THINGS YOU MAY HAVE MISSED – JANUARY 7

5th January 2018

IRAN’S CYBER ESPIONAGE, SABOTAGE, AND REVENGE

The Carnegie Center on 4th January published an article examining Iran’s cyber espionage and cyberattacks abilities and strategy, saying that it has become increasingly adept at conducting cyber espionage and disruptive attacks against opponents at home and abroad, ranging from Iranian civil society organizations to governmental and commercial institutions in Israel, Saudi Arabia, and the US.  It notes that its capabilities appear to be indigenously developed, arising from local universities and hacking communities though it often masks its cyber operations using proxies to maintain plausible deniability. Nevertheless, it says, activity can usually be traced to its Ministry of Intelligence or the IRGC.  The article suggests possible US reactions to the threats, including narrowly targeted sanctions could be used to deter foreign countries or other actors from providing assistance to Iranian offensive cyber operations.

http://carnegieendowment.org/2018/01/04/iran-s-cyber-threat-espionage-sabotage-and-revenge-pub-75134?utm_source=carnegiethisweek&utm_medium=email&utm_campaign=CTW20180104&mkt_tok=eyJpIjoiTW1Oak1URmxOMkV4T0RjMiIsInQiOiJhSG9zMmRkRkxnMVdkZmFkWWFiekJtNjJwUXFweVwvZmdZVkhEcUx1MEhiRGl6QzFHWVwvamE1bG5VUVVibW9GT2hrUW5wVXRaWit6UTZyZThoVGpWcVpXUElHa2VyN3VVOThNK2RCK04wWWp5U1JXTDFMcjdRMjdvenJiOWhoTFwvZyJ9

NORTH KOREAN MISSILE PARTS CRASHED INTO CITY

Proliferation News reports on a incident in April 2017 when a North Korea Hwasong-12/KN17 intermediate-range ballistic missile (IRBM) failed shortly after launch and crashed in the North Korean city of Tokchon, causing considerable damage to a complex of industrial or agricultural buildings.  According to a US government source with knowledge of North Korea’s weapons programmes who spoke to The Diplomat, the missile’s first stage engines failed after approximately 1 minute of powered flight, resulting in catastrophic failure.

FACEBOOK “SHOULD NOT HAVE CLOSED KADROV’S ACCOUNT”

Export Law Blog on 4th January argues that Facebook was wrong to say it had to close the account of Ramzan Kadyrov, head of the Chechen Republic, because of sanctions restrictions.  It points out that Kadrov was listed under the so-called Magnitsky sanctions, and that therefore a clear exemption covers information and informational material.  Anyway, it argues further, if they have to close his account, then what about those of Bashar al-Assad and Nicolas Maduro?

http://www.exportlawblog.com/

US SEEKS TO REDUCE DEPENDENCY ON IMPORTED MINERALS, ANNOUNCES NEW NATIONAL SECURITY STRATEGY WITH TRADE COMPONENT

HKTDC from Hong Kong reports on 5th January on one of the primary objectives of a 20th December Executive Order by President Trump, i.e. to seek to ease US vulnerabilities to the supply of critical minerals, boost domestic production of these minerals as well as the search for viable alternatives.  It is not yet clear which minerals will be affected, but the Department of the Interior has to produce a list within the next 2 months.  Within 3 months there must be a report outlining a strategy and an assessment of the current and potential situations, with recommendations.  It suggests that the aims might be lined to the new national security strategy that seeks to promote US prosperity by, among other things, encouraging free, fair and reciprocal trade relationships.  Noted in particular were the following points –

  • Using its economic and diplomatic tools the US will continue to target corrupt foreign officials and work with countries to improve their ability to fight corruption;
  • It will reduce the illicit appropriation of its public and private sector technology and technical knowledge by hostile foreign competitors, including by working work with Congress to strengthen the Committee on Foreign Investment in the US to ensure it addresses current and future national security risks; and
  • It will prioritise counterintelligence and law enforcement activities to curtail intellectual property theft by all sources and will explore new legal and regulatory mechanisms to prevent and prosecute violations.

http://economists-pick-research.hktdc.com/business-news/article/Regulatory-Alert-US/U-S-Seeks-to-Reduce-Dependency-on-Imported-Minerals-Announces-New-National-Security-Strategy-with-Trade-Component/baus/en/1/1X300W0C/1X0ACNW7.htm

NEW OR PLANNED US IMPORT/EXPORT RULES

Also on 5th January, HKTDC noted a range of new or proposed rules for 2018 from a range of US Government agencies.  These included –

  • a US Customs and Border Protection interim final rule to implement the mandatory Air Cargo Advance Screening programme for inbound aircraft required to make entry that have commercial cargo aboard (in January 2018);
  • a State Department final rule clarifying when exports may be made to or on behalf of a US government agency without a licence and expanding this exemption to allow for permanent exports; and
  • a proposed rule from the Bureau of Alcohol, Tobacco, Firearms and Explosives to replace the term “specifically designed” with the term “specially designed” in in certain rules to make terminology consistent between the US Munitions Import List, the ITAR and the Commerce Control List (in September 2018).

http://economists-pick-research.hktdc.com/business-news/article/Regulatory-Alert-US/U-S-Government-Agencies-Announce-Upcoming-Regulatory-Actions/baus/en/1/1X300W0C/1X0ACNV8.htm

MEXICO TO STEP UP AML/CFT ACTIVITY

Reuters reports on 5th January that following the IMF review of the country’s AML/CFT systems, Mexico’s acting attorney general said prosecutors were already working to improve investigations and co-operation with other countries following an international report that blasted the country for failing to punish money launderers (and failing to be proactive, rather than reactive, in seeking confiscation etc).

https://uk.reuters.com/article/uk-mexico-corruption-exclusive/exclusive-mexicos-attorney-general-vows-to-crack-down-on-money-laundering-idUKKBN1EU070?src=ilaw

OFAC DESIGNATES 5 ENTITIES LINKED TO IRANIAN MISSILE PROGRAMMES

UPI reports that OFAC has designated 5 Iranian entities, subsidiaries of the Shahid Bakeri Industrial Group, part of Iran’s Defense Ministry.  Each of the 5 entities – Shahid Kharrazi Industries, Shahid Sanikhani Industries, Shahid Moghaddam Industries, Shahid Eslami Research Center and Shahid Shustari Industries, are cited for researching, developing and producing components and systems for the Shahid Bakeri Industrial Group (SBIG).

https://www.upi.com/Top_News/US/2018/01/04/US-Treasury-Department-sanctions-Iranian-firms/1501515111269/?src=ilaw&utm_source=sec&utm_campaign=sl&utm_medium=2

https://sputniknews.com/middleeast/201801051060525950-usa-sanctions-iran-uk-deal/?src=ilaw

BVI “REJECTS PAKISTAN LEGAL ASSISTANCE REQUEST”

The News in Pakistan reports that the BVI has rejected Pakistan’s request for mutual legal assistance concerning criminal investigations into the case of former prime minister Nawaz Sharif, his children and their offshore companies – Nielsen and Nescoll.  It is reported that the requests were “flawed” and neither provide detail of the offence, including corruption, nor provide basic information about what needs to be investigated.

https://www.thenews.com.pk/print/264564-bvi-shuns-pakistan-on-sharifs-offshore-holdings?src=ilaw

