintains a stockpile of more than 1.5 million cluster munitions, containing over 90 million bomblets, in South Korea –

https://www.nytimes.com/2017/12/01/us/cluster-munitions-pentagon-south-korea.html

 

RUSSIAN BILLIONAIRE SULEYMAN KERIMOV ACCUSED OF €400 MILLION TAX FRAUD IN FRANCE

Ukrainian media reports French media publishing details of the case of Russian billionaire and member of parliament, Suleyman Kerimov, whom the French authorities have accused of tax evasion and money laundering.  France 3 reports that the Russian senator has been accused of hiding about €400 million owed due to undervaluing property sales.

 

SPAIN: EXTRADITION CASE OF UKRAINE MP BEGINS

Ukrainian media reports that Spain has begun the process of extraditing Ukrainian MP and billionaire Oleksandr Onyshchenko to Ukraine.  He wanted there on charges of embezzlement, treason and corruption.  A member of the People’s Will party, he is accused of involvement in embezzlement of $59 million from state-owned gas producer Ukrgazvybudovannya.  He fled Ukraine in 2016.

 

GAMBLING “BLACK FRIDAY” FRAUD

Website Gambling Insider reports on data showing that European online gambling fraud during Black Friday and Cyber Monday in 2017 was 67% higher than the daily average for the rest of the year but that fraudulent activity decreased 4% from 2016.  The figures were higher for online gambling than a range of other sectors (other leading sectors saw a 25% decrease).

https://www.gamblinginsider.com/news/4606/black-friday-data-shows-online-gambling-fraud-has-increased-60-since-2014?src=ilaw

 

INTERRELIGIOUS TENSION IN SOUTH AND SOUTH-EAST ASIA

ETH Zurich published on 1st December a briefing on tensions between Buddhist majorities and Muslim minorities in Myanmar, Sri Lanka and Thailand, which proposes greater engagement with Buddhist nationalism to understand its concerns and address its fears.

http://www.css.ethz.ch/en/services/digital-library/articles/article.html/91f505b5-f65c-4e41-8a21-06abdba7c814

 

JERSEY TO ASSESS BENEFICIAL OWNERSHIP COMPLIANCE

Jersey FSC says it will be assessing compliance with the island’s beneficial ownership regime in the first half of 2018.

 

HOUSE OF LORDS BRIEFING: FUTURE OF UK TRADE AND CUSTOMS POLICY

A House of Lords Library Briefing has been written ahead of the debate in the House of Lords on 5th December to take note of the future of UK trade and customs policy in the light of 2 recent white papers.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/LLN-2017-0089

 

PUBLIC–PRIVATE PARTNERSHIPS AND FINANCIAL CRIME: ADVANCING AN INCLUSIVE MODEL

On 1st December the Royal United Services Institute published a paper on the growth this year in forging public–private partnerships (PPP) between law enforcement and financial institutions as they seek to create a step-change in identifying and disrupting financial crime.  It reports that, following the lead of the UK Joint Money Laundering Intelligence Taskforce (JMLIT), set up in February 2015, further models have emerged in Australia, Singapore, Hong Kong, Canada and Netherlands.  It says that other countries with less well developed financial systems, such as Kenya, have also joined in.  One point raised is that where the creation of partnerships is seemingly constrained by cultural or legal barriers, more work needs to be done.

https://rusi.org/commentary/public%E2%80%93private-partnerships-and-financial-crime-advancing-inclusive-model

 

BELGIAN PILOT JAILED IN UK AFTER DROPPING COCAINE FROM LIGHTPLANE

A NCA news release reports on a Belgian pilot who dropped cocaine worth around £2.5 million from a light aircraft into a field in Kent and has been jailed for 14 years.

http://www.nationalcrimeagency.gov.uk/news/1249-pilot-dropped-cocaine-worth-2-5m-from-plane-into-field-in-kent

 

RUSSIAN COURT REJECTS SIEMENS TURBINE CRIMEA ACTION

The Always-excellent European Sanctions Blog reports on 1st December that a Russian court has dismissed Siemens’ action against Technopromexport (a subsidiary of Russian state conglomerate Rostec) and has refused to order the seizure of 4 power turbines that had been transferred to Crimea.  Siemens had filed the lawsuit in July after discovering the turbines had been diverted to Crimea, contrary to EU sanctions.

