17th July 2018
US ECONOMIC SANCTIONS: MID-YEAR REVIEW
On 13th July, Bloomberg BNA published this summary highlighting –
- the US withdrawal from the JCPOA;
- new Russian and North Korean sanctions listings;
- new Venezuela sanctions;
- Magnitsky Act and Global Magnitsky sanctions for human rights abuses;
- Enforcement trends – settlement with Ericsson, ZTE; and
- Future enforcement – Media reports indicate that OFAC is in discussions with a Zimbabwean bank regarding a settlement in which the financial institution would pay hundreds of millions of dollars to resolve its potential liability.
https://www.bna.com/insight-us-economic-n73014477450/
US BLOCKS AIRCRAFT DELIVERIES TO IRAN AS EUROPEAN APPEAL FAILS
AIN Online on 16th July reported that the US government has rejected an appeal by the EU to allow some exemptions to economic sanctions against Iran that the Trump Administration announced following its withdrawal from the JCPOA. The decision, now confirmed by US Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, blocks efforts by ATR and Airbus to deliver new airliners ordered by Iran Air after earlier sanctions were lifted.
$10 MILLION WORTH OF SMUGGLED BEER BUSTED IN CHINA
The Drinks Business on 16th July reported that customs officials in eastern China have broken up a beer smuggling ring leading to the discovery of $10.46 million worth of beer, the largest beer seizure in years. This happened at the same time as the World Cup when demand for beer in China saw a sharp increase from football fans watching the games. Also leading brewers in mainland China including Snow, Yanjing, and Tsingtao raised their prices for both bottled and canned beers by around 10% to 20% as a result of growing labour costs and rising cost of raw materials. A Fujian-based company in southern China has found to be deliberately under declaring imported beers including brands such as Heineken and Belgium’s Rochefort, and selling imported beers in cities in Zhejiang, Shanghai and Guangzhou. China is already the world’s biggest beer consumer by volume. Snow Beer, Tsingtao, Beijing Yanjing, Budweiser, and Carlsberg account for about 80% of China’s beer market.
https://www.thedrinksbusiness.com/2018/07/us10-million-worth-of-smuggled-beer-busted-in-china/
DEFERRED PROSECUTION AGREEMENTS: 5 YEARS ON, WHAT HAVE WE LEARNED?
On 16th July, Penningtons Manches LLP published an article reviewing the situation about DPA in the UK after the first 5 years of use, and the trends that have appeared in the, albeit few, cases to date. It concludes that it seems unlikely that DPA will proliferate throughout the English legal system as a readily available means of disposing of wrongdoing, though use may well however grow in certain areas of serious criminal conduct.
FINTECH FIRM REVOLUT REPORTS SUSPECTED MONEY LAUNDERING TO UK AUTHORITIES
WebFG on 17th July reported that Revolut, the UK’s fastest-growing financial technology company, has reported a spate of suspected money laundering to the UK authorities. It launched 3 years ago to take on the UK’s banks with prepaid cards and payment services. It then diversified into cryptocurrency and small business services.
https://uk.webfg.com/news/news-and-announcements/talktalk–3398747.html
IRELAND: 2 FRAUDSTERS TOLD THEY MUST PAY €23,000 FOR PRIVATE DETECTIVES WHO TRACKED THEM DOWN
The Journal in Ireland on 17th July reported that a judge has directed that 2 fraudsters pay the €23,000 expenses a car rental company invested in tracking them down to their own front doors. Hertz Rent-a-Car had sought to prove the 2 Lithuanians had been part of a €180,000 fraud.
VENEZUELA HAS SEIZED 16 TONS OF DRUGS IN 2018 SO FAR
Bernama.com on 17th July reported that Venezuelan authorities have seized 16 tons of illicit drugs so far this year. Venezuela has also deported several foreign drug cartel chiefs who were arrested in the country, as part of a crackdown.
http://www.bernama.com/en/world/news.php?src=ilaw&id=1480990
MYANMAR: DOZEN CUSTOMS OFFICIALS CHARGED AFTER BRIBERY COMPLAINT
The Myanmar Times on 17th July reported that a dozen customs officials have been charged with taking bribes from vehicle importers at a port in Yangon after the Anti-Corruption Commission looked into a complaint.
https://www.mmtimes.com/news/dozen-customs-officials-charged-after-bribery-complaint.html?src=ilaw
HONG KONG TRADE FINANCE TO FIGHT FRAUD WITH A BLOCKCHAIN-BASED PLATFORM
CCN.com on 17th July reported that the Hong Kong Monetary Authority (HKMA) has partnered with Chinese Ping An to release a blockchain-based trade finance platform. The joint effort is expected to speed-up the process and prevent fraud. A total of at least 21 banks involved in the enterprise, and each of them will share ownership in the platform. Although trials for the platform began in December and the announcement happened in late March, only now is the HKMA ready to finally launch it, which will occur in August. The system will automatically check the validity of all transactions, as well as all parties involved — the amount of paperwork required will drastically decrease, and the time taken to process transactions will be drastically reduced.
