22nd March 2018
US LAWMAKERS LAUNCH BILL BOLSTERING NUCLEAR PROLIFERATION SAFEGUARDS
On 22nd March, Energy World and others reported that a Bill had been introduced into the US Congress that would ensure that countries striking deals with Washington on sharing nuclear power technology abandon fuel-making activities that could be altered to make material for nuclear weapons. The Bill would reform current US nuclear energy law to force countries in nuclear partnerships to renounce the pursuit of enrichment and reprocessing technologies and capabilities. The Bill also requires a stronger approval process by Congress of civilian nuclear deals.
UN SECURITY COUNCIL RENEWS MANDATE OF DPRK PANEL OF EXPERTS
The Global Times on 22nd March reported that the UN Security Council had unanimously adopted Resolution 2407 extending the mandate of the Panel of Experts assisting the 1718 Democratic People’s Republic of Korea (DPRK) Sanctions Committee until April 24th 2019. The newly adopted Resolution determines that “proliferation of nuclear, chemical, and biological weapons, as well as their means of delivery, continues to constitute a threat to international peace and security”. The Panel of Experts established in 2009 supports the work of the Sanctions Committee through expert analysis, particularly in evaluating cases of non-compliance. While the Committee can make legally-binding decisions on how to specifically execute the sanctions, the Panel of Experts only has an informational and advisory role in support of those decisions.
COUPLE CHARGED IN US WITH SYRIAN BOMB EQUIPMENT PLOT
The Boston Herald on 21st March reported that Anni Beurklian, 49, and Antoine Ajaka, 50, fled the US in January as they were negotiating a plea deal for sending electronic components to a company that the US suspects of making bombs used against US forces in Iraq and Afghanistan, and have been indicted for allegedly doing business with a suspected Syrian bomb-maker. Amir Katranji 52, a Syrian resident who owns EKT, the Syrian company involved, was also indicted. Prosecutors said that the US government determined that EKT was involved in activities related to “the acquisition, attempted acquisition, and/or development of improvised explosive devices (IED)”. Since 2007, no US person has been permitted to export US goods to EKT without first obtaining an export licence from the Department of Commerce.
NORWAY’S OVERSIGHT OF E-MONEY AGENTS REQUIRES MORE ATTENTION
On 21st March, Payments Compliance reported on the FATF update report on Norway, in which it was said that oversight of overseas payments and e-money businesses was still lacking overall improvement for the purposes of AML/CFT control.
US DOJ INDICTS PAYZA DIGITAL PAYMENT COMPANY IN $250 MILLION MONEY LAUNDERING CASE
On 22nd March, it was reported that the US DoJ had filed a lawsuit citing digital payment service provider and cryptocurrency exchanger Payza for allegedly running an unlicensed money services business and abetting money laundering. Ferhan Patel from Montreal, one of Payza’s founders has been arrested in Detroit and his brother Firoz Patel sought. According to the DoJ, MH Pillars Ltd, doing business as Payza, allegedly processed more than $250 million of proceeds from Ponzi schemes, child pornography rings, and other criminal enterprises. The lawsuit also mentions about two more payment processing services, AlertPay and EgoPay, which the duo was said to have owned and operated. EgoPay was shut down in 2015, following an unconfirmed hacking incident.
WASHING MACHINES PLACED ON TOP OF PLAQUE COMMEMORATING OPENING OF PILATUS BANK IN MALTA AND OUTSIDE MALTA FSA
On 21st March, the Times of Malta reported that a washing machine has been placed on top of a plaque commemorating the opening of Pilatus Bank in Malta, hours after its chairman was charged in the US with money-laundering activities. Another washing was placed outside the offices of the Malta Financial Services Authority.
AUTHORITIES SEIZE CONTROL OF BANK AT CENTRE OF MALTA CORRUPTION SCANDAL
The Guardian on 21st March reported that Maltese authorities have taken control of a bank at the centre of a corruption scandal that was exposed by murdered journalist, Daphne Caruana Galizia. The Malta FSA said that it took control of Pilatus Bank after the arrest and indictment in the US of its Washington-based Iranian owner, Ali Sadr, who was charged in the US with money laundering and evading sanctions on Iran.
RUSSIAN CAR DEALER TOOK COUNTRYMEN FOR A RIDE, LAUNDERED THE DIRTY MONEY
NJ.com reported on 21st March on Sergey Kapustin, a 49-year-old Russian car dealer in New Jersey, who admitted to ripping off his former countrymen by offering up flooded-out salvage vehicles as luxury cars he never delivered. He offered citizens of Russia, Ukraine and other former Soviet countries high-end vehicles at prices below market value and would ask his customers to wire the full purchase price to him in advance. Most never arrived and he was arrested by FBI agents at his home in December 2016.