 

FRAMEWORK FOR THE LEGALISATION OF CANNABIS IN CANADA OPEN FOR COMEMNT

Gowling WLG has published a briefing reporting that the Canadian government recently published its proposed excise duty on cannabis products and proposed approach to regulation that will underpin its forthcoming Cannabis Act that will legalise and regulate non-medical cannabis.

https://gowlingwlg.com/en/global/insights-resources/framework-for-the-legalization-of-cannabis-in-canada-now-open-for-comment?lang=en-CA

 

CHINESE SMUGGLING CASE STATISTICS

Business Insider reports that Chinese customs authorities handled 2,773 cases of smuggling in the first 10 months of this year, as part of a nationwide crackdown.  The 2017 “Sword Guarding the Country’s Gate” campaign is said to have netted 233 smuggling cases involving weapons and ammunition, 474 cases related to illegal drugs and 86 related to endangered species (and even 56 cases involving rice smuggling), according a spokesman with China’s General Administration of Customs.

http://uk.businessinsider.com/r-china-customs-handles-2773-cases-of-smuggling-from-january-october-paper-2017-11?r=UK&IR=T

 

RISKMAP PODCAST: THE CORPORATE SECURITY AGENDA FOR 2018

Control risks has released its latest podcast in which Jonny Gray, Senior Partner at Control Risks, provides an update from the recent Overseas Security Advisory Council (OSAC) meeting in Washington, and discusses what is front of mind for global security managers as they wrap up a chaotic year in the world of risk.

https://www.controlrisks.com/our-thinking/insights/podcasts/rm-corporate-security-agenda-for-2018

 

KIM JONG NAM “WAS CARRYING VX ANTIDOTE AT TIME OF DEATH”

NK News reported on 1st December that Kim Jong Nam, the late half-brother of North Korean leader Kim Jong Un, was carrying 12 bottles of Antropine (the antidote for treating VX gas) in his backpack when he was killed in Malaysia in February, the Malaysian High Court heard.  This suggests that he was aware of the risk that he could be attacked with the substance.

https://www.nknews.org/2017/11/kim-jong-nam-carrying-vx-antidote-at-time-of-death-court-hears/

 

2nd December 2017

 EU REMOVES SANCTIONS FROM IRAQ REINSURANCE COMPANY

Commission Implementing Regulation (EU) 2017/2217, amending Council Regulation (EC) No 1210/2003 concerning certain specific restrictions on economic and financial relations with Iraq, removes Iraq Re-insurance Company from its sanctions lists with effect from 2nd December.

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.L_.2017.318.01.0023.01.ENG&toc=OJ:L:2017:318:TOC

 

BULGARIAN ORGANISED CRIME GROUP BUSTED

News service BTA reported on 2nd December that an organized crime group has been busted for economic crimes involving re-export of medicinal products.  Proceedings were launched in September following an alert received 6 months earlier. The operation in Sofia, Shoumen, Slivnitsa, and Plovdiv saw 20 people were arrested, over 60 addresses were searched, and tens of interrogations held.  BTA reports that the crime group comprises 7 persons.  The crime group is being investigated for tax crimes, money laundering, and export of medicinal products used by cancer patients and children, with much medicine seized.  Some of them are being used for parallel exports to EU Member States, while others are illegally imported and then exported. http://www.bta.bg/en/c/DF/id/1702270?src=ilaw

 

ANOTHER “FAT LEONARD” CONVICTION

On 2nd December the Straits Times reported that a senior US Navy officer – Commander Bobby Pitts, 48, who was in charge of the Fleet Industrial Supply Command in Singapore – had been sentenced to 18 months in prison in the USA, in connection with the huge corruption scandal linked to a Singapore-based defence contractor known as “Fat Leonard” Francis.

The scandal, the biggest in the history of the US Navy, goes back to at least 2007 and cost the US government about $35 million.  Leonard Glenn “Fat Leonard” Francis was arrested by federal agents in 2013 in a sting operation in San Diego and pleaded guilty to bribery. His Singapore-based company, Glenn Defence Marine Asia (GDMA), provided services to US Navy ships including fuel and tugboats at Asian ports.

http://www.straitstimes.com/singapore/courts-crime/us-navy-officer-gets-18-months-jail-in-fat-leonard-corruption-scandal?src=ilaw

 

