14th May 2018
TRUMP ORDERS U-TURN OVER SANCTIONS AGAINST CHINESE TELECOM GROUP
The Financial Times and others sources reported on 13th May of US backtracking on restrictions on Chinese-based telecoms company, ZTE. It is reported that a personal request from the Chinese president is the reason. A US ban crippled the Chinese technology company. ZTE suspended its main operations after the US Commerce Department banned US companies from selling to the firm for 7 years as punishment for ZTE breaking an agreement reached after it was caught illegally shipping US goods to Iran.
MYANMAR’S INVISIBLE WAR ON THE KACHIN CHRISTIAN MINORITY – ACCESS TO JADE AND AMBER A CAUSE
On 14th May, the Guardian carried an article about the Kachin minority in Burma/Myanmar. They are from the country’s north, in the state of Kachin, where another brutal but far less well publicised conflict is playing out between the largely Christian minority group and government militias. Conflict broke out after the military seized control of the country in 1962 and the Kachin Independence Army (KIA) was formed to defend Kachin land. One of the reasons for the ongoing repression is said to be the fact the area is the location of a wealth of amber mines and elsewhere in the state, there are lucrative jade mines. It is said that the total export figures of illegal jade sales, usually smuggled across the border to China’s Yunnan province, is in the billions. Between 50% to 80% of jade is smuggled across the Chinese border, and jade sales primarily line the pockets of well-connected cronies, military elites, drug lords, armed groups, and the Chinese.
ONLINE SHOPPING ALLOWS GUNS TO BE SMUGGLED INTO BRITAIN, NCA WARNS
On 14th May, the Telegraph reported that rising gun violence in Britain is being fuelled by online shopping as gangs smuggle weapons hidden among legitimate parcels, the NCA has warned. NCA warned that a surge in the number of parcels arriving into the UK is being exploited by gangs who are “concealing illicit goods amongst legitimate traffic”. The newspaper reports on the NCA strategic assessment of serious organised crime across the UK for 2018, which found that there were 4,629 organised crime groups in the UK at the end of last year.
Also in the NCA report –
GANGS BUY PLANES TO SMUGGLE MIGRANTS INTO REMOTE AIRSTRIPS
On 14th May, the NCA warned that thousands of airstrips across Britain could be exploited by criminals moving illegal immigrants into the country and reveals that organised crime groups have spent significant money buying or hiring aircraft to get people into Britain illegally. The report says that the UK has over 3,000 airstrips, presenting opportunities for criminals to use general aviation to exploit the UK border”.
ATTEMPT TO SMUGGLE HISTORIC BOOKS, MANUSCRIPTS FROM EGYPT FAILED
On 13th May, Egypt Today reported that an attempt at Cairo International Airport to smuggle 7 parcels containing 3 historic books, manuscripts and 10 governmental documents to an Arab country has been foiled.
NIGERIA: NEW AML/CFT PENALTIES REGIME FOR BANKS
The Nation in Nigeria reported on 13th May that the Central Bank of Nigeria (CBN) and the Office of the Attorney General of the Federation (OAGF) have approved new administrative sanctions regime against banks and their staff who fail to comply with AML/CFT regulations.
SINGAPORE LAUNCHES BEST PRACTICE PAPERS TO COMBAT MONEY LAUNDERING, TERRORISM FINANCING
The Strait Times on 14th May reported that Singapore regulators and the banking industry launched 2 best practice papers to better prevent money laundering and terrorism financing, in the wake of the 1MDB scandal that hit the city-state and amid the increasing sophistication of financial crimes. The papers discussed common red flags linked to trade-based money laundering, as well as recent typologies involving the misuse of companies and other legal persons. Such typologies include the round-tripping of funds controlled by the same or related individuals.
INJUNCTION AGAINST PERSONS UNKNOWN IN FRAUD CLAIM
On 1st May, Addleshaw Goddard published an article about an application for a worldwide freezing order. The email account of one of its senior managers had been hacked and payment instructions were sent for several large transfers to banks around the world from an account, amounting to around £6.3 million. The unusual feature in the case was that the claimant could not identify named individuals in its application for permission to serve out of the jurisdiction. English courts in 2003 had confirmed that they have jurisdiction in general against persons unknown. In this case, on the facts before the court England & Wales was the most appropriate forum as it was from here that the monies had been taken. The firm concludes that, given the rise in email system breaches and hacks, the decision may give some comfort to fraud victims that they should not be left with no way to trace and preserve funds.
UNPRECEDENTED CORPORATE BRIBERY TRIAL BEGINS IN MILAN
Ekklesia on 14th May reported that Royal Dutch Shell and Italian oil company Eni, along with a number of their senior executives, face criminal charges in Milan of aggravated international corruption for their role in a $1.1 billion deal for a Nigerian oil block. No company as large as Royal Dutch Shell or such senior executives of a major oil company have ever stood trial for bribery offences.
