If you want to know the background to the collapse of Venezuela, this 26-minute podcast is the best and most accessible way I have seen or read to date. Very clear and unbiased, I think. From the War College series in the US. If you want to know how Venezuela, once one of the world’s richest countries – with possibly the largest oil reserves in the world, plummeted so far, Keith Johnson of Foreign Policy seeks to explain in this interview.
Accountancy Daily on 16th October reported that the OECD has published a list of 21 countries which it says offer residence and citizenship by investment (CBI/RBI) options, or so-called ‘golden passport’ schemes, that can be used to hide assets held abroad from reporting under the common reporting standard (CRS). It includes Malta, Cyprus and Monaco, as well as Montserrat, Panama, Qatar, Saint Kitts and Nevis, Saint Lucia, Seychelles, Turks and Caicos Islands, Antigua and Barbuda, the Bahamas, Bahrain, Barbados, Colombia, Dominica, Grenada, Malaysia, UAE, Mauritius and Vanuatu. The OECD has raised the alarm about the fast-expanding $3 billion citizenship by investment industry. The Guardian explains that, in exchange for donations to a sovereign trust fund, or investments in property or government bonds, foreign nationals can become citizens of countries in which they have never lived. Other schemes, such as that operated by the UK, offer residency in exchange for sizable investments. The report follows a Transparency International one that described how the EU had gained nearly 100,000 new residents and 6,000 new citizens in the past decade through poorly managed arrangements that were “shrouded in secrecy”.
The OECD information, which includes the list of schemes and FAQ, is at –
16th October 2018
PODCAST: SPOTLIGHT ON DENMARK
In the latest TRACE podcast, Anders Worsøe of the Magnusson firm in Copenhagen discusses Danish attitudes toward corruption and then looks at compliance and enforcement in Denmark.
AUSTRALIA: DIRECTOR IDENTIFICATION NUMBERS – DRAFT LEGISLATION NOW OPEN FOR COMMENT
On 11th October, Holding Redlich published an article about the draft legislation to modernise and consolidate Australian business registers and to adopt a new system to create Director Identification Numbers (DIN) for company directors. This move is intended to target phoenix activities, where company controllers shut down an existing entity and transfer its assets to a new company as a means to avoid debts and liabilities, leaving creditors out of pocket and estimated to cost the Australian economy over $3 billion each year.
FATF “UNLIKELY” TO UPGRADE THE EFFECTIVENESS OF BAHAMAS’ AML REGIME DESPITE IMPROVEMENTS
Tribune 242 in the Bahamas on 15th October reported the comments of the Central Bank’s inspector of banks and trust companies at a conference in Nassau that FATF is unlikely to grant the Bahamas “much improvement” despite major efforts to improve its anti-financial crime and terror financing regime. He said that, with The Bahamas faring “worse than average” for effectiveness on a chart comparing the FATF mutual evaluation results for 50 countries, “We are in the middle of a re-evaluation process, and we have hopes that our technical compliance rating will improve”. The Bahamas’ was found to have ‘low’ effectiveness in 6 out of 11 AML/CFT categories (the “Immediate Outcome” measures of effectiveness).
IMF AND WORLD BANK TO ASSIST MAURITIUS IN STRENGTHENING THE FINANCIAL SECTOR
All Africa on 15th October that the organisations will be present in Mauritius in December this year to assist the country in enhancing financial stability, facilitating access to finance and addressing risk management. Talks with the World Bank included possible assistance on a well-designed centralised KYC in line with relevant norms and practices and using digitalised information system with high-level IT security and back-up system. The possibility of guidance of the World Bank to improve the National Risk Assessment and on ways and means of improving Mauritius compliance with the FATF standards and requirements concerning AML/CFT was also examined.
MALTA: AML COMMITTEE TO BE SET UP WITHIN MFSA
The Times of Malta on 15th October reported that amendments to legislation regulating the MFSA are being discussed in parliament which formally establish an Anti-Money-Laundering Committee and make various structural changes, such as the establishment of new directorates. It is said that the proposed amendments met with the approval of an IMF delegation, whose proposals, where possible, had also been incorporated into the Bill.
NORWAY TO CLAMP DOWN ON SEAFOOD SMUGGLING
Customs Today on 15th October reported that the Norwegian government will increase efforts to combat smugglers, and consider more effective measures. In 2018 so far over 4 tonnes has been discovered. The hauls are mostly fish fillets, which means that much of the fish is wasted and the majority of the seizures are cod.
