Unusually for the Isle of Man, a snow flurry causing chaos in early December….but also producing some lighter moments, as illustrated by this photo. Note the white police helmet – Summer issue I thought…
Day: December 9, 2017
Whitepaper: Entity Screening and Vessel Tracking for UN Sanctions
On 9th December, Project Alpha announced a new White Paper. It remarked that the most recent UN Panel of Experts report on North Korea (published on 27th February 2017) found that “implementation remains insufficient and highly inconsistent”. This suggests that the availability of information on vessels in breach of sanctions against North Korea and the capabilities to obtain such information needs to improve. Improvements in these areas would assist the UN Sanctions Committee, individual Member States, and businesses in implementing UN sanctions. The White Paper aims to assess the potential usefulness of entity screening and vessel tracking (such as AIS data) for sanctions compliance, implementation, and enforcement by law enforcement, regulators and private sector.
https://projectalpha.eu/whitepaper-entity-screening-and-vessel-tracking-for-un-sanctions/
The White Paper itself is at –
GUERNSEY LAW ENFORCEMENT ANNUAL REPORT ISSUED
The report covering 2016 shows that drug offences, assault and criminal damage were among the most common crimes, with the total number of reported crimes falling by 138 against 2015 to 1,389, continuing a trend. Fewer crimes were recorded during the year than in 2015 and detection rates remained largely on a par with the previous year at 48%. Cybercrime is said to be becoming increasingly commonplace for technology to be used as a tool to aid criminal activity, and is described as a major and increasing threat to the financial sector, businesses and members of the public. It says that the Financial Intelligence Service continues to proactively identify and target those engaged in financial and economic crime. Amongst the successes the report trumpets are –
- a number of successful prosecutions for fraud, including a director of a business group who had moved large sums of money between clients without their knowledge, one man who abused his position as a trustee to defraud his clients, and another for fraud by false representation involving the unlawful sale of shares; and
- assisting the Bulgarian authorities with international asset recovery, resulting in the forfeiture of assets worth approximately £1.1 billion.
http://www.guernsey.police.uk/CHttpHandler.ashx?id=111170&p=0
THINGS YOU MAY HAVE MISSED: DECEMBER PART 1
Well, at least from 5th December…
5th December 2017
VIOLATION OF EU SANCTIONS: RUSSIAN COURT DECIDES AGAINST SEIZING POWER TURBINES DIVERTED TO CRIMEA
Law firm Shepherd and Wedderburn has published an article on the decision of a Russian court against Siemens which had sued Technopromexport, a subsidiary of Russian state conglomerate Rostec, for breach of contract. Siemens, which had contracted with Technopromexport to provide power turbines to Russia, learned that the turbines in question had been directed to Crimea, breaching a contractual obligation not to violate international sanctions.
LATVIA AND TAXATION: THE NEW MONACO?
Baltic states’ (and Belarus) law firm Sorainen has issued an update on Latvian tax changes from 1st December.
http://www.sorainen.com/UserFiles/File/Publications/nf.is-Latvia-a-new-monaco.2017-11-30.eng..pdf
US SANCTIONS UPDATE AFTER A YEAR OF TRUMP
In its update on the first year of the Trump Administration, Guidepost Solutions provides guidance US businesses on sanctions developments during the year. It finishes by cautioning those with numerous clients in the UAE or Turkey (which it describes as major trading partners of sanctioned countries, and Iran in particular) to ensure that their KYC and transactions screening is sufficient. Furthermore, if they distribute oil and drilling equipment, they must know their customer’s activities, including their customer’s customers – to avoid unknowingly dealing with Iranian or Russian entities that may be subject to US sanctions.
http://www.guidepostsolutions.com/insight/sanctions-2017-now/
UN FORUM ON BUSINESS AND HUMAN RIGHTS
Freshfields Bruckhaus Deringer provides excellent coverage of developments concerned with the UN Guiding Principles (aka “Ruggie Principles”) and includes a 3-part recap of the UN Forum on Business and Human Rights 2017.
http://humanrights.freshfields.com/tag/ruggie%20principles
NEW BOOK ON 50 YEARS OF UN SANCTIONS
“The Evolution of UN Sanctions: From a Tool of Warfare to a Tool of Peace, Security and Human Rights,” examines the political context of the 30 sanctions cases since the UN’s founding in 1945 and how each case measures up to the UN Charter’s fundamental principles of promoting human welfare. An article on the Pass Blue website argues that the problem with sanctions is not with the sanctions themselves, but rather with is with the sanctions policymakers, particularly the leading countries on the Security Council, who routinely interject their national interests to confuse, conflate or corrupt UN sanctions. After all, it comments, sanctions are meant to be last resorts only after good-faith application of other measures (including persuasion and other pressure).
http://www.passblue.com/2017/12/01/after-50-years-of-un-sanctions-is-the-system-broken/
http://www.springer.com/de/book/9783319600048
Another article from the same source –
HOW COMPANIES AND THEIR INVESTORS PAY LIP SERVICE TO UN SANCTIONS
http://comcapint.com/companies-investors-pay-lip-service-un-sanctions/
NORTH KOREAN FIRM REINVENTS ITSELF TO BEAT SANCTIONS
On 1st December, KY360 reported that the Shinhung Trading Company has reinveted itself, having exported seafood, iron ore (to China’s national railway) and imported luxury goods from Japan. It is now said to be pitching itself as a seller of “North Korean specialities”, displaying in a recent exhibition in China. There were alcohol and confectionary products, herbeal remedies and even liquor made from tiger bone (!).
https://kyc360.com/news/north-korean-firm-reinvents-beat-sanctions/
DEATH AT THE AIRPORT: THE PLOT AGAINST KIM JONG-NAM
On 4th December, BBC Radio 4 broadcast this 45 minute play, a drama-documentary about the life and death of the North Korean dictator’s half-brother. Subject to restrictions on where it could downloaded, and available only for 30 days.
http://www.bbc.co.uk/programmes/b09h2tk6
ILLICIT – NORTH KOREA’S EVOLVING OPERATIONS TO EARN HARD CURRENCY
This 2014 book is available in full as a pdf online
https://www.hrnk.org/uploads/pdfs/SCG-FINAL-FINAL.pdf
NEW BOOK ON CAPITAL FLIGHT FROM AFRICA
Chr. Michelsen Institute (CMI) is a development research institute based in Norway. In October it published a new book, Lifting the veil of secrecy: Perspectives on international taxation and capital flight from Africa. CMI co-operated with Tax Justice Network Norway in preparing this book which seeks to offer cutting-edge analysis of key challenges tax havens pose for development in Africa. It is said to flow from the CMI-led project Taxation, Institutions and Participation (TIP): The dynamics of capital flows from Africa (2014-18), and a result of a unique collaboration between researchers, civil society actors and journalists. The book was launched at the 5th Pan-African Conference on Illicit Financial Flows and Tax in Nairobi.
https://www.cmi.no/publications/6382-lifting-the-veil-of-secrecy
The CMI-led project compared and contrasted 3 countries; Angola, Tanzania and Zambia, all of which experiences massive capital flight
https://www.cmi.no/projects/1797-taxation-institutions-and-participation-tip
CORRUPTION REPORTS ON BELARUS
The Council of Europe’s anti-corruption body, Group of States against Corruption (GRECO), has published summaries of 2 new monitoring reports on Belarus: the evaluation report on criminalisation of corruption and on transparency of political funding as well as the report on compliance with previous recommendations related to legal framework and practices of preventing and fighting corruption.
They note that the ratification by Belarus of the Council of Europe’s Criminal Law Convention against Corruption has not triggered a proper revision of the Belarusian Criminal Code. Also, despite the presence of 15 registered political parties, they only play a marginal role in the country’s political and electoral process, and do not appear to exercise their essential democratic function in law or in practice.
THE ROLE OF BITCOIN AND THE DARKNET IN EUROPE’S DRUG MARKET
The dismantling of online drug platforms last Summer has highlighted the primary role of e-commerce for Europe’s drug trade, according to this EurActiv article.
http://www.euractiv.com/section/digital/news/bitcoin-and-darknet-european-dealers-toolkit/
SOTHEBY’S BATTLE AGAINST FAKE ART
The Fast Company website reports that 1 one year ago Sotheby’s announced the acquisition of Orion Analytical, a materials analysis and consulting firm whose crack team of scientists would use their forensic skills to detect fake artworks. The auction house then established its Department of Scientific Research, which is the only facility of its kind in the art-auction industry. Now, on the department’s first anniversary, Sotheby’s has revealed one of its recent coups.
MIDDLE EAST STRIFE IS EXACTING A HEAVY TOLL ON REGIONAL ECONOMIES
The latest edition of the IMF Finance & Development magazine carries a report on the effect of many decades of conflict on Middle East economies. Along the way it identifies 4 ways conflict affects economies –
- death, injury, and displacement seriously erode human capital
- physical capital and infrastructure are damaged or destroyed
- economic organization and institutions are hurt
- the stability of the region and its longer-term development through its impact on confidence and social cohesion are threatened
http://www.imf.org/external/pubs/ft/fandd/2017/12/imus.htm
IMF PODCAST: THE PROMISE OF VIRTUAL CURRENCY SYSTEMS
Peter Smith is co-founder and Executive Director of Blockchain, and in this 12-minute podcast, he talks about the evolution of crypto currency financial systems and what it could mean for big data analytics.
SWISS TO RETURN $321 MILLION ABACHA MONEY TO NIGERIA
The Nation (and others) reported on 5th December that Switzerland will return to Nigeria around $321 million in assets seized from the family of former military ruler Sani Abacha via a deal signed with the World Bank, the Swiss government said.
http://thenationonlineng.net/swiss-govt-return-321m-stolen-funds-nigeria/?src=ilaw
LATEST HM TREASURY ADVISORY NOTICE REGARDING THE RISKS POSED BY UNSATISFACTORY MONEY LAUNDERING AND TERRORIST FINANCING CONTROLS IN A NUMBER OF JURISDICTIONS
On 5th December, HM Treasury’s latest Advisory Notice was published. It refers to 2 statements issued by FATF in November 9these are annexed to the Advisory Notice).
US CUSTOMS MEASURES TO ENFORCE BAN ON IMPORTS MADE WITH FORCED LABOUR AND SANCTIONS FOR FORCED NORTH KOREAN LABOUR IN SUPPLY CHAINS
On 5th December law firm Pillsbury reported on recent cases in the US, including Apples discovering the illegal use of student labour to manufacture components in China. Thatcase arose shortly after US CBP published a notice reminding importers of their obligation to exercise reasonable care and take all necessary and appropriate steps required. The forced labour ban is under a 1930 Act, with enforcement stepped up after the Obama Administration got rid of an exemption in 2015, with several enforcement actions since 2016 (compared with only 1 between 2000 and March 2016). The CAATSA Act of 2017 stepped up enforcement capability in respect of North Korea. The customs authority has issued an updated due diligence factsheet for importers in August –
https://www.cbp.gov/document/fact-sheets/forced-labor-importer-due-diligence
https://www.jdsupra.com/legalnews/cbp-takes-measures-to-enforce-ban-on-32395/
NCA ASKS: “WHO IS IAN ALLEN?”
An NCA news release appeals for information to trace a man they want to speak to in connection with a number of large-scale drug importations. This followed the seizure of 40 kg of cocaine found in a van by Border Force officers based at Coquelles, France in June 2017. If cut and sold the drugs would have had a likely potential street value of £4.8 million. The haul was concealed in a false floor inside freight crates and was destined for a freight forwarding company based near Manchester Airport. Investigators have identified 118 previous consignments which made exactly the same journey previously. Each time the same man collected the consignments, providing the name “Ian Allen”.
http://www.nationalcrimeagency.gov.uk/news/1253-who-is-ian-allen
FINCEN EXCHANGE LAUNCHED
In the US, FinCEN has launched “FinCEN Exchange” programme in order to enhance information sharing with financial institutions and to strengthen public-private partnerships to combat financial crime. It will involve regular briefings with financial institutions to exchange information on priority illicit finance threats, including targeted information and broader typologies. This will enable financial institutions to better identify risks and focus on high priority issues, and will help FinCEN and law enforcement receive critical information in support of their efforts to disrupt money laundering and other financial crimes.
