THINGS YOU MAY HAVE MISSED – JANUARY 26

2 MEN ACCUSED OF SMUGGLING HANDGUNS HIDDEN IN CARS SHIPPED FROM US TO TURKEY

The Seattle Times reports on 25th January that 2 Seattle-area men have been arrested by federal agents for allegedly conspiring to violate the US Arms Export Control Act after officials in Turkey found handguns hidden in vehicles shipped from Seattle and apparently intended for Kurdish rebels fighting in Iraq.  Paul Stuart Brunt, of Bellevue, and Rawnd Khaleel Aldalawi, of Seattle, are suspected of purchasing 3 vehicles that they used to smuggle dozens of semiautomatic handguns to Turkey.

https://www.seattletimes.com/seattle-news/crime/2-seattle-area-men-accused-of-smuggling-handguns-hidden-in-cars-shipped-to-turkey/

CANADIAN PROFESSOR ACCUSED OF SPYING FOR CHINA AND ACQUIRING ‘VERY SENSITIVE INFORMATION’

The Journal of Ireland on 25th January reported that a researcher at McGill University in Montreal whose brother was charged in the US with stealing technology and sending it to China is now also suspected in the case.  Ishiang Shih reportedly used his research position at the school to obtain integrated circuits used in US military radar, jammers and scramblers. The computer chips are at the centre of FBI accusations against his brother Yi-Chi Shih, who was arrested by the FBI on charges of scheming “to illegally obtain technology and integrated circuits with military applications that were exported to a Chinese company without the required export license”.  The computer chips had allegedly been shipped to Chengdu GaStone Technology Company (CGTC) in Chengdu, which was blacklisted by the US in 2014.

http://www.thejournal.ie/canada-professor-china-3817466-Jan2018/

US CONGRESS CONTEMPLATES BROAD AML/BSA REFORM

On 26th January the National Law Review reports that the US Congress is considering a new draft Bill, the Counter Terrorism and Illicit Finance Act (“CTIFA”), in committee in the Senate.  The CTIFA proposes the most substantial overhaul to the Bank Secrecy Act (BSA) since the PATRIOT Act.  The article goes on to discuss the various proposed changes.

https://www.natlawreview.com/article/congress-contemplates-broad-amlbsa-reform

FORMER MANCHESTER CITY FOOTBALLER MONEY LAUNDERING RING

On 25th January the Manchester Evening News reported that a former Manchester City player channeled large amounts of cash through “professional” network of money launderers.  Ryan McDowell and his cronies delivered piles of drugs cash stuffed into suitcases and bin bags to other criminals – who used a technique known as ‘cuckoo smurfing’ to make it disappear.  McDowell was jailed for 5 years at Liverpool Crown Court after being observed channelling at least £550,000 through the ‘professional’ network of money launderers, and an additional £142,000 through his own bank accounts.

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/former-manchester-city-player-channelled-14204351

VIP HOST AT CASINO DEREGISTERED AFTER BRITISH COLUMBIA GOVERNMENT PROBE

The Vancouver Sun reports that British Columbia’s gaming regulator has revoked the registration of River Rock Casino’s director of VIP gambler relations after an investigation into allegations of “third-party cash buy-ins” that violated AML regulations.  Lisa Gao, the employee deregistered by B.C.’s gaming policy and enforcement branch, has worked with VIP gamblers at Richmond’s River Rock Casino since 2012.  Peter German, the independent reviewer hired by Attorney-General David Eby, continues to probe the circumstances that allowed VIP gamblers from China to flood BC casinos with suspicious cash.

http://vancouversun.com/news/local-news/river-rock-vip-host-investigated-for-alleged-anti-money-laundering-violations

See also –

e-Know in Canada on 25th January reported that, in an effort to curb money laundering at casinos, from 10th January the British Columbia Lottery Corporation (BCLC) has implemented the first of Peter German’s interim recommendations, through new procedures requiring service providers to gather detailed information on the source of player funds for all transactions of $10,000 or more.

