19th March 2018
UK DEFENCE INDUSTRY URGES GOVERNMENT TO RELAX CONTROLS ON CRYPTO EXPORTS
On 16th March, Computer Weekly reported that a trade body representing defence, aerospace and security companies calls on government to make it easier to export “non-contentious” cryptography to secure organisations against cyber crime. Giving evidence to the Arms Export Controls Committee, Paul Everitt of ADS said that the current approval system for open individual export licences was “fraught with perceived problems and delays”. He told MPs that companies needed easier access to what he called “non-contentious cryptography” to secure their businesses against hacking and cyber crime.
RUSSIAN DESCRIBED AS GUN DEVELOPER FOR KALASHNIKOV CHARGED IN US
On 16th March, the Washington Post reported that Evgeny Viktorovich Spiridonov, 39, a Russian citizen described as a gun developer for Kalashnikov, is expected to plead guilty to a federal charge of attempting to violate US export controls, after being arrested at Los Angeles International Airport in January after leaving a major gun show in Las Vegas and attempting to board a flight for Moscow. He had ordered a $2,400 restricted advanced tactical rifle scope from a Pennsylvania gun dealer.
SANCTIONS AND KASPERSKY LABS
On 15th March, Lawfare published a long article by a Fellow at Stanford’s Center for International Security and Co-operation about Moscow-based anti-virus company, Kaspersky Labs. President Trump signed legislation in December 2017 banning Kaspersky products from use by Federal agencies and Kaspersky has lodged legal challenges in federal court. In the article the author explains that the US has many tools in reserve for potentially addressing the broader national security risks of Kaspersky software, and details 6 of them.
https://lawfareblog.com/us-policy-toolkit-kaspersky-labs
FRENCH CONSULATE EMPLOYEE ARRESTED BY ISRAEL FOR ARMS SMUGGLING
I24 News in Israel reported on 18th March that an employee at the French consulate in Jerusalem has been arrested by Israeli authorities and will appear in court for a “security” issue, sources close to the case said. Israeli authorities suspect him of arms trafficking, one of the sources said. France’s Le Figaro newspaper also reported that the man in question is suspected of smuggling weapons into Gaza on several occasions. The man was arrested as he crossed the border between Israel and the Gaza Strip.
SAUDIS CONTINUE TO DETAIN LARGEST INVESTOR IN ETHIOPIAN RENAISSANCE DAM
The Middle East Monitor in its 19th March edition reports that Saudi authorities continue to detain Saudi billionaire, Mohammed al-Amoudi; the largest investor in Ethiopia’s Renaissance Dam, according to the New York Times. He was detained in November in the anti-corruption campaign.
MAS FINES STANCHART SINGAPORE S$5.2 MILLION FOR AML/CFT BREACHES
Channel News Asia on 19th March reported Standard Chartered Bank, Singapore Branch (SCBS) has been fined S$5.2 million and Standard Chartered Trust (Singapore) Limited (SCTS) has been fined S$1.2 million for breaches of the Monetary Authority of Singapore’s (MAS) AML/CFT requirements, which occurred when trust accounts of SCBS’ customers were transferred from Standard Chartered Trust (Guernsey) to SCTS from December 2015 to January 2016. MAS found SCBS’ and SCTS’ risk management and controls in relation to the transfers to be unsatisfactory.
International Adviser on 19th March reported that the fines related to Guernsey transfers.
THE CONFLICT IN YEMEN AND EU’S ARMS EXPORT CONTROLS: HIGHLIGHTING THE FLAWS IN THE CURRENT REGIME
The Stockholm International Peace Research Institute on 19th March published an article which inter alia highlighted that the EU code of conduct on arms exports included a criterion that requires Member States to abide by certain standards when assessing licences for arms exports – this includes 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 unauthorised end-user or end-use. It says that NGO, parliamentarians and academics have often questioned whether EU Member States are applying the criteria of the Common Position correctly and consistently. The article asks how the requirements can be tightened and/or applied properly.
TRUMP ORGANISATION REAL ESTATE PARTNER IN INDIA ACCUSED OF ‘LARGE-SCALE FRAUD’
The Hill on 19th March reported that the Trump Organization’s real estate partner in India is being accused of at least $147 million in fraud. 2 global investment companies last month filed a criminal complaint with New Delhi police against IREO, accusing the company of engaging in “large-scale fraud,” alleging that the company was “illegally siphoning off” at least $147 million of investor money and alleging the figure could actually approach $200 million.
