Beloit Daily News on 27th February reported that one of Brazil’s top arms dealers has been charged in the US with illegally exporting firearms, accessories and ammunition, following an investigation by the US Immigration and Customs Enforcement, or ICE, and other agencies. Frederik Barbieri, 36, was arrested at his home in Florida after police seized about 60 rifles that the Brazilian had sent to Rio de Janeiro’s international airport in May 2017. The weapons were said to be used by drug traffickers in Brazilian slums. The scheme led by Barbieri is reported to have lasted from May 2013 to June 2017. Barbieri also has US citizenship and Brazilian police say he has been living in Florida since 2010. Brazil’s Justice Ministry said in a statement that it has requested Barbieri’s extradition.
On 27th February, the Globe & Mail reported that structural changes are required to clamp down on the unregulated private lending networks that drug traffickers are using to launder their illicit gains, a Simon Fraser University criminologist says. A recent Globe and Mail investigation identified people connected to the local fentanyl trade who are also private lenders, using Vancouver-area real estate to clean their cash. It identified 12 private lenders associated with the illicit drug trade and other crimes. Neil Boyd, a criminology professor at SFU, said the complexity of these private lending networks and similar white-collar crimes make them notoriously hard to prosecute. The article explains that the problem area involves the individuals granting a loan, then register a land title charge against the borrower’s real estate equal to the value of the debt, plus interest. The charge, which gives them a stake in the real estate, remains in place until the debt is cleared. If the property is sold, the loan is paid out from the sale proceeds, in clean money, all seemingly legal – except these financiers are unregulated and unlicensed, and the loans they grant are in cash likely derived from drug deals or other crimes.
27th February 2018
ISLE OF MAN AMENDS DETAILS OF DAEDONG CREDIT BANK (DCB) SUBJECT TO NORTH KOREA SANCTIONS
On 26th February, the Isle of Man issued a news release advising that the details relating to the Daedong Credit Bank, included in the list of those entities subject to sanctions, had been amended. The details concerned were merely the SWIFT code for the bank.
KOSOVO: PRE-ASSESSMENT MEETING ON ANTI-CORRUPTION AND AML/CFT
The Council of Europe has reported that from 19th to 21st February, the EU/CoE Joint Project against Economic Crime (PECK II) organised an explanatory meeting on the rules and methodology of the anti-corruption and AML assessment process based on the GRECO and FATF/MONEYVAL assessment Methodologies for Kosovo authorities. The assessment process of Kosovo compliance in both areas will be carried out during 2018 by the Council of Europe through PECK II Project.
FATF TO STEP UP MONITORING OF CRYPTOCURRENCIES IN MONEY LAUNDERING
Coindesk reported on 26th February that FATF has said it will step up its efforts in monitoring the use of cryptocurrencies in money laundering. This followed its recent Plenary meeting.
UK COURT DEFINES SCOPE OF A CONSENT ORDER WHICH DISCHARGED A FREEZING ORDER
On 16th February, Clyde &Co published a briefing about the High Court case of Abdullah Nasser Bin Obaid v Al-Hezaimi. The claimants had obtained a proprietary injunction and worldwide freezing order (Mareva order) against the defendants. The parties then came to an agreement about using rental proceeds from the frozen properties to meet ongoing essential costs. A few months later, the injunction and freezing order were discharged pursuant to the terms of a consent order made by the Court. A dispute subsequently arose as to the scope of the consent order and whether an undertaking given by the defendants (and referred to in the consent order) included rental income.
UK FREIGHT TRADE ASSOCIATION URGES MEMBERS TO REVIEW CYBERSECURITY MEASURES
On 26th February, in the light of the substantial cost of last year’s cyber attack on Maersk and other institutions, the British International Freight Association (BIFA) is urging its members to review their cyber security policies. The cyber attacks have revealed the scale of impact that security breaches can have on global logistics and supply chains, with the physical cost of rectifying the problems incurred at Maersk reported to be around $300 million.
SOUTH PACIFIC REGIONAL FISHERIES MEASURES BECOME EU LAW
On 26th February, the EU reported that the EU Council had reached an agreement with the European Parliament on how to incorporate into EU legislation measures adopted by the South Pacific Regional Fisheries Management Organisation (SPRFMO). The agreed regulation laying down management, conservation and control measures applicable in the convention area of SPRFMO applies to EU fishing vessels fishing in the SPRFMO convention area or, in the case of transhipments, to the species caught in the SPRFMO convention area. It also applies to third country fishing vessels that access EU ports and that carry fishery products harvested in the convention area. SPRFMO is an inter-governmental organisation that is committed to the long-term conservation and sustainable use of the fishery resources of the South Pacific Ocean. Currently, the main commercial resources fished in the SPRFMO area are Jack mackerel and jumbo flying squid in the Southeast Pacific and, to a much lesser degree, deep-sea species often associated with seamounts in the Southwest Pacific.
