Month: March 2018

31^st March 2018

CONFLICT IN YEMEN AND EU’S ARMS EXPORT CONTROLS: HIGHLIGHTING FLAWS IN CURRENT REGIME

Eurasia Review on 29^th March provided an analysis of apparent flaws in the export control systems on EU Member States.  Comparing the reality to what is required by the EU Common Position of 2008 on Arms Exports.  The criteria include denying licences when there is a ‘clear risk’ that the arms ‘might’ be used to commit violations of human rights or international humanitarian law and ‘[taking] into account’ the risk that they will be diverted to an unauthorized end-user or end-use.  It points out that, according to SIPRI data, the leading members of the Saudi-led coalition—Saudi Arabia and UAE — were the 2^nd and 4^th largest arms importers during 2013–17, respectively, and the UK and France were the second and third largest suppliers to Saudi Arabia in 2013–17, and France and Italy were the second and third largest suppliers to the UAE.  The analysis asks how can the EU Common Position be strengthened, explaining that during 2018, the European External Action Service (EEAS) and Member States are due to reassess the implementation of the Common Position and fulfilment of its objectives.

http://www.eurasiareview.com/31032018-conflict-in-yemen-and-eus-arms-export-controls-highlighting-flaws-in-current-regime-analysis/

UKRAINE INTELLIGENCE CLAIMS TO HAVE CAUGHT IRANIANS SMUGGLING A SHIP-KILLING MISSILE

On 30^th March, the Daily Beast carried an article reporting that in January, 2 Iranian nationals tried to buy parts of an advanced missile in Kyiv, according a spokesperson for the Ukrainian intelligence service, in an apparent attempt to evade a UN arms embargo on Iran.  The article claims that the incident became a secret diplomatic incident, and both men were detained and then quietly deported to Iran.  The Iranians tried to procure Kh-31 anti-ship missile components, produced in Ukraine, with the Kh-31 being a Russian-designed anti-ship weapon that can fly along the surface of the sea at supersonic speeds.  Anti-ship cruise missiles are said to be one of “4 core areas” which the Islamic Revolutionary Guard Corps Navy (IRGCN) has prioritised for naval weapons acquisition, according to a study in 2017 published by the US Office of Naval Intelligence (ONI).

https://www.thedailybeast.com/ukraine-intel-we-caught-iranians-smuggling-a-ship-killing-missile

FINANCIAL STABILITY BOARD ACTION PLAN ON ACCESS TO BANKING SERVICES BY REMITTANCE PROVIDERS

On 30^th March, Shearman & Sterling published an article saying that the Financial Stability Board (FSB) – an international body that monitors and makes recommendations about the global financial system – has published 2 reports relating to its actions to address the decline in correspondent banking.  One is addressed to the G20 Finance Ministers and Central Bank Governors on the FSB’s 4-point action plan to assess and address the decline in correspondent banking relationships.  The other is a stocktake of remittance service providers’ access to banking services, where the decrease in correspondent banking relationships has impacted the ability of remittance service providers to access banking services. The FSB has identified a number of reasons why banks have stopped providing banking services to remittance service providers, including perceived AML/CTF risks, divergence across jurisdictions in regulatory oversight of remittance service providers and a low level of compliance with international standards.  Recommendations are made that the FSB believes will improve access to banking services by remittance service providers, and it intends to report to the G20 in July 2019 on the steps and actions taken in relation to the recommendations.

https://www.jdsupra.com/legalnews/financial-stability-board-action-plan-41759/

CANADIAN CONVICTED IN $18 MILLION TELEMARKETING SCAM CASE IN US

The New York Post on 30^th March reported that Mark Eldon Wilson from Vancouver, owner of a Canadian telemarketing operation has been convicted of mail and wire fraud for orchestrating a scheme that prosecutors say defrauded at least 60,000 people out of more than $18 million in 1998-2001.  Wilson masterminded a cross-border scheme that targeted elderly victims with a bogus protection programme for credit card fraud in 37 US states.

https://nypost.com/2018/03/30/man-convicted-for-18m-cross-border-telemarketing-scheme/?src=ilaw

US SEEKS OVER 6 YEARS PRISON FOR MACAU BILLIONAIRE IN UN BRIBERY CASE

Reuters on 30^th March reported that Macau billionaire Ng Lap Seng faces more than 6 years in prison, after being convicted in July 2017 for bribing 2 UN ambassadors to help him build a multi-billion dollar conference centre which was never built.  He was accused of paying more than $1 million of bribes to officials including the late former UN General Assembly President, John Ashe.

https://www.reuters.com/article/us-un-corruption/u-s-seeks-over-six-years-prison-for-macau-billionaire-in-u-n-bribery-case-idUSKBN1H61RR?feedType=RSS&feedName=worldNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FworldNews+%28Reuters+World+News%29&src=ilaw

LUXEMBOURG REGISTER OF BENEFICIAL OWNERS

On 30^th March, White & Case published an article saying that the Luxembourg parliament is reviewing the draft Bill implementing Article 30 of the 4^th ML Directive, with a view to implementing additional obligations for certain Luxembourg corporate entities about notifying beneficial owners.  Requirements include maintaining certain records at the registered office in Luxembourg.  The information will have to be provided within 1 month from the date of its incorporation (or any changes to its beneficial ownership) for a new register of beneficial ownership called REBECO.  However, the article says that the draft Bill is still undergoing the required consultation process with the Luxembourg legal, financial and commercial sectors’ representative bodies.