WHY INSIDER BENEFIT IS IRRELEVANT TO CRIMINAL INSIDER TRADING IN US

Trotman Sanders on 4th January issued a briefing on the subtle differences between insider trading and a mere breach of confidentiality where there is no material benefit involved.  It notes, however, that in US federal criminal law can be used to sidestep common law arguments.  The briefing explains that the charges would “require proof of the defendant’s knowing participation in a scheme or artifice to defraud, defined in most federal appellate jurisdictions as simply any plan or course of action intended to deceive someone out of money or property, which courts have construed to include a company’s confidential information”.   Furthermore, there need only be a breach of confidentiality and some deceptive conduct, as opposed to a breach of confidentiality accompanied by a personal benefit to the insider.

https://www.troutman.com/why-insider-benefit-is-irrelevant-to-criminal-insider-trading-05-19-20171/

WHAT YOU SHOULD KNOW ABOUT THE TAXATION OF CRYPTOCURRENCIES IN THE US

On 4th January Forbes published an article about how activities involving cryptocurrencies are viewed by the IRS.

https://www.forbes.com/sites/greatspeculations/2018/01/03/what-you-should-know-about-taxation-of-cryptocurrencies/#2ddd35d1346c

DENMARK LEGALISES MEDICAL USE OF CANNABIS

EU Observer reports on 5th January that Denmark now allows the use of medical cannabis for patients suffering from various illnesses.  The 4 year-trial from 1st January also licensed some companies to grow and produce the drug.  The article notes that capsules, cannabis extract as a mouth spray, and dried cannabis flowers for vaporising or teas are the main authorised medicines in the EU, according to the EMCDDA, but no country authorises the smoking of cannabis for medical purposes.  The article also reflects on the status of medicinal cannabis elsewhere in the EU.

https://euobserver.com/health/140410

IMB ISSUES 24-HOUR MARITIME SECURITY HOTLINE REMINDER

On 4th January, the RYA in the UK reported that the International Maritime Bureau Piracy Reporting Centre (IMB PRC) is reminding all boaters to contact its dedicated 24-hour hotline if they have seen/heard/know of or have any information relating to maritime crime and/or security, including terrorism, piracy and other illegal activities.

Email: imbsecurity@icc-ccs.org Tel: +603 2031 0014 Fax: +603 2078 5769

www.rya.org.uk/newsevents/news/Pages/international-maritime-bureau-issues-24-hour-maritime-security-hotline-reminder-.aspx

MNANGAGWA “TELLS MINISTER TO GIVE UP ILL-GOTTEN GAINS”

Pindula in Zimbabwe reports that President Emmerson Mnangagwa is reported to have warned cabinet ministers who have been implicated in corruption and the looting of state resources to confess and to voluntarily surrender their ill-gotten loot. They risk arrest and prosecution if they do not comply.

https://news.pindula.co.zw/2018/01/05/mnangagwa-warns-ministers-implicated-corruption-surrender-ill-gotten-wealth/?src=ilaw

THE UK PRIVATE FUND LIMITED PARTNERSHIP: A ‘NEW’ TAX TRANSPARENT VEHICLE FOR ONSHORE FUNDS

On 4th January the Oxford Faculty of Law published a briefing on this new vehicle, a voluntary alternative to a traditional limited partnership, available from April 2017 and only to partnerships that qualify as “collective investment schemes”.   It reports that existing limited partnerships can opt-in to the new regime if they qualify, and new ones can elect to be treated as PFLP at the time of first registration or subsequently.  Most of the general law of limited partnerships continues to apply to PFLPs, but perhaps the most important modification is the provision for greater clarity on how limited partners – who enjoy limited liability in exchange for refraining from management activities – can exercise certain rights without being deemed to have taken on a management function.

https://www.law.ox.ac.uk/business-law-blog/blog/2018/01/uk-private-fund-limited-partnership-new-tax-transparent-vehicle

THE UK TAXATION (CROSS-BORDER TRADE) BILL

On 4th January the House of Commons Library issued an updated briefing note on this Bill in anticipation of the Second Reading in the Commons.  This “Customs Bill” is intended to allow the Government to create a functioning customs, VAT and excise regime for the UK after Brexit.  The Bill also contains trade defence measures to protect UK industry from unfair competition from abroad and provisions on trade preferences which allow imports from developing countries to benefit from reduced customs duties.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8126

MONEYGRAM TAKEOVER PLANS BY CHINESE TERMINATED

On 4th January Shearman & Sterling reported that MoneyGram International and Ant Financial Services Group recently announced the termination of their agreement providing for the acquisition of Texas-based money transfer company MoneyGram by the China-based company because they were unable to receive approval from the Committee on Foreign Investment in the United States (CFIUS), which seemingly rejected proposals by the companies to mitigate US national security concerns raised by the transaction.

https://www.jdsupra.com/legalnews/m-a-watch-ant-financial-and-moneygram-78546/

HAULIERS CALL FOR MORE SECURE PARKING TO STEM THEFTS

Loadstar reports that hauliers are calling for more secure parking areas across the Europe, Middle East & Africa (EMEA) region after a report from the Transported Asset Protection Association (TAPA) found that 85.1% of all cargo theft reported to it in November occurred at unsecured locations. The report coincides with claims in the UK that London’s police may not pursue “lower-level, higher-volume” crimes, including vandalism, vehicle crime and fuel theft.

US ATTORNEY GENERAL – “ENFORCE FEDERAL LAW ON CANNABIS”

Law 360 reports on 5th January that in a memo to US Attorneys, US Attorney General Jeff Sessions has rolled back an Obama-era policy of refraining from prosecuting marijuana businesses and individual users in states that have legalised the drug for medicinal or recreational use.  It remains to be seen how this use of federal law stands against states’ law where such use has been legalised – most recently in California.

http://jurist.org/paperchase/2018/01/sessions-rescinds-obama-era-marijuana-enforcement-policies.php

BACKGROUND INFORMATION ON THE IRAN DEAL AND FACILITIES

The Nuclear Threat Initiative, led by former Secretary of Energy Ernest Moniz, the principal negotiator of the final 2015 Iran deal nuclear provisions (JCPOA), has compiled a collection of resources and materials on the Iran nuclear agreement and Iran’s nuclear facilities and missiles.

www.nti.org/newsroom/news/future-iran-deal-comments-by-Moniz-Graphics-Videos-Analysis/

LEGAL PRIVILEGE IN UK: APPEAL TO BE HEARD IN JULY

On 5TH January, Elexica carried an article pointing out that in July 2018 the Court of Appeal will hear the appeal in SFO v ENRC, a case with major implications for privilege.  That high-profile judgment, it reminds one, endorsed the narrow approach to claims to legal advice privilege adopted by the Court of Appeal in Three Rivers District Council v The Governor and Company of the Bank of England (No 5) (and, later, the RBS Rights Issue Litigation case) and also rejects claims to litigation privilege made over a number of documents created by lawyers and forensic accountants in the context of a criminal investigation, at a stage when criminal proceedings (i.e. charges) had not yet been brought.

www.elexica.com/en/legal-topics/dispute-resolution-commercial/080118-disputes-sfo-v-enrc-appeal

ISLE OF MAN AML/CFT HANDBOOK UPDATED

On 4TH January the Isle of Man Financial Services Authority issued a news release advising of amendments to its Anti-Money Laundering and Countering the Financing of Terrorism Handbook (‘AML/CFT Handbook’).  These included expanded sections dealing with PEP and international sanctions, and further information on terrorist financing and typologies.

