OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 16

16th November 2018

CHINESE CUSTOMS ARREST 17 SUSPECTS FOR IVORY SMUGGLING

The Sundiata Post on 16th November reported that China has arrested 17 suspected smugglers and seized 10 pieces of African ivory weighing 323.7 kg in Shenzhen.  The suspects, including 6 Hong Kong residents, attempted to smuggle the ivory to the Chinese mainland via Hong Kong.

https://sundiatapost.com/2018/11/16/chinese-customs-arrest-17-suspects-for-ivory-smuggling/

IRELAND: ILLEGAL CIGARETTES COST THE STATE €229 MILLION IN LOST TAXES

On 15th November, The Times reported that, according to a Revenue Commissioners report, almost 1 in 7 cigarettes smoked in Ireland last year was illegally obtained, costing the state about €229 million in lost tax.  13% of cigarettes consumed in the Republic last year were illicit smuggled goods, against the estimated EU average of 10.4%.  An increase is largely due to the discovery of an illegal cigarette manufacturing plant, a factory capable of producing 250,000 cigarettes an hour, in a barn in Co Louth in March.

https://www.thetimes.co.uk/edition/ireland/illegal-cigarettes-cost-the-state-229m-in-lost-taxes-8mrc72wl5

CHARCOAL STILL SMUGGLED FROM KDF-CONTROLLED SOMALIA ZONE

Business daily Africa on 15th November reported that Al-Shabaab continues to reap substantial revenues from charcoal smuggling in southern Somalia.  Al-Shabaab makes at least $7.5 million from “taxation” at checkpoints, and “generates more than enough revenue to sustain its insurgency,” African Union monitors say.  With an estimated 3 million bags of charcoal smuggled last year from Somalia, the total value of the illicit trade is put at $150 million – the charcoal exports being destined for the UAE, with criminal networks based in Dubai, the UAE and Kismayo involved,

https://www.businessdailyafrica.com/economy/Charcoal-still-smuggled-from-KDF-controlled-Somalia-zones/3946234-4853800-5d68fv/index.html

JAPANESE FSA PLANS TO REGULATE CRYPTOCURRENCIES

Bitcoin.com reports that the Financial Services Agency, has unveiled a plan to regulate cryptocurrency wallet services. The regulator has put forward a number of regulatory measures as well as proposing how to implement them.  The plan unveiled at the meeting focuses on service providers — not software wallet developers or hardware wallet manufacturers.

https://news.bitcoin.com/japanese-regulator-cryptocurrency-wallet/

MONEYGRAM SETTLES AML COMPLIANCE FAILURE CHARGES

On 15th November, Cadwalader Wickersham & Taft LLP published an article containing background and commentary on the case of Moneygram settling charges filed by the US Federal Trade Commission for failing to implement previously prescribed FTC and DoJ AML compliance programmes.  MoneyGram International Inc agreed to extend its existing deferred prosecution agreement with the DoJ, forfeit $125 million in fees it received in connection with fraudulent transactions, and separately agreed to settle charges filed by the FTC for failing to implement FTC and DoJ fraud prevention compliance programmes.

http://www.mondaq.com/unitedstates/x/755052/Money+Laundering/Money+Transfer+Company+Settles+AML+Compliance+Failure+Charges

“CORPORATE AMERICA FLEES ZERO-TAX CARIBBEAN HAVENS AFTER CRACKDOWN”

Accounting Today on 15th November reported that many US multinational corporations have packed up or are choosing to open subsidiaries in low-tax, rather than no-tax, countries that are seen as more legitimate than the formerly popular island destinations of the Cayman Islands and the Bahamas – in response to regulations from the EU that require them to justify the business purpose for their offshore operations.  Some firms — such as hedge funds — are staying put in their Caribbean locations, undeterred by political pressure and facing fewer restrictions since many are private, it says.

https://www.accountingtoday.com/articles/corporate-america-flees-zero-tax-caribbean-havens-like-the-cayman-islands-and-bahama-after-tax-avoidance-crackdown

