5th April 2018
ICE ARRESTS REGGAETON SINGER FOR BULK CASH SMUGGLING
In the US, the Immigration & Customs Enforcement agency reported on 4th April that Carlos Efrén Reyes-Rosado, aka Farruko, 27, a reggaeton singer had been arrested for failure to declare transportation of monetary instruments more than $10,000 and for bulk cash smuggling into the US. He had travelled by helicopter from the Dominican Republic to Puerto Rico where he was detained after a search of his bags revealed that he was carrying approximately $51,802 in U.S. currency in his luggage and in the soles of his shoes in his bags.
MANUAL PUBLISHED IN AFGHANISTAN TO HELP RECOGNISE HUMAN TRAFFICKING VICTIMS
InfoMigrants on 4th April reported that the Afghan High Commission to Combat Trafficking in Persons and Smuggling of Migrants (the TIP Commission) has launched a training manual in Kabul on how to identify and assist victims of human trafficking in Afghanistan. The manual is aimed at state workers in the country and NGO stakeholders. The manual is the first of its kind in Afghanistan, and is funded by USAID, the US agency for international development. The manual will also be distributed to shelter managers and community leaders such as members of shuras, imams and university lecturers, to raise awareness on human trafficking.
NIGERIA BEGINS PROFILING OF NGO TO COMBAT TERRORISM FINANCING
This Day on 5th April reported that, as part of measures aimed at tackling illicit flow of funds in the country, the Nigerian federal government said that it had begun the profiling of non-governmental organisations (NGO) in the country to determine their level of vulnerability as conduit for money laundering as well as terrorism financing.
THE MALTESE CONNECTION WITH IRAN SANCTIONS BUSTING
On 5th April, the Financial Times carried an article on the Pilatus Bank/Sadr affair, providing a comprehensive breakdown. A must-read to understand the situation and the allegations.
BRAZIL’S EX-PRESIDENT, ‘LULA,’ CAN BE JAILED, COURT RULES
The New York Times reported on 5th April that Brazil’s highest court that former President Luiz Inácio Lula da Silva can be sent to prison while he continues to appeal his corruption conviction — a decision that upends the nation’s politics and appears to quash his bid to return to power, when he is reportedly leading candidate in the October 2018 election. Last July, he was convicted of corruption and money laundering, and sentenced to almost 10 years in prison, and in January, an appeals court upheld the conviction and increased the sentence to 12 years.
INDIA: BANK OF BARODA SLAPPED WITH FINE OVER REMITTANCE SCAM
In India, the Economic Times reported on 4th April that the state-owned bank had been fined for “failing” to adhere to AML requirements, and not having an effective system to report suspicious transactions linked to a scam in its Delhi-based branch. The FIU has levied the maximum penalty for each instance of “delayed” filing of Suspicious Transaction Reports (STR) by the state-owned bank in the case. After about 3 years of investigation, the FIU has held that the bank failed on at least 5 counts in detecting wrongdoing and instances of money laundering at its branch where the forex remittance scam had been reported in 2015.
HAWKS INVESTIGATING “PROPHET” BUSHIRI FOR MONEY LAUNDERING
Zimeye on 4th April reported that South Africa’s crime investigation department, the Hawks, has confirmed investigating the wealthy “prophet” Shepherd Bushiri on allegations of money laundering for illegally sending out of the country millions of Rands to his native home in Malawi. Bushiri is said to be sending out the money to his home country using his private jet and does not put the cash into the country’s banking system but invests it directly into his numerous business ventures.
SAPIN 2: FRENCH ANTICORRUPTION AGENCY (AFA) HAS PUBLISHED GUIDELINES FOR ECONOMIC ACTORS SPECIFYING THE FRAMEWORK OF ADMINISTRATIVE CONTROL AND THE DOCUMENTS TO BE PROVIDED
Duff & Phelps on 3rd April published a briefing about of the details of the AFA’s framework of regulatory control published in February 2018. In June 2017, France’s anti-corruption legislation, The Law on Transparency: The Fight Against Corruption and Modernization of Economic Life, more commonly known as “Sapin II” came into operation. The law stipulates that companies must establish an anti-corruption program to identify and mitigate corruption risks. Now a questionnaire and the list of documents to be provided during an inspection complement the previously issued recommendations regarding the implementation of an efficient anti-corruption programme internally and are part of a constructive effort to ensure the quality and effectiveness of the whole framework put in place to prevent and to detect corruption and bribery.
