THINGS YOU MAY HAVE MISSED: DECEMBER PART 3

17th December 2017 

FIRST TIME ANYONE CHARGED WITH PROLIFERATION OFFENCE IN AUSTRALIA

The BBC and others reported on 17th December that Chan Han Choi, 59, who has lived in Australia for more than 30 years, has been arrested in Sydney for allegedly acting as an economic agent and brokering illegal exports from the country and discussing the supply of WMD to North Korea, Australian Federal Police (AFP) have said.  Police allege he has broken both UN and Australian sanctions.

It is the first time anyone has been charged under Australia’s 1995 Weapons of Mass Destruction (Prevention of Proliferation) Act.

The 6 charges relate to –

  • brokering services related to North Korea’s weapons programme, including the sale of specialist services including the sale of missile components, including software for the guidance systems of ballistic missiles to foreign entities, in order to generate income for the regime; and
  • brokering the sale of coal from North Korea to groups in Indonesia and Vietnam, though there was no indication officials in Indonesia or Vietnam had been involved in the attempted coal sales.

www.bbc.co.uk/news/world-australia-42382399

 

RE THE RECENT US AMBASSADOR TO THE UN AND HER SPEECH ABOUT IRAN “VIOLATIONS”

Passing Blue has an article about the speech given by Nikki Haley, US Ambassador to the UN, at which she produced what she said was evidence of Iranian-made missiles supplied to Houthi rebels in Yemen, and this being evidence of Iran breaching the Joint Comprehensive Plan of Action (JCPOA) and/or sanctions.  This is despite

  • the IAEA again recently reporting that that Iran is following the letter and spirit of its obligations under the JCPOA;
  • UN sanctions experts on Yemen have also reported many times that there is no evidence of violations of the arms embargo imposed on Yemen’s insurgencies by official Iranian actors, no indications that the government or its proxies act as suppliers of what was supplied;
  • Defense Department experts do not provide evidence on how a recently fired missile or drone ended up in the hands of the Houthis;
  • there is no evidence that Iranian military forces had pulled the trigger on the Qiam missile fired at Saudi Arabia on 5th November;
  • even if the missiles/drones were Iranian it is accepted by UN sanctions and arms-embargo experts, based on standards that have been honed over 18 years and in many conflict zones, that the use of arms in such settings does not automatically impugn the manufacturer of arms or the manufacturer’s country of origin; and
  • UN experts regularly report about maritime vessels and other transports that are stopped, searched and seized by the international community whilst attempt to ship weaponry to Yemen, but none include Qiam missiles.

http://www.passblue.com/2017/12/16/loose-missiles-loose-talk-nikki-haleys-claims-of-irans-lawless-behavior/

 

BRAZIL FOILS ATTEMPT TO EXPORT ENDANGERED TIMBER

The Guardian reports on a rare success against rising deforestation in the Amazon, foiling an attempt to export $30 million worth of timber to China. Brazilian police and prosecutors were able to stop the scheme before exports started in earnest by means of 2 connected, year-long operations that have seen 31 people charged, including 2 Chinese entrepreneurs, Brazilian businessmen, environment officials and the former head of the environmental licensing institute of the state of Amapá, on the edge of the Amazon basin.  The Chinese had paid Brazilian company Pangea Mineração (Pangea Mining) $3 million of $15 million they had agreed for 50,000 sq metres of wood.

https://www.theguardian.com/world/2017/dec/17/brazil-amazon-china-corruption-amazon-amapa

 

WTO COMMITMENT ON FISHERIES CONTROLS

Sandler Travis Rosenberg reports that at the 11th ministerial meeting of the WTO there was a commitment from members to secure a deal by the end of 2019 on comprehensive and effective disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing and eliminate subsidies that contribute to illegal, unreported, and unregulated fishing (IIU).  This commitment is in line with a September 2015 UN Sustainable Development Goal that sets a 2020 deadline for eliminating IUU subsidies and prohibiting certain forms of fisheries subsidies, with special and differential treatment for developing and least-developed countries.

https://www.strtrade.com/news.html

 

HOW THE US COULD (IT SEEMS) DETECT AND PREVENT A MISSILE STRIKE ON GUAM

The Center for International and Strategic Studies has a short, 2-minute video on its website demonstrating how the US could use its satellite and missile defences to detect and shoot down a ballistic missile fired by North Korea at the Pacific island of Guam.

https://www.csis.org/home?qt-csis_homepage_playlist=1#qt-csis_homepage_playlist

 

THE HINDU EXPLAINS WHY INDIA JOINED WASSENAAR

In an article on 17th December Indian national newspaper, The Hindu, explains why India had to join the Wassenaar Arrangement.   The Arrangement is a group of 42 countries (now including India, since 8th December) that seek to bring about security and stability, by fostering transparent practices in the process of sale and transfer of arms and materials and technologies that can be used to make nuclear weapons with a view to prevent any undesirable build-up of such capabilities.

India will be now, it says, be able to more easily access dual-use technologies and materials and military equipment that are proscribed for non-participating members. India will also be able to sell its nuclear reactors and other materials and equipment indigenously produced without attracting adverse reactions. It will also be in a better position to collaborate with other countries in developing such capabilities.

However, whilst also a member of the Missile Technology Control Regime (MTCR), India is not yet a member of the 2 other important non-proliferation bodies – the Nuclear Suppliers Group (a group of nuclear supplier countries that seeks to contribute to the non-proliferation of nuclear weapons through the implementation of 2 sets of Guidelines for nuclear exports and nuclear-related exports) or the Australia Group (an informal forum of countries which, through the harmonisation of export controls, seeks to ensure that exports do not contribute to the development of chemical or biological weapons).

See the article below for the response of Pakistan.

www.thehindu.com/todays-paper/tp-national/is-wassenaar-arrangement-important-to-india/article21824677.ece

“Joining Wassenaar is India’s latest step in quest for ‘responsible nuclear power’ tag”, says Eurasia Review. This article provides a handy precis of the history and background to the 4 export control regime bodies.

https://www.eurasiareview.com/16122017-joining-wassenaar-is-indias-latest-step-in-quest-for-responsible-nuclear-power-tag-analysis/

 

PAKISTAN DETERRENCE DEVELOPMENT AND CONCERNS OVER INDIA JOINING MTCR AND WASSENAAR

The Daily Times in Pakistan is explaining that Pakistan is pursuing Full Spectrum Deterrence (FSD) as part of its broader Credible Minimum Deterrence (CMD) philosophy. This is aimed at safeguarding against possible gaps in the country’s deterrence capability.  It says that the civilian National Command Authority gave full approval to the FSD in 2013.  It explains that the main function of the FSD remains as a responsive deterrent to India’s Cold Start Doctrine, which it says is best described as “a limited war strategy designed to seize Pakistan’s territory swiftly and without, in theory at least, risking a nuclear conflict”.  It says that FSD capability represents a range of options available to the decision-making bodies, and at its core is the development of nuclear capability aimed at bringing all Indian targets into Pakistan’s striking range.  The article argues that India’s increasing efforts to secure membership to all the export control cartels (see above) — especially its recent admission into the Missile Technology Control Regime (MTCR) as well as entering into the Wassenaar Arrangement — could very well disturb the strategic balance in the region.

https://dailytimes.com.pk/161124/pakistan-needs-fsd-capability/

 

THE ANNUAL UPDATE OF EU DUAL-USE CONTROL LISTS

On 16th December the annual revision to the list of dual-use items subject to control under EU law came into force.  This brings EU lists fully into line with the current international export control regimes (Wassenaar Arrangement, for conventional weapons and dual-use items; Australia Group, for chemical and biological weapons; the Missile Technology Control Regime (MTCR); and the Nuclear Suppliers Group (NSG).

Further changes to both the international bodies’ lists and the EU lists are expected in or by late 2018, as some changes have already been agreed by the bodies.

The Deccan Herald reports that India was able to become a member of the Wassenaar Arrangement because it had introduced a new “Category 8” – a new inclusion in the roll of Special Chemicals, Organisms, Materials, Equipment and Technologies, a.k.a. the SCOMET list, subject to controls.  Category 8 includes certain special materials and related equipment, material processing, electronics, computers, telecommunications, information security, sensors and lasers, navigation and avionics, marine, aerospace and propulsion.  The items included in the new Category 8 are the those that the Wassenaar Arrangement also put on its control list of dual-use goods and technologies.

www.deccanherald.com/content/647355/category-8-paves-way-indias.html

 

WHERE THE NORTH KOREAN LAUNCH VEHICLES CAME FROM

Bryens Blog, written by a US expert, explains that the (photographic) evidence demonstrates that the transport/erector launcher (TEL) vehicles used by the North Koreans to transport its ballistic missiles during recent tests must have originated in China (as both China and Russia produces them, but not North Korea), and been supplied to North Korea in contravention of sanctions.

Mind you, Arms Control Wonk will tell you that the TEL are not, in fact, TEL – they are used to transport and erect, but not launch (they refer to them as “deadbeat Dad”, as turn up, have an erection and then leave!).

The blog also suggests that high-spec gyroscopes used in the engines of the latest, and largest ICBM originated in Russia.

http://www.bryensblog.com/tel-tell-tale/

 

“CHINA BOOSTS DUAL-USE TECHNOLOGIES”

i-hls.com claims that China is to develop high-tech industries with military technologies to boost military-civil integration, in order to cultivate new growth drivers and boost the economy.  This said to be in a new guideline issued by the State Council, as was one of the 7 key tasks set by the guideline on deepening the military-civil integration in the defense technology industry.  The guideline lowers the access threshold for enterprises to enter the field of weaponry equipment and will make the process more transparent. The guideline targets sharing technological innovation bases and facilities between military and civilian sectors while more efforts will be made to apply military technologies to non-military areas.  It quotes Chinese sources saying that the military integration will also focus on key areas such as space, cyberspace and maritime sciences, while private capital is encouraged to enter military industries.

https://i-hls.com/archives/80301

 

UNEXPECTED HEADLINE?  IRISH MILITARY GOODS EXPORTS €63 MILLION LAST YEAR

The Irish Examiner reports that according to Department of Jobs, Enterprise, and Innovation figures the value of Irish exports of equipment that can be used for both military and civilian applications more than doubled last year to almost €3.3bn, of which show exports used solely for military purposes increased by 47% to €62.8m in 2016; and the number of licences issued to suppliers of military equipment went from 81 in 2015 to 128 in 2016.  The majority of exports were to the US, with sales worth €37.9m (including €29.5m for equipment used in aircraft and unmanned aerial vehicles specially designed or modified for military use).  Other destinations received far lower levels – the next being Germany (€8.7m) and Singapore (€7.7m).  The Department said the licences it granted were mostly for components rather than finished goods.  According to the article, the Department said that most of the increase was related to intra-company sales of dual-use equipment by one licence-holder.  It also says only 2 licence applications were refused in 2016 on the grounds of “consideration about the intended end-use and the risk of diversion”.

www.irishexaminer.com/ireland/irish-exports-of-items-for-military-purposes-hits-63m-464245.html

 

CHINA CONTINUES BUILDING “NEW” ISLANDS IN SOUTH CHINA SEA

The Asia Maritime Transparency Initiative on 14th December reports that whilst China continues to pursue diplomatic outreach toward its SE Asian neighbours, it has continued substantial construction activities on its dual-use outposts in the Spratly and Paracel Islands.  China completed the dredging and landfilling operations to create its seven new islands in the Spratlys by early 2016, and seems to have halted such operations to expand islets in the Paracel Islands by mid-2017. However, China remains committed to advancing the next phase of its build-up — construction of the infrastructure necessary for fully-functioning air and naval bases on the larger outposts.  There are some interesting photographs too.

https://amti.csis.org/constructive-year-chinese-building/

 

25 YEARS OF US-NORTH KOREA NEGOTIATION AND PROVOCATION

The Center for Strategic and International Studies has an article relating the story of the past 25 years of relations between North Korea and the USA.

https://beyondparallel.csis.org/25-years-of-negotiations-provocations/

 

ALLEGED USE OF WHITE PHOSPHEROUS IN UKRAINE

On 9th December, an article from the Atlantic Council Digital Forensics Lab carried a story saying that on 6th December, the Ukrainian Armed Force’s (UAF) TV channel, Ukrainian Military TV, published a video showing what is allegedly the use of phosphorus grenades by Russian-led separatist forces from the so-called Donetsk People’s Republic (DNR).  White phosphorus is used in a number of munitions, including grenades, mortar shells, and aerial bombs, either in order to produce a large amount of white smoke, or to utilize white phosphorus’s extremely dangerous incendiary properties.  Most commonly, the former purpose is intended  —  the thick white smoke produced by white phosphorus munitions can serve as a potent smokescreen or as a signaling mechanism.  However, this white smoke is produced alongside extreme heat, which can cause fatal chemical burns and significant fire-related property damage.

A number of countries, including Israel, the US, Saudi Arabia and Russia, have been accused of using white phosphorus in conflicts over the last decade.

https://medium.com/dfrlab/alleged-use-of-phosphorus-grenades-in-ukraine-a74cfdfffac4

 

18th December 2017 

UKRAINE OLIGARCHS PRIVATE SETTLEMENT OF DISPUTE INCLUDING SWAP OF LONDON PROPERTIES

OCCRP carries a story dated 15th December involving Viktor Pinchuk, Igor Kolomoisky, and Gennadiy Bogolyubov, described as Ukrainian billionaires who made much of their money during the privatisation of state property that followed the collapse of the Soviet Union.  All hail from Dnipro, where they clashed over the Kryvorizkyi Iron Ore Factory, which was privatised in 2004 under disputed circumstances.  In a lawsuit many years later against Kolomoisky and Bogolyubov in London, Pinchuk claimed that he had paid them for the plant, which they had agreed to buy from the government on his behalf.  But in the end, they refused to hand it over.  He said he lost $2 billion in the deal.  The case was begun in the courts in London.  But on the eve of trial in early 2016, the parties declared that a settlement had been reached.

According to the article based on the Paradise Papers, the case was settled using offshore vehicles and Isle of Man-based Appleby. Arrangements were such, it says, that funds for a Ukrainian enterprise, divided among Ukrainian businessmen, would bypass Ukraine and its tax inspectors. Moreover, they would also bypass England, since all payments would be made through bank accounts in offshore tax havens.  Pinchuk received from others 2 valuable London properties – an office building in Knightsbridge in central London, whose official owner is a company that is ultimately controlled by a trust based in Jersey.  The other was the “Grand Buildings” at 1-3 Strand Street in Trafalgar Square, an iconic structure that once housed London’s Grand Hotel.

For all details see the original article at –

https://www.occrp.org/en/paradisepapers/ukrainian-billionaires-exchanged-luxury-london-real-estate-in-secret-settlement

 

ESMA WARNINGS ON INITIAL COIN OFFERINGS (ICO)

William Fry recently issued a briefing saying that the European Securities and Markets Authority (ESMA) had published 2 separate statements addressed to firms and investors on Initial Coin Offerings (ICO).  It said that the statements provide some insight into ESMA’s current thinking on ICO which have gained much attention in the fast moving and ever expanding cryptocurrency arena.

It explains that an ICO is a relatively recently devised means of raising capital by offering virtual coins or tokens that are created in exchange for legal tender or other cryptocurrencies such as Bitcoin, with the capital raised usually going towards initiating or completing the creation of a new cryptocurrency. As well as speculating on the value of the prospective cryptocurrency, initial investors will usually also gain additional rights such as rights to participate in the project and to vote on how it is run.

The ESMA statement addressed to investors recognises the possibility that ICOs may operate in a wholly unregulated space.  ESMA highlights this as a major risk associated with ICOs along with a number of other concerns in respect of ICO referring to them as “extremely risky and highly speculative investments“.

https://www.williamfry.com/newsandinsights/news-article/2017/12/15/title-investors-and-firms-alerted-to-initial-coin-offering-risks

 

CORRUPTION IN THE INDONESIAN ARMS BUSINESS: TENTATIVE STEPS TOWARDS AND END TO IMPUNITY

The World Peace Foundation has issued this paper which says, inter alia, that before 2015 there were virtually no cases of military officers or defence officials being investigated in relation to corruption, and none in relation to arms procurement.  Military personnel remain exempt from the civilian justice system, which means that the Corruption Eradication Commission (Komisi Pembarantasan Korupsi, KPK), which has been very active in other spheres since its foundation in 2002, is unable to directly investigate military corruption.  It also says that the Indonesian military also retains a large network of business activities, formal, informal, and illegal, providing an off-budget source of income outside civilian control. The “top suppliers” 2012-16 are listed as the UK (20% of deliveries of major conventional weapons), USA (15%), Russia (14.4%), South Korea (11%), China (9.1%), and Germany (7.6%), but they also received major conventional arms from 13 other suppliers.

https://sites.tufts.edu/wpf/corruption-in-the-indonesian-arms-business/

 

UK SANCTIONS POLICY FACES UNCERTAIN FUTURE, WARNS HOUSE OF COMMONS COMMITTEE

On 17th December the EU External Affairs Sub-Committee published a report on sanctions policy post-Brexit.  This report concludes that the effectiveness of UK sanctions will be undermined unless the UK can quickly agree arrangements for future sanctions policy co-operation with the EU.  Without this, the UK could be left with the choice of imposing less effective unilateral sanctions or aligning with EU sanctions it has no influence over.

