19th May 2018
PUBLIC RELEASE OF 1MDB REPORT IN MALAYSIA SIGNALS IMPORTANT TURN
On 16th May, Transparency International said that it applauds the actions of Malaysian Prime Minister Mahathir Mohamad to publicise the details of an auditor-general report into 1Malaysia Development Berhad (1MDB). Previously classified as secret, the report’s findings on 1MDB are critical to promoting anti-corruption efforts across the country. The 1MDB scandal, which is estimated at more than $4.5 billion, involves political leaders at the highest levels of government.
COLOMBIA EXTRADITES FROM US KEY WITNESS IN SUPREME COURT BRIBERY SCANDAL
On 18th May, Colombia Reports that Colombia’s former anti-corruption chief, Luis Gustavo Moreno, who has admitted to bribing the country’s Supreme Court, was extradited after a deal with the US. Testimonies given by Moreno resulted in the arrest of a former Supreme Court chief justice. One magistrate was removed from the court and a second former chief justice was also accused of having received bribes from politicians in what became known as the “Toga Cartel”. More than 25 former officials from all branches of government have since been implicated in the scandal, according to local media.
https://colombiareports.com/colombia-extradites-prime-suspect-in-supreme-court-bribery-scandal/
THE PASSPORT DEALERS AND “GOLDEN VISAS” OF EUROPE
On 6th March, Transparency International published a feature providing a non-exhaustive list of the options at your disposal in what it calls the “European Golden Visa Shop”. The idea, it says, is simple: governments trade citizenship or residence rights for investment. Arrangements differ from country to country, and requirements may include investment in business, real estate or government bonds. Over 20 countries or territories currently offer Golden Visa programmes worldwide, including 13 in Europe: Austria, Belgium, Bulgaria, Cyprus, Greece, Latvia, Lithuania, Malta, Monaco, Portugal, Spain, Switzerland, and the UK. Hungary ran a controversial Golden Visa programme from 2013 to 2017 [and is reported to be restarting a modified version].
https://www.transparency.org/news/feature/navigating_european_golden_visas
UN LIBYAN SANCTIONS: IMPLEMENTATION OF UN SCR 2357
On 11th May, the UN Secretary General published a report on the implementation of UN SCR 2357 which authorised and extended the inspection by Member States, acting nationally or through regional organisations, with appropriate consultations with the Government of National Accord in Libya, on the high seas off the coast of Libya, of vessels bound for or from Libya for which there are reasonable grounds to believe that they are carrying arms or related materiel. These inspections constitute an important part of its ongoing efforts to reinforce the implementation of its arms embargo adopted through UN SCR 1970. The UN Security Council had already called upon Member States to conduct inspections of cargo in their territories that was heading to and coming from Libya, which included inspections at airports and seaports, if the Member State had information that provided reasonable grounds to believe that the cargo contained prohibited items. Moreover, and outside the scope of the arms embargo but still pertaining to Libya, the Security Council also mandated the inspection on the high seas of vessels in other circumstances – to prevent illicit exports of petroleum from Libya and human trafficking. The seizure and disposal of prohibited items and collection of evidence appears quite limited, on the basis of what the report says. The report makes several recommendations (such as improved training and better intelligence on smuggling methods and routes).
https://reliefweb.int/sites/reliefweb.int/files/resources/N1813324.pdf
https://www.unodc.org/unodc/en/money-laundering/laundrycycle.html
US ADDS 33 NAMES TO ITS “UNVERIFIED LIST”
On 17th May, the US Federal Register reported that the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding 33 persons to the Unverified List (UL”) and adding an additional address for 1 person currently listed on the UVL. The 33 persons are being added to the UVL on the basis that BIS could not verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the US Government’s control. Although BIS has an interest in informing the public of its inability to verify the foreign party’s bona fides, there may not be sufficient information to add the foreign person at issue to its Entity List (which could amount to an export prohibition).
https://www.federalregister.gov/documents/2018/05/17/2018-10528/revisions-to-the-unverified-list-uvl
437 KG OF VIAGRA SEIZED AT SOUTH AFRICAN AIRPORT
IOL on 18TH May reported that customs officials said that they had seized 437 kg of male sexual enhancement pills (Viagra) at OR Tambo International Airport. This represents the biggest bust of sexual enhancement pills at the airport in the past year.