EU SPEEDS UP CONFISCATION OF CRIMINAL ASSETS
The International Chamber of Commerce on 19th March reported that it will soon be quicker and easier for EU Member States to request that criminal assets be seized and confiscated under recently-adopted new rules. The text agreed by the European Parliament’s Civil Liberties Committee recently introduces tighter deadlines, as well as a standard certificate to speed up procedures, and broaden the scope of the type of assets that can be seized or confiscated. MEP want states which receive a freezing or confiscation order to be bound to execute it within 20 days to reduce the time criminals have to move their assets.
https://icc-ccs.org/index.php/1243-eu-speeds-up-confiscation-of-criminal-assets
BRITAIN SAYS $500 MILLION FROM ALLEGED FRAUD CAN BE RETURNED TO ANGOLA
On 19th March, Reuters reported that the NCA said $500 million frozen in the UK as part of an ongoing investigation into a potential fraud against Angola’s central bank can be returned.
SWISS SEIZE BANK ACCOUNTS AMID PROBE LINKED TO RIO TINTO MONGOLIA MINE
Reuters on 19th March reported that Switzerland’s highest court has upheld the seizure of $1.85 million in Swiss bank accounts, part of a corruption probe linked to a former Mongolian finance minister, Bayartsogt Sangajav, who helped clear the way for a disputed Rio Tinto mining project. The Swiss Office of the Attorney General (OAG) also confirmed it has an ongoing criminal investigation in which prosecutors contend one of the seized accounts was used to transfer $10 million to the ex-minister.
POST-IMPLEMENTATION REVIEW: EXPORT CONTROL (ERITREA AND MISCELLANEOUS AMENDMENTS) ORDER 2011
On 19th March, the UK Department for International Trade set out the results of a review required by Article 9 of the 2011 Order which implements EU trade sanctions. The Order will be revoked and replaced when an equivalent instrument is laid under the forthcoming Sanctions and Anti-Money Laundering Act.
FIRMS APPOINT AML CHIEFS AS UK QUANGO LOOMS
The Law Society Gazette on 19th March reported that law firms have responded positively to requirements to appoint executives to oversee AML provisions, the Solicitors Regulation Authority has reported as the profession waits to learn how much a controversial new quango, Office for Professional Body Anti-Money Laundering Supervision (OPBAS), will hit solicitors’ pockets. The SRA said that 96% of firms have now appointed an AML compliance officer (MLCO). The compliance officer is a board level position in addition to the money laundering reporting officer (MLRO), responsible for day-to-day monitoring.
SPANISH COURT THROWS OUT €60 MILLION ONO VAT FRAUD CASE
On 19th March, Broadband TV News reported that a court in Madrid has completely dismissed a lawsuit brought by Vodafone against the management of Spanish cablenet ONO for an alleged VAT fraud of €60 million. It was alleged that inflated financial figures were based on the sale of international calling minutes, sold without the balance being subject to VAT. The former president, CEO and CFO were all dismissed by Vodafone when it took control of the company in 2014. But it has emerged that Vodafone was aware that an investigation was underway by the tax authorities during the acquisition process and had not raised any objection.
https://www.broadbandtvnews.com/2018/03/19/spanish-court-throws-out-e60m-ono-fraud-case/
VIETNAM ILLEGAL GAMBLING NETWORK RECEIVED MORE THAN $422 MILLION
Calvin Ayre on 19th March reported that new information has emerged in Vietnam’s investigation of a major illegal sports betting operation, which has resulted in the arrest of a former top cybercrime police chief along with 2 tech businessmen. A police raid led to the seizure of around $44 million in cash and other assets from the organisers. There were 2 websites, rikvip.com and rikvip.vn, in 2015, offering a card game called Rikvip, later operated as mobile and computer application under the name Tip.club. Before they could enter the games, the players had to buy virtual scores, also known as RIK, using prepaid telecom cards, game cards, or bank accounts, and they could also buy virtual scores at Rikvip agencies. The investigation showed that the group received more than $422 million in payments via “legal and illegal payment gateways,”.
LITIGATION PRIVILEGE AND TAX INVESTIGATIONS
On 19th March, law firm Berwin Leighton Paisner published a briefing saying that corporates facing an investigation by HMRC often undertake internal investigations in order to establish the facts. However, case law has cast doubt over whether interview transcripts produced during an internal investigation are protected by litigation privilege. The High Court’s decision in the recent case of Bilta v RBS now provides useful guidance on the scope of litigation privilege in the context of tax investigations.
