23rd March 2018
SANCTIONS ANNOUNCEMENT REVEALS HACKS OF US CRITICAL INFRASTRUCTURE
An article from the Carnegie Center on 16th March comments that one genuine piece of news behind the recent additional US sanctions against Russian individuals and organisations is the attribution to Russia of a cyberhacking campaign that has targeted critical US infrastructure. The US Treasury is quoted as saying that since at least March 2016, Russian government cyber actors have also targeted … the energy, nuclear, commercial facilities, water, aviation and critical manufacturing sectors, and the article says that this attribution reinforces the need to secure critical infrastructure.
MAN GETS 5 YEARS, 8 MONTHS’ JAIL, $30 MILLION FINE FOR SMUGGLING CIGARETTES AND BRIBERY IN SINGAPORE
The Strait Times on 22nd March reported that Mok Chee Kin, 50, who is stateless, was handed the heaviest sentence for contraband cigarette offences in 4 years, Singapore Customs and the Corrupt Practices Investigation Bureau said in a joint statement. Mok was said to be the mastermind of a plan to smuggle contraband cigarettes via Jurong Port into Singapore. He was last jailed for 7 months in 2011 for contraband cigarette offences. He is said to have headed a group smuggling the cigarettes.
IMF STATEMENT ON BAHAMAS AML/CFT
In a concluding statement following an Article IV mission to the Bahamas, the IMF said that strong compliance with AML/CFT and tax transparency standards should help mitigate the withdrawal of correspondent banking relationships and safeguard the integrity of the financial sector. Ongoing efforts in this direction are welcome. It is critical to work closely with the Caribbean Financial Action Task Force (CFATF) and the FATF to swiftly address the strategic deficiencies in the AML/CFT regime. The administration has committed to implement the OECD’s international standards on tax transparency and exchange of information as well as the Base Erosion and Profit Shifting (BEPS) minimum standards.
NEW ZEALAND PONZI SCHEME OPERATOR RECEIVES JAIL TERM FOR $17.5 MILLION FRAUD
Scoop in New Zealand on 23rd March reported that a Christchurch man, Paul Hibbs, who defrauded his clients of at least $17.5 million through a Ponzi scheme has been sentenced to 8 years in prison with a minimum non-parole period of 4 years for charges brought by the SFO. Hibbs owned and operated Cameron Gladstone Investments Limited and Hansa Limited.
SHIPS OWNED BY SANCTIONED COMPANY STILL VISITING SOUTH KOREA
NK News on 23rd March reported that a vessel owned by newly-designated company arrives in Incheon 1 month after US Treasury move.
CRITICS ROUND ON MALTA AFTER BANKER CHARGED IN US WITH EVADING SANCTIONS
Euronews on 21st March reported that lawmakers and campaigners have criticised Malta’s authorities for lax controls of Pilatus Bank whose Iranian chairman was arrested on US charges of evading sanctions and money laundering.
SHIPOWNERS FACE RISK OF CRIMINAL LIABILITY FOR ILLEGAL DEMOLITION OF END-OF-LIFE VESSELS
Reed Smith on 22nd March reported that a Dutch court has found Dutch reefer operator Seatrade and 2 of its directors criminally liable for illegally selling vessels for demolition in South Asian yards in breach of the EU Waste Shipment Regulation. The decision appears to be the first time an EU shipowner has been held criminally liable for the illegal export of vessels for demolition to South Asian yards. It reminds one that cases of illegal demolition of vessels are currently being investigated by national authorities, such as the UK and Norway. In Norway for example, the vessel the MV “Tide Carrier” was arrested by the Norwegian environmental authorities, and these have been investigating its owners for illegally selling the vessel to a South Asian yard for demolition. The article goes on to consider international and EU rules os disposal of end-of-life vessels.
EU PUBLIC CONSULTATION LAUNCHED INTO POSSIBLE CUSTOMS LAW ON BINDING VALUATION OF GOODS
On 23rd March, HKTDC reported that on 1st March the European Commission launched a public consultation on whether to introduce a legal basis for decisions on Binding Valuation Information in the EU – its full title is “Exploratory Public Consultation on the establishment in the EU of Decisions relating to binding information in the field of customs valuation”. This much-awaited consultation is an important step in the legislative process which may lead to the introduction of Binding Valuation Information in the EU. HKTDC says that some questions in the questionnaire require expert knowledge and companies are informed that they may answer only some of the questions. At the end of the questionnaire those wishing to submit further information will have the possibility to upload a document or position paper. The consultation runs to 1st June.
