27th November 2018
AMNESTY DEMANDS ISRAEL REVOKE NSO EXPORT LICENCE OVER SAUDI LINKS
On 26th November, Haaretz in Israel reported that Amnesty had asked the Defense Ministry to revoke cyber firm NSO’s export licence, saying it had been proven that its software had been used in “a series of egregious human rights violations,” after a Haaretz investigation revealed that the company offered Saudi Arabia a system for hacking cellphones.
SENIOR EL AL SECURITY OFFICIAL SUSPECTED OF RUNNING COCAINE SMUGGLING RING
The Times of Israel reported on 27th November that a former Shin Bet official among 4 arrested in ‘wide-ranging’ operation that police believe utilised the airline to transport drugs to Israel. It says that the main suspect was identified as Rami Yogev, a high-ranking El Al employee who oversees coordination between the airline and the Shin Bet security service, and is also in charge of the airline’s security abroad, and the former Shin Bet official as Beno Shalom, who previously served as head of security for the Prime Minister’s Office. Shin Bet is the internal security service in Israel (the equivalent to MI5).
NORTH KOREAN DETAINED AT VLADIVOSTOK AIRPORT FOR LARGE-SCALE CASH SMUGGLING
NK News on 26th November reported that, in the second such case since October, a North Korean citizen was recently detained at Vladivostok International Airport in possession of $192,300 and €1000 in undeclared cash as he went to board a flight to North Korea. The website reports that North Korea’s national airliner, Air Koryo, operates a regular biweekly flight between Pyongyang and Vladivostok, and that DPRK citizens also now benefit from a “simplified” free electronic visa when entering Russia via the “territory of the free port of Vladivostok”. In October, another man was detained attempting to take $180,000 of undeclared cash into Russia.
VANCOUVER’S BIGGEST CASINO IN THE RED DUE TO NEW AML PROTOCOLS
Calvin Ayre on 27th November reported that Parq Vancouver, British Columbia’s newest casino, was losing money in 2018 after the province imposed new AML protocols. It was named as one of 3 casinos that had been assigned a third-party auditor to ensure the venues were honouring their new compliance obligations.
ARE LIECHTENSTEIN TRUST LAWS FIT FOR PURPOSE?
On 27th November, the Financial Times published an article about trusts in Liechtenstein, which were first introduced in the 1920s. The article looks at how AML laws and scandals (such as the sale of stolen data and abuse by trust managers and trustees) has led to reforms, but that problems remain.
BRAZIL: EX-PRESIDENT LULA FACES NEW MONEY LAUNDERING CHARGES LINKED TO EQUATORIAL GUINEA
On 27th November, the Malaysian Insight website reported that ex-president Luiz Inacio Lula da Silva’s legal troubles mounted as he was accused by the Sao Paulo public prosecutor’s office of money laundering in his dealings with Equatorial Guinea, to benefit Brazilian group ARG in that country.
SECRET POLICE STUDY FINDS CRIME NETWORKS COULD HAVE LAUNDERED OVER $1 BILLION THROUGH VANCOUVER HOUSING IN 2016
Global News in Canada on 26th November carried an article about a list of more than $1-billion worth of Vancouver-area property transactions in 2016 that a confidential police intelligence study has linked to Chinese organised crime. The study of more than 1,200 luxury real estate purchases in in 2016 found that more than 10% were tied to buyers with criminal records, and 95% of those transactions were believed by police intelligence to be linked to Chinese crime networks. Money is said to come from the huge amounts of cash criminals are amassing from the fentanyl crisis in Canada (as in the US). The crime network, according to police intelligence sources, is a fluid coalition of hundreds of wealthy criminals in Metro Vancouver, including gangsters, industrialists, financial fugitives and corrupt officials from China.
SWISS GAMBLING LAW
MME Legal contributed the chapter on Switzerland to the International Comparative Legal Guide to Gambling 2019 and this was published on 27th November.
E-RESIDENCY INTRODUCED IN GEORGIA
On 25th November, Eurofast Global published an article saying that on 3rd October the Georgian Government announced a proposal to introduce e-residency; a concept which would provide non-residents with the possibility to register companies and open bank accounts in Georgia without staying in the country. It is expected that the relevant changes to be adopted will soon be in Parliamentary proceedings and that the concept of e-residency will be effective from 1st January.
