13th August 2018
A NEW BREED OF PIRATE IN VENEZUELA
On 2nd August, the Washington Post carried an article saying that, as chaos spreads in Venezuela, and as certain spots in the Caribbean become more dangerous than for decades, it is most dangerous off the coast of Venezuela.
EGYPT: A TOTAL OF 1,000 ANCIENT EGYPTIAN PIECES HAVE BEEN RECOVERED BY AUTHORITIES
Egypt Today on 12th August reported that the Supreme Secretary of Antiquities has announced that 1,000 smuggled ancient Egyptian antiques have been recovered; thanks to the efforts exerted by the ministry over the past couple of years, and that this was in addition to the recovery of the smuggled collection of antiques recovered in Italy recently.
PAKISTAN: IMPROVED GOVERNANCE GUIDELINES FOR BANKS OPERATING OVERSEAS
On 13th August, DAWN in Pakistan carried an article about the upcoming visit of the Asia-Pacific Group of FATF. It says that the group will examine whether Pakistan “has tightened the loose ends” of its AML policies. Based on its findings, the FATF will decide whether to keep the country on its watch list. It says that, in this context, the State Bank of Pakistan (SBP) has recently launched a framework of governance for overseas operations of banks. The guidelines follow the imposition of a penalty on Habib Bank Ltd (HBL) by the Department of Financial Services of New York in 2017 and the signing of a new agreement by United Bank Ltd (UBL) with New York’s Federal Reserve Bank last month to strengthen its compliance with the AML programme.
TRADE-BASED MONEY LAUNDERING A MASSIVE GLOBAL PROBLEM
The Straits Times in Malaysia on 13th August carried an article warning of the dangers from trade-based money laundering which starts by saying that the Sinaloa drug cartel was once the largest and most powerful in the world. The Mexican organised crime body at one point controlled so much of the illicit drug trade across Mexico and the United States that taking them down is a process that began in the 1980s – and the key to their sinister “success”? Clothing and teddy bears from China. The article calls on banks to be proactive in fighting the problem. Crucially, it says that financial intelligence is most robust when information flows between the public and private sectors. In the case of human trafficking, for example, presentations by leading NGO and government enforcement agencies have improved the banks’ ability to detect potentially related financial transactions. In turn, they have helped law enforcement disrupt trafficking networks.
CASPIAN SEA BREAKTHROUGH TREATY SET TO BOOST OIL AND PIPELINE PLANS
Bloomberg on 12th August reported that 5 Caspian Sea states – Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan – reached a breakthrough agreement on sovereign rights to the sea, paving the way for new oil and gas extraction – and pipelines – after more than 2 decades of disputes, and it allows each to lay pipelines offshore with consent only from the neighbouring states affected, rather than from all Caspian Sea nations. The 5 states also signed agreements on trade and economic ties, transportation and fighting terrorism. The territorial disputes are said to have prevented the exploration of at least 20 billion barrels of oil and more than 240 trillion cubic feet of gas.
CORRUPTION SCANDAL IN ARGENTINA FELLS TITANS OF BUSINESS
AFP reported on 13th August that records kept in notebooks of the kinds used by schoolchildren are bringing down titans of Argentina’s industry in a multimillion-dollar corruption scandal. It says that what sets this case apart from other Argentine scandals is the large number of people going down — around 20 so far, with additional names surfacing regularly — and their high-flying status in the business world. The scandal involves under-the-table payments to the governments of Nestor and Cristina Kirchner, the Peronist couple who ruled before the current president, Mauricio Macri, but that one big mystery is whether the money went to enrich government officials personally or was helped finance election campaigns. Prosecutor Carlos Stornelli has said bribes paid in the so called “corruption copybooks” case total $160 million.
HONG KONG POLICE’S ANTI-FRAUD SQUAD FROZE HK$530 MILLION LOST TO SCAMMERS OVER PAST YEAR, WITH PLANS TO EXPAND UNIT
The South China Morning Post on 13th August carried a report on the work of the Anti-Deception Coordination Centre, also saying that in cases of commercial fraud through email, scammers cheated victims out of HK$759.4 million in the first 6 months of 2018 – the largest loss among all types of scams – with a Spanish electronics company involved in an €11 million case, the biggest single amount this year. The squad says that about 16% of funds, or HK$530 million, involved in detected scams were successfully frozen before they could be transferred to the accounts of criminals, mostly in Hong Kong and mainland China.
THE FOUNDATIONS OF COMPANY LAW COMPLIANCE IN IRELAND
Law firm, A&L Goodbody has published an e-book, a guide which is a summary of some of the key corporate governance and compliance requirements under the Companies Act and Irish company law. The guide applies to private limited liability companies, designated activity companies and private unlimited liability companies incorporated and registered in Ireland. It is not intended to be definitive or to cover all aspects of company law compliance and we would of course be happy to provide you with further information on request.