Key findings –

  • After Brexit, the UK will be able to unilaterally impose sanctions, but restrictive measures are most effective when imposed at the same time as other countries.
  • The principal interests and threats facing the UK and the EU-27 will not change fundamentally when the UK leaves the EU.
  • The Committee welcomes the Government’s intention to continue to work in close partnership with the EU and other international partners after Brexit, but notes that the Government’s proposed “tailored” and “unprecedented” approach to UK-EU collaboration on sanctions policy is untested.
  • The UK should pursue informal engagement, as the US does, with the EU on sanctions. However, this is not a substitute for the influence it currently exercises through formal inclusion in the EU meetings where the bloc’s sanctions policy is agreed.
  • If participation in the Common Foreign and Security Policy after Brexit is not possible—or not sought by the UK—then the Government should propose that a political forum be established between the UK and the EU, for regular discussion and co-ordination of sanctions policy.

https://www.parliament.uk/business/committees/committees-a-z/lords-select/eu-external-affairs-subcommittee/news-parliament-2017/brexit-sanctions-policy-publication/

 

ISLE OF MAN-BASED PREMIER GROUP LOSES LICENCE

International Adviser reported 18th December that the Isle of Man-based Premier Group (PGIOM), the company behind the ill-fated £300 million New Earth Group of funds, has had its financial services operating licence revoked by the island’s regulator.  The Premier Group went into liquidation June 2016 after Isle of Man authorities ordered the New Earth Group to wind up 3 unregulated funds, for which taxpayers in the island would have to pay the bill.  One of the funds was the Eco Resources Fund which invested in bamboo plantations in Nicaragua, while another fund invested in the development and ownership of recycling facilities in the UK.  It is reported that around 3,250 investors put £292 million into the fund, the majority of whom fear they will lose all or a significant part of their money.  For more details see –

https://international-adviser.com/new-earth-owner-licence-revoked/

 

FROM ANTI-NARCOTICS LEGEND TO DRUG KINGPIN

On 15th December, El Pais in Spain reported on the head of a police group that held record for cocaine seizures in Catalonia who is now in prison himself.  Inspector Calixto M.G would always get the tip-off that led to the exact container on the exact ship coming in to port – and buried among legal merchandise was the cocaine. But curiously enough, there were hardly any arrests.  The truth was that Calixto was not only carrying out his work as deputy chief of a drug squad that had chalked up a record number of hauls in the region: he was also eliminating the competition.  He is now awaiting trial, charged with orchestrating a drug ring that planned to bring 2 enormous consignments of cocaine – 1,100 kg and 600 kg – from Colombia to the port of Barcelona.

https://elpais.com/elpais/2017/12/12/inenglish/1513097385_602677.html

 

EU TOBACCO TRACK AND TRACE SYSTEM FOR TOBACCO PRODUCTS TO COMBAT ILLEGALITY ETC

On 15th December the EU published a Q&A sheet on unique identifier codes to be applied to unit packets.  The amount of duty that EU tax administrations lose to illicit trade has been estimated at about €11.1 billion a year, representing a major funder of organised crime, as well as constituting a threat to public health, in large part because of the questionable content and production processes involved in illicit cigarettes and other tobacco products.  The Framework Convention on Tobacco Control (FCTC) Protocol to Eliminate Illicit Trade in Tobacco Products, which the EU ratified in 2016, requires the traceability system to be independent from the tobacco industry, and this will be the case in the EU.  Both the traceability system and the security features should be in place by 20th May 2019 for cigarettes and roll-your-own tobacco and by 20 May 2024, for all other tobacco products (such as cigars, cigarillos and smokeless tobacco products).

http://europa.eu/rapid/press-release_MEMO-17-5270_en.htm

 

BRAZIL SEES BIGGEST DRUG HAUL IN 22 YEARS

On 14th December Xinhua reported that the Brazilian federal police said that this year’s marijuana and cocaine haul has been the biggest in the past 22 years.  324 tons of marijuana and 45 tons of cocaine were seized between January and December 13th. Police attributed the success to more patrols, improvements in investigations, and more investments in technology that supported agents’ efforts.  Most of the drugs came from abroad. The marijuana was mostly from Paraguay and cocaine from Bolivia, Colombia and Peru.  Sao Paulo, which has the largest port in Brazil, registered the biggest cocaine seizure in 2017 — 16 tons out of the 45 tons confiscated so far.

http://news.xinhuanet.com/english/2017-12/15/c_136828177.htm

 

COCAINE PRODUCTION INCREASE IN COLOMBIA FUELLING EU DRUG TRAFFICKING

On 15th December, Colombia Reports quotes Europol saying that a “significant increase in production in Colombia has caused intensified trafficking activity” to the EU.  Europol made the claim in its “How Illegal Armed Drugs Sustain Organized Crime in the EU” report.

https://colombiareports.com/increased-cocaine-production-colombia-driving-drug-trafficking-europol/

 

COLOMBIA’S LARGEST ILLEGAL ARMED GROUP CALLS UNILATERAL CEASEFIRE

Also on 15th December, Colombia Reports carries an article saying that paramilitary group AGC, the largest illegal armed group in Colombia, on announced a unilateral ceasefire while it waits for the government to prepare its surrender.

https://colombiareports.com/colombias-largest-illegal-armed-group-calls-unilateral-ceasefire/

 

TECHNOLOGY AND THE EVOLUTION OF EXTORTIVE CRIME

Control Risks has issued an analysis saying that as technology continues to change the nature of modern life and business, so crises continue to evolve in both sophistication and complexity. Kidnapping has long been one of the highest-impact crimes for companies and their personnel, but a host of additional perils now have the potential to disrupt business. Technological advances are not only enabling new dangers to flourish, but also changing the ways in which old ones manifest. As criminal activities evolve at an ever quickening pace, corporate responses must keep up.  The analysis examines the period 2007 to 2017.

https://www.controlrisks.com/riskmap-2018/articles/technology-and-the-evolution-of-extortive-crime

Technology-fig1-100x563

NEW STUDY OFFERS INSIGHT INTO ZETA OPERATIONS IN MEXICO

A new study of the Zetas’ operations in northern Mexico offers a detailed examination of the roots of the organisation’s power as well as the extent of its reign of terror in 2011.  During the period in question, previously tranquil Coahuila witnessed one a severe downward spiral into violence.  Much of the study focuses on the Zetas’ control of the prison facility in Piedras Negras, Coahuila, a border town.

https://www.insightcrime.org/news/analysis/new-study-offers-insight-zeta-tyranny/

 

THE REAL RISKS IN THE MIDDLE EAST

Control Risks offers an analysis of what it sees as the real risks present in the Middle East.  It argues that it is hard to avoid turning to the familiar constructs and contrasts of: Sunni and Shia; democracy and authoritarianism; Israelis and Palestinians; youth and unemployment, Iran versus Saudi Arabia.  However, it contends, business leaders need to look beyond these appealing but simplistic prisms to identify and isolate the most likely issues that could disrupt business in the Middle East in 2018.  Despite rhetoric casting the future of the Middle East as an existential battle between the 2 regional powers, it thinks that a direct military confrontation between Iran and Saudi Arabia remains unlikely.  However, this rivalry will continue to play out indirectly, not face-to-face.  Look out for, it says, that simmering, rather than boiling, animosity in almost all the other regional flashpoints: prominent among them are Lebanon, Iraq and Oman.

https://www.controlrisks.com/riskmap-2018/articles/the-real-risks-in-the-middle-east

 

PODCAST: THE NORTH KOREAN ECONOMY, HOW IT DEVELOPED, AND HOW SANCTIONS AFFECT/MIGHT AFFECT IT

This interesting podcast from the Peterson institute for International Economics (PIIE) involving Soumaya Keynes of The Economist and Chad P. Bown of PIIE examines the origins of the North Korean economy, and how its characteristics could be amenable (or not) to the use of economic sanctions and inducements to resolve this issue.

https://piie.com/blogs/north-korea-witness-transformation/noland-trade-talks-podcast-sanctions-north-korea

 

ISRAELI COMPANY SUPPLIED SPYWARE TO ETHIOPIA USED TO TARGET DISSIDENTS ETC

Al Jazeera and the Times of Israel report that Ethiopia has “apparently” employed spyware purchased from an Israeli defence contractor to spy on independent journalists and dissidents living outside of the country, a recent report has revealed. Israel’s CyberBit Solutions Ltd (a subsidiary of Elbit Systems, an Israeli defence contractor with ties to the Israeli military) sold spyware to Ethiopia, which used the technology “to target activists and journalists, even PhD students and lawyers”, explained Bill Marczak, a researcher at the University of Toronto’s Citizen Lab, who wrote the report.  Marczak told Al Jazeera at least 43 people in 20 different countries – including the US, UK, Canada, Germany, and Eritrea – were infected over the course of about a year with the CyberBit spyware, known as the PC Surveillance System (PSS).  A spokesperson for the company said its products are regulated by the Israeli Ministry of Defense in accordance with the Israeli Defense Export Control Law and international treaties.

www.aljazeera.com/news/2017/12/ethiopia-targets-activists-israeli-spyware-report-171207194604670.html

https://www.timesofisrael.com/israels-elbit-spyware-accused-of-tracking-ethiopian-dissidents/

 

QATAR DIPLOMATIC CRISIS – WHERE ARE WE NOW?

Baker Mckenzie has issued a December 2017 update on the political and economic boycott of Qatar, which began on 5th June when Saudi Arabia, the UAE, Bahrain and Egypt cut diplomatic ties with Qatar and moved to close off access to the Gulf country, and which continues to have a significant impact on international trade in the Middle East.  The indications are, is says, that the dispute is unlikely to be resolved in the short term and will continue to be even more disruptive.  Some of the highlights from the briefing –

  • in August 2017, Qatar restored diplomatic ties with Iran by sending an ambassador to Tehran.
  • Qatar also asked the WTO to set up a dispute panel to adjudicate on its row with the UAE.
  • there are still no publicly released restrictions on investment between Qatar and the boycotting countries.
  • Qatar inaugurated a new $ 7.4 billion deep sea port along its Gulf coast in September 2017 as a regional transport hub to help shield its economy against the sanctions. The port has been receiving large quantities of food and building materials for construction projects since the boycott began, and allows Qatar to import goods directly from countries such as China and Oman instead of through a major re-export hub in Dubai.
  • Qatar has expanded shipping routes to India, Oman, Turkey and Pakistan and announced plans to raise its liquefied natural gas (LNG) output by 30% in an apparent effort to prepare for greater economic independence in the long term.
  • there is now a clear practice by the Qatar authorities to prohibit the import of goods of Saudi, UAE, Bahraini or Egyptian origin, including indirect shipments.
  • Qatar opened up its visa regime in September 2017, offering visa-free entry for citizens of 80 countries and becoming the first GCC country to create a permanent resident status for expatriate workers who have “given service to Qatar” or possess “skills that can benefit the country.”
  • UAE, Saudi Arabia, Bahrain and Egypt further extended their terrorist watch lists on 22nd November, adding 2 organisations and 11 individuals. The latest additions bring the list to 79 individuals and 23 organisations, including from 9 Arab countries, suspected of sponsoring terrorism and linked to Qatar.

For more detail, including Q&A on the main points, see the full article at –

www.bakermckenzie.com/en/insight/publications/2017/12/december-2017-overview-qatar-diplomatic-crisis

 

EU PROPOSES BAN ON “SPICE” AND OTHER PSYCHOACTIVE SUBSTANCES

The European Commission on 18th December proposed imposing a ban on 7 new psychoactive substances, including ‘spice’, ‘herbal incense’ and ‘legal weed’. The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) says the substances have been linked to some 170 deaths across the EU.  They would already probably be caught by the ban contained in the Psychoactive Substances Act in the UK.

http://europa.eu/rapid/press-release_IP-17-5289_en.htm

 

COUNCIL OF EUROPE UPDATE REPORT ON CORRUPTION IN ICELAND

The anti-corruption body of the Council of Europe has published a compliance update report on corruption prevention in respect of members of parliament, judges and prosecutors in Iceland.  In view of the conclusions contained in the previous Fourth Round Compliance Reports on Iceland and in view of the latest report, GRECO concludes that Iceland has implemented satisfactorily in total 5 of the 10 recommendations contained in the Fourth Round Evaluation Report. Out of the remaining recommendations, 3 have been partly implemented and 2 have not been implemented.

https://rm.coe.int/fourth-evaluation-round-corruption-prevention-in-respect-of-members-of/1680770758

 

HOME OFFICE RESPONSE TO SELECT COMMITTEE REPORTS ON RADICALISATION AND HATE CRIME (ABUSE, HATE AND EXTREMISM ONLINE)

On 18th December the UK Government published its response to the 8th Report of the Home Affairs Select Committee on radicalisation.  The report criticized the Government’s “broad brush” approach, and made a number of specific recommendations, which the response comments upon. The Government also issued its response to the 14th report of the same Select Committee on hate crime: abuse, hate and extremism online

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/668680/CCS207_CCS1217596216-1_Cm_9555_-_COVERS_AND_TEXT_WEB.pdf

https://www.gov.uk/government/publications/abuse-hate-and-extremism-online-government-response-to-14th-hasc-report-hc609

1MDB-web-of-money

The 1MDB case trail as published by

https://aliran.com/coalitions/clean-and-fair-elections/forex-losses-not-money-laundering-focus-1mdb/?src=ilaw

 

AML SUPERVISORY REVIEW: UK CONSULTATION RESPONSE – OPBAS OPERATIONAL ON 17th JANUARY

On 18th December, HM Treasury published its response to its consultation which sought views on whether the draft Oversight of Professional Body AML and Counter Terrorist Financing (CTF) Supervision Regulations (“the OPBAS Regulations”) delivered on the government’s intention that the Office for Professional Body AML Supervision (OPBAS) helps to ensure that professional body AML supervisors (PBS) comply with their obligations in the Money Laundering Regulations; and the impact on business from establishing OPBAS.  The OPBAS regulations have now been laid in Parliament, and will take effect on 17th January when OPBAS will become operational.  HM Treasury has to review whether OPBAS is the most effective and efficient way to fulfill requirements by June 26th 2022.

The response makes clear that the powers of OPBAS to publicly censure or recommend the removal of a PBS will apply to all relevant breaches.  The government has also clarified that OPBAS may publicly censure or recommend the removal of a PBS, or both, in response to a single contravention.  An appendix to the response is in Q&A format, answering many of the questions posed by a number of respondents.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/668772/AMLSR_response_to_consultation_web.pdf

 

BRIEFING NOTE ON UK AML LAWS

The House of Commons Library has issued this Briefing Paper which charts successive phases of UK money laundering regulations and considers their benefits and burdens.  It sets out the main features of the UK’s money laundering legislation which is comprised largely of legislation derived from the EU 3rd and 4th Money Laundering Directives, concentrating especially on the impact of the legislation on the financial services industry and upon professional services, such as accountants and solicitors, who are most exposed to the law.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN02592

 

HOUSE OF COMMONS BRIEFING ON THE SITUATION IN UKRAINE

On 18th December the House of Commons Library produced a Debate Pack for the debate on the ‘Situation in Ukraine’, to be held in Westminster Hall on 20th December.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CDP-2017-0260

 

PAYMENT PROCESSOR FOUND JOINT & SEVERALLY LIABLE WITH TELEMARKETING FRAUDSTER

Morrison & Foerster in the US have produced a briefing on a Florida case.  On December 13th  a court of appeal affirmed the decision of the US District Court for the Middle District of Florida finding a credit card payment processor jointly and severally liable, under a theory of aiding and abetting, for the full judgment entered against fraudulent telemarketers.  The payment processor, Universal Processing Services of Wisconsin, LLC and its then President did not appeal the trial court’s finding of aiding and abetting liability under the Federal Trade Commission’s telephone sales rule, but challenged the amount of judgment.  The principal merchant defendants were found to have operated a telemarketing boiler room scheme to exact payments from consumers in exchange for fraudulent credit card interest reduction services.  The briefing says that the FTC likely will be emboldened to pursue payment processors under an aiding and abetting theory where a determination is made that telemarketing merchants commit fraud, and payment processors aren’t the only financial services providers who could face liability for aiding and abetting fraud

https://www.jdsupra.com/legalnews/joint-and-several-liability-for-payment-72016/

 

CANADIAN-IRANIAN CITIZEN RECEIVES 32 MONTHS IN PRISON IN USA FOR CONSPIRING TO VIOLATE IRAN SANCTIONS

On 15th December a DoJ news release reports that Ali Soofi, between 2014 and December 2016, conspired to export military items from the US to Iran, both directly and through transshipment to intermediary countries, without a licence.  In particular, he acted as a broker on behalf of Iranian clients, including a high-ranking official in the Iranian Revolutionary Guard Corps, who sought US military technology.  The goods included helicopters, high-tech machine gun parts, tank parts, and military vehicles, all without a licence and knowing that such shipments were illegal under US law.   He worked to fill specific orders for the IRGC by contacting other individuals with access to the requested military items through email, phone, and in-person meetings.

https://www.justice.gov/usao-sdny/pr/canadian-iranian-citizen-sentenced-white-plains-federal-court-32-months-prison

 

WILL HONG KONG CONTINUE ITS EXPORT RESTRICTION ON BABY FORMULA?

Customs Today reports that, whilst it is 9 years since Mainland China witnessed the scandal of milk powder-melamine contamination that caused 30,000 babies to fall sick and 6 to die, suspicion over domestic food brands remains, especially on what people feed their infants, the most vulnerable in terms of health.  This has prompted mainland parents and smugglers to buy up foreign-made infant milk powder overseas, a situation that has often led to shortage of those products in places such as Hong Kong.  That is said to be why a majority of Hong Kong people want to keep in place the limit imposed in 2013 of 1.8 kg or 2 tins of milk powder being carried out of the city.  The government is now considering whether to cancel the limit.  In 2014, 5,152 people were caught smuggling milk powder in 4,300 cases.  The figure fell to 4,300 and 3,900 cases in 2015 and 2016 respectively. In the first 9 months of this year, there were 2,900 cases.

http://www.customstoday.com.pk/hk-may-be-better-off-retaining-the-curbs-on-milk-powder-export/

 

CHINA BUILDING PORT IN PAKISTAN

Loadstar carries a story from gCaptain website about the Pakistani port of Gwadar which is being built by China as part of its widening geopolitical expansion efforts.  However, in contrast to other infrastructure projects it is being accompanied by some $500 million in grants. The normal Chinese modus operandi is state-backed loans, which come with caveats that the debtors may not be fully aware of: compare and contrast with Gwadar’s Sri Lankan counterpart, Hambantota, the construction of which loaded the government in Colombo with so much debt that it gave China a 99-year lease on the port in return for reducing the repayments.  For its investment in Gwadar, China will receive 91% of revenues until the port is returned to Pakistan in 40 years.  The operator, China Overseas Ports Holding Company, will also be exempt from major taxes for more than 20 years.

http://gcaptain.com/china-lavishes-aid-pakistan-town-hope-build-deepwater-port/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Gcaptain+%28gCaptain.com%29&goal=0_f50174ef03-085ab9fdf0-139898593&mc_cid=085ab9fdf0&mc_eid=57ba42f705

 

TOBACCO TAX RISE DRIVING IRISH SMOKERS TO BLACK MARKET

Customs Today reported on 18th December that the Irish government was warned that increasing the duty on cigarettes by 50% in the recent budget may not yield any extra revenue.  Revenue officials told the Department of Finance that the increasing cost of tobacco was driving more Irish smokers to buy abroad or on the black market.  The advice was in an internal pre-budget advice note for the finance minister, who was told that the Revenue Commissioners had “expressed concerns that increases in excise may not lead to increased yields as consumers are further incentivised to exit the tobacco market in Ireland”.

http://www.customstoday.com.pk/tobacco-tax-rise-driving-smokers-to-black-market/

 

OECD: LITHUANIA HAS MADE REFORMS TO FIGHT FOREIGN BRIBERY AND SHOULD NOW ENSURE EFFECTIVE ANTI-BRIBERY ENFORCEMENT

On 18th December the OECD said in a news release that Lithuania has taken significant steps to strengthen its legislative framework to combat foreign bribery.  However, it said further efforts are needed to ensure effective enforcement of anti-bribery laws with regard to corporate liability and imposing sanctions for foreign bribery, including confiscation, according to a new report by the OECD Working Group on Bribery.

http://www.oecd.org/newsroom/lithuania-has-made-significant-legislative-reforms-to-fight-foreign-bribery-and-should-now-ensure-effective-anti-bribery-enforcement.htm

For more information on OECD’s work on combating corruption see –

http://www.oecd.org/corruption/

 

JERSEY’S NEW CRIMINAL JUSTICE LAW – COMEMNTS FROM PUBLIC

On 18th December, Jersey reported on comments received to the consultation on proposed new legislation concerned with criminal procedure.  The new law is due to be debated in the New Year.

https://www.gov.je/News/2017/Pages/CriminalJusticeLaw.aspx

 

APPLEBY TO SUE THE GUARDIAN OVER PARADISE PAPERS

International Adviser reported on 18th December that Appleby, the law firm at the heart of the Paradise Papers hack is seeking damages and has demanded that the Guardian and the BBC hand over documents.

https://international-adviser.com/appleby-sues-guardian-bbc-paradise-papers/

 