URBAN MINING: IN SEARCH OF EUROPE’S VALUABLE WASTE

EurActiv on 16th November carried an article that says each year Europe wastes millions of tonnes of valuable metals in landfill or by exporting them, and asks how can policy measures increase the recovery of these materials?  In 2014, Europe exported almost 2 million tonnes of scrap metal including aluminium and copper, as well as 1.3 million tonnes of electronic waste, according to industry association Eurometeaux.  The problem is actually getting worse – export levels have steadily increased for over a decade.  The European Commission has targeted an increase in the recovery of these used materials, so-called “urban mining”.  Some in the metals sector have complained that rather than addressing the problem, some EU legislation is actually exasperating it by making it more difficult to reuse materials due to environmental restrictions.

https://www.euractiv.com/section/circular-economy/news/mining-for-waste/

MEPs CALL FOR STRICTER CONTROL ON EU ARMS EXPORTS

EurActiv on 15th November reported that EU lawmakers passed a draft resolution on arms export control by 427 votes in favour, 150 opposed, and 97 abstentions on the need for tougher checks on EU arms exports and demanded a sanction mechanism to be put in place on those countries that systematically fail to comply with common criteria.  The EU is the second largest arms supplier in the world with 27% of the global share, after the US (34%), followed by Russia (22%), according to the EU’s 19th annual report on arms exports.

https://www.euractiv.com/section/defence-and-security/news/meps-call-for-stricter-control-on-arms-exports/

ANGOLA BATTLING TO REVIVE OIL EXPLORATION

Defence Web on 15th November reported that nearly 2 decades after securing initial rights, the Total CEO was in Luanda to snip the ribbon on a $16 billion oil project. It’s not clear when he, or his peers, will be cracking open the bubbly in Angola again.  Africa’s second-largest crude producer is facing a steep decline unless it revives exploration in what was once one of the world’s most exciting offshore prospects.  Oil accounts for 95% of exports and around 70% of government revenue.  Signs of fresh exploration follow a period of near-paralysis due to a lack of drilling success, a slump in oil prices and a deteriorating relationship between Sonangol and oil majors.  Angola’s offshore reserves are expensive to explore and develop.

http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=53753:angola-battling-to-revive-oil-exploration&catid=7:Industry&Itemid=116

AML GROUP COMPLETES REVIEW OF TAIWAN’S FINANCIAL OPERATIONS

Taiwan News on 16th November reported that the Asia/Pacific Group on Money Laundering (APG) completed its 2-week inspection of Taiwan’s financial sector that will determine wither or not Taiwan has been found to be in compliance with the regulations of the international AML agency.  The initial evaluation report from the APG was received by the Taiwan government on 16th November.  It is said that some government officials are expressing “cautious optimism” that Taiwan will receive a positive rating.

https://www.taiwannews.com.tw/en/news/3576967

IRAN TO BUILD RAILWAY THROUGH IRAQ, CONNECTING TO SYRIAN PORT

Customs Today on 14th November reported that Iranian technicians and engineers are due to complete the Shalamcheh – Basra railway with a plan to eventually connect it to Syria’s Lattakia port, an official in the Islamic Republic of Iran Railways (RAI) said.

http://www.customstoday.com.pk/iran-to-build-railway-through-iraq-connecting-to-syrian-port-official/

RUSSIA-US TRADE RAISES 8.5% YEAR-ON-YEAR DESPITE SANCTIONS, ACCORDING TO CUSTOMS SERVICE

Customs Today on 14th November reported that trade between Russia and the US increased by 8.5 per cent year-on-year in the first 9 months of 2018, compared to the same period last year, and stood at $18,019 billion, according to the data published by the Russian Federal Customs Service (FTS).

http://www.customstoday.com.pk/russia-us-trade-raises-8-5-year-on-year-despite-sanctions-customs-service/

WHAT DID US CUSTOMS DO ON A TYPICAL DAY IN 2017?