https://www.jdsupra.com/legalnews/luxembourg-register-of-beneficial-32666/

 

CANADIAN FEDERAL AND PROVINCIAL GOVERNMENTS TARGET ILLEGAL TOBACCO WITH NEW FUNDING

The Globe & Mail in Canada on 30^th March reported that the federal and provincial governments are planning to put more money into the fight against contraband tobacco − a thriving black market that is rife with organised crime, costing billions of dollars a year in lost tax revenue.  In Ontario, for example, it is believed that roughly one third of cigarettes are from an illicit source.  The RCMP has estimated that there are roughly 175 organised-crime groups in Canada with ties to the illicit tobacco market.

https://beta.theglobeandmail.com/canada/article-federal-provincial-governments-target-illegal-tobacco-with-new/

RUSSIA DEMANDS EXPLANATION FOR BRITISH CUSTOMS SEARCH OF AEROFLOT JET

On 31^st March, Rferl reported that Russia has demanded an explanation from British authorities over their search of an Aeroflot plane at Heathrow airport.  Customs officials boarded and searched the plane after it arrived from Moscow and passengers disembarked on March 30^th, without providing any explanation of their reasons for the search.

https://www.rferl.org/a/russia-says-uk-police-search-aeroflot-heathrow-london-denies/29136177.html

RUSSIA: CRIMINAL CASE OPENED AGAINST OWNERS OF SUMMA GROUP
The TASS news agency in Russia reported on 31^st March that Ziyavudin Magomedov and Magomed Magomedov, co-owners of Summa group of companies, as well as Head of the company in the group, Artur Maksidov, were detained on fraud and criminal association charges.  Embezzlement of budgetary funds on a grand scale, including those allocated for the construction of infrastructure and power supply facilities, is apparently alleged.  The Summa Group is self-described as a diversified private holding company with significant investments in port logistics, engineering, construction, telecommunications, and the oil and gas sector.
http://tass.com/society/997067?src=ilaw

https://www.rferl.org/a/russia-billionaire-magomedov-detained-embezzlement/29137186.html

LONDON, THE MONEY-LAUNDERING CAPITAL

As part of a feature on the “cancer” of corruption, Chatham House published this article by the Executive Director, Transparency International UK, which states that the City’s money markets clean up an estimated £90 billion of illicit funds each year.

https://www.chathamhouse.org/publications/twt/london-money-laundering-capital

CORRUPTION: HOW THE DISEASE IS SPREADING

In another Chatham House article, Trisha de Borchgrave talks to corruption expert Sarah Chayes, an award-winning National Public Radio journalist, moved to Afghanistan to cover the fall of the Taliban, about the threat to world order.  Chayes left journalism and set up a manufacturing business in Afghanistan.   She found that as billions of US aid dollars flowed in, much of it ended up overseas in property and other assets in more stable locations.  Chayes concluded that Afghanistan was not a country with a corruption problem but one governed by a crime syndicate.  In 2010, she became an adviser on strategic policy to the US chairman of the joint military chiefs of staff, and in 2014 she published, “Thieves of State: Why Corruption Threatens Global Security”, described as a wake-up call on the globalisation of the illicit quest for wealth and how it drives people to political and religious extremes.

https://www.chathamhouse.org/publications/twt/how-disease-spreading

CORRUPTION: DEFINING THE CRIME

A further Chatham House article by Sean Hagan, General Counsel and Director of the Legal Department of the IMF, provides an outline of the different forms corrupt acts can take.  It starts with the UN Convention Against Corruption (UNCAC), which 183 state parties have ratified, and which identifies a core set of corrupt acts that state parties are required to criminalise.  The different forms it describes includes –

• Unilateral corruption (acts such as embezzlement);
• Transactional corruption (which involves an exchange – typically with the corrupt actor taking, or abstaining from taking, an official action that affects a private party’s interests, and the private party);
• Extortive or coercive corruption (where an official coerces a benefit from a private party by threatening an adverse official act if the private party does not comply); and
• Collaborative or collusive corruption (where a private party initiates the transaction – or at least is a willing participant).

Any of these may be grand and petty corruption, based simply on the magnitude of the action or size of the bribe; and there is a distinction between incidental and systemic corruption.  A distinction is also sometimes drawn between administrative corruption, referring to corruption in the implementation of laws and regulations and state capture, where the very legal framework is fixed in advance to favour those who bribed the legislators.

https://www.chathamhouse.org/publications/twt/defining-crime

CANADA TO TARGET SMUGGLING OF STEEL INTENDED TO DODGE US TARIFFS

Customs Today on 31^st March reported that PM Justin Trudeau has said that Canada will act to prevent the smuggling of cheap steel and aluminium into the North American market to avoid new US tariffs on the metals.

http://www.customstoday.com.pk/canada-to-target-smuggling-of-steel-intended-to-dodge-us-tariffs/

US PROBE INTO INSOLVENCIES LINKED TO ALLEGED INDIA FRAUDSTER

Law 360 on 31^st March reported that the US federal government’s bankruptcy watchdog is seeking the appointment of a special examiner to investigate Indian billionaire Nirav Modi’s ties to his bankrupt US jewellery businesses, citing accusations that he orchestrated a $2 billion banking fraud in India.

