10th January 2019
JAPAN TO OFFER CO-OPERATION WITH “FIVE EYES” TO TARGET NORTH KOREAN SMUGGLING
The Nikkei Asian Review on 10th January reported that Prime Minister Abe is to offer another opportunity to deepen intelligence co-operation with Five Eyes members (UK, US, Australia, New Zealand, Canada) in the digital and telecommunications fields and to prevent cargo smuggling by North Korean ships on the sea.
CANADA: TAX EVASION, MONEY LAUNDERING AND ‘PROCEEDS-OF-CRIME’ COLLECTION
On 8th January, Rotfleisch & Samulovitch published an article which sought to provide a tax lawyer’s perspective to the arrangements in Canada for the use of its powers by the revenue authority where tax evasion and money laundering are involved, explaining that Canada has followed the international lead in making tax evasion a predicate crime for a charge of money laundering.
TO WHAT EXTENT CAN A CLAIM FOR DISHONEST ASSISTANCE BE MADE AGAINST BANKS WHEN RECEIVING FRAUDULENT BANK PAYMENTS?
Dentons published an article on 3rd January saying that, although claims for dishonest assistance are rare, as fraudulent bank payments have become increasingly common, is this now an area about which financial institutions need to be more savvy? It says a recent English High Court decision shows that the bar is set high if one is trying to prove one’s case, but nevertheless considers the factors necessary to bring a claim for dishonest assistance. It explains that “dishonest assistance” in this context is an indirect liability, where a party assumes legal responsibility for the acts carried out by another party, and where there is the existence of a trust (actual or constructive), breach of that trust (and the fiduciary responsibility of acting in the best interests of one’s client or customer), assistance rendered by a third party, dishonesty on the part of the person providing that assistance.
US FIREARMS EXPORT CONTROLS: THE RULES ARE ABOUT TO CHANGE
On 9th January, Ammoland in the US warned its readers about changes due to be implemented to the rules on the export and temporary import of guns, ammunition and other items that should be controlled under the US Military List (USML). Whilst the new or revised rules have yet to be published, the article provides advice on what companies can do to prepare for the changes.
FCA SURVEY OF ANNUAL FINANCIAL CRIME RETURNS
On 9th January, KYC 360 reported on the annual Financial Crime Return which contains information garnered from some 2,000 largest UK firms. The Return looks at the number of high-risk clients firms have, the number of internal external suspicious activity reports (SAR) submitted as well as the most common types of fraud. It also reveals which are considered the highest risk countries – Iran, Panama and Russia are deemed to be the highest risk whilst the US, Sweden and Norway are believed to represent the lowest risk.
IRELAND: MORE INFORMATION ON CAB AML RAIDS IN IRISH BORDER AREA
On 9th January, the Irish Times carried an article providing more information on recent raids carried out by CAB and garda in the cross-border area, saying that an unnamed, but well-known former member of the Provisional IRA has been targeted. He is said to have been one of the most influential players in the cross-border illegal cigarette market for 2 decades. Gardaí believe the former IRA member has continued for private gain the criminal activities that the terrorist group used to fund their terror campaigns for decades. Regarded as a dissident Republican who did not commit to the peace process, gardaí believe he was a prominent member of the Real IRA.
IRELAND: TERROR FINANCE UNIT ONLY HAS 2 STAFF
The Irish Examiner on 10th January reported that the Terrorist Financing Intelligence Unit, a specialist Garda unit tasked with assessing intelligence on the financing of terrorism only has 2 members attached to it, despite external calls on the State to boost its resources and “more actively” pursue prosecutions, and handling some 880 SAR a year. This has not changed since an analysis of Ireland’s AML/CFT record was undertaken by FATF, and the report published in September 2017. FATF had said additional resources should have been allocated to both the FIU as a whole and the TFIU.
DANSKE BANK BOSSES SUED IN US OVER MONEY LAUNDERING
On 10th January, the EU Observer reported that a US pension fund is suing the bank and 4 former CEO for inflating the price of its shares artificially by hiding and failing to stop widespread money laundering at its Estonian branch.
