8th August 2018
THE JUNE 2018 COLOGNE RICIN PLOT
In the August 2018 edition of the CTC Sentinel, an article says that, in June 2018, German security services uncovered an alleged terrorist plot involving ricin by a Tunisian extremist living in Cologne suspected of being inspired by and in touch with the Islamic State. It was the first time a jihadi terrorist in the West has successfully produced the toxic biological agent. The article says that the case illustrates the existing threat of bioterrorism in Europe. It also shows the importance of electronic surveillance to uncover plots by radicalised individuals using the Internet to obtain deadly material. It mentions previous plots using ricin, then details the Cologne case. If the allegations are proven, the suspect would be the first jihadi terrorist suspect in the West to successfully produce ricin.
https://ctc.usma.edu/june-2018-cologne-ricin-plot-new-threshold-jihadi-bio-terror
THE RENEWED JIHADI TERROR THREAT TO MAURITANIA
In the August 2018 edition of the CTC Sentinel an article says that a decade ago, terrorism was rampant in Mauritania, but then it stopped, even as terrorist activity was rapidly proliferating all around it. Instead of being a target of terrorism, Mauritania became a node of passive jihadi activity. Various explanations were proffered as to why this was happening: Mauritania was good at counter-terrorism; the government had made a deal with the devil; jihadi groups respected Mauritania’s neutrality. However, in May Al-Qaida in the Islamic Maghreb (AQIM) issued a communiqué that specifically mentioned Mauritania in a call for attacks, signalling a possible renewed jihadi terror threat to the country. The article looks at the history of the threat to the country, and why circumstances may have changed.
https://ctc.usma.edu/renewed-jihadi-terror-threat-mauritania
THE ISLAMIC STATE IN AFRICA
Another article in the August 2018 edition of the CTC Sentinel examines the presence of IS in the African continent. It says that best estimates suggest the presence of approximately 6,000 Islamic State fighters in Africa today, spread over a total of 9 Islamic State “cells”. It looks in turn at each of these cells – in West Africa (where a cell ostensibly replaced Boko Haram), in the Sinai, in Libya, in Greater Sahara (Mali), in Somalia (where the cell is secondary to Al-Shabaab), in Tunisia, Egypt, Algeria, and in Somalia and East Africa. It also considers the future of IS fighters in Africa.
https://ctc.usma.edu/islamic-state-africa-estimating-fighter-numbers-cells-across-continent
INTERVIEW WITH UK CHEMICAL AND BIOLOGICAL TERRORISM EXPERT
Another article in the August 2018 edition of the CTC Sentinel consists of an interview with Hamish de Bretton-Gordon is a highly experienced CBRN practitioner and a leading expert in chemical and biological counterterrorism and warfare. He was the commanding officer of the UK Chemical, Biological, Radiological and Nuclear (CBRN) Regiment between 2003 and 2007 and NATO’s Rapid Reaction CBRN Battalion between 2005 and 2007. A veteran of the First Gulf War and tours in Iraq, Afghanistan, and the Balkans, he retired from the British Army in 2011. He advises the MoD and FCO as well as the Kurdistan Regional Government on CBRN issues and is the managing director of CBRN at Avon Protection, which designs, develops, and manufactures CBRN respiratory protection products. Asked are such cheerful questions as “What are your greatest concerns when you look at the spectrum of CBRN threats?”, “What worries you about the capability of jihadis to use these kind of weapons?” [i.e. chemical weapons], “What chemical weapons threats most concern you?”, “How big a threat do radiological devices or “dirty bombs” pose?”.
MILLIONS FLOW TO PENTAGON’S BANNED CONTRACTORS VIA A BACK DOOR
On 6th August, Bloomberg Business published an article that says that some of the world’s largest companies have benefited from a little-known law that lets the Us DoD override decisions barring contractors accused or convicted of bribery, fraud, theft, and other crimes from doing business with the US government. This is achieved through a process allows the DoD in rare cases to determine that the need to fulfil certain contracts justifies doing business with companies that have been suspended from government work. 22 such determinations were revealed to Bloomberg Business – they include contracts to provide food services for DoD personnel at an Army base in Afghanistan, “vital” web-hosting services for an agency that serves the Pentagon and the US intelligence community, and aviation fuel sold to the Defense Logistics Agency. It seems that there have only been 30 determinations since the law allowing them was enacted in 1981.
https://about.bgov.com/blog/millions-flow-pentagons-banned-contractors-via-back-door/
9th August 2018
IRISH DJ JAILED IN AUSTRALIA AFTER SMUGGLING MILLIONS WORTH OF COCAINE AND ECSTASY IN NOODLE CONTAINERS
The Irish Sun reported on 8th August that Stephen Donnelly, 37, from Co Meath was caught supplying large amounts of cocaine and ecstasy to the Australian party scene and was jailed for 6 years and 9 months.
https://www.thesun.ie/news/2958558/stephen-donnelly-jailed-drug-smuggling-australia/
ICELAND CONSULTS ON BILL REFORMING AML/CFT LAW
Payments Compliance on 8th August reported that in July a consultation was launched on a Bill to implement the 4th AML Directive in Icelandic law (even though Iceland is not an EU Member State).
