22nd February 2018
PUFF THE MAGIC DRAGON (SORT OF) COMES TO WALL STREET
On 21st February, Forbes in the US asked do Cannabis stocks belong in a sober portfolio? It says that today the number of place where cannabis is allowed for medical use stands at 29 US states and the District of Columbia. It looks at cannabis businesses looking to float, and notes how many are so-called “penny stocks” and vulnerable to manipulation.
AFRICA: THE INFLUX OF SMALL ARMS AND LIGHT WEAPONS
All Africa carries an article claims that available data on Small Arms and Light Weapons (SALW) show that out of the 640 million circulating globally, it is estimated that 100 million are found in Africa, about 30 million in sub-Saharan Africa and 8 million in West Africa, alone. The majority of these SALW about 59% are in the hands of civilians, 38% are owned by government armed forces, 2.8 % by police and 0.2% by armed groups. It reflects on the damage this causes and risks it presents. It also says that it is obvious that despite the efforts of security agencies, borders of African countries are porous, allowing illicit arms trafficking. This has resulted in the proliferation of SALW. Events in recent years show that Nigeria is a source/origin, transit point and destination of trafficked SALW. It reflects on recent examples of detections and what Nigeria is doing, or could do, to help combat SALW trafficking and proliferation.
http://allafrica.com/stories/201802220192.html
CBA BANK DENIES NEW AUSTRAC ALLEGATIONS
On 23rd February, Investor Daily reports that the Commonwealth Bank of Australia has denied most of the 100 charges in the Australian Transaction Reports and Analysis Centre (AUSTRAC)’s amended statement of claim filed on 14th December, only admitting 11 in part. CBA agreed that it was late in filing 53,506 threshold transaction reports, but said it would ask the court to treat all 53,506 contraventions as a “single course of conduct”. CBA also admitted that it did “not adequately adhere to risk assessment requirements” for its intelligent deposit machines, which were used by criminals to launder cash overseas. AUSTRAC is alleging 230 SAR-related contraventions, the bank admitted to making errors in 98 instances – admitting that 53 SAR were filed late and a further 45 “should have been filed”.
https://www.investordaily.com.au/regulation/42621-cba-denies-new-austrac-allegations
BERMUDA ICO LEGISLATION SET TO BE TABLED NEXT MONTH
On 22nd February, the Royal Gazette in Bermuda reported that legislation related to ICO, or initial coin offerings, is in train and is expected to be presented to Parliament next month. It also said that Bermuda is preparing for an imminent FATF assessment that will look at the effectiveness of the country’s AML/CFT. With that on the horizon, warning voices have been raised.
JAPAN – 669 SAR RELATED TO CRYPTOCURRENCIES IN 2017
The Latin American Herald Tribune reports that Japan’s digital currency exchanges detected 669 cases of money laundering via cryptocurrencies between April-December 2017, according to a report by the Japanese police – the first time that a crime of this nature has been included in the annual report of the Japan Financial Intelligence Center – the police agency overseeing the country’s AML efforts – and follows the enactment of a new law authorising the use of digital currency as a method of payment. Such transactions accounted for 0.2% of more than 400,000 money-laundering cases registered in 2017.
www.laht.com/article.asp?ArticleId=2451371&CategoryId=12396
BRITISH MAN CHARGED WITH USING BITCOIN TO LAUNDER €11.5 MILLION
News BTC on 23rd February reported that a British man has been arrested on money laundering charges in Holland. He is alleged to have been running a “money cleaning” service for clients trading on the dark web between the years 2014 and 2016. The laundered money is thought to have come from various Dark Web dealings in illicit goods.
https://www.newsbtc.com/2018/02/23/british-man-charged-using-bitcoin-launder-11-5-million-euros/
CLAIM THAT FRANCE ‘MANIPULATING’ CASE AGAINST BUSINESSMAN SOUGHT OVER SARKOZY ALLEGATIONS
Swissinfo on 23rd February reported that the lawyer for a French businessman suspected of funnelling money from former Libyan leader Muammar Gaddafi to finance Nicolas Sarkozy’s 2007 presidential campaign accused French authorities of manipulating the case against him. Alexandre Djouhri, 58, is fighting extradition from Britain after being arrested on a European arrest warrant (EAW) at London’s Heathrow Airport last month.
