OTHER THINGS YOU MAY HAVE MISSED – OCTOBER 22

22nd October 2018

THE SERIOUS IMPACTS OF FISHERIES CRIME

Global Financial Integrity on 22nd October published an article containing remarks that the author of the article made at the recent FishCrime conference in Copenhagen.  Crimes – illegal fishing, drug trafficking, and human trafficking — that occur in the fisheries sector fall under the umbrella of fisheries crime.  It considers their impacts, as well as discussing treating illegal fishing as a serious transnational organised crime.  Illegal fishing is the most obvious fisheries crime.  Next is drug trafficking, asking what will be the tipping point for fishermen facing depleted stocks to turn to drug smuggling?  He also claims that companies and operators that engage in illegal fishing are often also guilty of human trafficking, specifically forced labour.  The article then asks why isn’t illegal fishing treated as a serious crime, a transnational organised crime?

https://www.gfintegrity.org/the-serious-impacts-of-fisheries-crime/

UKRAINIANS CARRY ABROAD THE “SUN STONES”: SMUGGLED AMBER

The Siver Telegram on 21st October said that the state border service continues to implement a systematic set of measures to combat illegal movement across the state border of Ukraine of smuggled stones of amber, saying that since the beginning of year the staff of state frontier service of Ukraine found nearly 300 lb of “sun stone”.

https://sivtelegram.media/ukrainians-carry-abroad-the-sun-stones-from-the-beginning-of-the-year-revealed-300-kg-of-smuggled-amber/56280/

HIGH-PROFILE BRISBANE LAWYER FACES COURT ON FRAUD AND MONEY LAUNDERING CHARGES

ABC News on 22nd October reported that high-profile Brisbane lawyer Adam Magill, 47, has been granted bail after appearing in court charged with fraud and money laundering offences.  He was charged as a result of an 18-month investigation into the Lawler-Magill law firm by the Crime and Corruption Commission (CCC).  3 other men, including 2 other solicitors, have also been charged as part of Operation Stockade.

https://www.abc.net.au/news/2018-10-22/brisbane-lawyer-faces-court-accused-fraud-and-money-laundering/10404638

MODERN SLAVERY VICTIMS LET DOWN BY GOVERNMENT, SAYS FORMER UK COMMISSIONER

Manx Radio on 21st October carried a Sky News story saying that the former independent slavery commissioner has criticised the Home Office for failing to implement proposals he says it agreed to a year ago.  He is among critics who say the victims are not being properly looked after once they have escaped or been rescued.

https://www.manxradio.com/news/uk-news/modern-slavery-victims-let-down-by-government-says-former-commissioner/

END OF 17-YEAR LEGAL BATTLE OVER LIABILITY FOR IMPORT CHARGES IN KENYA

The Daily Nation in Kenya on 22nd October reported that the end of a 17-year battle involving the Kenya Revenue Authority (KRA), the Court of Appeal has said that importers to bear responsibility in the event of any tax fraud committed by their clearing and forwarding agents.  In 2001 the KRA demanded unpaid duty for the import of cooking equipment in 1995.  The importer said that its agent had paid all taxes for the burners, and sent KRA documents in support of its stand; KRA insisted that the documents were forgeries.

https://www.nation.co.ke/news/Importers-to-pay-for-sins-of-clearing-agents/1056-4816228-nva9s0/index.html

COSTA RICA: KIDNAPPED E-GAMBLING OPERATOR FOUND DEAD

On 20th October, Gambling 911 reported that the body of Sean “Tony” Creighton has been found by law enforcement in Costa Rica.  He disappeared on September 24th after an alleged ambush by up to 5 men.  The victim’s family in Costa Rica paid a $750,000 ransom, reportedly sent to Cuba and in the form of Bitcoin.

https://www.gambling911.com/Costa-Rica-Police-5Dimes-Investigation.html

https://calvinayre.com/2018/10/21/business/costa-rica-5dimes-owner-tony-reported-dead/

TAIWAN ADOPTS OECD TAX DATA-SHARING PROTOCOLS BUT STAYS NON-MEMBER

HKTDC on 22nd October reported that Taiwan has implemented the Common Reporting Standard (CRS) despite not being a member of OECD.  Taiwan has announced plans to toughen up its tax evasion regime, and over the course of the last 12 months it has revised its AML legislation and has issued new due diligence guidelines to its financial institutions.