The FinCEN news release of 4th December is at –
https://www.jdsupra.com/legalnews/fincen-launches-fincen-exchange-to-88158/
PANAMA WELCOMES SUPERYACHT INVESTMENT
On 5th December, Superyacht News reported that, as part of its development plan, the Panamanian government is encouraging investment in superyacht businesses and infrastructure
http://www.superyachtnews.com/business/panama-welcomes-superyacht-investment-
CANADIAN INSIDER TRADING ALLEGATIONS AT FORMER POKERSTARS OWNER
Calvin Ayre reports that Quebec securities regulators have shed more light on their case against former Amaya Gaming CEO, David Baazov, with allegations that he and others conspired to pump up its stock ahead of its 2014 takeover of Rational Group (parent of Pokerstars).
CHINA CUSTOMS SEIZE ZINC WASTE
Customs Today reports that customs in Qingdao seized 1,762 tons of smuggled zinc waste in the country’s campaign against the import of “foreign garbage”, which China had notified the WTO about in July. The zinc slag was found in 88 containers during a spot check.
OFAC 2016 TERRORIST ASSETS REPORT PUBLISHED
The 25th Annual Report to US Congress on assets in the US relating to terrorist countries and international terrorism programme designees, covering financial year 2016, is now available.
https://www.treasury.gov/resource-center/sanctions/Programs/Documents/tar2016.pdf
TURKEY RULES OUT CAPITAL CONTROLS
On 5th December, Customs Today reported that Turkey’s President Erdogan had ruled out capital controls even as he clarified his demand for measures to prevent the smuggling of wealth abroad by unnamed businessmen he branded as “traitors”.
US COURT ACTION SEEKING SEIZURE OF PERSIAN ARTEFACTS IN MUSEUM
Law 360 reports that victims of a 1997 Hamas bombing of a mall in Jerusalem are seeking permission from the US courts to seize ancient Persian artifacts (the Persepolis Collection) held by the University of Chicago to satisfy a $71.5 million judgment against Iran.
EU PUBLISHES LIST OF NON-COOPERATIVE TAX JURISDICTIONS
On 5th December the EU finally published its awaited list of “non-cooperative” jurisdictions.
http://europa.eu/rapid/press-release_IP-17-5121_en.htm
See also accompanying Memo and Factsheet –
http://europa.eu/rapid/press-release_MEMO-17-5122_en.htm
https://ec.europa.eu/taxation_customs/sites/taxation/files/eu_list_factsheet_en.pdf
American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macao, Marshall Islands, Mongolia, Namibia, Palau, Panama, St Lucia, Samoa, Trinidad and Tobago, Tunisia, UAE.
The list of potential penalties included withholding of tax revenues collected by EU states that were due to blacklisted entities, freezing EU development funds, and blocking of loans from the European Bank of Reconstruction and Development (EBRD),
BRAZIL MONEY LAUNDERING CHARGES INCLUDE FORMER MINISTER AND CONGRESSMAN
According to Reuters on 5th December, Brazil’s prosecutor general officially presented money laundering and criminal association charges against 6 people, including a former federal minister and a congressman, Brazilian media reported.
THRIVING MARKET IN INDIAN ANTIQUITIES AND ARTEFACTS
The Times of India reports that India’s rich cultural heritage is under threat from the international smuggling syndicates which are stealing antiquities and artefacts from various archaeological sites and old temples in the country, according to a report from the Directorate of Revenue Intelligence (DRI) which has compiled a list of artefacts seized.
ITALY: CORRUPTION, COMPLIANCE AND THE MAFIA
The latest TRACE podcast involves Andrea Lo Gaglio, a Partner at Studio Legale Biamonti in Rome, on corruption, compliance and the role of the mafia in Italy.
https://www.traceinternational.org/bribe_swindle_or_steal
NORTH KOREAN WORKERS ORDERED OUT OF MONGOLIA
The South China Morning Post reports that nearly 1,200 North Koreans living in the country must leave as Mongolia enforces latest UN sanctions. The UN estimated in September that 100,000 North Koreans work abroad and send some $500 million home to the regime. North Koreans have to leave Mongolia by the end of the year as their 1-year work authorisations will not be renewed, the labour ministry said.
NORTH KOREA’S MILITARY CAPABILITIES
Defence One on 2nd December provided a brief rundown on the country’s military, nuclear and cyber capabilities.
“TRUST IN THE IAEA’S VERIFICATION OF IRAN’S NUCLEAR ACTIVITIES”
An article from the International Institute for Strategic Studies argues that opponents to the JCPOA should learn to trust the “robust” verification arrangements.
SATELLITE IMAGERY
Specialist site, 38 North, provides a fascinating look from the sky at what’s happening down in the DPRK.
https://www.38north.org/topics/satellite-analysis/
Meanwhile, on 4th December, Bloomberg took a look at how satellite imagery analysis is helping experts monitor what’s going on in North Korea.
THE “WORLD’S EMPTIEST INTERNATIONAL AIRPORT”, SRI LANKA AND INDIA-CHINA RIVALRY
War on the Rocks carries a story, originally in The Interpreter about Hambantota on the south end of Sri Lanka, where a large airport was built as part of a costly development expected (hoped) to maybe rival Singapore. Financed by Chinese investment, it was also suggested it could form part of a string of Chinese naval bases, but anyway with Chinese control of the port (like the airport, so far little used) and plans for a special economic zone there. India, worried by being surrounded by bases of its regional rival (with which it has fought more than once since WW2) has now offered to buy out the debt owed by Sri Lanka on the airport – it seems to try to checkmate the Chinese.
WHY AN OIL EMBARGO WON’T STOP NORTH KOREA
The Carnegie-Tsinghua Center carries an article (which originally appeared on CNN) which argues that even if President Trump got his stated wish that China stops oil supplies to DPRK this might not/would not necessarily affect its militant posture, or indeed its missile and WMD programmes. What is more, making the regime feel more vulnerable might trigger a reaction.
6th December2017
MEPS URGE BULGARIA TO TACKLE SHOCKING CORRUPTION AT TURKISH BORDER
EurActiv reports that 2 centre-left MEP have published a report on corruption on Bulgaria’s border with Turkey. They say they have received many complaints from EU citizens travelling to and from Turkey by road, and that the corruption involved has been going on for years. The costs included unnecessary foot and mouth “disinfection” and bribes for customs and order officials. In November the same website had reported the gist of an EU report saying that Bulgaria and Romania have made some progress in implementing judicial reforms and the fight against corruption but “there is still more work to be done”.
OFAC SANCTIONS JAMAICA-BASED ISIS RECRUITER
A Jamaican-based Islamic cleric, Abdullah Ibrahim al-Faisal’, has been added to OFAC’s Specially Designated Global Terrorist list for providing “recruitment services to the Islamic State of Iraq and Syria (ISIS)”.
https://www.treasury.gov/press-center/press-releases/Pages/sm0231.aspx
HM TREASURY RENEWS TERRORIST SANCTIONS LISTING FOR 2 ORGANISATIONS
OFSI in the UK has renewed the final designations of the following 1st December –
- POPULAR FRONT FOR THE LIBERATION OF PALESTINE – GENERAL COMMAND (PFLP-GC)
- POPULAR FRONT FOR THE LIBERATION OF PALESTINE (PFLP)
and hence they continue to be subject to sanctions in the UK.
MULTILATERAL ENFORCEMENT EFFORT LEADS TO DEFERRED PROSECUTION AGREEMENT FOR SWEDISH TELECOM COMPANY, TELIA
Osler Hoskin & Harcourt have published an article on the $546 million penalty and deferred prosecution agreement imposed by the US DoJ on Telia Co AB in a case involving alleged bribery of foreign officials. The article emphasises the international co-operation aspects of the case, with the DoJ thanking a number of countries for their assistance, including the Isle of Man.
JERSEY CONSULTING ON US-STYLE LLC
Carey Olsen reports that Jersey is consulting on the introduction of US-style Limited Liability Companies (LLC) – already available in several other jurisdictions including the Isle of Man. Responses are required by 12th January. The article asks, and answers, several questions about the proposed new corporate vehicle, and includes a helpful table comparing characteristics of the proposed LLC and LLP, PCC and normal limited companies.
https://www.careyolsen.com/briefings/coming-america-jersey-consults-us-style-llcs
COUNTERFEIT GOODS SEIZURES IN SOUTH KOREA
Kim & Chang of South Korea provides details from a report from the Korean Customs Service on seizures of counterfeit goods in 2016 –
- 9,853 cases involving seizures of counterfeit goods
- 9,422involved breaches of trademarks
- 181 cases of copyright infringement
- 250 cases of patent or other rights being infringed
- most (74%) seizures were from general cargo or express cargo
- the great majority (97%) of cases involved consignments sent by post and special courier services
- nearly 25% of cases involved toys, 14.5% clothing and textiles and nearly 12& handbags
- the biggest year-on-year increases were for athletic goods, clothing accessories and home appliances
- Mainland China was by far the most likely source of counterfeit goods, with Hong Kong the second but accounting for only about an eighth of the Chinese goods
NEW UK REGULATIONS TO ALLOW FOR CREATION OF PCC IN UK
The Risk Transformation regulations 2017 (SI 2017/1212) create a new form of regulated activity under the Financial Services and Markets Act 2000 for insurance-linked securities (ILS). It also enables the creation of a new form of body corporate called a “protected cell company” (PCC) to act as a special purpose vehicle in ILS transactions. PCC are comprised internally of segregated parts, and are already available in several other jurisdictions. Originally designed for use in insurance business, elsewhere they have been adapted for other uses. The new regulations are intended to provide a tax and regulatory regime which will allow the UK to become an attractive domicile for ILS Special Purpose Vehicles called PCC. The new regulations come into force on 8th December.
http://www.legislation.gov.uk/uksi/2017/1212/pdfs/uksi_20171212_en.pdf
SAUDI ARABIA FREEZES 376 BANK ACCOUNTS
On 6th December Turkish media reported that Saudi Arabia has frozen the bank accounts of 376 people over their alleged involvement in corruption, the Saudi Press Agency beig quoted as saying that the accounts were frozen by the public prosecution office “as a precautionary measure” and the account were those of “either detainees or linked to their corruption allegations”.
170 MONEY LAUNDERING CASES INVOLVING VIRTUAL CURRENCIES IN JAPAN IN 6 MONTHS
The Mainichi, a Japanese daily newspaper, reported on 6th December that the National Police Agency had reported that there were 170 cases in which virtual currencies were allegedly used to launder criminal money in the 6 months to September 2017. It is said that this is the first time such use had been recorded suspicious transactions using virtual currencies.
LIVE INTELLIGENCE EXCHANGE LEADS TO SEIZURE OF 19 MILLION CIGARETTES
New Europe reports that more than 19 million cigarettes were seized during a joint customs operation co-ordinated by the European Anti-Fraud Office (OLAF) and the Estonian Customs Administration, and also involving 14 EU states, and EU agencies FRONTEX and EUROPOL. A secure communication system was used to connect all participants in real time – and this proved to be a key factor for the success of the operation. An example cited involved a seizure by Latvia in June at its border with Belarus, despite the lorry being fitted with a mechanism which allowed it to switch licence plates automatically, at the push of a button, to fool police and customs officials.
EU TO UKRAINE – FIGHTING CORRUPTION ESSENTIAL FOR RELATIONSHIP
Ukraine news agency Interfax reports that the EU has reminded Ukraine that the fight against corruption in Ukraine is a key element in the development of bilateral relations, and that the independence of the National Anti-Corruption Bureau of Ukraine (NABU) is crucial.
http://en.interfax.com.ua/news/general/467444.html?src=ilaw
CRACKDOWN ON FOREIGN EXCHANGE DEALERS IN SUDAN
All Africa reported on 6th December that the Sudanese Ministry of Interior was taking action against foreign currency dealers outside the country, in its campaign to control foreign exchange activities on the parallel market. The Ministry alleged sabotage of the national economy by “dealing with foreign exchange, money laundering and financing terrorism”. The seizure of their bank accounts in Sudan were to be ordered, and the minister claimed Interpol could be used to pursue them. The article reports that in November, many currency traders fled abroad to avoid arrest in Sudan – with Ethiopia and the Gul States being said to be likely destinations. The fall in the value of the Sudanese pound, the penalty for trading in currency was increased more than three-fold to 10-years’ imprisonment, and new charges of ‘sabotaging of the national economy, money laundering and financing terrorism’ meant those convicted liable to a death sentence or life imprisonment.
http://allafrica.com/stories/201712060116.html?src=ilaw&viewall=1
IRAN´S EXPANDING SHI`A FOREIGN FIGHTER NETWORK
The always useful and informative ETH Zurich published on 6th December an article previously included in the CTC Sentinel magazine in November. It says that Iran’s Revolutionary Guard Corps is transforming Shi’a foreign fighters from Lebanon, Iraq, Afghanistan and Pakistan into transnational proxy forces capable of fighting asymmetric and conventional wars and that these forces have already participated in conflicts throughout the region. The authors warn that as these networks expand and become more formalised they could further Iran’s strategy for regional hegemony; exacerbate geopolitical and sectarian tensions in the Middle East; and threaten US interests in the region and beyond.