PIRATE ATTACK OFF SOMALIA REPULSED
On 26th February, Defence Web reported that suspected Somali pirates attacked a Singaporean-flagged chemical tanker but were repelled by guards on board, the EU Naval force said, the first such incident in several months. EU Navfor said in a statement the 50,000 metric tonne MT Leopard Sun was sailing from Sohar in Oman to Cape Town, South Africa, when it was attacked by 2 skiffs 160 nautical miles off the coast of Somalia.
UK ANTI-CORRUPTION STRATEGY AND THE ILLEGAL WILDLIFE TRADE
On 11th December, the UK Government issued its first cross-government anti-corruption strategy to guide its actions through to 2022. On page 16 of the strategy it says: “Criminal networks rely on corruption to facilitate illegal migration, modern slavery, drug trafficking and the illegal trade in wildlife”. On 26th February, the House of Commons produced a debate pack in advance of a Westminster Hall debate on the ‘Anti-corruption strategy and the illegal wildlife trade’ scheduled for 28th February.
PENSIONER ARRESTED AT HOLYHEAD PLEADS GUILTY TO £1 MILLION CIGARETTE TAX EVASION
The North Wales Chronicle on 26th February reported that a pensioner changed his plea to guilty to the fraudulent evasion of nearly £1 million in excise duty on cigarettes brought from Ireland. Trucker James Francis O’Reilly, 67, of London, who has also lived at Cavan in Ireland, was arrested in Anglesey last October after arriving at Holyhead with a cargo of more than 3 million cigarettes.
CHANGES TO UK AVIATION SECURITY
On 26th February, the Department for Transport reported that large phones, laptops and tablets are now allowed in the cabin on the majority of flights to the UK.
VESSEL COMPANY TO PAY $2 MILLION FOR FALSE RECORDS AND OIL/WASTE DISPOSAL
On 26th February, Law 360 reports that a vessel-operating company, Sea World Management & Trading Inc, must pay $2.25 million in fines after being convicted of falsifying records relating to the discharge of oil waste and garbage into the Caribbean Sea and Gulf of Mexico, the US DoJ said.
UKRAINE ARRESTS ‘AVALANCHE’ CYBERCRIME ORGANISER
It was reported on that Ukraine has detained one of the organisers of the massive Avalanche cybercrime network, police said, over a year after the global ring was busted in an international raid. Avalanche was a criminal network providing infrastructure for malware and DDoS (distributed denial of service) spam attacks across the world before it was busted in an unprecedented global sting operation. Speaking to AFP, a police spokeswoman confirmed the arrested man was Gennadiy Kapkanov, a Ukrainian citizen who was using a passport with a different identity.
SIPRI HOSTS WORKSHOP ON INTANGIBLE TRANSFERS OF TECHNOLOGY (ITT)
The Stockholm International Peace Research Institute together with the US Department of State, hosted a workshop on ‘Controlling Intangible Transfers of Technology (ITT): Mapping Key Challenges and Good Practices and Identifying Areas of Improvement’ at the start of February. The workshop brought together 28 experts from 15 European countries and the US. This included representatives of various industry sectors, research centres, foreign ministries, national licensing and enforcement agencies and the European Commission. The aim of the workshop was to discuss key issues related to the application of export controls to ITT, as well as to explore how their implementation could be improved by national authorities, by the EU, and through the use of available guidance materials. This workshop is one component of a project aimed at mapping key challenges and good practices associated with controls on ITT.
For more information on the project is at –
TURKISH ARMS INDUSTRY AIDING MILITARY OPERATION IN SYRIA
VoA on 25th February reports on the state of the arms industry in Turkey, and saying its offensive against a Kurdish militia in Syria shows the growing expertise of Turkish arms manufacturers.
MISSING DEGAS PAINTING FOUND IN BUS LUGGAGE COMPARTMENT IN FRANCE
On 27th February, Art Law & More reported that the painting was found when customs officials opened the luggage compartment of a bus on a highway just outside Paris on 16th February. ‘Les Choristes’ (The Chorus Singers) went missing one night in December 2009 after thieves unscrewed it from a wall in the Musée Cantini in Marseille. Investigators had all but given up hope of ever finding the pastel painting valued at approximately £700,000. Customs officials were performing a random search of the luggage compartment of a bus stopped in a motorway service station in Ferrières-en-Brie. None of the passengers aboard the bus claimed the suitcase as their own and no arrests were made.