https://www.law360.com/articles/1028425

MALTESE COURT ORDERS EXTRADITION OF MAN CONNECTED TO ‘GAME OVER’ GAMBLING ANTI-MAFIA OPERATION

Malta Today on 31^st March reported that the Maltese Court has ordered the extradition of Alessi Diomiro, 33, to Italy to face charges related to organised crime.  He was arrested against a European Arrest Warrant issued by the magistrate of the Court of Palermo.  Last month, the Malta Gaming Authority suspended the gaming licence of Phoenix International Ltd, following raids as part of an Italian anti-mafia police operation dubbed ‘Game Over’.  Diomiro had allegedly managed to escape from the raid which led to the arrest of 30 people, including the ‘betting boss’ Benedetto Bacchi – who reportedly controlled a network of 700 betting shops across Italy. He is said to be a corporate representative in Malta of Bacchi, and of holding administrative positions in the Maltese companies BL Man Limited and Dodoone Limited.

https://www.maltatoday.com.mt/news/court_and_police/85728/maltese_court_orders_extradition_of_man_connected_to_game_over_antimafia_operation#.Wr-w60xFycw

BRAZIL: DOCUMENTS APPEAR TO LINK PRESIDENT TEMER TO PORT BRIBERY SCANDAL

On 31^st March, Telesur provided an update on the case linking President Temer to a corruption scandal relating to a decree regulating the country’s ports.  Operation Skala has been launched to ascertain whether or not Temer received bribes to help shape the decree.  Other documents found by police appear to link Agreplan, a firm belonging to Joao Baptista Lima Filho, a close friend of Temer, to the scandal.  These documents along with other allegations led to a search and seizure operation at Agreplan headquarters, as well as 13 arrest warrants, according to Brasil 24/7.

https://www.telesurtv.net/english/news/Brazil-Documents-Appear-to-Link-Temer-to-Port-Bribery-Scandal-20180331-0001.html?src=ilaw

DOMINICA: WHERE YOU CAN GET A NEW PASSPORT, AND A NEW NAME

In his continuing coverage of citizenship by investment (CBI) and similar passport and visa schemes operated by some Caribbean states, Kenneth Rijock in his blog tells of an agency located in Dubai and said to market to Iranian clients.  He says that the agency’s website actually explains that CBI clients can take advantage of Dominica’s Deed Poll Law and may legally change their name 1 year after obtaining their CBI passport.   He says that the website even advises that the client’s previous legal name will not appear on their passport.

http://rijock.blogspot.com/

US EXTENDS ITS SOUTH SUDAN SANCTIONS AND “MALICIOUS CYBER ACTIVITY” SANCTIONS FOR ANOTHER YEAR

The always informative European Sanctions Blog on 31^st March reported that on 27^th March, President Trump extended for 1 year the sanctions contained in EO 13664 concerned with South Sudan.  The asset freezes and travel restrictions were imposed for activities that threatened the peace, security, or stability of South Sudan and the surrounding region.  On the same date, Trump also extended the application of EO 13694 (as amended) for a further year.  These sanctions impose asset freezes and travel restrictions on those engaged in malicious cyber-enabled activities originating from, or directed by persons located, in whole or in substantial part, outside the US.

https://europeansanctions.com/

UNODC PROMOTES UNIVERSALISATION OF INTERNATIONAL LEGAL INSTRUMENTS AGAINST NUCLEAR TERRORISM

On 29^th March, the UN Office for Drugs and Crime reported that representatives of over 30 Member States, experts and the UN actors, gathered in Vienna to discuss the importance of becoming a party to, and fully implementing, the international legal framework against nuclear terrorism.  It says that the relevant international instruments – the International Convention for the Suppression of Acts of Nuclear Terrorism (ICSANT), the Convention on the Physical Protection of Nuclear Material (CPPNM) and its 2005 Amendment  – provide tools to ensure that there is no safe haven for those committing the acts that they establish as offences.  However, these instruments could realise their full potential only with universal ratification since security is only as strong as the weakest link.

https://www.unodc.org/unodc/en/frontpage/2018/March/unodc-promotes-universalization-of-international-legal-instruments-against-nuclear-terrorism.html?ref=fs1

EAST AFRICA: ANTI-CORRUPTION CONFERENCE ON WHISTLEBLOWER PROTECTION, PUBLIC PROCUREMENT

On 29^th March, the UN Office for Drugs and Crime reported that further steps were taken towards the creation of a regional forum on anti-corruption in public procurement for Eastern Africa as 35 governmental representatives and civil society organizations gathered in Arusha, Tanzania in a conference organised by UNODC to discuss public procurement and whistleblower protection.  At the event participants discussed current challenges and decided to establish a Regional Public Procurement Anti-Corruption Forum (RPPAF) with a view to advancing cross-regional anti-corruption and procurement strategies.  The Forum will be constituted by a country-specific National Public Procurement Anti-Corruption Task-Force for Burundi, Djibouti, Ethiopia, Kenya, Rwanda, Tanzania and Uganda.  It is envisaged to reconvene in 6 months to discuss progress made.

https://www.unodc.org/unodc/en/frontpage/2018/March/east-africa_-unodc-organizes-anti-corruption-conference-on-whistleblower-protection–public-procurement.html?ref=fs2