STOKE POGES MONEY LAUNDERER, ORDERED TO PAY MORE THAN £1 MILLION WITHIN 3 MONTHS OR SPEND ANOTHER 7 YEARS IN JAIL
The Bucks Free Press on 21st March reported that former businessman, Sandeep Singh Gill, 43, who was jailed for laundering money from an online baking service used by criminals has been ordered to pay back more than £1 million within 3 months or spend another 7 years in prison and still owe the money. He was jailed for 6 years in June 2016 following an HMRC investigation that found he had laundered criminal cash through a string of bank accounts in Portugal, Cape Verde, Jersey, Cyprus, and finally into his Swiss bank accounts. Gill laundered money through the online banking service Universal Mercantile Building Society EF (UMBS). Its sister company, UMBS Online, was an illegal online banking facility, which was convicted of illegal trading in March 2011 and was used by criminals to move dirty money between bank accounts. He helped legitimise the financial transactions of account holders by producing false bank statements and documents.
NIGERIAN POLITICIAN IBORI APPEALS AGAINST UK FRAUD CONVICTION
Swissinfo on 21st March reported that James Ibori, a Nigerian politician who spent years in UK jails after pleading guilty to laundering a stolen fortune in Britain, has launched an appeal against his conviction, alleging corruption in the ranks of British police. As governor of oil-producing Delta State from 1999 to 2007, Ibori became one of Nigeria’s most powerful men and enjoyed a millionaire lifestyle, with properties and luxury cars in several countries. At the time of his arrest he was in the process of buying a $20 million private jet. His conviction in 2012, after he admitted 10 counts of fraud and money-laundering, was a rare example of a big player in Nigerian politics being held to account for corruption.
ISLE OF MAN AIRCRAFT REGISTRY HITS 1,000TH REGISTRATION MILESTONE
Flight Global on 21st March reported that the Isle of Man Aircraft Registry has notched up its 1,000th M-prefixed registration – a Gulfstream G650ER: M-JSWB. It currently lists around 440 active M-prefixed aircraft, making it the 6th largest business aircraft registry in the world and the second largest in Europe. While business aircraft and helicopters make up the bulk of the current IOMAR tally, commercial airliners that are temporarily registered between operational leases account for around a dozen registrations.
HMRC DETAILS OF DELIBERATE TAX DEFAULTERS
HMRC publishes details of people who deliberately get their tax affairs wrong, this is the current list of defaulters, issued on 22nd March.
EU EXTENDS ITS LIBYAN SANCTIONS TO 2 OCTOBER 2018
EU Council Decision 2018/476/CFSP had the effect of extending the EU sanctions relating to Libya to 2nd October 2018.
HEFTY SENTENCES FOR ABALONE SMUGGLERS IN SOUTH AFRICA
Defence Web on 22nd March reported that specialist police unit The Hawks in the Western Cape have welcomed the hefty sentences imposed on 5 suspects who operated an illegal abalone enterprise. The Hawks’ intelligence-driven investigation exposed export companies which were dealing with illegal abalone concealed in containers and shipped to China. Various plants were raided, abalone seized and 18 suspects were arrested and brought to Court. 2 were sentenced to 15 years, 1 to 8 years and 1 to 4 years, with another receiving a suspended sentence of 1 years’ imprisonment.
Abalone, or perlemoen it is also called in South Africa, is the name for a group of large, flat sea snails of the genus Haliotis.
OECD: POLAND MUST MAKE URGENT LEGISLATIVE REFORMS TO COMBAT FOREIGN BRIBERY
On 22nd March, a news release from the OECD says that Poland must make urgent progress on carrying out key recommendations of the OECD Working Group on Bribery that remain unimplemented, more than 4 years after its Phase 3 evaluation in June 2013. It says that Poland still needs to take urgent steps to ensure companies can be held responsible for foreign bribery, even if the persons who perpetrated the offence are not convicted. In addition, Poland must increase the fines for companies in order to ensure foreign bribery is punishable by effective, proportionate, and dissuasive sanctions. The Working Group say it is disappointed by Poland’s failure to take measures to ensure that the “impunity” provision in the Penal Code that applies to foreign and domestic bribery cannot be applied to the bribery of foreign public officials.