PHILIPPINES: EX-BANKER GETS JAIL AND $109 MILLION FINE OVER BANGLADESH CYBERHEIST
France 24 and others on 10th January reported on the first conviction over one of the biggest ever cyberheists which saw $81 million stolen from Bangladesh’s central bank in 2016. Hackers transferred the cash in 2016 from Bangladesh’s US accounts to Philippine bank Rizal Commercial Banking Corp (RCBC), and it then vanished. Maia Deguito was a branch manager where the money landed. A North Korean hacker is also wanted by the US in connection with the alleged state-sponsored operation. Only $15 million of the money was recovered, and much is said to have disappeared into Manila casinos, which were at the time exempt from rules aimed at preventing money laundering.
US PROSECUTORS PAINT NEW ZEALAND BANKER AS RINGLEADER IN $3 BILLION MOZAMBIQUE CORRUPTION SCANDAL
Stuff in New Zealand on 10th January reported on the 47-page indictment against Andrew Pearse, arrested in London last month, which is said to involve a French billionaire’s ship-building business, corrupt Mozambique officials, hundreds of millions of dollars in international wire transfers and allegations of money laundering, bribery, conspiracy and fraud against the small group of former Credit Suisse employees.
Worth reading, the indictment is available at –
CANADA: CROWN MISTAKENLY EXPOSED POLICE INFORMANT, KILLING MASSIVE BRITISH COLUMBIA MONEY LAUNDERING PROBE
On 9th January, Global News in Canada reported that a RCMP investigation of alleged underground bankers, estimated to be laundering over $1 billion per year collapsed in November because federal prosecutors mistakenly exposed the identity of a police informant who they feared could have been killed if the case proceeded. It targeted Richmond-based Silver International, an alleged illegal money services business, and involved the seizure of cash and casino chips. It was alleged that it took in about $1.5 million in criminal cash deposits per day, and distributed funds to about 600 bank accounts in China, as well as using cash from Vancouver drug dealers and casino loan sharks to fund Chinese high-rollers in British Columbia casinos – using legal and illegal casinos to help gamblers from China move money to and from Canada, and in some cases cash out chips for a casino cheque to deposit into Canadian banks and buy Vancouver real estate.
ALIBABA PURGES 200,000 TAX-AVOIDING VENDORS
Bloomberg on 9th January reported that the China-based online marketplace has blocked 200,000 vendors globally since September in response to pressure from governments to crack down on tax avoiders using its platform. VAT fraud in the UK is estimated to involve a tax loss from VAT fraud and error on online marketplaces of between £1 billion and £1.5 billion in 2016-2017, or 10% to 12% of the overall UK VAT gap.
SOUTH AFRICA: HUGE COCAINE BUST
Defence Web on 9th January reported that the Directorate of Priority Crime, also known as the Hawks, have seized a massive haul of 706 kg of cocaine in the port of Ngqura. The cocaine was on its way from Brazil in 1 kg bags when it was seized. The ship was destined for India with a stop in Singapore.
VIETNAM: FORMER BANKER ARRESTED AMID CORRUPTION CRACKDOWN
VN Express on 10th January reported that police have arrested Doan Anh Sang, former deputy CEO of BIDV, a bank that has come under scrutiny amid national anti-graft campaign, for “violations of regulations on banking operations”. Police also arrested 4 executives of the bank for similar allegations and a businessman accused of property appropriation. The bank’s former chairman and 2 other executives were arrested in November.
CHINESE GROUP SWINDLED $18.5 MILLION FROM INDIAN ARM OF ITALIAN COMPANY
Reuters on 10th January reported a story from Indian media saying that Chinese hackers robbed £14 million from the Indian unit of Tecnimont SpA through an elaborate cyber fraud that included impersonating the Italian engineering company’s CEO.
