Month: October 2018

International Adviser on 31^st October reported that the EU should set up a single AML authority with the power to levy big fines to tackle the stream of scandals across member states, Brussels-based thinktank Bruegal has said in a new report.  The report is entitled “A Better European Union Architecture to Fight Money Laundering” and is written by Joshua Kirschenbaum and Nicolas Véron.

https://international-adviser.com/eu-needs-single-anti-money-laundering-authority-says-thinktank

The report is available at –

http://bruegel.org/2018/10/a-better-european-union-architecture-to-fight-money-laundering/

10-minute podcast at –

http://bruegel.org/2018/10/deep-focus-how-to-improve-anti-money-laundering-efforts-in-europe/

Loadstar on 31^st October repeated a warning from online freight forwarder iContainers and forwarder network WCA for forwarders to stay clear of switch bills of lading (SB/L) following increased fraudulent activity.  SB/L are a second set of bills of lading issued by the carrier (or by the carrier’s agent) in substitution for the bills of lading issued at the time of shipment.  The WCA is quoted as saying that it has been advised by a reputable maritime law firm to stay away from SB/L as they could contain an element of fraud and, as it has seen a number of members experience issues arising from SB/L.  They can be used legitimately, often for commercially sensitive reasons, such as when the agent does not want to reveal the consignor’s details to a rival.  Whilst a genuine mistake made on the original bill needs to be corrected, iContainers advise that, even then, it is always advisable to amend the originals and pay the amendment fee, than issue a switch bill of lading.

https://theloadstar.co.uk/stay-clear-switch-bills-lading-warning-forwarders/

A useful note from International Transport Intermediaries Club Ltd in 2004 provides a useful background note on what SB/L are and when they might be used.

https://www.itic-insure.com/knowledge/circulars/article/issuance-of-switch-bill-of-lading-circular-2004-02-2944/

The Wall Street Journal on 31^st October reported that while Europeans have tried to salvage the Iran nuclear deal, an alleged plan to launch an attack near Paris is jeopardising their support.  France has expelled an Iranian diplomat over a bomb plot against a rally organised by Iranian opposition groups, diplomatic and security sources said.  Reuters has reported that a source, speaking after the government announced asset freezes, said that the Iranian deputy minister and director general of intelligence, Saeid Hashemi Moghadam, had ordered the attack and Assadollah Asadi, a Vienna-based diplomat held by German authorities, had put it into action.  Meanwhile, Denmark has accused Iran’s intelligence agencies of planning to assassinate an Iranian activist on Danish soil.  The target was believed to be a member of an Arab separatist movement, Denmark’s intelligence service said.  A massive police operation in Denmark last month linked to the case led to the bridge to Sweden being closed.

https://www.wsj.com/articles/bags-of-cash-and-a-bomb-plot-inside-a-covert-iranian-operation-in-europe-1540978201

https://www.bbc.co.uk/news/world-europe-46029981

https://www.reuters.com/article/us-france-security/france-points-finger-at-iran-over-bomb-plot-seizes-assets-idUSKCN1MC12X

On 31^st October, the Irish Revenue Commissioners issued a news release saying that the EU Commission is currently working in a project group with Member State customs experts.  The purpose of this group is to develop a legal framework for the future expansion of the current customs Single Window. The consultation is open to 16^th January.

https://www.revenue.ie/en/news/articles/single-window-environment-for-customs-launch-of-a-public-consultation-process.aspx

https://www.revenue.ie/en/customs-traders-and-agents/customs-electronic-systems/aep/ecustoms-notifications/2018/aep-notification-011-2018.pdf

Janes.com on 31^st October reported that militants linked to the Abu Sayyaf Group (ASG) are planning an attack on merchant shipping in the Sulu and Celebes seas, and the group will strike “at any opportune time”, warned an inter-governmental piracy watchdog – the Regional Co-operation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) Information Sharing Centre (ISC), which also keeps track of kidnap-at-sea and oil siphoning cases in the region.  Particularly vulnerable are crew of foreign vessels and businessmen, said ReCAAP.

https://www.janes.com/article/84173/recaap-warns-of-imminent-attack-on-ships-in-sulu-and-celebes-seas