FEARS THAT MONEY LAUNDERING EVALUATION MAY BE USED TO PUNISH TAIWAN POLITICALLY
The Taiwan Times on 13th August reported that Taiwan’s third mutual evaluation by the Asia/Pacific Group on Money Laundering is scheduled for November, but there is concern China may attempt to distort the results to damage Taiwan. As Taiwan prepares for the evaluation, concern has emerged that China, an influential member of the APG, along with Hong Kong, Macao, and other allies, may attempt to apply political pressure to distort results, or completely sabotage the evaluation. The article points out that the Liberty Times notes that a recent mock evaluation revealed that Taiwan may be at risk of receiving poor marks in 12 of the areas that will be evaluated. In order to maintain its status as a “low-risk” country for money laundering, Taiwan must reduce the “at risk” areas to 8.
KENYA: BANKS CAUGHT UP IN NGINYO KARIUKI LAND FRAUD WEB
The Daily Nation on 13th August reported that Barclays and KCB are reportedly entangled in a suit involving Nairobi tycoon Lawrence Nginyo Kariuki, who has accused a real estate company of fraudulently sub-dividing and selling off his land.
OLEG DERIPASKA OFFERS SANCTIONS RELIEF PLAN TO US TREASURY
The Irish Times on 13th August reported that Oleg Deripaska’s aluminium-to-energy group En+ has presented the final version of a plan to the US Treasury in a bid to free itself from sanctions, which threaten to sink the company and upend global metal markets.
MALI´S FRAGILE PEACE
On 13th August, ETH Zurich provides a briefing on the situation in Mali saying that despite a large international civilian and military presence, Mali continues to struggle with widespread insecurity and Islamist extremism, and asking why this it the case. Key reasons relate to Mali’s chronic poverty problems, ethnic tensions and a weak state apparatus. It says that democracy has been quite stable in Mali, yet secessionist ideology runs deep through the Tuareg populations in the north; and this rift has manifested itself in no fewer than 3 rebellions in support of the autonomous Tuareg state of the “Azawad” prior to 2012.
CRYPTO MILLIONAIRE LOST 5,500 BITCOINS IN ALLEGED INVESTMENT SCAM
Coindesk on 13th August carried a report about the alleged scam involving a 22 year old cryptocurrency Finnish businessman and Thai actor in Thailand. In June 2017, the Finn was approached for investing in several Thai stocks, a casino in Macau as well as a new cryptocurrency called Dragon Coin that could be used at the casino.
THE HUMAN RIGHTS MEASUREMENT INITIATIVE (HRMI)
This initiative is working to produce a free easy-to-access database of metrics, summarising human rights performance in countries around the world. It aims to be comprehensive by producing metrics that cover the full range of rights embodied in international law, particularly the collection of international treaties known as the International Bill of Human Rights. It says that HRMI will help everyone see the big picture more easily, influencing both global decision-makers and ordinary people.
RUSSIA SAYS “WILL DITCH US SECURITIES AMID SANCTIONS”
KYC 360 on 13th August reported that Russia will further decrease its holdings of US securities in response to new sanctions against Moscow but has no plans to shut down US companies in Russia, Finance Minister Anton Siluanov said on state TV.
UNAUTHORISED VIRTUAL CURRENCIES ARE ILLEGAL IN SAUDI ARABIA
On 13th August, Mondo Visione carried an article saying that in Saudi virtual currency including, for example but not limited to, the Bitcoins are illegal in the kingdom and no parties or individuals are licensed for such practices.
EVEN THOUGH PORTS CAN BENEFIT FROM CUSTOMS FAST-TRACKING AND PRIORITY TREATMENT THROUGH AEO CERTIFICATION, IT’S STILL NOT WIDELY ADOPTED
Port Strategy on 6th August carried an article saying that during a recent IMO special event on ports, and as part of the drive for reducing border delays, achieving smoother cargo flows, improving security and reducing logistics costs, the push for AEO – Authorised Economic Operator – status was highlighted. It says that UK Border Force and HMRC are actively encouraging ports and others to go for AEO certification. AEO was created by the WTO, as part of its SAFE framework of standards, designed to secure and facilitate global trade. The framework is based on countries having mutual recognition to give priority clearance to AEO exporters and importers across borders. The WTO sees AEO as the future of international trade. The article focuses on the uptake of AEO by British ports.
OFAC ADDS 1 NAME TO ITS TERRORISM SANCTIONS LIST
On 13th August, OFAC added Qassim Abdullah Ali Ahmed of Iran to its list of designated persons.
TAX OFFICE BAGS PRESTON FRAUDSTER’S £70,000 POKER WIN
The BBC on 13th August reported that Adam Lulat, 26, a convicted fraudster involved in a £40 million money laundering scam and VAT fraud and jailed in 2015 who won £70,000 in a poker tournament in Manchester in March has been ordered to pay the cash to the tax office. He was part of a six-man gang ordered to repay £590,000, although Lulat only had to repay £1 as he had no assets, but he has now been brought back to court – he was also ordered to hand over £2,840 held in a personal bank account within 3 months or face another 15 months in jail.