https://www.e-know.ca/regions/east-kootenay/bclc-seeks-curb-money-laundering-casinos/

ISRAEL’S BIG CRYPTO WINNERS HAVE A HARD TIME CASHING OUT

C-Tech by Calcalist reports on problems cryptocurrency users have depositing any gains.   Israel’s Prohibition on Money Laundering Law, which requires Israeli banks to automatically report suspicious deposits and all deposits exceeding around $14,700 to the Israeli Ministry of Justice.  In these cases, account-holders are required to turn in documents that verify the legitimacy of the deposit’s origin.  However, the anonymised nature of the cryptocurrency industry means Israeli banks refuse to accept such deposits, fearing they are illegally gained. Then there is taxation since no comprehensive guidelines have been formulated in Israel yet for how to tax crypto-derived income.

https://www.calcalistech.com/ctech/articles/0,7340,L-3730445,00.html

HOW TO FIX RUSSIA’S BROKEN BANKING SYSTEM

On 14th January, the Carnegie Moscow Center published an article by Andrey Movchan of the FT which begins by saying that Russia’s privately owned banks are collapsing one by one.  In 2017, Otkritie and B&N Bank failed within weeks of each other.  In the past 17 years, 2,600 of just over 3,000 registered banks have lost their licences.  Through years of mismanagement, the Bank of Russia, the country’s central bank, has created an unscrupulous and ineffective banking system. Now it must be rebuilt from the ground up.  The article proposes that needs a supervisory authority independent of the central bank; and retail banks should be prohibited from investing in non-liquid assets, while the liquid securities market should be saved for investors.  Terrifyingly, the article asserts that banks have issued loans with fake collateral, overstated the value of assets and inflated formal capital through structured transactions with affiliated companies, and that money laundering and cash conversion operations returned.  In the past 15 years, it is said that more than 80% of banks have exhausted their clients’ deposits through risky trades and offshore transfers to shareholders’ personal accounts.

http://carnegie.ru/2018/01/14/how-to-fix-russia-s-broken-banking-system-pub-75267?mkt_tok=eyJpIjoiWW1WaU1USmtaakl6T1RZMCIsInQiOiJcLzM2cWl3K3E0eGVcL1NnamtFeVBMOXBNMVBWemYwSXlOVzAzMFVJY0lERDNIclJWTjRLT0xDNUp5S0FWZnZzWFlJcHBtYThOOThpdkNuSWw3bmJkcSt2YzZlZ1dtdlpLVnZzOXdZcXdlR2FKMUpIZ3J2R0EzNDJ1dld6NUZWT0FuIn0%3D

NOW IN A MUSEUM IN THE ISLE OF MAN

Almaz

As well as this one, one more is currently on display at Castle Rushen High School in the Island, and Excalibur still has another green one as well as this – said to be at the International Space University (ISU) in Strasbourg – http://www.isunet.edu/blog/campus/facilities/facilities/122

The company had been based in the Isle of Man and planned to use the 4-seat capsules for “space tourism” trips (other possible uses were also mooted).  The Almaz capsules themselves come from a former Soviet military programme (almaz, or алмаз in Russian, means “diamond”), reputedly what was then an anti-satellite project (and hence probably illegal under treaties at the time).  It put the Isle of Man on the space map for a time (though, to be fair, the Island has other connections to satellite and other space projects) and at one time was incredibly said to be the 4th most likely country to mount a mission to the Moon!

See also http://www.bbc.co.uk/news/world-europe-isle-of-man-31813697

http://www.independent.co.uk/news/science/shooting-for-the-moon-time-called-on-isle-of-man-space-race-10101750.html

FIRST-EVER TRANSPARENCY ASSESSMENT OF RUSSIA’S 200 LARGEST COMPANIES 

On 25th January, Transparency International reported that Transparency International Russia had published a study that gives low scores on anti-corruption and financial transparency to most of the 200 top companies studied.  It assesses the financial disclosure practices of 200 companies in Russia with respect to their anti-corruption programmes as well as the availability of information on their subsidiaries and foreign branches and payments to government.  This is described as the first-ever full-scale assessment of Russian companies based on the Transparency in Corporate Reporting (TRAC) methodology developed by Transparency International.  Profits from these companies comprise more than 70% of Russia’s national income and their taxes are crucial to the Russian state budget.  41 companies scored zero on all three of the criteria assessed: the availability of information about their anti-corruption programmes, transparency on the company’s holdings, and the disclosure of key financial information on a country-by-country basis.

