THINGS YOU MAY HAVE MISSED – FEBRUARY 15

15th February 2018

 REVIEW OF EU EXPORT CONTROLS OF DUAL-USE ITEMS

Financier Worldwide carries an article looking forward to changes to the EU dual-use export control regime during 2018.  These include introducing the concept of “human security” into EU export controls and an added focus on human rights and cyber surveillance items.  5 such items are mentioned: mobile telecommunications interception equipment, intrusion software, monitoring centres, lawful interception systems and data-retention systems, and digital forensics, of which 2 items – monitoring centres and data retention systems – have been added to the control list by the current proposal under consideration by the EU, the other 3 already being caught by dual-use controls.  Cyber surveillance items would also be subject to the “catch all” fallback provisions that affect non-controlled items.  Other changes proposed include revising the rules on intangible exports, new general export authorisations, a further harmonising of licensing procedures across Member States and provisions relating to the necessity of internal compliance programmes within organisations.

https://www.financierworldwide.com/review-of-eu-export-controls-of-dual-use-items#.WoUdUkx2tZU

EU PUSHES ‘AML COMPLIANCE WITHOUT BORDERS’

On 13th February, law firm Freshfields Bruckhaus Deringer published an article advising on the requirements contained in the 4th ML Directive for any parent entity located within the EU to ensure that its policies, controls and procedures apply to all of its non-EU subsidiaries and branches.  The article details what is required, including senior management oversight and training, and what institutions should be doing in 2018 to prepare, as they will have only 3 months to comply with the detail of the new standards once they are issued by the EU.

http://risk.freshfields.com/post/102eq8o/eu-pushes-aml-compliance-without-borders

DELOITTE’S AUDITS OF HEZBOLLAH-LINKED BANK TO BE EXAMINED BY DUBAI COURT

On 14th February, Accountancy Age reported that, in a landmark ruling, a Dubai judge said the court will hear whether Deloitte Middle East was negligent as auditor of the Lebanese Canadian Bank from 1995, which was found to be at the centre of a global money laundering scheme linked to terrorist group Hezbollah and drug cartels.  Around $230 million of illicit funds were said to have passed through LCB’s accounts while Deloitte was auditor.  The case involves Deloitte & Touche Middle East (DTME), the member firm under which Deloitte & Touche in Lebanon, the bank’s auditor, operated, and the claimants are minority shareholders in the now defunct bank.  Deloitte remains the auditor in the liquidation of the bank.  The shareholders argued that they would not be able to get a fair trial in Beirut, and that bringing the case to the Dubai Courts is appropriate as DTME had oversight of the Lebanon-based firm.

https://www.accountancyage.com/2018/02/14/deloittes-audits-hezbollah-linked-bank-examined-dubai-court/

CYPRUS: CLAMPDOWN COMING ON CASH PAYMENTS OF €10,000 AND OVER FOR CERTAIN GOODS

The Cyprus Mail reported on discussions in parliament there on setting a €10,000-ceiling for the cash purchase of vehicles, precious stones and metals, works of art and antiques.

http://cyprus-mail.com/2018/02/14/clampdown-coming-cash-payments-e10000/

ISLE OF MAN UPDATES DRC SANCTIONS LIST

On 13th February the Isle of Man issued a news release advising of the addition of 4 names to its DR Congo sanctions lists in line with changes to the EU-wide sanctions regime.

https://www.gov.im/news/2018/feb/13/financial-sanctions-democratic-republic-of-the-congo/

UK PARLIAMENTARY COMMITTEE CALL FOR URGENT ACTION OVER ERUPTING PENSIONS MISSELLING SCANDAL

The Independent on 15th February reported that, in a damning report, members of the Work and Pensions Select Committee of Parliament said “dubious” advisers and “parasitical” introducers, had “shamelessly bamboozled” 2,600 British Steel Pension Scheme (BSPS) members.  As a result of bad advice, savers moved £1.1 billion of pensions out of the company’s “gold-plated” defined-benefit scheme into riskier funds with high management fees, the committee found.

www.independent.co.uk/news/business/news/mps-call-for-urgent-action-over-erupting-pensions-misselling-scandal-a8211191.html?utm_source=POLITICO.EU&utm_campaign=9f91d2a526-EMAIL_CAMPAIGN_2018_02_15&utm_medium=email&utm_term=0_10959edeb5-9f91d2a526-190081609

