MORE THINGS YOU MAY HAVE MISSED – AUGUST 20

20 August 2018

UK: GÜRALP SYSTEMS FOUNDER AND FORMER MD CHARGED WITH CORRUPTION OVER SOUTH KOREA CONTRACTS

On 17 August, the SFO issued a news release saying that Dr Cansun, Guralp founder and Andrew Bell, Managing Director, both formerly employed by Güralp Systems Limited charged with conspiracy to make corrupt payments to a public official and employee of the Korea Institute of Geoscience and Mineral Resources (KIGAM) between 2002 and 2015.  Güralp Systems Limited is an engineering company specialising in the production of seismic testing equipment.

https://www.sfo.gov.uk/2018/08/17/guralp-systems-founder-and-former-managing-director-charged-with-corruption-over-south-korea-contracts/?mod=djemRiskCompliance

HMRC DISCUSSION PAPER: AML SUPERVISION FEES

On 20 August, HMRC published a news release in which it sets out the background in a discussion paper and asks businesses to respond to questions about the way it charges fees to the businesses it supervises.

https://www.gov.uk/government/consultations/anti-money-laundering-supervision-discussion-about-fees

COLOMBIAN CRACKDOWN ON ILLEGAL GAMBLING

Intergame on 20 August reported that the Colombian gambling regulator, Coljuegos, has detailed a “strong offensive” against illegal gambling activities and services which it claims are avoiding paying taxes that would be diverted to the South American country’s health and social services.

http://www.igamingbusiness.com/news/colombian-regulator-strikes-back

SAUDI ARABIA ANTI-CORRUPTION AND YOUR COMPLIANCE

On 20 August, Thomson Reuters published an article saying Saudi Arabia anti-corruption and AML drive highlights why financial institutions must always know who they are doing business with, including third parties.  How, it asks, can they ensure compliance and fight financial crime?

https://www.jdsupra.com/legalnews/saudi-arabia-anti-corruption-and-your-22190/

CHINA BUSTS 2 MAJOR ONLINE GAMBLING OPERATIONS

On 20 August, Calvin Ayre reported that China has broken up 2 major online gambling rings, including one that utilised trademarks associated with legitimate Macau casino operators; and arrested over 50 suspects connected to a “transnational” online gambling ring that handled turnover of around $1.1 billion in the past 2 years from around 114,000 customers.

https://calvinayre.com/2018/08/20/business/china-busts-online-gambling-operations/

FRAUD DEFENCE CANNOT SURVIVE DISCONTINUANCE OF PROCEEDINGS TO ENFORCE A FOREIGN AWARD

CMS Law on 17 August published an article saying that the Court of Appeal has held that a fraud defence did not give rise to an independent claim and could not survive the discontinuance of proceedings to enforce a foreign award.  It concerns the case of Stati and others v Republic of Kazakhstan, in which the claimants were awarded damages in a Swedish arbitration and obtained an enforcement order in England, which Kazakhstan applied to set aside on a number of grounds.  It says that the case clarifies the circumstances in which the court will set aside a notice of discontinuance that appears to have been served for tactical reasons which are collateral to the proceedings themselves; and that this aspect of the decision is likely to be relevant beyond the arbitration context.

http://www.cms-lawnow.com/ealerts/2018/08/fraud-defence-cannot-survive-discontinuance-of-proceedings-to-enforce-a-foreign-award?_ga=2.246691012.1135574270.1534801299-1342748053.1511571046

MALAYSIA MAKES RECORD $12 MILLION RHINO HORN SEIZURE

The Daily Mail on 20 August reported that Malaysia has made a record seizure of 50 rhino horns worth an estimated $12 million at Kuala Lumpur airport as they were being flown to Vietnam.  The 50 rhino horns weighed 116 kg. Vietnam is a hot market for rhino horn, which is believed to have medicinal properties and is in high demand among the communist nation’s growing middle class.

http://www.dailymail.co.uk/wires/afp/article-6078545/Malaysia-makes-record-12-mn-rhino-horn-seizure.html

MAERSK AND IBM SAY 94 ORGANISATIONS HAVE JOINED BLOCKCHAIN TRADE PLATFORM

Reuters reported on 9 August about a blockchain platform developed by Maersk with IBM aimed at boosting efficiency and limiting the enormous paper trail of global container shipping.  It says that the industry has seen little innovation since the container was invented in the 1950s, and cross-border trade still leaves an enormous trail of paperwork and bureaucracy.  Maersk says it wants to provide end-to-end solutions for customers rather than just shipping a container from port to port. Port operators in Singapore, Hong Kong and Rotterdam, customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru, and container carrier Pacific International Lines (PIL) are among the companies and organisations that have joined the platform.

https://www.reuters.com/article/us-shipping-blockchain-maersk-ibm/maersk-ibm-say-94-organizations-have-joined-blockchain-trade-platform-idUSKBN1KU1LM

BERMUDA’S CHARITIES AMENDMENT ACT: BALANCING AML/CFT STANDARDS AND PRIVACY

On 20 August, Appleby published an article about the amendments made to the Charities Act 2014.  These bring local law into line with FATF standards, and ensure that privacy concerns of registered privately-funded charities are adequately respected.

