10th April 2018
REPORT: INDIA AND NON-PROLIFERATION EXPORT CONTROL REGIMES
The Observer Research Foundation, an Indian think tank, has produced a paper which seeks to analyse the Nuclear Suppliers Group (NSG) issue as part of the larger picture of India’s policy on non-proliferation-related export control regimes and its evolution in a generic sense, together with the origins and development of the 4 non-proliferation regimes – NSG, Australia Group (AG), Missile Technology Control Regime (MTCR) and Wassenaar Arrangement (WA). The paper also provides a useful reminder and summary for the reasons behind the setting up of the 4 regimes.
COINS, OTTOMAN ARTEFACTS SEIZED IN ANTI-SMUGGLING OPERATION IN ISTANBUL
The Daily Sabah on 10th April reported that police in Istanbul confiscated 1,512 artifacts ranging from Roman, Byzantine, Seljuk and Ottoman coins to valuable documents from the 19th Century in anti-smuggling operations. 3 suspects were detained, accused of attempting to smuggle the artefacts abroad. One of them was a retired staff member of a private museum in Istanbul.
NORWEGIAN SALMON FARMING COMPANY CEO STEPS DOWN AMID CHINA SMUGGLING ALLEGATIONS
Undercurrent News on 9th April reported that the CEO of Norwegian salmon farmer SalMar has resigned, a few days after links emerged between the company and an executive accused of salmon smuggling in China. However, he has denied the China story has anything to do with his departure. It has emerged that SalMar owns a company in Singapore with an executive who has been arrested in China, where authorities have launched a crackdown on a lucrative smuggling trade. A Chinese woman and holds a Norwegian passport, was arrested in China suspected of involvement in the salmon smuggling ring, said by authorities to be worth $100 million.
NEW MEASURES NEEDED TO PROTECT PORT WORKERS OPENING FUMIGATED CONTAINERS FROM HARM
On 10th April, the EU’s European Agency for Safety and Health at Work (EU-OSHA) issued a news release saying that a new study by the EU-OSHA has reviewed the risks to workers when opening fumigated shipping containers. The study identifies significant gaps in preventive measures and makes recommendations that should be implemented to improve the safety and health of workers. It says that each year, more than 600 million freight containers are shipped worldwide. These containers are frequently treated with pesticides to prevent damage to the goods. Agents used for this purpose have known toxic or irritant properties and can have long-term effects on the cardiovascular and central nervous systems, for instance phosphine (PH3), methyl bromide (MeBr) and formaldehyde. Workers at ports who open these containers, for example during customs inspections, can be exposed to these harmful agents. The report indicates that this problem has been underestimated. The report identifies a number of problem areas and says that a number of changes to current practice could vastly improve the safety and health of the workers in question.
ISRAEL: LAW REDUCING THE USE OF CASH
On 8th April, Barnea in Israel reported that the Knesset recently approved the Law for the Reduction in the Use of Cash. This law imposes bans and restrictions on the making and receiving of payments using cash and checks above prescribed levels. The Law also restricts cash-payment transactions being transacted under various contexts, including deals, gifts, donations, loans, and wages. The law, which will come into effect on January 1st 2019, constitutes another component of the battle against the “shadow economy” in Israel.
UK-WIDE ROADSHOW HELPS BUSINESS PREPARE FOR NEW CUSTOMS DECLARATION SERVICE (CDS)
On 10th April, the British International Freight Association (BIFA) reported that 3 organisations will be running a series of seminars ahead of August’s phased launch of the Customs Declaration System (CDS), the system set to completely replace the existing system for Customs declarations in the UK. Agency Sector Management (ASM), BIFA, and HMRC are combining efforts to offer advice and guidance to businesses affected by the implementation of the new CDS system. The have been organised in response to concerns about the readiness of the new system, and to provide companies with the opportunity to fully understand what CDS is, why it is being introduced, how it will impact their businesses, and when the system will be fully launched. They are being held at a number of locations across the UK during June and July, with the first taking place on June 12th.
