21st June 2018
TUSKS, BEAR BILE AND STUFFED BEASTS: INSIDE HEATHROW’S MORBID ‘DEAD SHED’
A depressing article in the Telegraph on 20th June, with the author having been permitted to visit a room at Heathrow Airport known as the “Dead Shed” where seized animal and other bits and pieces are stored and which is a training facility for the CITES team, whose job it is to disrupt the illegal wildlife trade at UK borders. One of the claims made by the team is that illegally-logged timber and unlawfully-sourced animal parts are often laundered through seemingly-reputable companies. One of the larger items to be seized by the CITES team was a bright-yellow sports car, which a well-known car manufacturer was trying to export to California and the interior of which used alligator leather with no export licence.
Illegal wildlife products
Number of seizures over 3 months: January to March 2018
ITALIAN CUSTOMS SEIZE SMUGGLED AFRICAN ARTEFACTS, ENDANGERED SPECIES AND CIGARETTES FROM PERSONAL EFFECTS IMPORT
The Independent in Nigeria reported on 21st June reported that Italian Guardia di Finanza said that they had intercepted a load of precious goods smuggled from Africa, including a Phoenician-Punic jug, possibly dating back to the 3rd Century BC, in a container shipped to Salerno from Eritrea in a container said to contain personal effects of 2 Italians returning home. Also found in the container were rare corals and shells, accessories made of snake and crocodile skin, African and Asian ivory as well as a large load of contraband cigarettes.
3 YEARS LATER AN INDIAN IDOL THEFT RACKET KINGPIN ARRESTED
The Indian Express reports on 21st June that 3 years after police seized 8 smuggled temple idols, the kingpin of the racket has been arrested. The theft and removal from India of such idols is a major problem.
CHINA: $33.5 MILLION SMUGGLED WINE NETWORK BUSTED
On 20th June, Drinks Business reported that another major wine smuggling bust had occurred in China, including 4,000 bottles of what was described as “blue chip” wine from Bordeaux. The smuggling ring operated in Zhuhai, a port city bordering Macau, and the wines were funnelled into the mainland by both under-reporting the value of the wines and hand-carrying by ‘coyotes’ – the parallel traders operating on the borders between the tax-free Macau and neighbouring Guangdong province. This is not the first time that Zhuhai has been thrust into the centre of Guangdong’s wine anti-smuggling campaign, another big bust having taken place in 2015.
US-LED COALITION KILLS THE ISIS CHIEF OF OIL SMUGGLING
Oil Price.com on 20th June reported that the coalition fighting Islamic State has killed the leader of the militants responsible for its oil and gas smuggling operations. It says that Abu Khattab al-Iraqi, the leader of ISIS’s oil network and who managed revenue generation through the illicit sale of oil and gas, was killed in Syria on May 26th, together with 3 other ISIS members affiliated with its oil and gas operations. The article also mentions that, according to a recent investigation by the New York Times and contrary to what has been assumed so far, black market oil sales were not the only and not even the largest revenue stream for ISIS – with “taxation” in its territory being greater.
The New York Times’ “ISIS Files” from April 2018 are available at –
NEW ZEALAND: BANKS USED BY THIRD PARTY TO OPERATE ACCOUNTS FOR UNLICENSED FINANCIAL SERVICES PROVIDER
On 21st June, Interest in New Zealand reported that the Reserve Bank says banks used by an employee to open accounts for financial services provider Worldclear in the name of another company probably didn’t know about the connection back to Worldclear. Worldclear Ltd was unable to establish and retain relationships with major New Zealand trading banks, apparently due to AML concerns held by the banks, so it hired Richard Whitham who set up T1 Holdings Ltd, which opened bank accounts and conducted financial transactions on behalf of Worldclear. A total of 26 bank accounts in T1 Holdings’ name were established with ANZ, ASB and BNZ, and with banks in Singapore and Europe.
