Day: May 27, 2018

DATA PROTECTIONISM: THE GROWING MENACE TO GLOBAL BUSINESS

An article from the Financial Times on 14th May argues that China’s digital protectionism is as great a threat as barriers it puts up for physical goods.  China severely restricts international transfers of data, the company incurs extra costs setting up local data storage and segregating some of the information from the rest of its operations.  Many countries are imposing similar, if less drastic, restrictions. As well as the expense of adding new national data centres, companies run much less efficiently if their information is Balkanised.  Governments have sharply increased “data localisation” measures requiring information to be held in servers inside individual countries. The European Centre for International Political Economy, a think-tank, calculates that in the decade to 2016, the number of significant data localisation measures in the world’s large economies nearly tripled from 31 to 84.  Business organisations including the US Chamber of Commerce want rules to restrain what they call “digital protectionism”. https://medium.com/financial-times/data-protectionism-the-growing-menace-to-global-business-f994da37e9e2

WHY THE PROBLEM OF ‘MONEY MULES’ IS ONLY LIKELY TO GROW

Illicit Trade on 25th April reported that a recent report from the UK fraud prevention body, Cifas, revealed that young Britons are increasingly being persuaded to act as money mules for hackers and other criminals.  The study highlighted a 27% rise in the number of 14 to 24-year-olds who allowed their bank accounts to be used to launder the proceeds of criminal activity last year. Throughout 2017, Cifas noted an 11% increase in the number of bank accounts that may have been used for money mule activities, suggesting that criminals are ramping up their efforts to recruit the cash-strapped to launder their ill-gotten gains.  Over recent years, a growing number of individuals and groups with funds to launder have used the internet to recruit mules who are happy to have cash paid into their bank accounts before forwarding it on. Criminals looking to recruit money mules often place advertisements on legitimate employment sites and classified listings services. Messaging apps such as WhatsApp and social media platforms including Facebook are also used to lure young people in.  In November, a Europol and the European Banking Federation operation resulted in 159 arrests, the identification 766 money mules and 59 money mule organisers operating in various countries across the globe. In total, law enforcement agencies that took part in the crackdown detected illicit money transfers worth $36 million.

https://www.illicit-trade.com/2018/04/why-the-problem-of-money-mules-is-only-likely-to-grow/

The Daily Nation on 27th May reported that Central Bank of Kenya (CBK) and the State watchdog, the Financial Reporting Centre, are  in a tight spot yet again as details of the multi-billion scandal at the National Youth Service continue to emerge.  It refers to a potential red flag – whether commercial banks involved reported any suspicious transactions to the CBK and the FRC, and if so, what regulatory action the agencies took to stem the payments.  

https://www.nation.co.ke/business/Banking-sector-regulators-on-the-spot-over-NYS/996-4582222-ojbgm4z/index.html?src=ilaw

 

On 27th May, Gulf News reported that 48% of Middle East respondents cited fraud and corruption as the greatest risk to their company, followed by cyberattacks, according to EY Global Fraud Survey.  The findings show that there is often a lag between the introduction of stronger anti-corruption laws and a change in behaviour. This year’s survey found that 42% of executives surveyed in the Middle East believe that corrupt practices still occur widely in business.

https://gulfnews.com/business/sectors/markets/fraud-biggest-risk-for-middle-east-companies-1.2227670?src=ilaw

 

APOLOGIES FOR ANY DUPLICATIONS – BUT THE BLOG SEEMED TO HAVE LOST SOME ENTRIES, ON MY COMPUTER ANYWAY…

FORMER UEFA PRESIDENT MICHEL PLATINI “HAS BEEN CLEARED OF BRIBERY CHARGES IN SWITZERLAND”

Sputnik News on 26th May reported that former UEFA president Michel Platini has been cleared of bribery charges in a case related to the graft scandal around FIFA, French media reported.

https://sputniknews.com/europe/201805261064832068-uefa-platini-prosecution-charges-lift/?src=ilaw

FACTBOX – HOW ITALY’S MINI-BOT “PARALLEL CURRENCY” WOULD WORK

On 26th May, Reuters reported that one of the most radical proposals in the programme of Italy’s new anti-establishment coalition is to issue securities to pay individuals and companies who are owed money by the state as payment for services or as tax rebates.  The article provides some questions and answers about the so-called “mini-BOT” – the name coined for Italy’s short-term Treasury bills.

https://uk.reuters.com/article/uk-italy-politics-minibots/factbox-how-italys-mini-bot-parallel-currency-would-work-idUKKCN1IQ2CL?rpc=401&

CURRENT UK ARMS EMBARGOES AND OTHER RESTRICTIONS

On 25th May, the Department for International Trade published updated details of arms embargoes, trade control restrictions, defence export policies and restrictions on terrorist organisations.