UK: GREYHOUND WELFARE BOOSTED THROUGH MULTI-MILLION POUND DEAL WITH GAMBLING INDUSTRY
On 10th January, a news release from the Department for Digital, Culture, Media and Sport said that bookmakers have agrees additional payments worth up to £3 million in what is described as a positive step which will ensure a fair return to the sport from industry giants. The extra money will also go towards improving safety across the nation’s 21 licensed racetracks, kennel improvements and the provision of air-conditioning for trainers’ vehicles to improve welfare standards.
US TREASURY PUBLISHES IMAGES OF VENEZUELA’S GORRIN NETWORK PRINCIPALS
Kenneth Rijock in his blog on 10th January reported that US Treasury, as part of a bundle of information about the network of a large number of sanctioned Venezuelan individuals and companies involved in a significant corruption scheme designed to take advantage of Venezuela’s currency exchange practices, generating more than $2.4 billion in corrupt proceeds.
BRITISH OVERSEAS TERRITORIES GIVEN 5 YEARS TO ESTABLISH PUBLIC REGISTERS OF BENEFICIAL OWNERS
On 10th January, Kenneth Rijock in his blog reported that the requirement to create public registers of the beneficial owners of corporations by the end of 2020, has been softened and extended until 2023.
FRAUD ON THE TENNIS COURT: CRIMINAL NETWORK GAINED MILLIONS FIXING PROFESSIONAL MATCHES
A Europol news release on 10th January said that an organised crime group involved in manipulating professional tennis competitions has been dismantled in an operation led by the Spanish Civil Guard. In total 83 suspects were arrested, 28 of them are professional players. In 2017 the Tennis Integrity Unit (TIU) denounced irregular activities related to pre-arranged matches in the ITF Futures and Challenger tournaments.
RUSSIANS ARE DOWNSIZING IN CYPRUS
On 10th January, Ekathimerini reported a Bloomberg story that new Cypriot AML regulations together with the effects of US sanctions against Russia and its high-profile businessmen are driving money away from Cyprus. The value of bank accounts at Cypriot banks held by foreign nationals from outside the euro area has fallen to €7.1 billion from €21.5 billion at the end of 2012. Bloomberg also says that reports that the En+ Group plc plans to move to Russia from Jersey rather than to Cyprus as previously planned.
GERMAN REGULATOR SADDLES DEUTSCHE BANK WITH ONEROUS MONEY LAUNDERING REVIEWS
Handelsblatt on 10th January reported that BaFin is imposing 8 new requirements on the Bank, including a review of 20,000 customer accounts deemed high-risk for possible money laundering. It says that the regulator is not happy with the bank’s controls for detecting suspicious activity and is ready to levy fines if the Bank does not meet the timetable for the new measures, i.e. by the end of June (and the least risky clients by summer 2021).
UK: WILDLIFE CRIMINAL JAILED FOR RARE BIRD EGGS IMPORT ATTEMPT
On 10th January, a NCA news release said that Jeffrey Lendrum, 57, who tried to smuggle 19 rare and endangered bird eggs into the UK strapped to his body has today, 10 January, been jailed for 3 years and 1 month.
CHINA-EUROPE RAIL: SURGE IN EASTBOUND TRAFFIC, WITH RAIL TRAFFIC FROM EUROPE INTO CHONGQING EXCEEDING WESTBOUND TRAFFIC IN 2018
Loadstar on 10th January reported a Railfreight article saying that total volume-growth between the Chinese city and Europe grew 117% year-on-year. The number of trains traveling back to Chongqing surpassed the number of outbound trains for the first time in 2018. Currently, trains originating from Chongqing reach over 30 European countries, and the goods brought back are transferred to other Chinese cities and destinations in SE Asia. Chongqing was also connected to the UK with a new service, with the most western destination being Barking in the UK.