US ASSISTANCE FOR COMBATTING CORRUPTION IN NIGERIA, SRI LANKA, TUNISIA, AND UKRAINE
On 5th December the US State Department issued a statement, as it co-hosted the inaugural Global Forum on Asset Recovery (GFAR) with the UK. The statement detailed some of the assistance given to the abovenamed countries – saying it assisted Ukraine find $3.24 billion of public funds, as well as seizing $1.3 billion in cash and co-locating officials in Ukraine.
https://www.state.gov/r/pa/prs/ps/2017/12/276268.htm
UK PROPERTY CRIME DATA TABLES: YEAR ENDING MARCH 2017
On 6th December the UK Office of National Statistics published the latest update to the data tables on property crime. These cover data from the Crime Survey for England and Wales (CSEW) and crimes recorded by the police and include victim demographic breakdowns for specific types of property crime. These tables also include information on the nature and circumstances of crime incidents from the CSEW, including when incidents happened, where they took place, information about offenders, the victim’s perception of the incident, and what items were stolen. Data on mobile phone theft and metal theft are also included.
https://www.ons.gov.uk/releases/propertycrimerelateddatatablesyearendingmarch2017
ACTION TO COMBAT ONLINE FRAUD MUST FAVOUR CUSTOMERS SAYS PUBLIC ACCOUNTS COMMITTEE
The House of Commons Public Accounts Committee has issued a report which says Government accepts ‘enormous amount’ to be done and banks should take more responsibility. The cost of the crime is estimated at £10 billion, with around 2 million cyber-related fraud incidents last year, though only around 20% of fraud is actually reported to police. The report says that online fraud is now too vast a problem for the Home Office to solve on its own, and it must work with a long list of other organisations including banks and retailers, however, it remains the only body that can provide strategic national leadership; and that setting up the Joint Fraud Taskforce in 2016 was a positive step, but there is much still to do.
FILM PRODUCER JAILED IN SWITZERLAND FOR FRAUD, FORGERY AND MONEY LAUNDERING
The Daily Mail reports that Felix Vossen, who was a producer on the movies “The Sweeney” and “Miss You Already” but defrauded friends, family and investors has been jailed. Said to be a maths genius, and heir to a family fortune, he had disappeared from London but finally arrested in Spain with 11 mobile telephones and £100,000 in cash. The 43 year old was extradited to Switzerland and has now been jailed for 6 years.
UK NOTICE TO IMPORTERS 2897: OPEN GENERAL IMPORT LICENCE (OGIL) 2017 AND GUIDANCE
On 4th December the Department for International Trade published the latest version of the OGIL – a UK national trade control measure. Its starting point is to allow the import of all goods into the UK, but it then sets out various prohibitions and controls to this general permission to import. The latest version of the OGIL and its Schedules is attached to the Notice.
The Notice places the OGIL and its use in a historic perspective, saying that such controls date back to the Import, Export and Customs Powers (Defence) Act 1939, which permitted imports to be prohibited or regulated by order and, during the war, the import of all goods that were not specifically useful to the war effort was banned, or subject to specified exceptions (such as Churchill’s cigars). In 1954, the Import of Goods (Control) Order 1954 was made and this remains largely in force, and allows licences to be granted which permit imports. Including OGILs. The effect of these is that an OGIL allows the import of all goods into the UK unless the terms of the OGIL provide otherwise. Membership of the EU, and more specifically the Single Market placed limitations on the UK ability to restrict imports, and the OGIL itself is subject to limitations placed on national controls by the EU.
NOTICE TO IMPORTERS 2896: UK BAN ON THE IMPORT OF BUMP STOCKS
On 4th December this Notice announced a UK import ban on so-called “bump stocks”. These are devices which, when fitted or added to a self-loading firearm, utilise the recoil forces to automate repeated pressure on the trigger, increasing the rate of fire of the firearm. This decision was taken on the grounds of public safety as there is a risk that such items can be used on legally-held rifles. The import ban will remain in force whilst tests take place on the ability of these devices to be used on legally-held firearms. Bump stocks came into the public consciousness following the recent Las Vegas shooting tragedy.
In the US, the Bureau of Alcohol, Firearms and Explosives (ATF) and DoJ initiated a regulatory process on 5th December to determine if bump stocks are illegal under federal prohibitions on machine guns.
BREXIT: NOTHING TO DECLARE? WARNING ON THE FUTURE OF UK BORDER SECURITY
RUSI has published an article warning that UK Border Force is already over-stretched. So if adequate resources are not in place by the time Brexit comes around in March 2019, this could present many new opportunities for organised crime.
https://rusi.org/commentary/brexit-nothing-declare-future-uk-border-security
US LAWSUITS FILED AGAINST OPIOID MANUFACTURERS
More lawsuits have been filed against opioid manufacturers and distributors in the US by the state of Montana and a county in Kentucky alleging that the opioid epidemic was part of a business plan, alleging statutory negligence, civil conspiracy, fraud and other complaints.
http://www.jurist.org/paperchase/2017/12/additional-lawsuits-filed-against-opioid-manufacturers.php
MYANMAR OPIUM CULTIVATION DECLINES SHARPLY, EXCEPT IN SOME CONFLICT AREAS: UN REPORT
The UN Office of Drugs and Crime reports that the total area of opium poppy cultivation in Myanmar has decreased significantly in 2017 to 41,000 hectares, down 25% from the 55,500 recorded in 2015, according to the Myanmar Opium Survey 2017 released on 5th December.
REPORT: TERRORIST ATTACKS ON LONDON AND MANCHESTER, MARCH-JUNE 2017
Following the terrorist attacks between March and June 2017, the Home Secretary commissioned the former Independent Reviewer of Terrorism Legislation, David Anderson QC to provide independent assurance of the internal MI5 and police reviews.
In response MI5 and the Metropolitan Police have issued a statement on publication of the Anderson Report.
https://news.npcc.police.uk/releases/mi5-and-mps-statement-on-publication-of-anderson-report
NEAR TONNE OF IVORY SEIZED IN CAMBODIA
A joint police operation led to the seizure of nearly a tonne of ivory hidden in containers in Sihanoukville port, Cambodia, according to WCO Iris website.
UNLICENSED BITCOIN BUSINESS IN MAINE
In the US, news site Mainebiz reports that the owner of an unlicensed Bitcoin business and his company have been sentenced in a federal court for violations of federal law – for “operating an unlicensed money-service business”. Sal Mansy, 41, was sentenced to a year and a day in prison and 3 years of supervised release, and his company, TV TOYZ LLC was sentenced to 3 years of probation.
RUSSIAN PERSPECTIVE ON POTENTIAL US-RUSSIA NUCLEAR CONFLICT
What is Russia’s position on the use of tactical nuclear weapons? Would Russia perceive a cyber-attack as the beginning of a nuclear conflict? The US-based Nuclear threat Initiative (NTI) has published an interview with Alexey Arbatov, who leads the Center for International Security of the Institute of World Economy and International Relations (IMEMO) of the Russian Academy of Sciences.
CANADA’S MISGUIDED DEBATE ON NORTH KOREA’S MISSILES
The Bulletin of Atomic Scientists on 5th December published an article countering the view of some that Canada should look to join with the US on ballistic missile defence in the light of the North Korea threat.
https://thebulletin.org/canada%E2%80%99s-misguided-debate-north-korea%E2%80%99s-missiles11327
TRANSFORM YOUR BUSINESS WITH BLOCKCHAIN-POWERED KYC
KPMG invites you to watch a video on how a proof of concept developed by KPMG and Bluzelle reveal the power and benefits of blockchain-enabled KYC shared ledger.
ISRAEL’S RED LINES FOR IRANIAN INVOLVEMENT IN SYRIA
INSS at Tel Aviv University has published an article saying that the understandings reached recently between the US and Russia regarding Syria accept the deployment of Iranian forces and Iranian-controlled militias (proxies) on the range from the Golan Heights border – a situation which it says is entirely unacceptable to Israel. The article argues that it seems that the time is coming when Israel, if it wants to stop Iran’s influence and consolidation in Syria, will have to become actively engaged in the Syrian quagmire. The article argues that Israel must demonstrate determination in its demand to remove Iranian forces and Iranian-controlled Shiite militias from the Golan Heights and prevent the establishment of Iranian military infrastructures in Syria that would provide military means to Assad, the Shiite militias, and Hezbollah
http://www.inss.org.il/publication/israels-red-lines-irans-foothold-syria/
JAPANESE STUDIES ON LONG-RANGE AIR-LAUNCHED MISSILES
Janes.com on 6th December reported that Japan is conducting studies about the missile capabilities required to boost national security but it has not yet adopted a policy to equip its fighter aircraft with long-range precision air-launched missiles that could strike North Korean missile sites, Japan’s Defence Minister has said.
On 7th December, Defense News reported that Japan’s defense minister at a media conference had downplayed media reports that the country is seeking to acquire standoff air-launched ground-attack missiles to give it the capability to strike North Korean missiles before they are launched. He said that no such decision on funding had been yet made.
SOUTH KOREA BOOSTS DEFENCE SPENDING IN RESPONSE TO THREATS FROM NORTH
Janes.com reports a 7% increase in the South Korean military budget for 2018.
CONFLICT POLLUTION AND ENVIRONMENTAL HEALTH CONCERNS IN IRAQ
A report from Dutch-based Pax for Peace, ‘Living under a black sky’, reveals how the conflict in Iraq has left a toxic trail of destruction which could have severe health consequences for communities and reconstruction efforts. Among other dangerous developments, the report identifies a sharp increase of hazardous artisanal oil refining.
https://www.paxforpeace.nl/publications/all-publications/living-under-a-black-sky#
BELGIAN AUTHORITIES RAID BANK LINKED TO OFFSHORE COMPANIES FOUND IN PANAMA PAPERS
ICIJ reports that Belgian police raided the offices of state bank Belfius as part of a probe into possible tax avoidance by companies exposed in the “Panama Papers”, and that Belgian media reported that the raid follows last year’s revelations that Belfius’ former subsidiary, Experta Corporate and Fund Services, had been a client of Mossack Fonseca, and had been a tax consulting firm which helped to establish hundreds of offshore companies on its clients’ behalf, allegedly taking advantage of lax reporting requirements for foreign accounts, according to the Belgian news organization Knack.
THE DEFENCE INDUSTRIES OF RUSSIA AND CHINA
The EU Institute for Security Studies on 6th December published “Defence industries in Russia and China: players and strategies” in which the Institute says it turns the spotlight on 2 major players in the global defence industry: Russia and China. It examines how both countries, however different in their trajectory and ambition, have in recent years narrowed the industrial and technological gap with the European armaments sector and are now openly challenging the West’s traditional superiority in this domain. The analysis looks at the defence technologies and industrial base of both countries, their military exports.
With Russia, its military exports, which the paper says were vital for Russian industry in the 90s, are still very important, but their relative value has diminished. After a dynamic boom during the first 15 years of the new millennium, the volume of Russian military exports hit a plateau in 2013-2015 ($14-15 billion per year) and the paper claims that it seems doubtful whether export levels will rise again on a sustainable basis, as they face considerable challenges particularly in the light of Western sanctions.
China is described as a successful arms exporter (remember the armoured vehicles prominent in the recent Zimbabwe non-coup were Chinese). It has been engaged in an ambitious, concerted, and methodical transformation of its armed forces since the late 90s, with considerable increase in expenditure.
