Day: September 27, 2018

27^th September 2018

AUSTRALIA: UNDERSTANDING US INFLUENCE ON DEFENCE EXPORT CONTROLS
Australia Defence Magazine carried an article reminding readers about the effects, including extra-territorial effects, of US export controls, including the recent arrest of an Iranian researcher while he was studying at the University of Queensland.  It says that an application by an Australian supply chain member for an ITAR (military) or EAR (dual-use) item – either tangible or intangible – may be needed in order to fulfil a contract requirement and therefore SME must be entrusted to remain compliant and fully aware of their obligations when granted this access.
http://www.australiandefence.com.au/news/understanding-us-influence-on-defence-export-controls#btXpm5LZESOwxO3b.99

Meanwhile, in India, the Institute for Defence Studies and Analyses published a comment piece on 26^th September –

CAATSA SANCTIONS AND INDIA

The article commented on the effect of the US CAATSA sanctions on military supplies to India where Russian or Chinese companies were listed – following the listing by the US of a Chinese company, the Equipment Development Department (EDD) of China’s Central Military Commission (CMC), and on its Director, on 20^th September.  In its analysis, the article says that 11 of the 12 prescribed sanctions under CAATSA would have little or no effect on India’s current dealings with Rosoboronexport, the export arm of the Russian defence industry (with which India has extensive contracts). and hence on India-Russia defence relations. However, the 12^th has the potential to completely derail the India-US Defence and Strategic Partnership unless the sanction were to be waived.  This, it says, needs some elaboration and explanation.  Amongst its conclusions the article says that, even if the US grants a waiver to India under CAATSA, this would not assist re payments to Rosoboronexport, because it faces identical multiple sanctions under various other legislative Acts and Executive Orders.  However, it says that a waiver of the CAATSA sanction is essential if the India-US strategic partnership is to survive.

https://idsa.in/idsacomments/caatsa-sanctions-and-india-gbalachandran-260918

WHERE US SANCTIONS BITE CHINA’S MILITARY

The Diplomat on 26^th September published an article saying that some of the new CAATSA sanctions are harmless, from China’s perspective, but one is likely to hurt.  This is those on the Equipment Development Department of the Chinese military, and its director, Li Shangfu, for military purchases from Russia.  The article poses the questions – what is the real-world impact of the sanctions on China?  Do they bite at China’s capability to procure military equipment and services, or its abilities to continue operating and fulfilling its requirements?  It says that the US sanctions affect 4 areas – US property, a visa ban, export denial, and the US financial system.  The article says that examining the potential for major impact of each sanction shows where China is most likely to feel the pain, and where it is more or less immune.  It argues that the greatest risk to China may result from the area of sanctions involving “a prohibition on foreign exchange transactions under United States jurisdiction,” and “a prohibition on transactions with the United States financial system”.

https://thediplomat.com/2018/09/where-us-sanctions-bite-chinas-military/

US AUTHORITIES PREPARED TO RETURN SMUGGLED ANTIQUITIES TO INDIA

On 26^th September, Smarajya published an article saying that a high-level team from the Archaeological Survey of India (ASI), Delhi, will visit the US to bring back 180 antiquities that were smuggled out of India in the past.  The article highlights the continuing problem of such antiquities being stolen from, and removed from, India.  It complains that Indian authorities have been either slow to react or have simply done the wrong things in cases involving items found or known to be in other countries.  It describes one case which, it says, is a classic example of how official inaction and red tape stifle an honest investigation.

https://swarajyamag.com/culture/heritage-tragedy-us-authorities-prepared-to-return-smuggled-antiquities-while-india-still-bungling-cases

SALFORD STUDENT MADE A SMALL FORTUNE WITH DUTY-FREE TOBACCO SCAM

The Manchester Evening News on 26^th September reported that a student bought airline tickets for countries outside the EU but would instead travel to other parts of the UK to sell on the cigarettes. The example cited was where the student, who worked part time as a travel agent, was caught trying to smuggle 9,600 cigarettes that he bought for £1,264 at Gatwick Airport in November 2016, using a boarding card for Geneva.  But instead of flying out to Switzerland, which is outside of the EU and means he can buy duty-free products, he got onto a flight bound for Glasgow to sell them on for profit.

