13th July 2018
AUSTRALIAN LIVE SHEEP EXPORT TRADE IN TURMOIL WITH EXPORT LICENCES SUSPENDED
The Australian and other Australian media reported on 12th July the ongoing discussions and disputes about whether or not to authorise the export of live sheep. In the latest report, the live export company behind the disastrous Awassi Express voyage in which thousands of sheep died says it is confident about the ongoing welfare of around 60,000 sheep held for weeks in pre-export quarantine pens with nowhere to go. The destination of such traffic is the Persian Gulf, with transport conditions on the entire journey very hot, uncomfortable for the animals and potentially lethal.
LINKING BENEFICIAL OWNERSHIP TRANSPARENCY TO IMPROVED TAX REVENUE COLLECTION IN DEVELOPING COUNTRIES
A report from the International Centre for Tax and Development at the Institute of Development Studies, funded by Bill & Melinda Gates Foundation. It poses the question: to what extent are current efforts to expand access to information on beneficial ownership likely, in practice, to enhance the ability of low-income countries to increase tax collection? It concludes that there has been quietly mounting concern that for low-income countries the successful implementation of new transparency rules may be comparatively costly, and the benefits comparatively limited. There is also, it says, a striking absence of systematic and publicly available research evidence with which to assess the likely benefits (and costs) of these initiatives for low-income countries.
THE POTENTIALLY MORE SINISTER THREAT IN BOKO HARAM’S SPLIT
Defence Web on 12th July carried an article about a report from the Institute for Strategic Studies that Boko Haram’s split in the Lake Chad region in 2016 saw the emergence of 2 distinct jihadist movements – ISIS-WA (Islamic State – West Africa) and Jama’atu Ahlis Sunna Lidda’awati wal-Jihad (JAS), with divergent operating methods, and one of the groups appears to be positioning itself as a long-term threat in a way that the other is not. The primary disagreement between JAS and ISIS-WA was an ideological one about targeting Muslim civilians. JAS continues to view the local populace as enemy combatants, predicated on a perception that they don’t support the movement. JAS is responsible for the continued wave of punitive and indiscriminate violence against civilians. This includes most suicide attacks (especially by female bombers). ISIS-WA’s dominant attack profile is designed to simultaneously weaken security forces and increase its own strength. However, the group remains capable of extreme violence against those who don’t follow its stipulations.
HIGHER EDUCATION EXPORTS AND THEIR VALUE TO THE UK ECONOMY
On 12th July, the House of Lords Library produced a briefing which has been prepared in advance of the debate in the House of Lords on the motion scheduled to be moved by Lord Norton of Louth on 19th July “that this House takes note of the value to the United Kingdom of higher education as an export”. This briefing considers what higher education exports are and their value to the UK economy. In addition, it considers how these figures have changed over time and any factors which may influence the value of Higher Education exports.
ITALIAN POLICE ARREST PANAMA PAPERS “FIXER”
OCCRP on 13th July reported that financial police in Romehave said that they have Gian Luca Apolloni, a purported top-level “fixer” named in the Panama Papers, as well as entrepreneur Roberto Lagana on charges of aggravated tax fraud. According to the accusations, Lagana’s company, RTS, counterfeited financial records to claim various unearned tax credits and exemptions, faking investments in disadvantaged areas of Southern Italy to take advantage of programs in the tax code meant to stimulate development in economically and socially distressed neighbourhoods. Apolloni, an Italian accountant with operations worldwide, was allegedly a middleman in the creation of over 200 offshore front companies in Panama. The shell companies were linked to entities based in Samoa, the Bahamas, Anguilla, BVI, and Cyprus.
LATVIA’S CORRUPTION SCANDAL IS GETTING EVEN WEIRDER
Bloomberg on 13th July published a helpful summary of the situation in Latvia where Ilmars Rimsevics, who’s been in charge of Latvia’s central bank as governor or deputy since 1992, is facing corruption accusations linked to Trasta Kommercbanka AS, a small lender that was shut in 2016 after being implicated in a $20 billion money laundering scheme. Martins Bunkus, a Latvian lawyer who’d been working on Trasta’s insolvency, was murdered while driving in Riga. Latvian banks are accused of handling some of the $1 billion stolen in 2015 from Moldova’s financial system and helping shift as much as $20 billion in illicit cash from Russia between 2010 and 2014. The Latvian branch of Privatbank AS paid a €2 million fine for handling money from the Moldovan fraud, and last year, 5 Latvian banks agreed to fines for failing to gather sufficient information on transactions and beneficiaries in deals linked to North Korea.