US BILL WOULD AID THE FIGHT AGAINST MONEY LAUNDERING AND TERRORIST FINANCING
The Risk and Compliance Hub carries an article on the Anti-Money Laundering and Counter-Terrorism Financing Modernization Act, currently in the US House of Representatives. If enacted as drafted, financial institutions would have more latitude to share SAR when money laundering or terrorism financing is suspected, and FinCEN would be modernised. The Act is intended to refocus the AML/CFT regime on quality over quantity, providing new tools to assist law enforcement, as its authors claim that 70% of spending on AML compliance is currently focused on inputs over outcomes, and require FinCEN to provide enhanced qualitative feedback to financial institutions. The Act would also direct the US Treasury to research the use of artificial intelligence, machine learning and other available technologies to better detect and prevent money laundering.
NEW US DEVICE CAPABLE OF FINGERPRINT AND FORENSIC IDENTIFICATION OF BOMBERS
US publication, Homeland Preparedness News, reported on 29th November that Edgewood Chemical Biological Center (ECBC) researchers recently delivered a prototype of a small machine that can perform fingerprinting and forensic analysis, which could help the US armed forces identify insurgents responsible for planting explosive devices. It is said to be capable of identifying trace particles of explosive material embedded between the grooves of the fingerprint to detain someone suspected of planting an improvised explosive device (IED).
US REPORT ON SECURITY OF FOREIGN AIRPORTS AND AIR CARRIERS
Also in Homeland Preparedness News, on 6th December, a recent US Government Accountability Office (GAO) study is reported. This examined foreign airport assessments and air carrier inspections, finding “considerable regional variation” in compliance with security standards and recommended practices. GAO is said to have looked at approximately 300 foreign airports that serve as last points of departures into the US. The goal was to evaluate progress in the objective of the US Transportation Security Administration (TSA) of enhancing assessments and air carrier inspections, the result of those assessments and inspections, and steps taken to address deficiencies. It is said that a lack of sufficient airport resources and technical knowledge contributed to foreign airports’ “considerable regional variation” in compliance with ICAO security standards and recommended practices in a period examined (2012 to 2016). The article notes that TSA does not have authority to enforce security requirements at foreign airports, but it is required under law to conduct assessments. However the study does remark that US and foreign-flagged air carriers providing last point of departure service to the US from foreign airports complied with all TSA security requirements in most inspections, and TSA was able to resolve the majority of security deficiencies it identified on the spot.
The report can be found at –
https://www.gao.gov/assets/690/688730.pdf
AIRLINER CREW CLAIM TO HAVE SEEN RE-ENTRY OF NORTH KOREAN MISSILE
On 4th December the Guardian reported that the crew of a Cathay Pacific Airlines flight from San Francisco to Hong Kong reported seeing a North Korean ballistic missile break up and fall out of the sky on 29th November – highlighting, the Guardian says, an unforeseen danger of Pyongyang’s weapons tests. Flight trackers put the airliner close to Japan around the time of the Hwasong-15 missile test, and the missile fell into the Sea of Japan.
VENEZUELA (EUROPEAN UNION FINANCIAL SANCTIONS) REGULATIONS 2017 COME INTO FORCE IN UK
These UK Regulations came into effect on 6th December. However, to date no names have been listed.
https://www.gov.uk/government/publications/financial-sanctions-venezuela#history
FRENCH COURT OFFERS KERIMOV €40 MILLION BAIL
RFI carries a Reuters story saying that a French court ordered Russian oligarch Suleyman Kerimov to post €40 million bail on 6th December. He is under investigation into alleged tax fraud and money-laundering linked to the purchase of luxury villas on the Côte d’Azur. Prosecutors had asked for Kerimov to be detained as they continue their investigation. The court rejected that call but set the bail high.
RECOVERING THE COSTS OF UK OFFICE FOR PROFESSIONAL BODY ANTI-MONEY LAUNDERING SUPERVISION (OPBAS): FEES PROPOSALS
In the UK, the Financial Conduct Authority (FCA) issued a consultation paper on 27th October on proposals for recovering the costs of establishing and running OPBAS. OPBAS was announced in March as the body to oversee the adequacy of the AML supervisory arrangements of the 22 professional body AML supervisors listed in Schedule 1 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The proposals cover application fees for reviewing and processing applications received from professional bodies who wish to be added to the list of professional body supervisors in Schedule 1 to the MLRs; and a structure for periodic fees to recover the annual costs of supervision.
Responses have to be made by 8th January.
NEW OECD INTERACTIVE MAP SHOWING STATUS/PROGRESS OF 150 COUNTRIES
The OECD have launched an online interactive map presenting key indicators and outcomes of OECD work on international tax matters for 150 countries and jurisdictions. The new interactive map shows the international state of play presenting key indicators and outcomes of the OECD work on international tax matters, with close to 150 countries and jurisdictions.
http://www.oecd.org/tax/international-tax-co-operation-map.htm
UK CONFIRMS SPRING (BUDGET) STATEMENT DATE
The UK government will publish its Spring Statement on Tuesday, 13th March 2018 – though the Budget itself will be in the Autumn.
EXPORTS: COUNTRY GUIDES FROM UK DEPARTMENT FOR INTERNATIONAL TRADE
DIT has produced guides for UK businesses who are interested in selling overseas, each covering a particular country.
https://www.gov.uk/government/collections/exporting-country-guides
2017 HURRICANE SEASON THE COSTLIEST ON RECORD
A briefing from law firm Locke Lord claims that the 2017 hurricane season, that ended on 30th November, and which included Hurricanes Harvey, Irma and Maria, cost over $202 billion I damage and losses caused.
SEC CYBER UNIT LODGES FIRST CHARGES
US law firm, Blank Rome, reported on 6th December on the SEC announcing that its newly formed cyber unit has filed its first charges (on 1st December) in connection with an Initial Coin Offering (ICO), describing this as an important step in protecting ICO investors and in enforcing against fraudulent ICO scams. It is also said to be a signal to companies contemplating ICOs that they must ensure compliance with applicable securities regulations. The token involved was called PlexCoin, and the SEC had obtained an emergency asset freeze to halt the ICO, which had already raised approximately $15 million and had promised investors a 13-fold profit
https://www.jdsupra.com/legalnews/fintech-alert-sec-s-new-cyber-unit-53450/
https://www.out-law.com/en/articles/2017/december/us-regulator-acts-to-curb-ico-fraud/
FIGHTING TERRORISM ONLINE: INTERNET FORUM PUSHES FOR AUTOMATIC DETECTION OF TERRORIST PROPAGANDA
On 6th December, an EU news release followed the third ministerial meeting of the EU Internet Forum
http://europa.eu/rapid/press-release_IP-17-5105_en.htm
EUROPOL STRATEGIC REPORT: HOW ILLEGAL DRUGS SUSTAIN ORGANISED CRIME IN THE EU
On 6th December, Europol released the above report that included the following points –
- €24 billion in revenue each year: The drugs trade in the EU is estimated to generate at least €24 billion in revenue each year, which makes it the EU’s largest criminal market.
- Highly poly-criminal organised crime groups: Around 35% of the organised crime groups active in the EU are involved in the production, trafficking or distribution of illegal drugs. 75% of these groups deal in more than just one illegal drug.
- 620 new substances: The market for synthetic drugs and new psychoactive substances (NPS) remains the most dynamic drugs market in the EU; over the last 5 years 620 new substances were detected.
- Fentanils, highly potent opioid narcotic drugs: There has been a large increase in the availability of fentanils on the European illicit drug market. Since 2012, a total of 24 new fentanils have been identified on Europe’s drug market, including 14 already since January 2016.
- Darknet marketplaces: Drugs are now widely traded online on various platforms. The sale of drugs via Darknet marketplaces is a significant threat and continues to expand.
- Poor success rate in fighting money laundering: The scale of money laundering activities in the EU is significant, reflecting the profits generated by the drugs trade. However, the global anti-money laundering framework has shown to have a poor success rate. Barely 1% of criminal proceeds are confiscated by relevant authorities at EU level.
AMBER SMUGGLER CAUGHT IN CZECH REPUBLIC
Prague’s customs officers found almost 10 kg of amber during a check on an international express train on 5th December. The contraband was found in a luggage of a Chinese man, who was unable to produce either a document on its acquisition or about its origin. Amber is a petrified resin which is popular in jewellery making. In Europe, it can be found particularly on the shore of the Baltic sea.
http://www.praguemonitor.com/2017/12/06/customs-officers-find-amber-worth-million-crowns-train
480% INCREASE IN WIRE FRAUD COMPLAINTS IN US REAL ESTATE SECTOR
Corporate Counsel reports that, according to the FBI, the Internet Crime Complaint Center saw a 480% increase in the number of complaints filed last year by those in the real estate industry. Most of these complaints were related to wire fraud, a scam becoming more common in the real estate industry.
ANALYSIS OF INCREASE MISSILE DEFENCE FUNDS IN THE USA
Missile Threat is a project of the Center for Strategic and International Studies in the USA, and it brings together a wide range of information and analyses relating to the proliferation of cruise and ballistic missiles around the world and the air and missile defense systems designed to defeat them. On 6th December it released a report on the planed or actual increase in missile defence funding in the US. Over the past few months, the US has taken major steps to increase funding for missile defense in light of the North Korean missile threat. One interesting note is that the report claims that “it’s not all for “missile defense,” as typically understood”. Some of it is focused on countering missile threats earlier, or “left of launch,” rather than intercepting them after they are in the air.
Attended the above expo at Kensington Olympia in November from/after which the following few items originate…
SOMALIA SIGNS MARITIME SECURITY CODE OF CONDUCT
The International Maritime Organisation (IMO) reported on 4th December that Somalia has become the 14th signatory to the Jeddah Amendment to the Djibouti Code of Conduct – the instrument developed and adopted by countries in the Western Indian Ocean and Gulf of Aden that has been a key factor in repressing piracy and armed robbery against ships operating in that region.
The Amendment significantly broadened the scope of the Djibouti Code when it was adopted at a high-level meeting in Jeddah in January 2017. It covers measures for suppressing a range of illicit activities, including piracy, arms trafficking, trafficking in narcotics, illegal trade in wildlife, illegal oil bunkering, crude oil theft, human trafficking, human smuggling, and illegal dumping of toxic waste.
The signatories are now – Comoros, Djibouti, Ethiopia, Jordan, Kenya, Madagascar, Maldives, Mozambique, Saudi Arabia, Seychelles, Somalia, UAE, Tanzania and Yemen.
http://www.imo.org/en/MediaCentre/WhatsNew/Pages/default.aspx
ISO 28007-1:2015 PRIVATE MARITIME SECURITY CERTIFICATION
ISO 28007 was published in 2015 and replaces ISO/PAS 28007:2012 which was introduced due to rapid growth in the number of private maritime security companies (PMSC) and the implications of using PCASP (legal issues, safety concerns for seafarers and varying national regulations). ISO 28007 gives guidelines containing additional sector-specific requirements, which PMSC wishing to comply with ISO 28000 can implement to demonstrate that they provide appropriate PCASP services on board ships.
For more information see Lloyds Register –
http://www.lrqa.co.uk/standards-and-schemes/iso-28007/
MARITIME RISK AREAS WORLDWIDE
Example of potential cyber attack profiles on shipping offered by Plymouth University
At the Security Expo the Home Office and Department for Transport offered the above in connection with the UK’s Future Aviation Security Solutions (FASS) Programme will deliver a step change in aviation security through innovative science and technology
NAVCIS (UK NATIONAL VEHICLE CRIME INTELLIGENCE SERVICE)
NaVCIS is the National Vehicle Crime Intelligence Service, a police unit dedicated to the prevention and detection of vehicle crime and supporting law enforcement colleagues both home and abroad. As part of the National Police Chiefs Council portfolio, it represents UK policing and provide support to NCA, Border Force and HM Government. It also provides santised information sharing and Logistics Industry Crime intelligence Bulletins and Alerts.