A news release from US Customs and Border Protection provided a snapshot, with such information that it daily processed 1,088,300 passengers and pedestrians and $6.5 billion worth of imported products.  It 21 arrests of wanted criminals at ports of entry and seized 5,863 lb of narcotics, $265,205 in undeclared or illicit currency, and $3.3 million worth of products with Intellectual Property Rights violations.  It intercepted 12 fraudulent documents.

https://www.cbp.gov/newsroom/stats/typical-day-fy2017

NEARLY 3,500 KG OF CANNABIS RESIN WERE FETCHED FROM THE SEA OFF EUROPA POINT, GIBRALTAR

The Gibraltar Chronicle reported on 16th November that nearly 3½ tonnes of cannabis resin were fetched from the sea off Europa Point as suspected drug traffickers escaped from the Guardia Civil’s marine officers.  The chase took place after a Maritime Service vessel patrolling in the Bay of Gibraltar spotted a Rigid-Hull Inflatable Boat, such as those often used for drug trafficking, in the sea.  To date, the Guardia Civil has stopped 4 RHIB since the ban on them came into effect on October 28th.

http://chronicle.gi/2018/11/3-5-tonnes-cannabis-seized-off-europa-point/

INTERPOL LEADS GLOBAL CRACKDOWN ON CRIMINAL MARITIME POLLUTION

Illicit Trade on 14th November carried a report on a worldwide law enforcement effort designed to tackle criminal maritime pollution backed by Interpol and Europol which has resulted in the discovery of hundreds of offences and exposed serious cases of contamination across the globe.  The month-long operation, which was dubbed “30 Days at Sea” and took place throughout October.  Numerous illegal discharges of oil and refuse from boats, shipbreaking, breaches of ship emissions regulations, and pollution on rivers and land-based run-off to sea water, were detected.

https://www.illicit-trade.com/2018/11/interpol-leads-global-crackdown-on-criminal-maritime-pollution/

MONGOLIA SHAKEN BY WIDENING LOAN SCANDAL

The Nikkei Asian Review on 16th November reported on demonstrations to demand prosecutions of officials caught in a widening loan scandal – with allegations that 3 members of the cabinet have benefited by getting the low-interest loans for business controlled by them or their family members. More than a dozen lawmakers and police officials have also been implicated.  The head of the fund has been arrested, and the state auditor and the minister overseeing the fund – himself an alleged beneficiary – have both been ousted.  Others are under investigation.

https://asia.nikkei.com/Politics/Mongolia-shaken-by-widening-loan-scandal

APG PRAISES TAIWAN’S AML EFFORTS, WITH CAVEATS

Focus Taiwan on 16th November reported that Taiwan’s AML efforts have impressed an evaluation team from the Asia/Pacific Group on Money Laundering (APG), but there is more work to be done.  A statement from the Cabinet said the preliminary results of a mutual evaluation by the APG found Taiwan’s AML system to be functioning well, and praising the newly established Anti-Money Laundering Office (AMLO).  However, the evaluation team is reported to have said that financial supervisory agencies should more tightly monitor the operations of banks’ offshore banking units, and punishments should be made harsher to deter money laundering.

http://focustaiwan.tw/news/aeco/201811160024.aspx

FRAUD CHARGES AGAINST IB TIMES OWNER RE ALLEGED $35 MILLION LAUNDERING SCHEME INVOLVING CHRISTIAN UNIVERSITY

On 16th November, the Press Gazette reported that the parent company of news website the International Business Times has been charged in connection with an alleged $35 million fraud which prosecutors say saw funds laundered through an evangelical Christian university.  IBT Media, formerly Newsweek Media Group, and its co-owner Etienne Uzac each face 2 counts of money laundering, 4 counts of falsifying business records, and 1 count of scheming to defraud and conspiracy.

https://www.pressgazette.co.uk/fraud-charges-filed-against-ib-times-owner-in-us-over-alleged-part-in-35m-laundering-scheme-with-christian-university/