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/cigarettes-tobacco-smuggling-hmrc-tax-15180305

ILLEGAL JADE MINING AND SMUGGLING FROM BURMA/MYANMAR

DVB in Norway on 26^th September published an article saying that the profits from the jade trade are mostly enjoyed by Burmese and Chinese businessmen, the military elite and ethnic armed groups.  3 years since a landmark investigation by Global Witness that revealed the industry’s worth $31 billion dollars, questions still abound about what improvements have been made by Aung San Suu Kyi’s government to share those revenues and stop jade being smuggled across the border into China.

http://www.dvb.no/news/the-jade-scramble-life-at-the-bottom-of-the-mines/81403

‘MODERN-DAY BOOTLEGGERS’ BUSTED FOR MULTI-MILLION DOLLAR CIGARETTE SMUGGLING RING IN NEW YORK

NBC in New York on 26^th September reported on a case in New York where an alleged group of smugglers made millions of dollars in illegal profits by buying cheap cigarettes outside of New York State and selling them in-state with counterfeit tax stamps.  Search warrants recovered around 6,267 cartons of untaxed cigarettes, in addition to $2.3 million in illegal proceeds.  The article says that $953,000 in taxes would have gone to New York City and New York State if the cigarettes had been sold with legal tax stamps.

https://www.nbcnewyork.com/news/local/Multi-Million-Multi-State-Cigarette-Smuggling-Ring-Busted-Queens-DA-Says-494407421.html

EGMONT GIVES NIGERIA CLEAN HEALTH BILL, LIFTS SUSPENSION

Business Day in Nigeria on 26^th September reported that Egmont, the international body for FIU, has lifted the suspension of the Nigerian FIU imposed in July 2017.  Following allegations by a former director, the NFIU had been placed in the Egmont support and compliance process, which necessitated a review of the entire compliance requirement of the NFIU.

https://www.businessdayonline.com/news/article/nfiu-egmot-gives-nigeria-clean-health-bill-lifts-suspension/

FORMER MEXICAN STATE GOVERNOR JAILED FOR 9 YEARS FOR MONEY LAUNDERING AND LINKS TO ORGANISED CRIME

On 27^th September, Devdiscourse reported that Javier Duarte, who governed the Gulf coast state of Veracruz for outgoing President Enrique Pena Nieto’s Institutional Revolutionary Party (PRI) until 2016, has been sentenced to 9 years in prison for money laundering and links to organised crime in a case that public auditors said was the worst they had ever seen in Mexico.  The court also fined Duarte $3,123 and seized 40 properties.

https://www.devdiscourse.com/Article/headlines/196944-former-mexican-state-governor-jailed-for-nine-years-for-money-laundering-crime-case

MALTA: FIRM NAMED IN PANAMA PAPERS AND USED FOR OFFSHORE ‘INVESTMENTS’ REBRANDS

The Times of Malta on 26^th September reported that a Maltese firm used by the Prime Minister’s chief of staff, Keith Schembri, for offshore “investments” exposed in the Panama Papers has announced a rebranding exercise.  MFSP Financial Management has been renamed Zenith.

https://www.timesofmalta.com/articles/view/20180926/local/firm-used-for-keith-schembris-offshore-investments-rebrands.690053

ICE DEPORTS PAKISTANI MAN CONVICTED AND ORDERED TO PAY $71 MILLION IN LAUNDERING SCHEME

A news release from US Immigration and Customs Enforcement on 25^th September reported that Muhammad Sohail Qasmani, 50, who was convicted in 2017 for conspiracy to commit wire fraud and sentenced to 48 months imprisonment and ordered to pay restitution in the amount of $70,960,070.73, has been deported on release from prison.

https://www.ice.gov/news/releases/ice-removes-pakistani-man-convicted-ordered-pay-71-million-laundering-scheme

ANOTHER RULING SUPPORTS CFTC’S ACTIONS AGAINST VIRTUAL CURRENCY SCAMS

Finance Feeds on 27^th September reported that the US Commodity Futures Trading Commission (CFTC) has managed to secure another ruling that supports its stance that virtual currencies are commodities and that, hence, the regulator can take actions against cryptocurrency scams.  The defendants’ principal argument had been that CFTC failed to state a claim because My Big Coin (MBC), the allegedly fraudulent virtual currency involved in the scheme, is not a “commodity” within the meaning of the Act.  The Judge denied the defendants’ motion to dismiss the case against them, explaining that virtual currencies are commodities under the Commodity Exchange Act.

https://financefeeds.com/another-ruling-supports-cftcs-actions-virtual-currency-scams/

OFAC ENFORCEMENT: THE EPSILON CASE AND THIRD-PARTY RISKS

Michael Volkov has published an article on 26^th September saying that the case is important because it confirms a broad reading of third-party risks for companies when dealing with the Iran Sanctions Program (and the Cuba Sanctions Program).  Companies can be held liable for a sanctions violation when they ship a product to a third-party in another country and know or have reason to know that the third party intends to reship the product to Iran.   Consequently, companies have to conduct due diligence and document appropriate assurances that the third party is not intending to ship the goods to Iran.  But, he asks, what does OFAC have to prove – that the products actually ended up in Iran or that the company had “reason to know” that the third party intended to ship the goods to Iran.   There is a big difference here, he says, between the two standards of proof.  The Court of Appeals has affirmed that an exporter may be found liable if it ships goods from the US to a third country, with reason to know that those goods are specifically intended for reexport to Iran, even if the goods never arrive in Iran.  However, for 5 transactions involved the Court found that the evidence did not satisfy the “reason to know” standard, and remitted the case back to OFAC for it to recalculate the penalty due.