MEP ALLEGATIONS AGAINST MINISTER IN MALTA

On 2nd December, Malta Today reported that Nationalist MEP David Casa says he has full Financial Intelligence Analysis Unit (FIAU) report calling for criminal investigations on minister Konrad Mizzi for alleged money laundering, but Mizzi denies the claims.  Casa said that the report contains damning conclusions in relation to Konrad Mizzi, but also other damning conclusions on people, companies, financial intermediaries and a bank “known to be involved in the shady dealings of Joseph Muscat’s inner circle.”  The FIAU categorically denied the allegations, insisting that there is no final report

http://www.maltatoday.com.mt/news/national/82745/casa_says_he_has_damning_fiau_report_on_konrad_mizzi_and_money_laundering_allegations?src=ilaw#.WiL4oLp2vIX

 

SON OF RUSSIAN MP SENTENCED IN US

The Independent reported that Roman Seleznev, 33, has been sentenced to 14 years in US federal prison over his role in a massive $50 million scheme involving bank fraud, identity theft and racketeering.  He is the son of prominent Russian parliament member Valery Seleznev — described as a close ally of President Putin.  He is already serving 27 years for computer hacking and credit card fraud scheme targeting US businesses. The prison sentence is the most jail time given to an individual convicted of a cybercrime in the US.   The prison sentence is the most jail time given to an individual convicted of a cybercrime in the US, but his latest sentence will be served concurrently, which means it will not add any additional time to his original sentence.

http://www.ibtimes.co.uk/russian-mps-son-roman-seleznev-sentenced-14-years-prison-over-massive-50m-fraud-scheme-1649854

 

“NORTH KOREA’S BIG FRICKIN’ MISSILE”

If you want to understand the most recent North Korean missile launch, and be entertained at the same time despite the subject matter, why not listen to the latest Arms Control Wonk podcast?

https://www.armscontrolwonk.com/archive/1204469/north-koreas-big-frickin-missile/

and the collected images at

https://www.flickr.com/photos/150159554@N03/sets/72157687883294232

 

GANGSTERS IN JAPAN

Fascinating article from the Japan Times on organised crime there and the split in the largest crime gang, Yamaguchi-gumi, in 2015.  The new breakaway Kobe Yamaguchi-gumi was allegedly spurred by the police creating suspicions and doubts in the original body, and even claims that police officers stood guard outside the new group’s headquarters when it announced its existence to the public!

But another observer of the scene is quoted as claiming that being a member of the Yamaguchi-gumi wasn’t “fun” anymore, but more like working for Toyota with what was once a criminal family was becoming a corporation.

https://www.japantimes.co.jp/news/2017/12/02/national/media-national/life-gangster-japan-just-isnt-fun-used/#.WiMC1bp2vIU

 

THE “BIGGEST THREATS” FACING BALTIC STATES

The Baltic Times reported that at Baltic Sea Task Force on Organized Crime, the Deputy Chief of the Latvian State Police and the head of the Operation Planning and Co-ordination of the Task Force said that the greatest threats to the Baltic Sea states from the organized crime are drug trafficking, illegal migration and the transformation of air guns into real guns.  The countries were urged to amend their lists of prohibited substances, including in them synthetic drugs and their precursors.

https://www.baltictimes.com/drug_trafficking__illegal_migration_greatest_organized_crime_threats_to_baltic_sea_states/

 

MORE TO COME ON MONEY LAUNDERING INVOLVING CANADIAN CASINOS

The Vancouver Sun quotes the Attorney General as saying that there are more revelations to come about the money laundering penetration by transnational organised crime in casinos in British Columbia.

http://vancouversun.com/news/local-news/more-to-come-on-money-laundering-allegations-b-c-attorney-general-says

UN REPORTS “SAYS YEMENI MISSILE IRANIAN IN ORIGIN”

The Missile Threat website carries claims that a confidential UN report leaked to Reuters says that fragments from 4 ballistic missiles fired into Saudi Arabia by Yemen’s Houthi rebels appear to be Iranian in origin – specifically like the Iranian designed and manufactured Qiam-1 missile – but without providing any clue to who or what may have supplied it to the Houthi.  It goes on to explain that the Qiam-1 is a single-stage liquid-fueled missile that Iran itself only employed for first time in June 2017 (using it against targets in Syria), and with a range between 700 and 800 km.

https://missilethreat.csis.org/classified-un-report-houthi-missiles-fired-saudi-arabia-iranian-origin/

 