See also –
MAKING PARCEL DELIVERY MORE AFFORDABLE IN THE EU
On 30th March, NCTM Studio Legale produced an article saying that the EU is close to finalising new rules on making the cross-border parcel delivery market more transparent and subject to increased regulatory controls. The new rules are expected to come into effect at the beginning of 2019. The article explains the main elements of the relevant EU Regulation.
CANADA’S FIRST QUANTUM EXPECTED TO PAY $1 BILLION IN ZAMBIA TAX DISPUTE
The Globe & Mail in Canada on 27th March reported that Canadian copper producer First Quantum Minerals Ltd will ultimately pay around US$1 billion to settle its tax spat with Zambia, according to a Wall Street analyst. The Zambia Revenue Authority (ZRA) has slapped First Quantum with a US$7.9 billion tax bill, claiming the miner had drastically underpaid certain import duties over a period of 5 years. The article says that First Quantum not the only Canadian mining company to be blindsided by tax demands from developing countries attempting to obtain an increasing share of resource riches, as commodity prices rebound – remarking on moves in Tanzania and DRC.
COUNCIL OF EUROPE ADOPTS NEW RECOMMENDATION ON TERRORISTS ACTING ALONE
On 4th April, the Council of Europe in a Recommendation from the Committee of Ministers reviews measures for preventing radicalisation, better identifying individuals who could potentially act alone and stepping up co-operation in the criminal law field. European countries are urged to consolidate their legal arsenal, drawing on the Convention on the Prevention of terrorism and its additional Protocol on tackling the problem of foreign terrorist fighters, as well as preventive tools (awareness and prevention campaigns, help-lines, training for law enforcement agencies, education and social-services professionals, etc).
EU LAUNCHES PROJECT AGAINST COUNTERFEITING IN SE ASIA
On 5th April, EurActiv carried an article reporting that the EU has put forward a project to strengthen intellectual and industrial property rights in all ASEAN countries. It is said that the project will include 2 platforms, IP Key Southeast Asia (IP Key SEA) and ARISE Plus, which are both part of EU policies in the field of intellectual and industrial property. ASEAN includes Burma, Brunei, Cambodia, the Philippines, Indonesia, Laos, Malaysia, Singapore, Thailand and Vietnam.
VAT: EU PROPOSALS FOR REFORM AND THE IMPLICATIONS OF BREXIT
On 3rd April, the House of Commons EU Scrutiny Committee published a report on post-Brexit VAT matters, including administrative co-operation to tackle VAT fraud.
DANSKE BANK’S DIRECTOR RESIGNS AMID PROBE
Market Watch on 5th April reported that Danske Bank AS said that Lars Morch has resigned from his position as member of its executive board amid a probe into money laundering in Estonia. Morch has been with the Danish bank since 1999 and been responsible for business banking since 2012, including the company’s international banking units and Baltic operations.
SECOND JAPANESE SHIPPING FIRM ADMITS TO CARTEL CONDUCT IN AUSTRALIAN COURT
On 5th April, Reuters reported that Kawasaki KK (K-Line) has pleaded guilty to criminal cartel conduct in the transport of vehicles, the second Japanese shipping company to make such an admission. Nippon Yusen KK (NYK) was convicted last year by Australia’s Federal Court and fined A$25 million for its part in the activity. The conduct relates to the shipping of cars, trucks and buses to Australia between 2009 and 2012, according to the Australian Competition and Consumer Commission (ACCC).
JAPAN UNVEILS GUIDELINES FOR ALLOWING INITIAL COIN OFFERINGS (ICO)
On 5th April, Bloomberg reported that Japan is moving toward legalising ICO, even as countries such as China and the US restrict the fundraising technique because of their risks for investors. A government-backed study group laid out basic guidelines for further adoption of ICO, including rules for identifying investors, preventing money laundering, tracking progress of projects and protecting existing equity and debt holders.
SWISS BANK WHISTLEBLOWER ARRESTED IN SPAIN
On 5th April, Reuters reported that Spanish police have arrested a former employee of HSBC’s Swiss private bank who was convicted of industrial espionage after leaking clients’ tax information. Herve Falciani, a French citizen, fled Geneva to France in 2009 after HSBC discovered the leak and put him under investigation. He says he is a whistleblower who wanted to help governments track down tax evaders.