HONG KONG SHOPS STILL SELL PANGOLIN SCALES DESPITE BAN
Customs Today on 23rd March reported that Hong Kong street shops see still being sold, despite being subject to an international ban: deep-fried scales of endangered pangolins. Also known as the scaly anteater, the pangolin has become the most trafficked mammal on Earth due to soaring demand in China and Vietnam. While its scales are prized for their supposed medicinal properties in treating everything from acne to liver disease and cancer, its flesh is considered a delicacy. Trade in the animals was banned in 2016 to protect remaining populations.
THAI GOVERNMENT ACCUSED OF STEALING $3.2 MILLION FROM POVERTY FUND
Thailand’s military government faces a graft scandal involving the misappropriation of 85% of funds that were allocated for the poor and for HIV patients, the Office of Public Sector Anti-Corruption Commission (PACC) said after finding evidence of $3.2 million missing. The money is usually distributed to the poor and to the patients by the Social Development and Human Security Ministry in the form of grants of up to $100.
RAISING FUNDS USING ICO – WHAT IS ALLOWED IN CENTRAL AND EASTERN EUROPE?
Law firm Schonherr has produced a short guide to the rules governing initial coin offerings in Austria, Poland, Hungary, Croatia, Bulgaria and Slovenia.
COLOMBIA’S LAST GUERRILLAS ESCALATE BATTLE TO CONTROL COCAINE HUB
Insight Crime on 22nd March reported that an ongoing conflict between Colombia’s 2 last remaining guerrilla groups continues to escalate along the Colombia-Venezuela border, highlighting the region’s role as an increasingly important and disputed organised crime hub in Latin America. Former insurgents of the Popular Liberation Army (Ejército de Liberación Popular – EPL) have “publicly declared war” against the National Liberation Army (Ejército de Liberación Nacional – ELN). The Catatumbo province not only has one of the highest yields of coca crops in the country and the ability to cheaply produce cocaine, but its location on the border with Venezuela gives access to key trafficking routes and other lucrative activities like contraband smuggling and extortion.
HYPERSONIC WEAPONS — HERE’S WHAT THEY ARE AND WHY THE US CAN’T DEFEND AGAINST THEM
CNBC on 21st March published an article saying that America’s top nuclear commander said the US doesn’t have defences against hypersonic weapons – a weapon that travels at Mach 5 or higher (i.e. at least 5 times the speed of sound). Russia and China are leading the way in developing hypersonic weapons.
GANGSTER’S PARADISE: HOW ORGANISED CRIME TOOK OVER RUSSIA
On 23rd March, the Guardian “Long Read” article says that under Vladimir Putin, gangsterism on the streets has given way to kleptocracy in the state.
SOARING COBALT PRICES FUEL CRIMINALITY IN DRC
ENACT on 22nd March reports that the increased global demand for smartphones and electric cars sees multinationals, militias and criminal groups scrambling for cobalt in the DRC. The demand for smartphones and electric cars has led to a massive surge in the price of cobalt used in batteries for high-tech items like electric cars and smartphones. The DRC is the world’s largest supplier.
US LICENSING SANCTIONS FOR 15 SOUTH SUDAN BUSINESSES
The US Department of Commerce, Bureau of Industry and security (BIS) Export Administration Regulations (EAR) contain a list of names of certain foreign persons – including businesses, research institutions, government and private organizations, individuals, and other types of legal persons – that are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items. These persons comprise the “Entity List”. On 22nd March, BIS added 15 South Sudan entities to the Entity List – the first South Sudan entities on the List –
Ascom Sudd Operating Company; Dar Petroleum Operating Company; DietsmannNile; Greater Pioneer Operating Co. Ltd; Juba Petrotech Technical Services Ltd; Nile Delta Petroleum Company; Nile Drilling and Services Company; Nile Petroleum Corporation; Nyakek and Sons; Oranto Petroleum; Safinat Group; SIPET Engineering and Consultancy Services; South Sudan Ministry of Mining; South Sudan Ministry of Petroleum; and Sudd Petroleum Operating Co.
These 15 entities are subject to a licence requirement for all exports and reexports destined for any of the entities and transfers (in-country) to them of all items subject to the EAR with a licensing review policy of a presumption of denial. This licence requirement also applies to any transaction involving any of these entities in which such entities act as a purchaser, intermediate consignee, ultimate consignee or end-user. Additionally, no licence exceptions are available to these entities.
BULGARIA JOINS THE EU ‘AMLD IV IMPLEMENTATION’ CLUB
Wolf Theiss on 15th March reported that the Bulgarian Parliament adopted the Anti-Money Laundering Act, which transposes EU Directive 2015/848 on the prevention of the use of the financial system for the purposes of money laundering and terrorist financings (the 4th ML Directive).