THE FOLLY OF DEPLOYING US TACTICAL NUCLEAR WEAPONS TO SOUTH KOREA

An article by a former Director of the Office of Strategic Policy and Negotiations at the US State Department 1990-1997, and from 2005-2015 a member of the Secretary of State’s Office of Policy Planning for 38 North.

http://www.38north.org/2017/12/rsokolsky120117/

 

3rd December 2017

DAILY MIRROR FEATURE ON NORTH KOREAN ICBM

The article is headed, “How deadly is North Korea’s Hwasong-15 missile? All we know about Kim Jong-un’s new weapon ‘which could strike the US and Britain’”.  The article itself did not answer the question it posed.

https://www.msn.com/en-gb/news/indepth/how-deadly-is-north-koreas-hwasong-15-missile-all-we-know-about-kim-jong-uns-new-weapon-which-could-strike-the-us-and-britain/ar-BBFUasR?li=AAnZ9Ug&ocid=wispr

 

CROSS-BORDER INVESTIGATIONS UPDATE – NOVEMBER 2017

Skadden’s semi-annual Cross-Border Investigations Update takes a close look at recent cases, regulatory activity and other key developments, including new UK reporting obligations for sanctions violations, compliance challenges under China’s new globalization initiative and AML enforcement trends in the US and EU.

https://www.jdsupra.com/legalnews/cross-border-investigations-update-89008/

 

HEZBOLLAH EMERGES A WINNER FROM MIDEAST TURMOIL, ALARMING FOES

Defence Web carried an article dated 1st December.  It remarks that Hezbollah “has emerged as a big winner in the turmoil that has swept the Arab world since the uprisings of 2011 that toppled governments in several countries. It has fought in Syria and Iraq, trained other groups in those countries and inspired other forces such as Iran-allied Houthis waging a war in Yemen”.  It goes on to explain that Hezbollah was set up by the powerful Iranian Revolutionary Guards (IRGC) to fight Israeli forces that invaded Lebanon in 1982 and to export Iran’s Shi‘ite Islamist revolution, and that an Iranian-backed Iraqi Shi‘ite militia, the Popular Mobilisation Forces (PMF), was sent from Iran into Syria to help it in the civil war.  It is also a part of the government in Lebanon.  It is also said to be buying (conventional) advanced rocket and missile technology.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=50077:hezbollah-emerges-a-winner-from-mideast-turmoil-alarming-foes&catid=115:middle-east&Itemid=251

 

LEBANON CENTRAL BANK “NOT LAUNDERING HEZBOLLAH MONEY”

Lebanese news site, Naharnet, reports that the armed forces chief defended Lebanon’s banking system stressing that it can’t be passing funds for the US-sanctioned party Hizbullah.  He was replying to remarks made by the Saudi Foreign Minister who accused “Iran of using its ally Hizbullah of laundering money” through Lebanon.  The chief stressed that Lebanon’s Central Bank adheres to the international standards and the international banking systems, and he did not think there is money for Hizbullah passing through Lebanese banks.

http://www.naharnet.com/stories/en/239015-geagea-defends-lebanon-s-financial-institutions-says-ties-with-mustaqbal-will-be-normal?src=ilaw

 

3 INDICTED FOR FRAUD CARRIED OUT FROM PRISON

The Times of Israel carries a story saying that 3 men had been charged with fraud against dozens of victims, pretending to be officials of the vehicle licensing office able to help the victims get away with unpaid traffic fines.  2 of the defendants were already in prison while they took part in the fraud from behind bars.

https://www.timesofisrael.com/three-indicted-for-fraud-ring-carried-out-from-behind-bars/?src=ilaw

 

TAX HAVENS LOBBY TO GET BACK THEIR LOOPHOLES IN THE US TAX BILL

IBT Times claims in an article that despite the recent controversial Republican tax Bill in then US  includes some provisions to close loopholes that help corporations shift money to offshore tax havens, DoJ documents reviewed by the International Business Times show that lobbyists for the tax havens Bermuda and the Cayman Islands are pressing lawmakers to restore the loopholes that they have used in the past.

http://www.ibtimes.com/political-capital/tax-havens-lobby-keep-loopholes-enrich-insurers-hedge-fund-managers-2622950?src=ilaw

 

HONG KONG CONSULTANTS TO IRISH FUND EMBROILED IN ALLEGED US $26 MILLION FRAUD CASE

The Irish Independent reports that one of the world’s largest overseas investment brokers for Chinese nationals has been caught up in a $26 million fraud involving a US scheme.  Delsk Group is self-described as a “channel between Asia and the world” and has raised some €60 million from Chinese investors to build nursing homes in Ireland.  It was also hired to recruit Chinese investors for a US fund to build a cancer therapy centre in California. But those behind that scheme, Charles Liu and his wife Xin Wang, have now been accused of “corporate looting” by the SEC – which alleges they took some $20 million for their own benefit.