VENEZUELA OFFICIAL PLEADS GUILTY IN US TO ROLE IN PDVSA BRIBE SCHEME
The VoA on 16th July reported that Luis Carlos De Leon Perez, 42, a former official at a Venezuelan state-run electric company pleaded guilty to US charges that he participated in a scheme to solicit bribes in exchange for helping vendors win favourable treatment from state oil company PDVSA and conspiring to violate the Foreign Corrupt Practices Act commit money laundering. He became the 12th person to plead guilty as part of a larger investigation by the DoJ into bribery at Petroleos de Venezuela SA that became public with the arrest of 2 Venezuelan businessmen in December 2015.
ARMENIAN SECURITY SERVICE REVEALS LARGE CORRUPTION SCHEME TO EXEMPT CONSCRIPTS FROM MILITARY SERVICE
On 16th July, the Public Radio of Armenia reported that the Armenian National Security service has revealed a corruption scheme, involving citizens, officials, doctors and staff of military commissariat. It is said that, in exchange for bribes of up to $14,000, the latter organised the release or determent of about 40 conscripts from military service on grounds of false diagnosis.
WHAT IS “SOVEREIGN IMMUNITY”?
Law firm Allen & Overy has issued a bulletin that highlights key points to consider, particularly when drafting or reviewing a sovereign immunity waiver clause, from an English law perspective. Sovereign immunity is the immunity of foreign states (and separate entities exercising sovereign authority) under English law. This affords a broad immunity to foreign states from the jurisdiction of the English courts to hear a dispute and reach a judgment; to recognise a foreign judgment or arbitral award; and to order injunctive relief, specific performance or other execution of any judgment or award against a state’s assets, unless one of the exceptions in the State Immunity Act1978 applies. In addition, the common law principle of “non-justiciability” can be applied by the English courts – such as where proceedings would require a court to consider the territorial claims of different states and where English courts would not hear these proceedings. Some international or European organisations may also have immunity and special privileges pursuant to separate legislation or treaties. The bulletin details the key exceptions to sovereign immunity.
http://www.allenovery.com/SiteCollectionDocuments/Sovereign-Immunity.pdf
THE WCO PRESENTS ITS STUDY REPORT ON ILLICIT FINANCIAL FLOWS
On 16th July, the World Customs Organisation presented its study report on illicit financial flows (IFF) to the Development Working Group (DWG) of the G20, at its 2nd meeting held in Tucumán, Argentina, on 12th July.
HOLDING COMPANIES CRIMINALLY LIABLE FOR HUMAN RIGHTS ABUSES?
Corker Bining on 17th July posted a blog item saying that the idea of holding companies criminally liable for human rights abuses committed overseas has gained traction over the past decade. In 2011, the UN Guiding Principles on Business and Human Rights (aka the Ruggie Principles) encouraged states to legislate so that companies within their jurisdiction respect human rights. In the UK, in 2017 the Joint Committee on Human Rights recommended the imposition of a duty on companies to prevent human rights abuses and the creation of a criminal offence of failing to discharge that duty, but the government in its response said it had no immediate plans to legislate further. The article asks if the government can maintain this position.
https://www.corkerbinning.com/holding-companies-criminally-liable-for-human-rights-abuses/
VIDEO OF US ARMS EXPORT FLOWS 1950-2017
This video details US weapons exports from 1950 to 2017. Data comes from the Stockholm International Peace Research Institute’s Arms Transfers Database with units are expressed in trend indicator values (TIV). Each dot on the map = 1 TIV. Visualization is by Will Geary.
https://vimeo.com/279923192?quality=1080p
THAILAND CONFIDENT TO BAN ILLEGAL FISHING AND FORCED LABOUR BY END OF YEAR, SAYS AMBASSADOR
EurActiv on 17th July reported that Thailand aims to become free from illegal fishing and forced labour by the end of this year, Virachai Plasai, the Thai ambassador and head negotiator on illegal, unreported and unregulated (IUU) fishing. In 2015, the EU had given Thailand a “yellow card” warning about IUU, meaning it risked retaliatory action. This move had been part of the policy of only allowing fisheries products that have been properly certified as legal to enter the EU, the world’s biggest fish importer. The ambassador pointed out a change in the mindset which he said was taking place in Thailand, and a new law enacted in 2015.