BASQUE TERRORIST GROUP ETA PLANS TO DISSOLVE FULLY BY THE SUMMER
El Pais in Spain reported on 22nd February that leaders of ETA have asked members to vote on a plan to dissolve completely by the summer. In a statement released by the newspaper Gara, avoiding the use of the terms “disappear” or “dissolve,” but referring to the “end of a cycle”.
ISLE OF MAN UPDATES ISIL/AL-QAIDA SANCTIONS ENTRY
On 22nd February, the Isle of Man confirmed that the entry for Djamel LOUNICI has been amended to reflect changes to UN and EU sanctions lists.
https://www.gov.im/news/2018/feb/22/financial-sanctions-isil-daesh-and-al-qaida/
‘AFRICA’S SATELLITE’ AVOIDED MILLIONS USING A VERY AFRICAN TAX SCHEME
ICIJ on 20th February carried an article on the New Dawn Satellite launched in 2011. It was partly funded by local investors and promoted as a way for African schoolchildren, nurses, civil servants and businesses to access world-class internet and mobile phone networks. The companies behind it channelled millions of dollars in payments from African companies and governments through offshore companies in Mauritius, using one kind of offshore company to avoid local taxes and another to pay as little as possible on bills paid from overseas using treaties signed between Mauritius and its African neighbours. The primary money-making company estimated that it would pay $22,500 in taxes on $75 million in revenue – just 0.03%, and in a 17-year lifespan, the company predicted, it would earn $936 million yet never pay taxes above $300,000. The Mauritius arrangement lasted until 2013 when Intelsat closed the companies down after unexpectedly low financial returns, and the project was cancelled.
REPORT: EU TO INCREASE SANCTIONS ON MYANMAR
EU Observer on 22nd February reported that EU foreign ministers at their meeting on 26th February) will call for additional sanctions against Myanmar. Sanctions could include targeted measures against senior military officers and strengthening of the arms embargo.
https://euobserver.com/tickers/141079
RUSSIA SET TO TAX CROSS-BORDER E-COMMERCE IMPORTS FROM MAY ONWARD
HKTDC on 23rd February reported that a higher level of import duty set to be phased in over the next 2 years as online shopping free-for-all ends. As of May, though, a new duty-declaration and customs-clearance system will see import taxes levied on any individual in receipt of goods worth more than €1,000 or weighing more than 31 kg in any one monthly period. Under current proposals, the threshold will drop to €500 from 1st January 2019, before settling at €200 from 1st January 2020. The regime is also set to be adopted across all of the Eurasian Economic Union member-states (Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia).
PRESIDENT SISI CRITIC PLACED ON EGYPT’S TERRORISM LIST
On 22nd February, Defence Web reported that an Egyptian court put former Islamist presidential candidate Abdel Moneim Abol Fotouh on a terrorism list, state news agency MENA reported, following his arrest for alleged contacts with the banned Muslim Brotherhood.
UK GAMBLING COMMISSION ADDS TO THOSE WITH WHICH IT CAN SHARE INFORMATION
Gambling Act 2005 (Amendment of Schedule 6) Order 2018 (SI 2018/211) extends the range of those with which the UK Gambling Commission may share information. Schedule 6 to the Gambling Act 2005 lists bodies to which the Gambling Commission may, under section 30 of the Act, provide information received by it in the exercise of its functions. The Order amends Part 3 of Schedule 6 to update the names of 3 existing entries and add 8 new persons and bodies. The Explanatory Memorandum says that it is vital that intelligence can be shared between all authorities and other persons and bodies (including sport governing bodies) with an interest in sports betting integrity to help to identify suspicious betting patterns and prevent match-fixing. This flow of information is essential to the fight against sports betting corruption, which is harmful both to sport itself and to the associated sports and betting markets. Schedule 6 to the Act specifies those persons and bodies which manage information to the necessary standard and can help maintain sports betting integrity. It adds United Kingdom Anti-Doping Limited (UKAD), Darts Regulation Authority, the Irish Rugby Football Union, the Rugby League European Federation, the Tennis Integrity Unit, Table Tennis England, Ladies European Tour (golf) and the International Paralympic Committee.
http://www.legislation.gov.uk/uksi/2018/211/contents/made
FAILURE TO DEFINE KILLER ROBOTS MEANS FAILURE TO REGULATE THEM
ETH Zurich on 23rd February published an article that reports that, in November 2017, the first formal UN meeting on lethal autonomous weapon systems (LAWS) took place in Geneva. Disagreements on how to define ‘autonomy’ are stalling formal UN discussions on the compliance of autonomous weapons with international humanitarian law. It proposes that the most likely to succeed would be to adopt a practical approach that focuses on lethal autonomous weapon systems’ critical functions, such as target selection and firing; as a pragmatic approach that focuses on the weapon’s critical functions, such as target selection and firing, can help move discussions forward in the future.