In Ireland, Delsk is adviser to the €100 million JWP ICAV Fund that targets wealthy overseas investors, which is authorised by the Irish Naturalisation and Immigration Service – the Department of Justice unit that operates the Immigrant Investor Programme (IIP).

https://www.independent.ie/business/world/immigration-investment-firm-caught-up-in-visa-fraud-36373568.html

 

HISTORY OF US AML LAWS

On its website FinCEN provides a potted history of US AML laws, starting with the Bank Secrecy Act 1970.

https://www.fincen.gov/history-anti-money-laundering-laws

and also a timeline of events since 1970 affecting the Act –

https://www.fincen.gov/resources/statutes-regulations/bank-secrecy-act/bsa-timeline

 

THE CHEMICAL WEAPONS CONVENTION COALITION (CWCC)

The CWCC is an independent, international body whose mission is to support the aims of the Chemical Weapons Convention (CWC) and to supplement the efforts of the member states of the Organisation for the Prohibition of Chemical Weapons (OPCW), with focused civil society action aimed at achieving full membership of the CWC, the safe and timely elimination of all chemical weapons, preventing the misuse of chemicals for hostile purposes, and promoting their peaceful use.  It was established in 2009.  One of its stated aims is to “Promote synergies among non-governmental organizations in advocacy for WMD demilitarization, disarmament, non-proliferation and peaceful uses, through cooperation and interaction among stakeholders in the nuclear, chemical and biological regimes”.

http://www.cwccoalition.org/2016/10/07/welcome-to-the-cwc-coalition/

 

TRADE-BASED MONEY LAUNDERING PAPER

In August, BAFT published “Combatting Trade Based Money Laundering: Rethinking the Approach”.  This paper proposes alternative, collaborative approaches to solving the problem of trade-based money laundering by increasing the public and private sector partnership.  Its objective is said to be to clarify bank-intermediated trade and banks’ ability to intercept illicit activity, and to explore ways that broader international trade stakeholders from both the private and public sectors can better align to help reduce trade based money laundering and terrorist financing without hindering international commerce and economic growth. BAFT describes itself as the leading international transaction banking association, providing advocacy, thought leadership, education and training, and a global forum for its members in the areas of trade finance, payments, compliance, and regulations, and was formed by the merger of the Bankers Association for Finance and Trade (BAFT) and the International Financial Services Association (IFSA).  For more information see

https://www.baft.org/about-baft

For the paper itself see

https://baft.org/events/general/2017/09/08/baft-releases-guidance-on-trade-based-money-laundering

 

USAF CYBER DEFENCES

Air Force Magazine has published an online article about the “cyber warriors” at the US Air Force’s 33rd Network Warfare Squadron.  Their mission is to defend the full Air Force Network (AFNET) — which the USAF uses for daily business, like emails and file sharing.  The article reports on the Air Force Cyber Defense (ACD) “weapon system”.  This is a $543 million, custom-built suite of devices and programmes deployed throughout the AFNET system, and reacts to any suspicious activity it recognises.

http://www.airforcemag.com/Features/Pages/2017/December%202017/Meet-USAFs-Most-Widely-Spread-Cyber-Weapon-System.aspx

 

EUROPEAN SECURITY AFTER THE INF TREATY

The latest edition (December 2017 – January 2018) of the free-to-download “Survival” journal from the International Institute for Strategic Studies (IISS) contains a number of interesting pieces, including this one asking about the potential consequences if the disagreements between Russia and the US over compliance with the 1987 Treaty on Intermediate-Range Nuclear Forces (INF Treaty) cannot be resolved.  There is a risk that it will be abandoned.  The article explains that the INF Treaty obliged Russia (and certain other successor states to the Soviet Union in which missiles subject to the treaty were located) and the US to eliminate their stockpiles of intermediate-range and shorter-range ground-launched ballistic and cruise missiles, and not to possess such systems in the future.  It provides a precis of the current position and how we got there, and argues that it would be Europe that would face the most problems if the Treaty collapses.