https://www.jdsupra.com/legalnews/ofac-enforcement-the-epsilon-case-and-59941/

CHINA: CUSTOMS OFFICERS SEIZE SMUGGLED RARE ANIMAL PARTS

ECNS on 27^th September reported that customs officers in Guangzhou, Guangdong Province, have seized 7.26 metric tonnes of pangolin scales after cracking down on a series of smuggling cases involving endangered animals and their products in July and August – the largest amount of pangolin scales seized by Guangzhou Customs this year.

http://www.ecns.cn/news/society/2018-09-27/detail-ifyyknzp7230580.shtml

NEW REPORT ON THE SECURITY IMPLICATIONS OF CHINA’S 21st CENTURY MARITIME SILK ROAD

On 4^th September, the Stockholm International Peace Research Institute published The 21st Century Maritime Silk Road: Security implications and ways forward for the European Union.  This examines the impact of the 2 most strategic maritime spaces that the initiative traverses: the South China Sea and the Indian Ocean Region.  It assesses the implications of the project for EU foreign and security interests, but should also be relevant to all stakeholders of the Road.

https://www.sipri.org/news/2018/new-report-21st-century-maritime-silk-road

EXPERTS CAST DOUBT ON EUROPE-IRAN PAYMENT CHANNEL

The Wall Street Journal on 26^th September reported that the EU plan for a special-payments channel to keep business flowing with Iran was met with scepticism by sanctions experts, who said it was unlikely to work.  The payment channel, which would be a special purpose vehicle created by the EU “to facilitate legitimate transactions with Iran,” intended as a way for countries to keep the 2015 nuclear agreement intact.

https://blogs.wsj.com/riskandcompliance/2018/09/26/experts-cast-doubt-on-european-iran-payment-channel/

BRITISH COLUMBIA LAUNCHES MONEY LAUNDERING PROBES INTO REAL ESTATE, HORSE RACING, CAR SALES, FINANCIAL SERVICES

The Star in Canada on 27^th September reported that the British Columbia government is launching separate reviews into the possibility of money laundering involved in the real estate market, horse racing, luxury vehicle sales and the financial services sector.  The investigations arise from a report by former RCMP deputy commissioner Peter German who concluded there was money laundering in the provincial gaming industry.

https://www.thestar.com/news/canada/2018/09/27/bc-launches-money-laundering-probes-into-real-estate-horse-racing-car-sales-financial-services.html

SEC FILES A SECURITIES FRAUD LAWSUIT AGAINST TESLA CEO ELON MUSK

Politico on 27^th September, alongside many other sources, reported that prosecutors allege that Musk made a “series of false and misleading statements” on Twitter last month that he had secured funding to take the company private.  The suit alleges Musk made the claim despite the fact that he “had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source”.

https://www.politico.com/story/2018/09/27/sec-elon-musk-securities-fraud-849452

SEC TAKES ACTION AGAINST BINARY OPTIONS MARKETERS

Finance Feeds on 27^th September reported that the SEC has charged a group of internet marketers who created and disseminated videos to lure retail investors to trade binary options.  It says that investors were defrauded of tens of millions of dollars through these marketing campaigns, which promised that investors would make large amounts of money by opening binary options accounts and using free or secret software systems to trade in them. The regulator alleges that the marketers were paid for each new brokerage account that investors opened and funded.

https://financefeeds.com/sec-takes-action-binary-options-marketers

PETROBRAS HIT WITH $853 MILLION CORRUPTION FINE

The BBC on 27^th September reported that Brazil’s state oil company, has agreed to pay more than $853 million to the US and Brazil, ending a long-running corruption investigation.  The probe stemmed from a bribery scheme at the firm, which involved millions in payments that were concealed from investors and regulators.  The payments were facilitated by executives at the “highest levels”.

https://www.bbc.co.uk/news/business-45670510

UK HEDGE BUSINESS FINED £400,000 OVER COMPLIANCE FAILURES

Citywire on 27^th September reported that hedge fund incubator and prime broker Linear Investments has been fined £409,000 by the FCA for failing to manage its risk of market abuse for more than 2 years to mid-2015.

http://citywire.co.uk/wealth-manager/news/hedge-business-fined-400k-over-compliance-failures/a1159382

BEING ALERT TO THE RISKS OF FALSIFIED AND SUBSTANDARD MEDICINES

The Irish Times on 27^th September carried a feature saying that, in Ireland, almost 1 million counterfeit or sub-standard medicines were seized in 2017.  Of these, 47% were anabolic steroids, 23% were sedatives and 13% were medicines for erectile dysfunction.  It also says that about 10% of medicines worldwide are falsified and this figure rises to 70% of all pharmaceuticals in some countries.