LORDS COMMITTEE RAISES CONCERNS ABOUT THE TAXATION (CROSS-BORDER TRADE) BILL
On 23rd February it was reported that the House of Lords Constitution Committee publishes a report on the Taxation (Cross-border Trade) Bill, which seeks to implement a new customs regime once the UK exits the EU. The Committee highlights that the Bill is a piece of framework legislation, as it includes only limited policy detail and instead provides broad delegated powers to ministers to create a new customs regime. The Committee raises concerns about the constitutional implications about the proposed powers, and also finds that the proposal in the Bill for legislating by public notice – with no scrutiny by Parliament – is overly broad, its potential use subjective, and thus is not constitutionally acceptable.
CHINA REGULATOR SEIZES ANBANG INSURANCE COMPANY, CHAIRMAN FACES FRAUD PROSECUTION
On 23rd February, the Irish times reported that China’s government will take temporary control of Anbang Insurance Group and prosecute founder Wu Xiaohui for alleged fraud, said to cement the downfall of a politically-connected dealmaker whose aggressive global expansion came to symbolise the financial overreach of China’s debt-laden conglomerates. It reminds one that Anbang burst onto the global scene with the purchase of New York’s iconic Waldorf Astoria hotel in 2014.
POLICE EXPOSE NEW BELARUS PYRAMID SCAM FRONTED BY SCOTTISH SHELL FIRM
On 23rd February, the Herald Scotland reported that Belarussian, Vladislav Shevelenko, had been accused of duping 900 people out of their savings using a Scottish Limited Partnership (SLP) firm called New Assets Union or NAU. He is said to have promised investors returns of between 100% and 300% a month if they put their money in to a finance firm officially based in central Glasgow. The 24-year-old was formally accused of fraud after heading what local media in Belarus have described as a classic pyramid scam.
NATIONAL CYBER SECURITY CENTRE RELEASES NIS DIRECTIVE GUIDANCE
Latham & Watkins on 22nd February published an article saying that National Cyber Security Centre (NCSC) has released principles-based guidance on cybersecurity for operators of essential services (OES) adds important detail to obligations under the EU’s Security of Network and Information Systems Directive (NIS Directive), which must be transposed into member state domestic legislation by 9th May. The NCSC’s guidance, released on 28th January, aims to help OES improve their security infrastructure and reduce their likelihood of suffering a cyber incident. The article says that OES will be required to use the principles to assess the robustness of their security operations and to drive continuous improvement. The NCSC indicated that its guidance will be widely applicable and encouraged all sectors to take note of the recommendations. It remains to be seen whether this guidance will evolve into a market practice standard.
https://www.jdsupra.com/legalnews/national-cyber-security-centre-releases-90030/
TAX CRACKDOWN IN RUSSIA BOOSTS GRAIN TRADERS’ PROFITS
Customs Today on 22nd February reported that a Russian crackdown on tax avoidance in the agriculture sector has been a boon for its grain traders, allowing them to buy directly from farmers and cut out a complex web of middlemen. Traders include big international commodities houses and some traders said profit margins on Russian grain had turned positive since the crackdown last year and now compared favourably with much of the business conducted in the EU.
www.customstoday.com.pk/tax-crackdown-in-russia-boosts-grain-traders-profits-2/
DUBAI CUSTOMS FOILS 1,628 SMUGGLING ATTEMPTS IN 2017
Customs Today on 22nd February reported that Dubai Customs made 1,628 seizures during 2017 compared to 1,347 seizures in 2016, which means a 21% increase over 2016. The Department of Passenger Operations at the airport had the lion’s share with 859 seizures, followed by Land Customs Centers Management with 699 seizures, Air Customs Centers Management with 58 seizures, Jebel Ali Customs Centers with 9 seizures, and Coastal Customs Centre Management with 3 seizures.