RACE FOR MEXICO’S ‘COCAINE OF THE SEA’ PUSHES 2 SPECIES TOWARD EXTINCTION
The Digital Journal on 10th April reported on the trade in dried fish parts – totoaba swim bladders – that can be worth thousands of dollars in China and prized in Chinese traditional medicine for their purported healing and beautifying properties. The casualties of this war include not only the critically endangered totoaba, but also the world’s smallest porpoise, the vaquita marina. Authorities say poachers filet the totoaba at sea, stash the swim bladders in hidden compartments and toss the bodies back into the water. Then they ship their haul in small quantities – the same strategy used by drug cartels, which it is thought also fund the fishing.
3 SYDNEY PROPERTIES RAIDED OVER ALLEGED MULTI-MILLION DOLLAR CORPORATE FRAUD
The Melbourne Age reported on 10th April that detectives have raided 3 Sydney properties as part of an investigation into an alleged corporate fraud involving a former employee and a former supplier of the National Australia Bank, worth tens of millions of dollars. The scheme was said to involve a NAB employee who allegedly obtained a commission for approving over-inflated invoices to an executive event and project management firm.
PIRATE ATTACKS WORSEN IN GULF OF GUINEA
The International Chamber of Commerce (ICC) on 9th April reported that a surge in armed attacks against ships around West Africa is pushing up global levels of piracy and armed robbery at sea, according to the ICC’s International Maritime Bureau (IMB). MB’s Piracy Reporting Centre recorded 66 incidents in the first quarter of 2018, up from 43 for the same period in 2017, and 37 in Q1 2016.
DOES THE UK NEED A MAGNITSKY LAW FOR A NEW SANCTIONS REGIME?
On 9th April, the Law Society Gazette published an article asking, following recent events in Salisbury, and the UK government looking at ways to respond to evidence suggesting that the Russian state was behind the poisoning of Sergei Skripal and his daughter Yulia, does the UK need its own version of the Magnitsky Act and to what extent are economic sanctions an effective response?
CUSTOMER SERVICE CENTRES AS AN ANTI-FRAUD RESOURCE
Professional Security Magazine Online on 10th April carried an article arguing that customer service centres can be very valuable resources for fraud prevention and detection, if they are accepted and recognised as such. While service centres are traditionally defined as workplaces to handle a large number of customer inquiries via calls, emails or digital channels, in their current stage they can also be very helpful in discovering a variety of fraud phenomena. The structure and functionality of customer service centres make them a unique place that link a variety of people, organisations, companies and financial institutions and can be considered as a hub for information exchange between customer service representatives and others. The article outlines steps that can be taken to profit from customer services.
UK PLEDGES PROTECTION FOR CORALS
DEFRA in the UK reported on 9th April reported that the UK has officially joined the Coral Reef Life Declaration, committing to safeguarding coral reefs, launched last year and so far 12 countries have signed the declaration, including Australia, Fiji and the Seychelles. The UK’s waters are home to cold-water corals over 8,000 years old, with the only known coral reef in English waters protected as a Marine Conservation Zone (MCZ). The UK’s Overseas Territories also hold a huge array of tropical and cold water coral reefs.
NCA: NEW UK CYBER THREAT REPORT
On 10th April, the NCA announced a report that says that criminals are launching more online attacks on UK businesses than ever before, revealed in a report published to mark the start of the country’s biggest cyber security conference – with specialists from across government, industry and law enforcement to the start of their flagship CYBERUK 2018 summit in the Manchester Central Convention Complex.
MARCH USED CAR SALES IN NEW ZEALAND AFFECTED BY STINK BUG BIOSECURITY SCARE
Customs Today on 9th April reported that used car sales in March plunged 18% on a year ago, as stink bug-infested ships were turned away from New Zealand shores for biosecurity reasons. New and used car sales dropped 6.6% in February and 4.4% in March. Stricter controls for dealing with car shipments from Japan was likely to continue to slow the supply chain and prompt further weakness in sales.
PUSH FOR PARLIAMENTARY PROBE INTO VAT FRAUD IN POLAND
Customs Today on 7th April reported that the ruling conservative Law and Justice (PiS) party in Poland has submitted a formal Bill to this effect to the lower house of parliament, providing for a special probe said to be needed to check finance ministry politicians and officials, as well as others who had a hand in the VAT system under the Civic Platform-led government, which governed Poland from 2007 to 2015.