https://www.iomfsa.im/fsa-news/2018/jan/updates-to-the-anti-money-laundering-and-countering-the-financing-of-terrorism-handbook-amlcft-handbook/

SOUTH AFRICAN MEDIA CITES SPAR’S USE OF ISLE OF MAN

The Mail & Guardian in South Africa carried another story derived from the Paradise Papers on 5th January, this time focussing on the local affiliate of the SPAR supermarket chains, and saying that it was one of around 500 South African businesses identified as using offshore entities.  It said further that “Spar, for example, has set up a company on the Isle of Man, a known tax haven. Although the company points to the weakening rand as their reason for doing so, the convoluted way it was done suggests that Spar and its Irish subsidiary, BWG, “may be seeking to use the opaque disclosure common to Isle of Man companies to hide certain transaction details or to reduce its tax”, according to reports”.

https://mg.co.za/article/2018-01-05-00-paradise-for-corporates-and-ultrarich

https://www.spar.co.za/Home

THE “MALTA FILES”

Along similar lines to the Panama Papers and the Paradise Papers, the “Malta Files” was a project run by the European Investigative Collaboration which says that its results “show how the Mediterranean state works as a pirate base for tax avoidance inside the EU”.  The project was undertaken by the network, which has brought together 13 media outlets and 49 journalists in 16 countries and 12 languages.  Notably the media outlets included Malta Today.

https://eic.network/projects/malta-files

As an example from the Files, an interesting article from May 2017 claiming that a rich Russian oligarch used Malta to run a payday loan type of operation (it claims Oleg Boyko holds an Italian passport).

www.maltatoday.com.mt/news/national/77383/russian_billionaires_fast_loan_empire_uses_malta_to_pay_peanuts_in_tax#.Wk-WwEx2tZV

MORE ON THE OLAF REPORT INVOLVING THE CZECH PRIME MINISTER

On 5th January Radio Prague reported that the Czech Finance Ministry has released the short conclusion of a 50-page report by the European Anti-Fraud Office (OLAF) into the so-called Stork’s Nest affair (which allegedly implicates the current PM).  While members of the lower house of the parliament’s immunity committee will be given access to the full report, it still remains unavailable to the public.  The report is said to call for EU funding for the recreation and hotel complex connected with Czech Prime Minister Andrej Babiš to be withdrawn.  Apart from the Stork’s Nest project, the Ministry of Finance called for the exclusion of another dubious 43 Czech projects investigated by OLAF from EU subsidies.  A spokesman is quoted as saying that the projects in question will be regarded as nationally subsidised and their financing will be covered from the taxpayer’s pockets.

http://www.radio.cz/en/section/curraffrs/czech-ministry-releases-short-conclusion-of-storks-nest-fraud-report?src=ilaw

UK WHITE PAPER ON GOVERNMENT RESPONSE TO FEEDBACK ON PLANS FOR A FUTURE TRADE POLICY

The Department for International Trade in the UK has published its response to feedback from stakeholders on its Trade White Paper: Preparing for our future UK trade policy.  The headings in the White Paper are –

https://www.gov.uk/government/publications/trade-white-paper-preparing-for-our-future-uk-trade-policy-government-response/trade-white-paper-preparing-for-our-future-uk-trade-policy-government-response#auxiliary-submissions

FRAUDULENT HAULIER INCLUDED IN HMRC’S TOP 10 CRIMINAL CASES OF 2017

Commercial Motor on 5th January reports that a haulier has been included in the HMRC top 10 criminal cases of last year.  Millionaire businessman Peter Charles Duffield, from Orpington, ran a 50-vehicle haulage business in Essex among other concerns but failed to submit a single tax return to HMRC in 7 years. He was found to owe £1.3m in tax and sentenced to 4 years.  When arrested at his home he told investigating officers that he hadn’t submitted returns because he wasn’t “a paperwork person”.  This was despite a previous warning from HMRC to keep his tax affairs in order. Arresting officers also seized more than £20,000 in cash that he had stashed in a wardrobe.

www.commercialmotor.com/news/compliance/fraudulent-haulier-included-hmrcs-top-10-criminal-cases-2017

NCA “INVISIBLE PEOPLE” SLAVERY EXHIBITION

On 5th January the NCA issued a news released tied in with a touring photographic exhibition which portrays the signs of slavery and exploitation ad which has been launched in London.  “Invisible People” will tour the country as part of the NCA campaign to raise awareness of modern slavery and human trafficking.  The NCA reminds one that slavery was abolished in the UK in 1807 yet more than 200 years on it still exists, ad that modern slavery is a crime which seeks out the most vulnerable men, women and children and abuses them for criminal profit.

http://www.nationalcrimeagency.gov.uk/news/1267-nca-s-invisible-people-exhibition-launches

OFAC AMENDS ITS TERRORISM SANCTIONS LISTS

On 4th January OFAC issued a Notice adding Muhammad al-Ghazali, Abukar Ali Adan and Wanas al-Faqih to its terrorism sanctions lists for being associated with al-Qa’ida affiliates al-Qa’ida in the Arabian Peninsula (AQAP), al-Shabaab, and al-Qa’ida in the Islamic Maghreb (AQIM). The same Notice lists the 5 new Iranian entities linked to its missile programme.  It also deletes Lucia Touzard Romo (who had been listed because of connections to the Waked money laundering organisation) and Fathi Shaqiqi (Secretary General of Palestinian Islamic Jihad-Shiqaqi).

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180104.aspx

https://www.state.gov/r/pa/prs/ps/2018/01/276848.htm

EGYPT ARRESTS 75 PEOPLE

Baker McKenzie on 5th January reported that Egyptian authorities have arrested 75 people including government officials and foreigners over an array of corruption-related charges, and the anti-corruption Administrative Control Authority said that they come in the wake of a 14-months-long investigation that revealed the defendants’ involvement with several “organised gangs.”  Egyptian state media reported by Defence Web claimed those arrested were involved in human trafficking.

http://www.riskandcompliancehub.com/egypt-arrests-75-including-officials-for-corruption/

CFO OF US COMPANY SENTENCED FOR $750 MILLION FRAUD

The US DoJ reports in a news release that, Michael Gluk, 59, the former chief financial officer of ArthroCare Corporation, a publicly-traded medical device company based in Austin, Texas, was sentenced to ­­50 months in prison for his role in orchestrating a fraud scheme that resulted in shareholder losses of over $750 million.

https://www.justice.gov/opa/pr/former-cfo-arthrocare-corporation-sentenced-prison-role-750-million-securities-fraud-scheme?src=ilaw

US SOCIAL MEDIA IN IRAN

Corporate Counsel on 5th January reflected on the effects and implications for US-based social media services by the recent Iranian street protests, which saw the communications service Telegram jammed by the government.  It comments on the complicated laws around what services provided by US tech companies can be exported to Iran, especially when those services involve encryption, and thus those involved may refrain from entering the market.  It quotes an attorney explaining that OFAC legislation permits the export of certain services and software that are incident to communications if that the app or site is “publicly available at no cost to the user”.  Therefore Instagram and Facebook can operate there, but messaging services such as Wickr and Signal (no, I don’t know them either) are not, because “terrorist” sanctions affecting Iran mean they specific authorisation from the US Government.

https://www.law.com/corpcounsel/sites/corpcounsel/2018/01/05/iranian-protests-underscore-legal-snags-for-u-s-encrypted-messaging-services/?kw=Iranian%20Protests%20Underscore%20Legal%20Snags%20for%20U.S.%20Encrypted%20Messaging%20Services&et=editorial&bu=Corporate%20Counsel&cn=20180105&src=EMC-Email&pt=Afternoon%20Update