LITIGATION PRIVILEGE, INTERNAL INVESTIGATIONS AND UNPAID VAT

On 14th February, Hardwicke published a brief asking what is the difference between the SFO and HMRC?  According to 2 recent decisions of the UK High Court, it says, internal investigations conducted in the face of litigation from one will be privileged, but not the other.  The brief examines the recent case of Bilta, and asks whether the 2 contexts are really so different.  Bilta was, prior to its liquidation, involved in the trading of carbon credits. Directors of the company allegedly perpetrated ‘missing trader’ (MTIC) fraud.  The sole question for the court to determine was were the documents prepared in connection with the alleged VAT owed for the sole or dominant purpose of conducting that litigation? The judge involved concluded that they were, and accordingly were privileged. The judge said that correspondence with HMRC is “very different” to that with the SFO, but he did not articulate what he considered to be the relevant difference – and hence the ruling in Director of the Serious Fraud Office v Eurasian Natural Resources Corp Ltd (where the judge concluded that internal investigations in the face of possible prosecution by the SFO were not privileged) remains good law.

http://www.hardwicke.co.uk/insights/articles/litigation-privilege-internal-investigations-and-unpaid-vat

REPORT: GLOBALIZATION 3.0 – HOW TO SURVIVE AND THRIVE IN A NEW ERA OF TRADE, TAX AND POLITICAL UNCERTAINTY

On 15th February, Baker McKenzie released a report entitled “Globalization 3.0” which, it says, takes a closer look at how the polarised forces of co-operation and competition are shaping 4 key policy areas and identifying how companies can prepare for the next era of globalisation.  The key areas are trade and investment, tax, data privacy, and labour and human rights.  One of the sections of the report covers the likely increasing impact of human rights and labour rights standards.

Globalisation

Highlights the firm identifies include –

New characteristics are defining the next era of globalisation, including heightened transparency, growing risks related to data privacy and security, more co-ordinated and aggressive government enforcement, the rising influence of NGO, and challenges to sourcing and moving talent;
The trade and investment policy landscape is becoming more complex as nations respond to the effects of globalisation, cybersecurity threats, state development strategies and geopolitical risks.  As a result, companies need to re-evaluate their business strategies, including investment decisions, supply partnerships, and preferential duty access;
7 of the 9 most advanced economies have changed their foreign investment review procedures since 2014 – or are considering doing so – to allow for greater government review of cross-border investments.  Investors need to prioritise foreign investment review risks as early as possible to increase the likelihood of getting deals approved; and
Heightened regulatory scrutiny and more protectionist measures, such as the EU’s GDPR, are making data privacy compliance more challenging.  Companies should ensure that their privacy governance structure is flexible enough to address differences across countries.

http://insight.bakermckenzie.com/globalization

NIRAV MODI, ACCUSED OF SWINDLING $1.8 BILLION, WAS AT DAVOS

Quartz in India on 15th February reported that Nirav Modi, accused of pulling off possibly India’s biggest bank fraud, was posing for pictures with PM Narendra Modi just a few weeks ago. The billionaire diamond merchant was part of the delegation of Indian businessmen and corporate leaders at the World Economic Forum in Davos last month.  Punjab National Bank (PNB), the country’s second-largest state-owned lender, has informed stock exchanges that it had detected a massive $1.77 billion fraud at one of its branches in Mumbai.   A specialised financial crime investigation agency reportedly raided at least 10 properties owned by Nirav Modi in February.  However, there are claims that he has left India.

https://qz.com/1208133/punjab-national-bank-fraud-nirav-modi-accused-of-swindling-1-8-billion-was-with-narendra-modi-at-davos-just-weeks-ago/?src=ilaw

INDIA’S JEWELLER TO HOLLYWOOD STARS, NOW ACCUSED OF MASSIVE BANK FRAUD

Nirav Modi’s name is a stamp of corporate India’s growing global prestige. On Hollywood red carpets, his diamonds have sparkled on the necklines and dangled from the earlobes of actors and models like Kate Winslet, Dakota Johnson and Rosie Huntington-Whiteley.

https://www.reuters.com/article/punjab-natl-bank-fraud-modi/newsmaker-indias-jeweller-to-hollywood-stars-now-accused-of-massive-bank-fraud-idUSL4N1Q53IE?src=ilaw

BITCOIN PHISHING SCAM BAGGED $50 MILLION OVER 3 YEARS

On 15th February, Coindesk reported that security researchers at Cisco have released new information about a bitcoin phishing scam that involves websites masquerading as Blockchain.info, the popular online wallet service.  In a blog post, the Coinhoarder phishing scam is explained, which it is said Cisco has been investigating in the past 6 months in partnership with Ukraine authorities.  It is claimed that those behind the scam had netted $50 million in cryptocurrency over a 3-year period.