https://www.iol.co.za/ios/news/r30-million-worth-of-viagra-seized-at-or-tambo-airport-15044272
JAIL FOR MAN WHO TRIED TO SMUGGLE STUN GUNS INTO DOVER
Kent Online on 18th May reported that Przemyslaw Dehr, 50, a company boss who tried to smuggle 199 disguised stun guns (together with CS gas canisters) into Dover has received an 8-year jail term – though he fled the UK months before his trial was due to begin at Canterbury Crown Court and has not been seen since even though he was not in court.
http://www.kentonline.co.uk/dover/news/stungun-smuggler-thought-to-have-fled-to-poland-183224/
US: MEN WHO ALLEGEDLY PUBLISHED THOUSANDS OF MUGSHOT PHOTOS ARRESTED FOR EXTORTION
On 18th May, the Guardian and others reported that Thomas Keesee and Sahar Sarid, 2 of the alleged owners of Mugshots.com, have been arrested in Florida, following an investigation led by the Northern California Computer Crimes Task Force. Along with the other 2 co-owners, Kishore Vidya Bhavnanie and David Usdan, they are accused of extracting more than $2 million in mugshot-removal fees from over 5,000 people in a 3-year period. Mugshots.com isn’t the only business to have turned a profit from people’s arrest photos; it’s part of a wider and controversial industry. There are also “mugshot tabloids” like Just Busted, for example, which make money by selling papers full of booking photos of people arrested in the local area, with captions describing the crimes they are accused of committing. Mugshots.com made its income from people paying to get their photos removed from a central, easily searchable database.
https://www.theguardian.com/us-news/2018/may/18/mugshot-photos-arrested-extortion-just-busted
FinCEN GRANTS A 90-DAY EXEMPTION FROM THE BENEFICIAL OWNERSHIP RULE FOR CERTAIN FINANCIAL PRODUCT RENEWALS AND ROLLOVERS
Vedder Price reported on 18th May that on 16th May FinCEN issued an administrative ruling that provides covered financial institutions with a 90-day exemption from the beneficial ownership requirements with respect to certain financial products and services that automatically rollover or renew (e.g., CDs or loan accounts) and which were established before May 11th.
https://www.jdsupra.com/legalnews/bsa-aml-alert-fincen-grants-a-90-day-28108/
UK GUIDANCE: CORPORATE OFFENCES FOR FAILING TO PREVENT CRIMINAL FACILITATION OF TAX EVASION
On 18th May, HMRC issued updated guidance to help one understand laws introduced to encourage businesses to prevent their representatives helping clients evade tax.
WOMAN FAILS TO RECOVER ALMOST €30,000 SEIZED BY GARDAÍ AS PROCEEDS OF CRIME
The Journal on 19th May reported that a woman, Lydia Whelan, whose nephew is allegedly in an organised crime gang has failed in her bid to recover almost €30,000 seized by gardaí as the proceeds of crime. The cash was seized on 14th June 2011 during a search of a house where her nephew, James Whelan, was living at the time.
http://www.thejournal.ie/court-assets-of-crime-4021529-May2018/?src=ilaw
NEW GUERNSEY ECONOMIC DEVELOPMENT STRATEGY
On 18th May, Guernsey published its new Economic Development Strategy which seeks to maintain the Island’s prosperity both now and in the coming decade. The Island’s parliament will debate the Strategy in June.
POLITICAL VIOLENCE AND CRIME INCIDENT REPORT: Q1 2018
Control Risks has released its latest update (available as free download) which analyses global incidents of war, terrorism, unrest and violent organised crime with commercial relevance.
MALTA RISKS BEING TAKEN OVER BY THE MAFIA, ITALIAN REPORT CLAIMS
The Times of Malta on 19th May in article said that a report by an Italian anti-Mafia foundation has warned that Malta might be “taken over by Mafia interests” if nothing is done and if the EU keeps “closing its eyes” to what is happening on the island. In its conclusions the Florence-based Fondazione Caponnetto said that “if no immediate action is taken, Malta risks being controlled by local and international criminal groups” connected to the Mafia. The report claims that the attitude of foreign groups using Malta for their interests, aimed at going around international sanctions, represents “a risk factor which cannot be ignored”.