FATF PUBLISHES UGANDA/ETHIOPIA MUTUAL EVALUATION REPORTS
On 26th November, FATF published the mutual evaluation reports carried out, and previously published, by the regional body, ESAAMLG.
UK GUIDE TO THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (EITI)
On 26th November, the Department for Business, Energy and Industrial Strategy published a guide which explains the Extractive Industries Transparency Initiative (EITI) and what oil, gas, quarrying and mining companies will need to do. EITI is an international standard for openness around the management of revenues from natural resources. It is designed to improve accountability and public trust for the revenues paid and received for a country’s oil, gas and mineral resources.
GUERNSEY: FIT AND PROPER GUIDANCE
Carey Olsen on 21st November published an article on new Guernsey FSC guidance for those involved in finance, insurance, banking and fiduciary sectors.
UNODC SUPPORTS LAUNCH OF ASSET RECOVERY INTER-AGENCY NETWORK IN WEST AND CENTRAL ASIA TARGETING ILLICIT WEALTH IN THE REGION
The UN Office for Drugs and Crime on 26th November reported on the launch meeting of the regional Asset Recovery Inter-Agency Network West and Central Asia (ARIN-WCA) in Kazakhstan. Participants included law enforcement, prosecution authorities and Attorney Generals’ Offices currently involved in asset tracing, freezing and seizure, as well as asset management and confiscation from Afghanistan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkmenistan and Uzbekistan. Members continued to build operational working relationships and also set strategic objectives for the network. Using an informal network to progress asset tracing investigations and enforce restraint and confiscation orders is still a new concept for many west and central Asia jurisdictions.
LONDON BOROUGH SECURES £450,000 CONFISCATION OVER ‘BEDS IN SHEDS’
Local Government Lawyer on 26th November reported that Ealing Council has obtained a confiscation order of nearly £450,000 against a landlord who ignored enforcement notices over ‘beds in sheds’ at one of her rental properties. The outhouses were originally built as garages, but the defendant was letting them out to up to 5 tenants. Ealing issued Mrs Nadeem with a planning enforcement notice in August 2014, ordering her to stop letting the outhouses and ultimately demolish them. After she ignored the enforcement notice, in September 2015 the council demolished the outbuildings and brought prosecution proceedings against her. This was the second confiscation order obtained by Ealing in the past month – another landlord was ordered to pay £42,000 for illegally letting an outbuilding at one of his properties in Southall.
UNDERTAKINGS FOR ENVIRONMENTAL OFFENCES SEE £2.2 MILLION CONTRIBUTED TO CHARITIES AND PROJECTS IN UK
The Local Government Lawyer on 26th November reported that a total of 15 charities and projects are to benefit from £2.2 million after companies and individuals agreed enforcement undertakings with the Environment Agency. The total amount was boosted after Wessex Water agreed to make the agency’s largest-ever financial contribution, £975,000, for an offence involving sewage spills at Swanage in Dorset. The other enforcement undertakings lead to payments ranging from £5,000 to £232,000.
CANADA-CHINA SMUGGLING: WHO ARE THE “BIG CIRCLE BOYS”?
Global News in Canada on 27th November reported that the kingpins of fentanyl smuggling to Canada have been linked by police to the “Big Circle Boys”, an organised crime group that traces its roots to China’s Cultural Revolution. During the 1960s, paramilitary groups known as Red Guards formed to purge those accused of being not sufficiently committed to China’s communist revolution.
ZIMBABWE MOVES FORWARD WITH THE IMPLEMENTATION OF AN AEO PROGRAMME
On 26th November, the WCO published a news release saying it and the China Customs Cooperation Fund (CCF China) conducted a National Workshop on Authorised Economic Operator (AEO) Programme in Zimbabwe.
US WOMAN DEFRAUDED BANKS, ADMITS TO LAUNDERING, BITCOIN SCHEME FOR ISIS
KYC 360 on 27th November reported that a 27-year-old woman is facing up to 20 years in jail over defrauding a number of financial institutions, and then laundering and transferring the proceeds to support ISIS.
“VERY DANGEROUS” BELGIAN GANGSTER USED RESTAURANT TO LAUNDER CASH, ASSETS FROZEN
On 27th November, KYC 360 reported that authorities have frozen a number of assets linked to a Belgian criminal who used a Spanish restaurant to launder illicit proceeds and then invest the money in real estate. He allegedly involved in robberies and other crimes such as drug trafficking and illegally dealing in firearms. The man was arrested in Spain this month following a European Arrest Warrant launched by the Belgian authorities.