FORMER VANUATU PUBLIC SERVANT FACES MONEY LAUNDERING CHARGES OVER EU FUNDS
Radio New Zealand on 9th August reported that Victor Rory, a former senior public servant, is facing money laundering charges after allegations he stole almost $135,000 while in charge of EU projects. He was the Principal Aid Negotiator when the alleged offences occurred.
BERMUDA: MONEY LAUNDERING BILL PASSES SENATE
The Royal Gazette on 8th August reported that what it described as the final piece of legislation in a raft of new safeguards to protect Bermuda from money laundering and terrorist funding has been passed by the Senate and now goes to the other house of the parliament for its approval. The Bill follows earlier changes and comes ahead of an assessment of the island’s AML/ATF regime by the Caribbean Financial Action Task Force, with an evaluation team due to visit Bermuda for 2 weeks in September to complete the on-site portion of the assessment. The Bill is said to close gaps identified during the national risk assessment in relation to Bermuda’s technical compliance with FATF recommendations as to admission to the legal profession, disciplinary action in relation to not just AML/ATF compliance but also as to compliance with supervisory functions.
http://www.royalgazette.com/politics/article/20180808/senate-money-laundering-bill-passes
SARDINIA SAND THIEVES FACE FINES OF UP TO €3,000
The Guardian on 8th August reported on a crackdown on Sardinia on tourists who steal sand from the island’s pristine beaches as a souvenir. One was recently fined €1,000 after police caught him in possession of a bottle of sand from Gallura beach, on the island’s north coast.
https://www.theguardian.com/world/2018/aug/08/sardinia-sand-thieves-face-fines-of-up-to-3000
JERSEY LIMITED LIABILITY PARTNERSHIPS
On 31st July, Ogier published an article saying that the Limited Liability Partnerships (Jersey) Law, 2017 is now in force and the Registrar of Limited Liability Partnerships is in a position to accept applications to register Jersey LLP incorporated under the Law. It explains that an LLP is a legal person distinct from its partners which can own property, sue and be sued in its own name. Each of its partners is obliged to contribute effort and skill or capital to the business of the LLP and is an agent of the partnership but not of the other partners.
https://www.ogier.com/publications/jersey-limited-liability-partnerships
CAYMAN ISLAND MONETARY AUTHORITY AML GUIDANCE FOR INVESTMENT FUNDS
On 30th July, Maples and Calder reported that CIMA has recently issued a set of FAQ in relation to how they expect AML procedures and functions to be undertaken by investment funds.
http://thoughts.maplesandcalder.com/post/102ezqn/cima-faqs-for-fund-aml-officers
The CIMA Notice of 20th July is available at –
SOUTH AFRICA: CORRUPTION WATCH REPORT SHOWS DISTURBING AMOUNT OF BRIBERY AND EMBEZZLEMENT
Business Day on 8th August reported that bribery‚ procurement irregularities‚ embezzlement and stolen resources were the most common forms of corruption for the first half of 2018 according to a report from civil society organisation, Corruption Watch. It received 2,469 reports of corruption in the first half of 2018 with most complaints relating to schools‚ municipalities‚ police‚ licensing centres‚ state-owned entities and the health sector. Corruption Watch said it had received 23‚000 reports of corruption since it was formed in January 2012. In law enforcement‚ just more than 4 in 10 complaints concerned the abuse of power within the police.
THAILAND’S ‘JET-SET’ MONK SENTENCED TO 114 YEARS IN PRISON
Reuters on 9th August reported that a former Thai Buddhist monk, Wirapol Sukphol, formerly known by his monastic name Luang Pu Nenkham, who provoked outrage with his lavish lifestyle sentenced to 114 years in prison after a court found him guilty of fraud, money laundering and computer crimes.
1MDB SUES FOR OWNERSHIP OF SUPERYACHT EQUANIMITY
Maritime Executive on 8th August reported that state investment fund 1Malaysia Development Berhad (1MDB) has claimed ownership of the $250 million superyacht Equanimity, which was arrested in Indonesia this March on charges that it was purchased with stolen funds and is now in a port in Malaysia. It is said that officials believe that it will cost more than $700,000 per month to maintain to vessel.