On 30^th October, the Center for a New American Security published a report by (friend of the blog) Dr Jonathan Brewer.  In the accompanying article, he says that despite the threat from the financing of proliferation of nuclear and other WMD, only a handful of governments and companies are taking meaningful steps to counter it.  The report outlines the various sources of the threat, the international control framework, and how authorities and financial sector actors fit into the countering proliferation finance regime.  Effective partnership between them is essential, he says, to identifying and countering the threat.  The report describes how authorities and financial institutions should conduct proliferation financing risk assessments, a necessary first step to take to protect themselves, and the indicators to take into account and procedures to follow, and offers a points-based blueprint for measuring specific levels of proliferation finance risk, which financial institutions could use as benchmarks against which to monitor their customers and their businesses.

https://www.cnas.org/publications/reports/the-financing-of-wmd-proliferation

On 31^st October, FATF published the 3^rd update report following the mutual evaluation report (MER) of 2015.  This report analyses Malaysia’s progress in addressing the technical compliance deficiencies identified in the MER.  To reflect this progress, the FATF has re-rated Malaysia on the following Recommendations –

• 32 – Cash couriers from largely compliant to compliant
• 34 – Guidance and feedback from largely compliant to compliant

The report also looks at whether Malaysia’s measures meet the requirements of FATF Recommendations that have changed since the MER, taking into account any new measures since the MER.  The FATF agreed to re-rate the following Recommendations –

• 5  – Terrorist financing offence from  largely compliant  to compliant
• 7 – Targeted financial sanctions related proliferation from partially compliant to compliant

The FATF maintains the ratings of “Largely Compliant” for Recommendation 8 and “Compliant” for Recommendations 18 and 21.

The report says that Overall, Malaysia has made progress in addressing the technical compliance

deficiencies identified in its MER and has been re-rated on 4 Recommendations, so that only 2 Recommendations remain PC.  Malaysia has addressed the deficiencies identified under R.7 including the revised requirement of R.7 and its Interpretive Note, and has been re-rated as Compliant with R.7.  Equally, Malaysia has addressed the minor deficiencies identified under R.5, R.32 and R.34 to be re-rated as Compliant on all 3.  Malaysia remains largely compliant with the revised R.8 and maintains a compliant rating with the revised R.18 and R.21.

The re-ratings result in the following –

http://www.fatf-gafi.org/media/fatf/documents/reports/fur/FUR-Malaysia-2018.pdf

EurActiv on 31^st October reported that the US has indicted 10 Chinese, including 2 intelligence officers, over a 5-year scheme to steal technology from US and French aerospace firms by hacking into their computers.  This came 20 days after the DoJ obtained the unprecedented extradition of a senior Chinese intelligence official from Belgium to stand trial in the US for running the alleged state-sponsored effort to steal US aviation industry secrets.  The DoJ said the Chinese Ministry of State Security, through its Jiangsu province unit, engineered the effort to steal the technology underlying a turbofan engine used in US and European commercial airliners.

https://www.euractiv.com/section/china/news/us-indicts-10-chinese-over-scheme-to-steal-aerospace-tech/

Real Clear Defense on 30^th October published an article on how the Chinese military gains access to research in Western countries.  It says that while this military–academic onslaught has largely flown under Western radars, China has made little effort to keep it secret at home.  It relates one story involving a “student” among those of the estimated 2,500 scientists and engineers “selected” by the Chinese military to study and work abroad in the last decade.  Examples of this phenomenon, and of the People’s Liberation Army’s broader expansion of research with universities outside China, are detailed in areport, “Picking Flowers, Making Honey: the Chinese Military’s Collaboration with Foreign Universities”, released by ASPI.

https://www.realcleardefense.com/articles/2018/10/30/how_the_wests_research_aids_chinas_military_113922.html

The report itself, from the Australian Strategic Policy Institute is at –

https://www.aspi.org.au/report/picking-flowers-making-honey

Its recommendations include, in respect of export controls –

• The Government should consider further controlling technology transfer to certain end users. Transfers of controlled technology to PLA members and civilians heavily engaged in military research should be restricted regardless of their geographical location;
• The Government should create a list of entities posing national security risks that are subject to special export licence requirements, modelled on the US Entity List;
• The government should help universities train and provide resources for staff with export control compliance duties;
• Work continuously with experienced scientists in emerging technology fields to determine whether and how emerging technologies should be controlled; and
• Ensure that universities are fully complying with controls relating to the intangible transfer of technology in their collaboration with the PLA.