PROJECT TO DIGITISE FIATA & NVOCC BILLS OF LADING

On 29^th March, the international federation of freight forwarders associations (FIATA) reported that it had signed a MoU with essDOCS to provide a framework for further co-operation in digitising Bills of Lading.  essDOCS enables paperless trade and its solutions digitise and automate paper-heavy processes.  Over 36,000 companies, ranging from 31% of the Fortune Global 100 to innovative SMEs, use essDOCS solutions across 169 countries.

https://fiata.com/media/press-releases/2018/29-march.html

US REPORT ON TRADE BARRIERS FACING EXPORTS

On 30^th March, Baker McKenzie reported that the Office of the US Trade Representative (USTR) had released the 2018 National Trade Estimate (NTE), an annual report documenting foreign trade and investment barriers facing American exports around the world.

http://www.internationaltradecomplianceupdate.com/2018/03/30/us-ustr-releases-2018-national-trade-estimate-report/

AFRICAN COUNTRIES LAUNCH AFRICAN CONTINENTAL FREE TRADE AREA (AFCFTA)

Also on 30^th March, Baker McKenzie reported that on 21^st March many African countries signed the Agreement Establishing the African Continental Free Trade Area (AfCFTA) – the article lists the countries involved and what they have signed up to.  The goal of the AfCFTA is to create a single market, followed by free movement and a single currency union.  Once all documents are concluded and ratified by 22 states, the free trade area will formally exist.  Baker McKenzie notes that notably absent was Nigeria, one of Africa’s largest economies and its most populous country, and although South Africa did not sign the AfCFTA text, it is committed to signing once internal legal processes are completed.

http://www.internationaltradecomplianceupdate.com/2018/03/30/african-countries-launch-african-continental-free-trade-area-afcfta/

On 28^th March, Clifford Chance referred to the above as a major step towards a Single African Market.

https://www.cliffordchance.com/briefings/2018/03/a_major_step_towardsasingleafricanmarket.html

ORGANISED GANG IN THE NORTH BEHIND £1.3 MILLION HERBAL CANNABIS IMPORTATION IN IRELAND

The Irish Examiner on 31^st March reported that 3 pensioners were among 6 people arrested after the haul was found on a shipping pallet inside an industrial sized fuel tank at a property in Dromore, Co Down.  The article quoted the PSNI as having previously said there are between 60 and 70 organised crime gangs in the drugs trade in Northern Ireland.

https://www.irishexaminer.com/breakingnews/ireland/–835173.html

 

 

On 30^th March, Paul Hastings published a briefing on this US Act which President Trump signed into law on March 23^rd, as part of a broader spending Bill.  It enacted crucial statutory changes affecting law enforcement access to data stored by online service providers.  The Act aims to resolve conflicts between US authorities and service providers arising from law enforcement requests to obtain data that is stored abroad.  A number of service providers took the position that law enforcement requests only applied to data stored on servers located within the US and not abroad, even though the provider had the capacity to access the data and full remote control of the data.  One thing pointed out is that the Act allows certain foreign governments to directly serve legal process requests on US providers without any intermediary requests to the DoJ or involvement of US courts.   Prior to the CLOUD Act, when governments attempted to obtain evidence stored in another country, they often had to work through slow and cumbersome mutual legal assistance treaties (MLAT) and were required to ask the DoJ to obtain a court order for that information.

https://www.paulhastings.com/publications-items/blog/ph-privacy/ph-privacy/2018/03/30/cloud-act-implements-crucial-statutory-changes-affecting-law-enforcement-access-to-data

The Kyiv Post on 31^st March reported that Austrian regulators smacked Raiffeisenbank International with a €2.74 million fine, the biggest in Austrian history, on March 30^th over charges that the bank failed to impose adequate AML/CFT controls.  This is said to have followed an investigation after the 2016 Panama Papers leak revealed a series of loans going from the bank to companies affiliated with Ukrainian President Petro Poroshenko.  The article claims that Raiffeisen’s reputation in Eastern Europe as a bank with more lenient compliance and a willingness to cut deals made it the go-to lender for numerous oligarchs wishing to move money westward.

https://www.kyivpost.com/business/raiffeisen-slapped-2-7-million-euro-fine-lack-money-laundering-controls.html?src=ilaw

On 29^th March, Medium carried an article from the Small Arms Survey providing examples of the use of converted weapons and saying that the conversion of imitation firearms, deactivated weapons, and gas pistols so that they can fire live ammunition was a long-neglected issue that has received more attention after recent attacks in Europe.  Those involved range from interested firearm aficionados to organised crime groups, with different groups favouring certain models, modes of transportation, and means of conversion —  and with several overlaps and cross-cutting issues.  For example, it says, both petty and serious crime actors utilise converted alarm weapons, which fall under the imitation firearm category.  Convertible firearms can include any imitation firearms incapable of expelling a projectile; deactivated firearms; and (according to some) semi-automatic weapons turned fully automatic.  A new report from the Small Arms Survey on converted firearms in Europe is coming out in mid-April: analysing the typologies of converted firearms, the nature and scope of the conversion threat, the mechanics of trafficking in converted firearms, and the European response to this issue.  In addition, the Project SAFTE report —  which the Small Arms Survey contributed the chapter on France — on terrorist access to illicit firearms markets in Europe is also coming out in mid-April.

https://medium.com/@SmallArmsSurvey/modifiers-a-snapshot-of-convertible-firearms-in-europe-de054c96f3aa