INTERNATIONAL CRIMINAL NETWORK INVOLVED IN SYNTHETIC DRUG TRAFFICKING DISMANTLED

On 12th December, a co-ordinated international operation supported by Eurojust and Europol dismantled an organised crime group involved in the production and trafficking of drugs and psychotropic substances and in money laundering.  The law enforcement and judicial authorities of Iceland, the Netherlands and Poland carried out joint operations against this organised crime group consisting mainly of Polish nationals.  8 suspects were arrested, 30 locations were searched and different types of drugs seized. Moreover, cash and other assets (such as cars, apartments and bank accounts) in excess of €1.8 million were seized.  The high value of asset seizure is also the result of the simultaneous financial investigations, initiated from the beginning of the case and targeting the proceeds of crime.

https://www.europol.europa.eu/newsroom/news/international-criminal-network-involved-in-synthetic-drug-trafficking-dismantled

See also –

ORGANIZED CRIME OPERATION WITH TENTACLES IN ICELAND ERADICATED IN INTERNATIONAL POLICE OPERATION

http://icelandmag.visir.is/article/organized-crime-operation-tentacles-iceland-eradicated-international-police-operation?src=ilaw

 

MAGNITSKY SANCTIONS UPDATE: CANADA

In the latest TRACE podcast, Bill Browder discusses Canada’s new Justice for Victims of Corrupt Foreign Officials Act and which country he hopes will be the next to adopt a similar law.

https://www.traceinternational.org/bribe_swindle_or_steal

 

FORMER HONDURAN CONGRESSMAN JAILED IN USA

Risk & Compliance reports that a Honduran businessman and former politician has been sentenced by a US court to 36 months in prison for laundering drug money.  Yani Rosenthal, 52, pleaded guilty in July to a single money laundering charge.  He is a member of a prominent family that owns a meatpacking business and which prosecutors say engaged in a multi-year scheme to launder proceeds of narcotics trafficking and bribery offences through accounts located in the US. Also charged were Rosenthal’s father, Jaime Rosenthal, and cousin, Yankel Rosenthal. Yankel pleaded guilty in August while Jaime remains in Honduras.

http://www.riskandcompliancehub.com/former-honduran-congressman-sentenced-to-36-months-for-money-laundering/

 

EMERGENCY IMPORT RESTRICTIONS IMPOSED ON ARCHAEOLOGICAL AND ETHNOLOGICAL MATERIALS FROM LIBYA

Baker McKenzie reports that US Customs has imposed emergency import restrictions on certain archaeological and ethnological materials from Libya, and which represent the cultural heritage of Libya.  The rule is made under the terms of the Convention on Cultural Property Implementation Act, which implements the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property.

http://www.internationaltradecomplianceupdate.com/2017/12/18/us-emergency-import-restrictions-imposed-on-archaeological-and-ethnological-materials-from-libya/

 

COURT OF APPEAL OVERTURNS IPCC DECISION IN CASE WHERE MAN STOPPED FOR QUESTIONING UNDER TERRORISM LAWS

Monckton Chambers reports on 18th December that, in R (Miah) v IPCC, the Court of Appeal has ruled against the Independent Police Complaints Commission (IPCC) in a case involving the disclosure of information to a complainant where national security concerns arise.  Miah  was ‘stopped’ by the Metropolitan Police at Heathrow Airport under Schedule 7 to the Terrorism Act 2000, which allows the police to stop travellers to question them about terrorism concerns, even where there are no grounds of suspicion. He complained to the Metropolitan Police that he had been discriminated against on grounds of race and religion and appealed to the IPCC when his complaint was dismissed without being told the reason for the stop.  The IPCC dismissed his appeal.  The Court of Appeal found that the Metropolitan Police investigation report was defective because it failed to sufficiently explain why the complaint had been dismissed, and there was no evidence that the police had considered and applied the statutory ‘harm test’ for redaction and non-disclosure.  The Court held that the IPCC was therefore wrong not to uphold the Appellant’s appeal that the complaint required further consideration.

https://www.monckton.com/court-appeal-rules-independent-police-complaints-commission-schedule-7-terrorism-stop-case/

 

EU LEGAL & POLICY FRAMEWORK FOR PERSONS SUSPECTED OF TERRORISM-RELATED CRIMES

A study, commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the European Parliament Committee on Civil Liberties, Justice and Home Affairs (LIBE Committee), presents an overview of the legal and policy framework in the EU and 10 select Member States on persons suspected of terrorism-related crimes.  The study analyses how Member States define suspects of terrorism-related crimes, what measures are available to state authorities to prevent and investigate such crimes and how information on suspects of terrorism-related crimes is exchanged between Member States.  The comparative analysis between the 10 Member States subject to this study, in combination with the examination of relevant EU policy and legislation, leads to the development of key conclusions and recommendations.

http://www.europarl.europa.eu/RegData/etudes/STUD/2017/596832/IPOL_STU(2017)596832_EN.pdf

 

DRAFT US BILL WOULD REQUIRE REPORTS ON AIRCRAFT PURCHASES BY IRAN

Homeland Preparedness reports on 18th December that the US Treasury would be required to report to Congress financial transactions related Iran’s purchase of commercial passenger aircraft from US manufacturers if a Bill that the House of Representatives has approved becomes law.  Under the Obama Administration’s OFAC authorised US aircraft manufacturers to begin negotiations with Iran in March 2016.  Since then, OFAC has permitted the sale of more than 200 aircraft.

https://homelandprepnews.com/stories/25811-house-approves-bill-enhance-oversight-iranian-aircraft-purchases-us-manufacturers/

 

 

19th December 2017

CONSULTATION ON NEW AML/CFT BILL IN THE ISLE OF MAN

On 18th December the Isle of Man launched a public consultation on the Anti-Money Laundering and Other Financial Crime (Miscellaneous Amendments) Bill 2017, which contains proposed changes designed to enhance its compliance with global standards on AML/CFT.  The Bill also acts on the recommendations made by Moneyval in its mutual evaluation report to strengthen the regulatory framework and further protect the island from financial crime.  The Bill proposes new measures aimed at trustees acting in a personal capacity (non-professional trustees) and foreign trustees, including requirements to keep records.  There are additional record-keeping requirements for Foundations and changes that clarify the powers of the Companies Registrar to examine and investigate relevant documents filed with the Registry.  The proposed legislation includes a higher level of financial penalties for failing to grant law enforcement authorities timely access to information. It also makes it explicit that where parts of a dishonesty offence such as theft or forgery were committed abroad, these can be prosecuted in a Manx court. It would not matter if offenders were operating from abroad, as they would be caught by the legislation.

https://www.gov.im/news/2017/dec/18/new-bill-aimed-at-protecting-isle-of-man-from-financial-crime/

 

ANOTHER THING TO WORRY ABOUT – ROGUE AQUATIC DRONES

On 19th December the Eurasia Review carried an article saying it is only a matter of time before aquatic drones cause as much of a potential threat and concern as aerial UAV do already. It says that terrorists have reportedly retrofitted aerial drones to conduct attacks and surveillance. The proliferation of aquatic drones may plausibly widen the terrorists’ capabilities and opportunities for attacks to coastal cities (or vessels, for that matter). It refers to seaborne attacks already made or attempted using small boats.  Over time, it contends, the aquatic drone technology would expectedly become more commercially viable and affordable, and so available to terrorists.  One might bear in mind the use already of “home-made” submarines by Colombian drugs cartels.

https://www.eurasiareview.com/19122017-rogue-aquatic-drones-analysis/

 

EMERGING TRENDS IN TERRORISM

US-based think tank, New America, has published a lengthy paper: “Jihadists Terrorism 16 Years After 9/11: a Threat Assessment”, which includes a section highlighting some emerging trends in terrorist attacks, these include –

  • TATP (triacetone triperoxide): the hydrogen peroxide-based bomb of choice, though the ingredients are highly unstable and can explode if improperly handled, and (the paper argues) therefore its use often indicates that a perpetrator received training or direction from a foreign terrorist group
  • The rise of vehicular attack, as evidenced in the UK
  • The use of armed drones by terrorist groups – ISIS had been experimenting with drone technology since at least 2015
  • The threat to airports and aviation – with 3 main threats to this sector deserving focus, the paper contends: attacks against aircraft involving explosives or other weapons taken past security; insider threats at airports that can allow terrorists to bypass security efforts; and attacks on unsecured parts of the airport
  • Bioterrorism – the paper says that one should not be so much concerned with terrorists who try to master biological weapons, but rather trained biologists becoming effective terrorists
  • Hostage-taking – the paper quotes statistics claiming that nearly 300 Westerners are known to have been taken hostage by jihadist groups over the last 16 years, including 50 Americans. On average, 18 Westerners have been kidnapped by jihadists each year over that period. These kidnappings, driven primarily by the Syrian civil war and the expansion of ISIS, peaked at 45 in 2013, declining to 10 in 2016. It says that, despite the recent decline in the number of incidents, jihadist groups continue to kidnap Westerners for propaganda and ransom. Ransom payments remain the primary source of funding for groups like Al-Qaeda in the Islamic Maghreb and Abu Sayyaf
  • The merging of terrorism and the media – with the use of social media to recruit, influence, inspire or claim credit for action (whether or not the group had any involvement) etc
  • The continued absence of CBRN attacks by jihadists in the US while terrorists motivated by other ideologies are trying to develop such weapon – so far, jihadists have not succeeded in using WMD in attacks in the West. Interestingly, the paper refers to attempted attacks by right-wing extremists in the US using such weapons or seeking to acquire their precursors

https://na-production.s3.amazonaws.com/documents/Terrorism_9-11_2017.pdf

 

IRISH CRIMINAL JUSTICE (CORRUPTION OFFENCES) BILL

Irish law firm Beauchamps reports that following the publication of the Irish Government’s report on white collar crime in November, the Minister for Justice and Equality has published the much anticipated Criminal Justice (Corruption Offences) Bill 2017. This Bill aims to completely modernise Irish anti-corruption law, repealing and replacing the 7 existing Prevention of Corruption Acts 1889 to 2010 into a single statute and providing for a number of new offences and for stronger penalties on conviction.  The firm reports that the Bill was introduced on 2nd November and has been referred to select committee.  The Bill is due to be enacted by the end of 2018.  The firm particularly notes clause 18 of the Bill which is concerned with the potential personal liability of a company’s officers, employee, shareholders or subsidiary.

https://www.beauchamps.ie/publications/536

 

THE ART SQUAD AND CULTURAL PROPERTY CRIME IN THE UK

Boodle Hatfield has issued a briefing providing an update on some matters affecting the arts and cultural goods sectors.  There had been fears that the specialist art squad of the Metropolitan Police would be disbanded, but it has in fact been reformed.  The firm reports that the Art and Antiques Unit was disbanded after the Grenfell Tower fire in June so its members could assist with the inquiry, and notes that it also closed temporarily after the London bombings in July 2005.  Budgetary pressures threatened to close the unit forever this year but a spokesman has confirmed the unit has been reformed.  In addition to an investigatory role, the Squad also maintains the London Stolen Art Database of 54,000 stolen artworks.

The firm also confirms that the 1954 Hague Convention for the Protection of Cultural Property is now a part of UK law with the enactment of the Cultural Property (Armed Conflicts) Act 2017. This Act is concerned with protecting cultural property in time of war and applies the 1954 Convention and its 2 Protocols.

https://artlawandmore.com/2017/12/14/met-police-art-squad-reforms-and-cultural-property-armed-conflicts-act-2017-enacted/#page=1

 

WORLD BANK BARS 2 FRENCH COMPANIES FOR CORRUPTION IN DEVELOPING COUNTRIES

Buckley Sandler reports that the World Bank recently sanctioned 2 French companies for separate allegations of corruption in developing countries –

  • Oberthur Technologies SA, a French digital security company, was debarred for 2.5 years for “corrupt and collusive practices” related to a project that would establish a national ID system in Bangladesh.
  • Sediver SAS, a French manufacturing company, was debarred for two years for a “corrupt practice” related to a project that would improve electricity infrastructure in the Congo.

Both companies are thus debarred from World Bank contracts and projects.

https://buckleysandler.com/blog/2017-12-15/world-bank-sanctions-two-french-companies-corruption-developing-countries#page=1

 

UKRAINE-/RUSSIA-RELATED SANCTIONS: US SECTORAL SANCTIONS UNDER EXECUTIVE ORDER 13662, CAATSA

OFAC at the end of November updated its FAQ on Ukraine/Russia sanctions to take account changes made to the sanctions regime in respect of debt financing for Russian companies under its sectoral sanctions. The changes considerably reduce the maturity length of the debt financing affected

https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#ukraine

 

JP MORGAN SUED BY NIGERIAN GOVERNMENT FOR MONEY LAUNDERING TRANSFER

Citywire reports a story in The Times that JP Morgan is being sued by the Nigerian government for $875 million for allegedly being “grossly negligent” and the middleman in an illegal oil deal, making payments to a convicted money launderer.  Papers filed with the High Court in London include claims that the bank transferred money to a company controlled by former oil minister Dan Etete, who had previously been convicted of money laundering by French courts, and who is also being pursued by Nigerian authorities.  He is owner of Malabu Oil & Gas, and served under military dictator Sani Abacha in the 1990s.  During his time as minister, Malabu was awarded an exploration licence. Later, an agreement was made for Malabu to give up to licence for a fee which would then be sold to Shell and Eni, with JP Morgan handling the transactions.

http://citywire.co.uk/wealth-manager/news/jp-morgan-sued-for-sending-875m-to-nigerian-money-launderer/a1078473

 

TIMETABLE FOR THE TRANSPOSITION OF THE 5th MONEY LAUNDERING DIRECTIVE

  • Publication in the Official Journal of the EU: expected mid-2018
  • Entry into force of the amended Directive: end 2019 (18 months after publication)
  • Opening of the national registers of business owners to the public at the end of 2019 (18 months after publication)
  • Opening of the national registers of trust owners to persons with a legitimate interest: early 2020 (20 months after publication)
  • Establishment of national bank account registers: mid-2020 (26 months after publication)
  • Interconnection of national registers: early 2021 (32 months after publication)

 

ESTONIA TO LAUNCH OWN VIRTUAL CURRENCY

EU Observer reports that Estonia is planning to launch a virtual currency nicknamed “estcoin”.  The managing director of Estonia’s e-residency programme announced this in a blog post on 19th December.

 

UK INVESTIGATORY POWERS ACT

On 18th December the Home Office published an overview of the Investigatory Powers Act and supporting documents.

https://www.gov.uk/government/collections/investigatory-powers-bill

Various Explanatory Memoranda for its components are at –

https://www.gov.uk/government/publications/investigatory-powers-regulations-explanatory-memorandums

And the investigatory powers regulations laid in Parliament under the Investigatory Powers Act 2016

https://www.gov.uk/government/publications/investigatory-powers-regulations

 

EUROPEAN COUNCIL CONCLUSIONS ON THE EU LIST OF NON-COOPERATIVE JURISDICTIONS FOR TAX PURPOSES

Why each jurisdiction was included on the list.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2017.438.01.0005.01.ENG&toc=OJ:C:2017:438:TOC

 

$40 MILLION SCAM OF SINGAPORE GOVERNMENT AGENCY

Ng Cheng Kwee, 41, has appeared in court over his alleged involvement in Singapore’s largest case of a public institution being defrauded to date, involving nearly $40 million. SkillsFuture Singapore, which promotes a culture of lifelong learning, has allegedly been defrauded through false training grant claims etc.

www.straitstimes.com/singapore/courts-crime/criminal-syndicate-scams-40-million-of-fake-skillsfuture-claims-in-singapores?src=ilaw

 

SINGAPORE FINANCIAL BANS RELATED TO 1MDB SCANDAL

Reuters reports that Singapore’s central bank has permanently barred Yeo Jiawei, a former wealth manager of Swiss bank BSI involved in breaches related to Malaysia’s 1MDB fund, from managing financial services firms and advisory activities.

 

CYBER THREAT TO UK FROM NORTH KOREA

The House of Commons Defence Committee on 19th December examined the cyber threat posed to the UK by North Korea and the UK’s response to this threat.

 

KASPERSKY LAB SUES WHITE HOUSE OVER SOFTWARE BAN

Law 360 reported on 19th December that Moscow-based anti-virus firm Kaspersky Lab is suing the White House in federal court, claiming that a US Department of Homeland Security order banning the company from US government computer systems violated its due process rights.

 

THE ORIGIN COUNTRIES OF ISIS WEAPONRY

On 18th December Forbes published an article which says that, despite the large amount of US-origin material captured in Iraq (US weapons only accounted for 1.8% of all items documented between 2014 and 2017), around 90% of weapons and ammunition deployed by ISIS are Warsaw Pact calibres, mainly originating in China (China manufactured 43.5% of all ISIS weapons documented in Iraq and Syria), Russia and Eastern Europe.   This is according to Conflict Armament Research which analysed 40,000 items recovered from ISIS forces in Syria and Iraq between 2014 and 2017.  The unauthorised retransfer of weapons originally destined for Syrian opposition forces is also said to have proven a significant source of arms and ammunition for ISIS, particularly advanced anti-tank guided weapons systems.

The report concludes that many of the group’s weapons — and notably ammunition—are newly manufactured, having been delivered to the region since the start of the Syrian conflict in 2011.

https://www.forbes.com/sites/niallmccarthy/2017/12/18/the-origin-countries-of-isis-weaponry-infographic/#16269f1a2a5a

The report is at –

www.conflictarm.com/publications/

The report also concerns itself with the procurement of chemical explosive precursors; and the supply sources of aluminium paste, nitrate-based fertilisers, and ancillary precursors, all of which IS forces use to manufacture homemade explosives (HME) and propellant. The findings are said to underscore the predominant role of the Turkish domestic market as a source of these precursors.

20171218_ISIS_Weapons

CONFLICT ARMAMENT RESEARCH ALSO PRODUCES OTHER USEFUL AND/OR INTERESTING REPORTS –

  • Sudanese stockpiles and regional weapon diversion (May 2017)
  • Investigating cross-border weapon transfers in the Sahel (November 2016)
  • Tracing the supply of components used in Islamic State IED (February 2016)

http://www.conflictarm.com/publications/

 

“47 HANDGUNS SEIZED FROM SHIP FROM USA”

Turkish websiteaa.com reports that Turkey’s Customs and Trade Ministry officials have seized 47 guns from a ship which arrived from the US to the port of Mersin.  They included 41 Glock handguns and 6 long-barreled weapons.  According to a statement by the ministry, custom officials sent a container from the ship for an X-ray scan.  The guns were hidden inside 2 vehicles in the container. The ship named SATIE carried Malta’s national flag, according to the statement. 4 suspects, including the importer company’s representative, have been arrested.