ICO HITS METROPOLITAN POLICE WITH ENFORCEMENT NOTICE OVER USE OF GANGS MATRIX

Local Government Lawyer on 16th November reported that the Information Commissioner’s Office has served an enforcement notice against the Metropolitan Police Service after an investigation found that its use of the ‘Gangs Matrix’ database had led to multiple and serious breaches of data protection laws.  The Gangs Matrix which records intelligence related to alleged gang members.  The article details the findings.  The ICO said that due to the timing of the case, it was dealt with under the provisions of the Data Protection Act 1998, and not the General Data Protection Regulation (GDPR) and 2018 Act that replaced it in May this year.

http://www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=37356%3Aico-hits-met-police-with-enforcement-notice-over-use-of-gangs-matrix&catid=55&Itemid=23

BOSS OF PERSONAL INJURY CLAIMS BUSINESS JAILED FOR FRAUDULENTLY MOVING £51,000 IN FUNDS

Accountancy Daily on 16th November reported that Darren Bullough, the boss of a personal injury claims management business has been jailed for 21 months and banned for 7 years after fraudulently removing company funds in the months before the courts would make a winding-up order resulting in the closure of the business.  His firm, Direct Assist Ltd, incorporated in 2007 had registered offices in Bury and Bolton and he was its sole director.

https://www.accountancydaily.co/boss-jailed-fraudulently-moving-ps51k-funds

UK FINANCE BUSINESSES’ CONCERNS FOR IMPERSONATION FRAUD

On 16th November, UK Finance reported on a webinar broadcast in October on impersonation fraud.  It says that it was clear to see that many financial institutions were experiencing similar issues around this type of fraud to those being reported by it intelligence team; and that it was still a growing, and was by far the biggest concern, amongst the audience of 336 finance professionals – with 42% of them highlighting this as the area where they have seen the biggest growth in fraud over the last year.  Notably, there was a marked concern over ‘misuse of facility’, which is a type of fraud where an innocent victim’s genuine information or account is used to apply for credit or to transfer funds to and from illicit accounts.  UK Finance’s advice was that financial institutions would be to familiarise themselves with guidance and advice from the Payment Systems Regulator and the FCA and raise awareness amongst customers through campaigns.  More importantly, it says, the advice would be to share data, intelligence and analysis on transactions, suspicious activity and known adverse cases, to help spot fraudulent activity sooner, to stop it having a significant impact on customers and organisations.

https://www.ukfinance.org.uk/organisational-concerns-for-impersonation-fraud/

NICE PUBLISHES DRAFT SCOPE FOR NEW GUIDELINES ON CANNABIS-BASED PRODUCTS FOR MEDICINAL USE

The Pharmaceutical Journal reported on 16th November that the National Institute for Health and Care Excellence (NICE) is consulting on guidelines on cannabis-based products for medicinal use in the UK.  The consultation closes on 4th December.  It notes that smoked cannabis and cannabis supplements, such as those marketed as food products, are excluded from the guidelines.   The guidance is due to be published in October 2019.

https://www.pharmaceutical-journal.com/news-and-analysis/news-in-brief/nice-publishes-draft-scope-for-new-guideline-on-cannabis-based-products-for-medicinal-use/20205747.article

The draft guidelines are at –

https://www.nice.org.uk/guidance/GID-NG10124/documents/draft-scope

CARGOX LAUNCHES FIRST OPEN, NEUTRAL BLOCKCHAIN SMART BILL OF LADING (B/L) PLATFORM FOR SHIPPING

On 16th November, Loadstar reported that the decentralised system for sending digital documentation, the Smart B/L platform is targeting forwarders, NVOCC and shippers was a world first.

https://theloadstar.co.uk/cargox-unveils-first-open-smart-bill-lading-platform-powered-blockchain/

https://cargox.io/

https://cargox.io/press-releases/cargox-platform-live/

CANADA’S CANNABIS LEGALISATION ENTERS INTO FORCE

A news release from the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) on 16th November reported that the law to legalise recreational use of cannabis entered into force on 17th October.  The news release provides brief details of the use, production and sales rules, and says that Health Canada anticipates that cannabis-containing edible products will be permitted within the next year.