Project SAFTE is an international research project funded by the European Commission.  SAFTE stands for Studying the Acquisition of illicit Firearms by Terrorists in Europe.  Research is conducted by an international network of firearms experts.  It is co-ordinated by the Flemish Peace Institute (Belgium).

http://www.flemishpeaceinstitute.eu/safte

On 30^th March, multiple media sites reported that the UN Security Council had blacklisted dozens of ships and shipping companies on 29^th March over oil and coal smuggling by North Korea.  21 shipping companies – including 5 based in China – 15 North Korean ships, 12 non-North Korean ships and a Taiwanese man have been designated.  The 12 non-North Korea ships are now subjected to a global port ban and must be deregistered by the countries of registration.  The Taiwanese individual, Tsang Yung Yuan, is accused of co-ordinating “North Korean coal exports with a North Korean broker operating in a third country, and he has a history of other sanctions evasion activities,” according to the UN listing.  He is subjected to an asset freeze and travel ban.  The 21 shipping companies include businesses based in the Marshall Islands, Singapore, Panama and Samoa, and their assets must now be frozen.  Observers point out that the new list, almost to a name, appears to match that issued last month by the US Treasury.

https://www.un.org/press/en/2018/sc13272.doc.htm

The lists of designated vessels under UN sanctions can be found at –

https://www.un.org/sc/suborg/en/sanctions/1718/materials/list-of-designated-vessels

In his final Power Vertical podcast for Rferl on 30^th March, Brian Whitmore (with Mark Galeotti) looks back over 7 years of covering Russia and what has happened, what was got right and what was got wrong, covering things like the Pussy Riot case, the rise of Aleksei Navalny, the Russian annexation of Crimea and intervention in the Donbas, and Vladimir Putin’s hybrid war on the West.  Always interesting, this perhaps even more so in light of recent developments, putting matters more in perspective and context.  Apparently, the podcast will continue in some form.

https://www.rferl.org/a/podcast-the-farewell-veretical/29134200.html

30^th March 2018

http://www.atlanticcouncil.org/blogs/econographics/ole-moehr-2 

ILLEGAL FISHING A ‘WIDESPREAD,’ ‘ORGANISED SECURITY THREAT’; MORE CHALLENGES

On 23^rd February, Homeland Security Today reported that, according to retired Royal Navy Commander. Peter Horn of the Pew Charitable Trusts, writing for the Maritime Foundation, said that illegal fishing is a threat to international security as well as to the environment, notes an expert on surveillance technology, and high-tech tracking of illicit trawlers along with choking off supply chains is essential to reining in the threat.  It is said that p to $23.5 billion a year is potentially lost in the global market due to IUU fishing, robbing law-abiding fishers of their economic security and livelihoods.  Interpol launched Project Scale in 2013 with the support of 190 countries to established an international alert system for suspects associated with fisheries crimes.  Separately, technology such as the Oversea Ocean Monitor facilitates integration of satellite tracking data and imagery data “with details about a vessel’s history, licences, ownership, risk index and more”.  It is also said that IUU fishing supports, both directly and indirectly, non-state actors engaged in organised crime, piracy, and armed insurgency and terrorism, has become a part of the portfolio of illegal criminal organisations, and includes forced-labour crews kept out at sea for months in modern-day slavery.

https://www.hstoday.us/subject-matter-areas/maritime-security/illegal-fishing-widespread-often-highly-organized-security-threat/

CHINA SMUGGLERS BUSTED FOR DRONES USED TO TRANSPORT SMARTPHONES FROM HONG KONG

The Asahi Shimbun on 30^th March reported that customs officers in southern China’s technology hub Shenzhen have busted a group of criminals using drones to smuggle $79.8 million worth of smartphones from Hong Kong to Shenzhen, the official Legal Daily reported in China.  The authorities arrested 26 suspects who used drones to fly 2 x 200-meter cables between Hong Kong and the mainland to transport refurbished iPhones.  It is said to be the first case found in China that drones were being used in cross-border smuggling crimes.

http://www.asahi.com/ajw/articles/AJ201803300024.html

GREEK SHIPOWNER DILETON SAYS ARMS SMUGGLING ACCUSATIONS BY SAUDI ARE TRUMPED UP

Tradewinds reported on 30^th March that Saudi officials are using arms smuggling charges to justify illegal interference with innocent merchant shipping to Yemen, claims Greek shipowner Dileton.  In September 2017, nearly 5 months after the Saudi Navy seized the 47,600-dwt product tanker Androussa, a Saudi customs tribunal issued a finding that the ship had been engaged in the smuggling of weapons into war-torn Yemen.

http://www.tradewindsnews.com/legal/1461515/dileton-says-arms-smuggling-accusations-are-trumped-up

2 SPANIARDS ARRESTED OVER SMUGGLING OF ARTEFACTS LOOTED BY ISIS

On 29^th March, WTVA News reported that Spanish police have arrested 2 men for allegedly smuggling pieces of art looted by groups affiliated with ISIS from sites in Libya.  Authorities there believe this to be the first ever police operation against the financing of terrorism through the looting of art.  The suspects, both 31-year-old Spanish nationals, are art experts who bought the pieces — known in the market as “blood antiquities” — to sell in their gallery, according to a police statement.

http://www.wtva.com/content/national/478286633.html?ref=633

UAE MONEY EXCHANGES TOLD TO RAISE THEIR STANDARDS

Gulf News Banking on 30^th march reported that money exchange houses in the UAE have been ordered by the central bank to raise their standards, after several banks cut ties with them due to concerns about the risk of illicit financial flows.  Its huge expatriate workforce and growing business and tourism sectors have made it a global centre for exchanging foreign currencies and transferring money to and from the Middle East, Asia, Africa and parts of Europe.  The central bank has published a document laying out standards that exchange houses must comply with by January 2019 or risk fines or losing their licence.

http://gulfnews.com/business/sectors/banking/uae-money-exchange-houses-ordered-to-raise-standards-by-regulator-1.2196663

COULD CLIENT-ATTORNEY PRIVILEGE PROTECTION COME TO JAPAN?

