Month: May 2018

On 31st May, the Council of Europe announced that its AML/CFT body Moneyval has just published its General Activity Report for 2017.  The Moneyval chairman pointed out that it is evident that the threats of being exposed to money laundering and terrorist financing are increasing. He also stressed that countless cases of money laundering are being reported by the media and brought to the attention of the general public.  “The lack of transparency of legal entities and trusts persist and international co-operation is still not working as effectively as it should be. We also need to improve information-sharing with the private sector and across borders”, he said.  Moreover, the Chairman underlined the need for more specialised training for investigators and prosecutors and to involve prosecutors at the early stages of investigations.

https://www.coe.int/en/web/portal/-/moneyval-s-annual-report-money-laundering-risks-are-increasing

 

On 31st May, OFAC advised that it had amended the Counter-Terrorism Designation entry for the Al-Nusrah Front, adding numerous aliases.

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180531.aspx

 

On 31st May, OFAC issued Ukraine-/Russia-related General License 13B, which replaces and supersedes General License 13A.   General License 13B extends the expiration date of the general license authorising certain transactions necessary to divest or transfer debt, equity, or other holdings in certain blocked persons  to 12:01 a.m. August 5th,

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180531_33.aspx

 

On 30th May, the Carnegie Endowment for International Peace published an article which starts by saying that detecting proliferation-relevant illicit financing is even harder than detecting money laundering or terrorism financing.  Governments and financial institutions around the world have been dealing with money laundering and terrorism financing for decades.  They have developed typologies, “red flags,” and standard operating procedures to minimize exposure to money laundering or terrorism financing.  Compared to money laundering and terrorism financing, proliferation financing is a relatively recent and less understood challenge. It then gives examples of how even apparently benign products can have an illicit role –

• semi-conductor material that is indispensable for laptops and transistors can be used in military equipment;
• production of instant coffee, as well as of dry ice-cream for astronauts, relies on freeze-drying technology that can be used in bio-warfare research; and
• components for nuclear power reactors that generate electricity rely on dual-use components and technology that can be used in a nuclear weapons programme.

The article explains why financial institutions struggle with implementing proliferation financing controls.  It also says that looking at proliferation financing challenges as related to export control efforts can significantly improve the overall national capacity of a given country to minimise proliferation financing risks.

https://carnegieendowment.org/2018/05/30/challenges-with-implementing-proliferation-financing-controls-how-export-controls-can-help-pub-76476

 

Out-Law provided a briefing on 30th May saying that as we approach 4th August, when US secondary sanctions begin to be reactivated, businesses with connections to Iran should be carefully considering their next steps.  It says that, in the face of such uncertainty, non-US businesses should start planning their exit from Iran – or, if committed to Iranian businesses notwithstanding the risk of US enforcement, establishing if they will be able to proceed on a legal and practical level.  It says that businesses should begin by asking themselves several questions which the article details.

https://www.out-law.com/en/articles/2018/may/us-iran-sanctions-non-us-businesses/

 

The Jersey Evening Post on 30th May reported that the chief executive of a Jersey finance firm has been banned from the industry after acting with a ‘serious lack of integrity’ and ‘incompetence of the most serious kind’.  The Royal Court rejected David Jonathan Francis’s appeal against the decision of the Jersey FSC to publicly criticise his business activities as chief executive and a major shareholder of Horizon Trustees (Jersey) Limited and to bar him from practice.

https://jerseyeveningpost.com/news/2018/05/30/finance-firm-chief-barred-for-serious-incompetence/

Breaking News on 30th May reported that a psychic turned financier – astrologer and tarot reader, Simon Gold, 53 – is facing trial accused of fraud and money-laundering offences.  Mr Gold is best known for his firm Astrology Ireland and has billed himself as “Ireland’s Leading 7th Generation Psychic Astrologer & Tarot Master”.

https://www.breakingnews.ie/ireland/psychic-turned-financier-to-face-trial-on-fraud-and-money-laundering-charges-846037.html

 

Gowling WLG, in the May 2018 edition of its Finance Litigation newsletter, reported on a case where the UK Court of Appeal has found that a debtor’s fears of extradition did not obviate the need for him to be cross-examined in person as to his assets under a worldwide freezing injunction.  In the case, the bank involved had made out a strong case against the respondent that he had been involved in a massive international fraud and was concealing evidence about relevant assets. The public interest in the court giving maximum practical effect to the freezing order it had granted was strong.

https://gowlingwlg.com/en/insights-resources/articles/2018/finance-litigation-cases-and-issues-may-2018

 

OFAC DESIGNATES IRANIAN ENTITIES ON SERIOUS HUMAN RIGHTS ABUSES, AS WELL AS 5 INDIVIDUALS

On 30th May, the US Treasury announced that OFAC had designated 2 Iranian entities for committing serious human rights abuses on behalf of the Government of Iran, as well as 3 leaders of one of these entities, the Ansar-e Hizballah organisation.  OFAC also designated an entity that has operated information or communications technology that facilitates monitoring or tracking that could assist or enable serious human rights abuses by or on behalf of the Government. OFAC also designated 2 individuals for engaging in censorship activities that prohibit, limit, or penalise the exercise of freedom of expression or assembly by citizens of Iran, and one individual for acting for or on behalf of an entity engaged in such censorship activities.   These designations, it says, come in the wake of recent protests by the Iranian people and the regime’s subsequent brutal crackdown. Included in the new designations is Abdulali Ali-Asgari, current Director General of Islamic Republic of Iran Broadcasting (IRIB) – itself already designated – and has acted on behalf of the organisation.

At the same time, OFAC has made amendments to the Iran sanctions entries relating to AL-BILAD ISLAMIC BANK FOR INVESTMENT AND FINANCE P.S.C, and AL-NASER AIRLINES (a.k.a. ALNASER AIRLINES),

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180530.aspx

OFAC AMENDS 1 ENTRY ON ITS UKRAINE/RUSSIA SANCTIONS LISTS

In its announcement of 30th May, OFAC also announced the amendment of one entry on its Ukraine/Russia sanctions list – DART AIRLINES (a.k.a. DART AIRCOMPANY; a.k.a. DART UKRAINIAN AIRLINES; a.k.a. TOVARYSTVO Z OBMEZHENOYU VIDPOVIDALNISTYU ‘DART’; a.k.a. “DART, LLC”; a.k.a. “DART, TOV”).

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180530.aspx

 

On 29th May, Forbes produced an article which starts by pointing out that the State Department’s Directorate of Defense Trade Controls (DDTC) processes about 39,000 export licence applications annually – about 10,000 are in the firearms and related items categories and of these, about 6,000 are for items that will move to the Commerce Control List (CCL) — including the vast majority of non-automatic and semi-automatic firearms under .50 calibre, and their ammunition.  It then outlines the advantages and disadvantages for businesses of the changes. The two main issues it highlights are keeping noise suppressors (commonly if incorrectly known as silencers — the noise made by a firearm can be suppressed, but not silenced) on the USML; and automatic firearms will remain on the USML even though manufacturers commonly produce both automatic and semi-automatic firearms on the same line, or using the same parts.

https://www.forbes.com/sites/tedbromund/2018/05/29/the-good-and-the-bad-of-reforms-to-firearms-export-controls/#d48f85e6b9a6