https://www.gov.uk/guidance/current-arms-embargoes-and-other-restrictions

GLOBAL CONFERENCE ON ILLICIT FINANCIAL FLOWS AND TRADE MIS-INVOICING

On 25th May, a news release from the World Customs Organisation reported that over 100 participants representing customs administrations, international organisations and the private sector attended the WCO Global Conference on Illicit Financial Flows (IFF) and Trade Mis-invoicing which took place at WCO Headquarters on 23rd May.  The WCO the Secretariat had concentrated its efforts on the production of a Study Report on the topic of IFF and Trade Mis-invoicing. That Report, which is the culmination of many months of empirical analysis and collaboration between Administrations, the Secretariat and other industry experts, provided a narrative background to the Conference.  The Study Report is a living document which will be shared with Members for their comments and input, before being assessed and approved by the Council, the WCO’s highest decision-making body, in June 2018. An excerpt of the Report will be presented to the G20 for their consideration.

http://www.wcoomd.org/en/media/newsroom/2018/may/global-conference-on-illicit-financial-flows-and-trade-mis-invoicing.aspx

SOUTH AFRICAN STATE CAPTURE HEARINGS TO START IN AUGUST

Defence Web on 25th May reported that an inquiry into allegations of influence peddling around former President Jacob Zuma and businessman friends of his will begin formal public hearings in August and could take 2 years or more, the head of the commission said.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51827:south-african-sate-capture-hearings-to-start-in-august&catid=54:Governance&Itemid=118

NCA SUSPICIOUS ACTIVITY REPORTS (SAR) ANNUAL REPORT 2017

The NCA has released the annual report that  covers a longer time period than previous reports, spanning the 18 months between October 2015 and March 2017 inclusive, as the the SARs Regime Committee decided in March 2016 to attempt to harmonise the SAR reporting period with the financial year.  Future SAR Annual Reports will cover the April to March period.

http://www.nationalcrimeagency.gov.uk/publications/suspicious-activity-reports-sars/826-suspicious-activity-reports-annual-report-2017/file

INCREASING NUMBER OF STATES USING ARMED UAV

Defence Web on 25th May reported that over the last 5 years the number of countries actively using armed unmanned aerial vehicles (UAV) has quadrupled, according to new research.  A new report published by Drone Wars UK entitled ‘Drone Wars: The Next Generation’ shows that from just 3 states (US, UK and Israel) in 2013, there are now a further 9 who have deployed armed drones, or UAV, in a variety of roles including for armed conflict and counter-terror operations.  The report also shows that a further 9 states are very close to having armed drone capabilities, almost doubling the number of existing users and to this number can be added 5 non-state actors who have used armed drones,

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=51835:increasing-number-of-states-using-armed-uavs&catid=125:unmanned-aerial-vehicles&Itemid=306

LATVIAN REGULATOR FINES MERIDIAN TRADE BANK OVER MONEY LAUNDERING

Reuters on 26th May reported that Latvia’s banking watchdog said it had fined Meridian Trade Bank (formerly Russian-owned SMP Bank), a financial firm mainly serving clients in Russia and other former Soviet states, for breaching money laundering rules.  Financial and Capital Market Commission (FCMC) said in a statement it had fined Meridian almost €456,000.

https://uk.reuters.com/article/us-latvia-banking/latvian-watchdog-fines-meridian-trade-bank-over-money-laundering-idUKKCN1IQ2GU

OECD’S FIRST PEER REVIEWS OF COUNTRY BY COUNTRY REPORTING INITIATIVES

Accountancy Daily from CCH on 25th May reported that the OECD has released the first peer reviews of the operation of the country by country reporting (CBCR) measures resulting from its base erosion and profit shifting (BEPS) project, which show that practically all countries that serve as headquarters to the large multinationals covered by the initiative have introduced new reporting obligations compliant with transparency requirements.

https://www.accountancydaily.co/oecds-first-peer-reviews-country-country-reporting-initiatives

DEADLY CHINESE FENTANYL IS CREATING A NEW ERA OF DRUG KINGPINS

On 22nd May, an article in Bloomberg argued that the opioid’s potency has transformed the global trafficking — and policing — of narcotics.  This is in part because it is one of the world’s deadliest and most profitable narcotics, so strong that it’s been studied as a chemical weapon, it has saturated American streets with breathtaking speed.  It kills more people than any other opioid, including prescription pills and heroin, because it’s so easy to overdose. It explains that a kilogram from China for $3,800, which, when turned into tablet form, could fetch on the street up to $30 million.  Compare that with a kilo of heroin, which wholesales for about $50,000 and generates a profit of just $200,000.

https://www.bloomberg.com/news/features/2018-05-22/deadly-chinese-fentanyl-is-creating-a-new-era-of-drug-kingpins

