22nd July 2018
US WAS MAIN IMPORTER OF UKRAINIAN SMALL ARMS IN 2017
On 21st July, Interfax-Ukraine reported that the main importer of Ukrainian small arms and light weapons in 2017 was the US, which bought 15,040 automatic weapons and submachine guns, and also 790 portable anti-tank rifles and grenade launchers. This is contained in the annual report for 2017 from the Ukrainian State Service of Export Control said in a report detailing international transfers.
AUSTRALIAN GST ON LOW-VALUE IMPORTS
The Australian Department of Home Affairs has published a factsheet on the VAT-like tax, GST, imposed on low-value goods from 1st July. Overseas vendors (including merchants, electronic distribution platforms, and re-deliverers) that meet GST registration requirements will be required to charge and collect GST at the point of sale on eligible goods. Consumers in Australia may have to pay GST to vendors, on applicable goods with a customs value of $1,000 or less before importing them into Australia.
BULK CARRIER BANNED FROM AUSTRALIA FOR UNDERPAYING CREW
On 12th July, the Australian Maritime Safety Authority (AMSA) reported that it has banned the Hong Kong-flagged bulk carrier MV Shandong Hai Wang for 12 months after it was discovered that crew had been deliberately underpaid. This followed information being received from the International Transport Workers’ Federation alleging discrepancies in the payment of crew wages. The ship was detained for breaching the Maritime Labour Convention which sets out seafarers’ rights to decent working conditions. The ship is operated by Qilu Ship Management Co Limited.
1MDB: POSSIBLE MONEY LAUNDERING BY CHINESE COMPANIES RELATED TO POTENTIALLY FICTITIOUS ENERGY PIPELINE
In its Financial Crime Wave newsletter on 21st July, ACFCS reports that there were “clear elements of money laundering taking place,” in reference to the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) and whether part of a loan from a Chinese state-owned bank for projects worth $2.3 billion was used to help repay dues of scandal-ridden state fund 1MDB. Contracts to build 2 pipelines were signed in 2016 by the administration of former prime minister.
SINGAPORE’S PRECIOUS STONES AND METALS INDUSTRY TO FACE TIGHTER SCRUTINY
In its Financial Crime Wave newsletter on 21st July, ACFCS reports that dealers of precious stones and metals could soon have to register with the authorities, under a regulatory regime proposed by the Ministry of Law in Singapore. Dealers already have to abide by a cash transaction reporting regime that mandates customer due diligence for cash deals of S$20,000 or more.
PILATUS BANK DEPOSITORS THREATEN TO SUE THE MALTA FSA
The Times of Malta reported on 22nd July that a group of Pilatus Bank depositors are threatening to sue the financial services watchdog in a bid to reclaim about €80 million in frozen assets. The MFSA acted after bank chairman, Ali Sadr Hasheminajad, was arrested in the US for alleged sanctions-busting and money laundering. The MFSA then issued another round of sanctions, effectively seizing the bank’s operations pending an investigation. The newspaper says that the legal threat was sent to the MFSA by the same law firm which threatened to “financially cripple” the late journalist Daphne Caruana Galizia – Mischon de Reya.
EUROPEAN COMMISSION TAKES ACTION AGAINST IRELAND OVER MONEY LAUNDERING LAWS
The Irish Legal News on 20th July reported on the action being taken against Ireland for failure to properly implement the 4th Money Laundering Directive. The deadline for implementation was 26th June 2017. It reports that the EU Commission will ask the Court of Justice of the EU to charge a lump sum and daily penalties until Ireland and the other countries affected take the necessary action to implement the Directive. The lump fine could be up to €1.7 million and the daily penalties could be around €7,200 a day, it says.
