Day: October 24, 2018

24^th October 2018

GERMAN POLICE ARREST 4 BROTHERS OF INFAMOUS MIRI-CLAN GANG

Deutsche Welle on 23^rd October reported that the Miri-Clan gang is believed to consist of several families of Lebanese-Arabic descent spread throughout Germany.  The 4 brothers were arrested in 4 cities in connection with selling and smuggling cocaine and marijuana.

https://www.dw.com/en/german-police-arrest-4-brothers-of-infamous-miri-clan-gang/a-46003195

JULIUS BAER CLOSES PANAMA OFFICE AFTER BANKER’S GUILTY PLEA

The Financial Times on 23^rd October reported that the Swiss bank is to close its presence in Panama after the arrest and conviction in the US of a former employee of the bank in Panama for laundering money embezzled from Venezuela’s state oil company.  Matthias Krull was a German banker who worked for Julius Baer in Panama when he participated in a scheme to launder $1.2 billion.

https://www.ft.com/content/8036aeec-d6b0-11e8-a854-33d6f82e62f8

 

 CAPITAL ONE HIT WITH $100 MILLION FINE OVER AML DEFICIENCIES

American Banker on 23^rd October reported that the US Office of the Comptroller of the Currency had announced that it has levied a $100 million civil money penalty against Capital One for deficiencies in its AML programme, stemming from action against Capital One in 2015, charging that the bank had failed to adopt and implement a compliance programme that met AML and Bank Secrecy Act requirements due to an “inadequate system of internal controls and ineffective testing”.

https://www.americanbanker.com/news/capital-one-hit-with-100m-fine-over-aml-deficiencies

ZAMBIA’S ADMISSION TO EGMONT GROUP OF FIU “A POSITIVE MILESTONE”

The Mast online on 23^rd October reported that Zambia’s finance minister has described Zambia’s admission to the Egmont Group as a positive milestone.  Confirmation of membership was made at the Plenary of the Egmont Group, recently held in Sydney.  The goal of the Egmont Group is to provide a forum for FIU around the world to improve support to their respective governments in the fight against money laundering, terrorist financing and other financial crimes.

https://www.themastonline.com/2018/10/23/zambias-admission-to-egmont-group-of-financial-intelligence-units-a-positive-milestone-mwanakatwe/

BREXIT TO TAKE THE UK OUT OF THE LUGANO CONVENTION GOVERNING JUDGMENTS WITH SWITZERLAND

CMS von Erlach Poncet on 23^rd October published an article saying that, as a consequence of leaving the EU at the end of March 2019, the UK will no longer be bound by the Lugano Convention, which currently governs the enforcement of foreign judgments in litigations between Swiss and British parties.  The applicable legal regime in the enforcement of judgments will change making it crucial that Swiss and British parties diligently plan any litigation in the years to come.

http://www.cms-lawnow.com/ealerts/2018/10/brexit-to-take-the-uk-out-of-the-lugano-convention-governing-judgments-with-switzerland?cc_lang=en

ECUADOR TO RALLY BANANA EXPORTERS TO FIGHT HARD DISCOUNTER ALDI

EurActiv on 24^th October reported that Ecuador, the world’s largest banana exporter, is urging Latin American producers to fight German supermarket chain Aldi’s bid to pay €1 less per case in 2019.  The banana crate — weighing 19.5 kg – currently sells for about €6.9.

https://www.euractiv.com/section/economy-jobs/news/ecuador-to-rally-banana-exporters-to-fight-hard-discounter-aldi/

FIXED ODDS BETTING TERMINALS (FOBT)

On 23^rd October, the House of Commons Library published a briefing paper looking at the background to the controversy over fixed odds betting terminals (FOBT) – electronic machines, sited in betting shops, which contain a variety of games, including roulette.  Each machine accepts bets for amounts up to a preset maximum and pays out according to fixed odds on the simulated outcomes of games.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06946

25 FOREIGN SUSPECTS IN TELECOM FRAUD NABBED IN PHILIPPINES

Focus Taiwan on 24^th October reported that, acting on a tip provided by the Chinese police, officers cracked down on a telecom fraud ring in the northern Philippines and arrested 25 foreign nationals, thought to be from China and Taiwan, and suspected of posing as judges, prosecutors, and bank staffers to trick an average 100 victims a day in China into transferring money to designated accounts.