PRESIDENT BUHARI’S FIGHT TO RECOVER NIGERIA’S STOLEN ASSETS
On 19th May, Deutsche Welle carried an article saying that, for quite some time now, Nigeria has been intensifying efforts to recover stolen state assets from abroad. President Muhammadu Buhari’s government has won some recent battles — but it is fighting a losing war. Nigeria has even slipped on Transparency International’s Corruption Perception Index — from the 136th place when Buhari was inaugurated to 148th out of the 180 countries surveyed. But there is one area in which Buhari is intensifying efforts: the recovery of embezzled and stolen assets domestically and abroad. A major international example was in April, when his government managed a spectacular success, announcing that over $320 million had been returned by Switzerland (from the Sani Abacha case, he being the 1990s military dictator). Much of the other recovered assets were from domestic Nigerian sources.
http://www.dw.com/en/president-buharis-fight-to-recover-nigerias-stolen-assets/a-43853588?src=ilaw
US ARM OF DUTCH RABOBANK SENTENCED FOR AML OFFENCES
On 18th May, Mondo Visone reported that Rabobank National Association, a California subsidiary of the Netherlands-based Coöperatieve Rabobank, was sentenced for impairing, impeding and obstructing its primary regulator, the OCC, by concealing deficiencies in its AML programme and for obstructing the OCC’s examination of Rabobank. Rabobank was sentenced to a 2-year term of probation and ordered to pay the statutory maximum fine of $500,000. Additionally, as part of its guilty plea, Rabobank forfeited $368,701,259 as a result of allowing illicit funds to be processed through the bank.
DRUG TRAFFICKING, ELECTION FUNDS DEFICIT COULD DERAIL GUINEA-BISSAU’S PROGRESS
A UN news release on 16th May reported that while small forward steps to break a languishing political impasse in Guinea‑Bissau were hopeful ahead of elections and the resumption of National Assembly plenary meetings, threats such as rampant drug trafficking and shortfalls in electoral project financing could hamper further gains, the Security Council heard from its Assistant Secretary‑General for Political Affairs.
https://www.un.org/press/en/2018/sc13343.doc.htm
PAKISTAN RACING TO MEET FATF DEMANDS BEFORE JUNE
WION in Pakistan [so not necessarily an impartial source] reported on 19th May that Pakistan is giving finishing touches to its action plan that proposes measures for combating money laundering and terror financing to prevent itself from being placed on the FATF grey list next month, according to a media report from Dawn News. A compliance report has been submitted to the Asia-Pacific Group (APG) – a sub-group within FATF – detailing the steps taken thus far and those that will be taken in the future to bring Pakistan’s financial, regulatory and legal landscape into compliance with the watchdog’s requirements. A meeting was convened at the Foreign Office to review the proposed actions which are to be discussed with APG joint working group in Bangkok and this was the last in a series of meetings taking place within the government as officials race to meet the June deadline by when Pakistan will be placed on the FATF grey list.
http://www.wionews.com/south-asia/pakistan-racing-to-meet-fatf-demands-before-june-138257?src=ilaw
HE WAS COLOMBIA’S ANTI-CORRUPTION CHIEF – NOW, HE’S FACING BRIBERY CHARGES IN MIAMI
The Miami Herald on 19th May carried an article about Colombia’s former anti-corruption chief, Luis Gustavo Moreno Rivera, and a private attorney who were extradited from Bogotá to Miami on charges of a foreign bribery scheme that US authorities say unfolded at a Miami-Dade mall and other locales.
http://www.miamiherald.com/news/nation-world/world/americas/colombia/article211461434.html#storylink=cpy
LATVIAN AML OFFICE LOOKING INTO TRANSACTIONS LINKED TO MALTA CORRUPTION SCANDAL
On 19th May, Re Baltica in Latvia carried an article claiming that Maltese investigators have asked help of the Latvian AML office to trace the payments via the Latvian bank, ABLV, in the alleged corruption case which, coupled with a murder of Daphne Caruana Galizia, has shook Malta, but there is no formal criminal investigation opened and the probe is slow. According to the Times of Malta, local investigators believe that the 2 payments of $1.4 million in November 2015 which came from Seychelles registered company with account in ABLV to various shell companies were allegedly meant to line the pockets of high-ranking Maltese politicians and their associates.