INTERPOL OFFICERS AT 8 MEDITERRANEAN SEAPORTS TO ASSIST LOCAL AUTHORITIES SCREEN TRAVELLERS AND DETECT POTENTIAL TERRORISTS DURING THE SUMMER TOURIST SEASON
Interpol on 13th July issued a news release saying that Operation Neptune, the counter-terrorism sea border operation addresses the threats posed by the travel of foreign terrorist fighters using Mediterranean maritime routes between North Africa and Southern Europe, as well as by people, drugs, or firearms traffickers. In the first week of Operation Neptune, more than 350,000 searches of INTERPOL databases resulted in the detection of 4 suspected foreign terrorist fighters and the localization of a missing person.
IS HONDURAS LOSING THE FIGHT AGAINST AERIAL DRUG TRAFFICKING?
Insight Crime on 12th July carried an article saying that Honduras authorities recently seized 5 aircraft thought to have been used to transport drugs through a remote region of the country where dozens of clandestine landing strips have been destroyed this year. Authorities also seized more than 30 containers of airplane fuel at a makeshift camp site and located a clandestine landing strip. But the long-running strategy of seizures and demolitions has done little to identify suspects, routes and suppliers, allowing the so-called “narco flights” to continue. Drug flights are expected to account for a relatively small proportion of trafficking into Honduras. In 2014 Honduras acquired radar systems and passed a law permitting the shooting down of planes suspected of transporting drugs. While Honduras has scaled up its destruction of clandestine landing strips, the practice is unlikely to have any significant impact on traffickers, who can easily and quickly rebuild them or construct new sites.
UK PARENT COMPANY LIABILITY FOR ABUSES IN AFRICA: UPDATE
On 11th July, MacFarlanes published an update article on 2 cases (involving Shell and Unilever case) in which claimants sought to pursue UK-domiciled parent entities in the English Courts for the acts or omissions of their overseas subsidiaries. An appeal in the Unilever case has now been heard and the claimants’ appeal has been dismissed, with the Court of Appeal unanimously finding that no duty of care was owed by Unilever to the claimants. As a result, the claimants will not be able to pursue their claims here as there is no “anchor defendant” to bring the claims within the jurisdiction of the English Courts – but the reasoning given which differs to that of the first instance judgment. However, the Court of Appeal did provide what the firm says is helpful guidance about the circumstances in which a duty of care may be found to be owed by a UK-domiciled parent company in respect of the actions of its subsidiary, these loosely being where the parent has in substance taken over the management of the relevant activity of the subsidiary, or where the parent has given relevant advice to the subsidiary about how it should manage a particular risk.
US CONTINUES IMPORT RESTRICTIONS FOR ARCHAEOLOGICAL AND ETHNOLOGICAL MATERIAL FROM LIBYA
Baker McKenzie on 10th July reported that US customs regulations continue the import restrictions on archaeological and ethnological material from Libya previously imposed on an emergency basis in a final rule published on December 5th 2017. Libya is on a list of countries for which an agreement has been entered into for imposing import restrictions. Import restrictions are being imposed for a 5-year period to February 23rd 2023.
PODCAST: NORD STREAM 2 GAS PIPLEINE FROM RUSSIA TO EUROPE
This podcast from US-based Center for European Policy Analysis (CEPA) in the “Power Vertical” series on how or why the pipeline may be a threat to European security, and even why it might not even be necessary. How will it stand if those involved are affected by US sanctions (given that some one the Russian end are, or may be, already affected by US and EU sanctions.
See also a 11th July article in the Guardian which says that politicians and energy experts say Nord Stream 2 will make Europe reliant on Russian gas. Like the podcast, it argues that the new pipeline is more political than commercial, for example by bypassing Ukraine (where an existing pipeline flows) and thus being able to deny Ukraine funds and gas. Sweden, Denmark and Finland have expressed ecological reservations about a second natural gas pipeline at the bottom of the Baltic, and the European Commission has objected on the basis that the project will undermine its plans for an energy union, including a greater diversity of supply.