http://focustaiwan.tw/news/asoc/201810240009.aspx

SCOTTISH ENVIRONMENTAL PROTECTION AGENCY HAS LAUNCHED A CLAMPDOWN ON ILLEGAL WASTE HAULAGE AND DISPOSAL

Commercial Motor on 23^rd October reported that SEPA launched the clampdown which involves the police and the other 3 UK environmental agencies.  Its £3.8 million Life Smart project, will use road stops and site visits to inform hauliers of their responsibilities surrounding waste disposal.  According to SEPA, waste crime costs the UK economy approximately £600 million a year and includes illegal transport and dumping of waste in Scotland by hauliers from England, Wales and Northern Ireland.

https://www.commercialmotor.com/news/compliance/sepa-clamps-down-illegal-waste-haulage

BRITISH COLUMBIA GAMBLING MONOPOLY HIRES THIRD PARTY AML AUDITOR

Calvin Ayre on 24^th October reported that British Columbia’s provincial gambling monopoly (BCLC) has hired a third-party auditor in the hopes of reducing “sketchy” transactions at its land-based casinos.

https://calvinayre.com/2018/10/24/casino/british-columbia-casinos-auditor-aml-rules/

SINGAPORE: 3D PRINTING AND ADDITIVE MANUFACTURING CENTRE

Customs Today on 23^rd October reported that the Port Authority of Singapore (MPA) has opted to build a 3D Printing and Additive Manufacturing Centre – the Centre of Excellence in Modelling and Simulation of Next Generation Ports (C4NGP) will be run by the National University of Singapore (NUS) and the Singapore Maritime Institute (SMI).

http://www.customstoday.com.pk/singapore-to-build-digital-twin-port/

US EXPORT REGULATIONS REVISED TO REFLECT CHANGES TO DUAL-USE GOODS LIST

Sandler Travis Rosenberg on 24^th October reported that changes had been made to the Commerce Control List and corresponding parts of the Export Administration Regulations to reflect changes made to the Wassenaar Arrangement’s List of Dual-Use Goods and Technologies in December 2017.

https://www.strtrade.com/media/publication/7818_bis%20wassenaar.pdf

INTERPOL PRESENTS E-MLA INITIATIVE AT UNODC CONFERENCE

On 23^rd October, a news release from Interpol about its initiative on the secure electronic transmission of mutual legal assistance (e-MLA) exchanges.  It said that in the coming months the e-MLA team will continue to engage with stakeholders to promote the launch of the second phase of the project and seek their support in developing this important technical platform on facilitating electronic mutual legal assistance.

https://www.interpol.int/News-and-media/News/2018/N2018-125

2 NEW BILLS READY FOR SIGNING IN THE US

The Hizballah International Financing Prevention Amendment Act – amends 2015 Act to allow for sanctions on foreign persons who assist in, or provide support for, fundraising or recruitment activities for Hizballah; foreign government agencies that provide financial support, arms or other assistance; and Hizballah networks engaged in criminal activities.

https://www.congress.gov/bill/115th-congress/senate-bill/1595/text

The Sanctioning the Use of Civilians as Defenseless Shields Act allows for the imposition of sanctions on those members of Hizballah or associates, any foreign person, entity, or instrumentality of a foreign state involved.

https://www.congress.gov/bill/115th-congress/house-bill/3342/text

Both Acts need to be signed by the President to become law.

UN AGENCIES LAUNCH MANUAL TO HELP MEASURE PROGRESS AGAINST CORRUPTION

The UN Office on Drugs and Crime (UNODC) reported on 24^th October that UNODC and the UN Development Programme (UNDP) have and published developed a “Manual on Corruption Surveys”, which helps measure bribery and other forms of corruption through sample surveys.  UNODC teamed up with the Mexico-based UNODC-INEGI Center of Excellence for Statistical Information and UNDP to develop the new corruption measurement initiative.  The manual is a comprehensive hands-on guide on the measurement of corruption through population- and business-based sample surveys.  It also provides methodological guidance on two indicators on bribery prevalence that countries need to produce to monitor progress towards Sustainable Development Goal (SDG) Target 16.5.

https://www.unodc.org/unodc/en/frontpage/2018/October/unodc-and-undp-launch-manual-to-help-measure-progress-against-corruption.html?ref=fs1