BONO-LINKED LITHUANIAN COMPANY FINED

The Guardian reported on 5th January that a Lithuanian company linked to the U2 frontman Bono has agreed to pay €53,000 in back taxes and a fine following an investigation prompted by the Paradise Papers.

https://www.theguardian.com/music/2018/jan/05/lithuanian-company-linked-to-bono-fined-after-paradise-papers-revelations

2 FORMER ZIMBABWE MINISTERS ARRESTED BY ANTI-CORRUPTION COMMISSION

Pindula in Zimbabwe reports the 2 more former government ministers have been arrested.  Former Minister of Foreign Affairs Walter Mzembi and former Minister of Energy and Power Development Samuel Undenge have been arrested by the Zimbabwe Anti-Corruption Commission (ZACC).

https://news.pindula.co.zw/2018/01/05/former-ministers-walter-mzembi-and-undenge-arrested/?src=ilaw

US ADDS 4 MORE NAMES TO VENEZUELA SANCTIONS LIST

The Free Beacon in the US reports that the US Government on 5th January imposed sanctions on 4 current and former senior military officials in Venezuela, including an ex-food minister accused of corruption and mismanagement of the troubled country’s food supply.  The officials sanctioned are Rodolfo Clemente Marco Torres, a former finance minister appointed by President Nicolas Maduro who also previously served as president of the Bank of Venezuela and minister of food; Marco Torres allegedly linked to corruption schemes related to food imports controlled by the Venezuelan military; Francisco Jose Rangel Gomez, the former governor of Bolivar; General Fabio Enrique Zavarse Pabon; and Major General Gerardo Jose Izquierdo Torres, a state minister.

http://freebeacon.com/issues/u-s-treasury-slaps-new-sanctions-four-venezuelan-officials/?src=ilaw

INSIGHTS INTO TERRORISM IN THE PHILIPPINES

The Manila Times in the Philippines has published a further article (the third of 4) on terrorist financing, and in doing so provides some interesting insights into terrorism there – something all too often overlooked.  For example, of the estimated US$7.5 million in ransom received by the Abu Sayyaf from January to June 2016, the bulk was paid in exchange for the releases of 14 Indonesian and 4 Malaysian crewmen who had been held at Abu Sayyaf jungle bases in Sulu province.  The militants also got $413,000 in ransom for freeing Marites Flor, a Filipino woman who was kidnapped in 2016 with 2 Canadians and a Norwegian from Samal Island.  The article also mentions the seemingly proven links between drugs and the terrorists in the country.  It also expresses concerns about anonymous payments using smartphones.  According to the International Data Corporation, the Philippines is the fastest-growing market for smartphones in SE Asia.  Almost 30% of the growing Philippine population are using smartphones, and about 3.5 million smartphone units were sold in 2016, with the sector is expected to double in 2018.

In the last part of the series, on 7th January, the Manila Times explains that there are 3 “financial systems” used by ISIS Central and Daesh-Maute in the Philippines – money laundering through major banks, registered private remittance centers, and the informal hawala/padala system in Cagayan de Oro City and in Region 10 or Northern Mindanao.

It says that ISIS Central made use of specific bank accounts in favor of Isnilon Hapilon to fund at least $1.5 million for the Marawi siege, raising the need to follow the ATM receipts of the terrorists in order to facilitate their prosecution.

http://www.manilatimes.net/anatomy-terrorist-financing/372571/?src=ilaw

http://www.manilatimes.net/padala-system-center-terror-funding/372760/

“BIOTHREATS AGAINST US ARE REAL AND IT IS UNPREPARED”

In the US, Homeland Preparedness on 5th January reports that renowned DePaul University College of Law Professor Barry Kellman — who has spent 25 years focusing on how to control and eradicate chemical, biological, nuclear and conventional weapons — biothreats against the US are real.  The article also claims that open source research appears to support the allegation that Nrth Korea has researched “chemical and biological weapons which could be delivered by missile”.  Kellman is quoted as saying, “The primary concern regarding biodefense is whether the Administration’s assaults on public health funding and on scientific research are undermining the US medical response to something breaking out on a large scale, be it natural like another type of SARS or an intentional bio-attack”.  He is among the world’s foremost legal authorities on the Chemical Weapons Convention (CWC), an arms control treaty that targets the elimination of the entire category of WMD, and served as chairman of the CWC committee of legal experts established by the Organization for the Prohibition Chemical of Weapons (OPCW).

https://homelandprepnews.com/stories/26072-depaul-university-law-professor-concerned-u-s-biothreat-response-capabilities/

US CUSTOMS SEIZES $61 MILLION OF COCAINE IN 3 DAYS

Homeland Preparedness also reports on 5th January about US Customs and Border protection Air and Marine Operations seizing $61.7 million in cocaine (more than 4,700 lb) from the Caribbean Sea over a 3-day stretch, 18th to 21st December, as part of Operation Full Court Press, an interagency effort to crack down on cocaine smuggling from the Caribbean.  Operations including directing the Dominican Navy to intercept 2 vessels.

https://homelandprepnews.com/stories/26051-cbp-air-marine-operations-seize-61-7-million-cocaine-caribbean-sea-three-day-stretch/

CHINA SAYS IT WILL LIMIT OIL ETC EXPORTED TO NORTH KOREA

KYC 360 reports that China’s Commerce Ministry said on Friday it will limit exports of crude oil, refined oil products, steel and other metals to North Korea, in line with tough new sanctions imposed by the UN, effective 6th January.

https://kyc360.com/news/sanctions-china-says-will-limit-oil-north-korea/

UKRAINE: SLIPPING INTO KLEPTOCRACY?

On 5th January, think tank the European Council on Foreign Relations released a report claiming that Ukraine was on the brink of becoming a kleptocracy and that the EU should act and confront its leadership on the issue.  Its cites the situation where Block Poroshenko and People’s Front introduced a Bill into the parliament in November calling for the dismissal of the head of National Anti-Corruption Bureau (NABU) and tightening political control over the bureau.  His “crime” had been to bring indictments for corruption and graft against high-ranking oligarchs, presidential advisers, and the son of a former prime minister.  Despite international observers assessing NABU’s investigations as watertight, the Ukrainian judiciary turned down all the cases.  To date the Bill has not been enacted.  The article also reports that 25 of the 113 judges recently appointed to Ukraine’s new supreme court do not meet integrity criteria: they possess unjustified assets and/or have engaged in cases recognized as political persecution or violated human rights as confirmed by the ECHR.  Whilst diplomatic protests from the US, EU, and IMF “have prevented the worst”, so far, the reports indicates that more must be done.

http://www.ecfr.eu/article/commentary_ukraine_on_the_brink_of_kleptocracy?utm_content=buffer94611&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

RUSSIAN MAFIA CARE HOME EXPLOITATION IN GERMANY

Deutche Welle on 5th January carried a worrying report that claimed that a law introduced to clamp down on care services fraud in Germany is having little effect, according to media reports.  It said that Eastern European organised crime continues to plunder what has become a lucrative revenue source.  It is said that in one lander alone, North Rhine-Westphalia,  the country’s state health insurance companies was being “drained” of €1 billion a year in claims for services that had never been provided (with alleged corruption in kickbacks also being reported).   Other frauds included care services forging training qualifications so that their employees could perform outpatient care, and lying about which employees were doing what.  It is said that investigators also discovered that the criminals were now concentrating on intensive care patients — where the most profits are to be made, as health insurers often pay as much as €22,000 a month for such services.