PAKISTAN CUSTOMS ARRESTS IRAQI PASSENGER AND RECOVERS 7 FALCONS
Customs Today on 16th October reported that customs at Islamabad airport have arrested a Dubai-bound Iraqi passenger and recovered 7 falcons from his luggage. Pakistan cannot issue export permits for falcons as this is not only against the local wildlife protection laws but also in violation of CITES and agreements signed by the country which ban export of rare species.
WORLD CUSTOMS ORGANISATION AND OSCE TO STRENGTHEN CO-OPERATION IN HELPING STATES TO ADDRESS SECURITY THREATS
On 16th October, the Organisation for security and Co-operation in Europe reported that the OSCE and WCO had agreed to deepen their co-operation in addressing emerging and evolving security threats under a Working Arrangement document. The Working Arrangement covers different areas of mutual interest, such as supporting customs administrations in securing and facilitating legitimate trade; preventing and combating different forms of transnational organised crime, particularly the illicit trafficking in cultural objects; implementing different procedures and systems to strengthen security at borders, notably Advance Passenger Information (API) systems; as well as working together in other areas, such as gender mainstreaming, combating corruption and enhancing the professional integrity of customs staff.
INDIA NEEDS WAIVER ON US SANCTIONS TO OPERATE CHABAHAR PORT; AND WILL ROUTE PAYMENTS THROUGH IRANIAN BANK
Money Control on 16th October reported that India and Iran’s strategic infrastructure investment in Chabahar Port would be successful at obtaining a waiver from the US from its economic sanctions on Iran, an official has said. Iran and India entered into a contract in 2015 to construct 2 terminals at Chabahar Port along with cargo and container terminals. The Iranian port would provide India an alternative and reliable access route into Afghanistan utilising India’s earlier investment in Zaranj-Delaram road built in Afghanistan. India is also is looking at making payments in rupees once the US sanctions are in place as using the US dollar would not be feasible, using Bank Parasgad Iran (BPI), an Iranian private bank to route payments to Iran.
MACAU CASINO SHARES DOWN 40% AS TRADE WAR DETERS CHINESE HIGH ROLLERS
The South China Morning Post on 16th October reported that China’s crackdown on corruption and investors’ fears over the impact of the trade war on the economy have sent the stock prices of Macau’s top 6 casinos tumbling an average of 40% since June.
FRANCE: UKRAINIAN ‘KING OF THE CASTLE’ ARRESTED AND OVER €4 MILLION SEIZED
On 16th October, Europol reported that the French Gendarmerie arrested in Burgundy close to Dijon a high-profile fugitive from Ukraine who was living a lavish lifestyle in France. The suspect is thought to be behind a complex case of international fraud and money laundering. The seizures during the action day alone amount at over €4.6 million and include a castle, a vintage Rolls Royce Phantom and 3 works of art by Salvador Dali. This followed an investigation on alleged suspicious transactions surrounding the purchase of a castle which was bought for €3 million by a Luxembourg company whose ultimate beneficial owner was a Ukrainian citizen suspected of corruption at a large scale in his country.
UK: PREGABALIN AND GABAPENTIN TO BE CONTROLLED AS CLASS C DRUGS
The Home Office reported on 16th October that prescription drugs pregabalin and gabapentin are to be reclassified as Class C controlled substances from April 2019, meaning it will be illegal to possess pregabalin and gabapentin without a prescription and it will be illegal to supply or sell them to others. The drugs, which are used to treat nerve pain, epilepsy and anxiety, can bring about an elevated mood in users but can also have serious side effects, particularly when used in combination with other drugs.
EU REVIEWS AND PLANS UPDATES OF IDENTITY DOCUMENT SECURITY
On 16th October. The EU issued a report on progress against a 2016 Action Plan to improve the security of ID documents in the EU. It says that half the 32 proposed measures had been implemented. In April, the Commission published a proposal to improve the security of ID cards and residence permits for EU citizens and their non-EU family members. The EU-wide Schengen Information System will now include information on falsified travel documents. The European Border and Coast Guard Agency’s Centre of Excellence for combating document fraud launched in February. A new proposal is that Commission on the European Border and Coast Guard proposes to integrate the False and Authentic Documents Online system (FADO), a system for the exchange of information on genuine and false documents which until now was based on co-operation between Member States, would become part of the EU legal framework and be managed by the European Border and Coast Guard Agency.
SWEDISH ECONOMIC CRIME BODY SAYS IT HAS RECEIVED REPORT THAT NORDEA BREACHED MONEY LAUNDERING RULES
Reuters on 16th October reported that documents from Hermitage Capital Management purport to show that Nordic bank, Nordea, breached its responsibilities under AML laws.