http://www.customstoday.com.pk/dubai-customs-foils-1628-smuggling-bids-in-2017/
BANGLADESH OPPOSITION LEADER JAILED FOR 5 YEARS ON CORRUPTION CHARGES
On 23rd February, Customs Today reported that Bangladesh Nationalist Party (BNP), Khaleda Zia, was convicted and sentenced to 5 years jail after a special court found her guilty of corruption. She was accused of embezzling nearly $250,000 in foreign donations meant for an orphanage trust established when she was prime minister from 2001 to 2006. The trust was named after her late husband and former Bangladesh President Ziaur Rahman. Her son, Tarique Rahman, the current BNP vice-chairman, received a 10-year sentence.
ITALIAN MINISTRY OF ECONOMY AND FINANCE ESTABLISHING RULES FOR VIRTUAL CURRENCY COMPANIES
Customs Today on 22nd February reported a draft of a ministerial decree on the regulation of virtual currency-related service providers. Comments were gathered during a public consultation period, which ended February 16th. Virtual currency is defined as “the digital representation of value, not issued by a central bank” and the decree would apply to virtual currency service providers (e.g., exchanges and lenders), and also includes “commercial operators that accept virtual currency as [payment] for … goods and services or other utilities.”
EU DIGITAL TAX FRAMEWORK THREATENED BY CONFLICTING POLITICAL AGENDAS
On 22nd February, Irish law firm Matheson published an article which begins by saying that the European Commission is about to unveil its proposals for the EU’s digital tax strategy. Major EU states like France and Germany want to take action now, but Ireland stands in their way.
AFTER PETRO, VENEZUELA ANNOUNCES NEW ‘PETRO GOLD’ CRYPTOCURRENCY
On 22nd February, the Santiago Times from Chile reported that Venezuela’s President Nicolás Maduro has recently announced that it is going to launch a new cryptocurrency, the Petro Gold, which, according to local news source Telesur, will be backed by precious metals.
http://santiagotimes.cl/2018/02/22/after-petro-venezuela-announces-new-petro-gold-cryptocurrency/
LARGE ROAD FUEL TANKER USED TO SMUGGLE EGGS FROM PALESTINE AUTHORITY (PA)
On 21st February, Yeshiva World reported and published a video said to show the lengths PA-based smugglers will go in order to take their produce to market in Israel. A truck was apprehended at the Hizme Checkpoint, connecting northern Jerusalem to Shomron communities. The tanker was used to smuggle illegal, unsupervised eggs originating in the PA, with a forged approval stamp with expiration dates and information pertaining to their point of origin are stamped on eggs in red ink.
400 KG OF COCAINE FOUND IN RUSSIAN EMBASSY IN ARGENTINA
The Arab News on 22nd February claimed that police have seized nearly 400 kg of cocaine from the Russian embassy in Buenos Aires and arrested several members of a drug trafficking gang, Argentina’s security minister announced. A gang of narco-criminals was trying to use the diplomatic courier service of the Russian embassy to ship the drugs to Europe, it is claimed. Russian and Argentine police had decided to mount a sting operation after the Russian ambassador informed them of the drugs find in December 2016. One of the 2 people arrested in Argentina is a naturalised Russian who was a member of the police force in Buenos Aires.
http://www.arabnews.com/node/1252406/world
UPDATED GUIDANCE ON THE UK MODERN SLAVERY ACT 2015
On 23rd February, law firm Ince & Co published a briefing subtitled “The Noose Tightens” and saying that it is reported that one third of businesses affected by the Act have not prepared a modern slavery statement, in spite of the legal requirement for them to do so.
US SANCTIONS “STOP $3 BILLION IN RUSSIAN ARMS DEALS”
On 21st February, the Moscow Times carried an article claiming that the Russian arms industry has lost more than $3 billion in failed weapons deals with third countries over the threat of US sanctions, the State Department told reporters.
https://themoscowtimes.com/news/us-sanctions-stop-3-bln-in-russian-arms-deals-state-department-60582
JAPAN AFFIRMS MILITARY TIES WITH MYANMAR
The Myanmar Times on 9th February reported that Japan has affirmed its defence co-operation with Myanmar despite international criticism of the country’s government and military over the handling of the northern Rakhine crisis. The claim is that Japan and its links to the Myanmar military “has an important role in consolidating democracy in Myanmar.”
https://www.mmtimes.com/news/japan-affirms-military-ties-tatmadaw.html
WCO NEWS ONLINE MAGAZINE (FEBRUARY 2018)
On 23rd February, the World Customs Organisation published online the latest edition of its magazine. Articles include –
- China’s AEO Joint Incentive Programme.