http://www.dw.com/en/german-authorities-struggle-to-curb-russian-mafia-care-home-exploitation/a-42044478

HOUTHIS IN YEMEN CLAIM CAPTURE OF UNDERWATER “SPY VEHICLE”

Now for an odd story.  Janes.com reported 5th January that the Houthis in Yemen had announced on 31st December that its naval forces had captured an underwater “spy vehicle” operated by the Saudi-led coalition. It then released video footage showing divers swimming with an unmanned underwater vehicle (UUV) painted yellow with ‘Hydroid’ written on the side and the logo of the Norwegian company Kongsberg (US-based UUV manufacturer Hydroid was acquired by Kongsberg Maritime in 2008).  The article said the UUV appeared to be a REMUS 600: a modular system that can be configured for marine research and commercial purposes as well as for military missions that include mine detection, surveillance, and reconnaissance.

http://www.janes.com/article/76835/yemeni-rebels-capture-hydroid-uuv

https://www.km.kongsberg.com/ks/web/nokbg0240.nsf/AllWeb/F0437252E45256BDC12574AD004BDD4A?OpenDocument

Remus 600

GERMAN BLOCK ON CHINESE TAKEOVER OF AEROSPACE PRODUCTS COMPANY

In Another example of concern over the acquisition of companies with a strategic importance by Chinese interests (the US recently reportedly blocked a Chinese takeover of Moneygram), Janes.com reports that the German Ministry for Economic Affairs and Energy has halted the proposed acquisition of aerospace composites company Cotesa by a state-owned Chinese industrial group, China Iron & Steel Research Institute, pending an investigation.  Although primarily a supplier of composite structures for Airbus commercial passenger aircraft, Cotesa is also involved in the production of A400M military transport aircraft.

http://www.janes.com/article/76845/germany-halts-chinese-purchase-of-composites-company

PAKISTAN: “US NOT AN ALLY ANYMORE”, AS US CUTS MILITARY AID

The Wall Street Journal reports that Pakistan’s foreign minister said on 5th January that he sees his country’s alliance with Washington as over after the Trump Administration announced the suspension of US security-related aid to Pakistan.  This comes after the US announced it was halting deliveries of military equipment and security funding, accusing Pakistan of playing a dangerous double game of accepting billions in US aid while supporting militants who attack US forces in Afghanistan, including the Taliban.

https://www.pri.org/stories/2018-01-05/us-cutting-security-assistance-pakistan-over-terror-groups

US CUSTOMS UPDATES GUIDANCE ON SEACHES OF ELECTRONIC DEVICES

On 5th January US Customs and Border Protection announced that it had released an update to the agency’s Directive governing Border Searches of Electronic Devices. This Directive, which supersedes the previous directive released in August 2009, is said to enhance the transparency, accountability and oversight of electronic device border searches performed by CBP.  In Fiscal Year 2017, CBP conducted 30,200 border searches, both inbound and outbound, of electronic devices.  Approximately 0.007% of arriving international travellers processed by CBP officers (more than 397 million) had their electronic devices searched (more than 29,200).

https://www.cbp.gov/newsroom/national-media-release/cbp-releases-updated-border-search-electronic-device-directive-and

TAJIK RAILWAYS’ FORMER BOSS AND HIS FOREIGN INTERESTS

OCCRP on 4th January carried an article in which it said that Amonullo Hukumov, the former head of Tajik Railways, had told the media that neither he nor his wife own any real estate abroad, but records obtained by OCCRP showed that his family has spent over $10.6 million on luxury real estate in 2 of the Czech Republic’s most popular tourist destinations. The hefty price tag, the article says, raises questions about the source of the family’s wealth, and that neither scandals nor forced retirement have slowed down the Hukumov family’s real estate purchases.  The report goes on to give a potted history of the family’s rise to influence and apparent affluence.  In case you had forgotten, Tajikistan is a country in Central Asia surrounded by Afghanistan, China, Kyrgyzstan and Uzbekistan.

https://www.occrp.org/en/corruptistan/tajikistan/ex-tajik-railways-chiefs-czech-bonanza

BAN KI-MOON’S NEPHEW PLEADS GUILTY TO BRIBERY IN NEW YORK

Law 360 reports on 5th January that Joo Hyun “Dennis” Bahn, 39, the nephew of former UN Secretary General Ban Ki-moon pleaded guilty in New York to a foreign real estate bribery plot, telling a Manhattan federal judge he tried to pay $500,000 to a Qatari official on behalf of his father’s South Korean company to facilitate an $800 million transaction for construction in Vietnam.  Bahn said he believed he was paying a $500,000 bribe to an official at Qatar’s sovereign wealth fund through a middleman, New York fashion designer and blogger Malcolm Harris.  In reality, Bahn said, Harris had no connection with any Qatari official and kept the money.

https://www.reuters.com/article/us-usa-corruption/ex-u-n-chief-bans-nephew-pleads-guilty-to-u-s-corruption-charges-idUSKBN1EU1TX?feedType=RSS&feedName=worldNews

UK CLAMPDOWN ON AML CONTROLS AT ONLINE GAMBLING OPERATORS?

Calvin Ayre reports that the UK Gambling Commission had posted a notice on its website indicating that it had “begun investigations into 17 online operators, and are considering whether 5 of these require a licence review”, and that the investigations followed the “serious nature of our findings” from the its thematic review of the online sector’s “approach to anti-money laundering and social responsibility.”.   The Commission said it had written to all online operators to set out how it expected operators to review all of their processes aimed at tackling money laundering and meeting their social responsibility obligations.

http://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2018/Letter-to-online-casino-operators.aspx

http://www.bbc.co.uk/news/uk-42583990?src=ilaw

6th January 2018

ISRAEL’S NUCLEAR PROGRAMME

On 5th January Telesur carried an article about Israel’s nuclear weapons, asking how did it procure them and with whose help?  It points out that Israel made an agreement in 1957 with France [the prominent supplier of weaponry to Israel at the time, it was its aircraft that were mainly used in the 6-DayWar, but it changed sides and cut off supplies after the oil shortage of the 70s – so that Israeli agents had to steal the plans to complete an upgrade of its French-built warplanes), and France helped install a plutonium-based facility in Dimona – although the US was a close political ally at the time it was not prepared to provide Israel with nuclear weapons. The nuclear facility was built under extreme secrecy (which remains) in the Negev desert near Dimona in 1958.   A technical co-operation and political agreement with France on the reactor and reprocessing plant was intended to ensure that Israel would only use plutonium for what was defined as peaceful purposes.  However, Israel also obtained resources from Norway, and, in 1960, Norway repurchased 20 tons of heavy water from the UK and exported it from the UK to Israel the article says that declassified intelligence documents show that the UK suspected that Israel was going to use the heavy water for plutonium production.