BATTERY SUPPLY CHAIN: A UNIQUE GROWTH OPPORTUNITY
On 9th April, White & Case carried an article about a comprehensive report saying that battery materials and electric vehicles offer something unique to today’s commodity producers and investors: a sustainable growth story that is not just China-dependent. The exponential growth in demand is creating a scramble for resources not seen since the last great commodity super cycle.
CORRUPTION IN THE CAUCASUS
In the latest TRACE podcast, Alexander Kupatadze discusses corruption and smuggling in his native Georgia and neighbouring post-Soviet states.
TRUSTS AND PROTECTORS – SHAM TRUSTS – AN UPDATE
On 9th April, Appleby published a briefing update on a ground-breaking case has potentially introduced the concept of an “illusory trust”, which differs in important respects from a sham trust, which differs in important respects from a sham trust (Mezhprom v Pugachev ). Appleby Guernsey’s Dispute Resolution and Private Client & Trusts teams review this important decision and the impact in the Channel Islands.
THE TRIAL OF THE MONOS: HISTORIC BLOW TO ARGENTINA’S UNDERWORLD?
Insight Crime on 9th April reported that jailing of 3 leading members of one of the country’s most notorious criminal groups, as well as 9 police officers linked to the gang, have been branded as a historic blow against organised crime. But questions remain as to the impact the ruling will have — if any — on the country’s underworld. On April 9th, the top leaders of the infamous criminal gang known as the Monos were sentenced. In addition, 9 police officers were found guilty of membership in the group while 4 others were acquitted. The article says that a closer look at the facts behind the trial paints a picture of the Argentine underworld and offers a glimpse of the challenges facing the fight against organised crime in the country.
UK: NATIONAL DATABASE OF ROGUE LANDLORDS GOES LIVE
Local Government Lawyer on 9th April reported that a national database of landlords convicted of a range of housing, immigration and other criminal offences such as leasing overcrowded properties, fire and gas safety offences and unlawful eviction, has gone live. Landlords may now be given banning orders as well, preventing them from leasing accommodation for a period of time, ranging from 12 months to life. The article provides links to the Home Office guidance provided to local authorities.
UK PARLIAMENT OPENS INQUIRY INTO ECONOMIC CRIME
On 9th April, Brodies LLP reported that the Parliamentary Treasury Committee has launched an inquiry into economic crime and is seeking views on AML, sanctions and the impact of these (and fraudulent activity more generally) on consumers. It says that the 2 main themes are AML and sanctions, and consumers and economic crime. The inquiry is open for written responses from individuals and businesses until 8th May.
ISLE OF MAN CONFIRMS AMENDMENT OF NORTH KOREA SANCTIONS
On 10th April, the Isle of Man confirmed that changes made to North Korean sanctions by EU Regulation 2018/548/EU, which brought EU sanctions into line with changes made to UN sanctions on 30th March, were in effect in the Island.
US STATEMENT ON PANAMA’S EFFORTS TO COMBAT CORRUPTION BY THE MADURO REGIME
On 10th April, the US Treasury issued a statement commending Panama for “its courageous efforts to safeguard its financial system from abuse by corrupt Venezuelan officials” and urged “the international community to stand with Panama and identify and investigate individuals and entities at high-risk of being involved in Venezuelan public corruption”.
THAI FISHERMEN ON STRIKE OVER EU REGULATIONS
On 10th April, EU Observer reported that more than a thousand fishing boats went on strike in protest against what they called overburdening laws introduced by their government to ensure Thai fishing operators comply with EU regulations. The EU had given a final warning in 2015 for its failure to effectively stop illegal, unreported and unregulated fishing (IUU) and threatened to stop importing of processed seafood to Europe.
MIGRANT SMUGGLING ORGANISED CRIME GROUP DISMANTLED IN ROMANIA AND AUSTRIA
Eurojust on 10th April reported that the organised crime group had initiated and orchestrated numerous illegal transports of migrants originating from Afghanistan, Pakistan, Syria and Iraq. Charging a fee ranging from €1,500 to €7,000 per person, they have been smuggling people through Turkey, Bulgaria, Serbia, Croatia, Slovenia and Hungary, who sought asylum mainly in Austria and Germany, but also in Italy and France. 19 premises were searched in Romania and 5 premises and an automobile were searched in Austria, and documents, mobile telephones and cash were seized during the joint action days, coordinated by Eurojust and Europol.