SLOVAKIAN POLICE ARE MANIPULATING CRIME STATISTICS, NGO CLAIMS
The Slovak Reporter on 5th April reported that the real state of Slovak police is much different from the image presented by the leaders of the Interior Ministry and the Police Corps, according to the findings of the Let’s Stop Corruption Foundation and the Trend weekly which interviewed 16 police investigators.
MANCHESTER CORPORATE FINANCIER’S TAX FRAUD CHARGES DROPPED
Insider Media on 5th April reported that the co-founder of a Manchester-based corporate finance house has had all charges of tax fraud against him officially dropped. Richard Hughes, who co-founded Zeus Capital, had been charged with conspiracy to defraud and intent to defraud HMRC by making claims for capital loss relief. 2 years ago Hughes and 9 others were accused of a major tax fraud involving a £134 million tax investment scheme. The charges came after an investigation which spanned more than 3 years. Despite being cleared Mr Hughes is still furious at the way his case has been handled by the authorities and is calling for any inquiry to be held in public.
PAIR JAILED FOR SUPPLYING 270 PUBS WITH ILLEGAL ACCESS TO PREMIER LEAGUE FOOTBALL IN £1.5 MILLION CON
On 5th April, Chronicle Live reported that conmen who ran a lucrative sports broadcasting fraud in scores of pubs across the North East have been jailed for a total of 9 years. John Dodds set up a sophisticated scam to provide illegal access to pay-TV, and his business partner, Jason Richards, also known as Jason Richard Graham, later joined in the worldwide fraud with “commander-in-chief” Dodds.
GROUND-BREAKING STUDY HIGHLIGHTS SCALE OF AFRICA-ASIA WILDLIFE TRADE
On 5th March, the Traffic NGO said that more than 1.3 million live animals and plants, 1.5 million skins and 2,000 tonnes of meat from CITES-listed species have been exported from 41 African countries to East and Southeast Asia since 2006, a ground-breaking new TRAFFIC report has revealed. In recent years, the focus on wildlife trade from Africa has centred on the illegal trade and the devastating onslaught on iconic species like elephants and rhinos. Comparatively little attention has been given to legal wildlife trade from the continent—until now.
UN REPORT REVEALS EXTENT OF NORTH KOREAN ARMS SALES
Janes.com on 5th April carried an article about the recent report by a UN panel of experts has identified a broad network of defence co-operation between North Korea and several other countries. It highlights the co-operation with Syria over chemical weapons – including the supply to front companies of resistant valves, thermometers, and acid-resistant tiles in quantities required for a “large-scale industrial project”. The tiles were assessed by an unidentified UN member state as capable of being used to construct the internal walls of a chemical facility. It also confirms the supply of ballistic missiles to Myanmar. The report also cited a UN member state as confirming that North Korea’s Ryonhap-2 Corporation assisted Syria in developing a manoeuvrable re-entry vehicle (MRV) for the latter’s ‘Scud D’ ballistic missile in 2008.
HOUTHI MILITANTS ATTACK SAUDI OIL TANKER IN RED SEA
On 4th April, Missile Threat reported that a missile was fired at Saudi-flagged supertanker, “Abqaiq” owned by Saudi shipping group Bahri, while in international waters west of Al Hudaydah port. The ship was able to complete its planned course while accompanied by a coalition warship.
IS CÔTE D’IVOIRE BECOMING A WILDLIFE TRAFFICKING HOTSPOT?
On 27th March, ENACT Africa posed this question saying that since 2016, Côte d’Ivoire has recorded at least 5 major incidents (seizures and/or arrests) related to wildlife trafficking. The most recent of these occurred in January, with the seizure of 578 kg of ivory, and over half a ton of pangolin scales, leopard skins and other items. It says that the seizures indicate that wildlife trafficking is a major phenomenon in the country.
CHINA’S MARITIME SILK ROAD: STRATEGIC AND ECONOMIC IMPLICATIONS FOR THE INDO-PACIFIC REGION
On 2nd April, the Center for Strategic and International Studies (CSIS) produced a detailed examination of the effects of the China project on the Indo-Pacific region. It says that there is a shortage of infrastructure investment to meet the needs of developing nations across the Indo-Asia-Pacific region and most nations have welcomed the opportunity to bid for Chinese funding. However, at the same time, there are growing questions about the economic viability and the geopolitical intentions behind China’s proposals. Large-scale investments are also structured in ways that invite questions about the potential for China to exert undo leverage over the domestic and foreign policies of heavily indebted recipient countries. To shed light on some of these themes, CSIS has commissioned 7 experts to unpack the economic and geostrategic implications of China’s infrastructure development across the Indo-Pacific region. The overall conclusion is mixed. China’s MSR projects are neither purely military nor purely commercial. Moreover, China’s overall approach is probably evolving.