http://economists-pick-research.hktdc.com/business-news/article/Economists-Pick-International-Market-News/Taiwan-Adopts-OECD-Tax-Data-Sharing-Protocols-but-Stays-Non-Member/imn/en/1/1X308LSH/1X0AFCDN.htm

NUMBERS OF SFO ASSET FREEZING ORDERS HALVE IN A YEAR

London Loves Business on 22nd October reported that attempts by the SFO to freeze the assets of fraudsters – through restraint orders – have halved from 8 to 4 in the past year, says the Pinsent Masons law firm.  It says that the SFO has not issued a restraint order within 2 months of opening and investigation in any of the past 3 years.  Pinsent Masons says that the fall in these asset freezing orders may be linked to the SFO’s focus on high-profile so-called ‘blockbuster’ cases that have a public policy interest, rather than purely a large financial value.

https://londonlovesbusiness.com/sfo-asset-freezing-orders-halve-in-a-year/

https://www.lawgazette.co.uk/law/sfos-blockbuster-focus-detracting-from-vital-work/5068028.article

CHINA’S INTERNET GATEKEEPER PLEADS GUILTY TO BRIBERY

OCCRP on 21st October reported that Lu Wei, once the gatekeeper of the internet for the entire population of China, has pleaded guilty to abuse of power and accepting what amounted to $4.6 million in bribes over the span of his 15-year career.  Wei became the head of the Cyberspace Administration of China (CAC), in 2014.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8774-china-s-internet-gatekeeper-pleads-guilty-to-bribery

PUSH PAYMENT FRAUD: UPDATE FOR AUTUMN 2018

On 17th October, Walker Morris published a report on the Payment Systems Regulator’s recent proposals for dealing with push payment fraud.  It explains that a push payment fraud will involve the fraudster somehow persuading the consumer to organise a transfer from the consumer’s account to the fraudster’s account.  It reviews past moves to combat the fraud and a steering group has now published a draft code which aims to ensure that the scheme is designed in the best way to minimise fraud and to protect victims.  Consultation on the new code runs to 15th November.

https://www.walkermorris.co.uk/publications/push-payment-fraud-update-autumn-2018/

HONG KONG: COURT OF FINAL APPEAL CLARIFIES INNOCENT PURPOSE DEFENCE TO INSIDER DEALING

Baker McKenzie on 18th October reported that, in Securities and Futures Commission v Yiu Hoi Ying Charles and Others, the Court of Final Appeal handed down a landmark decision on the innocent purpose defence under section 271(3) of the Securities and Futures Ordinance.

https://globalcompliancenews.com/hong-kong-court-of-final-appeal-clarifies-innocent-purpose-defense-to-insider-dealing-20181016/

US POSTAL SERVICE AUDIT EXAMINES USE OF POSTAL SERVICE NETWORK TO FACILITATE ILLICIT DRUG DISTRIBUTION

Customs brokers’ trade body in the US, the NCBFAA, reported on 22nd October that the Postal Service Office of the Inspector General released the results of an audit that looked at the role of the US Postal Service network in facilitating illicit drug distribution.  The report is said to highlight vulnerabilities, including – the inability to open and inspect packages suspected of including illicit drugs; federal sentencing guidelines do not include a distinct penalty for using the postal service network to facilitate illicit drug distribution; data analytics needs to be enriched to better target suspect mail; and there is a lack of a unified, organisation-wide strategy.

http://www.ncbfaa.org/Scripts/4Disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=21682&Time=-1212121917&SessionID=569355358gkn3ww6k6ntk98dfx6g5ko05b9tx1f5m4kdz9591zn1365wi04a1ygi&MenuKey=about

The report is at –

https://uspsoig.gov/document/use-postal-service-network-facilitate-illicit-drug-distribution

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US SANCTIONS ON THE RUSSIAN OIL SECTOR

On 22nd October, Torres Law published an article that discusses US economic sanctions on Russia as enforced by OFAC.  They impose, it says, a complex network of restrictions on U.S. parties seeking to do business with the Russian oil industry.  It says that it is important that parties who want to engage in transactions with the Russian oil industry conduct their due diligence.

http://www.torrestradelaw.com/cat/Insights/blog_images/4%20Article-ILS_%20Torres%20Law_%20A%20Crude%20Awakening%20U.S.%20Sanctions%20on%20%20Russias%20Oil%20Sector.pdf