https://www.irishtimes.com/life-and-style/health-family/being-alert-to-the-risks-of-falsified-and-substandard-medicines-1.3634466

On 27^th September, FATF issued the latest edition of its Business Bulletin.  It includes links to –

• Joint FATF/MENAFATF Evaluation of Bahrain published 4^th September
• Joint FATF/MENAFATF Evaluation of Saudi Arabia published on 24^th September
• FATF has re-rated Belgium on 15 out of the 40 Recommendations
• FATF has re-rated Sweden on 10 of the 40 Recommendations and moved the country from enhanced to regular follow-up

The US Presidency of FATF from 1^st July 2018 is said to include as priorities –

• enhancing its work to prevent the financing of the proliferation of WMD and maintain an emphasis on combating TF
• taking further action regarding crypto assets given their expansion and attractiveness as a payment method for illicit actors
• continue to focus on financial and regulatory technologies, private sector outreach, and capacity-building at FATF-style regional bodies (such as Moneyval)

http://www.fatf-gafi.org/media/fatf/documents/FATF-Business-Bulletin-September-2018.pdf

On 27^th September, This is Jersey reported that, in the light of reports of the Swiss rejecting a residency application from Roman Abramovich, ‘rigorous’ background checks are carried out on all super-rich immigrants before they are granted the right to live in Jersey.  The checks carried out in Jersey include a risk assessment on anyone considered to be a ‘politically exposed’ or ‘high-profile’ person, independent due diligence and consultation with the Jersey FSC and the States of Jersey Police.  Earlier this year, it was revealed that Mr Abramovich was granted residency rights in the Island under the 21E scheme for ‘High Value Residents’.

https://jerseyeveningpost.com/news/2018/09/27/checks-on-super-rich-are-rigorous-insist-states/

Bailiwick Express on 27^th September reported that a fraud case which saw money laundered through bank accounts in Guernsey and Jersey has come to light after a brother and sister were sentenced following an investigation led by the City of London Fraud Police.  Andrey Ryjenko, a former senior banker employed by the European Bank for Reconstruction and Development, was jailed earlier this year, while his sister, Tatjana Sanderson, 38, has now been given a suspended sentence for laundering $3.542 million on behalf of her brother through banks in Jersey and Guernsey.

https://gsy.bailiwickexpress.com/gsy/news/ci-banks-linked-multi-million-pound-fraud-case/?t=i#.W6yRo_ZFx9A

On 26^th September, the House of Commons Library published a briefing paper saying that the UK has a new legislative framework for imposing sanctions post-Brexit.  What effect would the UK’s departure from the EU have on sanctions policy in the UK and in the EU?  What is the broader international outlook?  A new 2018 Act provides for creating sanctions regimes independently of the EU, although the sanctions powers are not yet in force, something that will happen by EU exit day. The UK has often pushed for a robust sanctions policy within the EU; after Brexit there is a strong possibility that the EU will become less enthusiastic about sanctions in general, how independent will the UK sanctions regime really be?

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8402

iNews on 26^th September carried an article asking if you knew that Vicks inhalers and Sudafed are banned in Japan?  Or that codeine is illegal in lots of countries including Greece and the UAE?  Or that you need a licence to take some sleeping pills, strong painkillers and anti-anxiety pills into Singapore.  Some over-the-counter and prescription medicines available in the UK are illegal or strictly controlled in other countries.  It provides advice, such as checking in advance, carrying a copy of your prescription, even if it is not banned, and ensuring your travel insurance covers any pre-existing condition.
https://inews.co.uk/inews-lifestyle/travel/travel-medication/

See also –

https://www.nhs.uk/common-health-questions/medicines/can-i-take-my-medicine-abroad/

26^th September 2018

NORTH KOREA ‘INCREASINGLY’ USES CRYPTO TO AVOID US SANCTIONS, EXPERTS CLAIM

Coin Telegraph on 26^th September reported that North Korea is “increasingly” using cryptocurrencies to evade sanctions imposed by the US, according to two Washington-based experts quoted by news site Asia Times.  Both experts have claimed that the country is successfully trading existing cryptocurrencies, and is attempting to create one of its own, despite current restrictions imposed on fiat assets.

https://cointelegraph.com/news/north-korea-increasingly-uses-crypto-to-avoid-us-sanctions-experts-claim

SAM WYLY’S COLORADO RANCH SELLS FOR OVER 75% DISCOUNT

The Wall Street Journal on 21^st September reported that a sprawling Colorado property owned by trusts controlled by Sam Wyly, the one-time billionaire who was embroiled in a tax fraud scandal, has sold at auction for just over $14 million — a fraction of its nearly $60 million original asking price.  The SEC sued Sam Wyly and his brother Charles Wyly in 2010, alleging they earned $553 million in undisclosed profits by trading in 4 companies they controlled using trusts in the Isle of Man.  There were also separate IRS taxation allegations involving claims of $1.11 billion in back taxes, interest and penalties.  Sam Wyly had appeared on Forbes magazine’s list of the 400 richest Americans in 2010 with a net worth of $1 billion.