In Japan, Nagashima Ohno & Tsunematsu on 26^th March published a briefing saying that the absence of attorney-client privilege protections in Japan means that regulatory investigations must be handled with particular care and consideration. Japanese regulators, such as the Japan Fair Trade Commission (JFTC) and the Japan Financial Services Agency, are empowered to compel the production of or seize materials that would otherwise be protected as privileged.  Despite lobbying, as recently as April 2017 a JFTC Anti-monopoly Study Group report concluded that there was no requirement for such protection.  However, in January the JFTC held a press conference to state that it will postpone all amendments to an Act to allow more time to consider fully the controversial issue of whether privilege-style protections should be introduced, and the JFTC will presumably continue assessing the feasibility of introducing privilege-style protections under the act, but the timing of such amendments is uncertain.

https://www.noandt.com/data/book/index/id/17021/

EU CUSTOMS VALUATION RULINGS — STAKEHOLDER CONSULTATION

On 29^th March, Sidley Austin LLP published a briefing saying that, on March 1^st, the European Commission opened a public consultation on the possibility of introducing binding rulings for customs valuation purposes – the so-called Binding Value Information (BVI).  Currently, EU law allows a company to obtain a decision from the customs authority of an EU Member State on the classification and/or origin of goods.  These decisions, called Binding Tariff Information (BTI) and Binding Origin Information (BOI), respectively, are legally binding throughout the EU, but such a system does not exist at EU level for customs valuation purposes.

https://www.sidley.com/en/insights/newsupdates/2018/03/eu-customs-valuation-rulings-stakeholder-consultation

RUSSIAN CORRUPTION FUNDS MAY HAVE GONE THROUGH IRISH BANKS

On 30^th March, the Irish Times reported that money from one of the most high-profile Russian corruption cases in the past decade may have passed through bank accounts with AIB and Bank of Ireland.  Approximately €2.44 million from an elaborate $230 million tax refund fraud carried out by a Russian gang in co-operation with corrupt Russian tax officials is alleged to have passed through the Irish accounts.  A criminal investigation in Lithuania has led to the bank account of an offshore company linked to the Russian gang and the transactions on the account include multimillion dollar dealings with 2 Irish-resident companies.

https://www.irishtimes.com/news/crime-and-law/russian-corruption-funds-may-have-gone-through-aib-and-boi-1.3445018?src=ilaw

TEAM OF FAKE INDIAN JOURNALISTS BROUGHT TO AUSTRALIA BY ‘PEOPLE SMUGGLER’

The South China Morning Post on 29^th March reported that an Indian man has been charged with people smuggling after arriving at Australia’s Brisbane airport with 8 other travellers as part of a fake media contingent to cover the Commonwealth Games.

http://www.scmp.com/news/asia/australasia/article/2139433/forget-fake-news-heres-whole-team-fake-journalists-brought

AUSTRALIAN BUSINESSMAN SENTENCED TO 10 YEARS FOR LARGEST TAX FRAUD IN AUSTRALIAN HISTORY

Baker McKenzie reported on 29^th March that Michael Issakidis was sentenced to 10 years in prison over a $135 million tax evasion scheme.  He and co-defendant, Anthony Dickson, reported false losses for their company Neumedix Health Australasia Pty Ltd. and used a web of offshore shell companies to evade corporate taxes.  It is the largest tax evasion case in Australian history.

http://www.riskandcompliancehub.com/businessman-sentenced-to-10-years-in-prison-for-tax-fraud/

INDONESIAN GOVERNOR SENTENCED TO 12 YEARS FOR BRIBERY

On 29^th March, Baker McKenzie reported that south-east Sulawesi governor, Nur Alam, was sentenced to 12 years in prison on bribery charges, for granting mining licences to a mining firm in which he has a financial stake. The mining resulted in environmental damage the area.

http://www.riskandcompliancehub.com/indonesian-governor-sentenced-to-12-years-for-bribery/

http://www.atlanticcouncil.org/blogs/econographics/ole-moehr-2

PODCAST: PROLIFERATION NEWS REVIEW FOR MARCH

On 30^th March, the latest podcast from Arms Control Wonk Andrea discusses the new UN Panel of Experts report on North Korea’s illicit arms dealing, whether the DPRK is helping reconstitute the Syrian chemical weapons program, and some long-awaited discussions on Myanmar’s acquisition of North Korean ballistic missile systems.