SOUTH KOREA ATTEMPT TO EASE NORTH KOREA SANCTIONS FALLS FLAT

The Wall Street Journal on 19th October reported that South Korea’s president’s attempt to rally European support for loosening sanctions on North Korea appeared to have fallen flat.  He is said to have used a 9-day trip through Paris, Rome, Vatican City, Brussels and Copenhagen to urge greater engagement with North Korea.

https://www.wsj.com/articles/moons-hail-mary-for-eu-to-back-easing-north-korea-sanctions-1539952687?mod=searchresults&page=1&pos=1

SLAVERY AND HUMAN TRAFFICKING IN SUPPLY CHAINS: UK GUIDANCE FOR BUSINESSES

On 22nd October, the Home Office released an update of its 2015 guidance booklet for organisations on how to ensure that slavery and human trafficking is not taking place in their business or supply chains.

https://www.gov.uk/government/publications/transparency-in-supply-chains-a-practical-guide

SWIFT INTRODUCES NEW SOLUTION TO ADDRESS PAYMENT FRAUD

Electronic Payments International on 22nd October reported that SWIFT Payment Controls is designed to identify and respond to fast-moving, suspect transactions.

https://www.verdict.co.uk/electronic-payments-international/news/swift-payment-controls-fraud-prevention/

UK REGULATOR SEIZES 10,000 FAKE TEST KITS FOR SEXUALLY TRANSMITTED INFECTIONS

The Pharmaceutical Journal on 22nd October reported that the MHRA has seized nearly 10,000 fake sexually transmitted infection (STI) test kits — including some that screen for HIV — and is warning the public to check packs for the CE quality mark and ensure they are sold by an approved supplier.  The warning comes as MHRA research revealed that 25% of people aged 18–30 years have bought medical products online in the past 12 months, despite suspecting that they were counterfeit.

https://www.pharmaceutical-journal.com/news-and-analysis/news/regulator-seizes-10000-fake-test-kits-for-sexually-transmitted-infections/20205620.article

BELFAST-BORN FINANCE TYCOON ROGER ‘ROCKET’ KNOX CHARGED OVER £126 MILLION FRAUD

Belfast Live reported on 21st October that Roger Knox, 47, a UK citizen and former soldier who resides in France, was charged by criminal complaint in the US with securities fraud and conspiracy to commit securities fraud.  The charges relate to a massive global securities fraud scheme worth around $164 million.

https://www.belfastlive.co.uk/news/belfast-news/belfast-born-finance-tycoon-roger-15308769

UK SANCTIONS BODY OFSI GIVES EVIDENCE TO PARLIAMENTARY COMMITTEE

On 22nd October, the European Sanctions Blog provided a summary of the oral evidence given by representatives of the Office of Financial Sanctions Implementation and the FCA to the House of Commons Treasury Select Committee.  The transcript of the hearing is available at –

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/treasury-committee/economic-crime/oral/91663.html

Amongst the information provided was that, in 2017, OFSI received 133 reports of suspected sanctions breaches, estimated value £1.4 billion, with 103 of the 133 reported breaches reported to OFSI since it gained its powers to impose civil monetary penalties (though the Committee criticised its apparent inadequate enforcement).

https://europeansanctions.com/2018/10/22/ofsi-evidence-to-treasury-committee-economic-crime-inquiry/

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https://www.rferl.org/a/29556902.html

RUSSIA TO SEND MORE MILITARY TRAINERS AND EQUIPMENT TO CENTRAL AFRICAN REPUBLIC

Alternative Africa on 20th October reported that Russia plans to send additional military equipment to Central African Republic (CAR) and deploy 60 more instructors to train the country’s armed forces, escalating its most significant military foray in Africa in decades.  It donated hundreds of weapons and sent 175 trainers to CAR earlier this year to bolster the government’s fight against militia groups after receiving an exemption from a UN arms embargo.  Many of the Russians in CAR are said to be private security contractors and their remit has expanded into mediating negotiations among armed groups, securing mining projects and advising CAR’s president.

https://alternativeafrica.com/2018/10/20/russia-to-send-more-military-trainers-equipment-to-central-african-republic/