http://www.emcdda.europa.eu/news/2018/canada-cannabis-legislation-enters-into-force_en

US WITHDRAWAL FROM THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE, ONE YEAR LATER

On 16th November, the Brookings Institute published an article saying whilst the withdrawal did not attract the attention of other moves by the Trump Administration, it was still deeply disturbing for all those who care about fighting against corruption in natural resource extraction, particularly, with the US having been a leader in helping to curb corruption in extractives and other industries across the globe, by means of the FCPA, for example.  EITI is described as the global standard for the good governance of oil, gas and mineral resources – see its factsheet at –

https://eiti.org/sites/default/files/documents/eiti_factsheet_en_oct2018.pdf

https://www.brookings.edu/blog/fixgov/2018/11/16/unhappy-anniversary-u-s-withdrawal-from-eiti

COLOMBIA PROBES DEATHS OF WITNESSES AND ALLEGED COVER-UP IN BRIBERY CASE

The Wall Street Journal and the Economist on 16th November reported on the death of a key witness (and his son) in the bribery investigation linked to Odebrecht SA, and the revelation that he had sought US protection before he died. A recording from beyond the grave alleged that the man who is now Colombia’s prosecutor sought to over up bribes in the same case.

https://www.economist.com/the-americas/2018/11/17/colombias-biggest-corruption-scandal-gets-more-complicated?fsrc=scn/tw/te/bl/ed/colombiasbiggestcorruptionscandalgetsmorecomplicatedtheplotthickens

ADMINISTRATORS STRUGGLE TO TRACE PAINTINGS LINKED TO MONEY LAUNDERING SCANDAL

The Art Newspaper on 12th November reported that 2 art works supposedly owned by a bankrupt company, whose director Matthew Green resigned in February following an FBI sting operation, are “apparently” in Dubai.  Administrators cannot locate the 2 paintings supposedly belonging to Mayfair Fine Art Limited, whose former director Matthew Green is being charged with attempted money laundering following the Beaufort Securities scandal.

https://www.theartnewspaper.com/news/administrators-struggle-to-trace-paintings-linked-to-money-laundering-scandal

EU COURT UPHOLDS RELISTING OF TUNISIAN INDIVIDUAL

The European Sanctions Blog on 16th November reported that the EU General Court has upheld Mohamed Mabrouk’s 2017 and 2018 renewed listings under EU Tunisia sanctions targeting those responsible for the misappropriation of Tunisian state funds.

http://curia.europa.eu/juris/document/document.jsf?text=&docid=207811&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=3723092

PROSECUTORS DISMANTLE THE MOST IMPORTANT GROUP OF CANNABIS TRAFFICKERS IN BUCHAREST – WHO DIVERSIFIED INTO CRYPTO MINING

Romania Insider on 16th November reported that, in the past 3 years, this network managed to produce and distribute more than 2 tonnes of cannabis products in Bucharest and in neighbouring counties.  Moreover, to increase their income, the defendants also set up a complex system in a nearby hall, which they used for cryptocurrency mining.

https://www.romania-insider.com/diicot-most-important-group-cannabis-traffickers-bucharest/

UK MAN GUILTY OF SMUGGLING DRUG MADE WITH HUMAN BLOOD

OCCRP on 16th November reported that Brian Hall, a UKIP branch chairman, was caught with nearly 597 vials of ‘GcMAF’  worth $322,000 – this being a controversial drug said to cure cancer, HIV, multiple sclerosis, and autism – while attempting to board a ferry to northern France in 2015.  He had obtained the drug from a secret laboratory in Cambridge that had been shut down for manufacturing the blood product without a licence – Immuno Biotech Ltd.  The company reportedly sold the vials for €660 each.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/8917-uk-man-guilty-of-smuggling-drug-made-with-human-blood

ACTING US ATTORNEY GENERAL HITS BACK AT FRAUD ALLEGATIONS ABOUT COMPANY HE ACTED FOR

The Washington Post on 14th November reported that Acting Attorney General Matthew G. Whitaker received early warnings that customers were complaining that an invention-marketing company he advised might be a fraud – Patent Marketing.  He defended the company and remained on its board until joining the Justice Department in 2017.  The company shut down in May and agreed to pay a settlement of nearly $26 million to resolve a wide-ranging Federal Trade Commission complaint that it bilked customers.