AZERBAIJAN: LIST OF OFFSHORE “TAX HAVENS”
On 26th February, BM Morrison Partners LLC published an article saying that, in July 2017, the President of Azerbaijan approved a list of low-tax foreign jurisdictions (and territories), – those “where the tax rate is at least twice lower than the rate established by [the] Tax Code and with law protecting confidentiality of information of companies able to protect secrecy of their financial data or [beneficial owners]”. To be updated annually, the list includes 40 jurisdictions, including the Isle of Man, Jersey and Guernsey, BVI, Gibraltar and Panama.
NUCLEAR ENERGY AND WASTE IN AUSTRALIA
Law firm Hunt & Hunt produced this 17-page publication for Interlaw. It points out that Australian law currently prohibits nuclear generation, and it remains unlikely for the immediate future – though there is the possibility of it being a way of the country meeting its greenhouse gas targets. The only use of nuclear technology is for medical and research purposes, and as a result of this Australia generates some low and medium level radioactive waste. There is debate on providing a permanent site for nuclear waste storage and disposal for locally-sourced low-level and intermediate-level radioactive waste.
EU CANNOT FISH OFF THE WESTERN SAHARA COAST
On 27th February, EU Observer reported that a fishery deal between the EU and Morocco cannot include the disputed territory of the Western Sahara, annexed by Morocco, the European Court of Justice (ECJ) has ruled. The UK-based Western Sahara Campaign (WSC), which brought the case before the court, has described it as major victory. It reports that the verdict also pleased the Polisario Front, the political arm of the exiled Saharawi people, many of which fled to neighbouring Algeria during a protracted war that ended in a shaky ceasefire in the early 1990s.
RIDING THE TRAIN FROM BEIJING TO VIENNA (IN 2033)
On 27th February, EurActiv carried an article saying that the idea of travelling by train from Beijing via Moscow to the Austrian capital has long been an unlikely far-flung dream. But in 15 years, the Trans-Siberian railway could indeed reach the gates of Vienna, as China’s ambitions to extend the Silk Road into Central Europe mean solutions are being sought to avoid shipping freight on the more than 20,000 kilometre-long sea route and use the 11,000 kilometre-long and therefore time-saving land route.
BRAZIL PROSECUTOR ASKS COURT TO SILENCE THE HEAD OF POLICE
On 27th February, OCCRP reported that, according to Reuters, the prosecutor heading the most recent corruption case against Brazilian president, Michel Temer, has asked the Supreme Court to prevent the head of the federal police, Fernando Segovia, from interfering with the probe, aand any resulting court order would count public statements about the investigation as acts of interference. On 9th February, the police chief had said that that the investigation had found no evidence of corruption, that no crime was committed, and that the investigation would soon be over.
FORMER MAYOR OF VLADISVOSTOK ON TRIAL FOR BRIBERY AND CORRUPTION
RAPSI in Russia reported on 27th February that the former mayor of Vladivostok, Igor Pushkarev, has pleaded not guilty in a criminal case over large-scale bribery and abuse of office. His brother Andrey Pushkarev, head of “Vostokcement” group, and Andrey Lushnikov , head of “Roads of Vladivostok” company, are also defendants in the case.
TEXAS ISSUES ANOTHER CEASE-AND-DESIST OVER ALLEGED CRYPTO FRAUD
On 27th February, Coindesk reported that a Texas regulator, the Texas State Securities Board (TSSB), is gunning for yet another cryptocurrency-related company, Leadinvest of Panama, it accuses of promoting unregistered securities targeting the state’s residents.
FAST FOOD BINARY OPTIONS FRAUDSTERS – UPDATE
On 27th February, Finance Feeds provides an update on the story about a couple of fast-food chain workers who have perpetrated a binary options fraud on investors 2015-2017. Frank Gregory Cedeno and Leonel Alexis Valerio Santana purported to be SEC employees seeking money in connection with the investments the investors had made with Banc de Binary. In one common version of the scam, victims received emails that used official-seeming documentation and the SEC seal to support a false claim that the targeted investor must pay a fee in order to receive a portion of the settlement of the SEC’s lawsuit against Banc de Binary.