CPS: UK MODERN SLAVERY CHARGES RISE BY 27% BUT CONVICTIONS DO NOT
The Law Society Gazette on 9th August reported that despite the rise, figures in the first CPS Modern Slavery Report show that the number of convictions as almost the same as the previous year, and down from 2015/16.
https://www.lawgazette.co.uk/law/modern-slavery-charges-rise-by-27-cps/5067213.article
FiNCEN EXTENSION OF LIMITED EXCEPTION FROM BENEFICIAL OWNERSHIP REQUIREMENTS FOR LEGAL ENTITY CUSTOMERS OF CERTAIN FINANCIAL PRODUCTS AND SERVICES WITH ROLLOVERS AND RENEWALS
On 8th August, FinCEN made this announcement that it was extending the limited exception originally granted on 11th May for an additional 30 days, up to and including September 8th, from the obligations of the Beneficial Ownership Rule for rollover or renewal of certain financial products and services (i.e. certificate of deposit or loan accounts) that were established before May 11th 2018 to further consider the issue.
EU RESTRICTIONS ON HIGH-RISK FINANCIAL CONTRACTS FOR DIFFERENCE (CFD) AND BINARY OPTIONS TAKE EFFECT
Out-Law on 8th August published an article saying that EU-wide temporary restrictions by the European Securities and Markets Authority (ESMA) on the sale, marketing and distribution of high-risk speculative investment contracts for difference (CFD) products to retail investors have now taken effect, from 1st August. ESMA also imposed a temporary ban on the marketing, distribution or sale of so-called ‘binary options’ to retail investors, which took effect on 2nd July.
https://www.out-law.com/en/articles/2018/august/restrictions-high-risk-financial-contracts/
MOST VICTIMS TRAFFICKED INTERNATIONALLY CROSS OFFICIAL BORDER POINTS
The International Organization for Migration reported on 30th July that new data released by IOM, the UN Migration Agency, show that in the last 10 years, almost 80% of journeys undertaken by victims trafficked internationally cross through official border points, such as airports and land border control points. It says that trafficking in persons is often seen as an underground activity, linked to irregular migration, and hidden from the authorities and the general public. IOM case data depict a different story.
http://www.iom.int/news/iom-most-victims-trafficked-internationally-cross-official-border-points
FCA CONSULTS ON OBLIGATIONS FOR E-MONEY ISSUERS AND PAYMENT INSTITUTIONS
An article from Paul Hastings on 8th August reported that on 1st August the FCA published a consultation on General Standards and Communication Rules for the Payment Services and E-Money Sectors (CP18/21).
https://www.paulhastings.com/publications-items/details/?id=5ac34a6b-2334-6428-811c-ff00004cbded
UN REPORT DETAILS RUSSIAN ACTIVITY IN CENTRAL AFRICAN REPUBLIC
On 7th August, Janes.com reported that a UN panel of experts’ report has provided details of Russian support for the military and security forces of CAR: a subject that has attracted more attention following the murder of 3 journalists investigating the activities of Russian mercenaries in the country. Russia had been reported to have supplied, with UN permission, small arms and ammunition, and its reported to be training approximately 900 personnel from both the army and the Presidential Guard in CAR and Sudan. What are described as Russian “instructors” are present, and are guarding Russian-donated hospitals and convoys of materials. There are said to be 5 military and 170 civilian instructors involved.
https://www.janes.com/article/82222/un-report-details-russian-activity-in-car?from_rss=1
CANADA LABELLED A MONEY LAUNDERING HUB
On 9th August, the Wall Street Journal Risk & Compliance report said that two-thirds of Canadian banks examined by regulators had “significant levels” of non-compliance with AML rules, according to report to lawmakers reviewed by the newspaper. The piece said that factors producing this situation included strict privacy laws making it difficult to obtain warrants, a reluctance to prosecute and the failure in some cases of banks to report suspicious transactions.