The Manual itself is available at –

http://www.unodc.org/documents/data-and-analysis/Crime-statistics/CorruptionManual_2018_web.pdf

NEW RESEARCH PROJECTS ANNOUNCED TO TACKLE INTERNATIONAL CRIME INCLUDING HUMAN TRAFFICKING, CYBER-CRIME AND ILLICIT ACTIVITY AT SEA

The Economic and Social Research Council (ESRC) in the UK has announced on 24^th October 5 projects with £1.7 million of funding for projects investigating crime at sea, human trafficking, cyber-crime, crime in Africa and the overlap between crime and extremism.  They will run for up to 36 months, commencing in January 2019.  The projects are –

The projects are as follows:

• Transnational organised crime at sea: New evidence for better responses
• Deciphering and disrupting the social, spatial and temporal systems behind transnational human trafficking: a data science approach
• Hidden narratives of transnational organised crime in West Africa
• How online technologies are transforming transnational organised crime (Cyber-TNOC)
• The crime-terror nexus: Investigating the overlap between criminal and extremist practices, narratives and networks in Tripoli, Lebanon

https://esrc.ukri.org/news-events-and-publications/news/news-items/new-research-projects-announced-to-tackle-international-crime-including-human-trafficking-cyber-crime-and-illicit-activity-at-sea/

£2 MILLION OF FAKE MEDICINES SEIZED IN UK

Police Professional on 24^th October reported that diazepam, modafinil and dermal fillers were among the fake and unlicensed medicines and devices confiscated.  Airports and mail delivery centres were targeted, as well as websites on both the open and dark web selling ‘falsified’ and unlicensed medical products, leading to 123 websites being shut down and 535 online adverts being removed.  The Medicines and Healthcare products Regulatory Agency (MHRA) spearheaded the UK crackdown as part of the larger international operation.

https://www.policeprofessional.com/news/2-million-of-fake-medicines-seized-in-uk/

THIS AMAZING TIME-LAPSE VIDEO SHOWS HOW SHIPS GET THROUGH THE PANAMA

https://www.facebook.com/businessinsider/videos/10155163159739071/?t=9

PODCAST: THE ABRAMOFF LOBBYING SCANDAL AND BEYOND

In the latest TRACE podcast, Nat Edmonds of Paul Hastings describes his work as a prosecutor on the Jack Abramoff corruption cases and then provides broader insight into the compliance risks and schemes he sees worldwide.  The Abramoff case was exposed in 2005 and related to fraud perpetrated by political lobbyists on Native American tribes who were seeking to develop casino gambling on their reservations.

https://www.traceinternational.org/bribe_swindle_or_steal

A CRUDE AWAKENING US SANCTIONS ON THE RUSSIAN OIL SECTOR

This article from US law firm, Torres Law, which first appeared in the Newsletter of the International Law Section of the State Bar of Texas, discusses US economic sanctions on Russia as enforced by OFAC and provide an overview of Directive 4 to Executive Order 13662, which prohibits certain transactions related to the Russian oil sector.  While Directive 4 does not prohibit all oil sector transactions with companies in Russia, it does create many potential obstacles for US businesses.

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

OFAC GENERAL LICENCE FOR TRANSACTIONS INVOLVING CERTAIN ENTITIES IN BELARUS

On 24^th October, OFAC announced General License 2F which replaces General License 2E and extends to 25^th October 2019 the exemption for transactions involving 9 named Belarus entities that would otherwise be blocked by Executive Order 13405 of 2006 (which requires the freezing of property etc of certain persons undermining democratic processes or institutions in Belarus).  It does not authorise transactions involving other blocked persons or entities, even if conducted through or by any of the named entities.   The 9 entities are Belarusian Oil Trade House; Belneftekhim; Belneftekhim USA Inc; Belshina OAO; Grodno Azot OAO;  Grodno Khimvolokno OAO; Lakokraska OAO; Naftan OAO; andPolotsk Steklovolokno OAO.

https://www.treasury.gov/resource-center/sanctions/Programs/Documents/belarus_gl2f.pdf

 

Loadstar on 24^th October reported that the Global Shippers’ Forum has warned that the biggest issue since VGM (i.e. container weighing before loading onto vessels) is likely to be bugs.  The International Plant Protection Convention (IPPC) is investigating concerns that parasites and other invasive species are being spread globally on the outside of containers, contributing to the demise of local ecodiversity.  North America, Australia and Japan have all expressed concern over the issue and the fear among the maritime industry is that the UN or governments will attempt to regulate.