https://www.coindesk.com/cisco-50-million-bitcoin-phishing-scam-mimicked-blockchain-web-wallet/

UK FOREIGN OFFICE MINISTER CONDEMNS RUSSIA FOR NOTPETYA ATTACKS

On 15th February, the UK FCO published a news release saying that the UK attributed the NotPetya cyber-attack to the Russian Government, and said that the decision to publicly attribute this incident underlines the fact that the UK and its allies will not tolerate malicious cyber activity.  It is said that the attack masqueraded as a criminal enterprise but its purpose was principally to disrupt.  Primary targets were Ukrainian financial, energy and government sectors. Its indiscriminate design caused it to spread further, affecting other European and Russian business.

https://www.gov.uk/government/news/foreign-office-minister-condemns-russia-for-notpetya-attacks

DIGITISATION OF THE UK VAT RETAIL EXPORT SCHEME (RES)

On 14th February, the Chartered Institute of Taxation reported that HMRC had provided on 13th February an update on their project to digitise the VAT Retail Export Scheme (RES) – where visitors to the UK can reclaim VAT on purchases when going home – to improve the efficiency for both retailers and travellers, and also to help reduce fraud.

https://www.tax.org.uk/sites/default/files/180213%20VAT%20Retail%20Export%20Scheme.pdf

SEC EXAMINATIONS IN 2018 TO FOCUS ON ICO AND CRYPTOCURRENCY

On 14th February, Goodwins reported that on February 7th the SEC Office of Compliance Inspections and Examinations (OCIE) announced its 2018 Examination Priorities.  In what comes as no surprise, the exam priorities include initial coin offerings (ICO) and cryptocurrency.

https://www.jdsupra.com/legalnews/sec-exams-to-focus-on-icos-and-40253/

URUGUAY TO BLOCK INTERNATIONAL ONLINE GAMBLING SITES

On 15th February, Calvin Ayre reported that Uruguay will follow through on its threat to begin blocking international online gambling sites within days, according to the state-owned gambling monopoly.

https://calvinayre.com/2018/02/15/business/uruguay-online-gambling-domain-blocking/

CHINESE RAIL OPERATOR SAYS SERVICE TO EUROPE TO INCREASE

On 15th February, Loadstar reported that freight train services between China and Europe are expected to increase by some 30% this year, at least for one carrier. Rail Freight reports Wuhan Han’ou International Logistics’ claim that some 500 trains will traverse its tracks from Wuhan to the likes of Moscow, Hamburg, Duisburg, Lyon, Gorzow and Pardubice. Alongside this east-west axis, the company is also looking to open routes from the central Chinese province to Iran, Turkey and Ukraine.

https://theloadstar.co.uk/chinese-operator-expects-big-increase-europe-bound-trains/

SENT BUT NOT SERVED – THE PITFALLS OF SERVING DOCUMENTS BY EMAIL

On 14th February, an article from Walker Morris published by The Lawyer reports that, in Glencore Agriculture B.V., (formerly Glencore Grain B.V) v Conqueror Holdings Limited it was held that, where a contract permits documents (such as adjudication notices) to be served by email, the individual receiving the email needs to have the appropriate level of authority to accept such documents.

https://www.walkermorris.co.uk/publications/adjudication-matters-february-2018/

 

IN US, SWINOMISH TRIBE BEGINS ISSUING OWN TRIBAL CARD “PASSPORT”

Relevant for KYC and CDD?  On 14th February, US Customs and Border Protection in a news release reported that the Swinomish (native American) tribe began issuing Enhanced Tribal Cards (ETC) on 6th February.  ETC serve the mutual interests of CBP and the tribe by expediting and facilitating cross-border trade and travel for members of the tribe, as well as providing a tribally issued secure travel document to eligible tribal members.  Since 2008, federally recognised tribes to work with CBP to produce an ETC, denoting citizenship and identity that is acceptable for entry into the US through a port of entry.  Modelled on passport and enhanced driver licences, ETC have machine-readable facilitative technologies, contain security features to prevent counterfeiting, and allow data-sharing between tribes and CBP for real-time validation.  The Kootenai Tribe of Idaho was the first tribe to sign a memorandum of agreement with CBP in March 2009.

https://www.cbp.gov/newsroom/local-media-release/through-agreement-cbp-swinomish-tribe-begins-issuing-tribal-card#

For more background on the Western Hemisphere Travel Initiative (WHTI), under which ETC are issued, and details the various types of documents that can be used at land, sea or air entry and exit points.