https://www.applebyglobal.com/insights/insights-2018/bermuda-s-charities-amendment-act–balancing-aml-atf-standards-and-privacy.aspx

ECUADOR BUS TRAGEDY REVEALS INNOVATIVE TACTICS OF COLOMBIA TRAFFICKERS

Insight Crime on 20 August reported that a fatal bus crash in Ecuador has drawn attention to a new drug trafficking method: international “narco-bus tours” and transnational drug trafficking group dubbed the “Border Merchants” (Los Mercaderes de la Frontera).  Authorities discovered a 637 kg shipment of marijuana hidden in a secret compartment beneath the floor of the bus.

https://www.insightcrime.org/news/brief/ecuador-bus-tragedy-reveals-innovative-tactics-colombia-traffickers/

NORTH KOREA TO PERMIT ICAO INSPECTIONS

Missile Threat on 20 August reported that North Korea will reportedly admit inspectors from the International Civil Aviation Organization (ICAO) to conduct in-country inspections to assess measures taken by Pyongyang to improve the safety of commercial aircraft from North Korea’s ballistic missile launches.

https://missilethreat.csis.org/dprk-to-permit-icao-inspections/

US CUSTOMS INTERCEPTS CANS OF BABY FORMULA FILLED WITH PROHIBITED PORK FROM EL SALVADOR

Homeland Preparedness News on 20 August reported that officers at a Washington DC airport recently discovered pork sausage links concealed in an El Salvadoran woman’s baby formula cans.  Swine meat from El Salvador is not allowed to enter the US because of the presence of swine vesicular disease (SVD), a highly contagious viral disease of pigs.

https://homelandprepnews.com/stories/30055-cbp-intercepts-cans-of-baby-formula-filled-with-prohibited-pork-at-dulles-airport/

INMATES IN 17 US STATES PROTEST OVER “MODERN SLAVERY” PRISON CONDITIONS

The Crime Report reported on 20 August that they say they are protesting exploitative labour practices in correctional facilities and that Americans “need to recognize how we are supporting the prison industrial complex through the dollars that we spend”.

https://thecrimereport.org/

 

 

INITIAL COIN OFFERINGS (ICO) COULD FACE REGULATION UNDER EU CROWDFUNDING RULES

Out-Law on 20 August published an article saying that businesses hoping to raise funds through public ‘initial coin offerings’ (ICO) would be obliged to make a series of disclosures to prospective investors about themselves, the nature of their projects and the risks inherent in the investment under new rules proposed by an MEP.

https://www.out-law.com/en/articles/2018/august/initial-coin-offerings-regulation-eu-crowdfunding-rules/

The draft report is at –

http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&reference=PE-626.662&format=PDF&language=EN&secondRef=02

FBI RELEASES ARTICLE ON INTERNET OF THINGS RISKS

Robinson & Cole Data Privacy published an article on 20 August saying that the FBI released a Public Service Announcement on August 2 entitled “Cyber Actors Use Internet of Things Devices as Proxies for Anonymity and Pursuit of Malicious Cyber Activities,” which outlines how cyber criminals search for and compromise vulnerable IoT devices “for use as proxies or intermediaries for Internet requests to route malicious traffic for cyber-attacks and computer network exploitation”.  The smart devices most commonly targeted by cyber criminals include: routers, wireless radio links, time clocks, audio/video streaming devices, Raspberry Pis, IP cameras, DVR, satellite antenna equipment, smart garage door openers, and network attached storage devices.

https://www.dataprivacyandsecurityinsider.com/2018/08/fbi-releases-article-on-iot-risks/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DataPrivacyAndSecurityInsider+%28Data+Privacy+%2B+Security+Insider%29

The FBI release is at –

https://www.ic3.gov/media/2018/180802.aspx

CHINA SHIFTS TO IRANIAN TANKERS TO KEEP OIL FLOWING AMID US SANCTIONS

The Tehran Times on 20 August reported that Chinese buyers of Iranian oil are starting to shift their cargoes to vessels owned by National Iranian Tanker Company (NITC) for nearly all of their imports to keep supply flowing amid the re-imposition of economic sanctions by the US.

http://www.tehrantimes.com/news/426743/China-shifts-to-Iranian-tankers-to-keep-oil-flowing-amid-U-S

INQUIRY INTO ‘STATE CAPTURE’ SCANDAL BEGINS IN SOUTH AFRICA

Deutsche Welle on 20 August reported that a judicial commission is expected to investigate the extent of the influence of the wealthy Gupta family in South African politics.  Local media dubbed the allegations as ‘state capture’. It is probing allegations of fraud and graft during the tenure of former president Jacob Zuma.

https://www.dw.com/en/inquiry-into-state-capture-scandal-begins-in-south-africa/a-45148092?src=ilaw