- In order to develop the transport of postal items by rail, the Universal Postal Union (UPU) has set up a task force and undertaken several pilots in order to better understand how the performance of rail transport between China and Europe can be improved and how its use by shippers can be enhanced
- Australia and New Zealand trial a ‘green lane’ for international mail.
- Combating overvaluation: Malawi’s experience – which notably include the comment that it is high time Customs realised that overvaluation fraud is as serious as other Customs offences like undervaluation, as it deprives countries of much needed capital and may result in money laundering.
- Customs transit procedures: insights from an operator in the EU.
- Securing the health of Customs officers – which includes a recounting that in 2016, in Germany, 7 workers at a warehouse were hospitalised following the unpacking of 2 containers. They had inhaled toxic gases invisible to the eye and with no noticeable smell, and were suffering from severe eye irritation, respiratory distress and nausea.
http://www.wcoomd.org/-/media/wco/public/global/pdf/media/wco-news-magazines/wconews_85.pdf?la=en
US ATTORNEY GENERAL ORDERS CREATION OF CYBER-DIGITAL TASK FORCE
On 22nd February, Homeland Preparedness reported that the US DoJ will use a new Cyber-Digital Task Force to assess its current efforts to combat global cyberthreats and identify areas of improvement, Attorney General Jeff Sessions announced. The Task Force will involve various agencies, including the FBI, DEA, US Marshals Service and others.
ORGANISED CRIME IN AFRICA AND THE SUSTAINABLE DEVELOPMENT GOALS
An article from ENACT Africa on 19th February explores how organised crime threatens the achievement of development goals.
BANKS, BRIBES, AND ALLEGED LATVIAN LAUNDERERS
Medium carries an article dated 23rd February detailing what we do and do not know about reports of corruption against the president of the Bank of Latvia.
https://medium.com/dfrlab/balticbrief-banks-bribes-and-alleged-latvian-launderers-3e3ca3b04b38
WHITE PAPER REVEALS CRITICAL ISSUES IN US CUSTOMS AUTOMATED ENVIRONMENT (ACE)
On 23rd February, Loadstar reported that the National Customs Brokers and Forwarders Association of America (NCBFAA), whose members process 97% of all entries filed for goods entering the US, had published a white paper that calls for action on a number of elements that need to be remedied in US Customs and Border Protection’s Automated Commercial Environment (ACE) system. ACE is said to be more than 3 years and $1 billion over budget. It is supposed to streamline data flow to and from CBP but is still plagued by flaws. This could have a knock-on effect for the planned Air Cargo Advanced Screening (ACAS) programme, as ACE has been regarded as the conduit for forwarders to submit their shipment information prior to moving the goods. ACE was meant to replace the obsolescent Automated Commercial System some years ago. After delays CBP started introducing elements of the new regime in 2015 and had targeted full implementation by the beginning of last year, but was forced to postpone some elements of the system indefinitely.
The NCBFAA paper is said to highlights 4 areas where more work is required – the release of goods, programming capabilities to support entry or entry summary, post release data issues and clarity of messages issued by the system.
BOEING 737 AIRLINER APPEARS ON PATCH OF LAND – AND NO ONE KNOWS HOW IT GOT HERE
On 23rd February, the Mirror reported on an aircraft has seemingly been left dumped on the site in Bali, Indonesia – and it appears there is not a person who can explain its random appearance. It is not known when the Boeing 737 landed on the patch of field but from the appearance of the plane it is believed it has been there for a little while. It is not the only abandoned Boeing 737 in Bali. Another of the giant aircraft lies in Kedonganan next to a Dunkin’ Donuts where its wings hang over a street. Why this plane was abandoned there is also a mystery.