 

NEW YORK CULTURAL OBJECTS ANTI-TRAFFICKING UNIT ESTABLISHED

The Manhattan DA is forming a new anti-trafficking unit that will expand work the office is already doing to recover looted items, as New York is seen as the epicentre of antiquities sales, fuelled by its concentration of wealth, galleries and notable museums. The unit, made up of lawyers, a paralegal and a team of antiquities trafficking analysts, will be tasked with scrutinising the tips the office receives from scholars and others about the origin of items held by the city’s dealers and collectors, and gathering the evidence they need to confirm whether the treasures in question were obtained legally.  He made the announcement in a ceremony in which three statues dating to the 3rd, 4th and 6th centuries BC were returned to Lebanon. The statues, worth more than $5 million, were excavated from a temple and stolen during the Lebanese Civil War that began in 1975.

www.santafenewmexican.com/news/prosecutors-become-treasure-hunters-in-repatriation-campaign/article_a1169c23-37b6-5735-9aac-f91b0a0fb565.html

 

NEW ARTICLE ANALYSES POTENTIAL CONSEQUENCES OF WMD-RELATED “FAKE NEWS”

A piece on the Nuclear Threat Initiative (NTI) website reports on a new article with interactive graphics from Center for Nonproliferation Studies Research Associate Sam Meyer and published on NTI website which analyses several cases of WMD-related disinformation or “fake news” and outlines the potentially serious policy-related repercussions.  One of the most notable incidents, detailed in the article, involved a news outlet reporting that the U.S. had moved its tactical nuclear weapons from Turkey to Romania in August in 2016.  The story went global after being printed in several news outlets and shared on social media.

www.nti.org/newsroom/news/new-article-analyzes-potential-consequences-wmd-related-fake-news/

 

NEW RUSSIAN MOBILE LAND-BASED CRUISE MISSILE SYSTEM FOR EXPORT

Janes.com reports that Russia’s Novator Joint Stock Company has revealed details of a new export version of the Club missile system – designated Club-T – and its 3M-14E land attack cruise missile (LACM).  Designed around a 8×8 transport erector vehicle (TEL), the Club-T is armed with 6 3M-14E1 LACM.  Additionally, a senior representative has confirmed to Jane’s that the range of the LACM can be extended beyond the 300 km stipulated by the Missile Technology Control Regime (MTCR) export control regime of which Russia is a member.

http://www.janes.com/article/76469/novator-reveals-new-club-system-missile-and-range-details

 

APPEAL COURT REJECTS CONVICTED VAT FRAUDSTER’S CLAIM THAT SOLICITOR FORCED HER TO DROP APPEAL

Legal Futures reports on 19th December the story that the Court of Appeal has rejected the arguments of a convicted VAT fraudster that her former solicitors pressured her to drop an appeal that included a claim that they represented her badly and helped land her in jail.

https://www.legalfutures.co.uk/latest-news/appeal-court-rejects-convicted-vat-fraudsters-claim-solicitor-forced-drop-appeal

 

LEGAL ADVICE PRIVILEGE – A SEARCH FOR CLARITY?

In an article for the New Law Journal, law firm Travers Smith reviews recent developments in legal professional privilege (LPP).  It concludes that the current restrictive approach to privilege poses real challenges to lawyers when seeking to investigate issues raised by corporate clients without creating documents that will be subsequently disclosable to regulators or litigants; and increasing difficulties in claiming privilege may make it harder to persuade employees to fully co-operate in investigations.

https://www.traverssmith.com/assets/pdf/Articles/Legal%20advice%20privilege%20-%20a%20search%20for%20clarity%20-%201%20December%202017.pdf

 

11 ARRESTS FOR SPORTS CORRUPTION IN MULTIPLE EU MEMBER STATES

Europolon 19th December reported that the National Bureau of Investigations of the Slovenian Police, supported by the Croatian Police and Europol, have dismantled an international crime syndicate involved in sports corruption and illegal betting. The network had created an illegal web platform in order to convey large bets on major Asian bookmakers.  In total, 13 house searches and 15 vehicles searches in different locations in Slovenia and Croatia were carried out.  The investigation began in March 2017, when the Slovenian police realised that an organised crime group had created different websites as part of an online illegal betting platform used to place bets on manipulated sport events that took place in multiple European countries. The criminals are suspected of being involved in attempts to fix professional football matches in at least Serbia, FYROM and the Czech Republic.

https://www.europol.europa.eu/newsroom/news/eleven-arrests-in-successful-hit-against-sports-corruption-in-multiple-european-member-states

 

GIBRALTAR POLICE ANTI-TERRORISM INITIATIVE

The Gibraltar Chronicle reports that the Royal Gibraltar Police on 18th December launched a new scheme designed to deter, detect and disrupt criminal and terrorist activity in crowded places.  Project Servator sees the deployment of both highly visible and covert police officers and staff, alongside other resources including dogs, firearms and CCTV cameras in the city centre, other hotspots and at large.

 

US PASTOR AND WIFE DEFRAUDED CONGREGATION

Time reports that a Virginia pastor and his wife have been convicted of defrauding members of their congregation and investors in a Nigerian oil scheme.  Terry Wayne Millender (former senior pastor of Victorious Life Church in Alexandria), 53, and Brenda Millender, 57, were convicted by a federal jury of a $2 million fraud scheme, according to the United States Attorney’s office for the Eastern District of Virginia.  Prosecutors said the couple recruited investors for companies they said provided small loans to poor people in developing countries and helped broker Nigerian oil deals, but they used investor money to pay for golf trips, a birthday party, and to help purchase a $1.75 million home.

http://time.com/5071173/virginia-pastor-nigerian-oil-scheme/?src=ilaw

 

LIST OF GOODS REQUIRING A UK EXPORT LICENCE

The UK Department for International Trade has issued the updated consolidated list of ‘controlled’ military and dual-use items that require an export licence issued by the Export Control Organisation.

https://www.gov.uk/government/publications/uk-strategic-export-control-lists-the-consolidated-list-of-strategic-military-and-dual-use-items-that-require-export-authorisation

 

ICIJ ADDS 4 CARIBEAN STATES TO ITS PARADISE PAPERS DATABASE

On 19th December the International Consortium of Investigative Journalists (ICIJ) released information from 4 “secrecy jurisdictions” corporate registries that were included in the Paradise Papers investigation: Barbados, the Bahamas, Aruba and Nevis.  There are now a total of 55 jurisdictions searchable on the online Offshore Leaks database.

https://www.icij.org/blog/2017/12/four-caribbean-tax-havens-added-offshore-leaks-database/?src=ilaw

 

UK EXPORTING GUIDES UPDATES

The UK Department for International Trade has updated its guides for UK businesses who are interested in selling overseas.

https://www.gov.uk/government/collections/exporting-country-guides

 

UK CONDEMNS NORTH KOREA FOR WANNACRY ONLINE ATTACK

Foreign Office Minister Lord Ahmad of Wimbledon has attributed the WannaCry ransomware incident to North Korean actors the Lazarus Group.  The FCO says that the decision to publicly attribute this incident sends a clear message that the UK and its allies will not tolerate malicious cyber activity.  The WannaCry ransomware incident impacted 300,000 computers in 150 countries including 48 NHS trusts.

https://www.gov.uk/government/news/foreign-office-minister-condemns-north-korean-actor-for-wannacry-attacks

 

PRINCIPAL IN WAKED MONEY LAUNDERING CASE IN PANAMA GETS 2 YEARS IN USA

Kenneth Rijock reports that Nidal Waked Hatum, a principal in Panama’s notorious Waked Money Laundering Organization, has been sentenced to 27 months of imprisonment, in a plea deal in the USA. The Waked Organization, said by many to be the largest money laundering operation in the Western Hemisphere, moved massive amount of criminal proceeds for Colombian and Mexican drug trafficking organizations, for at least 2 decades.  He suggests that the Government obtained open-ended Order of Forfeiture against the criminal operation, which the Government itself estimated exceeded $20 million, but could be larger, was the primary motivation for the plea agreement.

 

AUSTRALIA TAKES MAJOR STEPS TO COMBAT FOREIGN BRIBERY; OECD WANTS MORE ENFORCEMENT

A news release from the OCED on 19th December follows completion by its Working Group of the Phase 4 evaluation of Australia’s implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related instruments.  The report further makes a number of recommendations to Australia aimed at strengthening its foreign bribery enforcement. Key recommendations highlight the need for Australia to:

  • address the risk that the Australian real-estate sector could be used to launder the proceeds of foreign bribery;
  • ensure that Australian authorities have adequate resources to effectively enforce the foreign bribery offence;
  • proactively pursue criminal charges against companies for foreign bribery; and
  • enhance its whistleblower protections in the private sector.

http://www.oecd.org/australia/australia-takes-major-steps-to-combat-foreign-bribery-but-oecd-wants-to-see-more-enforcement.htm

 

UNODC MANUAL ON INVESTIGATION AND PROSECUTION OF FOREIGN TERRORIST FIGHTERS

On 19th December the UN Office for Drugs and Crime issued a statement remarking that foreign terrorist fighters (FTF) continue to pose a threat to the international community, with South-Eastern Europe having been identified as one of the regions that remains most vulnerable to the phenomenon.  Acknowledging that co-ordination across borders is key to identify the most appropriate criminal justice responses, UNODC’s Terrorism Prevention Branch has developed a new training manual entitled, “Foreign Terrorist Fighters: Manual for Judicial Training Institutes, South-Eastern Europe“.  The manual seeks to provide guidance on international legal instruments against FTF activities and techniques for digital investigation and evidence collection, especially concerning global financial transactions and social media activity.  While it is tailored for judicial training institutes in South-Eastern Europe, it can be utilized in any jurisdiction seeking resources to address the FTF threat.

https://www.unodc.org/unodc/en/frontpage/2017/December/unodc-launches-manual-on-investigation-and-prosecution-of-foreign-terrorist-fighters.html?ref=fs1

 

SPANISH AUTHORITIES SEIZE 332 KG OF COCAINE IN TRANSIT VIA BRAZIL

On 18th December EFE reported that Spanish authorities have seized 332 kg of cocaine apparently hidden in a shipment of sugar from Brazil at the southwestern port of Algeciras.  The goods were being transshipped through Spain on their way to the Liberian capital, Monrovia, according to the agency.

https://www.efe.com/efe/english/portada/spanish-authorities-seize-332-kilos-of-cocaine-in-transit-via-brazil/50000260-3470501#

 

COLOMBIAN NAVY HAS NOW SEIZED OVER 100 DRUG SMUGGLERS SUBMARINES

In an interesting article, Dialogo reports that near the end of October, the Colombian National Navy seized a semi-submersible in the Colombian Pacific.  The vessel, camouflaged in an estuary and capable of transporting 2 tons of cocaine, measured almost 14 meters long and 3 meters wide.  The article says that Narcotraffickers invest more than $1 million in the construction of a semi-submersible. With this most recent seizure the Navy now counts 101 such vessels seized in the past 20 years in the fight against narcotrafficking.  The first semi-submersible was found in 1997 on Providencia Island in the Colombian Caribbean.  In 2017, the Navy seized 4 semi-submersibles in the Colombian Pacific — 2 fewer than in 2016.

https://dialogo-americas.com/en/articles/colombia-exceeds-100-semi-submersibles-seized

 

ISLE OF MAN UPDATES RUSSIA SANCTIONS

On 19th December, the Treasury in the Isle of Man announced that on 15th December an order came into operation applying in Island law Council Regulation (EU) 2017/2212 of 30th November which amended Article 4 of Regulation (EU) 833/2014 by inserting a new paragraph 2aa in order to permit certain operations concerning the purchase or sale of rocket fuel hydrazine, required for the joint Russian-European space project ExoMars, by exempting it from the sanctions against Russia.

https://www.gov.im/news/2017/dec/19/european-union-sanctions-russia/

 

THE NUCLEAR SUPPLIERS GROUP (NSG)

On 14th December, the Carnegie Center published an article about the NSG, providing details of its origins (formed in 1975 by 7 countries following India detonating a nuclear device). These founders pledged to vigorously restrain the transfer of nuclear wares to would-be proliferators.  Over the years, the number of NSG member states increased, but from the outset the group’s core membership included 2 geostrategic adversaries: the Soviet Union and the US.  Regardless of their global rivalry, the two superpowers throughout the Cold War co-operated without interruption in administering the NSG and the nuclear trade regime.  The article considers how the NSG has grown and changed over the years.

http://carnegieendowment.org/2017/12/14/more-geopoliticized-nuclear-suppliers-group-pub-75027?mkt_tok=eyJpIjoiTURRNE1XUTRaamRqTWpSbSIsInQiOiJxaUk3VTByajdkNnYrNStFNjdudkphZmcrSWIwK2hWa1FYM2pJcUVmVm5jUXBlSURTQkxpeW1ybUVlM3BiYTlSUzNONlI3OGd6REdtbmhuNHZpajlEUTF0RWVWYWJadWFxSkVFN0psdlhudUwwaGxINms0bzJTTnJcL1FZbHBNOSsifQ%3D%3D

 

ROCKET MEN: THE TEAM BUILDING NORTH KOREA’S NUCLEAR MISSILE

On 15th December the New York Times published an article on the men – known by nicknames such as the “nuclear duo” and the “missile quartet” – who have built an intercontinental ballistic missile that appears capable of hitting any city in the US.

https://www.nytimes.com/interactive/2017/12/15/world/asia/north-korea-scientists-weapons.html?mkt_tok=eyJpIjoiTURRNE1XUTRaamRqTWpSbSIsInQiOiJxaUk3VTByajdkNnYrNStFNjdudkphZmcrSWIwK2hWa1FYM2pJcUVmVm5jUXBlSURTQkxpeW1ybUVlM3BiYTlSUzNONlI3OGd6REdtbmhuNHZpajlEUTF0RWVWYWJadWFxSkVFN0psdlhudUwwaGxINms0bzJTTnJcL1FZbHBNOSsifQ%3D%3D

 

NORTH KOREA IS “SEEKING A PILE OF BITCOIN” TO ESCAPE ECONOMIC SANCTIONS

On 19th December Forbes magazine reported that North Korea was mining for Bitcoin.

https://www.forbes.com/sites/ralphjennings/2017/12/19/north-korea-seeks-a-pile-of-bitcoin-to-escape-economic-sanctions/#303fe41f39ba

 

COLOMBIAN OFFICIALS UNDER INVESTIGATION FOR MONEY LAUNDERING

Telesur reports that Colombian officials are under investigation on suspicion of money laundering after US Immigration agents caught sight of a congressional vehicle parked outside an alleged money launderer’s home.  The car was outside the home of Diego Alberto Vidal Dussan who was arrested earlier this month for allegedly heading an international network of money laundering for drug traffickers.  According to reports, the businessman, who worked as a representative for a plastic surgery center and as a technology importer, trafficked over $24 million in double-bottom lined suitcases to Panama and Peru.  Suspicions of a congressional connection were aroused when Luis Javier Rojas Morera., the son of former government assets manager, was found with a congressman’s car and $200,000 in cash.

https://www.telesurtv.net/english/news/Colombian-Officials-Under-Investigation-For-Money-Laundering-20171219-0014.html?src=ilaw

 

COSTA RICAN PRESIDENT UNDER INVESTIGATION FOR CORRUPTION

Telesur also reports that Costa Rican President Luis Guillermo Solis is under fire after a report accused him of corruption by allegedly accelerating the legal process of Chinese cement imports in favour of businessman and owner of Cementazo, Juan Carlos Bolaños.  The Special Commission trusted with monitoring state banks and transfers was alerted to various inconsistencies at the Banco de Costa Rica, BCR, and launched a 4-month investigation.

https://www.telesurtv.net/english/news/Costa-Rican-President-Under-Investigation-for-Corruption-20171219-0019.html?src=ilaw

 

OECD DELAYS SWEDISH ANTI-BRIBERY EVALUATION

The Wall Street Journal reports that the OECD has delayed its review of Swedish anti-bribery progress until 2019, saying the country hasn’t enacted needed legislation.

 

DRAFT FATF REPORT CRITICISES MEXICO FOR AML/CFT FAILINGS

Reuters, in an “exclusive” on 19th December reports that a draft FATF evaluation report says that Mexican prosecutors are failing to systematically punish money launderers and tax authorities are too lax with potential drug money fronts such as real estate and luxury goods firms.   The article notes that Mexico is the top source of illegal drugs to the US and both countries’ authorities have been criticised by civil society groups for leaving drug gang finances largely intact.  It says that the 200+ page report commends previous efforts to clean up the Mexican banking sector, and officials say tighter regulations flushed much illicit money from the banking system.  However, the report says Mexican tax authorities did not do enough to monitor businesses outside the financial sector used for money laundering, such as real estate.  Data in the report provided by Mexico shows the country seized just $32.5 million in 2016. That represents less than 0.1% of the $58.5 billion of illicit revenues the government estimates is generated by organised crime annually; and only 8% of investigations in Mexico last year were based on FIU reports, according to data in the FATF report. That is down from around an average of 15% in recent years.

https://uk.reuters.com/article/uk-mexico-corruption-exclusive/exclusive-anti-money-laundering-group-blasts-mexico-in-draft-report-idUKKBN1ED2A7?src=ilaw

 

UK LAW SOCIETY ON NEW SANCTIONS REPORTING REQUIREMENTS

Maya Lester QC’s always useful blog reports that the Secondary Legislation Scrutiny Committee of the House of Lords has published its correspondence with the Law Society relating to the new sanctions reporting requirements in the EU Financial Sanctions (Amendment of Information Provisions) Regulations 2017 which impose reporting obligations on an expanded group of professionals and businesses, including independent lawyers.  The correspondence airs the concerns of the Law Society.

https://europeansanctions.com/

The correspondence itself is at –

https://publications.parliament.uk/pa/ld201719/ldselect/ldsecleg/23/23.pdf

 

FINRA AML GUIDANCE ON CDD, BENEFICIAL OWNERSHIP OBLIGATIONS ETC

In the US, Manatt reports that, in the latest AML news, the Financial Industry Regulatory Authority (FINRA) published guidance on AML obligations of firms subject to FINRA supervision.  Its guidance supplements the FinCEN final rule on Customer Due Diligence (CDD) for financial institutions. The CDD rule now requires identification of beneficial owner(s) is required under the CDD Rule. Covered entities must now collect and retain the required information—including name, date of birth, address, and Social Security number or other government identification number — of beneficial owners; but FINRA points out this only to new accounts opened on or after the date of the rule’s implementation.  The CDD rule also now requires AML programmes to include risk-based procedures for conducting ongoing CDD – this not being a new requirement, but a codification.  The article notes that firms have until May 11th 2018, to update their AML programmes to comply with the CDD Rule and the guidance.

https://www.jdsupra.com/legalnews/aml-news-finra-guidance-62047/

 

NEW QATAR MISSILE SYSTEM

On 19th December, the Missile Threat website revealed that Qatar had unveiled its new short-range ballistic missile (SRBM) system during its 2017 National Day parade. It appeared to be a modified Chinese SY-400 system, capable of carrying both BP-12A and SY-400 SRBM.  The BP-12A can carry a 480 kg conventional payload over a 280 km range, while the SY-400 can carry a 200 kg conventional payload over a 200 km range.  While both missiles have the range to reach land targets in Saudi Arabia and the UAE, neither give Qatar significant reach into Iranian territory.

https://missilethreat.csis.org/qatar-unveils-new-chinese-srbm-system/

 

20th December 2017

TRIAL OF FORMER HONG KONG MINISTER TO BEGIN

The Standard in Hong Kong reports that the prosecution of former Hong Kong home affairs secretary Patrick Ho Chi-ping has officially begun after the US DoJ filed a formal indictment against him for bribery.  Ho, 68, is accused of leading a multimillion-dollar bribery scheme between 2014 and 2017, when he allegedly helped a Chinese energy firm gain exclusive oil rights in Africa.  He faces 8 charges – 5 relating to bribery in violation of the Foreign Corrupt Practices Act, and 3 involving money laundering.  If convicted, he could be jailed for up to 20 years.

http://www.thestandard.com.hk/section-news.php?id=190905&sid=11

 