AIRCRAFT OWNERSHIP AND “NON-PAYMENT INSURANCE” GUARANTEES
Dentons on 27th November explained that Non-Payment Insurance (NPI) is similar to export credit support for commercial lenders via insurance cover rather than a guarantee. The lenders finance an aircraft acquisition and rely on the insurers covering the risk of non-payment by the airline. The insurance is several, with each insurer liable for its own share of the default risk only. It highlights one scheme for new Airbus aircraft under which insurers will typically provide 100% cover for up to 12 years.
GLOBAL ELECTRONIC AIRCRAFT TRADING SYSTEM (GATS)
Also mentioned by Dentons in an update on aircraft financing on 27th November was GATS. Under GATS, aircraft will be owned by trusts in the US, Ireland or Singapore. Instead of using lease novation and selling legal title to aircraft, the beneficial interests in those aircraft trusts will be traded electronically. The legal owner of the aircraft and the parties to the lease stay the same. Only the beneficiaries of the trust change. Plans for GATS were first announced in May.
SPAIN – THE NEW ‘GOLDEN VISA’ HAVEN OF EUROPE
El Pais on 26th November reported that statistics suggest a new record this year in applications for a residency-by-investment programme that critics say does not provide enough safeguards against money laundering. 5,778 foreigners have obtained in the first 10 months of the year what is commonly known as a “golden visa” in Spain. The Law to Support Entrepreneurs and their Internationalization, has allowed them residence after investing in Spain.
RUSSIA/UKRAINE CHOKEPOINT BLOCKADE EXPOSES SUPPLY RISK FOR BLACK SEA GRAIN
Hellenic Shipping News on 27th November reported that Russia’s brief blockade of a key shipping channel in the Sea of Azov for Black Sea grain highlights the risk of disruption to an important source of global supply. Shipments from the Ukraine ports affected, Mariupol and Berdyansk, make up about 5% of the country’s grain exports, and cargoes that had previously planned to leave those areas may instead move by rail or other ports.
WHY NEW TARIFF CODES ARE NECESSARY TO IMPROVE TRADE AND COMBAT CLIMATE CHANGE
A post from the LSE says that agricultural products are still traded with a generic tariff code that doesn’t differentiate biodegradable from non-biodegradable ones. The Harmonised System (HS) establishes common classification for goods, and the creation of new tariff codes for environmental products under HS would help to renovate the trade system as some products are (or would be) banned from many countries or charged high tariffs (e.g. plastics), and could provide an incentive for countries to opt for environmentally-friendly products (e.g. biodegradables).
US: ARMS TRAFFICKER GUILTY OF CONSPIRING TO SUPPLY AND USE ANTI-AIRCRAFT MISSILES
Homeland Security Today on 21st November reported that a federal jury has convicted a black-market arms dealer of conspiring to acquire, transfer and use missiles and missile systems designed to shoot down aircraft. Rami Najm Asad-Ghanem, 52, (aka Rami Ghanem) a naturalised US citizen was living in Egypt at the time of the offences. Ghanem conspired to transfer a wide array of different surface-to-air missile systems to customers around the world, including clients in Libya, the UAE, Iraq and other countries. He also negotiated the salaries and terms of service of the mercenary missile operators, coordinated their payment, facilitated their travel to Libya, and offered them a $50,000 bonus if they were successful in their mission of shooting down military aircraft flown by the internationally recognised government of Libya. The investigation into Ghanem started in mid-2014, when a Los Angeles-based supplier of military supplies alerted the US government that it had been solicited to provide equipment to Ghanem.
SETTLEMENT AGREEMENT BETWEEN OFAC AND COBHAM HOLDINGS INC
On 27th November, OFAC announced a $87,507 settlement with Cobham Holdings Inc of Arlington, Virginia on behalf of its former subsidiary Aeroflex/Metelics Inc for 3 apparent violations of the Ukraine Related Sanctions Regulations involving the indirect export of components to be incorporated into commercial air traffic control radar to a person owned 50% or more, directly or indirectly, by a person identified on OFAC sanctions lists. Cobham voluntarily self-disclosed the apparent violations on behalf of Metelics.