https://www.wsj.com/articles/ex-billionaires-colorado-ranch-sells-for-over-75-off-1537563592

See its photo at –

https://www.denverpost.com/2017/10/13/circle-r-ranch-aspen/

 TURKEY INTRODUCES RULES REQUIRING EXPORT PROCEEDS TO BE REPATRIATED WITHIN CERTAIN TIMEFRAMES

On 20^th September, Moroğlu Arseven in Turkey published an article saying that Turkey has introduced new rules to protect the value of its currency, aimed at ensuring profits from export transactions between 4^th September 2018 and 4^th March 2019 are returned to Turkey.  Accordingly, value received from export transactions made by Turkish residents must be repatriated within certain time limits – within 180 days from the date of actual export.

https://morogluarseven.com/magazette/ma-gazette-edition-69-20-september-2018

NEW ZEALAND: INFORMATION SHARING TO TARGET ORGANISED CRIME

On 26^th September, Scoop reported a news release from the New Zealand Government about the consultation on a proposal to extend the 2016 information-sharing agreement between the police and Inland Revenue, where they have reasonable grounds to suspect a serious offence is being committed, to include the customs service and SFO.  Under the proposal, the one-way flow of information from Inland Revenue would be extended to the SFO and Customs.  Information could be requested from IRD or proactively provided if there are reasonable grounds to suspect a serious offence may be or has been committed.  The consultation runs to 30^th October.

http://www.scoop.co.nz/stories/PA1809/S00354/information-sharing-to-target-organised-crime.htm

IMF: FIGHTING CRIME IN TRINIDAD AND TOBAGO

On 25^th September, the IMF published a Country Report on selected issues concerning Trinidad & Tobago.  This included a chapter on fighting crime, saying that spending in Trinidad and Tobago, like in many other Caribbean countries, is concentrated more on law enforcement and correction than prevention. It also represents a large share in percent of government expenditure compared to other Caribbean countries.  The report also says that the government is putting crime reduction and increasing detection rate as its top priority. The authorities are adopting a preventative approach to tackling crimes.  This plan includes collaboration among national security agencies, especially in the areas of transitional crimes, money laundering, cybercrime, and human trafficking.  The government has also acquired new naval vessels for maritime enforcement, and with US assistance will establish a border control system to better monitor international travellers.

https://www.imf.org/en/Publications/CR/Issues/2018/09/25/Trinidad-and-Tobago-Selected-Issues-46268

THE TRUE STORY OF HOW THE CITY OF LONDON INVENTED OFFSHORE BANKING – AND SET THE RICH FREE

On 7^th September, the Guardian published a “Long Read” article (also available as a podcast) providing a useful and fascinating history lesson, and telling the story of Siegmund Warburg inventor of the “Eurodollar” bonds, formally issued at Schipol Airport, to avoid fees, and to be paid in Luxembourg, to avoid tax, but managed to get the LSE to list the bearer bonds.  The method was used by tax evaders, the ultra-wealthy, corrupt dictators etc.  The article is adapted from Moneyland: Why Thieves & Crooks Now Rule The World & How to Take it Back by Oliver Bullough, published by Profile Books

https://www.theguardian.com/news/2018/sep/07/the-real-goldfinger-the-london-banker-who-broke-the-world

OVER 50% OF FRAUD REPORTS IN UK ARE ASSESSED SOLELY BY AUTOMATED SYSTEMS

Finance Feeds on 26^th September reported that during the financial year 2017/2018 there were a total 294,984 reports, of which 181,496 were assessed solely by an automated system.

https://financefeeds.com/rise-machines-50-fraud-reports-uk-assessed-solely-automated-systems/

SWITZERLAND’S FINANCIAL REGULATORY WATCHDOG ISSUES WARNING ON ALLIANCE CAPITAL

BTC Manager on 26^th September reported that Switzerland’s Financial Market Supervisory Authority has warned cryptocurrency investors to be wary of Alliance Capital, a firm claiming to offer clients cryptocurrency trading services, binary options, and other financial products, has been added to the scam watch list of FINMA.

https://btcmanager.com/finma-cryptocurrency-alliance-capitals-looks-scam/

CHARTERED INSTITUTE OF TAXATION COMMENTS ON PROPOSALS TO EXTEND HMRC CIVIL INFORMATION POWERS

On 25^th September, CIOT issued its response to a HMRC consultation document on the effectiveness and efficiency of powers under Schedule 36 to the Finance Act 2008, and proposals for an extension to the powers, including the creation of a new “financial institution notice” – for issue to such as banks and deposit-takers.  The other main proposals is the removing the requirement to obtain Tribunal approval in all cases where an information notice for third parties is to be issued.  On the whole, the CIOT does not support the options as currently formulated.