SWEDEN SEES SURGE OF CYBERCRIME WITH CRYPTO-JACKING CASES UP 10,000%
Finance Magnates on 22nd March reported that criminals are switching to hijacking victims’ computers to mine cryptocurrency. Fuelled by the massive growth of cryptocurrencies since mid-2017, the number of crypto-jacking cases went up by 10,000 percent in the last quarter 2017 – twice the global growth rate for the same period.
DARK WEB DRUG DEALERS GET 56 YEARS SENTENCES
A NCA news release on 21st march reported that 5 members of prolific dark web drug dealing group have been jailed for a total of 56 years following a NCA investigation. Londoners Basil Assaf, Elliot Hyams, Jaikishen Patel, all 26, and James Roden, 25 were students at Manchester University when they began selling drugs on the notorious Silk Road website. Junior member Joshua Morgan, 28, of Manchester, was paid to package drugs for the group. Led by Assaf, the group moved their small-time drug dealing operation on to Silk Road in May 2011 and were soon running one of its most successful businesses. Under the brand-name Ivory they sent drugs including LSD, ecstasy, 2CB, ketamine and valium to buyers around the world.
UK COURT CLEARS KAZAKH BANK TO SUE EX-CHAIR’S RELATIVE
Law 360 on 22nd March reported that the UK Court of Appeal paved the way for JSC BTA Bank to sue the son-in-law of former chairman Mukhtar Ablyazov, finding that the bank can bring a claim of unlawful means conspiracy against Ilyas Khrapunov. The bank alleges that Khrapunov conspired to help his father-in-law, Ablyazov, dodge a worldwide asset-freezing order. Ablyazov, who was chairman between 2005 and 2009, plundered billions of dollars from the bank, it claims.
BITTER PILL FOR POLISH MEDICINE SMUGGLERS
Customs Today on 22nd March reported that Poland’s right-wing government said it would go after smugglers whose illegal medicine exports to countries like Germany have left Poland with a shortage of pharmaceutical products – with a draft amendment that would hand a jail sentence of up to 10 years to anyone who sells or purchases medicine illegally. Bought in Poland, where many products are considerably cheaper than in neighbouring Germany which uses the euro, the medicines is then sold abroad at higher prices.
TRAFFICKED BY VOODOO THREATS: OPERATION IN EUROPE RESCUES 39 NIGERIAN WOMEN
On 22nd March, a news release from Europol reported that the Spanish Guardia Civil in collaboration with the National Agency for the Prohibition of Trafficking in Persons (NAPTIP) from Nigeria and the UK NCA, have dismantled a Nigerian organised crime group in one of the largest operations against trafficking in human beings in Europe. This particular criminal network was active across multiple Member States, with victims trafficked from Nigeria to Europe via Libya and Italy. The investigation began when one of the underage victims filed a complaint with the police; she reported she was coerced into trafficking by voodoo threats in Nigeria. Police officers carried out 41 house searches in Spain and in Manchester. The bank accounts used by the organisation to launder more than €300 000 from the illicit activity have been blocked. In total the operation resulted in 89 arrests and 39 victims were safeguarded.
HONG KONG REGULATOR STEPS IN TO HALT INITIAL COIN OFFERING (ICO)
On 21st March, Out-Law reported that the Securities and Futures Commission (SFC) said it had concerns that Black Cell Technology’s ‘initial coin offering’ (ICO) to the public in Hong Kong was promoted in breach of regulatory requirements.
28 TONNES OF ILLEGAL TOBACCO DESTROYED IN AUSTRALIA
TJI on 21st March reported that 28 tonnes of illegally-grown tobacco and 45,000 seedlings have been destroyed by authorities near the provincial Queensland city of Bundaberg, the Brisbane Times reported. The destroyed crop was estimated to have been worth a$30 million and its seizure was the result of the “largest cross-agency operation in the Australian Tax Office’s history”, the newspaper reported. No arrests were made.
PAKISTANI BALLISTIC AND CRUISE MISSILE MODELS
NTI has produced a guide to Pakistani missiles with 3D modelling.
See also –
FAA MULLS OPTIONS FOR MORE TRANSPARENT AIRCRAFT REGISTRY
AIN Online on 21st March reports that Boston Globe articles have criticized the FAA registry for obscuring the true owners of aircraft used for illegal activities such as human or drug trafficking. However, a spokesman for the FAA said an internal audit revealed that only a “very, very small percentage” of US-registered aircraft are used for illicit purposes. However, ongoing, simultaneous reviews of the FAA aircraft registry by the DOT Inspector General and the Government Accountability Office — both prompted by the Boston Globe reports — had led to the FAA internally debating options to increase owner transparency. Some would barely upset the status quo, while others would make sweeping changes to the amount of owner information the FAA collects.