CYPRUS: ‘GOLDEN VISAS’ RISK BEING EXPOSED TO FRAUD
The Cyprus Business Mail on 22nd July reported that a vice president at Arton Capital, which advises high-net-worth individuals (HNWI) on residency and citizenship matters has warned that foreign investors applying for a ‘golden visa’ may be exposed to malpractice and fraud if the government decides to grant companies or individuals selling investments the right to operate as licensed advisors. The article says that the scheme, introduced in its current form 4 years ago, was last updated in May, when the government announced new measures to regulate the business. Last year the scheme allowed 503 investors to acquire a Cypriot passport for themselves and a further 510 for family members. The Cyprus Business Mail says that documents it has seen show that the scheme attracted mainly candidates from Russia, Ukraine, the Middle East and South and East Asian countries, many of which are considered high-risk jurisdictions in terms of money laundering.
SOUTH AFRICA: ARMS DEAL LAWYER DISHES MORE DIRT
News 24 in South Africa reported on 22nd July that the National Prosecuting Authority (NPA) has received new evidence to bolster its corruption case against former president Jacob Zuma and French arms company Thales. It says that there are further details around the alleged €1 million donation Thales paid the ANC in exchange for dropping the charges against it in October 2004. The lawyer also alleges that former justice minister Penuell Maduna asked for “compensation” for his “services” in getting the charges dropped against the company, and was paid €50,000.
HONG KONG CUSTOMS SEIZES 7,100 KG SUSPECTED PANGOLIN SCALES
Customs Today on 21st July reported that 7,100 kg of suspected pangolin scales, with an estimated market value of about US$450,000, were seized in a container from Nigeria.
VENEZUELA: A MAFIA STATE?
A special report from Insight Crime says that Venezuela has become a hub of organised crime in the region. Amongst other things it says that importers “wildly inflate the value of goods brought into the country to grab US dollars at rock-bottom exchange rates. Sometimes, they fake the shipments altogether and import nothing at all,” according to an investigation by the New York Times. It also says that there has been a devolution of state powers to irregular and illegal actors, with an exponential growth of Venezuelan organised crime. Colombian drug trafficking organisations and warring factions set up shop, turning Venezuela into a logistics base, safe haven and one of the principal transit nations for Colombian cocaine. However, with the rising levels of criminality and the large-scale contraband to neighbouring countries, including many small and vulnerable Caribbean islands, Venezuela is becoming a net exporter of criminality. It considers drug cartels within the Venezuelan regime. It considers the links, for drugs and other crime, between Venezuela and Colombia, the Dominican Republic and El Salvador.
VIETNAM TEMPORARY IMPORT BAN FOR CRYPTOCURRENCY MINERS
On 21st July, BTC Manager reported that more than 2 months after a big scam scandal, the Vietnamese Central Bank is now following government recommendations and has agreed shut down all support for cryptocurrency mining equipment imports. The Prime Minister has ordered several ministries to remain vigilant with ICO and anything that had to do with cryptocurrency industry. The fraud is said to have involved Modern Tech Corp in Ho Chi Minh City carrying out fraud valued at over US$656 million, luring investors through its investment models. Mining itself is not legal in Vietnam, it says, but the use of cryptocurrency as a payment method is illegal.
RUSSIA: FSB RAIDS RESEARCH FACILITY AFTER SUSPECTED LEAK OF HYPERSONIC MISSILE SECRETS TO WEST
Alert 5 on 22nd July reported a Moscow Times story that the Russian security service, FSB, has searched the offices TsNIImash and the office of the United Rocket and Space Corporation’s head of research, Dmitry Payson. TsNIImash is also known as the Central Research Institute of Machine Building and is part of Russia’s federal space agency, Roscosmos. The FSB investigation is reportedly into a suspected leak of secret hypersonic missile technology to the West from inside some of the country’s leading research labs.
PODCAST: CATCHING UP ON THE KILLER ROBOT DRONES
An interesting 37-minute podcast from the War College website in the US on 31st May involves a discussion with an expert (Kelsey Atherton, a writer for C4ISRNet and Fifth Domain) on the current and future state of play with unmanned air vehicles (i.e. drones). Available on the acast podcast website.