MOVES TO BLOCK DIRTY MONEY FLOWING IN LOCAL REAL ESTATE IN AUSTRALIA
Financial Review on 20th June reported that the property sector is moving to shore up the local real estate sector against the effects of dirty money as Australia’s anti-corruption regime struggles to catch up with global standards. It says that the surge in investment from China especially has raised alarm bells. The federal government’s Black Economy Taskforce has recognised there is a problem and has proposed reforms to boost transparency and accountability. Foremost is extending the AML/CTF rules to cover non-financial businesses and professions such as real estate agents, jewellers, other high-value dealers, and trust and company service providers. The article mentions that neighbouring New Zealand is rolling out its own AML/CTF provisions progressively to various professions. The next stage will be applied lawyers, conveyancers, accountants, real estate agents, sports and race betting, and businesses that deal in certain high-value goods.
AFTERMATH OF THE “PANAMA PAPERS” IN AUSTRALIA
On 21st June, Financial Review carried an article about the effects of the release, in the light of a second tranche of leaked documents. Australia has raised $65 million in assessments, part of more than US$650 million raised around the world. The Australian Tax Office has completed 315 reviews or audits with another 81 audits still in progress. 3 individuals are under criminal investigation.
HOMELESS COUPLE IN BELGIUM WHO SHARED WINDFALL WITH FRIENDS ON TRIAL FOR MONEY LAUNDERING
The Guardian on 20th June reported that a homeless couple who found €300,000 in an old Singer sewing machine while squatting in an abandoned building are on trial for money laundering after giving away some of the windfall to people who had helped them in the past. The prosecution has accepted the couple, who are also facing charges of drugs possession, distributed the cash out of generosity. The owner of the abandoned building is said to want the cash returned.
PANAMA PAPERS: MOSSACK FONSECA WAS UNABLE TO IDENTIFY COMPANY OWNERS
The BBC on 20th June reported that a new leak of documents from the offshore service provider at the centre of the Panama Papers scandal reveals the company could not identify the owners of up to three quarters of companies it administered. It reports that 2 months after becoming aware of the data breach, Mossack Fonseca was unable to identify the beneficial owners of more than 70% of 28,500 active companies in the BVI as well as 75% of companies in Panama, according to new documents seen by BBC Panorama.
SFO: WHY THERESA MAY WANTED TO MERGE IT WITH THE NCA AND THE GOVERNMENT’S APPARENT RENEWED FAITH IN THE SFO
On 6th June, Squire Patton Boggs published the first of 2-part post looking at some of the infamous cases that may explain repeated attempts by Theresa May, first as Home Secretary and later as Prime Minister, to dismantle the SFO. On 12th June, the second part reflected on the important role the SFO continues to play in combatting corruption, fraud, and other forms of white collar crime, especially now its coffers have been boosted and Lisa Osofsky has been appointed the new Director.
SINGAPORE INTRODUCES DEFERRED PROSECUTION AGREEMENTS (DPA)
Reed Smith on 8th May published an article about the DPA framework in Singapore.
EUROPEAN COURT OF AUDITORS: EU CHEMICAL, BIOLOGICAL, RADIOLOGICAL AND NUCLEAR CENTRES OF EXCELLENCE – MORE PROGRESS NEEDED
On 19th June, the EU’s European Court of Auditors (ECA) published its report on the EU CBRN Centres of Excellence Initiative. The Initiative is the main scheme for mitigating chemical, biological, radiological and nuclear threats and risks from outside the EU. Though these risks are low, there are signs that they are on the rise and, if they were to materialise, their impact on the global health, environment and economy could be high. The ECA discusses whether the EU CBRN Initiative had mitigated the CBRN threat, concluding that it did but that many challenges remain, and the ECA makes a number of recommendations for improving the Initiative. In the Report it is said that the acquisition and malevolent use of CBRN components takes place, and the threat is expected to grow in the coming year.