SOME OTHER THINGS YOU MAY HAVE MISSED – AUGUST 20

Off on travels again for a couple of weeks, so the blog may be disrupted…

20th August 2018

ADEN PORT OFFICIALS FOIL ATTEMPT TO SMUGGLE YEMENI ANTIQUES

The National on 19th August reported that the Yemen government says Houthi rebels are selling historical objects abroad to raise funds.  Yemen is home to several UNESCO-listed heritage sites that are under threat from the country’s civil war between the internationally recognised government supported by a Saudi-led Arab military coalition and the Iran-backed Houthis.

https://www.thenational.ae/world/mena/aden-port-officials-foil-attempt-to-smuggle-yemeni-antiques-1.761448

CANADA’S FINANCIAL OMBUDSMAN WARNS BINARY OPTIONS PRESENT SYSTEMIC RISK AS CHARGEBACKS FAIL

Finance Feeds on 20th August reported that, nearly 1 year after the Canadian Securities Administrators (CSA) announced a ban on binary options, Canada’s OBSI says banks involved are not at fault for the failure of chargebacks requested by binary options fraud victims because the banks followed the normal chargeback policies and procedures.

https://financefeeds.com/canadas-financial-ombudsman-warns-binary-options-present-systemic-risk-chargebacks-fail/?src=ilaw

IRELAND: MOTOR INSURANCE CLAIMS DECLINE AFTER INTRODUCTION OF ANTI-FRAUD MEASURES

On 20th August, the Irish Times reported that the decision by insurers to report suspicious claims to Garda leads to fall in claims.  The Motor Insurers’ Bureau of Ireland (MIBI) said 1,572 claims were submitted in the January to July period, as against 1,716 claims for the same period a year ago.  The organisation said the decline in claims was due to the introduction of anti-fraud measures last year that included the forwarding of potentially fraudulent claims to the Garda. The decision came after the body said that up to 1 in 8 insurance claims being submitted were “suspicious”.

https://www.irishtimes.com/business/financial-services/motor-insurance-claims-decline-after-introduction-of-anti-fraud-measures-1.3601122?src=ilaw

FIJI WOMAN FACES HUMAN TRAFFICKING CHARGES IN NEW ZEALAND

The Fiji Sun reported on 20th August that a 31-year-old Fiji national allegedly involved in a human trafficking case in New Zealand has been charged.  Her sister has been charged in absentia with 5 counts of obtaining property by deception and one count of money laundering.  The 2 were alleged to have facilitated the travel of 17 Fijian citizens who were exploited through slavery and became victims of human trafficking in New Zealand, between April and August 2014.  They had been operating a travel agent business in Fiji, and are alleged to have placed an advertisement about employment opportunities in New Zealand.  The victims were allegedly exploited through forced labour to work in unfavourable weather conditions, with little or no wages, unacceptable living (accommodation) conditions because male and female victims had to share one room.

http://fijisun.com.fj/2018/08/20/woman-faces-human-trafficking-charges/?src=ilaw

HONG KONG REGULATOR FINES BANK OVER POOR AML AND DUE DILIGENCE CHECKS

KYC 360 on 20th August reported that the Hong Kong Monetary Authority (HKMA) has penalised Shanghai Commercial Bank (SCOM) HK$5 million for breaching AML rules, including failing to conduct vital due diligence checks and monitor transactions which were not in line with its knowledge of the customer’s risk profile or source of funds.  It found that SCOM did not continuously monitor its business relationship with 33 customers by examining the background and purposes of their transactions.  SCOM failed to conduct CDD measures in respect of certain pre-existing customers.

https://kyc360.com/news/hong-kong-regulator-fines-bank-over-poor-anti-money-laundering-due-diligence-checks/

OFAC GUIDANCE REGARDING NORTH KOREA SANCTIONS

On 10th August, Arent Fox published an article saying that on 23rd July OFAC issued a useful guidance document that provides businesses a helping hand in dealing with the risk of being involved in trade with North Korea affected by US or UN sanctions.  The article seeks to identify the highlights of the guidance.

https://www.arentfox.com/perspectives/alerts/ofac-issues-helpful-guidance-regarding-north-korea-sanctions-businesses-supply

GUERNSEY: REFUSAL OF CONSENT UNDER AML REPORTING REGIME – ROYAL COURT WEIGHS IN

On 20th August, a briefing from Ogier says that the Financial Intelligence Service’s (FIS’s) recent refusal to consent to a proposed transaction under Guernsey’s AML reporting regime has resulted in the Royal Court deciding its first private law action between the person claiming the asset and the financial institution holding it, and clarifies the legal framework for determining the source of funds, which will be highly relevant to all regulated entities in Guernsey.  In 2012, the Guernsey Court of Appeal had indicated that the appropriate remedy for an asset owner being denied access to their funds following a SAR was to bring proceedings against the entity holding the funds and not an application for judicial review.  The article examines the background to the hearing and the outcome, but notes that law officers have not clarified whether a bank complying with a civil court order to pay out funds may still be prosecuted if the funds later turn out to be proceeds of crime.

https://www.internationallawoffice.com/Newsletters/White-Collar-Crime/Guernsey/Ogier/Refusal-of-consent-under-AML-reporting-regime-Royal-Court-weighs-in