EFFORTS TO DISCOVER THOSE RESPONSIBLE FOR CHEMICAL WEAPONS USE IN SYRIA AT A STANDSTILL, UN SECURITY COUNCIL TOLD
On 4th April, UN News reported that the Joint Investigative Mechanism (JIM) of the Organisation for the Prohibition of Chemical Weapons (OPCW) and UN was created in 2015 by the Council, but its mandate expired in November 2017. However, of chemical weapons production sites declared by Syria, destruction of the 2 remaining facilities will be verified by the OPCW and is expected to be completed within 2 to 3 months from the start of destruction. As for the allegations of the use of chemical weapons that were brought to the attention by the Syrian Government, the OPCW fact-finding mission is currently in Damascus to determine if such weapons were used. The mission, however, is not mandated to determine who used them.
CATCHING A CHINESE IP THIEF: HOW THE FBI TRACKED AND CAUGHT SINOVEL
The Cipher Brief on 5th April reported that resentment, an insatiable appetite for women and an even larger appetite for cash are all elements that led to an insider threat that spelled a devastating theft of US technology by a Chinese company. But this time, it says, the culprit was caught – or at least, the company behind him was. In January, Chinese wind turbine manufacturer Sinovel Wind Group Co. Ltd. Was found guilty on all counts of stealing the software technology of AMSC, a US company. The investigation of Sinovel, an 18% Chinese state-owned enterprise, dates back to 2010 when AMSC engineers inspecting a Sinovel wind turbine in the Gobi Desert in NW China suspected their proprietary control system software, which operates as the brains of a wind turbine, had been hacked by Sinovel.
US REPORTED TO BE POISED TO IMPOSE NEW SANCTIONS ON RUSSIAN BILLIONAIRES
Rferl on 5th April reported claims that the US plans to impose a new round of sanctions on Russia, this time targeting Russian billionaires with ties to President Vladimir Putin – with new sanctions will target wealthy people on a list released in January by the Treasury Department, which includes such prominent figures as Aleksei Miller, the CEO of the Russian gas giant Gazprom, and Igor Sechin, the chief executive of Russia’s state-run oil giant Rosneft.
THE MYSTERY OF WHO OWNS SHERLOCK HOLMES’S £130 MILLION HOME
Quartz on 5th April carried an article, valued at more than £130 million, the property spanning 215 to 237 Baker Street is held via a web of secretive offshore corporations which hide its owner’s identity. It is notorious among anti-corruption activists. The UK government also cited the buildings in its 2017-2022 Anti-Corruption Strategy.
IMPORTING ANIMAL FURS AND SKINS INTO UK AND EXPORT OF FISH
On 5th April, HMRC reissued guidance on the prohibitions and restrictions on the import of animal furs and skins into the UK and the export of salmon and trout.
CYPRUS MAKES PROGRESS IN COMBATING CORRUPTION, COUNCIL OF EUROPE SAYS
On 5th April, the Cyprus Mail reported that Cyprus has received praise from the Group of States Against Corruption (Greco) for having taken a series of measures aimed at combating corruption in public life and boosting transparency in government.
SPAIN READIES DRAGNET FOR CRYPTO TAX EVASION
Bloomberg on 5th April reported that Spain’s Tax Agency has asked financial firms to turn over names and trading data on cryptocurrency buyers, launching the country’s biggest dragnet yet for potential tax evasion and money laundering using digital currency. 60 companies were sent requests for trading information including banks and securities firms as well as currency platforms. The drive originated in part from a probe by the National Fraud Investigation Office on bank accounts opened abroad by foreign-exchange shops, according to the official. Spain is trying to crack down on online tax evasion with authorities said to be increasing demands on Internet-based companies, including Airbnb Inc., to reveal client identities.
KOREA: COINNEST CEO ARRESTED FOR EMBEZZLEMENT, FRAUD
The Korea Joongang Daily on 5th April reported that the CEO of a local cryptocurrency exchange was arrested on charges of embezzlement and fraud, the first time that the head of an exchange has been detained in Korea. Coinnest opened its service in July last year, becoming the 5th largest trading platform in Korea.