23rd April 2018
UKRAINE CRIME GANG HID PROCEEDS IN LUXURY LONDON FLATS
On 23rd April, a BBC TV Panorama programme following up the “Paradise Papers” reported that a Ukrainian crime gang used offshore firms in British tax havens to secretly invest millions of pounds in the UK. The gangsters, and in some cases family members, bought luxurious property in prime London locations, including a £12.5 million flat. The daughter of a man dubbed the “Don of Odessa” is the registered owner of 3 homes in one expensive block. The gang were from the Black Sea port of Odessa and made money in the oil industry. They came on to the police’s radar in the late 1990s when they were suspected of drugs and arms smuggling. In the chaos following the collapse of the Soviet Union the gang branched out into Europe, using Italy as a base.
DIFFICULTIES IN COMBATING MONEY LAUNDERING IN EUROPE
EurActiv on 23rd April carried an article saying that despite tougher rules against money laundering, there are still many shortcomings among Member States, the European Central Bank and the EU Commission has said. One element that the article and report say is that the limited role of the European Central Bank on money laundering that has most handicapped the EU in its fight against money laundering. Indeed, the ECB does not have any formal powers to act against a bank which is infringing money laundering regulations, without the prior consent of the member state concerned.
GERMAN EXTRADITION OF ITALIAN NATIONAL TO THE US DOES NOT INFRINGE EU LAW
On 23rd April, Greenberg Traurig reported that an Italian national called Pisciotti started a case against Germany for extraditing him to the UniteUS where, since 2007, there had been a criminal case pending against him for alleged cartel anti-competitive agreements made in relation to tenders and prices from 1999-2006. An arrest warrant was issued against Pisciotti in 2010 and he was listed as wanted by Interpol. He was arrested by the German police in 2013 at a stopover at Frankfurt and was extradited to the US a year later, where he pleaded guilty and was fined and sentenced to 2 years imprisonment. After he was released, Pisciotti argued that because he was an EU citizen, Germany violated EU law when it extradited him. Eventually, the German courts asked the ECJ the EU Treaty precluded Member States from making a distinction between its nationals and nationals of other Member States under constitutional law when it comes to extradition to third countries. As a result of the ECJ ruling, it is clear that EU law applies to a request for extradition to a third country when the citizen has exercised the right to move freely within the EU, and a Member State may distinguish between nationals and non-nationals on the grounds of constitutional law when it comes to extradition to third countries.
EXPORT (PENALTY) (AMENDMENT) REGULATIONS 2018
These UK regulations (SI 2018/507) come into force w.e.f. 14th May to replace references to the Community Customs Code (CCC) and associated legislation with references to the Union Customs Code (UCC) and associated legislation.
CHINA MAKES NEW MOVE TO CATCH FUGITIVE BILLIONAIRE GUO WENGUI
In a report dated 24th April, Nikkei Asian Review reports that social-media-loving Beijing critic may become hostage in a trade war. Police in China are looking to work with US counterparts on an investigation into potentially forged official documents connected to wealthy businessman Guo Wengui, a vocal critic of the Chinese government now accused of donating money to US political campaigns. Beijing is ratcheting up pressure for Washington to extradite Guo, who seeks asylum in the US.
TREASURY THROWS RUSSIAN ALUMINIUM GIANT RUSAL A LIFELINE
The Atlantic Council in the US on 23rd April reported that the US Treasury signalled on April 23rd that the Russian aluminium giant, RUSAL, could have US sanctions lifted if the Kremlin-linked oligarch Oleg Deripaska divests his holdings in the firm. The decision by OFAC to extend the deadline for investors to exit RUSAL is neither surprising nor unusual given the firm’s size.
ANGOLAN ARMY CHIEF SACKED IN LATEST ANTI-GRAFT MOVE
News 24 reported on 23rd April that Angolan President Joao Lourenco sacked his army forces’ chief of staff over corruption allegations in a deepening purge of senior figures linked with graft. Geraldo Sachipengo Nunda was fired after being named by the attorney-general’s office in an investigation into a fraudulent international credit scheme worth $50 billion.
UK COURT ORDERS EXTRADITION OF AGROKOR FOUNDER OVER ALLEGED FRAUD
Reuters on 23rd April reported that a British judge has ordered that Ivica Todoric, founder of beleaguered food production and retail conglomerate Agrokor, be extradited to Croatia to face allegations of fraud totalling tens of millions of euros. Agrokor, which accounts for 15% of Croatian GDP and is the largest employer in the Balkans, was placed under emergency state administration a year ago after it came close to collapsing under a mountain of debt. Todoric, who founded the company in 1976, has denied accusations of fraud and said the Croatian investigation into his financial affairs was politically motivated.