https://www.patreon.com/acwpodcast/posts?tag=Podcast

HUNGARY’S “GOLDEN VISA” SCHEME

On 29^th March, Transparency International published an article referring to a series of investigations by the Organized Crime and Corruption Reporting Project (OCCRP) into EU member states’ Golden Visa programmes, showing show how governments have been trading citizenship or residence rights for investment and the risks such schemes may pose.  The Hungarian Investment Immigration Program is a controversial programme that is currently no longer accepting applications, there have been talks that the government may resume the programme after the 2018 parliamentary election.  It allows non-EU citizens to acquire Hungary’s permanent residency status by investing at least €300,000 in special Hungarian government bonds. Different to other Golden Visa schemes, individuals investing in the Hungarian programme are fully repaid after 5 years with a fixed interest rate of 2%.  Another unique feature is that foreigners do not directly invest in the residency government bonds, instead the investment is made through designated intermediary companies with opaque ownership structures.

https://voices.transparency.org/hungarys-controversial-golden-visa-scheme-ins-and-outs-daf8961df85d

ANTONOV: THE UNSUNG VICTIM OF THE RUSSIA-UKRAINE CONFLICT

On 30^th March, the Carnegie Moscow Center published an article about the Antonov aircraft manufacturing company, a former Soviet and now Ukrainian company, and maker of the world’s largest aeroplane (the An 225) and the An 124 used for very heavy lift cargo movements (and by the Russian Air Force).  The article provides a potted history of Antonov, which was established in Novosibirsk in 1946 as Research and Design Bureau No. 153, where it produced the classic An-2 biplane light transport (used for crop-dusting, and even now seen for use by parachuters).  It moved to Kiev in 1952 and went on to produce dozens more iconic Soviet planes, from the regional An-24 jet that carried 30% of all Soviet air passengers to the large cargo planes that it focused on from the 1960s.  following the collapse of the Soviet Union, Antonov fared far better than Moscow-based construction bureaus such as Tupolev, Ilyushin, and Yakovlev.  In 2015, Antonov became part of the state-run Ukraine Defense Industry Corporation, but it has been 3 years since Antonov produced a serial aeroplane.  It has no solid contracts, not even from the Ukrainian government.  Whilst Russian co-operation in the aerospace industry continues despite sanctions – Russia continues to provide titanium parts and engineering solutions to global aircraft markets – this is a different story where Ukraine is concerned.

https://carnegie.ru/commentary/75944?utm_source=rssemail&utm_medium=email&mkt_tok=eyJpIjoiTjJWaU9ERmlaVGxsT0RSbSIsInQiOiJFVythWHVDUWppdVlJOUo4VytGeHU5ZEQ5TmNLVzhuRnFDYzlydWU4QkpudDlCRHgwNnZFQTMrRnExUUlPdU9DdGxGNVN6Y3F6akpUR3Q0ZUZ2NTBDZ01nN1orcjkzK2ZNekx4WGJWTk1xXC9ZQnVjY1drbk9Ecm5haUsra0xYbjIifQ%3D%3D

ARIZONA BITCOIN TRADER CONVICTED FOR CRYPTO MONEY LAUNDERING

Coindesk on 30^th March reported that an Arizona bitcoin trader been convicted for using the cryptocurrency to launder the proceeds of drug deals.  Thomas Mario Costanzo, who goes by Morpheus Titania on Twitter and operated a peer-to-peer bitcoin exchange website, was found guilty of charges of 5 money laundering by a federal jury in Phoenix on March 28^th.

https://www.coindesk.com/arizona-bitcoin-trader-convicted-for-crypto-money-laundering/?src=ilaw

MALTA WATCHDOG PROPOSES NEW BLOCKCHAIN GAMING GUIDELINES

Coindesk on 30^th March reported that the Malta Gaming Authority (MGA) has published proposed guidance on using distributed ledger technology and cryptocurrencies within the nation’s online gaming space.  The consultation document is available at –

http://www.mga.org.mt/wp-content/uploads/MGA-Public-Consultation-Guidance-on-the-use-of-Distributed-Ledger-Technology-and-the-acceptance-of-Virtual-Currencies-through-the-implementation-of-a-Sandbox-Environment.pdf

https://www.coindesk.com/malta-watchdog-proposes-new-blockchain-gaming-guidelines/?src=ilaw

UKRAINIAN BUSINESSMEN LINKED TO RUSSIAN “FRONT MAN” FOR EQUATORIAL GUINEA’S RULING OBIANG FAMILY

OCCRP on 30^th March reported that an alleged Russian “front man” for Equatorial Guinea’s ruling Obiang family counts 2 notable Ukrainian businessmen among his associates: Vladimir Yevdokimov and Roman Chelnokov – a former security official who was once imprisoned for smuggling missiles to Iran and an arms dealer with business interests throughout Ukraine’s civilian airports.  The Russian, Vladimir Kokorev, 63, was arrested in Panama in 2015 along with his wife and son on allegations that they had played a key role in facilitating the looting of Equatorial Guinea by the family of the world’s longest-serving president.  They were then reportedly extradited to Spain and are awaiting trial.  The arrests followed an initial complaint alleging that Kokorev laundered $26.5 million of oil money embezzled from Equatorial Guinea into Spanish real estate and it is reported that Spanish investigators believe Kokorev has facilitated corrupt weapon sales.  Yevdokimov had a colourful history and has been linked to various movements of weaponry and dual-use goods, including alleged air shipments from North Korea to Iran.  The article provides background details on both Vladimir Yevdokimov and Roman Chelnokov.

https://www.occrp.org/en/28-ccwatch/cc-watch-indepth/7847-ukrainian-businessmen-linked-to-russian-front-man-for-equatorial-guinea-s-ruling-obiang-family