BEIJING CONVENTION ON AVIATION SECURITY TO ENTER INTO FORCE ON 1st JULY
HFW on 20th June reported that following the recent ratification by the Turkish government, the ICAO has announced that the Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation (the “Beijing Convention”) will enter into force on 1st July. The briefing identifies the key aspects of the Beijing Convention, its ramifications for the airline industry, and preparatory steps airlines should consider to ensure their observance. The Beijing Convention creates a new international legal framework by requiring States to criminalise a number of emerging threats to the safety of civil aviation. These include using an aircraft as a weapon and the organising, directing and financing of acts of terrorism. The briefing says that major trading nations that have signed the treaty include the US, UK, China and South Korea. However, none of these countries have, to date, formally deposited their instruments of ratification with ICAO. The events of 9/11 highlighted several weaknesses in the international legal regime relating to aviation security. Parties that ratify the Beijing Convention agree to criminalise the use of civil aircraft as weapons; the use of dangerous materials to attack aircraft or other targets on the ground; the illegal transport of Biological, Chemical, and Nuclear weapons and related material; and hijacking and attacks on air navigation facilities by coercion or technological means. For example, ICAO has stated that cyber attacks on air navigation facilities are likely to constitute an offence under the Beijing Convention.
MECHANISM ON THE WAY TO FIGHT TRANSNATIONAL CRIME IN CENTRAL AND WEST AFRICA
Defence Web on 20th June reported that a ground-breaking agreement adopted by police chiefs from Central and West Africa will boost efforts to fight transnational threats across these regions. The Central African Police Chiefs Committee (CAPCCO) and West African Police Chiefs Committee (WAPCCO) including Mauritania signed a declaration for co-operation on criminal and police matters.
FIXED ODDS BETTING TERMINALS (FOBT)
On 20th June, the House of Commons Library Service issued a briefing on the controversy in the UK over FOBT.
CEO OF AXACT DUBAI-BASED MONEY EXCHANGE COMPANY INDICTED IN PAKISTAN
On 21st June, DAWN in Pakistan reported that Axact CEO, Shoaib Ahmed Sheikh, and 2 directors of a Dubai-based money exchange firm had been indicted in a money laundering case.
$2.9 MILLION IMPOUNDED FROM LAO MONEY SMUGGLERS
On 21st June, the Bangkok Post reported that the Thai Anti-Money Laundering Office has impounded 98 million baht (about US$2.9 million) seized from 2 brothers from Laos who tried to smuggle the cash out of the country, hidden in their vehicle. The Finance Ministry requires travellers to declare possession of foreign currency in cash valued at about $13,500 or more when entering or leaving Thailand.
POLICE MOVE IN ON £13 MILLION SUSPECTED PENSION LIBERATION SCAM
iExpats.com on 21st June reported that a trustee had been suspended in connection with an alleged million pension liberation scam which offered retirement savers loans of up to 75% of their pension funds if they transferred to the scheme. The funds that were not paid out were invested in high-risk offshore projects, such as mining gem stones and processing olive oil. So far 2 advisers have been jailed for money laundering offences, while a third received a suspended sentence from the courts.
TRADE IN FAKE ITALIAN GOODS COSTS ECONOMY BILLIONS OF EUROS
The OECD on 20th June issued a news release saying that the global trade in fake Italian goods such as luxury handbags, watches, foodstuffs and car parts is taking a bite out of Italy’s economy equivalent to around 1-2% of GDP in terms of lost sales, according to a new OECD report. The “Trade in counterfeit goods and the Italian economy” estimates the total value of counterfeit and pirated Italian goods sold worldwide at over €35 billion for 2013, equivalent to 4.9% of global Italian manufacturing sales. This resulted in over €25 billion in lost sales by Italian companies in a year when Italy’s GDP was €1.6 trillion. The combination of trade in fake Italian products and imports of counterfeit goods resulted in a loss of public revenues in Italy equal to €10 billion, or 0.6% of Italian GDP. Counterfeiting and piracy also led to the loss of at least 87,000 jobs in Italy in 2013, equivalent to 2% of the country’s full-time equivalent employees.