CATEGORISATION OF NUCLEAR THREATS
CAEN Sys presentation categorized risks from “nuclear threats” to shippers etc as –
- “Dirty bomb”: radioactive material mixed with conventional explosive
- Silent source: high-intensity and hidden radioactive source used to irradiate and produce damages
- Orphan source: unknown or lost source that requires removal to protect public health
UN SCR 2309
UN Security Council Resolution 2309 of 22nd September 2016 calls upon all States to work within the International Civil Aviation Organisation (ICAO) to ensure that its international security standards are reviewed and adapted to effectively address the threat posed by terrorist targeting of civil aviation, to strengthen and promote the effective application of ICAO standards and recommended practices, and to assist ICAO to continue to enhance audit, capacity development and training programmes in order to support their implementation. It calls upon all States, as part of their efforts to prevent and counter terrorist threats to civil aviation and acting consistent with relevant international legal instruments and framework documents.
https://www.un.org/counterterrorism/ctitf/en/sres2309
FUGITIVE LAWYER IN $550 MILLION FRAUD CASE SENT TO PRISON
The US DoJ reports that a former Social Security disability lawyer facing a 12-year sentence in a $550 million social security fraud, who was apprehended abroad and returned to the US has been arraigned on charges stemming from his escape from home confinement and his failure to appear for sentencing following his March 2017 guilty plea in a social security disability benefits fraud scheme. He immediately began serving the previously imposed 12-year prison sentence, which was ordered in his absence in June 2017.
GLASGOW GANG PLEAD GUILTY
The Evening Times in Glasgow reports that a “major crime gang” is behind bars, and that the 9 accused have changed pleas to guilty following pre-trial hearings. The group includes “cocaine baron”, Mark Richardson and former soldier turned gun-runner, Martyn Fitzsimmons. The newspaper reports that they had faced a total of 28 charges, including the shooting of another man outside a primary school. Other charges include attempted murder and the involvement of an alleged £1.5 million in hidden criminal gains. The charges cover the period 2013-2017.
UK MODERN SLAVERY ACT – ARE TOUGHER DISCLOSURE REQUIREMENTS ON THEIR WAY?
Hogan Lovells asks this question in an article on 6th December. It says that some shortcomings are addressed by updated guidance, and by a private members’ Bill currently in the House of Lords. However, it says, even if the Bill does not secure government support, it may still influence the future development and strengthening of the requirements. There remains pressure from civil society and within parliament for more fundamental changes to the disclosure regime.
https://www.jdsupra.com/legalnews/uk-modern-slavery-act-are-tougher-55856/
REPORT THAT CARIBBEAN DIPLOMATIC AND CBI PASSPORTS FACING GREATER SCRUTINY
Kenneth Rijock reports that It is being reported that customs & immigration officers in the US and Canada are detaining holders of citizenship-by-investment (CBI) and diplomatic passports from the East Caribbean countries participating in CBI programmes. He says that passports are being photocopied, mobile telephones inspected, and questions asked about business activities of the holders. Some reports state that the delays were extensive.
7th December 2017
WEAKNESSES AND LOOPHOLES IN EU CUSTOMS CONTROLS
The European Court of Auditors has published a report (Special Report 19/2017) which states that important weaknesses and loopholes indicate that EU customs controls are not being applied effectively, and this has an adverse effect on EU finances. Goods entering EU Member States from outside the EU are subject to customs controls before they are released for free circulation within the EU. However, importers can deliberately reduce or evade customs duty liability by, for example, undervaluing their goods, declaring a false country of origin or shifting to a product classification with a lower duty rate. The auditors examined whether the Commission and the Member States had designed robust controls on imports. They visited the customs authorities of 5 Member States: Spain, Italy, Poland, Romania and the UK. They found serious weaknesses indicating that there are shortcomings in the legal framework, as well as ineffective implementation of customs controls on imports. This adversely affects the financial interests of the EU.
https://www.eca.europa.eu/Lists/News/NEWS1712_05/INSR_CUSTOMS_EN.pdf
ENGLISH-SPEAKING SECESSIONISTS AND VIOLENCE IN CAMEROON
Defence Web reported on 7th December that militants seeking independence for Cameroon’s English-speaking regions killed 4 soldiers and 2 policemen in attacks, adding to dozens of civilians killed since October following a government crackdown against those claiming to have been marginalised by the country’s French-speaking majority government. A presidential election is scheduled for 2018.
WHY THE US MILITARY IS IN SOMALIA
The US Africa Command has published an article on its website explaining that Somalia collapsed as a state, beginning in the late 80s, and the Somali people have suffered some 30 years of war, displacement, and famine ever since. The US response to the challenges in Somalia has been to work with authorities there, in co-ordination with the African Union, UN, and other partners working toward a common goal: to support Somali-led efforts to stabilise and rebuild the country along democratic and federal lines. It says that the US Africa Command and US military work in close collaboration with the US Mission to Somalia and US Agency for International Development. The article refers to the presence of groups such as Al-Shabaab, Boko Haram and Al-Qaeda in the Islamic Maghreb (AQIM), which have killed tens of thousands of Africans, indeed tens of thousands of their fellow Muslims. The work is said to also reflect the local, regional and global threats posed by Al-Shabaab and ISIS-Somalia, threats that it says can be best addressed over the long term by inclusive and effective Somali governance, including security forces able to exert control over territory. US efforts include support for intelligence, surveillance, and reconnaissance to facilitate efforts to target violent extremist organisations in the country. Training includes advising and assisting the Somali Forces to increase their capability and effectiveness in order to bring stability and security to their country. There are said to be more than 500 US military personnel in Somalia, a number that fluctuates from time to time depending on training missions, operations and other security force assistance activities that are being carried out in any given month.
http://www.africom.mil/media-room/article/30125/why-the-u-s-military-is-in-somalia
FORMER NFL PLAYER JAILED FOR PONZI SCHEME
The New York Post reports that a former University of Virginia and professional American football player has been sentenced to 40 years for running a $10 million fraud scheme that victimized more than 50 investors. Merrill Robertson Jr, 37, was convicted in August of offences, including mail and wire fraud and money laundering. He is said to have operated Cavalier Union Investments in Virginia, targeting former coaches, donors, alumni and employees of schools he had attended, selling promissory notes that he claimed would pay an annual return of up to 20%.
UK AND IRISH WHISTLEBLOWERS TO THE SEC
The Irish Independent reports that 12 individuals based in Ireland and 84 in the UK (the second-largest after the US) were among those who acted as whistle-blowers to the US SEC last year as it handed large sums to people who reveal securities violations resulting in successful prosecutions. This is revealed in the latest whistle-blower annual report to the US Congress – reporting around 500 tip-offs from outside the US, of more than 3,00 in total. The SEC does not indicate whether tips received from any particular country resulted in successful prosecutions. The programme was launched 7 years previously.
BRITISH COLUMBIA CASINOS MONEY LAUNDERING ACTION
The Globe and Mail in Canada reports that measures taken to crack down on money laundering in British Columbia’s casinos are just the first, preliminary swipe at the problem, according to the Attorney-General. This is after it was confirmed there are large, suspicious cash transactions passing through casinos.
UK COUNTRYWIDE CRACKDOWN CONTINUES: 20 DIRECTORS AND 16 COMPANIES DISQUALIFIED FOR EMPLOYING ILLEGAL WORKERS
BrookStreet des Roches LLP published an article on 5th December highlighting the continuing action by the UK authorities against businesses employing illegal workers, i.e. those that failed to comply with statutory obligations under the Immigration, Asylum and Nationality Act 2006 and the Immigration Act 2016 to ensure that relevant immigration checks were completed and copy documents retained. The Insolvency Service has announced that 20 directors in 16 businesses have been disqualified for 6 or 7 years, including directors of restaurants in Antrim, Glasgow, Bognor Regis and Newport, South Wales. They were also fined a total of over £500,000. 41 illegal workers were involved in total (which does not exactly sound a lot to me, but the Home Office has emphasised that the workers were apparently unpaid.
CHANGES TO EU ANTI-DUMPING LEGISLATION
Bird & Bird on 7th December reported on key changes to be made to the anti-dumping legislation of the EU. The Council of Trade Ministers have adopted important changes and Bird & Bird identified the key aspects of the newly adopted rules as including –
- amendments to anti-dumping calculations regarding the normal value when market distortions are present; and
- the possibility for the Commission to prepare and issue reports to the public on possible market distortions in any given country or sector.
http://www.euractiv.com/section/economy-jobs/news/eu-toughens-anti-dumping-trade-powers/
STALEMATE AT THE WTO
At a meeting in November, the WTO Dispute Settlement Body (DSB) failed, on its 10th attempt, to launch a selection process to fill a growing list of vacancies on the Appellate Body. If the situation continues into 2018, the tribunal may not be able to perform its functions properly, with appeals grinding to a halt and the whole arrangement might effectively collapse. The DSB can deal with disputes between WTO members, and has authority to establish dispute settlement panels, refer matters to arbitration, adopt reports, maintain surveillance over the implementation of recommendations and rulings contained in such reports, and authorise suspension of concessions in the event of non-compliance with those recommendations and rulings.
For more information on the work of the DSB see –
https://www.wto.org/english/tratop_e/dispu_e/dispu_body_e.htm
For an article on the current situation see –
http://ecipe.org/publications/the-search-for-solutions-to-save-the-wto-appellate-body/
SOUTH AFRICA-FRANCE JOINT ANTI-DRUG TRAFFICKING EXERCISE IN REUNION
South Africa-based Defence Web (a constant source of interesting material, often missed by others) carries an article which says that countering drug trafficking is the main theme of Exercise Oxide 2017 taking place in Reunion in the Indian Ocean and involving the French and South African navies, with board, search and seizure operations among exercise highlights. Such joint exercises with the French take place from time to time, the last being 2 years ago. Nearly 500 French and South African soldiers, sailors and pilots took part in Oxide 2017, with the main portion taking place between 27th November and 6th December.
STATISTICS – OPERATION OF POLICE POWERS UNDER UK TERRORISM ACT 2000
The Home Office on 7th December released the latest quarterly statistics relating to the Terrorism Act 2000, including arrests, outcomes and stops and searches made under the powers of the Act.
https://www.gov.uk/government/collections/operation-of-police-powers-under-the-terrorism-act-2000
IMF CONCERN AT LACK OF PROGRESS AGAINST CORRUPTION IN UKRAINE
The IMF chief, Christine Lagarde, issued a statement on 6th December saying that the IMF was deeply concerned by recent events in Ukraine that could roll back progress that has been made in setting up independent institutions to tackle high-level corruption.
On 7th December, Interfax reported that the World Bank is (also) concerned about recent attacks on the independent anti-corruption institutions, such as the National Anti-Corruption Bureau (NABU) and the Special Anti-Corruption Prosecutor’s Office (SAPO), as this threatens their ability to fight corruption and recover stolen assets, the World Bank said
USER GUIDE TO OPERATION OF POLICE POWERS IN UK UNDER TERRORISM LEGISLATION
The Home Office has issued an updated version of this publication, originally issued in 2013. The user guide to operation of police powers under the Terrorism Act 2000 and subsequent legislation is said to be a useful reference guide with explanatory notes. It includes sections on data providers, arrests and outcomes, terrorist and extremist prisoners and stops and searches.
SURVEY OF POSTAL OPERATORS
Postal Intelligence reports on a survey undertaken earlier this year by software supplier Escher Group conducted online across 25 countries to gain key insights into the current and future landscape of the postal industry. Interesting results include 59% of postal operators foresee a growth in their physical presence; 95% of posts either offer or plan to deliver a customer app; and 89% of respondents currently offer or plan to offer digital mail products. A copy of the study may be obtained from Escher.
http://www.postalandparceltechnologyinternational.com/news.php?NewsID=88659
SAUDI ARABIA’S ISLAMIC ANTI-TERRORISM EFFORT: A COALITION OF THE WILLING OR AN ANTI-IRAN FRONT?
Article by visiting fellow at the Royal United Services Institute (RUSI) in London on the new Islamic Military Counter Terrorism Coalition (IMCTC) that, he argues, went practically unnoticed in the West as much of the focus was on the current turmoil in the Middle East. He says that questions remain over its role and teeth, and if it is just a political tool wielded by the Saudis against the Iranians? He says it is obvious that some major Muslim nations are missing from the coalition (Iran, Iraq and Syria) leading to fears that it is merely an anti-Shia and ‘Sunni bloc’.
EU AGREEMENT ON CHANGES TO COMBAT ONLINE VAT FRAUD
VAT Live on 5th December reported that EU Finance Ministers had reached agreement on a serious of e-commerce VAT reforms, to facilitate VAT collection and combat the €5 billion in distance-selling VAT fraud.
https://www.vatlive.com/vat-news/eu-ministers-agree-vat-e-commerce-reforms/
PANAMA, TRUMP OCEAN CLUB AND THE RUSSIANS
Keneth Rijock has announced that his blog is to include a series of articles following the recent media coverage, detailing the alleged role of reputed Russian organised crime members as purchasers of most of the condominium apartments at Panama’s Trump Ocean Club in Panama.