US TREASURY TO REVIEW FINCEN’S CRYPTOCURRENCY PRACTICES

On 19th December the National Law Review carried an article that said that the US Treasury Annual Plan published in October and outlining the Office of Inspector General’s audit and investigative priorities for fiscal year 2018 contained the commitment to examine how FinCEN deals with digital currencies.  The Plan said that “digital currencies provide a potential money laundering instrument because they facilitate international payments without the transmittal services of traditional financial service,” and identifies determining “how FinCEN identifies, prioritizes, and addresses money laundering and terrorist financing risks associated with virtual currencies” as a priority.  The Secretary of Treasury recently echoed these sentiments in an interview with Yahoo Finance earlier this month.  The NLR notes that FinCEN has already taken some notable action in this space; in 2013, FinCEN published guidance on cryptocurrencies, which aimed to clarify the applicability of Bank Secrecy Act regulations to virtual currency businesses.  It has also already been involved in enforcement action against cryptocurrency organisations.

https://www.natlawreview.com/article/us-treasury-to-review-fincen-s-cryptocurrency-practices

 

POUNDLAND OWNER INVOLVED IN ACCOUNTING SCANDAL IN SOUTH AFRICA

This is Money reports that Poundland in the UK has sought to distance itself from its South African owner Steinhoff as an accounting scandal threatens to derail the South African investment firm.  Steinhoff has lost 2 chief executives this month amid a fraud scandal which has seen shares crash more than 87%, wiping £7.5 billion off its value, and it has warned investors it is losing support from its banks because of the crisis.  Steinhoff bought Poundland for £597 million in 2016, and the crisis raises questions about its 802 UK stores and 18,000 staff. http://www.thisismoney.co.uk/money/markets/article-5195839/Poundland-distances-shamed-South-African-owner.html#ixzz51mMtd53B

 

UK ANTI-CORRUPTION STRATEGY TO 2022

In its update for December 2017, Addleshaw Goddard reports on the UK government launching a new “longer-term framework” to tackle corruption both in the UK and abroad, designed to run until 2022.  The plans set out a longer term vision to reduce threats to national security, create greater public trust and ensure stronger economic opportunities for British businesses in particular.  The government has highlighted 6 priorities to tackle: reducing insider threats in high-risk domestic sectors, strengthening the integrity of the UK as an international financial centre, promoting integrity across all sectors, reducing public corruption, improving business globally and working with other countries to tackle corruption.

https://www.gov.uk/government/publications/uk-anti-corruption-strategy-2017-to-2022

 

OECD REPORT ON ENFORCEMENT OF FOREIGN BRIBERY

Addleshaw Goddard also mentions the OECD report showing that the enforcement of foreign bribery offences has increased since the launch of its Working Group on Bribery 20 years ago.  There has been progress in the fight, with 500 investigations alone in 2016 taking place in 43 different member states of the group, but the report equally highlights areas that must still be addressed.  Most OECD countries still do not provide adequate protection against bribery, with a failure to provide whistle-blowers protection, despite their important role in revealing such offences. There is also a failing of some tax authorities to share information with law enforcement authorities, while the enforcement authorities themselves should be better trained to detect such foreign bribery cases in cross-border transactions.

http://www.oecd.org/corruption/anti-bribery/The-Detection-of-Foreign-Bribery.pdf

The Addleshaw Goddard document is at https://www.lexology.com/library/document.ashx?g=fbdbf0b2-900d-452f-831a-425d9f10b270

 

US SANCTIONS ON RUSSIAN SOVEREIGN DEBT?

US law firm, Steptoe & Johnson has issued an article speculating that western investors may be shut out of the sovereign debt market as a result of new or modified sanctions.  US (and EU) sanctions aimed at Russian debt financing have been in place since 2014.  The new concerns follow the warning last year against US or EU banks participating in a Russian sovereign Eurobond offering, on the grounds that the proceeds may be diverted to sanctioned state-owned enterprises.  Currently, U.S. law does not prohibit involvement in the issuance or trading of Russian sovereign debt. However, the recently enacted Countering America’s Adversaries Through Sanctions Act (CAATSA) in the US might alter the situation, particularly as section 242 requires the US Treasury to report on possible expansion of sanctions “to include sovereign debt and the full range of derivative products.”

https://www.steptoeinternationalcomplianceblog.com/2017/12/u-s-sanctions-on-russian-sovereign-debt-coming-soon-or-already-here/#page=1

 

US DEFENSE DEPARTMENT TO RECOMMEND REFORMS TO FOREIGN INVESTMENT SCREENING

On 16th December Baker McKenzie issued a briefing saying that on December 12th President Trump signed into law a defense authorization Bill requiring the Defense Secretary to submit a report to Congress in 3 months on improving US foreign investment screening procedures, and to make recommendations on improving the prevention of foreign investments that could threaten national security, and co-operation with US allies on foreign investments threatening national security.

http://tradeblog.bakermckenzie.com/defense-department-to-recommend-reforms-to-us-foreign-investment-screening/#page=1

 

VENEZUELA DEBT RESTRUCTURING – US SANCTIONS COMPLIANCE

Law firm Orrick, Herrington & Sutcliffe LLP has produced a briefing discussing if involvement in the restructuring of Venezuela debt might be caught or affected by US sanctions (EU sanctions being somewhat less extensive, it notes).  OFAC has warned that US persons should not, without a licence from OFAC, engage in debt restructuring discussions that involve participation by a blocked (sanctioned) person.​​

https://www.jdsupra.com/legalnews/venezuela-debt-restructuring-sanctions-86556/

 

EU REGULATOR TO INCREASE REGULATION OF CFD?

Calvin Ayre reports that spread betting firms are reeling after the EU securities regulator (ESMA) announced plans on 15th December to further restrict their use.  It issued an update on its probe into the sale of contracts for differences (CFD), including rolling spot forex, and binary options to retail clients. ESMA also announced that it would conduct a brief public consultation in January.  Some jurisdictions, Calvin Ayre says, including the UK, had imposed national measures to limit retail customers’ exposure to CFD, binary options and the like.  Among the new curbs ESMA is said to be considering are a blanket prohibition on marketing, distribution or sale of binary options or CFD to retail clients in EU Member States, and additional restrictions for limiting leverage of CFD trades are also currently under review.

https://calvinayre.com/2017/12/19/business/spread-betting-firms-reel-eu-restrictions/

See also the UK Financial Conduct Authority release about the ESMA action –

https://www.fca.org.uk/news/statements/fca-statement-esma-ongoing-work-possible-product-intervention-retail-cfd-binary-options

 

LEGAL PROFESSIONAL PRIVILEGE: WHAT IS “EVIDENCE” OF A PRIVILEGED COMMUNICATION?

Law firm Allen & Overy on 18th December issued a briefing concerning the High Court case of In The Matter Of Edwardian Group Limited [2017].  The briefing notes that Legal advice privilege attaches not just to communications between lawyer and client which have as their purpose the giving or receiving of legal advice, but also extends to material which “evidences” the substance of those communications. The High Court has recently provided welcome clarity on the level of “evidencing” that is required for secondary material to be rendered privileged. The secondary material must contain a definite and reasonable foundation from which the legal advice can be inferred. There is no need for the legal advice to be directly referenced.

http://www.allenovery.com/publications/en-gb/Pages/What-is-evidence-of-a-privileged-communication–.aspx

 

EU-NORWAY DECISION ON VAT CO-OPERATION TO COMBAT FRAUD AND RECOVER DEBTS

Council Decision (EU) 2017/2381 of 5th December authorises the signing, on behalf of the EU, of the Agreement between the EU and Norway on administrative co-operation, combating fraud and recovery of claims in the field of VAT.  Norway is, of course, not a Member State, making this proposed extension of similar co-operation to that between Member States’ VAT authorities of particular note.

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017D2381&from=EN

 

ILLEGAL CIGARETTE FACTORY FOUND IN SWEDEN

The Local reports that 3 men have been jailed after the Swedish customs authority busted an illegal cigarette factory hidden in a horse farm.  The operation began when the customs authority was tipped off about illegal cigarettes being sold in the area around Vara, south-western Sweden. 250,000 cigarettes were subsequently found in a van.  That led customs to the horse farm, where a raid revealed machines for manufacturing, 10 tonnes of tobacco and over 15 million finished cigarettes.

https://www.thelocal.se/20171220/prison-for-three-men-after-sweden-busts-cigarette-factory-in-horse-farm

 

CHINA SEIZES 323,000 TONNES ILLEGAL WASTE IMPORTS

Xinhua has reported that Customs in 13 Chinese provincial regions seized 323,000 tonnes of smuggled waste in a move against the import of “foreign garbage.”  127 suspects were arrested during the action, the latest round in the “Blue Sky” campaign against solid waste smuggling, a General Administration of Customs spokesperson said.  It was not said where the waste, including waste plastic and mineral waste residue, had come from.

http://news.xinhuanet.com/english/2017-12/19/c_136838054.htm

 

EU IMPORT CONTROLS ON CULTURAL GOODS FROM CONFLICT AREAS

On 19th December the EU Parliament issued a research note which seeks to provide an initial analysis of the strengths and weaknesses of the European Commission’s impact assessment (IA) accompanying the proposal, adopted on 13th July and now under discussion in Parliament and Council.  The proposal aims to prevent the import and storage in the EU of cultural goods illicitly exported from a third country, in order to reduce trafficking in cultural goods, combat terrorism financing and protect cultural heritage, especially archaeological objects in source countries affected by armed conflict.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/611032/EPRS_BRI(2017)611032_EN.pdf

 

THE UK’S SECRET WAR

The Oxford Research Group published the Remote Control’s latest report – All quiet on the ISIS front? British secret warfare in an information age – in March 2017.  It tracks the UK’s secretive but growing military commitments abroad by analysing the rise in the use of drones for targeted killing, the use of Special Forces, and the provision of capabilities such as intelligence and embedded troops to allied forces. The deniability of these operations may bring flexibility, which can create opportunities when it comes to dealing with fluid and complex security threats. But the report questions the notion that greater secrecy is always better strategy, particularly in an age when leaks of information are seemingly inevitable, demand for political accountability is high, and trust in politicians and the wider expert community is low.

www.oxfordresearchgroup.org.uk/publications/briefing_papers_and_reports/remote_control_project_report_all_quiet_isis_front_british_

 

PROCEEDS OF CRIME ACT 2002 (INVESTIGATIONS IN DIFFERENT PARTS OF THE UNITED KINGDOM) (AMENDMENT) ORDER 2017

SI 2017/1280 amends the Proceeds of Crime Act 2002 (Investigations in different parts of the United Kingdom) Order 2003 needs to be updated in light of the Criminal Finances Act 2017 (“CFA”) amendments so that court orders issued by the criminal courts in one jurisdiction can be recognised and enforced in the other jurisdictions of the United Kingdom.  The 2003 Order contains the recogniton and enforcement procedures across the United Kingdom for orders made, and search and seizure warrants issued, relating to certain investigations under Part 8 of POCA. The 2003 Order only applies to court orders and warrants issued by the criminal courts (civil court orders are recognised and enforced under the provisions of the Civil Jurisdictions and Judgments Act 1982).  Amendments to the 2002 Act in the CFA have introduced 2 new categories of investigation for which orders under Part 8 of POCA may be obtained, and 2 new categories of orders in relation to money laundering.  Note that the amendments made to POCA by the provisions in the CFA affected by this Order are not being commenced in Northern Ireland at this time, with the exception of “further information orders”.  The Order comes into operation on 31st January, except for certain provisions insofar as they relate to detained property investigations (the commencement date for which is 16th April).

www.legislation.gov.uk/uksi/2017/1280/contents/made

 

UK UPDATES ITS NORTH KOREA SANCTIONS REGIME

The North Korea (United Nations Sanctions) (Amendment) (No. 3) Order 2017 (SI 2017/1278) further amends the North Korea (United Nations Sanctions) Order 2009 to give effect to certain aspects of further UN sanctions imposed against North Korea by the Security Council in Resolution 2375, adopted on 11th September.  The Order –

  • extends offences related to carriage of goods to North Korea to broaden the range of goods to which the offences apply: to include condensates and natural gas liquids, refined petroleum products, and crude oil, and textiles;
  • creates an offence relating to the facilitation of or engagement in ship-to-ship transfers concerning North Korean ships and items being transported to or from North Korea; and
  • creates offences relating to access to UK ports by ships owned, operated, crewed or flagged by North Korea, or vessels which refuse inspection for carriage of goods prohibited under the 2009 Order.

http://www.legislation.gov.uk/uksi/2017/1278/contents/made

At the same time the Democratic People’s Republic of Korea (Sanctions) (Overseas Territories) (Amendment) (No. 4) Order 2017 made equivalent changes.

http://www.legislation.gov.uk/uksi/2017/1277/note/made

 

5 ARRESTED FOR SPREADING RANSOMWARE THROUGOUT EUROPE AND USA

Europol reported on 20th December that Romanian authorities have arrested 3 individuals who are suspected of infecting computer systems by spreading the CTB-Locker (Curve-Tor-Bitcoin Locker) malware – a form of file-encrypting ransomware. 2 other suspects from the same criminal group were arrested in Bucharest in a parallel ransomware investigation linked to the US.  During Operation “Bakovia“, 6 houses were searched in Romania as a result of a joint investigation carried out by the Romanian Police, the Romanian and Dutch public prosecutor’s office, the Dutch National Police (NHTCU), the UK NCA, and the FBI with the support of Europol.

https://www.europol.europa.eu/newsroom/news/five-arrested-for-spreading-ransomware-throughout-europe-and-us?src=ilaw

 

RAIDS ON HOMES AND OFFICES OF FORMER KPMG PARTNERS IN BELFAST RULED UNLAWFUL

The Irish times reports that  the High Court has ruled that search warrants issued to raid the homes and offices of 4 former partners at the Belfast office of KPMG were unlawful.  Judges identified defects in statements of complaint to support applications for permission to trawl their premises as part of an investigation into suspected tax evasion.  However, they rejected separate claims that HMRC provided misleading information and targeted the 4 involved for the “collateral purposes” of a publicity stunt.

https://www.irishtimes.com/business/financial-services/raids-on-homes-and-offices-of-former-kpmg-partners-in-belfast-ruled-unlawful-1.3333621?src=ilaw

 

ITALIAN JUDGE ORDERS BIGGEST CORPORATE BRIBERY TRIAL IN HISTORY AGAINST SENIOR SHELL AND ENI BOSSES

The Ecologist and others reports that Royal Dutch Shell and Italian oil giant Eni have been ordered to stand trial in Milan on charges of aggravated international corruption for their role in a 2011 $1.1 billion deal for Nigerian oil block OPL 245.  For years, Shell had claimed that it only paid the Nigerian Government for the oil block. But investigations showed, and Shell confessed, that it had dealt with former oil minister Dan Etete, via his front company Malabu.  Etete was convicted of money laundering in France in 2007.  He had awarded the OPL 245 oil block to his secretly owned company while serving as oil minister.  In December 2016, the Milan Public Prosecutor alleged that $520 million from the deal was converted into cash and intended to be paid to the then Nigerian President Goodluck Jonathan, members of the government and other Nigerian government officials.  He also alleges that money was also channelled to Eni and Shell executives with $50 million in cash delivered to the home of Eni’s then Head of Business for Sub-Saharan Africa, Roberto Casula.  Nigerian authorities have also filed charges against a Shell subsidiary and Eni as well as several of their staff.

https://theecologist.org/2017/dec/20/judge-orders-biggest-corporate-bribery-trial-history-against-senior-shell-and-eni?src=ilaw

 

FORMER BOSS OF NORTH-EAST SCRAP METAL FIRM ADMITS £205,000 VAT FRAUD

The Evening Express reported that the former director of a scrap metal firm has admitted more than £200,000 of VAT fraud.  Russell Goodenough, 47, obtained £205,600 by fraud while acting as sole director of scrap metal company T’ir Trading Ltd in 2011.  Goodenough appeared at Aberdeen Sheriff Court where he pleaded guilty to forming a fraudulent scheme to obtain money.  Goodenough imported quantities of scrap metal from abroad on which no VAT was payable.  On repeated occasions, Goodenough then sold scrap metal to a number of other firms.  Invoices relating to the sales specified that VAT was included.

https://www.eveningexpress.co.uk/fp/news/local/former-boss-of-north-east-scrap-metal-firm-admits-205000-vat-fraud/

 

FCA REFUSES TO CLOSE THE DOOR TO ‘PERMISSIONLESS’ BLOCKCHAIN NETWORKS AND STEPS UP SCRUTINY OF ICO

Out-Law reports that financial services firms that wish to set up “permissionless” blockchain networks will not automatically be engaged in outsourcing and be in breach of Financial Conduct Authority rules, the FCA has said.

https://www.out-law.com/en/articles/2017/december/fca-refuses-to-close-the-door-to-permissionless-blockchain-networks-and-steps-up-scrutiny-of-icos/

 

SCOTTISH POLICE SEIZE £3 MILLION OF DRUGS AND MOBILE PRODUCTION LAB

On 19th December, in a report on recent drugs-related investigations in Scotland, the BBC said that the largest haul, which exceeded £2.7 million in value, was made following the discovery of a mobile drug lab in Glasgow. The vehicle, which had moulds and a hydraulic press, is believed to be the first of its kind in Scotland.

http://www.bbc.co.uk/news/uk-scotland-glasgow-west-42413522

RIO POLICE BUST AIRPORT DRUGS RING THAT EXPLOITED INNOCENT PASSENGERS’ LUGGAGE LABELS

The Guardian reports that Brazilian police have busted a drug-smuggling ring that operated in Rio de Janeiro’s international airport by duplicating the luggage labels of innocent passengers traveling domestically to send suitcases of cocaine abroad.  27 people were arrested, including airline and airport staff, a foreigner, and an official from the Brazilian tax office, police said. A large amount of foreign currency was also found.

https://www.theguardian.com/world/2017/dec/19/brazilian-police-drugs-ring-rio-airport

 

JAPAN TO SEEK TO ACQUIRE LONG-RANGE CRUISE MISSILES

The Japan Times reports that the Defense Ministry says it will seek funding for long-range cruise missiles.  The missiles in question are both the JSM made by Norway’s Kongsberg Defense & Aerospace, and have a range of about 500 km, and the Lockheed Martin’s JASSM-ER and LRASM missiles, which each have a roughly 900 km range.  The JSM will be mounted on Air Self-Defense Force F-35 stealth fighters and the JASSM-ER and LRASM will be surveyed for possible mounting on F-15 fighters.

https://www.japantimes.co.jp/news/2017/12/08/national/defense-ministry-says-will-seek-funding-long-range-cruise-missiles/#.WjqBxUx2tZV

The plan was discussed in an Arms Control Wonk podcast on 20th December –

https://www.armscontrolwonk.com/archive/author/podcast/

 

NORTH KOREA, DUE DILIGENCE AND THE PANAMA PAPERS EPISODE: LESSONS FOR PROLIFERATION FINANCE

In the December 2017 a paper from the Middlebury Institute of International Studies at Monterey University, “Countering North Korean Procurement Networks Through Financial Measures: The Role of Southeast Asia”, was made up of 4 studies intended to aid SE Asian governments and financial institutions in their efforts to counter the financing of WMD programmes in North Korea and other states of concern.  The 4 studies (which can be viewed and downloaded separately) are –