By the mid-70s Israeli had developed a ballistic missile capable of use as a delivery system, and its relationship with South Africa enabled it to legally obtain uranium (and there was a purchase of approximately 100 tons of Argentinian uranium in 1963-1964 that should not have been permitted under the IAEA rules).  Israeli technician Mordechai Vanunu revealed the story in 1986 and was jailed for his trouble until 2004.  Israel has either not become a signatory of the WMD non-proliferation conventions or has yet to ratify them.  Since the Nixon Administration, the article claims, the US has provided Israel with assistance for its nuclear energy programme. https://www.telesurtv.net/english/opinion/Israels-Nuclear-Weapons-Program-20180105-0035.html

REPORT PREDICTS HUGE MARKET FOR UNMANNED AIRCRAFT SYSTEMS

A news release from Northern Sky Research (NSR) predicts a cumulative revenue opportunity of $19.7 billion for unmanned aircraft systems (UAS) satellite communications and $4.3 billion for commercial UAS imaging service during the 2016-2026 period owed to an accelerating Government and Military UAS market, with increased adoption rates for unmanned systems around the world.  The military requirements include both in the intelligence, surveillance and reconnaissance (ISR) and combat roles, with civilian requirements including to meet the needs of the energy sector, industrial inspection, and surveying, where mapping and analytics services are required.  It you wants its report, it will cost you over $4,000…

https://globenewswire.com/news-release/2018/01/05/1284354/0/en/A-24-Billion-Opportunity-for-Unmanned-Aircraft-Systems-in-Communications-and-Imaging.html

13 TO STAND TRIAL IN SWITZERLAND ON CHARGES OF FUNDING “TAMIL TIGERS”

The Tamil Guardian reports that 13 Tamils accused of fraud, falsifying documents, extortion and money laundering in order to fund the Liberation Tigers of Tamil Eelam (LTTE) are to stand trial in Switzerland.  The men, from Germany, Switzerland and Sri Lanka, are accused of sending $15.3 million to the LTTE.  The site also says that the case has been criticised by the Swiss Council of Eelam Tamils who said that around 80% of Swiss Tamils had made payments to support the LTTE, ad that the LTTE was not proscribed as a terrorist organisation in Switzerland (so they will not face charges of funding a terrorist organisation, as such).  Swissinfo reports that some are former members of the World Tamil Coordinating Committee (WTCC), which represented the LTTE in Switzerland until 2009, and include its founder, his deputy and the person in charge of finances.  As well as channeling contributions from the Tamil diaspora, they are accused of raise higher amounts, the WTCC was accused of creating fictitious companies in the name of borrowers that issued fake salary certificates.  The funds were allegedly transported in cash by couriers to Singapore and Dubai.  The case is said to date back to 2009, and in 2011 the authorities carried out arrests, ad in 2012 interviewed witnesses in Sri Lanka.  Credit Suisse was also implicated because of claims that it had accepted 135 loans under the name of a Sri Lankan national based in Germany, but those charges were dismissed.

http://www.tamilguardian.com/content/13-tamils-accused-money-laundering-ltte-stand-trial-switzerland

https://www.swissinfo.ch/eng/money-laundering_tamil-tiger-financiers-to-stand-trial-in-switzerland/43798808

AS NEW ZEALAND BANS FOREIGNERS BUYING PROPERTY, WHAT ABOUT CANADA?

The Financial Post in Canada reports that, with effect from January 1st, foreigners are banned from buying property in New Zealand because of soaring real estate prices.  The article also notes that last year, FATF gave Canada a poor grade because of its legal and real estate loopholes, saying that “requirements [in Canada] are inoperative toward legal counsels, legal firms and Quebec notaries,” said the FATF report. “In light of these professionals’ key gatekeeper role, in particular in high-risk sectors and activities such as real-estate transactions and the formation of corporations and trusts, this constitutes a serious impediment to Canada’s efforts to fight money laundering (or terrorist financing).”

http://business.financialpost.com/personal-finance/mortgages-real-estate/foreigners-are-banned-from-buying-property-in-new-zealand-canada-should-do-the-same

ISLE OF MAN FIU ANNUAL REPORT

Manx Radio reports that more than £3 million in funds were frozen on the Isle of Man by law enforcement agencies 2016-17, after suspicions of money-laundering. The figure has been revealed in the FIU annual report for that year, after the body’s first full year of operation – it was established in April 2016.  The report is being laid before the January sitting of the Island’s parliament –

http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2017-GD-0081.pdf

ISLE OF MAN INSISTS IT DID RESPOND TO INDIAN REQUEST FOR ASSISTANCE

Energy FM in the Isle of Man reports that the Manx Government had refuted claims from India of a lack of response to a request for information from Indian authorities investigating a case of corruption and bribery.  The Government claims the Attorney General’s Chambers provided all the evidence it had, and responded to a supplementary letter from the authorities in India, and the Attorney General has now written to Indian authorities to remind them of the assistance the Island provided.

https://www.energyfm.net/cms/news_story_508174.html

ISLE OF MAN AMENDS ANTI-TERRORISM LAW

The November agenda for the parliament in the Isle of Man included the Anti-Terrorism and Crime Act (Compliance With International Standards) Order 2017, which makes provisions in island law in respect of terrorism-related offences committed outside the island by a resident of the island, offences relating to financing the travel of a terrorist fighter, and extends provisions in the Act to terrorist organisations that are not themselves proscribed.

http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/20XX-SD-XXXX-1-MEMO.pdf

ISLE OF MAN GAMBLING COMMISSION ANNUAL REPORT

The 2016-17 annual report from the Isle of Man Gambling Commission was laid before the November sitting of the island’s parliament.

http://www.tynwald.org.im/business/opqp/sittings/Tynwald%2020162018/2017-GD-0048.pdf

WHERE ARE JIHADI TERRORISTS RELOCATING?

The Week on 6th January reports that with the fall of its haven in Syria, jihadis’ new base(s) would be/are in Africa.  It notes that this is, in a sense, nothing new, with Boko Haram operating in Nigeria since at least 2002, 171 Islamist militant attacks in Africa in 2009, resulting in 541 fatalities, and 738 attacks that left 4,600 dead in 2015.  It notes that Tunisia alone accounted for up to 6,500 of ISIS foreign fighters.  The article claims that the main stronghold is now Libya, which remains embroiled in a chaotic civil war, and its other North African hub is in Egypt’s largely lawless Sinai Peninsula.  Aside from ISIS, the article says that al Qaeda has been seeking to make a comeback, and its leaders are grooming Osama bin Laden’s favorite son, Hamza, for a prominent role as an inspirational leader, and Al Qaeda’s arm in Africa, Al Shahab, which originated in Somalia.

http://theweek.com/articles/746630/jihads-new-home?src=ilaw

$10 MILLION BAIL BOND APPLICATION FOR PATRICK HO

The South China Morning Post reports that an application has been made for a former Hong Kong home affairs secretary, Patrick Ho, for him to be released on a US$10 million bond, 10 times the original application, after he was indicted on 8 bribery and money laundering charges related to pay-offs to government officials in Africa.

http://www.scmp.com/news/hong-kong/politics/article/2127133/lawyers-request-us10-million-bail-former-hong-kong-official?src=ilaw

IRAN TO QUERY WHY CHINA CLOSED BANK ACCOUNTS

The Mehr News Agency in Iran reports that the Chairman of Tehran Chamber of Commerce said that the Chinese have declared money laundering to be the reason for closing the bank accounts of Iranians in China and announced that the problem will be discussed with the foreign minister in a meeting – though the Chamber in August had denied that there was a problem.  He also said there would be discussions over why a change of policy had apparently excluded Iran from China’s ambitious Silk Road Project.

https://en.mehrnews.com/news/130947/Iran-to-probe-into-frozen-bank-accounts-in-China

https://financialtribune.com/articles/economy-business-and-markets/69983/closure-of-iranian-bank-accounts-in-china-denied