https://www.cbp.gov/travel/us-citizens/western-hemisphere-travel-initiative

CJEU DECISION CASTS DOUBT ON ABILITY TO PREVENT PARALLEL IMPORTS FOLLOWING DE-MERGERS

On 14th February, Osborne Clarke published an article saying that a trade mark registration which is transferred between companies in a de-merger or re-structuring will not always enable the new owner to prevent the importation into its territory of identically named products manufactured by the other, even though the companies are now competitors and the products were not put on the market by the claimant company.  The article considers the impact of the CJEU’s judgment in Schweppes SA v Red Paralela SL (Case C-291/16).

http://www.osborneclarke.com/insights/cjeu-decision-casts-doubt-on-ability-to-prevent-parallel-imports-following-de-mergers/

CAN COLLECTION AND ANALYSIS OF INFORMATION FROM THE PUBLIC DOMAIN BE A TRADE SECRET?

Another briefing from Osborne Clarke on 14th February considered the fact that the CJEU handed down judgment on 5th February in a long running dispute over data, claimed to be confidential, which appeared in reports prepared by the European Medicines Agency (EMA) in the course of an application for marketing authorisation for a new treatment for cystic fibrosis. The company had compiled further information from a variety of sources including the Cystic Fibrosis Society and other public sources, but also conducted a market survey seeking direct clinical information, which it compiled into further submissions.  When, however, a subsidiary of another company sought access to the EMA’s documents relating to the product approval, the first company brought a claim challenging the EMA’s decision to permit the new company to see the material.  Objections were not limited to claiming that the independent research it had carried out was confidential. – it also argued that the entire report compiled by the EMA’s Committee on Human Medicinal Products (CHMP) was covered.  The article considers the factors involved, and asks how should businesses define confidential information to avoid running into this problem?

http://www.osborneclarke.com/insights/can-collection-and-analysis-of-information-from-the-public-domain-be-a-trade-secret/

US ARMY REQUESTS EXPEDITIONARY AND MOBILE SYSTEMS TO COUNTER ‘LOW, SLOW, AND SMALL’ DRONES

On 15th February, Janes.com reported that the US Army is looking to rapidly deploy 2 new systems to protect its forces against ‘low, slow, and small’ unmanned aircraft systems (UAS), having identified a need to develop countermeasures against enemy-armed and intelligence gathering UAS operating at various speeds and altitudes, which are targeting US interests both at home and abroad,

www.janes.com/article/77924/us-army-requests-expeditionary-and-mobile-systems-to-counter-low-slow-and-small-uass

CYBER RISKS FACING SHIP MANAGERS

On 14th February, Ince &Co published a briefing which begins by outlining that digitalisation of shipping and the associated cyber risk vulnerabilities are hotly debated and discussed topics in the shipping industry, both at state and corporate levels.  Whilst the focus appears to be largely on shipowners and the use of autonomous ships, there are also a number of pressing areas of concern that ought to be considered and addressed in the context of ship management. It explains that the industry-standard BIMCO SHIPMAN contract allows the owners to delegate all or some aspects of managing their fleets to ship management companies – including technical, crew and commercial management of operations.  Each of these areas brings its own challenges and risks as regards the implementation and use of technology.

http://www.incelaw.com/en/knowledge-bank/cyber-risks-facing-ship-managers?event=reloadPublications&currentPagePiD=58ef56d8c6fe1b0e9cddff00&assetType=PUBLICATION&orderBy=datedesc&take=8&skip=0&ajaxbranchid=58ef614fc6fe1b266450fe10

THE IMPORTANCE OF GETTING PARTIES’ NAMES RIGHT WHEN ISSUING PROCEEDINGS

A second briefing from Ince & Co on 14th February asks what happens if a party is wrongly named in a claim form in English court proceedings?  Can the correct party be substituted, even if the limitation period has subsequently expired? It reports that a recent case arising out of an incident that resulted in the sinking of a vessel, the Commercial Court has allowed the substitution.

http://www.incelaw.com/en/knowledge-bank/the-importance-of-getting-parties-names-right-when-issuing-proceedings?event=reloadPublications&currentPagePiD=58ef56d8c6fe1b0e9cddff00&assetType=PUBLICATION&orderBy=datedesc&take=8&skip=0&ajaxbranchid=58ef614fc6fe1b266450fe10

AGREEMENT ALLOWS AIRBUS TO RESUME EXPORT CREDIT FUNDING

On 15th February, Flight Global reported that Airbus has reached agreement with export credit agencies (ECA) on a process under which it will be able to start applying again for ECA-backed funding.  The manufacturer says the ECA financing will be considered on a case-by-case basis, it having been embroiled in a number of investigations into alleged compliance issues (alleged bribery, corruption etc), including some which have centred on applications for ECA support.