https://www.tax.org.uk/sites/default/files/180925%20Amending%20HMRC%27s%20Civil%20Information%20Powers%20-%20CIOT%20comments.pdf

The consultation closes on 2^nd October, and the consultation document can be accessed at –

https://www.gov.uk/government/consultations/amending-hmrcs-civil-information-powers

EU COULD BAN 37 CARGO AIRLINES FROM EUROPE AS A CONSEQUENCE OF BREXIT

Loadstar on 26^th September reported that 37 airlines, as well as aviation-related companies, will not be allowed to carry or handle cargo going to the EU after 29^th March, if the EU fails to create a new security clearance designator mechanism – these being those provided by the UK, but that will expire once the UK ceases to be a Member State under a ‘no deal’ scenario.

https://theloadstar.co.uk/eu-wont-allow-airlines-carry-cargo-uk-europe-no-deal-brexit/

HEALTH MANAGEMENT ASSOCIATES TO PAY $260 MILLION OVER FALSE INVOICING CLAIMS

Law 360 on 25^th September that the company would to pay the penalty to settle allegations that it wrongly pressured physicians to admit more patients to its hospitals’ emergency services departments.

https://www.law360.com/articles/1086322/hospital-chain-to-pay-260m-over-false-billing-claims

‘STARK’ BREXIT WARNING ON CHEMICALS REGULATION ISSUED

Out-Law on 25^th September published an article saying that a stark warning on the implications of a ‘no deal’ Brexit for the chemicals industry has been issued by the UK government, a legal expert has said.  It is concerned with REACH, the legislative regime for chemicals that requires EU companies to register chemicals before placing them on the EU market.  The UK has warned that a ‘no deal’ scenario would restrict UK-based chemical companies’ access to the EU market.

https://www.out-law.com/en/articles/2018/september/brexit-warning-chemicals-regulation/

NEW ZEALAND: NEW POWERS TO COMBAT DRUG SMUGGLING AT SEA

Scoop on 26^th September reported that the Maritime Powers Extension Bill amends the Misuse of Drugs Act 1975 to make drug smuggling in international waters an offence under New Zealand law.  It also amends the Customs and Excise Act 2018 to allow Customs to board and search ships and take action against individuals suspected of committing these offences, meaning that Customs can enforce its powers into the 200-mile Exclusive Economic Zone and the high seas beyond.

http://www.scoop.co.nz/stories/PA1809/S00360/new-powers-to-combat-drug-smuggling-at-sea.htm

MIDDLE EAST A MAJOR HUB FOR WILDLIFE TRAFFICKING 

Nature Middle East on 26^th September reported that major airports in the Arab region are among the main wildlife trafficking transit hubs in the world, according to a new report.   One quote is that amount of wildlife trafficking destined for UAE seems to pale in comparison with the sheer volume of wildlife trafficking moving through it.  The report: ‘In Plane Sight: Wildlife Trafficking in the Air Transport Sector’, the report was produced by the C4ADS.  It analysed global airport seizures of wildlife and wildlife products from 2009 to 2017, finding examples of trafficking in at least 136 countries worldwide.

http://www.natureasia.com/en/nmiddleeast/article/10.1038/nmiddleeast.2018.120

The C4DS report is available at –

https://www.traffic.org/publications/reports/in-plane-sight/

UNION CUSTOMS CODE (UCC) REVIEW

On 26^th September, the European parliamentary Research Service produced an assessment which examines the current state of play as regards the implementation of the UCC.  It examines in particular whether the Code is being properly implemented for the benefit of European consumers, businesses and the EU budget.  It also analyses the governance structure and makes recommendations on how to improve its transparency. The UCC entered into force in 2016, and is accompanied by 2 delegated and 4 implementing acts, which refer to each other.  The assessment considers various aspects, including the use of transitional rules and the shortcomings identified.

http://www.europarl.europa.eu/RegData/etudes/STUD/2018/621854/EPRS_STU(2018)621854_EN.pdf

MEXICAN AUTHORITIES DISARM ACAPULCO POLICE AMID CORRUPTION INQUIRY

The New York Times and Reuters on 26^th September reported that heavily-armed Mexican marines and soldiers have acted against the police force of violent port city Acapulco on suspicions of ties to organised crime, arresting 2 officers accused of homicide and seizing weapons and equipment.