For a useful background piece on what the company got up to, see the “Planet Money” podcast from NPR at –

https://www.npr.org/templates/transcript/transcript.php?storyId=668040733

https://www.washingtonpost.com/politics/he-was-yelling-whitaker-pushed-back-against-early-fraud-complaints-about-company-he-advised/2018/11/14/53e5cbc6-e78f-11e8-a939-9469f1166f9d_story.html?utm_term=.20dbed7f0ae3

FATF PUBLISHES THE MUTUAL EVALUATION REPORT ON THE SEYCHELLES AND UPDATED CONSOLIDATED SCHEDULE OF ASSESSMENTS

On 16th November, FATF published the report, already published on 9th November by the regional FATF-style body, ESAAMLG.  It also published an updated version of the consolidated schedule of all assessment markings.

http://www.fatf-gafi.org/publications/mutualevaluations/documents/assessment-ratings.html

NEW AND EMERGING DRUG TRENDS AND DEVELOPMENTS

A news release from the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) on 16th November introduced a report that details the results of a 2-day workshop on the EMCDDA’s trendspotter methodology held in Lisbon in November 2017.  The workshop involved representatives from national drug observatories based in countries from the Community of Latin American and Caribbean States (CELAC), along with experts from European countries and regional and international organisations active in the drugs field.  The main focus was on identifying the most recent trends and developments in the region with regard to drug use, harms and markets.

http://www.emcdda.europa.eu/system/files/publications/9941/EMCDDA-COPOLAD-Trendspotting-report-EN.pdf

HOW DATA ANALYTICS CAN SUPPORT FINANCIAL INTELLIGENCE, SUPERVISION AND ENFORCEMENT

This Occasional paper from RUSI on 16th November reviews the efforts of national authorities to harness the opportunities of data analytics for anti-money-laundering purposes. It sets out potential methods and their benefits, as well as other factors that should be considered to ensure the proportionality and sustainability of innovative approaches. The cases reviewed as part of this research illustrate the value of data analytics for AML supervision and enforcement.  For the purposes of this research, the term ‘data analytics’ refers to methods allowing users to turn data into knowledge that would not be revealed through a human review of the data in question.  This includes traditional statistical methods and more recent developments relating to ‘big data’ or machine learning.  Its conclusions include that supervisors, FIU and law enforcement agencies should adopt a strategy to identify and harness opportunities for the use of data analytics in an AML context; and that bodies such as FATF and the IMF should more systematically review to what extent member countries have considered and harnessed the potential of data analytics for AML intelligence, supervision and enforcement purposes, which will allow for peer learning.

https://rusi.org/publication/occasional-papers/sharpening-money-laundering-risk-picture-how-data-analytics-can

RECORDING LEADS TO NEW ALLEGATIONS COLOMBIA PROSECUTOR COVERED UP BRIBES

Baker McKenzie on 16th November reported a VoA story that a dramatic recording from beyond the grave has led to allegations that Nestor Martinez, Colombia’s chief prosecutor — a key US ally in the war on drugs, and at the time a legal counsel to Colombia’s biggest banking group — tried to cover up bribery payments that were part of Latin America’s biggest corruption scandal, prompting calls for his resignation.

http://www.riskandcompliancehub.com/recording-leads-to-new-allegations-colombia-prosecutor-covered-up-bribes/

https://www.voanews.com/a/recording-new-allegations-colombia-prosecutor-nestor-martinez-covered-up-bribes/4658879.html