DRUG FIRMS FIGHT US GOVERNMENT’S IRAQ CORRUPTION PROBE
Pharmaphorum on 9th August reported that major drug companies have denied any involvement in corruption that allegedly led to medical supplies being used to fund attacks against US soldiers in Iraq. The denial comes in the wake of reports of the DoJ making inquiries into the activities of AstraZeneca and others.
https://pharmaphorum.com/news/drug-firms-fight-us-governments-iraq-corruption-probe/?src=ilaw
SREBRENICA – “MONEY LAUNDERING HEAVEN”
The Independent Balkan News Agency reported on 9th August that Deputy of the Srebrenica municipal Assembly Speaker had stated that in the past several years, the Party of Democratic Action (SDA) in collusion with the former mayors had “laundered” around € 10 million. He called on the competent authorities to investigate and identify the people who abused office and took part in the alleged embezzlement of money donated in aid and money laundering.
https://www.balkaneu.com/srebrenica-money-laundering-heaven/?src=ilaw
BRITISH COMPANIES EMBROILED IN POLAND’S ‘TRASH MAFIA’ SCANDAL
The Telegraph on 8th August reported that 3 British waste disposal companies handling household waste are embroiled in an international criminal investigation into a fake recycling scandal in Poland. It says that Polish authorities have also revealed that more than 1,000 tonnes of British waste falsely labelled as recyclable plastic has been seized by government inspectors.
https://www.telegraph.co.uk/news/2018/08/08/british-firms-embroiled-polands-trash-mafia-scandal/
PHYSIOTHERAPIST STRUCK OFF FOR WEAPONS DEALING
The BBC reported on 3rd August that a physiotherapist from Handsworth, Birmingham has been struck off the healthcare register after being convicted of conspiracy to transfer prohibited weapons and ammunition. Dr Mohinder Surdhar had admitted the offence and was jailed for 14 years in January. A healthcare tribunal panel said his conduct was “appalling” and a “fundamental departure” from trust. He used a legitimate firearms certificate to get weapons which were sold on by co-conspirators
https://www.bbc.co.uk/news/uk-england-hereford-worcester-45048338
ARE PARENT COMPANIES LIABLE FOR VIOLATIONS BY OVERSEAS SUBSIDIARIES?
On 9th August, a briefing from Gowling WLG examined this question in the light of a case where claimants sought to argue that Unilever plc (as the UK parent) was responsible along with Unilever Tea Kenya Ltd (as the foreign subsidiary) for the latter’s failure to protect the claimants and their families from the risk of extreme ethnic violence endured after the 2007 Kenyan presidential election. Supporters of the losing candidate had attacked the tea plantation where the claimants, members of an ethnic community that had supported the winning candidate, assaulting, killing and raping. They had to establish a “duty of care”, by showing the risk was reasonably foreseeable and this could be attached to the parent. The High Court had dismissed the claim, and the matter had passed up to the Court of Appeal, which confirmed the High Court’s decision but for different reasons. Despite dismissing this claim, the Court of Appeal gave 2 examples of where a parent could still be liable –
- where a parent company has in substance taken over the management of the relevant activity in place of, or jointly with, the subsidiary’s own management; or
- where the parent company has given relevant advice to its subsidiary about how it should manage a particular risk.
KOSOVO APPOINTS FUGITIVE FROM SERBIA AS CONSTITUTIONAL COURT JUDGE
Reuters on 9th August reported that Kosovo has appointed a judge, ethnic Serb Radomir Laban, who fled from Serbia to Kosovo to avoid a prison sentence for corruption to serve on its constitutional court. He was approved by a vote in parliament in May. A senior police source is quoted as saying that he is still a wanted person by Belgrade authorities and there is an Interpol red notice warrant for him. In 2011 he was sentenced to 6 years in jail for corruption as an official of the Serbian customs, served half his sentence in pre-trial detention between 2006 and 2009, temporarily released and he then fled to neighbouring Kosovo.
STRUGGLING AML UNIT IN GERMANY
The National in the UAE on 9th August carried a lengthy article claiming how the failings of the German FIU may have allowed extremists to funnel money to Syrian terrorists. It says that the FIU was only established in 2016 and has 165 full-time workers, who reportedly have a backlog of 20,000 reports to review and more than 70,000 new ones are expected this year. It mentions the Islamic KT Bank in Frankfurt, a subsidiary of the Turkish banking institution Kuveyt-Turk Participation Bank, which is itself owned by the Kuwaiti Finance House (KFH). It says that both have been accused of being used to funnel money to ISIS, al-Qaeda and Hamas, and that US officials have alleged KFH had been used by Gulf-based extremists to help fund the former al-Qaeda Syrian offshoot Al-Nusra Front.
OFFSHORE FINANCIAL REGULATORS ANNOUNCE COLLABORATIVE FINTECH PARTNERSHIP
Low Tax.net on 9th August reported that 11 financial regulators – including those of some low-tax financial centres keen to attract FinTech start-ups – have announced the creation of the Global Financial Innovation Network, a partnership intended to support businesses to engage in innovative financial technology projects in their territories.
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