  • Countering North Korean Procurement Networks Through Financial Measures: The Role of Southeast Asia – highlights how North Korea has exploited weak financial controls in the region to advance its nuclear and missile programmes. The study reviews UN Security Council and FATF actions to combat such abuse of the international banking system, as well as the role of US sanctions.  Effective implementation of these measures in SE Asia, the study concludes, could contribute significantly to constraining North Korea and other proliferant states.
  • Needed Next Steps to Strengthen Measures to Counter Proliferation Finance – identifies gaps in international measures to combat proliferation finance, and calls on the UN Security Council and FATF to clarify standards for national-level implementation of counter-proliferation-finance rules and to adopt improved enforcement mechanisms.
  • Chinpo Shipping: A Singaporean Financial Agent of North Korea – how North Korea created an offshore de facto bank in Singapore to finance its illegal activities and how Singapore’s courts addressed the first known prosecution for financing proliferation. The case underscores that greater due diligence by banks and regulatory authorities is urgently needed.
  • Due Diligence And The Panama Papers Episode: Lessons For Proliferation Finance – shows how a North Korean bank, denied access to the international banking system, set up an offshore entity to transact its business. The analysis calls for greatly strengthened enforcement efforts by offshore tax havens, closer scrutiny of clients by banks and law firms conducting international business, and greater efforts by governments to block sanctions-violating front companies from accessing their banking systems.

www.nonproliferation.org/op35-countering-north-korean-procurement-networks-through-financial-measures-the-role-of-southeast-asia/

 

OFAC DESIGNATES 5 FURTHER RUSSIANS

VoA reports on 20th December that the US has financially blacklisted 5 Russians, including Chechen strongman Ramzan Kadyrov, whom it accused of carrying out deadly repression against people trying to expose government corruption.  In addition, the US designated Ayub Kataev, a prison warden and head of a branch of the Chechen internal affairs ministry, accused of extrajudicial killing and other human rights violations, including abuse of gay men.  The 3 others, Alexei Sheshenya, Yulia Mayorova, and Andrei Pavlov were said to be involved in the $230 million tax fraud conspiracy uncovered by attorney Sergei Magnitsky at the Russia-based Hermitage Fund.

https://www.voanews.com/a/us-sanctions-chechen-strongman-kadyrov-four-other-russians/4172077.html?src=ilaw

 

HOW UK IMMIGRATION STAFF HANDLE PERSONS SUBJECT TO TRAVEL BANS UNDER UN/EU SANCTIONS

On 20th December, UK Visas and Immigration released its updated guidance for staff on how to manage individuals who are, or are suspected of being, subject to a UN or EU travel ban.

https://www.gov.uk/government/publications/international-travel-bans

 

LAST REPORT OF UK INTELLIGENCE SERVICES COMMISSIONER

On 20th December, the Intelligence Services Commissioner published his last annual report, covering 2016.  On 1st September 2017 the office of the Intelligence Services Commissioner was abolished and his powers taken over by the Investigatory Powers Commissioner’s Office.  There are some interesting comments, such as “SIS’s [i.e. MI6] poor record-keeping makes it harder to check their compliance, and exposes them to legal risk” (!).

https://www.gov.uk/government/publications/report-of-the-intelligence-services-commissioner-for-2016

 

21st December 2017

DUAL-USE INFORMATION SECURITY SOFTWARE CONTROLS RELAXED A LITTLE AFTER LATEST WASSENAAR MEETING

The Hill reports on 21st December that the countries making up the Wassenaar Arrangement for international export control of dual-use items agreed at a meeting in December to changes in the wording of definitions.  The parties agreed to add technical notes “for the local definitions [of] ‘vulnerability’, ‘disclosure’ and ‘cyber incident response’”, and adopt a revised statement of understanding for the relevant section, so that restrictions “do not apply to ‘vulnerability disclosure’ or ‘cyber incident response’”, and defines vulnerability disclosure so as to allow individuals and organisations “responsible for conducting or coordinating remediation” to communicate and analyse vulnerabilities.  ‘Cyber incident response’ also gets a definition, so individuals and organisations can exchange information to help them resolve incidents.  The Hill article says that the changes are good news for those businesses involved in the information security sector, as they will make certain relevant cross-border sharing activities around vulnerability disclosure and security incident response exempt from requiring export control licences.

The article also says that controls over computers have been amended, in part because performance-based export controls quickly fall behind the development of newer, bigger, and faster machines.

https://www.theregister.co.uk/2017/12/21/infosec_controls_relaxed_a_little_after_latest_wassenaar_meeting/

 

SOFTWARE TO CONVERT MANED AIRCRAFT TO UNMANNED CAUGHT BY EU EXPORT CONTROLS

In its analysis of changes to the EU dual-use export control legislation, a briefing from Baker McKenzie noted a change relating to amendment of the Missile Technology Control Regime (MTCR).  The changes included a new note to the 9D105 software control to highlight that this control includes software specially designed for a manned aircraft converted to operate as an unmanned aerial vehicle (UAV).

 

HIGH-RANKING MEXICAN OFFICIAL ARRESTED ON CORRUPTION CHARGES

Reuters reports that Mexican authorities have arrested Alejandro Gutierrez, a former high-ranking official of President Enrique Pena Nieto’s PRI party in a corruption investigation in the northern state of Chihuahua.  This is a further corruption allegation involving the PRI, with 4 former governors arrested on such charges this year.  Reuters says that entrenched corruption is expected to be a key issue in the run-up to Mexico’s next presidential election in 2018.

https://www.reuters.com/article/us-mexico-corruption/mexico-arrests-former-high-ranking-pri-official-in-corruption-probe-idUSKBN1EF0BL?feedType=RSS&feedName=worldNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FworldNews+%28Reuters+World+News%29&src=ilaw

 

BURKINA FASO BANS NORTH KOREA IMPORTS

News 24 reports that Burkina Faso is banning imports from North Korea to comply with UN economic sanctions after an inquiry by the US in October showed that it was still trading with North Korea despite sanctions imposed the month before.  According to official figures, imports from North Korea – mainly petroleum products – amounted to $6.8 million in 2016.

https://www.news24.com/Africa/News/burkina-faso-bans-imports-from-north-korea-20171220-2?src=ilaw

 

THE SCANDAL AFFECTING POUNDLAND

Business Day in South Africa has an article published on 14th December providing some background to the Steinhoff accounting scandal which is having a knock-on effect on UK retailer, Poundland, which is owned by the German-registered but South Africa-based company.  The title, “Claims against Steinhoff uncover revolving tangle of dodgy deals”, provides an indication of the tenor of the article.

https://www.businesslive.co.za/bd/companies/retail-and-consumer/2017-12-14-claims-against-steinhoff-uncover-revolving-tangle-of-dodgy-deals/

 

CHINA JAILS 50 FOR TELECOMS FRAUD, INCLUDING 22 FROM TAIWAN

Reuters reports that, despite protests from Taiwan, a Chinese court has jailed for up to of up to 15 years 50 people deported from Kenya for telecoms fraud, including 22 from Taiwan.  Over the past 2 years countries including Kenya, Spain, Vietnam and Cambodia have deported hundreds of people from Taiwan to China for telecoms fraud, sparking accusations from Taipei that Beijing was effectively kidnapping its citizens.  China has defended the deportations, saying the crimes were committed against people in China and that as Taiwan is a part of China it was natural foreign governments should send these people to China rather than Taiwan.

Chinese authorities are facing telecom crime which it says has led to huge financial losses, with callers often impersonating officials or authority figures and preying on the elderly, students or the unemployed.

The fraud has spread overseas, with Chinese speakers recruited in neighbouring Taiwan increasingly setting up operations in East Africa or SE Asia.

https://uk.reuters.com/article/uk-china-taiwan-crime/china-jails-22-taiwanese-for-telecoms-fraud-taiwan-says-evidence-ignored-idUKKBN1EF07E?rpc=401&

 

22nd December 2017

SERBIA SEEKS TO HAMONISE AML LAW WITH EU REQUIREMENTS ETC

CMS Law reports that on 14th December the Serbian Parliament passed a new Law on Prevention of Money Laundering and Financing of Terrorism.  The main reason for the adoption of the new Law, in which more than half of the articles were changed, is the need to harmonise and adjust Serbian legislation in line with the EU 4th ML Directive and other UN and Council of Europe acts.  Amongst other things the new Law defines a PEP, and identifies a foreign trust as a legal entity, requires AML risk assessments and introduces or updates KYC requirements.

www.cms-lawnow.com/ealerts/2017/12/the-serbian-parliament-passed-a-new-law-on-prevention-of-money-laundering-and-financing-of-terrorism?cc_lang=en

 

ISO 37001 ANTI-BRIBERY CONTROLS

A year after a global anti-bribery standard was implemented by the International Standards Organization, a slow trend is emerging among major corporations, such as Microsoft and Wal-Mart, announcing they will seek certification under the standard. This presents an opportunity for companies to obtain a best practices certification concerning its anti-corruption controls, which could serve as a favourable factor for lenience for the corporation from criminal or civil enforcement authorities, should a problem arise.  ISO 37001, a global standard aimed at implementing an anti-bribery management system designed to help prevent, detect and mitigate bribery, was adopted by the ISO on 14th October 2016.  It is based on previous guidance from organisations such as the International Chamber of Commerce, OECD, and the US DoJ and SEC.

https://www.bakerlaw.com/alerts/iso-37001-testing-the-ability-to-implement-a-global-anti-bribery-standard

 

THE ISLAMIC STATE’S LIBYAN EXTERNAL OPERATIONS HUB: THE PICTURE SO FAR

The latest edition of the CTC Sentinel from the Combating Terrorism Center in the US includes 2 articles of particular note – this is the first.  The Islamic State has built up an external operations network with a hub on Libyan soil and spokes connecting it to nodes of Islamic State supporters within the Libyan and Tunisian diaspora in Europe.  While much is still unknown about the reach of the network, the group has been linked to a series of major terrorist attacks and plots against Westerners in Europe and Tunisia.  Despite setbacks for the Islamic State in Libya, international attack planners on Libyan soil continue to pose a threat on both sides of the Mediterranean.

https://ctc.usma.edu/posts/the-islamic-states-libyan-external-operations-hub-the-picture-so-far

A JIHADI TAKEOVER BID IN NIGERIA? THE EVOLVING RELATIONSHIP BETWEEN BOKO HARAM AND AL-QA`IDA

This is the other –

Ever since Boko Haram’s leader Abubakar Shekau pledged allegiance to Abu Bakr al-Baghdadi in March 2015, the group has been seen as firmly in the Islamic State fold. But as both the Islamic State and Boko Haram weaken, al-Qa`ida, which has a history of cooperation with jihadis in Nigeria, including factions within Boko Haram, may be making a takeover bid.

https://ctc.usma.edu/posts/a-jihadi-takeover-bid-in-nigeria-the-evolving-relationship-between-boko-haram-and-al-qaida

 

FINCEN LAUNCHES NEW INFORMATION-SHARING PLATFORM: THE FINCEN EXCHANGE

Wilmer Hale has issued a briefing concerning the new voluntary platform to facilitate information sharing between the government and industry on topics related to AML and other financial crime issues.  It argues that this programme represents a significant step forward on 2 related priority areas for FinCEN: information sharing and public-private partnerships.  It appears that the FinCEN Exchange will convene briefings every 6-to-8 weeks among FinCEN, law enforcement and financial institutions to exchange targeted information on priority illicit finance threats, such as specific money-laundering methods and typologies.  Participation in the programme is strictly voluntary and does not introduce any new regulatory requirements.  It is unclear which financial institutions will participate in the FinCEN Exchange, or how those institutions will be selected; it is possible that the programme will be invitation-only, at least in the near term.   The article also notes that there are at least 3 separate Bills to reform the Bank Secrecy Act are currently being considered in the US Congress that have the potential to revamp many aspects of the BSA and the AML regulatory regime, including in the areas of information sharing and public-private partnerships

https://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=17179886282

 

UK ECONOMIC CRIME STRATEGY SPECIFICS REMAIN UNCLEAR

In an article published on 20th December, the chartered secretaries’ body, ICSA, has welcomed the announcement of the National Economic Crime Centre and is pleased policing financial misdeeds is back on the government agenda, but says that the details are, as yet, vague.

 

SOFTWARE COMPANIES IN EUROPE URGED TO REVIEW THEIR EXPORT CONTROL CLASSIFICATIONS

Out-Law carried an article dated 21st December in which it said that software companies across Europe should “re-assess their current export control classifications” in light of EU dual-use Regulations that recently came into force on 16th December.  It gives as an example of the software that might be affected as encryption software, which is subject to export controls because it is capable of dual-use: although such software can be used to ensure the confidentiality of information for common commercial transactions, it can also be used for illicit purposes, and the changes include major changes to rules in relation to the export of encryption software and technology.

https://www.out-law.com/en/articles/2017/december/software-companies-in-europe-urged-to-review-their-export-control-classifications/

 

ALLEN & OVERY ASIA PACIFIC FCPA AND ANTI-CORRUPTION UPDATE

On 21st December law firm Allen & Overy published the latest edition of this newsletter, which starts by noting the 40th anniversary of the US Foreign Corrupt Practices Act (FCPA), enacted by the 95th Congress on 19th December 1977.

Headings in the newsletter that are of interest include –

  • DOJ’s new FCPA Corporate Enforcement Policy: Companies have greater incentives to disclose, but caveats remain
  • The FCPA’s broad reach and its impact on non-US companies and individuals

https://www.aohub.com/aohub/publications/the-fcpas-broad-reach-and-its-impact-on-non-us-companies-and-individuals?nav=FRbANEucS95NMLRN47z%2BeeOgEFCt8EGQ71hKXzqW2Ec%3D&key=BcJlhLtdCv6%2FJTDZxvL23TQa3JHL2AIGr93BnQjo2SkGJpG9xDX7S2thDpAQsCconWHAwe6cJTmlnVN%2BUp8Mvj2L%2BEiiz68X

  • The Advent of Stronger Foreign Bribery Laws in Australia

http://www.allenovery.com/publications/en-gb/Pages/Asia-Pacific-FCPA-and-Anti-Corruption-Update.aspx

 

SEC ALLEGES $1.2 BILLION PONZI SCHEME BY FLORIDA FUND

On 21st December, Law 360 reported that the SEC had accused a Florida-based fund owner of running a $1.2 billion Ponzi scheme that spanned at least 5years.  Robert H. Shapiro and a group of unregistered investment companies called Woodbridge Group are accused of allegedly defrauding more than 8,400 investors to the tune of $1.2 billion.

 

EX-EMBRAER EXECUTIVE ADMITS BRIBERY

Law 360 reports that a former Embraer SA executive told a federal judge in the US that he paid $1.65 million to a go-between to sweeten a jet contract with Saudi Aramco and then took a $130,000 kickback, thereby admitting to violating the FCPA, lying to the FBI and other criminal offences.

 

CHANGES TO AIRPORT SECURITY REQUIREMENTS IN THE UK

On 21st December the UK Department for Transport issued an update saying that large phones, laptops and tablets were now allowed in the cabin on the majority of flights to the UK from Turkey and Tunisia.

https://www.gov.uk/government/news/changes-to-uk-aviation-security

 

UK RENEWS TERRORISM SANCTIONS DESIGNATION

On 21st December HM Treasury announced that the designation of Khalid Sheikh MOHAMMED under its terrorism sanctions regime had been renewed.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/670445/Notice_KSM_December_2017.pdf

 

UK CONFIRMS START DATE FOR NEW AML WATCHDOG, OPBAS

On 21st December, HM treasury issued a news release about the Office for Professional Body AML Supervision (OPBAS) which begins operations on 18th January, operating within the NCA.  It will work across the UK’s AML supervisory regime to, HM Treasury says, improve standards and ensure supervisors and law enforcement work together more effectively.  It will directly oversee the 22 accountancy and legal professional body AML supervisors in the UK.

https://www.gov.uk/government/news/uk-establishes-new-money-laundering-watchdog

 

ALLEGED ZIMBABWE “AIRPORT TENDER SCAM”

On 21st December, the Zimbabwean alleged that Minister of Transport and Infrastructural Development Joram Gumbo had ordered the Civil Aviation Authority of Zimbabwe (CAAZ) to unprocedurally award a €28 million contract without going through the tender process.

http://www.thezimbabwean.co/2017/12/mugabe-airport-minister-in-33-million-tender-scam/

 

DUBLIN ZOO VICTIM OF €500,000 SCAM

Breaking News in Ireland reports that Dublin Zoo has been victim to an international scam known as “invoice redirect fraud” where criminals hack an official email which looks legitimate and ask for payments to be made to a different bank account.  Gardaí managed to freeze €370,000 worth of the payments.  The scammers are understood to have pretended to be contractors working for the zoo.

http://www.breakingnews.ie/ireland/dublin-zoo-defrauded-out-of-almost-500000-819780.html

 

THE WORK OF THE UK INTELLIGENCE AND SECURITY COMMITTEE

The House of Commons Library issued a Briefing Paper on 21st December that describes the functions and powers of the Intelligence and Security Committee, which is responsible for scrutinising the UK’s intelligence and security agencies. It outlines reforms to the Committee under the Justice and Security Act 2013, and summarises recent inquiries.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN02178

 

US DESIGNATES 52 PERSONS UNDER ITS MAGNITSKY LAW

The Nikkei Asia Review reported 21st December that the US had imposed sanctions on 13 “serious human rights abusers and corrupt actors”, under its so-called Magnitsky Law, including Myanmar general Maung Maung Soe, who oversaw the crackdown against the Rohingya Muslim minority.  It also targeted 39 other individuals and entities with sanctions that block their assets under US jurisdiction, bar most Americans from dealing with them and largely cut them off from the global financial system.  Others included Benjamin Bol Mel, who has served as an adviser to South Sudan President Salva Kiir and is suspected of getting preferential treatment in government contracts, former Gambian leader Yahya Jammeh, accused of human rights abuses and corruption, and Israeli billionaire Dan Gertler, accused of using his friendship with Democratic Republic of Congo President Joseph Kabila to secure sweetheart mining deals, Slobodan Tesic, a Serbian arms dealer, and a top financial adviser to the president of South Sudan, Artem Chayka, the son of Russia’s prosecutor general, Sergey Kusiuk, former head of an elite police force in Ukraine, and former president of Gambia, Yahya Jammeh.

https://asia.nikkei.com/Politics-Economy/International-Relations/US-sanctions-Myanmar-general-others-for-abuses-corruption?src=ilaw

https://www.washingtontimes.com/news/2017/dec/21/donald-trump-sanctions-dozens-foreign-individuals-/?src=ilaw

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20171221.aspx?src=ilaw

More information –

https://qz.com/1163890/trump-sanctions-myanmar-general-for-rohingya-massacre-gambias-yahya-jammeh-for-human-rights-abuses-corruption/?src=ilaw

Transparency International reaction, regrets former Panamanian President Martinelli not on list –

https://www.transparency.org/news/pressrelease/no_magnitsky_sanctions_passed_against_martinelli_anti_corruption_investigat?src=ilaw

See also earlier blog post –

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

On 22nd December the US Treasury imposed “Magnitsky Law” sanctions against a number of individuals, 10 of which are said to be connected to the criminal organisation and 2 affiliates.