https://www.flightglobal.com/news/articles/airbus-agreement-permits-resumption-of-eca-funding-445941/

LACK OF COLLABORATION WITH ANTI-MAFIA AUTHORITIES WORRIES MALTA’S GAMING REGULATOR

The Times of Malta on 15th February reported that the Malta Gaming Authority is worried that lack of collaboration between anti-Mafia Italian authorities, the Malta police and regulators weakened the fight against irregular activity.  MGA sources said that though the regulator was not a law enforcement agency, intelligence on irregular activity involving companies registered in Malta did occasionally reach it.  “The problem is there is no collaboration between the Italian authorities investigating the Mafia, the Malta police and authorities like us.  We are literally kept in the dark and find out what’s happening from the Italian press,” the sources complained.  It is reported that the MGA wants to collaborate with the Anti-Mafia Commission in Italy.

https://www.timesofmalta.com/articles/view/20180215/local/gaming-regulator-worried-by-lack-of-collaboration.670693

POSSESSION OF ‘SILENCERS’ THAT CAN BE USED ON AIR WEAPONS OR RESTRICTED/PROHIBITED FIREARMS

On 14th February, PNLD issued a Q&A on this issue.  It points out that the definition of a “firearm” in the UK Firearms Act includes an accessory to a lethal barrelled weapon or a prohibited weapon where the accessory is designed or adapted to diminish the noise or flash caused by firing the weapon.  The answer does say that silencers for air weapons do not carry any licensing requirements.  Therefore, whether an offence is committed in relation to a silencer, for example, possession without a licence under section 1 or possession by a convicted person under section 21, will depend on what weapon it is designed to be used with.

https://www.pnld.co.uk/your-legal-questions-answered/possession-of-silencers-that-can-be-used-on-air-weapons-or-s1-firearms/

E-SIGNATURES – WHAT’S THE BIG DEAL?

The February 2018 edition of the Finance and Credit Law newsletter poses this question. Amongst other things, it says that to tackle the B2B market, providers of e-signatures have proliferated, encouraged by favourable regulatory regimes in Europe, the US and further afield.  However, it says that the absence of globally harmonised legislation, coupled with cumbersome local laws, have led to uncertainty around the scope of application and validity of e-signatures.  Likewise “Cloud” delivery models (employed by the majority of service providers) present challenges, particularly from the point of view of data security and data residency.  The newsletter seeks to address some of those issues in the article.

https://www.eversheds-sutherland.com/documents/services/commercial/fcl_0218.pdf

SAMSUNG TO PRODUCE FIREARMS

The Firearms Blog on 15th February reported that South Korean electronics manufacturing giant Samsung is apparently set to break into the defence and consumer-level weapons industry with a new take on firearms design.  It is said to seemingly developing handheld armament that diverges from typical modern-day design.

www.thefirearmblog.com/blog/2018/02/14/samsung-future-gun/

COMBATING DIPLOMATIC INVOLVEMENT IN HUMAN TRAFFICKING

On 13th February, Dechert LLP published an article saying that human trafficking is a well-documented worldwide problem, but that a lesser-known issue is the trafficking by diplomats of domestic workers and servants, who are forced to work, often in brutal conditions, typically with little or no pay, or subjected to emotional, physical or sexual abuse.  It points out that victims of diplomatic trafficking face a distinct challenge: to have any hope of finding justice, they have to overcome the defences of diplomatic immunity often claimed by their captors.  Decehrt was involved in an important US case several years ago, the Swana case that, by showing that diplomatic immunity was no longer invincible, Swarna was a watershed, opening the door to a slew of successful lawsuits against high-ranking diplomatic officials.  Recently, a Dechert team acting pro bono won a default judgment in New York on behalf of a domestic worker from Bangladesh who had been kept in barbaric conditions by Bangladesh’s former consul general in New York, now the country’s ambassador to Ethiopia.

www.mondaq.com/article.asp?articleid=672924&email_access=on&chk=1633748&q=960824

PRESIDENT TRUMP ESTABLISHES NATIONAL VETTING CENTER TO FURTHER “EXTREME VETTING” PLAN

On 9th February, Ogletree Deakins published an article saying that the National Vetting Center’s mission is to co-ordinate and streamline vetting efforts to identify individuals who present a threat to national security, border security, homeland security, or public safety.  Trump has promised “extreme vetting” of those entering the US.  The article asks what is next and what the possible implications are.