US DENTAL COMPANY SETTLES WITH OFAC OVER IRAN ALLEGATIONS
On 6th December, OFAC announced that Dentsply Sirona Inc, a US company specialising in dental solutions, had agreed to pay OFAC $1,220,400 to settle allegations that it committed 37 violations of Iranian sanctions, 2009-2012, by shipping via third countries goods that ended up in Iran.
https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20171206_Dentsply.pdf
AIRLINE INDUSTRY AGREES DANGEROUS GOODS TREATMENT OF LITHIUM BATTERIES ETC
Cargo news website, Loadstar, reports that the International Civil Aviation Authority (ICAO) has backed airline trade body International Air Transport Association (IATA) proposals to segregate shipments containing lithium batteries and those containing Class 1 dangerous goods in unit load devices (ULD) – a pallet or container used to load luggage, freight, and mail on aircraft. It is reported that the proposals will come into voluntary force from the start of 2018, with ICAO implementing mandatory regulations the following year.
MORE SHIPPING COMPANIES SIGN UP TO AGREEMENT TO COMBAT FAKE GOODS
Loadstar also reported that a shipping line (CMA CGM-owned APL) and 2 major shippers signed up to the International Chamber of Commerce’s (ICC) Declaration of Intent to Prevent the Maritime Transport of Counterfeit Goods, which is just over a year old. Loadstar quotes the OECD belief that the trade in counterfeit goods hit $461 billion in 2013, whilst the BASCAP division of the ICC has estimated that the total annual cost of counterfeiting and digital piracy now stands globally at up to $1.13 trillion.
The ICC agreement is at –
https://iccwbo.org/publication/declaration-intent-prevent-maritime-transportation-counterfeit-goods/
it includes commitment to a zero tolerance policy regarding counterfeiting; supply chain controls; use of risk profiling; raising awareness and conducting training; and sharing information and co-operation between signatories.
https://theloadstar.co.uk/market-leading-brands-join-fight-trade-fake-goods/
HOW THE £1 BILLION, 7-YEAR CARLYLE CASE PUTS GUERNSEY ON THE MAP FOR FUNDS LITIGATION
Law firm Ogier has published an article on the largest civil case in Guernsey history, in which the island’s Royal Court cleared Carlyle Capital Corporation, a Guernsey investment fund that went into insolvency in the wake of the financial crash in 2008, of liability over its collapse, and dismissed all claims considered at trial against each of its 7 executive and non-executive directors.
PAIR GUILTY OF HUMAN TRAFFICKING AFTER DRUGS RAID IN UK LEGAL FIRST
The Guardian reported on 6th December that 2 gang members who ran a so-called “county line” drug network have been convicted of human trafficking in the first case of its kind. They had pleaded guilty to trafficking a 19-year-old woman, who was forced to transport drugs from London to Swansea. It is believed to be the first time police have successfully used powers under the Modern Slavery Act to target members of city gangs, who use a phone line to facilitate their supply of Class A drugs into county or coastal towns. Their victim, from London, was contacted on social media before being lured into a car and driven to Swansea and her mobile phone was destroyed.
OVER 100 ILLEGAL FIREARMS EN ROUTE TO JAMAICA SEIZED IN FLORIDA
The Jamaica Observer reports that a major multi-agency transnational investigation is now underway by the Jamaica Constabulary Force (JCF) and US law enforcement, following the seizure of over 100 illegal firearms, with ammunition, seized by the US Customs and Border Protection (CBP) at Miami International Airport in a shipment destined for Jamaica.
SPANISH GUARDIA CIVIL CLOSE DOWN ILLEGAL CIGARETTE FACTORY
On 5th December, the Spanish Guardia Civil, with support from the State Border Guard Service of Ukraine, the EU Border Assistance Mission to Moldova, the Bulgarian Police of the Ministry of Interior, the Romanian Guard Police, the Greek Police, and Europol, arrested 18 members of a criminal organisation for manufacturing more than 2 million cigarettes per day. The organised crime group had invested almost €3 million to start up their illegal tobacco factory in Granada and had even created their own cigarette brand.
GLOBAL VIOLENT DEATHS 2017
The Small Arms Survey reports that lethal violence claimed 560,000 lives in 2016 — more than 1 person every minute of every day of the year. It has published a new report: Global Violent Deaths 2017: Time to Decide. This says that the global homicide rate increased for the first time since 2004. Of the 5 countries with the highest death rates in 2016 — Syria, El Salvador, Venezuela, Honduras, and Afghanistan — only 2 had active armed conflicts. The study also elaborates scenarios for the future based on current trends, to assess the number of people that could be saved if states implement effective violence reduction initiatives.
http://www.smallarmssurvey.org/about-us/highlights/2017/highlight-gvd-report.html
MENENDEZ, MCDONNELL AND ANTI-BRIBERY EFFORTS IN THE US
In the latest TRACE podcast interview, Randall Eliason discusses the recent Menendez trial, the impact of the Supreme Court’s McDonnell decision and the current state of domestic anti-bribery enforcement in the US.
https://www.traceinternational.org/bribe_swindle_or_steal
YEMEN’S FUTURE LOOKS GRIM AFTER SALEH KILLING
A Chatham House article examines the prospects for Yemen after the death of the former president Ali Abdullah Saleh who has been killed in a roadside gunfight while attempting to flee the capital Sanaa. It says he was a divisive figure, but he was also the person most likely to be able to broker some kind of settlement. It reminds one that Saleh oversaw the merger of North and South Yemen, fought 2 civil wars, and formed and abandoned any number of alliances of convenience in the process: with tribesmen, Islamists, technocrats, jihadists and latterly the Houthis, a group of Zaidi Shia rebels who he had spent almost a decade trying to crush.
https://www.chathamhouse.org/expert/comment/yemens-future-looks-grim-after-saleh-killing
THE VORY – RUSSIA’S SUPERMAFIA
Unknown to many (me included) the vory v zakone (вор в зако́не “thieves in law”) is a group that has survived and thrived amid the changes brought on by Stalinism, the Cold War, the Afghan War, and the end of the Soviet Union. It was, according to a new book from Yale University Press, born early in the 20th Century, largely in the gulags and criminal camps, where the members developed their unique culture. They are identified by their signature tattoos, abide by the so-called Thieves’ Code -a strict system that forbade all paid employment and co-operation with law enforcement and the state.
https://yalebooks.yale.edu/book/9780300186826/vory
For more background –
https://fas.org/irp/world/para/docs/rusorg3.htm
FCA: COMPLIANCE FUNCTIONS IN WHOLESALE BANKS
Wholesale banking, as opposed to “retail banking”, describes banking undertaken between, for example, merchant banks and other financial institutions and larger clients, such as large corporations and other banks. On 23rd November, the FCA published the results of research into compliance functions in wholesale banks, after sending a questionnaire to 22 banks in January 2017. The FCA says that the exercise was designed to give us greater insight into the changes in the function over the past few years and where further changes remain. The questionnaire covered role and structure; strategy and planning; compliance monitoring; technology; support and challenge; personnel. It also says that firms and heads of compliance may find the contents helpful in developing their departments, and it included a series of questions at the end of the summary section that boards and senior management might pose to themselves. It has been suggested by commentators that the purpose of the research may be connected to a move to providing more guidance from a “supervision” angle rather than just becoming involved in reacting to something and carrying out enforcement action.
https://fca.org.uk/publication/research/the-compliance-function-in-wholesale-banks.pdf
RUSSIA – THE MINISTER, THE OLIGARCH AND BEHIND THE SCENES IN PUTIN’S COURT
This 24th November podcast from RFE/RL is concerned with the background to the corruption trial of former Economy Minister Aleksei Ulyukayev and the role of Rosneft CEO Igor Sechin. Is this evidence of Putin flexing his muscles, or losing his grip? All this as Putin and co prepare for the presidential elections.
https://www.rferl.org/a/podcast-court-politics/28870231.html
HOUSE OF LORDS EXAMINES THE SANCTIONS AND ANTI-MONEY LAUNDERING BILL
The Sanctions and Anti-Money Laundering Bill continued its committee stage in Parliament, the first chance for line-by-line scrutiny, in the House of Lords on 6th December. Peers discussed a range of subjects including money laundering, terrorist financing and how owners of UK businesses and properties are identified when they are registered overseas. The next stage is set for 12th December.
BREXIT: POSITION OF THE EUROPEAN ARREST WARRANT
The UK Government has responded to the report of the House of Commons EU Home Affairs Sub-Committee on Brexit: judicial oversight of the European Arrest Warrant (EAW). The report examined whether alternatives to the European Arrest Warrant are possible, explores the options available for resolving disagreements between the UK and the EU in the absence of the oversight of the European Court of Justice (CJEU), and it does not seem at all clear how the UK will remain part of EAW arrangements if it is outside the EU, with no jurisdiction for the CJEU, and says that the most promising avenue for the Government to pursue could be to follow the precedent set by Norway and Iceland and seek a bilateral extradition agreement with the EU that mirrors the EAW’s provisions as far as possible.
CHANGE OF POLICY BY EUROPEAN COMMISSION ON ONLINE GAMBING?
Calvin Ayre reports that the Commission has sent letters to trade associations and other stakeholders, saying that it is to drop all current infringement procedures against protectionist EU online gambling markets, and to shun handling of future complaints on this subject, as part of a “political commitment to be more strategic in enforcing EU law”, saying that it was “not a priority for the Commission to use its infringement powers to promote an EU Single Market in the area of online gambling services”. The Commission appears to think that national courts in Member States can deal with future disputes using rulings and decisions already made.
US VISA RESTRICTIONS ON INDIVIDUALS RESPONSIBLE FOR UNDERMINING CAMBODIAN DEMOCRACY
On 6th December the US State Department announced that the Secretary of State will restrict entry into the US of those individuals involved in undermining democracy in Cambodia. In certain circumstances, family members of those individuals will also be subject to visa restrictions.
https://www.state.gov/r/pa/prs/ps/2017/12/276288.htm
For some background on the current position in Cambodia, where PM Hun Sen has promised to add another 10 years to the 32 he’s already spent in power, and its Supreme Court dissolved the Cambodian National Rescue Party (CNRP), the country’s only viable opposition party in next year’s national elections, see this 27th November article from The Diplomat
https://thediplomat.com/2017/11/cambodian-treason-case-highlights-cold-war-rivalries/
EU TARGETS MONEY LAUNDERING AT FOREIGN SUBSIDIARIES
On 7th December, website Law 360 reported that Joint Committee of the European Supervisory Authorities in the EU was said to be drafting new laws that will require businesses to manage terrorist financing and money laundering risks at group-level, aiming to close loopholes open to subsidiaries in third countries. This would mean parent companies of banks, insurers and securities firms in the future having to manage the risks of subsidiaries in third-party countries with lax compliance laws, something the authorities say that credit and financial institutions already have to put in place and which maintain AML policies and procedures to assess risk, the authorities said. Where subsidiaries are outside the EEA and local law causes difficulties, other “effective steps” must be taken to manage any risks that might result. https://www.law360.com/articles/992168
WHAT TO EXPECT WHEN YOU ARE THE SUBJECT OF AN FCA INVESTIGATION
UK law firm Corker Binning has published a briefing which aims to provide a basic understanding of the initial stages of the Financial Conduct Authority investigation process and to answer some of the most common questions that arise.
https://www.corkerbinning.com/what-to-expect-when-you-are-the-subject-of-an-fca-investigation/
“MY FATHER THE SPY AND THE CIA’S SECRET WAR IN LAOS”
This BBC podcast is fascinating and deals with a little-known “secret” war that took place alongside the Vietnam War (not so secret, if you’ve seen the Mel Gibson movie, “Air America” perhaps…). US radio producer Peter Lang-Stanton thought his father was a paper-pushing bureaucrat in the State Department. Then one day, his father revealed his double- life as a spy. Much of his father’s past was a lie; he never fought in the Vietnam War, as he said. Instead, he was involved in a covert mission in 1960s Laos under his codename: “Pig-Pen”. Through deep interviews with ex-CIA and a former Laotian soldier, Peter Lang-Stanton tells a story of lies and half-truths, of pride and regret.
http://www.bbc.co.uk/programmes/p05psvz1#play
THE HWASONG-15: THE ANATOMY OF NORTH KOREA’S NEW ICBM
The Diplomat provides an in-depth analysis of the new, large North Korean ICBM.