 

JP MORGAN “BREACHED SWISS AML REGULATIONS”

Moneycontrol.com reported that JP Morgan seriously breached Swiss AML regulations in its dealings with Malaysian sovereign wealth fund 1MDB, the Swiss financial markets watchdog FINMA reported. The bank’s subsidiary “failed to adequately identify the increased money laundering risks in some of the business relationships related to this case”, FINMA said, referring to a money-laundering scandal that has shaken the Malaysian political establishment.  “The bank seriously breached anti-money laundering regulations by failing to screen adequately transactions and business relationships booked in Switzerland associated with the Malaysian sovereign wealth fund 1MDB and one of its business partners,” FINMA said in a statement.  Despite its findings, FINMA said it would not seek legal proceedings against any individuals and there would be no fines against JP Morgan.

http://www.moneycontrol.com/news/business/jpmorgan-seriously-breached-anti-money-laundering-regulations-switzerland-2466591.html

 

BRAZIL CHARGES SPANISH-SWISS BANKER IN “CAR WASH” INVESTIGATION

Risk and Compliance reports that Federal prosecutors in Brazil have charged a Spanish-Swiss banker with laundering $21.7 million in graft money for Brazilian clients involved in “Car Wash”, the country’s largest corruption scandal, including jailed former lower house speaker Eduardo Cunha.  David Muino Suarez, a relationship manager of Zurich-based BSI bank, was arrested at Sao Paulo’s Guarulhos airport as he got off a flight from Switzerland and is being held in Curitiba, the centre of the so-called Car Wash investigation.  Prosecutors said in a statement that Suarez, who has dual Swiss-Spanish nationality, knew the money came from bribes paid to Cunha and Pedro Bastos, a former executive at state-run oil company Petrobras, from an oil field acquisition in the African nation of Benin in 2011.  They said Suarez concealed the illegal financial operation with false information given to the bank’s compliance office.

http://www.riskandcompliancehub.com/brazil-charges-swiss-bank-manager-with-laundering-bribe-money/

 

POLICE SEIZE 26,456 ANCIENT ARTEFACTS IN TURKEY’S LARGEST ANTI-SMUGGLING OPERATION

Customs Today reported on 21st December that Istanbul police confiscated 26,456 ancient artefacts and detained 13 smugglers in Turkey’s “most extensive anti-smuggling operation” to date.  Police squads carried out the operation after 3months of surveillance.  Artefacts confiscated in the operation are from the Byzantine and Roman Empires, as well as the Middle Ages, and include coins, plinths and stone art pieces.  The smugglers were planning to sell the artefacts abroad, reports said, instead they will be handed over to Istanbul Archaeology Museum.  In recent years, Turkey has stepped up efforts to prevent smuggling and has launched initiatives to retrieve stolen artefacts.

http://www.customstoday.com.pk/police-seize-26456-ancient-artifacts-in-turkeys-largest-anti-smuggling-op/

 

£115 MILLION TAX LOSS RISK AS NORTHERN IRELAND SMOKERS TURNING TO UNTAXED TOBACCO

Customs Today also carries an article which says that more than half of smokers in Northern Ireland said the rising price of cigarettes has tempted them to buy untaxed tobacco.  A survey by the Tobacco Manufacturers’ Association claimed there are shocking levels of illegal trade and tax avoidance among smokers, because the government has made legal ones so expensive.  Its report claims the government could be losing out on up to £115 million in revenue from Northern Ireland – part of a £3 billion UK-wide shortfall.

http://www.customstoday.com.pk/115m-tax-loss-risk-as-northern-ireland-smokers-turning-to-untaxed-tobacco/

 

PARADISE PAPERS PROMPT CRIMINAL COMPLAINT AGAINST GLENCORE

The Guardian reports that a Swiss human rights watchdog group has filed a criminal complaint against the Anglo-Swiss commodities giant Glencore following revelations from the Paradise Papers.  They have formally asked the country’s attorney general to investigate how the multinational obtained a copper mine in the DR Congo.  Under Swiss law, the office of the attorney general will be required to assess and formally respond to the criminal complaint lodged by Public Eye.

https://www.theguardian.com/business/2017/dec/21/paradise-papers-prompt-criminal-complaint-against-glencore

 

WCO OPERATION COCAIR VI: OVERVIEW OF INITIAL RESULTS

The WCO on 21st December reported on the outcome of Operation COCAIR VI took place from 9th to 17th December, bringing together the enforcement services of airports in some 30countries in Africa, Latin America and the Caribbean, and the Middle East.  The main objective of the Operation was to intercept illicit consignments of cocaine by air from South America bound to Europe, either directly or via transit zones in Africa.  More generally, its aim was to intercept any illicit substance or contraband that might be transported by air, in particular currency, countless seizures in previous operations having netted cash and securities.

Cocaine, the main product targeted during the Operation, topped the list in terms of numbers of seizures, and ranks first in terms of quantities intercepted (900 kg).  Heroin, tobacco, methamphetamine, cannabis, khat, medicines, LSD and species of flora and fauna protected by the Washington Convention were among the other products intercepted.  The Operation also made 3 interceptions of currency totalling over $700,000, confirming that the movement of smuggled currencies observed during the previous COCAIR operations is still prevalent.  32 people have already been detained, and 2 companies incriminated.

http://www.wcoomd.org/en/media/newsroom/2017/december/operation-cocair-vi.aspx

 

DRONE EXPORT TRENDS 2017

The Forum on the Arms Trade website carried a piece on 21st December reviewing trends involving drones.  It says that many of the trends in drone proliferation that emerged in 2016 continued into 2017 and are likely to persist in 2018.  With new deals and drones, China pursued international customers for its strike-capable drones in 2017.  Other countries embarked on or expanded their own programs to develop or acquire drones.  And non-state actors continued to modify and deploy small armed drones, raising fresh concerns that these systems might be used to attack civilian targets.  China continued to push exports of its drones.  Drone use by non-state actors also expanded this year.

https://www.forumarmstrade.org/looking-ahead-blog/recent-drone-proliferation-and-what-may-lie-ahead

 

MILLIONS OF MEDICINES SEIZED IN LARGEST OPERATION AGAINST THE TRAFFICKING OF MISUSED MEDICINES

In a Europol news release it reported on Operation MISMED, the largest action of its kind targeting the illicit trafficking of misused medicines saw some 100 arrests in and the seizure of more than €230 million worth of medicines and doping substances in the EU.  In a series of co-ordinated actions carried out throughout 2017, the French Central Office against Environmental and Public Health Crime (OCLAESP) and the Finnish Customs led an operation targeting medicines diverted for psychotropic, recreational or doping purposes.  Overall, involving customs, law enforcement and health regulatory authorities from France, Finland, Spain, Italy, Romania, Hungary, Greece, the UK and Ireland, Operation MISMED led to a record number of 75 million units of medicine and doping substances seized, with an estimated street value of over €230 million.  The series of coordinated action resulted in the launch of 205 investigations and the identification of 277 suspects, of which 111 were arrested.  This intelligence-led operation was initiated in 2017 after the initial investigation revealed that the medicine ‘Subutex’ was being illicitly trafficked between France and Finland.

https://www.europol.europa.eu/newsroom/news/millions-of-medicines-seized-in-largest-operation-against-trafficking-of-misused-medicines

 

CEREMONY MARKS END OF ICTY

Jurist reports on the International Criminal Tribunal for the former Yugoslavia (ICTY) on 21st December its official closure with a ceremony held in The Hague.  The event marked the end of the ICTY’s 24-year tenure trying those most responsible for genocide, crimes against humanity, violations of the laws of war and grave breaches of the Geneva Convention committed within the territory of the former Yugoslavia during the early 1990s.  ICTY indicted 161 people, of which 90 were found guilty and sentenced and 19 acquitted.  Over roughly 10,800 days of trial, the court heard from 4,650 witnesses and generated 2.5 million pages of transcripts. The cases against 2 prominent defendants are currently on appeal before a residual tribunal.

 

UN REMOVES 1 NAME FROM GUINEA-BISSAU SANCTIONS LIST

The UN Security Council has removed 1person, Sanha Clussé, from its Guinea-Bissau sanctions list, and the travel ban set out in paragraph 4 of UN SCR 2048 (2012) no longer applies to him.

 

IMPORTS A KEY FOCUS OF NEW US FEDERAL STRATEGY ON CRITICAL MINERALS

Sandler Travis & Rosenberg reports that reducing imports is among the primary objectives of a 20th December Presidential Executive Order that seeks to ease US vulnerabilities to the supply of critical minerals. The EO also aims to boost domestic production of these minerals as well as the search for viable alternatives.

https://www.strtrade.com/news-publications-imports-critical-minerals-executive-order-122217.html

 

GRECO REPORT ON ANTI-CORRUPTION IN ARMENIA

The Council of Europe’s anti-corruption body Group of States Against Corruption (GRECO) has published a new report assessing the implementation by Armenia of its earlier recommendations on preventing corruption in respect of members of parliament, judges and prosecutor.  GRECO concludes that Armenia has implemented satisfactorily 5 of the 18 recommendations. Of the remaining recommendations, 12 have been partly implemented and 1 has not been implemented.

https://www.coe.int/en/web/portal/-/armenia-council-of-europe-anti-corruption-body-issues-a-new-compliance-report

 

EU AMENDS SOMALIA SANCTIONS TO ALLOW FOR HUMANITARIAN RELIEF

From 23rd December, EU Regulation 2017/2415/EU amends Regulation 356/2010 so that the restriction on the supply of financial funds etc does not apply to that required for the timely supply of humanitarian relief by the UN and other such agencies.  See also Council Decision 2017/2427/CFSP.

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R2415&from=EN

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2017.343.01.0078.01.ENG&toc=OJ:L:2017:343:TOC

 

EU COUNCIL DECISION EXTENDS RUSSIA SANCTIONS TO JULY 2018

Council Decision 2017/2426/CFSP of 21st December confirms the extension of EU sanctions on Russia due to the situation in Ukraine, to 31st July 2018.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2017.343.01.0077.01.ENG&toc=OJ:L:2017:343:TOC

 

EXPORT CONTROL (SYRIA AND LIBYA SANCTIONS) (AMENDMENT) ORDER 2017

SI 2017/1311 amends the UK’s trade sanctions regimes against Syria and Libya to take account of recent changes made by EU Regulations.

http://www.legislation.gov.uk/uksi/2017/1311/contents/made

 

CANADIAN PONZI-LIKE SCHEME LINKED TO MOBILE LIGHTING

The Calgary Herald in Canada reports that the prospect of riches from mobile industrial lighting blinded investors who were bilked for more than $10 million in probably the largest fraud scheme ever uncovered in central Alberta, say RCMP.  The Ponzi-like scheme reached from Canada into the US, and used existing mobile light towers from a company called Silvertip Energy which sold or rented the same equipment multiple times on paper to investors and also offered devices that had never been manufactured.  Initial investors received some of their money back from those coming after them, until interest in the scheme dried up.

http://calgaryherald.com/news/crime/mounties-u-s-secret-service-arrest-red-deer-man-in-alleged-10-million-ponzi-scheme/wcm/57a20339-9ea6-48e7-b03b-6eeb147cd56b?src=ilaw

 

A HISTORY OF THE UK PASSPORT

The Home Office blog provides a short history of the British passport.

https://homeofficemedia.blog.gov.uk/2017/12/22/a-history-of-the-uk-passport/

 

HMRC DETECTED ILLICIT FUEL USE IN MORE THAN 300 HGV LAST YEAR

Commercial Motor on 20th December reported that a Freedom of Information response had revealed that more than 300 HGV were discovered to have used illicit fuels in 2016/17, with operators paying in excess of £100,000 to have their trucks returned to them.  HMRC reported that 318 trucks were found unlawfully using marked rebated fuels, such as red diesel, or mixed, smuggled, laundered and illicitly-produced fuels during the previous financial year, with all such vehicles seized.  Some £104,539 in restoration fees etc was collected in 2016/17.  It says that HMRC was unable to identify any hotspots, or whether the illicit fuel was detected as a result of random or targeted checks. It said this information would “reveal the scope and level of HMRC capabilities, allowing potential tax evaders to modify their behaviour to avoid detection”.

http://www.commercialmotor.com/news/compliance/hmrc-detected-illicit-fuel-use-more-300-hgvs-last-year

 

HOW WOMEN BECOME RADICALISED, AND HOW TO EMPOWER THEM TO PREVENT RADICALISATION

This study, commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the Committee on Women’s Rights and Gender Equality, focuses on Islamist radicalisation and violent extremism in the EU and seeks to explore and assess the question of women’s radicalisation and their involvement in violent extremism in the EU as well as to look into the mechanisms in place to prevent women and girls from radicalisation.

http://www.europarl.europa.eu/RegData/etudes/STUD/2017/596838/IPOL_STU(2017)596838_EN.pdf

 

POSSESSION OF FIREARMS COMPONENTS BY A PREVIOUSLY CONVICTED PERSON

PNLD Q&A: is it an offence under section 21 of the Firearms Act 1968 in the UK to possess component parts of a firearm?  Component parts are included for the purposes of the offence under section 21 (possession of firearms by persons previously convicted of crime), and section 21 also prohibits the possession of components by a person who has been convicted of certain crimes.

https://www.pnld.co.uk/your-legal-questions-answered/possession-of-component-parts-of-firearms-by-previously-convicted-persons/

 

IMO PROVIDING GUIDANCE AND WORKSHOPS TO PREVENT STOWAWAYS

The International Maritime Organisation is continuing to assist countries with the highest number of stowaway incidents by spreading the knowledge of effective port security measures, and, thereby, helping to facilitate the free flow of international maritime traffic.

www.imo.org/en/MediaCentre/WhatsNew/Pages/default.aspx

 

US REGULATOR VIRTUAL CURRENCY INFORMATION AND PROPOSED DEFINITION OF DELIVERY

US law firm Buckley Sandler reports that the Commodities Futures Trading Commission in the US has Issued Proposed Interpretation of “Actual Delivery” in Virtual Currency Transactions; and has Launched a Virtual Currency Resource Page.  It includes its view regarding the term “actual delivery” in the context of retail virtual currency transactions.  Applying a broad definition of the term virtual currency, the CFTC believes that these type of currencies are commodities, which means that certain transactions in virtual currencies are subject to CFTC oversight.  Comments on the proposed regulation must be received on or before March 20th.  See the CFTC virtual currency page on CFTC at –http://www.cftc.gov/Bitcoin/index.htm

https://buckleysandler.com/blog/2017-12-21/cftc-issues-proposed-interpretation-“actual-delivery”-virtual-currency-transactions-launches-virtual-currency-resource-page

 

JABHAT AL-NUSRA (AL-NUSRA FRONT) IN THE SYRIAN CONFLICT

Sustainable Security on 15th December published a profile of the organisation and the article, in summary, says that Al-Nusra Front is one of the main Jihadist actors currently involved in the Syrian war. It says that several factors have allowed its integration into the Syrian landscape, and its evolution.  It was founded as an al-Qaeda affiliate during the Syrian conflict, but has gradually evolved towards a form of nationalised Jihadism to fit with the local realities as well as reinforce its legitimacy among the people.

It was founded as the “Front of Support for the People of the Levant”, the movement wants to establish a Jihadi hub in Syria, and from the beginning, al-Nusra’s declared enemy has always been the Syrian regime and its allies and proxies.  Unlike several other Jihadi groups whose agenda has seemed to be more ambitious, such as ISIL, al-Nusra was an early adopter of a nationalisation-process through which all military and political efforts were directed against the Asad regime and its supporters.   In July 2016, a crucial decision to become Jabhat Fatah al-Sham (“Front for the Conquest of the Levant”) turned out to be an essential milestone in the Syrianisation process initiated by al-Nusra.  This move helped the group’s efforts to become a force aiming to play a central role in the war against the regime or any contender claiming to exert primacy over the Syrian rebellion; although connections undoubtedly still exist with al-Qaeda.  Evolving from the status of a foreign movement to a domestic one, al-Nusra has certainly become a major force to be reckoned with, not only in the present Syrian context, but also for many years to come.

https://sustainablesecurity.org/2017/12/15/jabhat-al-nusra-in-the-syrian-conflict/

 

US APPROVES SALE OF WEAPONS TO UKRAINE

The US has approved the sale by US manufacturers (i.e. not sold directly by the US Government) of lethal defensive weapons to Ukraine. The export licence covers such weapons as semi-automatic and automatic firearms, according to the Reuters news agency, and includes combat shotguns, silencers, military scopes, flash suppressors and parts, and Administration officials said the equipment approved for sale was valued at $41.5 million. However, the Washington Post reported that there had been no approval for requests by Ukraine for heavier weapons, like Javelin anti-tank missiles.  The Washington Post also said Canada had approved similar sales to Ukraine.  The legal ability to grant such a licence was established by the Obama Administration.

 

UAE IS PAYING EX-CIA OFFICERS TO BUILD A SPY EMPIRE IN THE GULF

Stars & Stripes, the newspaper for the US military (but not owned by the DoD), claims that the UAE is paying ex-CIA officers to build a spy empire in the Gulf.  In an article on 21st December it identifies complex near Zayed Port in Abu Dhabi, and another site about 30 minutes outside downtown Abu Dhabi called “The Academy”. It says that the facilities and courses run are part of the UAE nascent efforts to create a professional intelligence cadre modelled after those of the West.

https://www.stripes.com/news/middle-east/the-uae-is-paying-ex-cia-officers-to-build-a-spy-empire-in-the-gulf-1.503449

 

TCSP FIRST NAMES GROUP BOUGHT

Website Verdict from Private Banker reports that SGG Group has agreed to acquire First Names Group, the Jersey-based provider of private client, corporate and fund services, from AnaCap Financial Partners.  The deal, which is subject to regulatory nod, expands SGG’s reach in Jersey, Guernsey, the Isle of Man, Switzerland and Cyprus. It will also make SGG the world’s 4th largest provider of trust, corporate and fund services, by revenue.

https://www.verdict.co.uk/private-banker-international/news/sgg-group-snap-first-names-group/

 

UK MONEY LAUNDERING SUPERVISION: ENFORCEMENT MEASURES

HMRC on 22nd December issued updated detailed guidance to enable businesses to have written risk assessment, policies, controls and procedures in place to prevent others using them to launder money or finance terrorism. Businesses are also required to report suspicious transactions to the National Crime Agency (NCA) to meet their obligations.

https://www.gov.uk/government/publications/money-laundering-supervision-enforcement-measures

 

HMRC GUIDANCE: PENALTIES FOR ENABLERS OF TAX AVOIDANCE SCHEMES

On 22nd December HMRC issued updated guidance that supports new legislation introduced in the Finance (No 2) Act 2017 which applied w.e.f. 16th November, and is concerned with penalties for any person who enables the use of abusive tax arrangements which are later defeated.

https://www.gov.uk/government/publications/penalties-for-enablers-of-tax-avoidance-schemes-draft-guidance

 

UK ADDS 4 TERRORIST ORGANISATIONS TO BANNED LIST, AND REMOVES ONE OTHER

In the UK, the Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2017 [SI 2017/1325] amends the list of proscribed (banned) terrorist organisations – add 4 names and delisting one.  As a result, from 21st December the following are added to the list of proscribed organisations –

  • al-Ashtar Brigades (Saraya al-Ashtar) (The Wa’ad Allah Brigades) (Islamic Allah Brigades) (Imam al-Mahdi Brigades) (al-Haydariyah Brigades)
  • al-Mukhtar Brigades (Saraya al-Mukhtar)
  • Hasam (Harakat Sawa’d Misr) (Harakat Hasm) (Hasm)
  • Liwa al-Thawra.