http://www.mondaq.com/article.asp?articleid=672270&email_access=on&chk=1633094&q=960824

FINDINGS OF FACT IN ARBITRATION FORM BASIS OF GRANT OF FREEZING ORDER

On 9th February, Mishcon de Reya published an article saying that in the case of Great Station Properties SA and another v UMS Holding Ltd and others [2017] the Commercial Court in London granted a worldwide freezing order over the defendant’s assets in an attempt to secure enforcement of an arbitration award against the defendant exceeding $305 million.  It says that the decision highlights the importance the Court attaches to enforcement of judgments, and that freezing orders are an extremely powerful tool, especially when granted post-judgment where the order may be granted indefinitely until payment.

http://www.mondaq.com/article.asp?articleid=671970&email_access=on&chk=1632794&q=960824

NEW YORK DFS ISSUES ANTI-FRAUD GUIDANCE FOR VIRTUAL CURRENCY ENTITIES

On 12th February, Cadwalader Wickersham & Taft LLP published an article to report that the New York State Department of Financial Services had announced guidance for virtual currency entities licensed by New York State, including those that hold money transmitter licenses, and that it had reminded these companies to implement measures to detect, prevent and respond to fraud and other wrongdoing.  The guidance also emphasises that companies should be “especially vigilant” against efforts to manipulate the price of a virtual currency.  The article points out that the guidance advocates against a “one-size-fits-all” policy in favour of a customised anti-fraud program designed to address the specific risks faced by different types of virtual currency companies and, in addition, calls for attributes that would be considered compliance best practice.

http://www.mondaq.com/article.asp?articleid=672526&email_access=on&chk=1633350&q=960824

TOP 10 TOPICS FOR DIRECTORS IN 2018, INCLUDING US SANCTIONS

Law firm Akin Gump has issued a report detailing the Top 10 topics for directors of US companies in 2018.  They include cybersecurity threats, corporate social responsibility, SEC enforcement action, and trade and sanctions issues.  On the latter, the report comments that this risk is particularly acute for US persons who serve on the boards of non-US companies. It recommends that, although non-US companies that are not themselves owned or controlled by US companies are not generally subject to US comprehensive sanctions against Iran, for example, US directors at these companies must comply with these restrictions.  Accordingly, non-US companies should consider establishing blanket recusal policies that require US directors to exclude themselves from engaging in any activities that might trigger US sanctions and wall them off from meetings, discussions, decisions or other dealings related to such  activities.

https://www.akingump.com/images/content/6/3/v2/63381/Corporate-Alert-Top-10-Topics-for-Directors-121317-16.pdf

FIFA URGED TO ADDRESS ‘SERIOUS’ ABUSES IN CHECHNYA AHEAD OF WORLD CUP

On 15th February, Rferl reports that Human Rights Watch says FIFA must tackle rights abuses in the North Caucasus region of Chechnya now that the Egyptian national team selected the regional capital, Grozny, as the location for its base camp during this summer’s World Cup in Russia.

https://www.rferl.org/a/chechnya-world-cup-fifa-human-rights-watch-abuses/29041103.html

RUSSIAN GETS 12 YEARS IN US FOR ROLE IN CREDIT-CARD HACKING SCHEME

On 15th February, Rferl reported that Vladimir Drinkman, 37, was sentenced in New Jersey.to 12 years in prison for his role in a hacking scheme that prosecutors said caused hundreds of millions of dollars in damage through the sale of 160 million stolen credit-card numbers.  He was arrested in the Netherlands in June 2012 and extradited to the US in February 2015.  He had pleaded guilty to conspiring to illegally access computers and conspiring to commit wire fraud in September 2015.  Another Russian man who was arrested along with Drinkman, Dmitry Smilianets, 34, was also sentenced but to time already served in jail and released by the court, having also pleaded guilty to conspiring to commit wire fraud in September 2015.

https://www.rferl.org/a/convicted-computer-hacker-drinkman-gets-12-year-jail-role-credit-car-hacking-scheme/29040879.html

IMPLICATIONS OF US AIR ATTACK THAT KILLED 200 RUSSIANS IN SYRIA

On 14TH February, an opinion piece in Bloomberg reflected on the implications, in the US and Russia, of the US air attack on 7th February when some 200 Russians were killed (said to be the greatest number killed by the US since the Cold War ended).  The situation is complicated, for Putin particularly, by the Russians being “mercenaries” employed by private security companies (at least on paper?), rather than Russian troops.

https://www.bloomberg.com/view/articles/2018-02-14/putin-is-struggling-to-keep-his-wars-separate