ZIMBABWE PARLIAMENT TO SUMMON MUGABE OVER DIAMOND MINING
News 24 in South Africa reported on 10th April that a committee of lawmakers in Zimbabwe is to summon former president Robert Mugabe to testify at a probe into lost revenue from diamond mining, and over his 2016 claim that the country had lost $15 billion in income from diamonds due to corruption and foreign exploitation.
TAIWAN LEGISLATURE PASSES INTERNATIONAL ASSISTANCE CRIMINAL JUSTICE BILL
Focus Taiwan on 10th April reported that the Taiwan legislature has passed the third and final reading of a Bill on international mutual judicial and legal assistance in criminal matters with the aim of facilitating co-operation between Taiwan and other countries in the field of criminal justice. However, it does not apply to extradition and transfer of sentenced prisoners. Taiwan has a degree of judicial assistance in criminal matters with 35 countries and the Bill provides a clearly defined legal basis to follow when China, Hong Kong and Macau pursuing criminal cases request judicial assistance from Taiwan, or when Taiwan requests the same of them. The Bill is an important element of meeting FATF recommendations in time for its evaluation by the Asia/Pacific Group on Money Laundering at the end of 2018.
SFO SETS ‘ROBO-LAWYER’ TO WORK ON CASES
The Law Society Gazette on 10th April reported that the (SFO) has announced that artificial intelligence (AI) which can work 2,000 times faster than a human lawyer will be used on all new casework. A pilot ‘robot’ able to process more than half a million documents a day, was implemented by the SFO to scan for legal professional privilege (LPP) content in its case against Rolls-Royce. The SFO said the new system, called ‘Axcelerate’ and produced by software company OpenText, will be rolled out alongside the ’robot’. The SFO said this will enable SFO staff to ’better target their work and time in other aspects of investigative and prosecutorial work’.
US FOREIGN CORRUPT PRACTICES ACT REQUIRES MORE THAN A POLICY
Dorsey & Whitney on 10th April reported that the recent agreement between the SEC and Canadian mining company, Kinross Gold, was a reminder that it is not enough to adopt a parent-company level anti-corruption policy designed to promote compliance with the Foreign Corrupt Practices Act (FCPA). Effective implementation and monitoring at the operating level is also needed.
NOVICHOK HAS ALREADY KILLED
OCCRP on 10th April reported that, contrary to previous understanding, new evidence unearthed in Russia shows that some of the group of substances called Novichok was obtained by criminals after being produced in a government lab as late as 1994 — and has since killed at least 2 people. Reporters for Novaya Gazeta tracked down records from a sealed 1995 criminal case in which a Russian banker and his secretary were murdered using a poisonous substance. 2 specialists who have worked with Novichok independently confirmed to reporters that the toxin described in the investigation was one of several varieties of the Novichok agent.
ILLEGAL TRADE OF REPTILES AS EXOTIC PETS LARGER THAN THOUGHT
OCCRP on 10th April reported keeping exotic pets, such as reptiles and amphibians, has become increasingly popular over the past 2 decades but the trend has spawned an enormous illegal trade, citing a New York Times article.
NEW ZEALAND: FIRM FACING $2.6 MILLION FINE UNDER MONEY LAUNDERING, TERRORISM FINANCING LAWS
Baker McKenzie on 10th April reported that more than $100 million may be the value of transactions not properly checked under money laundering laws by Qian DuoDuo Limited (QDD). QDD, which was trading under Lidong Foreign Exchange, has not been accused of money laundering or funding terrorism but still faces a $2.6 million penalty.
THE ITALIAN MAFIA RETURNS TO BULGARIA AND ROMANIA
Novinite on 10th April reported remarks about the organisations of the Italian mafia having been long settled in all countries of Eastern Europe – above all in Bulgaria and Romania. “Giant” money from international trade in drugs, weapons and hazardous waste has been invested in real estate or stock exchange transactions – described as the simplest way to launder money. It was also said that the Mafia is involved in Romania’s poisonous waste scandals and has spread its tentacles to Gazprom, and the Casalesi clan, one of Camorra’s most successful bandit groups, has consolidated interests in Romania, and the Corleone clan has been involved in scandals with illegal poisonous waste. Recently, the mafia’s appetites are also directed at EU structural funds, the resources of which are slowly being shifted from the southern flank of Europe to the eastern European member states.