EX-CEO OF CHILEAN MINING FIRM SETTLES SEC BRIBERY PROBE

The Wall Street Journal on 25^th September reported that Patricio Contesse, the former CEO of Sociedad Química y Minera de Chile SA, or SQM, a Chilean chemical and mining company has settled a foreign bribery case with SEC.  He was reportedly responsible for nearly $15 million in payments to Chilean politicians, political candidates and people and entities associated with them, supported by fake documentation that he submitted to the company.  The company itself paid $30 million in January 2017 to settle with the DoJ and SEC.  Contesse worked for the company for more than 25 years, nearly all of it as its CEO, but was sacked in 2015 after the scandal broke.

https://www.wsj.com/articles/ex-ceo-of-chilean-mining-firm-settles-sec-bribery-probe-1537916717?mod=searchresults&page=1&pos=2

TRACE PODCAST: A YEAR IN PRISON FOR INSIDER TRADING

In the latest TRACE podcast, Roomy Khan, “Tipper A” in the Galleon Group insider trading case, discusses the many small decisions that lead to catastrophic consequences in the world of financial crime.  The Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009.  The firm was the centre of a 2009 insider trading scandal.

https://www.traceinternational.org/bribe_swindle_or_steal

ISLE OF MAN AMENDS ITS LIBYAN SANCTIONS LISTS

On 26^th September, the Isle of Man issued a news release advising of amendment of 5 entries on the Libyan sanctions list.

https://www.gov.im/news/2018/sep/26/financial-sanctions-libya/

COURT HAS SEIZED THE ASSETS OF THE FORMER ECONOMY MINISTER OF BULGARIA, TRAICHO TRAIKOV

Novinite in Bulgaria on 26^th September reported that Sofia City Court has imposed security on movable and immovable assets of the former Bulgarian Minister of Economy and Energy.  From 2009 to 2012, he was Minister of Economy and Energy in the first cabinet of Boyko Borisov but resigned.  It reports that the proceedings against Traikov began in connection with the accusations against him in relation to the EVN case, where the accused are the former Deputy Prime Minister Simeon Dyankov, the co-founder of Capital and Dnevnik Ivo Prokopiev and others.

https://www.novinite.com/articles/192337/The+Court+has+Seized+the+Assets+of+the+Former+Economy+Minister+of+Bulgaria+Traicho+Traikov

ANGOLA: THE FALL OF THE DOS SANTOS CLAN

On 26^th September, Deutsche Welle carried a feature saying that 1 year ago, the dos Santos family handed the Angolan presidency over to Joao Lourenco.  The new president promised to tackle corruption which crippled the oil-rich nation.  Now the ex-president’s son has been arrested.  For almost 4 decades, the dos Santos family determined the political and economic destinies of Angola.  They have what is described a s business empire, and the eldest daughter of the former president, Isabel dos Santos, was able to build a huge corporate empire in just a few short years and rose up the ranks to become the “richest woman in Africa”, according to Forbes.  She is said to have interests in hundreds of companies in various sectors, including telecommunications, the diamond trade, tourism, real estate — in Angola, Portugal and a number of other countries.

https://www.dw.com/en/angola-the-fall-of-the-dos-santos-clan/a-45646757

CYPRUS: POLITICALLY EXPOSED PERSONS LINKED TO €146 MILLION IN CO-OP BAD LOANS

The Cyprus Mail on 26^th September reported that over 1,100 PEP had accounts in the former Co-op Bank and 623 of these are connected to non-performing loans, the probe into the collapse of the bank heard.

https://cyprus-mail.com/2018/09/26/politically-exposed-persons-linked-to-e146m-in-co-op-bad-loans

ISRAEL AND CHINA FIRMS BRIBE KENYAN OFFICIALS

The Daily Nation in Kenya on 25^th September carried an article saying that Chinese and Israeli companies are among international contractors who regularly bribe Kenyan officials to win lucrative public infrastructure contracts, a new report by Transparency International (TI) says.  TI says bribery of Kenyan officials has over the years continued unabated, partly because foreign governments are not enforcing the existing anti-bribery laws.  However, Kenya last year enacted a law criminalising bribery and with severe penalties.

https://www.nation.co.ke/business/Israel-China-firms-bribe-Kenyan-officials/996-4776908-8j0d7j/index.html

FRANCE’S BLACKLIST OF FRAUDULENT CRYPTOCURRENCY ENTITIES CONTINUES TO GROW

Finance Feeds on 26^th September reported that AMF, the French financial markets regulator, adds more entries to its blacklist of fraudulent cryptocurrency platforms.  The 21 names added to its blacklist are mostly entities offering activities related to cryptocurrencies – ICO, trading and mining.

https://financefeeds.com/frances-black-list-fraudulent-cryptocurrency-entities-continues-grow

TAIWAN AUTHORITIES CLAMP DOWN ON MONEY LAUNDERING

The Taiwan News on 26^th September reported that Taiwan police have been instructed to sweep illegal money exchanges in preparation for international audit by the Asia Pacific Group on Money Laundering.  Police have mobilised hundreds of officers, interviewing dozens of suspects and associates across Taiwan.  The report says that Taiwan will have its 3^rd field assessment by the Asia Pacific Group on Money Laundering in November, where Taiwan will hope to maintain its “low risk” grade from the regional body.