http://www.iiss.org/-/media//silos/survival/2017/survival-59-6/survival%2059%206.pdf

 

IMPLICATIONS OF THE 2013 SYRIAN CHEMICAL WEAPONS CRISIS FOR DETERRENCE AND TRANSATLANTIC RELATIONS

Another article in the December/January of “Survival” from IISS.  This one deals with the consequences of the 2013 chemical weapons attack by the Syrian government, using sarin nerve gas.  It reports that were hints prior to the attack that Syria might opt to use the weapon.  It refers to discussions between the US, UK and France in the aftermath.  Despite criticisms of the reaction, including the Obama “red lines”, it says that former US administration officials are adamant that Obama made the correct decision and that the outcome was a good one.  A more firm response by the US was problematic, not least after a 2013 poll appeared to show that 60% of US voters opposed military action (and only 9% were in favour).  Whilst it could be argued that the West, or at least the US, had reverted to its previous policy of deterring use of such weapons, the article concludes that it remains to be seen if the April 2017 airstrike has restored deterrence.  It argues that Britain, France and the US need to stick together, especially when other UN Security Council permanent members (China and Russia) are unlikely to be helpful.

http://www.iiss.org/-/media//silos/survival/2017/survival-59-6/survival%2059%206.pdf

 

CYBERSPACE TREATY ATTEMPT FAILS

Another article in the December/January of “Survival” from IISS.  One might not have been aware that for nearly 7 years an attempt had been ongoing to draft the rules that should guide state activity in cyberspace. The article reports that since 2010, the US had persuaded others to agree to a set of increasingly prescriptive norms of what they could and could not do in cyberspace, but then broke down over the US intention to have signatories explicitly agree that the laws of war applied to cyber conflict – Russia, China, Cuba and others refused to do so.  Therefore, the whole thing fell apart during Summer 2017.  The article provides a handy briefing on the background to the intended agreement, and the norms involved.

http://www.iiss.org/-/media//silos/survival/2017/survival-59-6/survival%2059%206.pdf

 

WAR IN UKRAINE: IS THIS THE WAY IT ENDS?

The final article noted in the December/January of “Survival” from IISS asks if Russia, Ukraine and its western allies are moving towards a messy resolution of the effective civil war of the last 4 years.  The article cites as factors the failure to reclaim historic Catherine the Great’s “Novorossiya” territory from Ukraine, the budget squeeze resulting from economic stagnation and Western sanctions on Russia, the implausibility of any Ukrainian military re-conquest of lost territory in the east and the old Ukrainian oligarchy once more establishing itself.  It seems highly likely, inevitable, that Crimea will stay Russian (on a personal note, I would say my experience in Crimea was that it appeared overwhelmingly Russian, and there seemed no surprise in the referendum result, which I thought would have needed little or no manipulation to provide the “right” result).

http://www.iiss.org/-/media//silos/survival/2017/survival-59-6/survival%2059%206.pdf

 

BANGLADESH STARTS CONSTRUCTING ITS FIRST NUCLEAR POWER PLANT

On 30th November, Bangladesh started the construction of its first nuclear power plant at Rooppur. The pouring of the first nuclear safety-related concrete for the power plant made Bangladesh the third ‘newcomer’ country to start constructing its first nuclear power reactor in 3 decades – following the UAE in 2012 and Belarus in 2013.  The 2 VVER type (AES-2006) pressurized water reactors are to be supplied by Atomstroyexport of Russia.

 

4th December 2017

BENEFICIAL OWNERSHIP AND MERCHANT PROCESSING IN THE USA FROM MAY 2018

Venables LLP has issued a briefing advising that from May 2018 FinCEN will require banks in the USA – and their processor, ISO, and payment facilitator partners – to capture the beneficial ownership information of merchants seeking access to merchant processing accounts.  The article provides a background to the change, first advised in 2016, and what banks need to do to prepare for the change.

https://www.venable.com/The-Impact-of-Beneficial-Ownership-Rules-on-Payment-Facilitators-11-30-2017

 

AUTONOMOUS VESSELS: HOW AN EMERGING DISRUPTIVE TECHNOLOGY IS POISED TO IMPACT THE MARITIME INDUSTRY MUCH SOONER THAN ANTICIPATED