PERU PRESIDENT UNDONE BY CORRUPTION SCANDALS HE VOWED TO END
KYC 360 on 22nd March reported that Pedro Pablo Kuczynski resignation means that he joins a long list of recent Peruvian presidents undone by scandals that have destroyed voters’ trust in their elected officials. For months, as 3 of his predecessors were probed and 1 even jailed for taking bribes from Brazilian construction firm Odebrecht, Kuczynski steadfastly denied having any business or political ties with the company at the heart of Latin America’s biggest graft scandal. Then opponents produced confidential bank documents from Odebrecht showing $780,000 in decade-old payments to his consulting firm. Kuczynski said he had no knowledge of the payments that overlapped with his years as a government minister and said that in any case had paid taxes on all of his earnings.
THE OTHER SIDE OF THE NORTH KOREAN THREAT: LOOKING BEYOND ITS NUCLEAR WEAPONS AND ICBM
On 19th March, the Center for Strategic and International Studies published a study outlining the other weapons and forces available to North Korea, as well as its biological warfare capabilities.
THE POLITICS BENEATH ROSNEFT’S BOTTOM LINE
In an article published on 21st March, Intersection said that Rosneft’s proximity to the Russian state is a mixed blessing internationally, particularly in a context of sanctions, but has allowed for a dominant market position in Russia itself. It contains a potted history of the background to the company.
GREEK EX-MINISTER’S COUSIN CHARGED WITH MONEY LAUNDERING
Ekathmerini in Greece on 22nd March reported that Nikolas Zigras, the first cousin of former defence minister, Akis Tsochatzopoulos, who is serving time for kickbacks from state procurement contracts, faces charges of money laundering after Swiss prosecutors said they had traced a bank transfer of about €306,000 to an account in his name.
The money has been linked to one of the defence contracts that Tsochatzopoulos signed. The alleged bank transfer into Zigras’s account was traced by Swiss authorities in response to a request by their Greek counterparts.
SHELL COMPANY FRONTMEN FACE JAIL IN CRACKDOWN ON DIRTY MONEY IN UK PROPERTY
The Belfast Telegraph on 22nd March reported that frontmen of foreign shell companies which own some of London’s most exclusive properties could face up to 2 years in jail and unlimited fines if they fail to disclose their true owners’ identity, ministers have said. Under the proposals foreign companies must make clear who ultimately owns the properties in question through the world’s first public register of beneficial ownership. This follows the publication of a government response to a consultation on a register of beneficial ownership held last year.
ZAMBIA CHARGES MINING TRANSNATIONAL WITH MULTI-BILLION FRAUD
Prensa Latina on 22nd March revealed that the mining company accused of $8 billion tax dodge in Zambia in Canadian transnational, First Quantum Minerals, which is said to have evaded the taxes due to the import of equipment for its operations in Zambia, one of the main producers of copper on the planet.
SWISS STAGE RAIDS IN PROBE OF DEFENCE DEALS WITH PUTIN LINKS
The Seattle Times on 22nd March reported that Swiss federal authorities searched house and seized documents following claims by state-owned defence contractor Ruag of possible criminal wrongdoing, reportedly in connection with allegations about shady business practices and bribery. The Swiss attorney general’s office said that it opened a case for possible criminal mismanagement, misconduct in office, and violations of a law governing war material. Swiss newspaper, Handelszeitung reported Swiss businessmen including the current chief of Julius Baer private bank in Moscow and a top executive of Ruag Amnotec, Ruag’s ammunition division, had delivered handguns and sniper rifles worth several million dollars to bodyguards of the Russian leader.
ARREST WARRANT ISSUED FOR KOREAN EX-PRESIDENT LEE MYUNG-BAK OVER CORRUPTION CLAIMS
France 24 reported on 22nd March that a South Korean court approved an arrest warrant for ex-President Lee Myung-bak over a range of corruption allegations, making him the latest in a series of leaders embroiled in scandals and other problems after leaving office. It is alleged he also used a private company as a channel to establish illicit slush funds totalling $33 million, embezzled its official funds and evaded taxes.