QATAR-GULF CRISIS: ALL THE LATEST UPDATES
A-Jazeera on 15th June provided an update on the blockade of Qatar by Saudi Arabia and its other neighbours. 1 year ago, an air, sea and land blockade was imposed on Qatar by 4 Arab countries: Saudi Arabia, UAE, Bahrain and Egypt. The recent developments include, on May 27th, Qatar ordered shops to remove goods originating from a group of Saudi Arabian-led countries and the government will also try and stop products such as Saudi dairy goods from entering Qatar via a third country. Products originating from blockading states, which as a result of the blockade cannot pass the Gulf Co-operation Council (GCC) customs territory, have to undergo proper import inspections and customs procedures. On March 21st, an Iraq’s foreign ministry spokesman questioned the UAE’s claim that Qatar funded Shia-dominated paramilitary forces in Iraq. Also on March 21st, Qatar’s National Counter-Terrorism Committee, established in 2007, published its national “terrorist” list, including 20 individuals and 8 entities.
PEEL PORTS OFFERS ALTERNATIVE BREXIT IMPORTS PLAN
On 20th June, Port Strategy reported that Peel Ports, a major port operator in the UK, had provided an alternative option to introducing a warehouse into the supply chain routing for trade after the UK’s departure from the EU. Rather than goods being stored in a warehouse as contingency, retailers and manufacturers should build up contingency stock at a port of entry using stand trailers, with the operator also calling for cargo which is not perishable or urgent to be able to travel on unaccompanied services.
The report is available at –
MOZAMBIQUE CUSTOMS SERVICE SEIZES 1440 TONS OF CEMENT AT BORDER
Cemnet.com on 14th June reported that the Mozambican customs service has defended the seizure on 2nd June of 28,800 sacks of cement imported from South Africa, despite the insistence by the importing company, Kawena, that such imports are exempt from customs duty.
IRAN’S TOP LEADER OPPOSES JOINING AML BODY
On 20th June, Baker McKenzie reported that Iran’s Supreme Leader Ayatollah Ali Khamenei has publicly opposed joining FATF. Khamenei, who has final say on all state matters, said the parliament should instead prepare its own Bills against money laundering and terrorism, accusing the convention of merely “securing the interests” of big powers.
SIPRI RELEASES MAP OF MULTILATERAL PEACE OPERATIONS IN 2018
This new map showing all multilateral peace operations active as of May 2018 was issued on 20th June. The data is taken from SIPRI’s Multilateral Peace Operations Database, which contains extensive information on all multilateral peace operations (both UN and non-UN) conducted since 2000, including location, mandate, lead nations, number of deployed personnel and the organizations involved, budget and mission fatalities.
NEW BOOK: PREVENTING BLACK-MARKET TRADE IN NUCLEAR TECHNOLOGY
On 7th June, the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies at Monterey reviewed a new book saying that every nuclear weapons programme for decades has relied extensively on illicit imports of nuclear-related technologies. This book offers the most detailed public account of how states procure what they need to build nuclear weapons, what is currently being done to stop them, and how global efforts to prevent such trade could be strengthened. This book argues that preventing illicit transfers wherever possible is a key element of an effective global non-proliferation strategy. The UK price is £90, hardback.
BID TO REVEAL SECRET OWNERS OF SCOTTISH LAND
On 21st June, the Herald in Scotland reported that the Scottish Government has announced detailed proposals to try to expose the true owners of land – rather than untraceable firms at PO Boxes in the Caribbean or Channel Islands. It said it wanted to create a register which, if agreed, would “reveal for the first time the controlling interests of land owned by trusts and overseas companies”.
ROMANIA’S RULING PARTY LEADER GETS JAIL SENTENCE
EU Observer on 21st June reported that Liviu Dragnea, the head of Romania’s ruling Social Democratic Party (PSD), who is considered as the country’s true leader, was sentenced to 3½ years in prison for abuse of power. The ruling can be appealed.