PODCAST: SPOTLIGHT ON BRAZIL

In the latest TRACE podcast, Rafael Gomes discusses Petrobas all that has been going on in Brazil recently on the anti-corruption front, the current outlook there and the upcoming run-off election.

https://www.traceinternational.org/bribe_swindle_or_steal

EX-CROATIAN PM TO SERVE JAIL TERM FOR BRIBERY

The Anadolu Agency on 22nd October reported that Croatia’s former Prime Minister Ivo Sanader has been sentenced in Zagreb to 2½ years in prison for bribery and unjustified profits in the 90s wars.

https://www.aa.com.tr/en/europe/ex-croatian-pm-to-serve-jail-term-for-bribery/1289567#

DIRECTORS MUST PAY £2 MILLION IN LANDMARK WHISTLEBLOWING CASE

Personnel Today on 22nd October reported that 2 directors of International Petroleum (IPL), a company based in Australia but listed on the LSE, have been held liable for the unfair sacking of a whistleblower for the first time.  Alexander Osipov had been CEO of the company who was sacked in 2014, primarily for making protected disclosures under whistleblowing legislation.  This had followed disagreements over operations and the award of contracts in Niger.  He told an employment tribunal that his concern was good corporate governance and the need to avoid suggestions of bribery and corruption, which had blighted businesses in Niger.  He had also voiced concerns over the holding of data that may have breached Niger’s petroleum code.

https://www.personneltoday.com/hr/directors-must-pay-2m-in-landmark-whistleblowing-case

MORE THAN 40 FOOTBALL CLUBS AND 170 PLAYERS FACING TAX INVESTIGATION IN UK

BT Sport on 22nd October reported that HMRC has confirmed it is currently looking into tax information concerning 44 league clubs, 171 players and 31 agents as it continues to crack down on the sport.  HMRC established its specialist Football Compliance Project in 2017 to oversee all of its compliance activities within the football industry.  HMRC is reportedly looking at “image rights” which enable players to exploit their image for commercial value through sponsorship and endorsements.

http://sport.bt.com/news/more-than-40-clubs-and-170-players-facing-tax-investigation-S11364304842975

 BULGARIAN MONEY COUNTERFEITERS BUSTED

The Mail Online on 22nd October reported that Bulgarian authorities say they have successfully taken down an illegal counterfeit operation that was printing high quality bogus euro and US dollar banknotes.  The illegal printing press and bogus €500, €100 and $50 banknotes were found in the basement of a hotel in the Black Sea resort of Sunny Beach.

https://www.dailymail.co.uk/wires/ap/article-6303601/Bulgarian-money-counterfeiters-busted-authorities.html

AUSTRALIA: REVISED PENALTIES COME DOWN HARD ON WHITE COLLAR CRIME

Baker McKenzie on 22nd October reported that the Australian Federal Government is to introduce legislation into parliament to increase the penalties for white collar crimes – criminal penalties were set to double in some cases, while civil penalties for corporations and individuals would “skyrocket”.

http://www.riskandcompliancehub.com/australia-revised-penalties-come-down-hard-on-white-collar-crime/

MALDIVES COURT FREES OPPOSITION LEADER CONVICTED OF BRIBERY

Baker McKenzie on 22nd October reported that Qasim Ibrahim, a political party leader and businessman owning a chain of tourist resorts, was sentenced to more than 3 years in prison last year after he joined forces with the opposition in trying to unseat President Yameen Abdul Gayoom.  He was accused of offering to fund re-election campaigns of government lawmakers in return for voting for an opposition-sponsored no-faith motion against the parliamentary speaker.

http://www.riskandcompliancehub.com/maldives-court-frees-opposition-leader-convicted-of-bribery/

LET THEM EAST CHEESE: RUSSIAN PLANT THRIVES AMID SANCTIONS

Rferl on 22nd October carried an article about the results of the food import ban imposed in retaliation for Western sanctions that followed the Kremlin’s 2014 annexation of Ukraine’s Crimean Peninsula.  The import ban included dairy products, and that meant foreign cheese.  Entrepreneurial Russians spotted an opportunity to fill the void with homegrown alternatives.  Like others in Russia’s food industry, the cheese plant in Sernur – the subject of the article, accepted the challenge.

https://www.rferl.org/a/let-them-east-cheese-russian-plant-thrives-amid-sanctions-/29557433.html