https://www.taiwannews.com.tw/en/news/3538716

WORLDWIDE REGULATORS ISSUE $26 BILLION OF FINES SINCE 2008

FS Tech on 26^th September reported that the fines and penalties for non-compliance with sanctions, AML rules and KYC in the past 10 years, according to a new study which ranks the FCA as the toughest regulator in Europe with the FCA accounting for the majority of fines issued by European regulators, who issued a collective $1.7 billion of penalties over the past decade.

http://www.fstech.co.uk/fst/Fenergo_Anti_Money_Laundering_Report.php

BRITISH MAN JAILED IN FRANCE FOR HEADING CRIMINAL NETWORK THAT SMUGGLED HUNDREDS OF MIGRANTS INTO THE UK

The NCA on 26^th September reported that Rekawt Kayani, 36, was arrested by NCA officers at his home address in Derby in May 2016, as part of a joint operation being run with the French police.  He was involved in numerous smuggling runs including one in June 2015 when 68 migrants from Afghanistan, China and Vietnam were found inside four lorries at the Harwich International Port.  Investigators also found Kayani orchestrated runs from Dieppe to Newhaven.

http://www.nationalcrimeagency.gov.uk/news/1477-derby-man-headed-up-international-people-smuggling-network

SFO INCREASINGLY USING POWER TO DEMAND INFORMATION WITHOUT COURT APPROVAL

Out-Law on 26^th September published an article which said that the SFO is increasingly using its powers to demand information from large businesses without the need to ask for court approval, new data has shown.  It reports that the number of ‘section 2’ notices issued by the SFO more than doubled in the last 5 years, from 463 in the year ending 31^st March 2014 to 1,032 in 2017/18.  They allow the SFO to compel the production of documents, electronic data and information from any individual or business without the need for court approval.

https://www.out-law.com/en/articles/2018/september/sfo-demand-information-without-court-approval/

NEW REPORT FINDS NUCLEAR WEAPONS AND RELATED SYSTEMS INCREASINGLY VULNERABLE TO CYBERATTACK

Nuclear Threat Initiative (NTI) on 26^th September said that its new report showed that nuclear weapons and related systems are increasingly vulnerable to sophisticated cyberattacks, and nuclear-armed states must co-operate and accelerate efforts to prevent an attack that could have catastrophic consequences.

https://www.nti.org/newsroom/news/new-report-finds-nuclear-weapons-and-related-systems-increasingly-vulnerable-cyberattack/

STEPS TOWARDS A DEFINITIVE EU VAT SYSTEM

On 26^th September, the EU Parliament Research Service provided a briefing in preparation for the October Plenary of the Parliament which says that harmonisation of domestic provisions on VAT dates back to 1967 because of the potential distorting effect of this consumption tax on the Single Market.  The transitional VAT arrangements, departing from the intended destination-based principle, have applied for more than 2 decades.  Since 2016, the VAT framework is being reviewed and updated, moving to a destination-based framework that also includes a revision of the VAT-rate provisions.  Parliament is due to vote on 2 Commission proposals on VAT during its October 1^st plenary session.

http://www.europarl.europa.eu/RegData/etudes/ATAG/2018/628222/EPRS_ATA(2018)628222_EN.pdf

EU AGENCY FOR CRIMINAL JUSTICE COOPERATION (EUROJUST)

On 26^th September, the EU Parliament Research Service provided a briefing in preparation for the October Plenary of the Parliament explaining the role and background of Eurojust.  Since its creation in 2002, it has become a central player in judicial co-operation in criminal matters.  During its October plenary session, the EU Parliament is expected to vote on a proposal for a Regulation that aims to modernise its legal framework and streamline its functioning and structure.

http://www.europarl.europa.eu/RegData/etudes/ATAG/2018/628223/EPRS_ATA(2018)628223_EN.pdf

HOW THE US TREASURY IS USING THE FULL RANGE OF ITS AUTHORITIES AND TOOLS TO ADDRESS 3 UNIQUE, YET RELATED, CHALLENGES IN IRAN, RUSSIA, AND NORTH KOREA

On 26^th September, the US Treasury issued a news release containing the statement of Assistant Secretary Marshall Billingslea before the US House of Representatives’ Financial Services Sub-Committee on Monetary Policy and Trade.  He outlined how the US was using sanctions, described as “active and complex”, and other tools, providing a brief overview of the steps the US Treasury has taken to counter each challenge.  The other multiple other tools and authorities that are used in conjunction with sanctions actions by OFAC are said to include reporting and analysis of financial intelligence provided by US financial institutions to the FinCEN, and FinCEN’s authorities under the Bank Secrecy Act and USA PATRIOT Act, extensive private sector engagement both at home and abroad, and financial diplomacy conducted globally by our international financial attachés and the Office of Terrorist Financing and Financial Crimes.   On a daily basis, he said the US Treasury works bilaterally and multilaterally to strengthen the AML/CFT regimes worldwide, including with those countries exposed to Iranian, Russian, and North Korean illicit financial flows.

https://home.treasury.gov/news/press-releases/sm496