US DEPORTS RUSSIAN MAN CONVICTED OF NUCLEAR BRIBERY SCHEME
On 19th May, Rferl reported that news agencies say that US authorities have deported a former Russian executive previously convicted of arranging corrupt payments linked to the Russian state nuclear company, Rosatom. Vadim Mikerin, 59, was sentenced to 4 years in prison in 2015, was deported by federal authorities on May 18th. He was an executive with a Maryland-based subsidiary of Tenex, a Rosatom-owned firm that supplies and exports uranium and enrichment services to nuclear power companies worldwide. He was reported to have helped facilitate the payment of bribes made to win “improper business advantages” for US firms that worked with Tenex.
ONLINE BETTING INDUSTRY VOWS TO FIGHT DUTY RISE IN LIGHT OF FOBT DECISION
The Racing Post on 18th May reported that representatives of the online gambling industry said they would push back against plans to raise remote gaming duty to make up for lost tax receipts caused by the government’s cut in FOBT stakes. The government announced that it was cutting FOBT stakes to £2 from £100, with the change linked to an increase in the duty paid by online gaming operators.
NETHERLANDS: 4 ARRESTED IN DARK WEB DRUG BUST; COCAINE, PILLS SENT BY POST
On 19th May, Customs Today reported that Dutch police had busted a drug network and 4 men were arrested for trading drugs on the Dark Web and sending drugs all across the world through the regular postal service. The suspects had clients all over the world and sent drugs, mostly ecstasy, to their clients in normal postal packages and envelopes.
http://www.customstoday.com.pk/four-arrested-in-dark-web-drug-bust-cocaine-pills-sent-by-post/
JERSEY BUSINESSES LOSE £1 MILLION IN CYBER ATTACKS
The Jersey Evening Post on 19th May reported that fraudsters have stolen more than £1 million from Jersey businesses in a wave of ‘highly sophisticated’ cyber-attacks. They used ‘impersonation attacks’ specifically against large Jersey companies, businesses are being sent false invoices or payment requests that are identical to official versions, with the exception of the bank account details.
https://jerseyeveningpost.com/news/2018/05/19/big-firms-lose-1m-in-cyber-attacks/#wyu2lXskCttLyOy1.99
DIGITAL POLICING REVIEW – TECHNOLOGY FUTURES OPERATIONS
Vigilant Research has produced a report. The Digital Policing Review Technology Futures Operations report examines the current resourcing and demand for technology futures operations within the UK police service. It considers how policing can best work with industry, academia and peers to realise the ambition of effective, sustainable technology futures. Police and “government readers” can request a free copy by providing an email address. According to Tech UK, the research was proposed by the National Police Technology Council, and it examines the current state and resourcing of technology futures operations within the UK police service, considers operating models for the capability within comparable businesses and the technology industry, categorises and sets out policing’s technology futures requirements, reviews the external sources of technology futures insight and proposes appropriate objectives for a centralised police technology futures capability. The paper confirms that the service has much to gain from technology futures insight which is shaped by the police technology community and suggests some proposals for improving capability by harmonizing operations to which technology futures activities are well suited.
INFOGRAPHIC: THE EVOLUTION OF INTERNATIONAL MONEY TRANSFERS
On 18th May, Fintech Futures produced an interesting infographic which traces the evolution of international money transfers from barter to Bitcoin, from around 3,000 BC to date. The infographic is free to download at –
https://www.bankingtech.com/2018/05/infographic-the-evolution-of-international-money-transfers/
UK GOVERNMENT ANNOUNCES WIDE-RANGING CHANGES FOR BOTH RETAIL AND ONLINE GAMBLING IN THE UK
Paul Hastings on 18th May published a briefing outlining planned changes to the gambling industry in the UK, changes which extend beyond those relating to FOBT stakes and balancing online gambling tax increases.
https://www.paulhastings.com/publications-items/details/?id=a7fccc6a-2334-6428-811c-ff00004cbded
THE UNTOLD STORY OF JAPAN’S SECRET SPY AGENCY
On 19th May, The Intercept carried an interesting feature on a secret spy agency headquarters for the Directorate for Signals Intelligence, Japan’s version of the National Security Agency. Its role is to eavesdrop on communications. But its operations remain so highly classified that the Japanese government has disclosed little about its work – even the location of its headquarters.
https://theintercept.com/2018/05/19/japan-dfs-surveillance-agency/
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