WHY INDIA AND CHINA AREWATCHING THE NEPAL ELECTIONS
Another article from The Diplomat, on 1st December, regarding the India-China competition and regional rivalry – Beijing is hoping for the left alliance to emerge victorious; India is rooting for the Nepali Congress.
https://thediplomat.com/2017/12/why-india-and-china-are-watching-nepals-elections/
FRANCE, GERMANY WANT IRAN TO REVERSE BALLISTIC MISSILE PROGRAMME
Reuters reported on 4th December that France and Germany agree that Iran must reverse its ballistic missile programme and end its “hegemonic temptations” across the Middle East, the French foreign minister said, but also said that the countries would continue to defend the JCPOA 2015 nuclear deal between Iran and world powers
8th December 2017
SCREENING SOFTWARE PROBLEM LEADS TO PENALTY
In the US, a case highlights the risks of over-relying on simple screening software. Pilot Air Freight has suffered a $175,000 penalty ($75,000 suspended) for aiding and abetting attempted unlicensed export by a customer to IKAN Engineering Services (which is on the BIS Entity List). The company had multiple interfaces for customers’ shipping data and one, the main interface, was linked to proprietary screening software that would screen recipients against the Entity List and other relevant lists. However, the other interface allowed customers to enter shipment data, but this was not automatically linked to the screening software. So, in this case, the shipment was not flagged, and was then stopped by US Customs in Long Beach. It does not seem that Pilot Air Freight knew of the problem with their software, and the shipper would not have known either.
US-CHINA TRADE RISKS REPORTED
The HK TDC website carries an article on the release of the 2017 US-China Economic and Security Review Commission report to the US Congress on the national security implications of the trade and economic relationship between the US and mainland China. The report warns about a continuing backslide in trade liberalisation as the mainland Chinese government policy contributes to rising protectionism and unfair regulatory restrictions.
The US trade deficit in goods with mainland China is $347 billion in 2016, the second-highest on record, and was up 6.2% in the first 8 months of 2017. However, US services trade surplus with mainland China reached a record high of $38 billion in 2016, up from $438 million in 2006.
The report highlights 3 threats or problems for the US –
- mainland Chinese foreign direct investment is targeting industries deemed strategic by the mainland Chinese government, including information communications technology, agriculture and biotechnology;
- mainland Chinese companies operating in strategic sectors are private only in name; and
- some mainland Chinese companies are attempting to invest in sensitive US industries avoiding or evading US regulatory procedures – using methods such as shell companies based outside China and conducting cyber espionage campaigns to financially weaken and acquire US businesses.
US CUSTOMS TO EXAMINE USE OF BLOCKCHAIN IN THE TRADE ENVIRONMENT
HK TDC also reports that US Customs and Border Protection progressing an evaluation of the implications and potential application of blockchain technology to trade processing. As part of that effort, CBP’s Commercial Customs Operations Advisory Committee has established a working group to examine this issue.
COMBATING MONEY LAUNDERING, TERRORIST FINANCING, AND COUNTERFEITING ACT OF 2017
Barbri Inc in the US has issued an article on the above Bill, currently being considered by the US Congress. It comments that Congress appeared willing to support increasing investigative powers, removing stumbling blocks in complex money laundering cases and raising penalties for individuals lying to banks or hiding behind anonymous ownership structures.
One interesting aspect was the comment that it would also make it easier and faster for US investigators to get foreign bank records from overseas law enforcement, and allow for punishment of non-cooperative “partners”, this being described as a ”vital update to antiquated mutual legal assistance treaty (MLAT) procedures”.
The changes proposed are set in the context of a claim of less than 1% of alleged “dirty money” being recovered by investigators. Notable was a quote from a former US Treasury official, who said that for a money launderer to be caught and prosecuted, that person has to be really stupid or really unlucky.
IN CASE YOU FORGOT – THE YUKOS CASE CONTINUES…
In 2004, 3 former majority shareholders of the Russian oil company Yukos initiated an arbitration under the auspices of the Hague Permanent Court of Arbitration in order to resolve their dispute against the Russian Federation arising from the expropriation of Yukos for the benefit of the state-controlled companies Rosneft and Gazprom. Eventually, in 2014 awards condemned the Russian Federation to pay $50 billion in damages plus arbitration and legal fees. The saga continues, with court action and enforcement put on hold or abandoned in France Belgium, Germany, India, the UK and the US, whilst the claimants fought the decision in 2016 of the Hague court to annul the arbitration awards.
FOLLOW-UP TO FATF MUTUAL EVALUATION REPORT ON SWITZERLAND
CMS von Erlach Poncet AG of Switzerland has published an article about what has happened following the evaluation report (published December 2016) and referring to the Swiss Financial Markets Supervisory Authority (FINMA) publishing in September a draft amendment to its Anti-money Laundering Ordinance. Switzerland is in a follow-up process and must report to the FATF in February 2018 regarding the progress made. The article summarises the recommendations made in the report and the proposed changes to Swiss law and procedures.
http://www.internationallawoffice.com/Newsletters/White-Collar-Crime/Switzerland/CMS-von-Erlach-Poncet-Ltd/Fallout-of-FATF-mutual-evaluation-report-on-Switzerland (free subscription)
US MONEY LAUNDERING TRENDS UPDATE
On 1st December, the Association of Certified Financial Crime Specialists (ACFCS) in the US published an update which highlights –
- the use online rental services by criminals to launder funds;
- duping millennials into becoming “money mules” through sham social media job posts (CIFAS in the UK being cited as a source); and
- illicit groups are using Russian crime forums to look for colluding hosts on Airbnb to launder cash from stolen credit cards
FORMER PROCUREMENT OFFICER AT US FEDERALLY-FUNDED NUCLEAR RESEARCH AND DEVELOPMENT FACILITY PLEADS GUILTY TO WIRE FRAUD AND MONEY LAUNDERING
On 5th December, the DoJ issued a news release saying that a former procurement officer employed at Sandia Corporation, the prime operator of a federally-funded nuclear R+D facility, pleaded guilty to charges of wire fraud and money laundering for orchestrating a scheme to obtain approximately $2.3 million in federal funds through fraudulent means and for laundering fraudulently obtained proceeds through her father’s companies. Sandia Corporation, managed and operated Sandia National Laboratories (SNL), a nuclear research and development facility owned by the federal government.
EU SANCTIONS: AMENDMENT OF LIBYAN SHIP DETAILS
On 7th December EU Council Decision 2017/2265/CFSP announced amendment of the details for the vessel “Capricorn”, which is listed pursuant to UN SCR 1970.
MONEYVAL: VATICAN/HOLY SEE HAS MADE PROGRESS ON AML/CFT, BUT NEEDS TO STEP UP EFFORTS TO OBTAIN PROSECUTIONS
The Council of Europe’s AML/CFT body Moneyval has published the 3rd progress report of the Holy See/Vatican City State. The report evaluates the Holy See’s compliance with the recommendations made by MONEYVAL in its Mutual Evaluation Report in July 2012 and developments since the last progress report submitted in December 2015.
HABIB BANK LTD NEW YORK
Business Recorder (Pakistan) reports that the New York State Department had imposed the fine $225 million on Habib Bank Ltd (HBL) New York Branch due to non-compliance of reporting procedure laid down by the Department. HBL is said to have been told to address and resolve issues in the areas of risk management, and compliance especially AML/CFT, ad since March 2016 HBL had to submit monthly updates to the regulator. However, the Pakistan parliament was told that no actual allegations of money laundering had been made against HBL New York.
THE AFRICAN UNION’S CHEQUERED HISTORY WITH MILITARY COUPS
ETH Zurich has published an article reflecting on the AU’s reaction to past coups and coup attempts in the light of the recent Zimbabwean changes.
https://isnblog.ethz.ch/government/the-african-unions-chequered-history-with-military-coups
MEMBER STATES WARNED ON NON-IMPLEMENTATION OF 4th ML DIRECTIVE
Letters of formal notice have been issued by the European Commission urging Cyprus, along with Bulgaria, Greece, Luxembourg, Malta, the Netherlands, Poland and Romania, to transpose the 4th AML Directive into their national legislation. Member States had to transpose the Directive into national law by June 26th. All the 8 countries have already received letters of formal notice in July and the Commission is now calling on them to take the necessary measures to fully comply with the Directive and if they fail to do within the next 2 months, the Commission may decide to refer the cases to the CJEU.
PONZI FRAUDSTER ESCAPES FROM PRISON IN USA
UPI reports that a Ponzi scheme fraudster behind $100 million fraud has escaped from federal prison in California. Frederick Darren Berg, 55, was serving an 18-year sentence for wire fraud, money laundering and bankruptcy fraud.
RISE IN APP FRAUD MAY LEAD TO LAW CHANGE ON COMPENSATION
On 7th December, iExpats reported that claiming compensation may become easier for fraud victims scammed into transferring huge sums of money to bank accounts controlled by criminals using automated push payment (APP) fraud. It reports that in the first 6 months of the year in the UK, 19,000 people inadvertently handed over £100 million to criminals.
For more information on APP see –
http://www.osborneclarke.com/insights/authorised-push-payment-fraud-who-pays/
https://www.psr.org.uk/psr-publications/news-announcements/PSR-sets-out-progress-on-tackling-scams
HONG KONG AND THE ENIGMA NETWORK
Bloomberg reports that, 5 months after one of the most dramatic stock crashes in Hong Kong history, the city’s authorities are stepping up their investigation into a group of companies that one prominent investor has dubbed the “Enigma Network.” It reports that anti-corruption and securities regulators searched 8 locations and arrested 3 senior company executives. The actions were related to the Enigma Network, a group of 50 listed businesses highlighted by activist investor David Webb for their complex web of cross-shareholdings, according to a person with knowledge of the matter.
TAIWAN SEEKING EXTRADITION OF 218 NATIONALS FROM SPAIN
Taiwan is seeking the extradition of 218 Taiwanese nationals who are being detained by the Spanish government on charges of telecom fraud. A total of 269 people were arrested for telecom fraud late last year by the Spanish government, 218 of whom were Taiwanese nationals.
THE COST OF THE UK’S STRATEGIC NUCLEAR DETERRENT
On 8th December the House of Commons published a briefing paper on the historic cost, and likely current/future cost of the independent nuclear deterrent.
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8166
‘IMPENDING CRISIS’ FOR UK WASTE RECYCLING DUE TO CHINA BAN?
Customs Today reports that China’s ban on imported plastic (and many other types of solid waste) from early 2018 puts the UK at risk of environmental pollution owing to the recycling industry’s lack of capacity, according to an investigation by Greenpeace UK. The UK exports almost two thirds of its total waste to China, with UK businesses shipping more than 2.7 million tons of plastic waste there and to Hong Kong since 2012.
UKRAINE: AS YANUKOVYCH FELL, REGIME-CONECTED BANK SENT MILLIONS OFFSHORE
OCCRP reported on 7th December how, in the last days of Yanukovych’s rule, about $19 million in state funds were diverted from a large Ukrainian bank that belonged to a friend of the president’s younger son. A portion of the funds ended up in offshore companies connected to the bank’s owner. A further $38 million disappeared from a correspondent account held by the same bank in Austria. Pivdenkombank had been established in 1990 as one of Ukraine’s first commercial banks in the post-Soviet era. Pivdenkombank was in part owned by a larger holding company called Metal Union, also controlled by Ruslan Tsyplakov. The group’s other assets included Zhovti Vody, an iron ore enrichment company; 3 oil refineries; and several companies specialising in the extraction of minerals in Africa. For the full story see
THAI AUTHORITIES SEIZE 50,000 SMUGGLED SIM CARDS
The Bangkok Post reports that authorities have seized more than 50,000 mobile phone SIM cards which may have been destined for sale to call centre scammers, at a checkpoint as the cards were smuggled in from Cambodia. Meanwhile, police have detained 21 suspects, including three Taiwanese nationals, in a major call centre gang and charged with them fraud and related offences. The suspects were arrested during 24 recent…
https://www.bangkokpost.com/news/crime/1374707/sim-card-haul-seized-from-mule
WHEN CAN A CLOSED MATERIAL PROCEDURE BE USED?