HOW UNSTABLE IS OIL PRODUCTION IN LIBYA AND WHAT IS ITS POTENTIAL?
On 17th July, Defence Web carried an article about difficulties affecting the production of oil in Libya. It says that, after a relatively stable spell, Libya’s oil production seesawed because of a stand-off at eastern export terminals and the abduction of 2 workers at Sharara oilfield. Military clashes forced the National Oil Corporation to close 4 terminals in June and July. The ports reopened on 11th July, and production restarted in another oilfield – but was hit in another due to the kidnapping. It says that the risk of further output shocks lingers while Libya remains politically and militarily divided. The article also poses the question: what is Libya’s potential? It says that Libya has the largest proven reserves of oil in Africa and that last year the NOC outlined plans to raise production to 2.2 million bpd by 2023 – but said this would need around $18 billion of investment. Foreign oil companies including Italy’s Eni, Total of France, Austria’s OMV and US firms ConocoPhillips and Hess have production stakes through joint ventures with the NOC.
INDIA AND US HOLD TALKS ON PROPOSED US SANCTIONS AGAINST IRAN
Livemint and others on 17th July reported that India and the US have agreed to continue consultations on the proposed US sanctions on Iran, a day after an Iranian deputy foreign minister visited New Delhi for discussions on pressing ahead with energy and connectivity co-operation. The sanctions would mean India looking for a new supplier of oil to replace its third-largest source of energy after Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil between April 2017 and January 2018. The article says that analysts in India were of the view that India would not be able to resist the impact of US sanctions but they were divided in their view on whether India would be able to insulate Chabahar Port (which it wants to develop as a gateway to the landlocked Afghanistan and Central Asia) if it cut down on oil imports.
PODCAST: A GUIDE TO THE RUSSIAN MAFIA
From blue-tattooed psychopaths to “businessmen” with a twist, Russia’s vory developed a code all their own – if you can call it that. Mark Galeotti takes us through the history of Russia’s mafia and how that history helped to shape Vladimir Putin’s state. For a more detailed look, check out his book “The Vory: Russia’s Super Mafia”. This 50-minute podcast from War College provides an interesting interview with the knowledgeable Galeotti.
https://www.acast.com/warcollege/yourhandy-dandyguidetotherussianmafia
SOUTH AFRICA: VBS BANK 101 – FROM THE MASTERMINDS TO THE MASS FRAUD
On 17th July, Fin24 in South Africa provided an article on the background to the collapse of the VBS bank, where 1.5 billion Rand is said to have been stolen leaving more than 22,000 depositors in the lurch and has revealed explosive and wide-ranging allegations against several individuals. The South African President has described the case as a shock and a travesty of trust. The bank is said to have been the victim of a large-scale fraud. VBS was founded in 1982 and originally operated as the Venda Building Society. In October 2000, it was granted a permanent bank licence and it is one of 3 mutual banks in South Africa. Vele Investments became a majority shareholder of VBS, allegedly through fraudulent means, in March 2017. 3 individuals have been named as the “controlling minds” behind the saga, one being the financial adviser to the Venda king and had founded Vele Investments with the king.
BELARUS LAUNCHES NEW EFFORT TO LEGALISE ONLINE GAMING
i-Gaming Business on 17th July reported that the Minister of Taxes and Levies in Belarus, has put forward a new Bill in the latest effort to legalise and regulate online gaming in the country. The Bill is said to make reference to a state-run online gambling portal that will oversee tax management in the gambling sector. It is estimated that Belarus could rake in as much as $6 million in tax within the first 3 years of a regulated online gaming service.
http://www.igamingbusiness.com/news/belarus-launches-new-effort-legalise-online-gaming
UK HAS 3-YEAR PLAN FOR GAMBLING INDUSTRY
On 17th July, the Intergame website reported that the UK Gambling Commission’s chairman has set out his organisation’s 3-year mission to “treat the consumer more fairly” in the just-released Annual Report. He said that there are 5 strategic priorities: protect the interests of consumers; prevent harm to consumers; raise standards; optimise returns to good causes from lotteries; and improve the manner of regulation. He also mentioned a statutory levy on the industry to fund research, education and treatment.
https://www.intergameonline.com/casino/news/uk-has-three-year-plan-for-industry
BANGLADESH DRUG WAR DEATH TOLL HITS 200
Channel News Asia reported on 17th July that a local human rights group claimed that 200 people had been killed and 25,000 alleged dealers jailed in the course of a crackdown since May on the surging trade in “yaba”, a cheap methamphetamine and caffeine pill, which authorities say has spread to almost every village and town. It says that Bangladesh has struggled to contain the trade in “yaba”, with hundreds of millions of pills entering the country from Myanmar. Authorities last year seized a record 40 million pills but said an estimated 250 million to 300 million more entered the market.