RARE MONKEYS ARRIVE IN DORSET FOLLOWING BEIRUT RESCUE

The Dorset Eco on 27th May reported that a pair of extremely rare White-throated guenons are now recovering at Monkey World, after being seized from smugglers at Beirut airport.  The primates, a new species for Monkey World, were confiscated at the airport after being smuggled into Lebanon via a passenger flight from Ghana. Lebanese authorities have been cracking down on the illegal wildlife trade, after joining the Convention on the International Trade in Endangered Species (CITES) 5 years ago.

http://www.dorsetecho.co.uk/news/16251491.Rare_monkeys_arrive_in_Dorset_following_Beirut_rescue/

ISRAELI PUBLISHES DRAFT LAW CONCERNING MONEY LAUNDERING AND CRYPTOCURRENCY

Finance Magnates on 27th May reported that Israel has taken a step forward in regulation cryptocurrency with draft legislation concerning money laundering via cryptocurrency.  It explains that on 1st June a new law covering financial service providers will come into effect, including provision for digital asset providers for the first time and the new draft notice is an addition to this new law.

https://www.financemagnates.com/cryptocurrency/news/israeli-publishes-draft-law-concerning-money-laundering-cryptocurrency/

SOUTH AFRICAN POLICE INVESTIGATE ALLEGED CRYPTO PONZI-SCHEME INVOLVING 28,000 INVESTORS

Coin Telegraph on 26th May reported that South African Police are pursuing an alleged major cryptocurrency investment fraud.  According to a police statement, over 28,000 investors are said to have suffered losses exceeding $80.4 million.  The Hawks, an investigative unit of South Africa’s Directorate for Priority Crime Investigation (DPCI), have outlined the case, which they say involves “BitCaw Trading Company, commonly known as BTC Global”.  Promises involved 2% interest per day, 14% per week and ultimately 50% per month. BitCaw Trading has denied the company has had any involvement with BTC Global.

https://cointelegraph.com/news/south-african-police-investigate-alleged-crypto-ponzi-scheme-involving-28000-investors?src=ilaw

SCOTLAND’S MINIMUM ALCOHOL PRICING WILL HELP CRIMINALS AND MAKE LIFE WORSE FOR PROBLEM DRINKERS

Illicit Trade on 2nd May carried a posting saying that Scotland has become the first country in the world to introduce a minimum price for alcohol.  After a lengthy legal battle with the drinks industry, the Scottish government has made it illegal for any alcoholic beverage to be sold for less than 50p per unit.  As a result, Scottish drinkers now find themselves having to fork out a minimum of £4.50 for a bottle of wine, a similar amount for a 4-pack of continental-strength lager, or at least £14 for a bottle of standard whisky.  The article argues that tt is likely that problem drinkers and alcoholics in Scotland will now simply look for new ways to get the money they need to fund their habits, or seek out alternative ways to achieve the oblivion they crave.  While the former option might result in them turning in greater numbers to petty crime, experts have warned that making cheap alcohol prohibitively expensive for low-income drinkers could persuade some to experiment with former so-called legal highs such as Spice.  The new minimum pricing in Scotland will also almost certainly result in a new cross-border smuggling market emerging.

https://www.illicit-trade.com/2018/05/scotlands-minimum-alcohol-pricing-will-help-criminals-and-make-life-worse-for-problem-drinkers/

BTC Manager on 26th May reported that Polish digital currency investors have refused to abide by the PPC Law, due to its draconian nature.  Now the Polish authorities have agreed to temporarily suspend the “Civil Law Transactions Tax,” which aims to tax all crypto-related transactions regardless of profits made.  The Polish Finance Ministry plans to formulate another regulation after conducting an “in-depth analysis“ of the virtual currency industry. In April 2018, the ministry had issued a notice saying that all digital currency transactions attract an income tax of either 18% or 32%, plus an additional 1% levy tax since the government sees cryptocurrency trading as a transfer of property rights.

https://btcmanager.com/polands-cryptocurrency-tax-law-crashes-as-investors-resist-draconian-regulation/

 

Coin Telegraph on 27th May provided a handy guide to US agencies involved in regulating cyber and virtual currencies etc.

https://cointelegraph.com/news/sec-cftc-irs-and-others-a-guide-to-us-regulating-bodies

 

On 26th May, Gulf News reported that President Donald Trump said the US would allow Chinese telecommunications-equipment maker ZTE Corp to remain in business after paying a $1.3 billion fine, changing its management and board and providing “high-level security guarantees”.  ZTE would also have to hire American compliance officers, a source is quoted as saying.

https://m.gulfnews.com/business/sectors/technology/trump-says-china-s-zte-to-pay-1-3-billion-fine-to-reopen-1.2227172