And Hezb-e Islami Gulbuddin is removed.

http://www.legislation.gov.uk/uksi/2017/1325/contents/made

https://www.gov.uk/government/publications/proscribed-terror-groups-or-organisations–2

 

$26 MILLION PENALTY BY US AUTHORITIES IMPOSED ON MERRILL LYNCH

Investment News reports that the SEC and FINRA have censured Merrill Lynch and imposed combined penalties totalling $26 million over its AML policies and procedures.  The SEC and FINRA, which each fined the firm $13 million, said that Merrill Lynch’s AML policies and procedures in place from 2011 to 2015 that were “not reasonably designed to account for the additional risk associated with the additional services offered by certain of its retail brokerage accounts, and the SEC said that Merrill Lynch failed to adequately monitor for, detect, and report certain suspicious activity related to transactions or patterns of transactions in its customers’ accounts.

www.investmentnews.com/article/20171222/FREE/171229964/merrill-lynch-fined-26-million-over-suspicious-transactions?src=ilaw

 

ANIMAL CHARITY BOSS STOLE £640,000 FOR GAMBLING HABIT

On 22nd December the Belfast Telegraph reported that the boss of an animal charity who committed fraud and used £640,000 on an online gambling website has been jailed for 5 years.  Simon Price, 53, and his wife Alayna, 39, admitted cheating Birmingham Dogs Home in an £894,754 fraud over 4 years, from 2012.

https://www.belfasttelegraph.co.uk/news/uk/crooked-animal-charity-boss-jailed-for-five-years-after-stealing-640000-36431005.html?src=ilaw

 

REPORT INTO THE “GRAND THEFT” OF $2.6 BILLION FROM MOLDOVA

Balkan Insight carries a piece on a new report commissioned by the country’s central bank which suggests a Moldovan banker and mayor, who is already on trial, was the possible mastermind behind the 2014 ‘billion dollar’ theft that shook the country.  The commissioned report suggests that Ilan Shor, and affiliated companies and individuals close to him, played a key role in co-ordinating the affair known as the “grand theft”, which involved lifting a billion US dollars from the Moldovan banking system.  The report claims that “at least 77 companies with accounts at the 3 Moldovan Banks made up this group”, naming Banca de Economii SA, Banca Sociala SA, and Unibank SA – these are some of the largest banks in Moldova.   It also cites used of UK limited partnerships and offshore companies in Belize, the BVI and Panama etc as being involved in the “movement” of some $2.6 billion in 2012-14.

http://www.balkaninsight.com/en/article/kroll-s-report-sheds-light-on-moldovan-grand-theft–12-22-2017?src=ilaw

 

HEAD OF ANTI-CORRUPTION AGENCY ON CONTINUING CORRUPTION IN TUNISIA

The Middle East Monitor reports that the President of Tunisia’s National Anti-Corruption Agency (INLUCC) unveiled new cases of “alleged” corruption involving officials at the Ministry of Finance.  He revealed a number of files “of corruption” surrounding taxation and huge financial losses that had caused a “significant loss to the general treasury”.  He also revealed cases of alleged corruption in tobacco distribution channels and the closing of patents without payment of arrears by their owners. These practices affect decisions taken by certain officials in public finance who have allegedly suppressed debts totalling nearly $6 million.  Other cases of alleged corruption include the writing off of debts of certain companies and people as well and overlooking unauthorised sales of products like tobacco.  He has been targeted as a result of his work to tackle corruption; he has received death threats and his car was ransacked earlier this month. He has called on authorities to do more to prevent people being targeted for their anti-corruption work.

https://www.middleeastmonitor.com/20171222-new-cases-of-corruption-unveiled-against-tunisia-ministry/?src=ilaw

 

CHINA TIGHTENS RULES ON OUTBOUND INVESTMENT BY PRIVATE COMPANIES

Forbes Reports that China has followed up earlier restrictions on outbound investment with new regulations on foreign investment by private companies, with a 36-point code of conduct for private companies that seeks to ensure that overseas deals are rational and legal, and not meant to be used for transferring assets abroad or for money laundering.  This is part of an effort to regulate outbound investment, which had been strongly encouraged between 2012 and 2016, in order to reduce risks.

https://www.forbes.com/sites/sarahsu/2017/12/22/china-tightens-overseas-investment-to-reduce-risks/#646ba8ac772c

 

REPORT ON ALLEGED FRAUD BY CZECH PM

Radio Prague reports that the European Commission is assessing the report from OLAF concerning the case of an alleged EU subsidy fraud in the Stork’s Nest farm and hotel complex, owned by Prime Minister and ANO leader Andrej Babiš. He is suspected of having orchestrated a plan for his farm to acquire a 50 million crown EU subsidy which should technically have been out of his reach

http://www.radio.cz/en/section/news/ec-evaluates-olafs-report-on-the-storks-nest-case?src=ilaw

 

MACEDONIA STILL FAILING ON ANTI-CORRUPTION REQUIREMENTS

The Macedonian Information Agency website carries a report saying that NGO Transparency International maintains that Macedonia is still failing to meet the recommendations of the 4th assessment of GRECO (the Group of States against Corruption) involving Parliament, judiciary and the Public Prosecution, Transparency International (TI), dating from 2013.  “The report of GRECO’s fourth round of evaluation, adopted back in 2013, contains an array of remarks and recommendations on how to fix the remarks. However, no efforts have been made yet in an adequate manner to fix them,” TI-Macedonia says in a statement.  This has apparently been corroborated by the head of GRECO, who has recently stated that the Council of Europe’s anti-corruption monitoring body expected the recommendations to be met ‘on account of the interests of the citizens of the Republic of Macedonia, not because of something that is expected by GRECO”.  It is reported that of 19 recommendations in the report, only 3 recommendations have been met, 10 are partially fulfilled with 6 recommendations not fulfilled at all.

www.mia.mk/en/Inside/RenderSingleNews/209/134033878?src=ilaw

 

FORMER JERSEY MAN FACES 8 YEARS IN JAIL FOR FAILURE TO PAY CONFISCATION ORDER

The Jersey Evening Post reports that former islander, Gerald Smith, who once owned Jersey-registered company ORB, was sentenced to 8 years in prison in 2006 after committing a £35 million fraud, and also given a confiscation order of £41 million – which has now risen to £64 million owing to interest – has failed to secure money from 2 well-known London property tycoons in an attempt to pay off his debt.  He faces a further 8 years in prison if he fails to pay the debt. https://jerseyeveningpost.com/news/2017/12/22/ex-islanders-confiscation-order-debt-hits-64-million/#HKRmWjSuplWcJdO7.99

 

UK CRIMINAL ASSETS SEIZURES FALL 19%

The value of criminal asset seizures fell by 19% this year, despite a rise in the value of fraudulent activity. One expert has said that the fall in seizures was caused by law enforcement budget cuts.  Out-Law has issued an article saying that authorities such as the NCA, City of London Police and other local police forces often do not have the resources to move quickly enough to seize criminal assets. This means criminals have more time to move assets out of their reach, and victims are less likely to receive compensation.  It says that figures obtained by Pinsent Masons (the law firm behind Out-Law) show that the value of criminal assets seized in the UK in 2016/17 from to £206.7m in 2016/17, from £254.7m in 2015/16. Meanwhile according to KPMG’s fraud barometer, fraudulent activity in the UK was worth £1.1bn in 2016, its highest level since 2011.  Given that the UK faces an evaluation exercise with FATF next year, these figures do not bode well

https://www.out-law.com/en/articles/2017/december/law-enforcement-budget-cuts-behind-fall-in-criminal-asset-seizures-says-expert/

 

EASTERN MEDITERRANEAN GAS FIELDS: IMPACT AND IMPLICATIONS FOR THE MIDDLE EAST

The European Council on Foreign Relations published a briefing on 21st December about the possible impact and implications of natural gas from fields in the Eastern Mediterranean, saying that discoveries of gas reserves in the eastern Mediterranean raised the prospect of stronger economic integration between states in the region, which would see enhanced relations and pave the way for greater stability there, but that gas deals won’t end conflict in the Middle East.  The known gas fields are, in the zones controlled by Israel and Egypt – and on the edge of that belonging to Cyprus, though others may be discovered, and possible pipelines could run from terminals in either (or both) Israel or Egypt into Europe. The briefing underlines the complicated and sensitive relationships, rivalries and potential conflicts in the whole area.

www.ecfr.eu/publications/summary/a_flammable_peace_why_gas_deals_wont_end_conflict_in_the_middle_east?utm_content=buffer6455d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Med gas fields

RISING TESION ON THE SYRIA-ISRAEL FRONT

War on the Rocks on 22nd December says that, whilst attention is focused on another Middle East rivalry – between Saudi Arabia and Iran – that between Israel and Iran-backed Hizbollah in Syria looks equally dangerous. It says that Iran’s plans to set up permanent military bases and build weapons production plants in Syria are placing Israel and Iran on a dangerous collision course.  It also mentions such recent events as Israel shooting down an Iranian-supplied drone and firing warning shots across the demilitarised zone on the border.  Even more worrying were on 2nd December when Israeli fighter jets targeted a military compound south of Damascus, in which Iran planned to permanently station hundreds of troops and, 2 days later, another high-value target was bombed — this time a Syrian military facility connected to a plan by Iran to produce precision-guided missiles in Lebanon and Syria.

https://warontherocks.com/2017/12/collision-course-avoiding-war-israel-axis-resistance/

 

WHAT IS HAPPENING WITH THE IRAN DEAL?

The Carnegie Center released on 22nd December a podcast where the JCPOA agreement between the West and Iran now stands, given the Trump Administration stance on the deal.  The interviewer sat down with 2 experts from the Center and discussed the status of the Iran deal, including what President Trump may do next year, what is happening in Congress, and how US global partners are reacting to the uncertainty over the future of the deal.  Whilst the IAEA has certified that Iran is complying with the terms of the JCPOA, the Administration remains unhappy – though Congress recently opted not to back the President’s decision not to certify the agreement in October. Divisions between the US and its EU allies have become apparent. Trump has to make a decision in mid-January.

http://carnegieendowment.org/publications/75101?mkt_tok=eyJpIjoiWVdVeU1URTROVE0wWXpjeiIsInQiOiJkOElENGEyUW5WNlwvQ2lsbTZZQTUzZVdWVnFBYUl3YlhUQWQ0OFhRTEJQMWRkbHk5UlBlVFlod3hMTTlXblNcL3JDa1JmZlFiTzFIVnNDYVNWT3k0NFQ1NW5PYzJkdkFXK25cL1VhSThTdmFZSERkYVEyNEtxd05XYUpibG1QcEFGWiJ9

http://carnegieendowment.org/diplopod

 

23rd December 2017

WORLD’S BIGGEST BUILDER OF OIL RIGS PAYS $422 MILLION PENALTY IN CORRUPTION CASE

Bloomberg reports that Keppel Offshore and Marine Ltd, the world’s biggest builder of oil rigs, agreed to pay $422 million to end a U.S. bribery probe into illegal payments to officials at Petrobas, Brazil’s state-owned oil company, and to the then-governing political party. It paid about $55 million to win 13 contracts with Petrobras and another company, as part of outsize commissions to an intermediary and disguised as consulting agreements, according to prosecutors.

https://www.bloomberg.com/news/articles/2017-12-22/keppel-offshore-agrees-to-pay-422-million-to-end-bribe-probe?src=ilaw

 

US GOVERNMENT CUBA SANCTIONS

On 22nd December law firm Akin Gump published an update on recent changes to US sanctions imposed by OFAC, the State Department and the Department of Commerce on entities and persons in or from Cuba, and business dealings with Cuba and Cubans.  This included amendment of the sanctions regulation administered by OFAC to target those engaging in direct financial transactions with entities and sub-entities identified on a new list—the Cuba Restricted List, which lists entities and sub-entities that the State Department has determined to be “under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel” and with whom direct financial transactions would “disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba”.  Those listed include 2 Cuban government ministries, more than 80 hotels in districts across the island, 2 tourist agencies, 5 marinas, 10 stores in Old Havana, and more than 30 entities that directly serve the Cuban defense and security sectors, and 5 major Cuban holding companies.  Unlike other sanctions, it appears that entities or sub-entities that are owned or controlled a listed entity are not automatically restricted.

https://www.jdsupra.com/legalnews/treasury-state-and-commerce-implement-61082/

 

WARNING OVER COMORO ISLANDS PASSPORTS

Kenneth Rijock warns on his blog that the Comoro Islands may issue diplomatic and citizenship-by-investment passports to anyone who is willing and able to pay for them.  He points out that Mohamed Zarrab (brother of Reza) who is fugitive from justice in the landmark Iran Oil-for-Gold international sanctions evasion case, has one, as do other Iranian nationals on the OFAC list.

 

PRIMER ON MONEY-LAUNDERING

In this latest TRACE podcast, a 22-year veteran of the US Treasury and consultant to the DoJ, John Madinger sheds light on some of the money-laundering schemes he has uncovered and why the “Breaking Bad” car wash scheme probably wouldn’t have worked.

https://www.traceinternational.org/bribe_swindle_or_steal

 

MANY US STATES’ BIOTERRORISM COUNTERMEASURES ARE LAGGING, REPORT FINDS

Homeland Preparedness reports on 22nd December that reduced US federal and state funding for public health over the last 15 years has left many states ill-prepared to respond to acts of bioterrorism, infectious disease outbreaks and natural disasters, according to a recent report by Trust for America’s Health (TFAH).  The Trust report, “Ready or Not? Protecting the Public’s Health from Diseases, Disasters and Bioterrorism,” considers 10 key indicators to gauge states’ public health preparedness. 25 states scored 5 or lower, and just 19 states increased public health funding in the fiscal year ending in 2017.   It reports that federal public health funding, meanwhile, has been halved since 2002.  It reports that the “best” places to face threats are Massachusetts and Rhode Island, these meeting the most measures, and Alaska [surely the most at risk, as the nearest target for North Korea?] the “worst” as it meets the least.

https://homelandprepnews.com/countermeasures/25921-many-state-bioterrorism-countermeasures-lagging-report-finds/

The report is at –

http://healthyamericans.org/reports/readyornot2017/

 

CALL FOR US DEPARTMENT OF HOMELAND SECURITY TO COUNTER USE OF ENCRYPTION BY TERRORISTS

On 22nd December, Homeland Preparedness reported that, after citing widely available encryption technologies that can be used by terrorists, the Chair of the US House of Representatives Homeland Security Committee recently renewed his call for the Department of Homeland Security (DHS) to convene an advisory panel to help better understand the challenges at hand, and on DHS leaders to draw leaders from the private sector, government and civil society together to address terrorists’ abuse of encryption technologies.

https://homelandprepnews.com/stories/25897-house-homeland-security-committee-chair-calls-dhs-address-terrorists-abuse-encryption-technology/

 

NEW UN SECURITY COUNCIL RESOLUTION ON NORTH KOREA

On 22nd December the UN Security Council imposed new sanctions on the DPRK, increasing the extent of measures imposed on the country in the wake of its continued nuclear and ballistic weapons programme, including the ballistic missile launch on 28th November.  Under the new resolution calls –

  • all Member States shall “prohibit” the direct or indirect supply, sale or transfer to the DPRK of crude oil, refined petroleum products, and various types of equipment and raw materials;
  • restrictions also apply with respect to the Member States’ territories, nationals, flagged vessels, aircraft, pipelines, rail lines, or vehicles and whether or not originating in their territories;
  • all Member States shall repatriate all DPRK nationals earning income in that Member State’s jurisdiction and all DPRK government safety oversight attachés monitoring DPRK workers abroad “immediately but no later than 24 months,” (unless the Member State determined that the national’s repatriation is prohibited under applicable national and international law, or if that national is a national of that Member State);
  • re the maritime interdiction of cargo vessels, the Council decided that Member States shall seize, inspect, and impound any vessel in their ports if the Member State has reasonable grounds to believe that the vessel was involved in activities, or the transport of items, prohibited by relevant UN resolutions;

The Security Council expressed its “deep concern” at the grave hardship that the people in the DPRK are subjected to and condemns the country for pursuing nuclear weapons and ballistic missiles instead of the welfare of its people.

Also in the resolution, the Council affirmed that it shall keep the country’s actions under “continuous review” and that it is determined to take further “significant measures” in the event of a further nuclear test or launch.

https://www.un.org/apps/news/story.asp?NewsID=58345#.Wj5XZ0x2tZU

UN Security Council Resolution 2397 is at –

http://www.un.org/en/sc/inc/pages/pdf/scr2397.pdf

 

UN SECURITY COUNCIL URGES STATES TO STRENGTHEN MEASURES TO COUNTER THREATS POSED BY RETURNING FOREIGN TERRORIST FIGHTERS

“Gravely concerned” over risks posed by foreign terrorist fighters returning from conflict zones, the UN Security Council on 21st December called on Member States to strengthen their efforts to counter the threat through measures on border control, criminal justice, information-sharing and counter-extremism.  A unanimous resolution, called on Member States to strengthen measures to prevent the transit of terrorists, including ensuring that identity documents were not forged, as well as employing evidence-based risk assessments, screening procedures, and the collection and analysis of travel data to identify individuals who posed a terrorist threat, in accordance with domestic and international law, without resorting to profiling based on discrimination.

The Council also called upon Member States to notify other countries of the travel, arrival, deportation or detention of individuals whom they had reasonable grounds to believe were terrorists as well as to take appropriate action in regards to suspected terrorists and their accompanying family members who entered their territories, including by considering appropriate prosecution, rehabilitation, and reintegration measures in compliance with domestic and international law.

http://www.un.org/apps/news/story.asp?NewsID=58337#.Wj5ZOUx2tZU

UN Security Council Resolution 2396 is at –

http://www.un.org/en/ga/search/view_doc.asp?symbol=S/RES/2396(2017)

UN FURTHER SANCTIONS ON NORTH KOREA

NEW UN SECURITY COUNCIL RESOLUTION ON NORTH KOREA

On 22nd December the UN Security Council imposed new sanctions on the DPRK, increasing the extent of measures imposed on the country in the wake of its continued nuclear and ballistic weapons programme, including the ballistic missile launch on 28th November.  Under the new resolution calls –

  • all Member States shall “prohibit” the direct or indirect supply, sale or transfer to the DPRK of crude oil, refined petroleum products, and various types of equipment and raw materials;
  • restrictions also apply with respect to the Member States’ territories, nationals, flagged vessels, aircraft, pipelines, rail lines, or vehicles and whether or not originating in their territories;
  • all Member States shall repatriate all DPRK nationals earning income in that Member State’s jurisdiction and all DPRK government safety oversight attachés monitoring DPRK workers abroad “immediately but no later than 24 months,” (unless the Member State determined that the national’s repatriation is prohibited under applicable national and international law, or if that national is a national of that Member State);
  • re the maritime interdiction of cargo vessels, the Council decided that Member States shall seize, inspect, and impound any vessel in their ports if the Member State has reasonable grounds to believe that the vessel was involved in activities, or the transport of items, prohibited by relevant UN resolutions; and
  • an additional 16 individuals (mainly banking officials) and 1 entity (the Ministry of the People’s Armed Forces) added to sanctions lists.

The Security Council expressed its “deep concern” at the grave hardship that the people in the DPRK are subjected to and condemns the country for pursuing nuclear weapons and ballistic missiles instead of the welfare of its people.

Also in the resolution, the Council affirmed that it shall keep the country’s actions under “continuous review” and that it is determined to take further “significant measures” in the event of a further nuclear test or launch.

https://www.un.org/apps/news/story.asp?NewsID=58345#.Wj5XZ0x2tZU

UN Security Council Resolution 2397 is at –

http://www.un.org/en/sc/inc/pages/pdf/scr2397.pdf