CORRUPTION PURGE IN DAGESTAN, RUSSIA

On 13th February, the Novaya Gazeta reports (in Russian) of the ongoing anti-corruption purge underway in the Dagestan Republic in Russia.  Dozens of prosecutors have arrived in the republic since the start of the year, and a report claims that corruption has penetrated into all spheres of public relations in the Republic and is systemic in nature.  The frauds included those in public procurement, road construction and social programmes, as well involving land, illegal building permits etc.

https://www.novayagazeta.ru/articles/2018/02/14/75506-pridut-na-zapah-konyaka

DAGHESTAN’S ACTING PM, DEPUTIES AXED IN CORRUPTION CRACKDOWN

Rferl also carries an article on the situation (in English this time) on 15th February.

https://www.rferl.org/a/caucasus-report-gamidov-arrested-/29041830.html?src=ilaw

VENEZUELA (SANCTIONS) (OVERSEAS TERRITORIES) ORDER 2018

This Order, SI 2018/179, gives effect in specified Overseas Territories to sanctions measures adopted by the EU in Council Decision (CFSP) 2017/2074, and in Council Regulation (EU) 2017/2063 both of 13th November.  The sanctions imposed include an arms embargo, as well as specific measures to place restrictions on equipment that might be used for internal repression and to prevent the misuse of communication equipment. They also include asset-freezing measures against designated persons.  It applies in Anguilla, the  British Antarctic Territory, the British Indian Ocean Territory, Cayman Islands, Falkland Islands, Montserrat, Pitcairn, Henderson, Ducie and Oeno Islands, St Helena, Ascension and Tristan da Cunha, South Georgia and the South Sandwich Islands, The Sovereign Base Areas of Akrotiri and Dhekelia in the Island of Cyprus, the Turks and Caicos Islands, and BVI.

www.legislation.gov.uk/uksi/2018/179/contents/made

UNITED NATIONS (INTERNATIONAL RESIDUAL MECHANISM FOR CRIMINAL TRIBUNALS) ORDER 2018

This Order, SI 2018/187, enables the UK to co-operate with the International Residual Mechanism for Criminal Tribunals in the investigation and prosecution of persons accused of Mechanism crimes and the punishment of persons convicted of such crimes.  The Mechanism was established by UN Security Council Resolution 1966 (2010) to complete the tasks of the international criminal tribunals for the former Yugoslavia and Rwanda.  It includes arrest and other powers that displace the powers of national courts.

http://www.legislation.gov.uk/uksi/2018/187/contents/made

US BANCORP FINED $613 MILLION FOR MONEY-LAUNDERING VIOLATIONS

The Street, and others, on 15th February reported that the $613 million include penalties assessed by the DoJ over matters related to its Bank Secrecy Act and anti-money-laundering compliance programmes.  The Minneapolis-based bank agreed to pay the money to federal authorities and regulators to resolve violations related to the Bank Secrecy Act and AML rules.

https://www.thestreet.com/story/14490076/1/us-bancorp-to-pay-613-million-over-money-laundering-violations.html?src=ilaw

https://www.law360.com/articles/1012916/breaking-us-bank-to-pay-613m-for-faulty-money-laundering-program

MOBILE PHONE DEALER GETS 12 YEAR BAN FOR VAT SCAM

Channel Web on 15th February reported that a director of an Oxford wholesale mobile phone company has been slapped with a ban for his part in a VAT fraud scheme.  William Robert Howard, 45, director of the now liquidated Expeditors Limited will be prevented from acting as a director for 12 years.  The business started in 2004 and a petition was made to wind up Expeditors Limited in June 2017 with an unpaid VAT bill of £22,545.  An investigation by the Insolvency Service then focused on the firm’s participation in a form of VAT fraud known as Missing Trader Intra Community fraud (MTIC).

https://www.channelweb.co.uk/crn-uk/news/3026778/mobile-phone-dealer-disqualified-for-12-years

DOJ EMPLOYS MONEY LAUNDERING STATUTE TO PROSECUTE VENEZUELAN OILMEN FOR FOREIGN BRIBERY

On 15th February, Ballard Spahr reported that the US DoJ has again used a money laundering statute to accomplish the otherwise elusive goal of prosecuting foreign officials who allegedly receive bribes – involving 5 Venezuelans employed by or closely connected to Petroleos de Venezuela S.A. (PDVSA), the Venezuelan state-owned and state-controlled oil company.