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REFORMING THE WTO

This briefing paper from the EU Parliament Research Service is an update of a December 2017 paper and deals with efforts to reform the World Trade Organisation.  Since its establishment in 1995, the WTO has embodied the multilateral trading system, but it currently faces serious challenges to its legitimacy and its effective functioning.  A chief concern is said to be the US blocking new appointments to the WTO’s Appellate Body, which fulfils a key role in the WTO dispute settlement system.  This impasse could soon paralyse the practical enforcement of multilateral trade rules, which would undermine the rules-based system.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/603919/EPRS_BRI(2017)603919_EN.pdf

ALBANIAN PM RAMA: “GAMBLING BUSINESS IS FUNDED BY CRIME” – ALL BETTING SHOPS TO CLOSE

Top Channel TV reported on 22nd October that the Albanian prime minister has said that after January 1st, all betting shops in Albania will be closed.  He said that the gambling business was being used for money laundering, and was funded by crime.  Sports betting will be banned in residential areas.

http://top-channel.tv/english/rama-gambling-business-is-funded-by-crime

https://europeangaming.eu/portal/latest-news/2018/10/22/30811/albanias-new-betting-regulation-could-bring-betting-monopoly/

UK HIGH COURT: SECONDARY SANCTIONS NO GROUNDS TO AVOID INSURANCE POLICY

Out-Law on 22nd October published an article commenting on the recent decision in Mamancochet Mining Ltd v Aegis Managing Agency & others.  It summarises the decision that an insurer could not rely on a sanctions-related exclusion clause to resist paying out on a marine insurance policy in the context of the impending reinstatement of US secondary sanctions against Iran, the High Court has ruled.  A lawyer at the law firm behind Out-Law comments that judgment in the case was expedited so that it could be handed down before the reinstatement of the second wave of US secondary sanctions on 4th November.

https://www.out-law.com/en/articles/2018/october/secondary-sanctions-no-grounds-avoid-insurance-policy/

A QUICK GUIDE TO MEDICAL CANNABIS

A timely and helpful guide and infographic was published by the Pharmaceutical Journal on 25th July.  It aims to tell pharmacists what they need to know.  It includes a distinction between THC and CBD, important to know when talking about cannabis, its legalisation and derivatives.  THC is the psychoactive component of cannabis. Weak partial agonist on CB1 and CB2 receptors. THC potency in dried cannabis has increased from an average of 3% in the 1980s to around 15% today. Some strains contain more than 25% potency.  CBD (cannabidiol) does not produce psychoactive adverse effects. Has little affinity for CB1 and CB2 receptors directly. It is believed to modulate the effects of THC throughout the endocannabinoid system which is why the THC/CBD ratio can lead to different responses and adverse effects.  It also details where cannabis is legal, illegal or decriminalised.

https://www.pharmaceutical-journal.com/news-and-analysis/infographics/a-quick-guide-to-medical-cannabis/20205224.article

RUSSIAN OLIGARCH TAKES NORDIC BANKS TO COURT

EU Observer on 22nd October reported that Boris Rotenberg (not himself currently subject to EU sanctions), has taken 4 Nordic banks – Nordea, Danske Bank, Handelsbanken and Finland’s OP Corporate Bank – to court in Helsinki for breaching service agreements as a result of US sanctions imposed on him in 2014.

https://euobserver.com/tickers/143174

MONEY LAUNDERERS ETC TURNING TO PROPERTY IN UK UNIVERSITY TOWNS

A blog posting from I Hate Money Laundering on 22nd October links to a Independent interview with Mark Hayward, chief exec of NAEA Propertymark, who says the attention on London property is driving those wishing to acquire property (PEP, money launderers and other criminals) to university cities like Cambridge.  The NAEA, a body for UK estate agents, also complained about ‘woefully underfunded’ government efforts to crack down illicit funds flowing into the UK’s £7 trillion of housing stock.  The article points out that, while most financial services businesses have to go through a lengthy vetting process by the City watchdog, all that is required to become an estate agent is to register with HMRC and join a redress scheme, which means customers get their money back if things go wrong, but even these requirements appear to not be followed by some operators.  Only just over half of estate agents are overseen by the NAEA, which implements minimum standards, meaning thousands are operating “under the radar”.

https://www.independent.co.uk/news/business/analysis-and-features/criminals-target-property-university-towns-money-laundering-eatate-agents-a8537931.html