UK REPORT CONCERNED WITH POST-BREXIT TRADE CONTROLS

On 5th January, the UK Department for International Trade published a news release concerned with the final report on research into economic issues in anti-dumping and anti-subsidy investigations, including assessment of injury, causation and the UK economic interest, it was undertaken jointly by Copenhagen Economics and Van Bael and Bellis (lawyers), takes a look at some of the technical and practical challenges faced by an investigating authority in conducting anti-dumping and anti-subsidy investigations.  The report will, along with extensive stakeholder engagement and research, help inform the development of a future UK Trade Remedies Framework in the post-Brexit environment.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/672122/Trade_Remedies_Research_Final_Report_Jan2018.pdf

US DESIGNATIONS UNDER THE INTERNATIONAL RELIGIOUS FREEDOMS ACT

The always useful European Sanctions Blog on 5th January reports on the little-known US International Religious Freedoms Act 1996 (well, little known to me at least).   Each year the Secretary of State designates governments that have engaged in or tolerated violations of religious freedom as “Countries of Particular Concern”.  Currently Burma, China, Eritrea, Iran, North Korea, Sudan, Saudi Arabia, Tajikistan, Turkmenistan, and Uzbekistan are designated, with (unsurprisingly perhaps) Pakistan being placed on a “Special Watch List” (to be fair, religious intolerance there is not usually inspired or instigated by official authorities).  There are potential sanctions including export licence restrictions.

https://www.state.gov/r/pa/prs/ps/2018/01/276843.htm

CHINA IMPOSES BAN ON PLASTIC WASTE IMPORTS

Customs News reports on China ban on the import of plastic waste to protect China’s environmental interests and people’s health.  China was, before it imposed a ban, the biggest importer of plastic waste which was used to be recycled into plastic bottles, carpets, pipes and other household materials.  China had served notice of the planned ban to the World Trade Organisation in July 2017.  The article tells us that, in 2017, China imported 7.3 million metric tonnes of waste, including metal, plastics and paper among other waste materials and that, according to a 2014 study by the International Solid Waste Association, the plastic waste imports in China increased from 5.9 metric tonnes to 8.9 metric tonnes between 2006 and 2012, which is about 66% of the total waste produced globally.  Despite being forewarned, tonnes of wastes have already piled up in the UK, with an investigation revealing that the UK exports an average 65% of its plastic waste to China.

www.customstoday.com.pk/world-at-a-loss-as-china-bans-import-of-plastic-waste/

SEIZURE OF 1.8 TONNES OF PANGOLI SCALES IN HONG KONG

Customs Today reports that Hong Kong Customs on January 5th seized about 1 800 kilograms of suspected pangolin scales from a container with an estimated market value of about $2.8 million at the Kwai Chung Customhouse Cargo Examination Compound.  Through risk assessment, Customs officers inspected a 40-foot container declared to contain plastic materials arriving in Hong Kong from Nigeria. Upon inspection, Customs officers found the suspected pangolin scales at the innermost part of the container.  All of you need to know about this much-hunted anteater can be found at –

www.telegraph.co.uk/science/2016/03/15/pangolins-13-facts-about-the-worlds-most-hunted-animal/

http://www.customstoday.com.pk/hong-kong-customs-seizes-suspected-pangolin-scales-2/

THE SAND MINING CRISIS

In its Worldview podcast on 3rd January, National Public Radio in the Us discussed the worldwide sand shortage. As global standards of living rise, the demand for sand has risen, which one expert has called “a looming tragedy”. It discusses the report in the Science Magazine: “A looming tragedy of the sand commons”.  This report notes that between 1900 and 2010, the global volume of natural resources used in buildings and transport infrastructure increased 23-fold.  Sand and gravel are the largest portion of these primary material inputs (79% or 28.6 gigatons per year in 2010) and are the most extracted group of materials worldwide, exceeding fossil fuels and biomass.  What is little known is that –

  • organised crime groups in India, Italy and elsewhere conduct illegal trade in soil and sand;
  • Singapore’s high-volume sand imports have drawn it into disputes with its neighbours;
  • sand mining affects both local communications and the marine and land environments;
  • a report by the Water Integrity Network found that sand mining exacerbated the effects of the 2004 Indian Ocean tsunami;
  • the giant Mekong Delta in Vietnam is threatened with salt water intrusion, affecting food security;
  • sand mining and supply has become a $70 billion a year industry;
  • Cambodia has permanently banned sand exports, officially ending sales to Singapore which has used it for years as part of its land reclamation and had imported more than 72 million tonnes of sand from Cambodia since 2007, according to UN figures (expanding its physical size by 24% since 1960);
  • Indonesia and Vietnam are another 2 countries which have banned export of sand to the tiny island nation which, according to the Singapore Land Authority, has expanded its physical size by about 24% since 1960.
  • a clean sand is also a vital component in fracking, but has to be heavily-compacted silica sand;
  • the sands of the deserts are usually the “wrong” kind of sand

In February 2017, the Guardian called the sand mining crisis the “global environment crisis you’ve never heard of”-

https://www.theguardian.com/cities/2017/feb/27/sand-mining-global-environmental-crisis-never-heard

http://science.sciencemag.org/content/357/6355/970

VISA CUTS OFF GIBRALTAR DIGITAL PAYMENTS COMPANY

Gibraltar Chronicle on 5th January reports that hundreds of thousands of prepaid cryptocurrency cards issued by Gibraltar-based WaveCrest were deactivated after Visa terminated its relationship with the company, with Visa saying it had ended due to “continued non-compliance with our operating rules”.

chronicle.gi/2018/01/visa-cuts-off-gib-based-digital-payment-company/

7th January 2018

 3D PRINTED GUNS CASE MAY BE HEADED TO THE US SUPREME COURT

This case relates to the federal government’s attempts to regulate 3D printing of firearms and specifically if US export control laws apply to the software and technology required.  On 5th January, blog Lawfare carried a posting recalling that the case arose after the State Department instructed Defense Distributed, a Texas based non-profit committed to defending gun rights through digital manufacturing, to remove several files from its website, saying that they were controlled by International Traffic in Arms Regulations (ITAR) and that they had been posted without required prior authorisation, and would have allowed users to 3D print, for example, parts for making an AR-15 rifle.  The application scheduled to be considered by the Court is more of a challenge to the legal and technical aspects of the case than the constitutional argument.  The posting also explains that making a homemade gun is far easier than it used to be, with toolkits available online and YouTube instructional videos to guide novices, and that critically, homemade guns are not required to have serial numbers, which makes it easier to evade law enforcement.

https://www.lawfareblog.com/3-d-printed-guns-may-be-headed-supreme-court-update

DUTCH BANK TO PLEAD GUILTY TO AML CHARGES IN CALIFORNIA

In the US, the San Diego Union Tribune reports that the California subsidiary of the Netherlands-based Rabobank has announced that it plans to plead guilty in connection with a long-running investigation into the bank’s AML programme.  This follows a former bank vice president admitting in San Diego federal court to turning a blind eye to suspected drug money flowing through Imperial Valley branches, which it says foreshadows the larger DoJ investigation into Rabobank and implicates other unnamed high-level personnel.  Rabobank National Association has told shareholders it has set aside $374 million in anticipation of settling DoJ investigations into its AML compliance programme.  It has described the expected guilty plea by the bank to be for “a single offense related to former employees’ withholding of information” from US Treasury (presumably meaning SAR information under the Bank Secrecy Act) nearly 5 years ago.