SWISS RELEASE SOME ANGOLA FUNDS
On 13th July, The Oil & Gas Year website reported that the Swiss Office of the Attorney General (OAG) has unblocked about $60 million of funds seized in an investigation into money laundering at Angola’s sovereign wealth fund. OAG initially froze around $210 million of assets but has already unfrozen $60 million held by the Angolan sovereign wealth fund because their use by unauthorised third parties could be ruled out. Swissinfo has also reported that senior justice ministry officials from Switzerland and Angola have discussed closer co-operation in the major international case of suspected corruption amid ongoing criminal proceedings involving an Angolan-Swiss businessman, Jean-Claude Bastos, 50, a top manager of the Swiss-based Quantum Global Fund, who is suspected of corruption and money laundering with cases opened in both Angola and Switzerland. Described as an “entrepreneur”, he lives in Angola and is banned from leaving that country.
1MDB: JHO LOW ‘NOT IN CHINA’
The South China Morning Post on 13th July reported that China, having received multiple tip offs that the fugitive was in China, says he has not been found.
MOSCOW COURT DISMISSES APPEALS AGAINST CONFISCATION OF $145.3 MILLION FROM FORMER RUSSIAN ANTI-CORRUPTION OFFICIAL
RAPSI in Russia on 13th July reported that the Moscow City Court has dismissed 4 appeals against a decision confiscating $145.3 million from the former Russian anti-corruption official Dmitry Zakharchenko charged with corruption crimes, as well as his relatives. He was arrested in September 2016.
31 PEOPLE, INCLUDING 10 WOMEN, ARRESTED OVER GOLD TRADING SCAM IN HONG KONG
EJI Insight on 13th July reported that 31 people have been arrested in relation to an investment fraud where victims were lured into thinking they were trading gold on the London markets. Officers raided 27 residential units and 8 commercial units in Hong Kong. It is said that the women looked for victims through the WeChat messaging app, pretending to be interested in making friends with them and then ensnaring them gradually into parting with their cash.
PODCAST: MAFIA UNDER THE SPOTLIGHT – THE ‘NDRANGHETA
A BBC World Service Radio documentary from 12th July about the most powerful Mafia organisation in the world – which few people have heard of. The ‘Ndrangheta crime syndicate has used the enormous wealth derived from its control of cocaine smuggling to spread its tentacles far and wide around the world. The crime organisation began as bandits in the late 19th Century in Calabria in southern Italy and is now thought to be operating in 50 countries. The ‘Ndrangheta shuns the limelight but earlier this year a brutal murder brought it unwelcome attention when Investigative reporter Jan Kuciak was shot dead while investigating possible links between the ‘Ndrangheta and the government in his native Slovakia. Suddenly the Mafia was in the news. For Assignment Andrew Hosken travels to Slovakia and Italy to investigate the killing and the ‘Ndrangheta’s global reach and power.
BARAK ABRAMOV, OWNER OF AN ISRAELI PREMIER LEAGUE SOCCER CLUB, ACCUSED OF MONEY LAUNDERING, TAX FRAUD
The Standard in Hong Kong on 13th July reported that Barak Abramov, 39, owner of an Israeli Premier League soccer club (Bnei Yehuda Tel Aviv) and a local popular restaurant chain, has recently been arrested on suspicion of a huge tax fraud involving food outlets at sports stadiums and elsewhere in Israel.
ALWAYS SOMETHING IN “PRIVATE EYE” #1 – UK DISCOVERS VISA REQUIREMENT FOR MUSICIANS ENTERING THE UK VIA IRELAND
In Issue 1474 (13th-23rd July), Private Eye reports that the recent focus on Northern Ireland border issues has brought to light a 1972 control order that has not been enforced for decades – but is now. Whereas musicians from non-EU entering the UK to perform have a visa-waiver system, this does not apply if they enter the UK via Ireland – though no-one appears to know this.