KENYA FRAUD CHARGES OVER CHINESE-FUNDED $3 BILLION RAILWAY
The BBC on 13th August reported that 2 senior Kenyan government officials have been charged in court with fraud over the building of a $3.2 billion Chinese-funded railway line, accused of paying more than $2 million in compensation to private firms which falsely claimed to own land through which the line ran. The officials and 15 other accused have pleaded not guilty to the charges. The line runs between the port city of Mombasa and Nairobi. It is supposed to eventually connect landlocked South Sudan, eastern DRC, Rwanda, Burundi and Ethiopia to the Indian Ocean, but the project has been marred by corruption allegations, and claims by economists that the cost was too high.
EU PLANS GOLDEN VISA CRACKDOWN
Cyprus Mail on 13th August reported that the EU is planning to crack down on EU countries including Cyprus that award citizenships to rich third-country nationals amid growing concerns over dirty money from Russia, according to the Financial Times. In 2017, 503 foreign investors acquired a Cypriot passport and a further 510 family members. 3 months ago it launched a PR campaign to improve its image abroad, tarnished by reports in the past linking it to the legalisation of illicit funds. The FT quoted the EU Commissioner for Justice, Vera Jurova, as saying that such schemes in 8 Member States will come under tougher scrutiny from the Commission as part of a broader drive against money laundering and corruption.
AML CASH TRANSFER MEASURES COME INTO EFFECT IN ZANZIBAR
The Citizen in Tanzania reported on 13th August that controls on the movement of $10,000 in cash or its equivalent into or out of Zanzibar have come into force. It is the latest of a series of AML-connected measures being introduced in Tanzania.
VENEZUELAN PRESIDENT IMPLICATED IN US INVESTIGATION OF €160 MILLION LAUNDERED THROUGH MALTA
Baker McKenzie on 13th August reported that a criminal complaint filed in Miami alleges that Maduro’s stepsons helped launder $1.2 billion in funds embezzled from Venezuela’s state oil company PDVSA that were wired to an unnamed Maltese bank between late 2014 and early 2015. The scheme allegedly employed a series of fake investment schemes including fraudulent bond issues and investment funds.
THE NEW LEGAL LANDSCAPE FOR CROSS-BORDER INVESTMENT IN THE UNITED STATES: WHAT INVESTORS IN EUROPE AND ASIA NEED TO KNOW
Clifford Chance on 13th August produced a briefing on the implications of the Foreign Investment Risk Review Modernization Act (FIRRMA) and the Committee on Foreign Investment in the United States (CFIUS).
LEGISLATION IN WALES FOR MINIMUM PRICE FOR ALCOHOL RECEIVES ROYAL ASSENT
Local Government Lawyer on 13th August reported that a new law introducing a minimum price for alcohol in Wales has been granted Royal Assent. The Public Health (Minimum Price for Alcohol) (Wales) Act 2018 is part of wider efforts to reduce excessive drinking and is expected to come into operation in Summer 2019.
REGULATION AND THE LEGALISATION OF CANNABIS IN CANADA
On 13th August, Chatham house published an article saying that under a new law that comes into effect on October 17th, Canadians over the age of 18 will be able to buy and consume marijuana legally. To date, Uruguay, 9 US states, as well as the District of Columbia, have legalised marijuana for recreational use, but Canada will become the first G7 country to do so at a national level. The legislation permits the possession of up to 30g of legal cannabis or its equivalent in public; the sharing of up to 30g of legal cannabis or its equivalent with other adults; the purchasing of dried or fresh cannabis and cannabis oil from a provincially licensed retailer (including online). The article poses a number of questions, including how will Canada square the circle between regulating recreational and medicinal uses of the drug? How will the illegal market be eliminated? How should the drug be taxed? How should Canada manage commercialisation, advertising and the power of big cannabis companies?
MALAYSIA SEEKS FINANCIER’S $35 MILLION JET LINKED TO 1MDB SCANDAL
KYC 360 on 13th August reported that Malaysia is seeking to repossess a Bombardier Global 5000 $35 million private jet owned by financier Low Taek Jho as part of investigations into a multi-billion dollar scandal at state fund 1MDB. The jet was grounded last year in Singapore, according to some media reports.
THE FUTURE OF CHEMICAL WEAPONS: IMPLICATIONS FROM THE SYRIAN CIVIL WAR
On 13th August, this article from the Security Studies Journal analyses whether the Syrian case will lead to further proliferation and use of chemical weapons by states. It argues that chemical weapons have demonstrated limited military utility in Syria, either tactically or as a tool of civilian victimisation, the costs of use have been repeatedly demonstrated by the international reaction to their use, and the use of sarin — a nerve agent — has attracted a stronger international response than the use of chorine, a less lethal chemical agent.