GARDAÍ SEIZE DOCUMENTATION TARGETING LIMERICK CRIMINAL GANG’S LAUNDERING OF PROCEEDS OF CRIME
The Irish Examiner reported on 23rd April that Gardaí have raided homes and professional offices in Limerick and Galway, in a planned operation targeting the alleged laundering of money generated from the proceeds of crime by a Limerick-based organised criminal gang. 4 properties, including 3 in Limerick city and county, and one at a location in Galway, were searched by officers attached to the Criminal Assets Bureau (CAB).
IRAN’S CENTRAL BANK IMPOSES BAN ON CRYPTOCURRENCY TRANSACTIONS
Bloomberg on 23rd April reported that Iran’s central bank prohibited domestic financial institutions from handling virtual currencies, citing money-laundering concerns, as it seeks to ramp up control over the nation’s currency markets.
SANCTIONS UPDATE – REVISED NORWEGIAN GUIDELINES ON ASSET FREEZING
DLA Piper on 23rd April published a briefing saying that the Norwegian Ministry of Foreign Affairs and the Financial Supervisory Authority published an updated version of the Norwegian guidelines on financial sanctions and asset freezing – the guidelines are based on the sanctions passed by the UN Security Council as well as restrictive measures decided by the EU which have been implemented into Norwegian legislation. This updated version is meant to be more precise in its aim to provide interpretation guidance and support to the general public in this particular field of legislation. As such, the guidelines are primarily addressed to banks, payment service providers and other regulated entities that are expected to ensure that their systems cannot be abused contrary to sanctions or other restrictive measures.
MERSEYSIDE PAIR USED LOGISTICS BUSINESS AS COVER FOR DRUG SMUGGLING
A news release from NCA on 23rd April reported that 2 friends from Liverpool who used their logistics firm as a front for drug trafficking have been jailed, after attempting to smuggle heroin on the same day. Kevin Aitchison, 44, and Kevin Noble, 60, were both stopped hours apart in “PNT Express” marked Mercedes vans at the Channel Tunnel terminal in Coquelles in October 2017.
COURT RULES ‘EQUANIMITY’ FREE TO LEAVE INDONESIA
Superyacht News on 23rd April reported that a local court has said that the superyacht detained in Bali earlier this year as being an asset linked to the 1MDB scandal may leave the country. A South Jakarta district court has ruled that the yacht has no link with 1MDB and that the vessel can thus be returned to its owner. In a statement, Indonesia Special Economic Crimes Unit Director Dr Rudy Heriyanto Adi said that the police would follow the decision made by the court.
PILATUS: A PRIVATE BANK FOR AZERBAIJAN’S RULING ELITE
On 23rd April, OCCRP provided a briefing on the Pilatus Bank, a controversial private bank in Malta which is being investigated for laundering money for its clients.
MAN FUNDING THE SO-CALLED ISLAMIC STATE APPREHENDED IN SPAIN
Europol on 23rd April reported that Spanish National Police, with the support of Europol and the National Intelligence Center, arrested a Moroccan individual in Málaga, Spain, suspected of terrorist financing. The arrestee had been sending large amounts of money to his wife – highly radicalised and considered one of the most dangerous terrorists by the Spanish authorities – to help her travel to Syria and join the so-called Islamic State (IS). It is estimated that the arrestee sent a total of €6,000 to his wife [showing the relatively small sums that can be involved in such cases], helping her reach IS territory in Syria and continue her terrorist activities from there.
SENATE BILL IN US CALLS FOR NATIONAL STRATEGY TO COMBAT GLOBAL FINANCIAL NETWORKS USED BY CRIMINAL SYNDICATES
Homeland Preparedness News on 23rd April reports that bipartisan legislation introduced in the US Senate would require President Trump to draft a national strategy to identify and disrupt global financial networks used by transnational criminal organisations to transfer an estimated $870 billion around the world. Under the Criminal Organizations’ Narcotics, Finances, Resources, Operations and Networks Targeting (CONFRONT) Act the President would work with federal agencies to target financial transactions related to criminal activities like opioid trade, drug dealing and identity theft.