KEY JUDGMENTS ON SOLICITORS’ LIABILITY FOR PROPERTY TRANSACTIONS HIJACKED BY FRAUDSTERS
On 14th May, the Law Society Gazette reported that the Court of Appeal is due to give judgment in Dreamvar (UK) Limited v Mishcon de Reya and P&P Property Limited v Owen White & Catlin LLP. At stake is the issue of who should bear the financial burden where fraudsters have posed as sellers to complete a property purchase, then diverted funds transferred by the buying party.
HMRC SPENDING ON DEBT COLLECTORS UP BY MORE THAN 500% IN 3 YEARS
The Guardian on 14th May reported that what HMRC paid to private-sector debt collectors has risen by more than 500% in 3 years, suggesting it may be stepping up the pressure on people who cannot pay their tax bills. The figure rose to £39.1 million in 2017, which was 62% higher than that HMRC spent on these services in 2016, according to the accountancy firm UHY Hacker Young.
HUNDREDS OF SMUGGLED ANIMALS FOUND IN SUITCASE IN RECORD-BREAKING CUSTOMS SEIZURE IN AUSTRALIA
On 1st May, ABC News reported that Western Australia’s largest seizure of native Australian animals has been recorded by police, with 219 creatures found stuffed inside a suitcase and other containers in a car believed to be attempting to cross the state border into South Australia. The haul included 198 reptiles — 58 of them venomous — as well as 16 marsupials, 3 cockroaches and 2 spiders.
‘MAFIA-LINKED’ GAMING FIRM FROM MALTA OPERATED WITH NO LICENCE
The Times of Malta on 14th May reported that a gaming company with alleged Mafia links continued to operate from Malta despite having its licence cancelled by the regulator. Gżira-based gaming company, Leaderbet, continued to operate even after its parent company, LB Group, had its licence cancelled in February. LB Group was managed by a Cosa Nostra branch from Mazara del Vallo, a city in the west coast of Sicily controlled by Matteo Messina Denaro. He has been on the run since 1993 and court records show that the prosecutors believe online gaming might have lately financed his life in hiding. Who owns LB Group remains a mystery as its shareholding is hidden behind fiduciaries acting on behalf of the real owners. Until 2016, LB Group’s shares were held by a Maltese trust company called GVM Holdings, part owned by David Gonzi, son of former prime minister Lawrence Gonzi.
€1.2 MILLION CASH FOUND IN IRISH CAR BOOT DEEMED PROCEEDS OF CRIME
The Irish Examiner on 14th May reported that a High Court judge has deemed that €1.2 million cash found in the boot of a car seized following a Garda Intelligence operation is the proceeds of crime. The money was recovered by the Criminal Assets Bureau (CAB) in August from a vehicle driven by haulier John Fitzgerald after he was stopped at a Garda checkpoint.
HMRC: A CENTRAL PIECE OF THE UK’S AML PUZZLE
An article from the Royal United Services Institute on 14th May pointing out the HMRC is also in the forefront of the fight against money laundering, but that its efforts are not always amenable to public scrutiny. It says it has key functions in any crackdown against the “professional enablers” in clamping down on dirty money. HMRC’s AML supervision role is crucial – and complex. It could almost be seen as the supervisor of last resort, allocated to those sectors that do not naturally fit elsewhere, and supervises such things as money service businesses, ’standalone’ trust and company service providers, all real estate agents, and all high-value dealers. The article calls for greater transparency in its role, and greater co-operation and information-sharing to improve its, and others’, effectiveness.
ROMANIAN EX-PM CLEARED OF GRAFT
The Seattle Times on 14th May reported that Victor Ponta, a former Romanian PM, recently cleared of graft charges has urged prosecutors to clean up in-house or risk interference from politicians. He was premier 2012-2015, and was acquitted on May 10th of making false statements, money laundering, conflict of interest and being an accomplice to tax evasion. However, prosecutors can appeal the ruling.
ALBANIAN EX-INTERIOR MINISTER TO STAND DRUG TRAFFICKING TRIAL
OCCRP on 14th May reported that an Albanian court decided that Saimir Tahiri, the former minister of interior will have to remain under house arrest and face trial on charges of drug trafficking and corruption.
US SUPREME COURT OPENS DOOR TO LEGAL SPORTS BETTING
On 14th May, the New Jersey Law Journal reported that the US Supreme Court has struck down the 1992 federal law that bans most states from licensing sports betting, opening the door to legalised sports gambling nationwide. The decision could transform sports and sports gambling from coast to coast. It is currently a mostly illegal activity that, according to the American Gaming Association, “has grown to a $150 billion-a-year industry”.
UK BOOKIES BEWARE: US WILL LOOK AFTER ITS OWN IN BETTING REVOLUTION
The Guardian on 14th May carried an article saying that legalisation of sports betting in US should be greeted with caution by UK operators.