This article from law firm Blank Rome, featured in the launch edition of the Journal of Robotics, Artificial Intelligence and Law, argues that autonomous vessels could be just around the corner.  It refers to a 2016 agreement between partners in the UK, and to impact on several international control agreements that are based on human involvement or intervention – such as those aimed at controlling pollution – tests with a remote-controlled tug in Denmark, and the launch in 2017 of an approved autonomous control system.  It seems Lloyds of London has already issued guidance on the use of autonomous control, specifying 6 levels of control.  Given existing concerns about use of vessels by terrorists, such as “importing” WMD in containerised traffic, and with the expectation that the UK and US would expect to be in the forefront of autonomous vessel development, this is just one further complicating factor.

http://www.blankrome.com/index.cfm?contentID=37&itemID=4410

 

UN COMMENDATION FOR WORK IN RECOVERING HOSTAGE SAILORS

The Hostage Support Partnership (HSP) is a collaboration between well-known law firm HFW, John Steed of NGO Oceans Beyond Piracy and Les Edwards of the risk management company, Compass Risk.  HFW reports that on 7th November the UN Security Council passed UN SCR 2383 commending the work of the HSP in securing release of 26 hostages from the vessel “Naham 3”, who had been held by Somali pirates for more than 4 years.  These hostages are amongst some 1,800 that have been recovered over the past 12 years.

http://www.hfw.com/HFW-commended-by-the-United-Nations-Security-Council

 

VENEZUELA LAUNCHES OIL-BACKED CRYPTOCURRENCY

Reuters reports that Venezuela’s President Maduro is to circumvent US-led financial sanctions by announcing the launch of the ”petro” backed by the country’s oil reserves.

 

MONEY LAUNDERING USING BITCOIN ATM?

Business Reporter and City AM report that criminals could be laundering their money through cryptocurrency cash machines, according to the Metropolitan Police.  Scotland Yard has warned that illegal cash could be deposited into the machines – which converts the money into digital currency such as Bitcoin.  A crackdown, by the extension of AML rules, is predicted.

https://business-reporter.co.uk/2017/12/04/met-warns-criminals-may-laundering-money-cryptocurrency-cash-machines/?src=ilaw

 

LICENSING OF BETTING SHOPS IN THE UK AND FOBT

On 4th December the House Commons Library issued a briefing paper on the licensing of bookmaker premises in the UK.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06919

and another on fixed-odds betting terminals (FOBT)

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06946

 

CITIZENSHIP BY INVESTMENT PROGRAMMES

The Low Tax (Tax News) website carries a feature which looks at the details of Malta’s Individual Investor Programme, and other similar citizenship-by-investment (CBI) schemes that exist elsewhere in the world.  This follows the announcement on 17th November by Malta’s PM that Malta intends to renew its, sometimes controversial, programme.

https://www.lowtax.net/features/Malta-And-Citizenship-by-Investment-574667.html

 

SEC CHARGES RELATING TO CANADIAN ICO

Coindesk reports on 4th December that the US SEC had filed charges against 2 individuals, Dominic Lacroix and Sabrina Paradis-Royer, and a company called PlexCorp, and obtained an “emergency asset orders” for $15 million on charges of violating US securities laws and fraud linked to a Canadian initial coin offering (ICO).

https://www.coindesk.com/sec-files-fraud-charges-canadian-ico-organizer/

 

IRAQ REINSURANCE COMPANY REMOVED FROM UK SANCTIONS LISTS

On 4th December, HM Treasury issued a Notice confirming that the Iraq Reinsurance Company was no longer subject to financial sanctions in the UK.  This follows the publication of EU Regulation 2017/2217 on 2nd December.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/664497/Notice_2017_2217_IRAQ.pdf

 

ANDROMEDA BOTNET DISMANTLED

A news release from Europol on 4th December reported that the FBI, in close co-operation with the Luneburg Central Criminal Investigation Inspectorate in Germany, Europol’s European Cybercrime Centre (EC3), the Joint Cybercrime Action Task Force (J-CAT), Eurojust and private-sector partners, dismantled one of the longest running malware families in existence called Andromeda (also known as Gamarue).  This widely distributed malware created a network of infected computers called the Andromeda botnet. The release says that, according to Microsoft, Andromeda’s main goal was to distribute other malware families. Andromeda was associated with 80 malware families and, in the last 6 months, it was detected on or blocked an average of over 1 million machines every month.

https://www.europol.europa.eu/newsroom/news/andromeda-botnet-dismantled-in-international-cyber-operation

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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