TOP SYDNEY LAWYER ARRESTED FOR ALLEGED FRAUD
The Daily Mail in Australia reported on 27th February that a 35 year old, unnamed top Sydney lawyer has been charged with almost $10million in fraud offences that allegedly took place between June 2016 and August 2017. He allegedly transferred the money from the bank accounts of his high-end clients.
LITTLE HOPE FOR VESSEL ARREST PURELY FOR FOREIGN COURT PROCEEDINGS IN SINGAPORE
On 27th February, Reed Smith published an article reporting that the recent Singapore High Court decision of The Eurohope confirms the position under Singapore law that a vessel cannot be arrested in Singapore in aid of foreign court proceedings, but it can be arrested for the purposes of obtaining security in aid of international arbitrations. The position in Singapore differs from the position in England and Wales, where a vessel can be arrested and retained as security for both foreign court proceedings and international arbitrations.
GREEN CHANNEL SMUGGLING SCAM WORTH BILLIONS OF RUPEES UNCOVERED IN PAKISTAN
Customs Today reports that a few senior customs officials are allegedly involved in unscrupulous activities at Port Qasim. They are allowing smugglers to get their smuggled goods onto the market after getting clearance through green channel under protection of a few customs officials. They are clearing these illegal or banned goods by declaring as scrap.
PORTUGAL TO INVESTIGATE ILLEGAL FUEL IMPORTS FROM SPAIN
Customs Today on 27th February reported that the Portuguese government is to establish a working group to combat illegal overland fuel imports from neighbouring Spain, the finance ministry said. The issue revolves around the price differential between fuel bought in Portugal and Spain. Taxes levied on diesel and petrol in Spain are considerably lower than those in Portugal. Big profits can therefore be made by buying fuel in Spain and importing it undeclared for sale in Portugal.
THE MAYOR OF BELGRADE’S MULTIPLYING BANK ACCOUNTS
OCCRP on 26th February carried an article claiming that Sinisa Mali, the mayor of Belgrade, appears to have had control over 45 bank accounts, according to a report obtained by the Organized Crime and Corruption Reporting Project (OCCRP) and Serbian investigative journalism outlet KRIK. It also reports that a November 2016 report by the Serbian Administration for the Prevention of Money Laundering (APML) details suspicious transactions involving Mali, his wife, and companies that he owned or worked for. The mayor held at least 42 accounts registered under himself, his wife, and his 3 underage children, into some of which he deposited large sums of money. He also had the power of attorney over 3 accounts registered under other names. A 2013 investigation was closed, prosecutors saying that they saw no evidence of criminal activity and therefore no grounds to open an investigation. The article nevertheless goes on to raise many questions about transactions and activities involving Mail. It concludes that as Belgrade gears up to another election, it seems the APML and Serbia’s Anti-Corruption Agency are left with many unanswered questions — perhaps more numerous than even Sinisa Mali’s bank accounts.
FOR THE US ARMY, A 3-D PRINTED DRONE IS NICE – A CUSTOMISED, 3-D PRINTED DRONE IS BETTER
On 24th February, C4ISR Net reported that US Army researchers are developing the ability for soldiers to 3D print a quadcopter airframe. Better yet, it says, they are developing a system to allow soldiers to customise their drones to meet specific mission needs. It is reported that early research led to a 2016 demonstration at at Fort Benning, Georgia, and a second demonstration in the autumn of 2017 at Camp Lejeune, North Carolina. The article says that Army planners say they envision a portable set of interchangeable components that could be used to build a wide assortment of drones. Ideally, a 3-D printer would churn out the frame, while a selection of motors, sensors, cameras and other apparatus could be selected from a standing inventory. However, there is no set timeline for the 3D printed drones to go operational, as ARL continues to fine-tune the technology and explore the needs of potential user groups.
ALBANIA TO PROBE POLICE FORCE TO CRACK DOWN ON CORRUPTION
France 24 on 27th February reported that Albanian lawmakers have passed a law to screen police officers in a bid to clamp down on corruption and links to organised crime, an important part of EU-required judiciary reform.
WHAT’S BEHIND INDONESIA’S CHINA DRONE BUY?
The Diplomat on 27th February posed this question, answering by saying it is due to the need to boost the country’s drone capabilities, recognising that the country does not have nearly enough vessels and aircraft to fully monitor its vast airspace and coastline. The article also says that the purchase signals both Indonesia’s efforts to boost its capabilities and the inroads Chinese drones are making in some markets.
NORTH KOREAN LEADERS USED BRAZILIAN PASSPORTS TO APPLY FOR WESTERN VISAS
On 27th February, Reuters carried a story with an exclusive tag claiming that North Korean leader Kim Jong Un and his late father Kim Jong Il used fraudulently obtained Brazilian passports to apply for visas to visit Western countries in the 1990s, 5 senior Western European security sources told Reuters.