https://www.transparency.org/news/pressrelease/first_ever_transparency_assessment_of_russias_200_largest_companies1?utm_medium=email&utm_campaign=Global%20Newsletter%2026%20January%202018&utm_content=Global%20Newsletter%2026%20January%202018+CID_d0b01c8e8121bd01dc140cb4f5e87463&utm_source=Email%20marketing%20software&utm_term=First%20ever%20transparency%20assessment%20of%20Russias%20200%20largest%20companies

AFRICAN UNION ANTI-CORRUPTION DRIVE

On 26th January, Transparency International reported that the 30th Assembly of Heads of States and Governments of the African Union (AU) was to convene in Addis Ababa to launch a new campaign with a single, important goal: to fight corruption across the continent.  The session’s theme will focus on building a new, sustainable path to end corrupt practices and promote transparency throughout government, business, and civil society.  The article points out that many African candidates have been elected on the promise to fight corruption and govern differently- George Weah most recently in Liberia, Ghana before that, and the ANC in South Africa said to be losing ground because of the taint of corruption.  The AU Convention on Preventing and Combatting Corruption (AUCPCC) was adopted in 2003 and ratified by 38 countries – but its effects would seem to be limited.  There is also the African Union Advisory Board on Corruption (AUABC) which, since 2006, has had a mandate to promote and encourage the adoption of measures and actions by states to prevent, detect, punish and eradicate corruption.

https://voices.transparency.org/the-african-union-kicks-off-2018-with-an-anti-corruption-campaign-b4c233eab262

GUATEMALA SAYS ODEBRECHT AGREES TO PAY $17.9 MILLION OVER BRIBES

Reuters reported on 25th January that Brazilian construction company Odebrecht has agreed to pay Guatemala $17.9 million in compensation for bribes paid to an official for public works.  The UN-backed International Commission Against Impunity in Guatemala (CICIG) revealed this month that ex-infrastructure minister Alejandro Sinibaldi had agreed to take $19.5 million to arrange for Odebrecht to secure the $300 million contract (a fugitive now, he is said to have actually received $17.9 million).

https://www.reuters.com/article/us-guatemala-corruption/guatemala-says-odebrecht-agrees-to-pay-17-9-million-over-bribes-idUSKBN1FE09N

FALSIFICATION OF MEDICINES: EU COMMISSION CALLS FOR STRICT ENFORCEMENT OF THE RULES

On 26th January the European Commission referred to a report on the application of penalties for those involved in the production and circulation of falsified medicines published today shows a wide variation in penalties across the EU.  Maximum prison sentences for the falsification of medicines range from one year (Sweden, Finland and Greece) to 15 years (Austria, Slovenia and Slovakia); and maximum fines range from €4,300 (Lithuania) to €1 million (Spain) and ‘unlimited’ (UK).  The report comes following the requirement enshrined in the Falsified Medicines Directive (2011/62/EU) that all EU countries put in place proportionate, effective and dissuasive penalties for those involved in the production and circulation of falsified medicines.  Member States and stakeholders are working on a pan-EU authentication system for medicines scheduled to enter into force in February 2019. This means that the authenticity of prescription medicines will be checked before they are dispensed to patients.

https://ec.europa.eu/health/human-use/falsified_medicines_en

HM TREASURY NOTICE: CHANGES TO DETAILS OF VESSEL “CAPRICORN” UNDER LIBYAN SANCTIONS

On 26th January, HM Treasury issued a Notice confirming application in the UK of the changes to the details of the designation of the vessel “Capricorn” under the EU Libyan sanctions regime.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/677222/Notice_2018_126_Libya.pdf

 

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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