In a survey on 27th February, Wolf Theiss examined the status of implementation of the Directive in the countries of central, eastern and south-eastern Europe –
ISRAELI SHIPYARD SUSPECTED OF BRIBERY IN NIGERIAN WARSHIP DEAL
Defence Web on 23rd March carries an article linked to the reported bribery and corruption affecting Israel Shipyards, which it says is involving the sale of Shaldag patrol boats to the Nigerian Navy. According to Haaretz, the chairman of Israel Shipyards, Samy Katsav, was questioned by police on 19 March and released to house arrest. Katsav controls 20.25% of Gold Bond, which is the parent company of Israel Shipyards. Israeli officials are looking at the sale around 10 years ago of 2 Shaldag patrol boats to the Nigerian Navy worth $25 million. The company has also exported vessels to Chile, Sri Lanka, Greece, Mexico and Equatorial Guinea.
BAHAMAS FAMILY REMANDED OVER $1.3 MILLION CASH SEIZURE, GANJA FIND
The Nassau Guardian on 23rd March reported that a man and his 2 sons appeared before a magistrate arraigned on charges of drug possession with intent to supply and proceeds of criminal conduct. Police allegedly found $1,351,162 secreted away in the ceiling of the home, and officers also allegedly found 45 lb of marijuana.
COUNCIL OF EUROPE ANTI-CORRUPTION BODY ISSUES NEW COMPLIANCE REPORT FOR ARMENIA
Armenpress on 23rd March reported that the Council of Europe’s anti-corruption body Group of States Against Corruption (GRECO) has published a new report assessing the implementation by Armenia of its earlier recommendations on preventing corruption in respect of members of parliament, judges and prosecutors. It says that GRECO concludes that Armenia has implemented satisfactorily 5 of the 18 recommendations. Of the remaining recommendations, 12 have been partly implemented and 1 has not been implemented.
SRI LANKA TO TIGHTEN CONTROLS ON PRIVATE COMPANIES
On 23rd March, Mirror Business in Sri Lanka reported that Sri Lanka’s company law is to be changed to give powers to authorities to force shareholders of private companies to submit more information about themselves, and authorities will demand more information from shareholders of private companies who hold more than 25% of the shares or those who exercise control. It says that Sri Lanka has fast-tracked compliance to international money laundering laws after the country was warned and put under monitoring by FATF.
DFID ACQUIRES £4.4 MILLION FROM CORRUPTION CASE TO TACKLE POVERTY IN CHAD
The GOV.UK Blog reports that that the Department for International Development is to use £4.4 million recovered in a corruption case by the SFO to help people in desperate need in Chad. The SFO was granted permission to recover funds from the sale of shares in ‘Chad Oil’, a front company used by Griffiths Energy to bribe Chadian diplomats.
HEYSHAM MAN JAILED AFTER LEADING £4 MILLION FAKE CD SCAM
The Lancaster Guardian on 23rd March reported an investigation initiated by the City of London Police’s Intellectual Property Crime Unit (PIPCU) following a referral from UK record labels industry body, the BPI (British Phonographic Industry). Michael Hargreaves, 61, pleaded guilty to 2 counts under section 92 of the Trademarks Act and was sentenced to 16 months in prison. A PIPCU investigation found that between 2011 and 2013 Hargreaves had imported, distributed and sold high-quality counterfeit music CDs, through online selling platforms.
PROMINENT FUGITIVE PANAMANIAN MONEY LAUNDERER DETAINED IN MIAMI
Kenneth Rijock on 23rd March reported that Gabriel Btesh, a fugitive from Panamanian justice, accused of money laundering and participation in corrupt activities, was detained upon arrival in Miami. He was a former editor of “Panama America” during the regime of fugitive former Panamanian President Ricardo Martinelli. Btesh, who is described as a member of Panama’s powerful Syrian organised crime syndicate, was allegedly involved in the illegal electronic surveillance of Panamanians that is the subject of the criminal case against Martinelli and selling arms and ammunition to the FARC.
FOREX FRAUDSTER GETS 16 MONTHS FOR PERVERTING THE COURSE OF JUSTICE
Law 360 on 23rd March reported that Alex Hope, who was jailed for 7 years in 2015 after being convicted of fraud related to a Ponzi scheme has been sentenced at a London court to 16 months in jail for perverting the course of justice after he had “deliberately evaded” court orders.
ISLE OF MAN AMENDS ITS EGYPT SANCTIONS
On 23rd March, a news release advised that the Egypt sanctions regime in the Isle of Man, in line with changes made by EU Regulation 2018/465/EU, had seen details for 3 individuals amended and 6 other individuals removed from the lists of those subject to sanctions.