BANK FRAUD SUSPECT VINAY MITTAL EXTRADITED FROM INDONESIA TO INDIA
The Hindu on 16th October reported that industrialist Vinay Mittal, who was wanted by the Indian Central Bureau of Investigation for allegedly cheating banks, has been extradited from Indonesia to face trial in the cases pending against him. Mittal and others are alleged in 2014 and 2016 to have cheated Corporation Bank and Punjab National Bank.
FORMER WESTMINSTER COUNCIL PENSIONS BOSS FOUND GUILTY OF £1 MILLION FRAUD
On 16th October, Public Sector Executive reported that a former employee of Westminster City Council has been found guilty of stealing nearly £1 million from the council pension fund. Ian Woodall, the former interim head of pensions and investments at the council, was convicted of fraud by abuse of position and concealing criminal property at Southwark Crown Court. He was a contractor at the council for approximately 3 years and was responsible for the day-to-day oversight of the council’s £1 billion pension fund.
ZAMBIAN MINING GROUP SAYS TAX CHANGES WILL HIT MINERAL EXPLORATION
Reuters reported on 16th October that Zambia’s proposed mining tax increases will hit mineral exploration and production in Africa’s second biggest copper producer, according to companies involved in exploration. Zambia plans to introduce new mining duties, replace VAT with sales tax and increase royalties to help bring down mounting debt.
ILLEGAL BLUEFIN TUNA MARKET MADE OVER €12 MILLION A YEAR SELLING FISH TO SPAIN
A news release from Europol on 16th October reported that Europol had co-ordinated the international Operation Tarantelo, conducted by the Spanish Guardia Civil with support of French, Italian, Maltese and Portuguese authorities, in which 79 individuals were arrested. More than 80 tonnes of illicit Bluefin tuna were seized and it is estimated the network trafficked a volume of over 2.5 million kg a year. Several poisoning cases were detected due to the unsanitary conditions in which the fish were stored. The tuna business is often linked to other crimes such as food fraud or document fraud.
On 16th October, OFAC added 20 new entities, including Bank Mellat, the Sina Bank and Parsian Bank, amended 2 entries, and deleted 7 previous entries (including former entries relating to the 3 banks) which were not subject to secondary sanctions under those listings. The new sanctions measures are said to be to target a network of businesses providing financial support to the Basij Resistance Force (Basij), a paramilitary force subordinate to Iran’s Islamic Revolutionary Guard Corps (IRGC).
On 16th October, the European Sanctions Blog posted a report about a decision of the Commercial Court in the UK: Mamancochet Mining Ltd v Aegis Managing Agency Ltd & Others. The court held that payment of a claim under a policy could be paid by the defendants, because payment would not “expose” the underwriters to EU or US sanctions on Iran if paid out before 4th November (when the latest US sanctions on Iran take effect) – and thus the “sanctions clause” in the policy did not apply. Crucially, the Court said that “exposure” to sanctions meant that the payment had to breach sanctions as opposed to exposing insurers to a real risk of breach. The court did not make a ruling on whether or not a refusal to pay such a claim might breach the EU Blocking Regulation (which seeks to prohibit compliance with the US sanctions and so protect EU businesses involved), but “saw force” in the argument that it would not – because the insurer was relying on the terms of the policy, and not merely complying with the sanctions requirement.
The court report is available at –
The Irish Examiner on 16th October reported that the UK Gambling Commission found “significant” amounts of stolen money had been gambled with Paddy Power’s online exchange Betfair after it failed to carry out proper AML checks. The inquiry centred on 5 customers in 2016, including 2 who were allowed to gamble stolen money – one of whom had defrauded his employer, Birmingham Dogs Home – the money will be returned to the dogs home.
On 15th October, the UN advised that ANJEM CHOUDARY, a UK citizen jailed in the UK in 2014, had been added to sanctions lists on the recommendation of the relevant sanctions committee.
HM Treasury added him to UK sanctions lists on 16th October
EU Regulation 2018/1542/EU has formally created a new sanctions regime – a new EU regime of restrictive measures to address the use and proliferation of chemical weapons. The sanctions may include travel restrictions and the freezing of funds and economic resources of certain persons, entities or bodies that are responsible for, provide financial, technical or material support for, or are otherwise involved in, manufacturing or using chemical weapons or engaging in preparations for the use of chemical weapons, as well as those who assist or encourage such activities.
See also Council Decision 2018/1544/CFSP.
EU Regulation 2018/1539/EU added Algerian national Hocine Bougetof to its sanctions lists.
See also Council Decision 2018/1540/CFSP.