STANDARD CHARTERED BOSS WARNS OF WORSENING HACKING PROBLEM WITH MORE THAN £750 BILLION OF DIRTY MONEY IN THE SYSTEM EACH YEAR
On 14th May, This is Money reported that Bill Winters, the boss of Standard Chartered bank, has warned that banks and the police are unable to keep up with an online crime wave sweeping the world. He said more than £750 billion of dirty money flows through the financial system every year – but just 1% of it is frozen or confiscated. Although banks are spending more than ever on the problem, with his increasing annual spending on compliance 10-fold since 2012, it is not improving, he warned.
IRAN SANCTIONS THREATEN THE PETRODOLLAR
Oil Price on 14th May reported that, with US sanctions on Iran’s horizon, the Chinese yuan could further advance as the new “petrodollar”, as Beijing has vowed to continue buying Iranian crude, which will most likely be paid in yuan. Iran has already required the settlement of import deals in dollars and ditched the currency in favour of the euro in reporting its forex reserves. In other words, Iran will be more than happy to take in Chinese yuan for its crude, or alternatively, to apply some oil-for-goods exchange scheme similar to the one recently agreed with Russia. It says that settling Iranian imports in yuan is just the beginning. In the long run, it would make sense for many oil trades to be carried out in the currency of the top importer. But it will take years for the yuan to undermine the dollar as the ultimate petrocurrency.
SWITZERLAND DISCLOSES BANK ACCOUNTS OF YEFREMOV FAMILY FROM UKRAINE
112UA in Ukraine on 14th may reported that the Swiss authorities have disclosed to Ukrainian law enforcers information about the million-dollar bank accounts of the relatives of Olexander Yefremov, former chairman of Partiya Rehioniv (the Party of the Regions), who is currently in custody. It says that since 2006 CHF 33 million have been received from the companies of Cyprus, the BVI and Canada, which belong to the son and daughter-in-law of Olexander Yefremov. At the end of July 2014, the Prosecutor General’s Office of Ukraine opened a criminal case against him on the abuse of power.
EUROPEAN MARITIME SINGLE WINDOW
On 14th May, the EU Parliament Research Service published a briefing that says that reporting formalities for ships arriving in and/or departing from ports of the Member States are currently set out in Directive 2010/65/EU – the Reporting Formalities Directive (RFD). That Directive aims to simplify and harmonise administrative procedures in maritime transport by introducing a single window for reporting formalities for ships. The European Parliament has said it intends to introduce measures to simplify and harmonise administrative arrangements.
EU BRIEFING: FATCA LEGISLATION AND ITS APPLICATION AT INTERNATIONAL AND EU LEVEL
On 14th May, this EU Parliament Research Service briefing contains a study commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs at the request of the PETI Committee, and which analyses FATCA legislation (the US Foreign Account Tax Compliance Act) and its application at international and EU level: it first provides a global overview on exchange of tax information and of the FATCA mechanisms applied through intergovernmental agreements. The study then describes the extraterritorial nature and negative externalities of FATCA, in particular its impact on US citizens.
NEW BILL WOULD JAIL RUSSIANS FOR ADHERING TO WESTERN SANCTIONS
Rferl on 14th May reported that Russians who adhere to economic sanctions imposed by the US could be imprisoned for 4 years under legislation due to be considered in the Russian parliament. The Bill, co-sponsored by leaders of all 4 parties in the legislature, was submitted to the State Duma lower house on May 14th.
MODERN SLAVERY LAWS USED TO JAIL UK DEALERS WHO FORCED TEENAGE GIRL TO SELL DRUGS
Illicit Trade reported that prosecutors in the UK have used modern slavery legislation to jail a pair of drug dealers who trafficked a teenage girl between London and Cardiff and forced her to sell crack cocaine and heroin. The men were also made subject of 20-year slavery trafficking prevention orders, which are designed to protect people from those who have been convicted of modern slavery or human trafficking offences. The case involved so-called “county lines” operations – where mobile phones customers are told to call to place orders and sees older gang members send children to locations sometimes hundreds of miles away from their homes to sell substances such as heroin and cocaine.
SOMALIA’S ILLICIT CHARCOAL TRADE THREATENS SECURITY, THE ENVIRONMENT AND LIVELIHOODS
The Mail & Guardian in South Africa carried a Deutsche Welle story on 14th May that reports that representatives from the UN and the Somali government came together in Mogadishu this month to consider the main aspects of the problem – the security situation and the impact of the trade on the lives of people and the environment. Al-Shabaab fighters arrive “from time to time” to collect payments from traders who operate in areas under its control, and concern is growing that Somalia is slowly turning into a desert due to the loss of an estimated 8.2 million trees between 2011 and 2017 alone.