ENDANGERED EELS AT RISK FROM EUROPE’S COCAINE RIVERS
EurActiv on 21st June reported that Europe’s river-dwelling creatures are threatened by traces of cocaine in some of the continent’s most well-known rivers, according to a new study, with migratory animals like the eel are particularly at risk. A new Italian study claims to have discovered that low levels of cocaine in rivers and other freshwater bodies are causing severe damage to eels.
LOOT FROM THE TIME OF SANI ABACHA BEING REPATRIATED TO NIGERIA
On 21st June, the Council on Foreign Relations reported that Nigeria’s Minister of Justice and Attorney General have said that the country has reached agreement with a number of countries, including the US, France, and UK, for the repatriation of $500 million in looted public funds. This follows an earlier agreement with Switzerland for the return of $321 million allegedly stolen by the former military head of state, Sani Abachi.
BRAZIL CHICKEN EXPORTS SLUMP AS EU BANS HAVE EFFECT
Reuters on 21st June reported that Brazilian chicken exports fell by 8.5% in the 5 months through May as the world’s largest exporter was hit by trade embargoes imposed by the EU following a food-sector corruption investigation, trade group ABPA said. Shipments to the EU fell the most, by 40%.
EU COURT UPHOLDS RELISTING OF UNNAMED “PROMINENT SYRIAN BUSINESSMAN IN THE OIL AND GAS SECTOR”
On 21st June, the European Sanctions Blog reported that the EU General Court has now upheld his 2016 and 2017 re-listings on the Syrian sanctions lists. He was relisted for being an “influential businessman operating in Syria” who supported or benefitted from the Syrian regime, and for being a member of the Syrian Parliament. The Court rejected HX’s argument that the Council had breached its obligation to state reasons by equating being an influential businessman in Syria with support or benefit from the Syrian regime.
GERMANY’S STRONG ANTI-BRIBERY ENFORCEMENT AGAINST INDIVIDUALS NEEDS TO BE MATCHED BY COMPARABLY STRONG ENFORCEMENT AGAINST COMPANIES
The OECD on 21st June published a news release following a recent evaluation of the country detailed in a new report by the OECD Working Group on Bribery. The Group made a range of recommendations to Germany and the Working Group raises concerns about the low corporate enforcement rate as well as an inconsistent approach to holding companies liable across the different Länder (states). The report also notes that the sanctions imposed on both individuals and companies are not always sufficiently deterrent and that whistleblower protection needs to be reinforced.
LAUNCH OF THE GIBRALTAR ASSOCIATION FOR NEW TECHNOLOGIES (GANT)
On 21st June, the Government of Gibraltar announced the launch of GANT, an association to be formed with the private sector. GANT will serve several purposes, primarily to enhance the development in Gibraltar of the use of blockchain and distributed ledger technologies (DLT) and other future developments, as considered appropriate, collectively referred to as “New Technology”, with a view to enhancing the reputation, integrity and public trust in this sector. GANT will also be tasked to raise the profile of “New Technology” in Gibraltar across a spectrum not necessarily limited to financial services.
COSTA RICA: A WELCOMING CARIBBEAN SHORE FOR HIGH-LEVEL ROMANIAN FUGITIVES
On 21st June, OCCRP carried a long and interesting article saying that 2 women, a top government minister and a chief prosecutor, found themselves fugitives, convicted on corruption charges and facing years in prison and they chose the same escape: Costa Rica. There they found help in the form of Mihai Radulescu, a Romanian businessman. The women have both applied for refugee status in Costa Rica which, if they get it, will protect them from extradition as if they were citizens.
WALES TO BRING FORWARD ALCOHOL MINIMUM UNIT PRICING
Out-Law on 21st June reported that plans to introduce a minimum unit price (MUP) for alcohol have been approved by members of the National Assembly for Wales.
TAKE AN ONLINE QUIZ TO SEE WHAT SORT OF NUCLEAR POSTURE YOU WOULD ADOPT
CNS at the Middlebury Institute has recently released an interactive quiz.