IRISH MAN ARRESTED IN SPAIN FOR PLAN TO SELL OVER 1,100 FAKE FOOTBALL JERSEYS
Customs Today on 19th March reported that Spanish police have arrested an Irishman they say was planning to sell more than 1,500 counterfeit football tops online for a profit of €75,000. The 37-year-old was held in the Costa Blanca resort of Torrevieja after officers confiscated the Chinese-made sportswear at Alicante Airport.
ON THE TRAIL OF CASH COMING THROUGH DULLES AIRPORT
WCO Iris on 19th March reports that large amounts of seized cash have been piling up at Dulles International Airport, Washington DC, and all with a connection to one country – Ghana. Since July, there have been 10 seizures of large amounts of undeclared cash carried by people going to or coming from Ghana. In September, one man was stopped with more than $150,000 on him.
https://wtop.com/local/2018/03/behind-invisible-wall-trail-cash-coming-dulles/
NEW INFORMATION SURFACES ON SRI LANKA’S TAINTED MIG 27 DEAL WITH UKRAINE
Alert 5 on 19th March reported that Sri Lanka’s Sunday Times has uncovered new evidence in its 3-year investigation into alleged corruption on the purchase of MiG 27 jet fighter-bombers from Ukraine. A document signed between Ukraine’s arms export company Ukrinmarsh and the Sri Lanka Air Force has turned out to be a fake, and the Ukranian Prosecutor General has told Sri Lanka that the deal is fraud. It seems that in reality, the agreement with Ukrinmarsh has been with the Singapore based D.S. Alliance, which had supplied the MiG 27 fighter jets to the Air Force. Sri Lanka paid $ 10 million for 4 MiG 27 in 2006. 2 of these fighter jets were grounded after being purchased and unserviceable during the warranty period.
http://www.sundaytimes.lk/180318/news/mig-fraud-fcid-finds-startling-new-details-286582.html
WOLFSBERG GROUP FAQ ON HOW TO MANAGE COUNTRY RISK IN THE CONTEXT OF FINANCIAL CRIME COMPLIANCE
On 19th March, the Wolfsberg Group published its FAQ on how to manage Country Risk in the context of Financial Crime Compliance. Country risk is widely used as a factor in customer risk assessment and was first addressed by the Group in the 2006 Risk Based Approach to Managing Money Laundering Risks. The Wolfsberg Group hopes that these FAQ will contribute to the promotion of a better understanding of country risk, and effective risk management more broadly, across the industry and further the goal of its members to prevent the use of their institutions for criminal purposes.
https://www.wolfsberg-principles.com/articles/publication-country-risk-faqs
INVESTIGATION BLAMES RUSSIAN FACILITY FOR LAST YEAR’S RUTHENIUM ISOTOPE LEAK
On 23rd February, Chemistry World reported that in September/October 2017, the radionuclide ruethenium-106 was detected all over Europe – the first time it had been recorded on such a scale since the Chernobyl disaster. A nuclear reprocessing facility in Russia became the focus of attention. In their final report, the French Institute for Radioprotection and Nuclear Safety (IRSN) has confirmed that a significant quantity of ruthenium was released from the South Ural region, probably from processing of spent nuclear fuel. But the Russian authorities deny any leaks occurred at their facilities in this area and are seeking further data on weather effects. IRSN says the release probably occurred either during a fuel processing operation or during refining of fission products, and that it favours the second suggestion.
MALTESE SUPERYACHT COMMUNITY CHALLENGES EUROPEAN COMMISSION
Superyacht News on 19th March reported that the Malta Maritime Law Association, the Malta Maritime Forum, the Yachting Services Trade Section with the Maltese Chamber of Commerce, Enterprise and Industry, the Institute of Financial Services Practitioners and the Super Yacht Industry Network Malta have joined to denounce the recent notice sent to Malta by the EU in connection with the Maltese VAT rules for pleasure yachts.
http://www.superyachtnews.com/business/maltese-superyacht-community-challenges-eu-commissioner
FINANCIAL STABILITY BOARD RELEASES UPDATED DATA REPORT ON CORRESPONDENT BANKING
On 19th March, Shearman & Sterling published a briefing which says that the latest report updates the data report the FSB published in July 2017 alongside a report for the G20 on progress made on the 4-point action plan the FSB launched in November 2015 to address the decline in correspondent banking relationships. The latest data report updates the July 2017 data report with additional information provided by SWIFT incorporating the period from January to June 2017.
https://www.jdsupra.com/legalnews/financial-stability-board-releases-35776/
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