http://www.sandiegouniontribune.com/news/courts/sd-me-rabobank-investigation-20180106-story.html

INSIGHTS INTO TERRORISM IN THE PHILIPPINES (UPDATED)

The Manila Times in the Philippines has published a further article (the third of 4) on terrorist financing, and in doing so provides some interesting insights into terrorism there – something all too often overlooked.  For example, of the estimated US$7.5 million in ransom received by the Abu Sayyaf from January to June 2016, the bulk was paid in exchange for the releases of 14 Indonesian and 4 Malaysian crewmen who had been held at Abu Sayyaf jungle bases in Sulu province.  The militants also got $413,000 in ransom for freeing Marites Flor, a Filipino woman who was kidnapped in 2016 with 2 Canadians and a Norwegian from Samal Island.  The article also mentions the seemingly proven links between drugs and the terrorists in the country.  It also expresses concerns about anonymous payments using smartphones.  According to the International Data Corporation, the Philippines is the fastest-growing market for smartphones in SE Asia.  Almost 30% of the growing Philippine population are using smartphones, and about 3.5 million smartphone units were sold in 2016, with the sector is expected to double in 2018.

In the last part of the series, on 7th January, the Manila Times explains that there are 3 “financial systems” used by ISIS Central and Daesh-Maute in the Philippines – money laundering through major banks, registered private remittance centers, and the informal hawala/padala system in Cagayan de Oro City and in Region 10 or Northern Mindanao.

It says that ISIS Central made use of specific bank accounts in favor of Isnilon Hapilon to fund at least $1.5 million for the Marawi siege, raising the need to follow the ATM receipts of the terrorists in order to facilitate their prosecution.

http://www.manilatimes.net/anatomy-terrorist-financing/372571/?src=ilaw

http://www.manilatimes.net/padala-system-center-terror-funding/372760/

BANGLADESH ANTI-CORRUPTION COMMISSION (ACC) HAS BEEN QUIZZING 6 FORMER AND CURRENT DIRECTORS OF AB BANK AND A BUSINESSMAN OVER MONEY LAUNDERING SCAM WHICH TOOK PLACE IN 2014

The Daily Star in Bangladesh reports this story with current directors Syed Afzal Hasan Uddin, Shishir Ranjan Bose and Mesbahul Hoque and former directors Faheemul Huq, Anwar Jamil Siddiqui and Runa Zakia Shahrood Khan required to appear before the Commission in respect of the action of the board of directors of the AB Bank in December 2013 approving an investment of $20 million in Singapore-based fundraising and investment company Pinnacle Global Fund Pte Ltd through the bank’s offshore banking unit (OBU).  It reports that in February 2014, the OBU moved the money to an account at the UAE-based Abu Dhabi Commercial Bank belonging to Cheng Bao General Trading LLC which acted as a special purpose vehicle (SPV) or a mediator for Pinnacle Global Fund ,Cheng Bao immediately withdrew the money and closed the account.

www.thedailystar.net/city/money-laundering-in-bangladesh-anti-corruption-commission-acc-quizzes-6-arab-bangladesh-ab-bank-directors-1516207?src=ilaw

US TRADE BOYCOTT LIST UNCHANGED

Sandler Travis & Rosenberg reported in an article dated 8th January that the US Treasury has published an unchanged quarterly list of countries that require or may require participation in, or co-operation with, an international boycott.  The list comprises Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, UAE, and Yemen.  US law prohibits US companies and their foreign affiliates from participating in foreign boycotts that the US itself does not sanction, and the Arab League boycott of Israel is the principal foreign economic boycott that US companies involved.

CHANGES TO AML LAW IN NEW ZEALAND

Stuff in New Zealand reports that lawyers and real estate agents will be obliged to alert the authorities to dodgy transactions under the next phase of tough AML rules coming in this year (lawyers claim a fear over potential breaches of client confidentiality.  The Anti-Money Laundering and Countering Financing of Terrorism Act came into force initially with banks and financial institutions 4 years ago, but in July the law will be extended to accountants, real estate agents, lawyers and conveyancers, and will also apply to the NZ Racing Board and businesses dealing in “high net worth goods”.

https://www.stuff.co.nz/business/money/100343529/.html?src=ilaw

KOREAN BANKS FACE BITCOIN PROBE

The Korea Joongang Daily reports that Korean financial authorities plan to launch a special investigation into local banks that provided accounts to cryptocurrency exchanges as part of government efforts to prevent cryptocurrencies from being used in illegal financial activities and curb speculative investment.  The FIU will work with the Financial Supervisory Service to review accounts owned by local bitcoin exchanges and issued by 6 major commercial banks – KB Kookmin, Shinhan, Woori, NH Nonghyup, the Industrial Bank of Korea and Korea Development Bank.

http://koreajoongangdaily.joins.com/news/article/Article.aspx?src=ilaw&aid=3042996

IRAN: CLAIM THAT BOEING TO FINANCE AIRLINER PURCHASE AND LICENCE AGREED

On 7th January the Fars News Agency in Iran reported the CEO of Iranian Atiyeh Saba Investment Company announcing that Boeing will finance the purchase of 30 new passenger planes by Iran, saying that a licence “is being received from OFAC” and that Boeing is due to finance all the 30 planes of the first package, with the first due for delivery in 2020.

http://en.farsnews.com/newstext.aspx?src=ilaw&nn=13961017001085

AL JAZEERA INVESTIGATION INTO “THEFT” OF ALREADY STOLEN ASSETS IN UKRAINE

On 7th January, Al Jazeera claimed an exclusive on a report that 3 Ukrainian oligarchs traded part of around $1.5 billion in illicit assets traced to cronies of former Ukrainian President Yanukovich.  It says that an unsigned contract it has  obtained identifies Alexander Onyschenko – the gas tycoon, former member of parliament and currently one of Ukraine’s most wanted men – and Pavel Fuchs, a real estate tycoon who made his fortune in Moscow, as the buyers in the illegal deal.  It reports that other documents suggest the seller was Serhiy Kurchenko – a fugitive Ukrainian gas tycoon based in Moscow who was known as Yanukovich’s “family wallet”.  The contract obtained by Al Jazeera said Onyschenko and Fuchs paid $30 million, including cash and a private jet, for the Cyprus-based company, Quickpace Limited, which company held $160 million in bonds and cash, which was frozen by a Ukrainian judge as they were suspected of being the proceeds of crime.  It says that the scheme involves using a web of offshore companies and international lawyers to raid $160 million under the noses of the authorities, with the money is effectively being stolen for a second time.  A claim is that Yanukovich’s “clan” pumped stolen money into companies in Ukraine with bank accounts in Latvia and gradually passed it through dozens of offshore shell companies in Cyprus, Belize, BVI and other money-laundering hotspots including the UK.  A series of reports called “The Oligarchs” is to be screened on Al Jazeera, and the article provides the times and dates.

www.aljazeera.com/news/2017/12/exclusive-dirty-deal-traced-ukrainian-tycoons-171217131747631.html

http://www.aljazeera.com/investigations/theoligarchs/

“The Oligarchs” webpage includes links to bios of Pavel Fuchs and Serhiy Kurchenko, and a selection of documents referred to in the reports.

https://www.documentcloud.org/public/search/projectid:%2036660-the-oligarchs%20

 

Author: raytodd2017

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

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