ALWAYS SOMETHING IN “PRIVATE EYE” #2 – WAS THE ORDER REQUIRING OVERSEAS TERRITORIES TO HAVE A PUBLIC BENEFICIAL OWNERSHIP REGISTER DELIBERATELY FLAWED?
In the same issue, it is claimed that the order requiring the BVI, Cayman Islands etc to have such registers is flawed, and that ministers were warned that it was and that it needed amendment. The allegation is that it was allowed to go on, knowing that the territories could appeal it (and presumably win, or at least delay it), thus appearing to get the UK Government off the hook, appearing to do the right thing but providing the territories with a potential loophole.
US-UK AGREEMENT JOINT WORK ON INTERNATIONAL CRIME
As President Trump visits the UK, on 13th July the Home Office published a news release announcing agreements to tackle the global threat posed by transnational criminal organisations – including illegal opioid traffickers. The measures include –
- A joint UK-US ministerial taskforce on synthetic opioids, led by a Home Office minister, focused on sharing expertise in detection and tracking, specialist law enforcement intelligence capabilities and prevention and treatment;
- A joint UK-US Strategic Dialogue on illicit finance, led by senior officials to tackle shared threats and work with other countries to maintain and strengthen implementation of global standards, scheduled to meet for the first time in September 2018; and
- An informal, ad-hoc dialogue between law enforcement officials which will assess the work of current initiatives and groups, such as the Five Eyes Law Enforcement Group.
US INDICTMENT AGAINST RUSSIAN GRU OFFICERS FOR ALLEGED INVOLVEMENT IN CYBER OPERATIONS AGAINST THE US
They are 12 Russian Main Intelligence Directorate (GRU) officers accused of hacking the emails of employees and volunteers of Hillary Clinton’s campaign, including that of campaign chairman John Podesta. The indictment says that the officers created a fake security alert email from Google that instructed recipients to change their passwords on a GRU-created website, thereby giving the officers access to the recipients’ passwords as well as exploited security vulnerabilities on the Democratic Congressional Campaign Committee and Democratic National Committee’s computer networks.
HOW THE SALE OF STOLEN ANTIQUITIES FUNDS ORGANISED CRIME
On 13th July, CNN published an article following the recent major police operation against an operation in the Caltanisetta region in Sicily, where local members of an organised crime group had been illicitly excavating archaeological material, as well as producing forgeries. These goods were smuggled out of Italy and assigned false provenances to suggest they were legally excavated and exported. They were then sold to collectors through German auction houses. It says that international crime syndicates first turned their attention to art crime in the early 1960s, when the Corsican Mafia was linked to a string of heists. However, illegally excavated antiquities provide a far easier way for crime syndicates to profit.
THE INTERNATIONAL CRIMINAL COURT – ACHIEVEMENTS AND CHALLENGES 20 YEARS AFTER THE ADOPTION OF THE ROME STATUTE
On 13th July, the EU Parliament Research Service published a briefing marking the 1998 Statute of Rome, the founding treaty of the International Criminal Court, which was set up to deal with the most serious crimes of international concern, namely genocide, crimes against humanity and war crimes. It began operations in 2003.
SEC CHARGES STOCK PROMOTER AND 4 OTHERS INVOLVED IN AN ALLEGED SERIES OF MICROCAP FRAUD SCHEMES
Mondo Visione on 13th July carried a report saying that the charges related to the accused having hijacked companies and manipulated the market to enrich themselves at the expense of the investing public. They took control of a purported medical device company and, with a Cayman Islands-based broker, then allegedly engaged in a matched trading scheme that caused the company’s share price to rise from zero to $1.20 per share. They were caught after the involvement of an undercover FBI agent.
WORKPLACE AUTOMATION AND ROBOT MANUFACTURING “WILL PUSH SOUTH-EAST ASIAN WORKERS INTO MODERN SLAVERY”
Illicit Trade on 13th July carried a post saying that increasing workplace automation will result in rising numbers of SE Asia workers being pushed into modern slavery, according to a new report from risk consultancy firm Verisk Maplecroft. The UN International Labour Organisation has estimated that 56% of workers in major manufacturing centres in Thailand, Cambodia, Indonesia, the Philippines and Vietnam could lose their jobs over the next 2 decades.