SWISS GOLD REFINERS ACCUSED OF SOURCING ILLEGAL AND CONFLICT GOLD
Swissinfo on 22nd March reported that a report by the NGO Society for Threatened Peoples (STP) has accused Swiss gold refiner Metalor of procuring gold from controversial suppliers in Peru. Metalor denies the charge. The STP report also accused Swiss gold refiners of laxness concerning imports from the UAE, which it deems to be a hub for conflict gold from African countries. It pointed fingers at the Swiss refiner PAMP.
The report is at –
MEXICO: WELCOME TO INSIDER TRADING PARADISE WHERE NO ONE WORRIES ABOUT JAIL
Fortune on 22nd March published an article saying that insider trading is rife in the $400 billion Mexican stock market — and almost everyone knows it. As in the US, trading on non-public information is illegal. Mexico’s financial regulator has been making penalties public only since 2008, and just 28 people have been punished since then.
SFO TO RECOVER £4.4 MILLION FOLLOWING “CHAD OIL” CORRUPTION CASE
Energy Voice on 22nd March reported that the UK SFO is to recover £4.4 million lost in a corruption case involving bribes to Chadian diplomats in the US and Canada. The article says that African oil business Griffiths Energy, which has since been bought by London-based commodities trader Glencore, bribed Chadian diplomats to secure exclusive contracts through the front company “Chad Oil”, which was set up 5 days before the agreements were signed. In 2013, Griffiths self-reported the transactions as bribes intended to illegally secure commercial interests and pleaded guilty to corruption charges brought by authorities in Canada. In 2014 the SFO began civil proceedings to recover the share sale profits.
HOW BELGIUM OVERCAME THE THREAT FROM RETURNING FOREIGN TERRORIST FIGHTERS
On 22nd March, the Royal United Services Institute published an article which starts by saying that 2 years have passed since terrorists struck at the heart of Brussels, and Belgium has done well in dealing with the threat. However, complacency may be setting in. Over the past 4 years, Belgian authorities have sought to craft a coherent response to the returnees’ challenge. Anyone returning from the Levant now faces pre-trial detention and a 3- to 5-year (and sometimes longer) prison sentence. In jail, they are spread among the general prison population with individual security measures and monitoring, as well as constant assessment of radicalisation behaviour by trained staff and special units. Moreover, inmates are offered tailor-made disengagement programmes and probation measures to facilitate their return to society.
EU COURT REJECTS APPEAL AGAINST LISTING OF FORMER UKRAINE COAL MINISTER
The European Sanctions Blog on 22nd March reported that the EU General Court has rejected the appeal by Edward Stavytskyi, former Minister for Energy and the Coal Industry of Ukraine, against his inclusion on the EU Ukraine sanctions lists.
SLOVENIA AND KOSOVO APPREHEND MAJOR PEOPLE-SMUGGLING ORGANISED CRIME GROUP IN BALKANS
On 22nd March, Europol reported that law enforcement authorities arrested 12 migrant smugglers operating in the Balkans. Slovenia, Kosovo, the European Union Rule of Law Mission in Kosovo (EULEX) and Europol arrested the individuals as part of a cross-border operation to dismantle an organised crime group based in the area. Over the past year the group has smuggled 300 people, including minors, to Europe a month. The smugglers charged the migrants €2,500 to €3,000 each and made €900 000 every month through their illegal activities.
CANADA SEIZING FEW SHIPMENTS OF FAKE GOODS DESPITE LAW TARGETING COUNTERFEITS
CBC on 22nd March reported that new border controls meant to curb imports of counterfeit goods into Canada have had little impact, newly released figures suggest. In the 3 years since the Combatting Counterfeit Products Act came into force, custom officers have detained just 48 shipments — an average of 16 each year, and most of the suspect goods eventually were released when the cases failed to move forward. The issue of counterfeit goods in Canada is a major irritant in the trading relationship with the US, which as recently as January cited lax enforcement.
2017 KIDNAPPING TRENDS: INFOGRAPHIC
Control Trends on 22nd March produced an infographic in pdf form summarising trends for 2017.
EU PARLIAMENT APPOINTS CHIEF FOR NEW MONEY LAUNDERING AND TAX EVASION COMMITTEE
KYC 360 reported on 22nd March that the European Parliament has announced the appointment of Czech politician, Petr Ježek, as head of its new financial crime TAX3 committee, recently formed to address tax evasion, avoidance and other crimes such as money laundering. He has served as co-rapporteur for the previous PANA committee on money laundering and tax evasion linked to the Panama Papers and other related issues. He is also a member of the ECON and LIBE groups, or Committee on Economic and Monetary Affairs and Committee on Civil Liberties, Justice and Home Affairs, respectively.