MARITIME THREAT ‘ONE OF THE MOST DYNAMIC ASPECTS’ OF GLOBAL KIDNAPPINGS IN 2017

Homeland Security Today on 24^th March reported that a review by Control Risks of global kidnapping trends in 2017 found that seizures at sea were one of the “most dynamic aspects of the crime,” with danger spots for ships continuing to shift.  For example, the Philippines-based Abu Sayyaf Group offshore kidnap threat – a significant development in the 2016 kidnapping environment – all but disappeared from the Sulu Sea while the group focused its operations and resources elsewhere.  However, the Gulf of Guinea remained the global hotspot for offshore kidnapping, but there were fluctuations in the pattern of the threat in the region.

https://www.hstoday.us/subject-matter-areas/maritime-security/maritime-threat-one-most-dynamic-aspects-global-kidnappings-2017/

MAYOR OF SENEGAL’S CAPITAL JAILED FOR FRAUD

The Anadolu Agency on 30^th March reported that Khalifa Sall has been convicted of embezzling $3.4 million funds meant for development of Dakar.

https://aa.com.tr/en/africa/mayor-of-senegal-s-capital-jailed-for-fraud/1104163

HOME OFFICE STATEMENT ON PRE-CHARGE BAIL

The Home Office blog on 30^th March responded to a BBC story on police releasing people arrested for violent crimes without bail since the 28-day limit on pre-charge bail was introduced, saying that victims of violence were potentially being placed at risk.  The statement says that the Minister for Policing and the Fire Service wrote to Chief Constables in December, asking them to review their forces’ use of bail in order to ensure that those who objectively should be on bail are not being released without conditions.

https://homeofficemedia.blog.gov.uk/2018/03/30/statement-on-pre-charge-bail/

GUYANA ASKS ICJ TO CONFIRM ITS BORDER WITH VENEZUELA

Law 360 on 30^th March reported that Guyana asked the International Court of Justice to confirm a 119-year-old arbitral award setting the location of the country’s western boundary with Venezuela, following decades of unsuccessful negotiations and attempts to settle a controversy that has revived in recent years following the offshore discovery of oil.

https://www.law360.com/articles/1027976

KPMG HIT BY HONG KONG HIGH COURT DECISION IN $400 MILLION FRAUD CASE

KYC 360 reported on 30^th March that KPMG has suffered a major setback in its battle against liquidators of former US-listed healthcare firm China Medical Technologies Inc, whose executives have been charged in the US with defrauding investors out of over $400 million.  Hong Kong’s High Court rejected a KPMG procedural request that would limit the time in which China Medical liquidators can pursue claims against KPMG for losses and damages for its audits of the now-defunct company.  A substantive hearing on that action is widely expected later this year.

https://kyc360.com/news/kpmg-hit-hong-kong-high-court-400-million-fraud-case/

SEC CHARGES 2 WITH SELLING ELDERLY INVESTORS DEFUNCT PRE-REVOLUTIONARY CHINESE BONDS

On 30^th March, the SEC announced that it had charged the pastor of one of the largest Protestant churches in the US and a self-described financial planner in a scheme to defraud elderly investors by selling them interests in defunct, pre-Revolutionary Chinese bonds.

http://www.mondovisione.com/media-and-resources/news/sec-charges-prominent-pastor-financial-planner-in-scheme-to-defraud-elderly-inv/

 

If you want to read the reasons given for the UN listing individuals and entities related to ISIL (Da’esh), Al-Qaida and associated individuals and entities sanctions go to –

https://www.un.org/sc/suborg/en/sanctions/1267/aq_sanctions_list/summaries

On 29^th March, the relevant UN Security Council Sanctions Committee added 1 entry to its sanctions list – KHATIBA IMAM AL-BUKHARI (KIB), for being associated with ISIL or Al-Qaida for “participating in the financing, planning, facilitating, preparing, or perpetrating of acts or activities by, in conjunction with, under the name of, on behalf of, or in support of”, “recruiting for”, “otherwise supporting acts or activities of ” and “other acts or activities indicating association with” Al-Nusrah Front for the People of the Levant.  Information on KIB and the reasons for its listing can be found at –

https://www.un.org/sc/suborg/en/sanctions/1267/aq_sanctions_list/summaries/entity/khatiba-imam-al-bukhari-%28kib%29

https://www.un.org/press/en/2018/sc13271.doc.htm

On 30^th March, Shearman & Sterling published an article saying that FATF has published its report to G20 Finance Ministers and Central Bank Governors.  In the report, FATF reiterates its commitment to tackle all sources, techniques and channels used in terrorist financing and to continue its work to increase financial transparency and improve the environment for remittances.  The report provides an update on workstreams –

• strengthening the FATF’s institutional basis, governance and capacity;
• countering the financing of terrorism and proliferation;
• improving transparency and the availability of beneficial ownership information;
• supporting financial inclusion and access to regulated financial services;
• bank de-risking and the impact on remittances;
• FATF engagement with judges and prosecutors to improve the effectiveness of the criminal justice system; and
• the risks and opportunities of FinTech, RegTech and virtual currencies

A further update will be provided in November/December 2018.

https://www.jdsupra.com/legalnews/financial-action-task-force-report-to-20877/

The report is available at –

http://www.fatf-gafi.org/media/fatf/documents/FATF-G20-FM-CBG-March-2018.pdf