The Human Rights Blog from law chambers, One Crown Office Row, explains that the Justice and Security Act 2013 introduced the idea of Closed Material Proceedings (CMP) to civil litigation in a significant way for the first time. This is a procedure (which had previously only used in a small number of specialist tribunals) whereby all or part of a claim can be heard in closed proceedings in order for the court to consider material which, if disclosed publicly, would risk harming national security. These hearings exclude even the claimant, who is represented instead by a Special Advocate who takes instructions and then is unable to speak to his or her client again once they have seen the sensitive material. The post relates to a recent case where the Act’s reference to the use of such material in proceedings in a criminal cause or matter is not permitted. The Post reports that the court noted, in criminal matters “closed proceedings might be likely to breach Article 6, as well as long-established common law principles”, which is why they are exempted from the 2013 Act.
https://ukhumanrightsblog.com/2017/12/07/when-can-a-closed-material-procedure-be-used/
AUSTRALIA ADOPTS DEFERRED PROSECUTION AGREEMENTS
KYC 360 reports that Australia has established its deferred prosecution agreement (DPA) scheme which will enable prosecutors and firms suspected of wrong doing to negotiate settlements instead of going through the trial process, said the Ministry of Justice.
https://kyc360.com/news/australia-establishes-deferred-prosecution-agreements/
RUSSIA “READY FOR INF TALKS”
Rferl reports that Russia says it is prepared to hold talks with the US to maintain a landmark arms-control treaty signed between US and Soviet leaders in 1987. The Russian Foreign Ministry’s statement on December 8th coincided with the 30th anniversary of the Intermediate-Range Nuclear Forces (INF) Treaty, which eliminated an entire class of cruise and ballistic missiles in Europe and established a verification framework to ensure compliance. The US had accused Russia of being in violation of the treaty.
https://www.rferl.org/a/us-russia-says-ready-talks-on-arms-control-treaty/28904761.html
Missile Threat website on 8th December carried a story saying that US National Security Council official Christopher Ford had revealed in a speech at the Wilson Center on November 29th that the Russian missile said to be violating the INF Treaty is the land-based cruise missile Novator 9M729 (NATO designation: SSC-8). It reports that the Russian Ministry of Foreign Affairs released a statement saying that Russia is not violating the treaty, and it will continue to fulfill its obligations.
RUSSIA “HARASSING MOLDOVAN LEADERS”
Rferl reports that the head of Moldova’s ruling party has accused Russian authorities of harassing him and other party officials with bogus lawsuits. Vlad Plahotniuc was charged in absentia by Russian investigators with orchestrating the attempted murder of a banker in London in 2012, but Plahotniuc said that Russian officials are trying to frame him to put him on international law enforcement watch lists. He said he expected further retaliation after the Moldovan parliament passed a law to prevent the dissemination of foreign “fake news” on Russian-language and other channels.
SECURITY UNION: EU COUNCIL PAVES THE WAY TO IMPROVE THE TOOLS AVAILABLE TO JUDICIAL AND POLICE AUTHORITIES TO FIGHT TERRORISM AND CROSS-BORDER CRIME
EU Justice Ministers agreed on general approaches on 2 European Commission proposals that they say will contribute to completing the Security Union. First, the European Commission’s proposal extending the European Criminal Records Information System to third country nationals will make it easier for judicial authorities to exchange information on criminal convictions of non-EU citizens. See –
http://europa.eu/rapid/press-release_IP-17-1788_en.htm
Secondly, the proposed Regulation on the mutual recognition of freezing and confiscation orders will simplify the current procedures and improve the cross-border enforcement of freezing and confiscation orders. See http://europa.eu/rapid/press-release_IP-16-4401_en.htm
http://europa.eu/rapid/press-release_MEX-17-5189_en.htm
DRUG DEALING TELECOMMUNICATIONS RESTRICTION ORDERS REGULATIONS 2017
SI 2017/1240 provide the civil courts in the UK with the power to make a drug dealing telecommunications restriction order (DDTRO). DDTRO require a communications provider to close down particular phone lines (or take whatever action the order specifies) to prevent or restrict the use of communication devices in connection with drug dealing offences, and are said to respond to an urgent high priority operational need of the Police, to support them in tackling the issue of “county lines” drug dealing and its related violence and criminal exploitation. “County lines” is the police term used to describe the approach taken by gangs originating in large urban areas, who travel to locations elsewhere, such as suburban, county or coastal towns, to establish new or take over existing drug markets and sell predominately Class A drugs. Telecommunication Restriction Orders are already available in respect of prisoners.
http://www.legislation.gov.uk/uksi/2017/1240/contents/made
HM TREASURY ISSUES NOTICE AMENDING EU LIBYA SANCTIONS ON SHIP “CAPRICORN”
On 8th December, HM Treasury issued a Notice notifying changes to its Libya sanctions regime following the publication of Commission Implementing Regulation (EU) No 2017/2260, amending the details relating to the vessel “Capricorn”.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/665967/Libya_2017_2260.pdf
THE ARREST OF FORMER HONG KONG MINISTER
The South China Morning Post carries a story on the background to the arrest in the US of former Hong Kong home affairs secretary Patrick Ho Chi-ping on bribery charges last month, which it says came amid an upswing in co-operation between Washington and other countries trying to crack down on corruption. Ho, who had been working for a subsidiary of CEFC China Energy after he left the Hong Kong government, allegedly sent $2.9 million worth of bribes to Chad’s president, Idriss Déby, Uganda’s foreign minister, Sam Kutesa, and Ho’s co-defendant, Cheikh Gadio, formerly Senegal’s foreign minister.
OPPOSITION LEADER SAAKASHVILI ARRESTED IN UKRAINE
The Globe & Mail reports that Ukraine opposition figure Mikheil Saakashvili has been arrested. Saakashvili, the former president of Georgia who later moved to Ukraine, has been a leader of opposition to Ukrainian President Petro Poroshenko, especially criticizing the president’s failure to halt corruption in the country. The Ukraine authorities say it has evidence that Saakashvili’s representative received $500,000 to finance protests from Ukrainian businessmen with ties to Russia. Saakashvili rejects the allegations, pointing to his long record of opposition to Russian President Vladimir Putin. He is also wanted in Georgia on charges of abuse of office during his 2004-13 presidency.
THE CORRUPTION OF THE ANTI-CORRUPTION FIGHT IN ROMANIA
As a series of high-profile controversies have come to light, New Europe magazine has investigated Romania’s anti-corruption strategy. It says that this is the story of Romania’s fight against corruption: a 50% increase in indictments in the past 5 years, a conviction rate of 92%, and a ruthless crackdown seemingly unrivalled anywhere else in Europe. Urged on by European institutions desperate for a success story from the troublesome 2007 expansion, Romania’s National Anti-Corruption Directorate (DNA) has been lavished with praise in recent years. However, New Europe reports a very different story – one of intimidation, coercion, and apparent collusion with the Romanian Intelligence Service (SRI); a tragedy of corruption at the heart of the anti-corruption struggle.
https://www.neweurope.eu/article/corruption-romanias-anti-corruption-fight/
BILLIONAIRE GETTING BY ON £5,000 A WEEK
Fortune Carries a Bloomberg report that as the Indian tycoon, Vijay Mallya, fights his extradition from the UK back to India on fraud charges, another set of lawyers is trying to overturn a £1.15 billion worldwide freezing order against him across town. In the meantime, it says, Mallya has to get by on £5,000 a week, according to court documents. He is is accused by more than a dozen Indian banks, including the state-owned IDBI Bank Ltd., of willfully defaulting on about $1.4 billion in debt for his now-defunct Kingfisher Airlines Ltd.
http://fortune.com/2017/12/08/vijay-mallya-court-order/?src=ilaw
GUERNSEY SHARES SEIZED FRAUD MILLIONS WITH THE US
The BBC reports that a total of £9.5million recovered from an internet poker fraudster has been shared with US authorities. The funds were laundered by Raymond Bitar through Guernsey. In 2013 he pleaded guilty to defrauding Full Tilt Poker customers out of $350 million, but handed just $40 million to authorities. Now a total of $14.3 million has been shared by Guernsey with the US Treasury, relating to both Full Tilt Poker and a separate case. Guernsey authorities restrained bank accounts and provided financial records between 2012 and 2015 to help US investigators seize Bitar’s assets, and in 2013, he pleaded guilty to defrauding Full Tilt Poker’s customers about the security of their funds.
http://www.bbc.co.uk/news/world-europe-guernsey-42284441
https://www.gov.gg/assetsharing
https://guernseypress.com/news/2017/12/08/guernsey-shares-millions-of-forfeited-funds-with-us/
ARGENTINA: FORMER PRESIDENT DE KIRCHNER CHARGED
OCCRP carries a Reuters report that an Argentine federal judge indicted ex-president Cristina Fernandez de Kirchner for treason and other charges related to allegations that she covered up Iran’s possible involvement in a 1994 bombing of the AMIA Jewish center in Buenos Aires.
PERU PROSECUTORS RAID OFFICES OF KEIKO FUJIMORI’S PARTY
Risk & Compliance Hub carries a Washington Post story saying that prosecutors raided 2 offices of Peru’s main opposition party as part of an investigation of alleged money laundering by the campaign of losing presidential candidate Keiko Fujimori.
http://www.riskandcompliancehub.com/peru-prosecutors-raid-offices-of-keiko-fujimoris-party/
MACEDONIA MONEY LAUNDERING INVESTIGATION INTO HIGH-RANKING OFFICIALS
Risk & Compliance Hub reports that Macedonia’s prosecution has launched a probe into allegations that former high-ranking Macedonian officials have used companies in neighboring Serbia for money-laundering schemes. The prosecution said that it is probing allegations made by Serbian opposition leader Vuk Jeremic,
http://www.riskandcompliancehub.com/prosecutors-probe-macedonia-serbia-money-laundering-claim/
THE RISK OF NUCLEAR POWER IN THE MIDDLE EAST
Following the claim that Yemeni Houthis had targeted an attack on the Barakah nuclear power plant in Abu Dhabi (a claim denied by the UAE), the Bulletin of Atomic Scientists carries an article that nevertheless highlights the risks, saying that nuclear power facilities will always be potential targets for enemy states and non-state actors, including terrorist groups. In the Middle East, in particular, there is a history of attacks on nuclear sites during regional conflicts. It argues that UAE and other Middle Eastern countries should seriously consider the risks when deciding whether to pursue their own forays into nuclear power.
https://thebulletin.org/yemeni-rebel-claim-highlights-risk-nuclear-power-middle-east11335
OSCE WORKS TO COMBAT TRAFFICKING OF WEAPONS
The work of the Organisation for Co-operation and Security in Europe (OSCE) work in fighting illicit trafficking of small arms and light weapons is an important part of global anti-terrorism efforts, it was said at a ministerial conference in Vienna. The OSCE has been working on developing the best practice guide on deactivation of small arms and light weapons. In the area of preventing diversion of the weapons to illicit markets, the OSCE focuses on safe and secure storage of the small arms and light weapons, and also conventional ammunition.
The OSCE reports that in 2012-2017 the OSCE assisted Serbia in eliminating the risks to population and environment posed by unstable and unsecure napalm powder, white phosphorus-filled ammunition and special chemicals-filled ammunition. Due to the OSCE’s support more than 15,000 tonnes of the highly toxic and hazardous materials have been removed from rocket fuel components and safely disposed of in Ukraine making the country free from hazardous materials and eliminated the risk of leakage and contamination of the soil.
http://www.osce.org/forum-for-security-cooperation/361531
PLANS FOR NEW US COUNTERING WEAPONS OF MASS DESTRUCTION (CWMD) OFFICE
On 8th December, Homeland Preparedness News in the US carried a story saying that the US Congress in examining a new office within the Department of Homeland Security (the Countering Weapons of Mass Destruction (CWMD) Office) to counter diverse threat of WMD. And a witness at a House of Representatives sub-committee hearing identified drone delivery of biological, chemical and nuclear weapons as one of the newest threats to homeland security.
REZA ZARRAB MADE $150 MILLION EVADING IRAN SANCTIONS
In a trial in the US, Reza Zarrab claims he made some $150 million by helping Iran evade sanctions. KYC 360 reports the latest news from the trial of his former co-defendant, Turkish banker Mehmet Hakan Atilla.
raytodd.blog 