https://theloadstar.co.uk/bugs-biggest-issue-container-shipping-since-vgm/

This BBC Radio 4 programme for its “File on 4” series examines “Waste crime” – the illegal disposal of the UK’s mountains of often hazardous rubbish, and those involved are finding new and inventive ways of cashing in.  It investigates how gangs hide hundreds of tonnes of waste in fields and makeshift tips around the country, and goes out with enforcement officers as they raid factories and depots around the country.  The crime costs the UK an estimated £600 million a year, as it’s escalated from opportunist fly-tipping to a dangerous and competitive criminal industry.

https://www.bbc.co.uk/programmes/m0000t75

On 23^rd October, Ogier produced a set of articles examining new proposed requirements for an economic substance test for Jersey tax-resident entities have been published to meet the requirements of the EU Code of Conduct Group.  Subject to States approval, they come into effect on 1^st January.  The articles examine the proposals from the perspective of –

• Fund managers;
• Holding companies; and
• banks, insurance businesses and leasing vehicles.

https://www.ogier.com/news-and-publications

A peer-reviewed article is available (for £20 download) online and published last year.  It aims to constructively critique the new global methodology (the “Immediate Outcomes” marking used by FATF) for evaluating the effectiveness of AML regimes against defined outcomes.  It finds that FATF’s “effectiveness” methodology does not yet reflect an outcome-oriented framework as it purports.  Misapplication of outcome labels to outputs and activities miss an opportunity to evaluate outcomes, as the impact and effect of AML policies.

https://www.emeraldinsight.com/doi/pdfplus/10.1108/JMLC-07-2017-0029

Interest in New Zealand on 24^th October carried an article saying that the mutual evaluation to FATF standards of New Zealand is due for 2020.  It says that leaked results from the UK’s ‘report reveals an effectiveness deficit, and opportunities for other countries to boost their FATF ratings.  According the article, it seems that the UK’s AML regime is due to receive the second highest rating amongst 61 countries assessed to date.  The UK’s reported scores rank its AML regime behind only the US, yet both countries feature prominently in nearly every major money laundering scandal.  The article claims that, using on official figures, the UK’s ‘success rate’ by UN standards was the lowest of all countries surveyed. UK authorities successfully intercepted 0.1% of criminal proceeds, The author says that the “outcomes” used by FATF mostly reflect the efforts of regulatory and enforcement authorities, and are not outcomes in the usual sense of whether those efforts have any meaningful effect or impact on serious crime.  Criticising the marking method and evaluation process, the author nevertheless says that although FATF’s new ‘effectiveness’ ratings system arguably lacks much meaning (at least in terms of recognised evaluative principles and policy effectiveness), low scores have a very real impact on any jurisdiction’s access to financial markets.

https://www.interest.co.nz/opinion/96510/ron-pol-reflects-effectiveness-issues-revealed-uk’s-leaked-amlcft-evaluation-shares

UK DEFENCES AGAINST MONEY LAUNDERERS “OVERWHELMINGLY EFFECTIVE”, ACCORDING TO FATF

ACAMS carried the report referred to by the Interest article on 19^th October.  The draft report is said to praise the country’s “aggressive” prosecution of money launderers and terrorist financiers, confiscation of £1 billion in illicit assets over the past 4 years and implementation of counterterrorism and counterproliferation sanctions.  The UK rated “high” in 2 outcomes, “substantial” in 6, “moderate”—the second-lowest possible score—in 3, and did not rate “low” in any.  Those totals match the US, which has held the top spot in terms of efficacy for the past 2 years after receiving 4 high, four substantial, 2 moderate and 1 low score in the same 11 categories.  The report was approved by FATF members at the recent plenary.  It is said that the British delegation unsuccessfully lobbied to have the UK’s moderate ratings — a failing score — for AML supervision and use of financial intelligence upgraded.  The UK also rated fully “compliant” or “largely compliant” in 38 of FATF’s 40 technical recommendations for combating financial crime, whereas the US received 4 non-compliant grades in its December 2016 evaluation.

https://www.moneylaundering.com/news/uk-defenses-against-money-launderers-overwhelmingly-effective-fatf/