THE WORLD’S BIGGEST AEROPLANE
MSN on 27th February carried a video of the world’s largest aircraft- Stratolaunch, funded by Microsoft co-founder Paul Allen, which had completed its first taxi on a runway. The plane, which has 2 fuselages was able to reach a top speed of 40 knots, is an air-launch platform to make access to space more convenient, reliable, and routine.
For more information, see –
REPORT ON GROWING PROTECTIONISM AROUND THE WORLD
Law firm Glowling WLG has produced a report on growing protectionism by countries around the world. The firm says that protectionism is on the rise and those setting the strategy for their business must ask themselves: are we leaving ourselves open to the risk or prepared for the opportunity? It has created research and analysis into protectionism – an issue which goes beyond the current headlines of UK political turbulence, Trump and Brexit and examines what these recent seismic changes mean for UK businesses trading internationally. This report, available to download, includes exclusive research, insight from our research into trade policies, as well insight from leading thinkers across a diverse range of sectors.
The BBC Radio 4 “Law in Action” devoted a whole 30-minute programme to the problem with disclosure in the UK. The number of prosecutions in England and Wales that collapsed because of a failure by police or prosecutors to disclose evidence increased by 70% in the last 2 years. In the programme, Joshua Rozenberg speaks to the Director of Public Prosecutions and to David Tucker from the College of Policing about their response to this rising concern. He also speaks to those directly affected by the failures – members of the public charged and taken to court because police failed to disclose evidence that would clear them. Such cases are nothing new to the Criminal Cases Review Commission (CCRC), which investigates potential miscarriages of justice. Law in Action speaks to the CCRC’s chair Richard Foster about the current wave of cases and his concerns that people are being wrongly imprisoned because evidence is not shared with defence teams.
On 27th February, Gowling WLG produced a helpful Q&A document intended to boost understanding of the key issues and terminology.
On 27th February, the New York Times reported that North Korea has been shipping supplies to the Syrian government that could be used in the production of chemical weapons, UN experts contend. The supplies from North Korea include acid-resistant tiles, valves and thermometers, according to a report by UN investigators. In addition, North Korean missile technicians have also been spotted working at known chemical weapons and missile facilities inside Syria, according to the report, which was written by a panel of experts who looked at North Korea’s compliance with UN sanctions. The possible chemical weapons components were part of at least 40 previously unreported shipments by North Korea to Syria between 2012 and 2017 of prohibited ballistic missile parts and materials that could be used for both military and civilian purposes, according to the report. The report gives fresh details of a military relationship between North Korea and Syria that goes back decades (including North Korea pilots flying Syrian warplanes in the 60s and 70s in wars against Israel). North Korean technicians helped to develop Syria’s arsenal of ballistic missiles and to build a nuclear power plant capable of producing plutonium, which can be used to make nuclear weapons (but destroyed by Israel in 2007).
NK News on 27th February reported that the Japanese government had published further evidence of North Korean vessels engaged in ship-to-ship (STS) transfers on the high seas, a practice prohibited by UN Security Council sanctions. The posts on multiple government websites include photographs of the STS transfer taking place on the morning of February 24th between a North Korean ship and a vessel flying a Maldives flag. The Chon Man San – the North Korean oil tanker photographed by Japan – was one of the vessels designated on February 23rd, as was its registered DPRK owner, Korea Achim Shipping Co. The other ship involved – the Xin Yuan 18 – is also an oil tanker. While flying the flag of the Maldives, it is owned by a Hong Kong company called Ha Fa Trade International.
On 26th February, a news release from the UN advised that the Security Council had unanimously decided to renew a travel ban, assets freeze and arms embargo against those threatening peace and security in Yemen. UN SCR 2402 (2018) renewed until 26th February 2019 the travel ban and assets freeze first imposed in UN SCR 2140 (2014). It also reaffirmed the arms embargo — as laid out in UN SCR 2216 (2015) — against several individuals, including former Yemeni President Ali Abdullah Saleh.
On 27th February, OFAC added 2 new names and 7 ISIS-related groups in Bangladesh, Egypt, the Philippines, Somalia, Tunisia and West Africa.
For background, see Reuters at –
On 27th February, HM Treasury published a news release following the recent FATF plenary meeting and concerned with money laundering and terrorist financing controls in higher risk jurisdictions, and the requirement to apply Enhanced Due Diligence for higher risk jurisdictions.