FORMER VENEZUELAN NATIONAL TREASURER SENTENCED TO 10 YEARS IN PRISON FOR MONEY LAUNDERING CONSPIRACY INVOLVING OVER $1 BILLION IN BRIBES
The US DoJ on 27th November announced that Alejandro Andrade Cedeno (Andrade), 54, a Venezuelan citizen residing in Florida and a former Venezuelan national treasurer, has been sentenced to 10 years in prison. As part of his plea agreement, Andrade agreed to a forfeiture money judgment of $1 billion and forfeiture of all assets involved in the corrupt scheme, including real estate, vehicles, horses, watches, aircraft and bank accounts.
BRITISH PROSECUTORS SECURE MORE CONVICTIONS IN BERTLING BRIBERY CASE
Reuters on 27th November reported that 3 former executives of the former UK division of German logistics and freight company Bertling have been convicted of bribery alongside a former logistics official after an SFO investigation into North Sea oil exploration contracts. The latest trial brought to 9 the total number of convictions landed – which include 1 for FH Bertling Ltd itself – in a 4-year investigation into corrupt schemes in the North Sea and Angola.
“WONDER DRUG” GcMAF CREATOR SENT TO PRISON FOR 15 MONTHS
On 27th November, Guernsey Press reported that a former Guernsey resident behind a banned ‘wonder drug’ made from human blood as a cure for cancer, HIV, multiple sclerosis and autism’ has been sent to prison for 15 months. David Noakes, 65, made nearly £8 million selling GcMaf through his Guernsey company Immuno Biotech from September 2011 to February 2015. Products containing GcMaf are thought to cause a significant health risk and several customers suffered severe effects from the drug.
ITALY SEIZES $1.7 BILLION IN MAFIA-LINKED PROPERTY
On 27th November, OCCRP reported that Italian authorities have seized €1.5 billion in assets from the heirs of a late businessman who had allegedly built his wealth on funds provided by Sicily’s notorious Cosa Nostra organised crime group. The properties included over 200 buildings, a yacht, 3 resorts, 25 companies, and a golf club in Rome, all linked to the tourism and electronics empire of Carmelo Patti.
CAMORRA BOSS, A TOP ITALIAN FUGITIVE, ARRESTED IN NAPLES
UPI on 27th November that Italian police have captured Antonio Orlando (aka Mazzolino), described as one of the most dangerous fugitives in Italy as he evaded arrest since 2003 for association with organised crime. He was arrested in an apartment in Naples. He was on a list of the 100 most dangerous criminals in Italy.
HOW A POKER STAR, ONLINE BETTING KING AND SUSPECTED MEMBER OF THE CHINESE TRIADS USED MONEY AND INFLUENCE TO WIN OVER MONTENEGRO
On 27th November, The Black Sea website published an long and detailed article on how a Malaysian called Paul Phua and his associates have gained influence and riches in Montenegro. Phua is said to be the owner of one of the largest online betting companies in the world, IBC Bet, now called Maxbet (the Montenegro government is said to have issued an online gambling licence and concession to Montenegrin company called E-Gambling Montenegro, which operates the brokerage firm called BET-IBC). He is also said to own the company behind the new Maestral Hotel and Casino which opened in 2017. He is reported as a multi-millionaire bookmaker who was convicted for running an illegal betting scheme in Malaysia during the European Football Championships in 2004, and arrested in both Macau and Las Vegas for similar operations in the World Cup in 2014. He is also said to be facing trial in San Marino on accusations of bribing officials with over €2 million, in connection with procuring a diplomatic passport in 2011. The article also repeats allegations that Montenegro is also used as a base for laundering proceeds by Asian organised crime groups.
UPDATES TO THE ISLE OF MAN AML/CFT HANDBOOK
On 27th November, the Isle of Man FSA announced amendments to the Anti-Money Laundering and Countering the Terrorism Handbook (‘AML/CFT Handbook’). These include the addition of a section regarding the risk assessment of introducers; the addition of guidance regarding meeting customers; an update to the sections regarding the Acting on Behalf of and Eligible Introducers concessions; and an update to the guidance regarding sanctions.
HUNGARY DENIES EXTRADITION OF SUSPECTED RUSSIAN ARMS DEALERS TO US
Rferl on 27th November reported that Hungary has denied a US request to extradite 2 suspected Russian arms dealers and instead sent the 2 men – Vladimir Lyubishin Sr and Vladimir Lyubishin Jr – to Russia.