DUTCH MINISTER READY TO GET TOUGH ON SHELL COMPANIES, TAX HAVEN CLAIMS
On 23rd February, Dutch News reported that the Cabinet had given its approval to junior finance minister Menno Snel’s plan to crack down on the shell company industry in the Netherlands in line with international and EU agreements. “We are going to make serious work of tackling letter box firms”, Snel said after the weekly cabinet meeting. “Only companies which actually bring jobs will be welcomed here with open arms”.
HMRC “FULFILMENT HOUSE” VAT CRACKDOWN TO REDUCE EVASION
On 23rd February, IBT Times reported on the new HMRC Fulfilment House Due Diligence Scheme (FHDDS), which is to be launched on 1st April, and will crack down on non-EU businesses which, by failing to comply with VAT regulations, are flooding the UK market with cheap, often fraudulent, online goods. Fulfilment houses, and any company providing warehousing and distribution for goods imported from a non-EU business for sale in the UK, need to register for the scheme and ensure its clients are VAT registered. Clamping down on the route to market for non-compliant overseas businesses will deter them from trading in the UK. Fulfilment businesses already trading need to apply by 30th June, and if a company starts trading after 1st April, they must register by 30th September.
www.ibtimes.co.uk/hmrc-vat-fraud-crackdown-fight-counterfeit-goods-1663418
LIST OF PEOPLE BANNED FROM RUNNING AN EMPLOYMENT AGENCY OR BUSINESS IN UK
On 23rd February, the UK Department for Business, Energy and Industrial Strategy published an updated list containing details of people who have been banned from running an employment agency or business, including the period of the ban.
PODCAST – UNDERCURRENTS: EPISODE 2 – THE CALABRIAN MAFIA AND TRANSATLANTIC RELATIONS
On 23rd February, Chatham House published the latest episode of the new podcast series, Agnes Frimston and Ben Horton interview Chatham House experts about the critical underlying issues which are shaping modern society. Agnes speaks to Helen Fitzwilliam about a new Italian judge-led project to relocate the wives and children of the Calabrian mafia family, the ‘Ndrangheta. Ben then interviews Xenia Wickett about her recent report on transatlantic relations.
NORWAY IMPLEMENTS NEW RULES CONTROLLING FOREIGN OWNERSHIP
On 23rd February, Baker McKenzie reported that the Norwegian Parliament is expected to pass a new Act on National Security under which the Norwegian Government will be able to stop foreign investments that may threaten security interests of national importance.
https://globalcompliancenews.com/norway-foreign-ownership-20180223/
THE USE OF COMPELLED TESTIMONY IN CRIMINAL PROCEEDINGS
On 23rd February, UK law firm Corker Binning published the first of 2 briefings exploring the use of compelled testimony in criminal proceedings. This first article asks whether there are any circumstances in which compelled testimony can be lawfully admitted against the compelled person. The second article will ask whether there is any prohibition on admitting compelled testimony against a defendant other than the compelled person.
https://www.corkerbinning.com/the-use-of-compelled-testimony-in-criminal-proceedings/
INTERDICTING NORTH KOREAN VESSELS: ANOTHER FALSE HOPE
In the light of the latest updating of US sanctions targeting North Korean shipping, 38 North recommends re-reading this article from October 2017.
https://www.38north.org/2017/10/awinner100417/
US TESTING X-RAY TRAINING SYSTEM THAT TRACKS OFFICER’S EYE MOVEMENTS DURING SEARCHES
On 23rd February, Homeland Preparedness reports that the US Transportation Security Administration is evaluating a new x-ray image analysis training system that tracks the eye movements of TSA officers as they conduct visual searches of travellers at airports across Oregon. Known as ScreenADAPT, the technology is being developed by the Department of Homeland Security Science and Technology (S&T) Directorate and the TSA. The goal, it is said, was to develop training methods and tools, through technology innovation, that would be relevant, challenging, intuitive and engaging to enhance transportation security officer (TSO) visual search skill.
CYBERSECURITY PROFESSIONALS FORESEE ‘CATASTROPHIC” CYBERATTACKS IN COMING YEARS
Homeland Preparedness in the US on 23rd February reported that more than 80% of cybersecurity professionals believe that their employer will experience a “catastrophic” data breach within the next 3 years, and 66% believe that it could “seriously diminish” shareholder value, according to a global study.
raytodd.blog 