https://www.channelnewsasia.com/news/asia/bangladesh-drug-war-death-toll-hits-200-rights-group-10537600
CHINA EXPANDS SURVEILLANCE OF SEWAGE TO POLICE ILLEGAL DRUG USE
Scientific American reported on 16th July that dozens of cities across China are applying an unusual forensic technique to monitor illegal drug use: chemically analysing sewage for traces of drugs, or their telltale metabolites, excreted in urine. Illegal drug use has been monitored through wastewater-based epidemiology (WBE) in other countries, including Belgium, the Netherlands, Spain and Germany, but most studies have collected data for epidemiological research rather than for setting policies. A 2016 study in 8 European cities found a strong correlation between the amount of cocaine detected in waste water and data from drug seizures. However, in the case of metamphetamines the correlation was not as strong.
LANDMARK US LEGAL SHIFT OPENS PANDORA BOX FOR DIY GUNS
Wired.com in its 18th July edition reports on the recent decision of the DoJ to give up on the case where it had sought to argue that uploaded printable files showing how to make 3D-printed firearms and components to the Internet was the same as producing and exporting actual weapons and their parts. Lawyers for Cody Wilson had argued that by forbidding Wilson from posting his 3D-printable data, the State Department was not only violating his right to bear arms but his right to freely share information – and hence both the First and Second Amendments to the US Constitution. The article links the change to the changes in US arms exports rules for weapons of less than 0.5in calibre (with a few exceptions like fully automatic weapons and rare gun designs that use caseless ammunition) that this gives Wilson and his ilk a licence to publish data about those weapons anywhere they choose. Wired says that non-profit founded by Wilson, Defense Distributed, has relaunching its website Defcad.com as a repository of firearm blueprints created and collected, from the original one-shot 3D-printable pistol to AR-15 assault rifle frames and more exotic DIY semi-automatic weapons. The relaunched site will be open to user contributions, too; Wilson hopes it will soon serve as a searchable, user-generated database of practically any firearm imaginable.
https://www.wired.com/story/a-landmark-legal-shift-opens-pandoras-box-for-diy-guns/
KASHMIR: 70 YEARS OF DISPUTES
The EU Parliament Research Service has produced a briefing paper on the history of, and current situation in, Kashmir, the volatile border region of India and Pakistan. The dispute dates back to 1947, when the regional leader opted to join India, despite the province being Muslim-majority, and so logic would have dictated it become part of the new Pakistan. The province also borders China – which has fought India in two wars since WW2 and is a traditional ally of Pakistan. It has been the site of continual, and continuing, civil unrest and military and terrorist activity, and confrontation between India and Pakistan.
http://www.europarl.europa.eu/RegData/etudes/ATAG/2018/625135/EPRS_ATA(2018)625135_EN.pdf
ITALIAN POLICE SEARCH THE GAUDY HOMES OF MAFIA MOBSTERS AS 31 MEMBERS OF ROME’S NOTORIOUS CASAMONICA CLAN ARE ARRESTED IN HUGE CRACKDOWN
The Mail Online on 17th July published a report, complete with fascinating photos, saying that the carabinieri has arrested 31 members of the powerful Casamonica mafia in a series of raids across Italy, including one of the alleged heads of the organised crime unit: Giuseppe Casamonica. Charges relate to drug trafficking, extortion and loan sharking. Photos show officers leafing through expensive-looking goods in gaudy properties with gilded and marble furniture. The raids took place in parts of Rome, as well as Reggio Calabria and Cosenza further south in Italy. The founder, Vittorio Casamonica, died in 2015, having founded the clan in the 1980s (and at his funeral the Godfather film theme was played by an orchestra…).
GREECE POSTPONES EXTRADITION HEARING FOR ALLEGED GEORGIAN CRIME BOSS
Rferl on 17th July reported that the Greek Supreme Court has postponed to 20th July an extradition appeal hearing for Lasha Shushanashvili, 57, a Georgian citizen who is alleged to be the head of an international crime ring after the suspect complained of feeling unwell and made his court appearance in a wheelchair. Shushanashvili, suspected of leading a network that specialized in burglaries and robberies, was arrested in Thessaloniki in April along with 13 other people in co-ordination with French authorities. Another 17 suspected ring members have been arrested in France, which is seeking Shushanashvili’s extradition.
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