https://www.jdsupra.com/legalnews/doj-employs-money-laundering-statute-to-81689/

CYBER CROOK MADE THOUSANDS FROM TESTING SITE FOR HACKERS

An NCA news release on 15th February reported that a cyber criminal who ran a product-testing service for hackers has been sentenced to 24 months in prison.  Goncalo Esteves, 24, admitted guilt in January following a joint investigation by the NCA and cyber security firm Trend Micro.  He ran the website reFUD.me, which allowed offenders to test, for a fee, whether their malicious cyber tools could beat anti-virus scanners.  Under the pseudonym KillaMuvz, he also sold custom-made malware-disguising products and offered technical support to users.

http://www.nationalcrimeagency.gov.uk/news/1290-cyber-crook-made-thousands-with-testing-site-for-hackers

TABCORP IT EMPLOYEE USED INSIDE INFORMATION TO STEAL $600,000 TO CASH IN UNCLAIMED WINING BETS

Calvin Ayre on 15th February reported that Australian sports betting and lottery operator Tabcorp Holdings was fleeced for over A$600,000 by a former employee who used inside information to cash in unclaimed winning betting slips.

https://calvinayre.com/2018/02/15/business/tabcorp-staffer-cashed-600k-fake-winning-wagers/

JUDGE BLOCKS ATTEMPT TO UNFREEZE KAZAKH BANK’S STOLEN ASSETS

Law 360 reported on 15th February that Kazakhstan’s JSC BTA Bank has blocked an attempt in the courts in London by the son-in-law of its former chairman Mukhtar Ablyazov to set aside a worldwide asset-freezing order against the 2 relatives, in the latest step of its long-running battle to claw back $6 billion it claims Ablyazov embezzled during his time in charge.

https://www.law360.com/articles/1012863

THIRD COUNTRIES ALIGN THEMSELVES WITH EU VENEZUELAN SANCTIONS

On 14th February the EU announced that the Candidate Countries – the former Yugoslav Republic of Macedonia, Montenegro and Albania, as well as Bosnia and Herzegovina, and the EFTA countries of Iceland, Liechtenstein and Norway, members of the EEA, as well as Ukraine, Moldova and Georgia have aligned themselves with EU sanctions on Venezuela.

http://www.consilium.europa.eu/en/press/press-releases/2018/02/14/declaration-by-the-high-representative-on-behalf-of-the-eu-on-the-alignment-of-certain-third-countries-concerning-restrictive-measures-in-view-of-the-situation-in-venezuela/pdf

CTC SENTINEL

The February 2018 edition of this magazine from the Combating Terrorism Center at West Point is available online. It includes –

HOW AL-QAIDA LOST CONTROL OF ITS SYRIAN AFFILIATE: THE INSIDE STORY

The Syrian jihad presented invaluable opportunities for al-Qaida to establish what it had always sought: a popular, broadly representative jihadi resistance movement that could support the creation of an Islamic government presiding over an expanse of important territory.  However, Jabhat al-Nusra prioritized localism over globalism, which as time passed, pushed its relationship with al-Qaida to the breaking point.

https://ctc.usma.edu/al-qaida-lost-control-syrian-affiliate-inside-story

NEIL BASU, SENIOR NATIONAL CO-ORDINATOR FOR COUNTER-TERRORISM POLICING IN THE UK

“From the CT Foxhole” interview with Deputy Assistant Commissioner Neil Basu.  Appointed to his role in October 2016, he is responsible for delivering the police response to the Pursue and Prevent elements of the Government’s CONTEST strategy.  In this role, he co-ordinates the policing response to threats arising from terrorism and domestic extremism nationally and also manages the Metropolitan Police Service’s Counter Terrorism Command (SO15). In his career, he has worked as a detective in all ranks to Detective Superintendent, served as the Area commander for South East London, and headed London’s Armed Policing within Specialist Crime & Operation.

https://ctc.usma.edu/view-ct-foxhole-neil-basu-senior-national-coordinator-counterterrorism-policing-united-kingdom

US HSI CO-OPERATION WITH EUROPOL

With the fall of Raqqa, many foreign fighters from the Islamic State have since fled territory previously controlled by the group — some returning to their countries of origin within Europe.  US law enforcement entities, with assistance from the Department of Defense, are leveraging partnerships within Europol to identify returning foreign terrorist fighters and prevent attacks on both US and European soil.  This article focuses specifically on Homeland Security Investigations’ (HSI) role in this effort.  International and interagency counter-terrorism co-operation benefits from Europol’s unique multilateral co-ordination tools to deter and defeat both terrorist and criminal threats.

https://ctc.usma.edu/beyond-conflict-zone-u-s-hsi-cooperation-europol

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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