ISLAMIST MILITANCY IN THE SAHEL: 4 KEY TRENDS
On 10th January, Control Risks published a briefing saying that, by analysing data from Control Risks’ risk monitoring platform CORE, it has noted 4 concerning trends –
- The number of attacks has consistently grown in the region since 2015;
- Islamist militancy has spread rapidly across the Sahel in recent years;
- Attacks have become increasingly deadly; and
- Private organisations and business personnel are increasingly attractive targets.
It also highlights accusations of the “looting” of local resources. Al-Qaida in the Islamic Maghreb (AQIM) in May explicitly threatened Western companies operating in the Sahel for the first time, there being many mining operations in the Sahel and West Africa. However, Chinese contractors in Mali have also been targeted, suggesting that the perpetrators do not clearly distinguish between target nationalities.
ILLEGAL LOGGING IN CHIHUAHUA IS NOW MEXICO CARTEL TERRITORY
Insight Crime on 10th January carried an article saying that among the most vibrant criminal markets in Mexico is for illegal timber, and in the northern state of Chihuahua, there is increasing alarm that drug trafficking organizations are fighting for control of the trade.
BRAZIL: AUTHORITIES SEIZE 760 KG OF COCAINE DESTINED FOR BELGIUM
On 10th January, Hellenic Shipping Report said that, on 5th January, customs officials seized 760 kg of cocaine hidden in a frozen poultry container during a routine operation at the port. The narcotics were bound for Belgium, according to local authorities.
LIBYA: CUSTOMS SEIZE 20,000 PISTOLS IN CONTAINER FROM TURKEY AND 8 TONNES OF CANNABIS
On 10th January, Hellenic Shipping Report said that, at the start of January, Misrata port saw a container seized containing some 20,000 pistols from a ship that had arrived from Turkey, reportedly hidden behind boxes containing household items and toys, and in defiance of a UN arms embargo. Earlier, customs officials had seized 8 tonnes of cannabis from 2 containers shipped from Malta.
SHIPPING OFFICIAL SAYS MANY PORTS DO NOT ALLOW IRANIAN VESSELS TO DOCK
On 10th January, Hellenic Shipping Report said that an official from Iran’s Shipping Society says that a significant number of ports across the world do not permit Iranian-registered vessels to enter and dock, and that 20 international shipping companies have closed down their offices at Iranian ports.
MURDERED LIMERICK CRIMINAL ACQUIRED HOUSES THROUGH PROCEEDS OF CRIME, COURT RULES
The Journal in Ireland on 10th January reported that the High Court has ruled that 2 houses in Limerick City linked to murdered criminal Kieran Keane, leading member of the Keane gang, were acquired with the proceeds of crime. He was kidnapped and murdered in 2003 by members of a rival Limerick-based crime gang. CAB had claimed that 2 houses were acquired by Keane, whose widow Sophie became the beneficial owner.
INDIAN GOVERNMENT REMOVES HEAD OF CBI INVESTIGATIVE AGENCY
The Miami Herald on 10th January reported that Alok Verma, the chief of India’s Central Bureau of Investigation was removed by the government on corruption charges, days after being reinstated by the Supreme Court. He and his deputy, Rakesh Asthana, both face corruption charges which are being investigated by an anti-corruption body that recommended both Verma and Asthana be transferred out of the agency.
TIFFANY WILL NOW DISCLOSE THE ORIGIN OF DIAMONDS
OCCRP on 10th January reported that the US luxury jewellery retailer announced that it will begin disclosing the origins of its diamonds as part of an unprecedented transparency initiative in what it describes as a traditionally opaque industry. Tiffany will provide the country or region of provenance for individually registered diamonds that are 0.18 carats and larger in an effort to assure customers their jewels are responsibly sourced. However, the article cautions that diamonds may be tainted by abuses ranging from slavery and displacement to environmental harm, and rough diamonds from Zimbabwe and Angola are accepted under Kimberley Process standards, for example, even though the diamond trade in Zimbabwe is linked to torture and forced relocation, and to child labour and slavery in Angola.
KUWAIT LAUNCHES INVESTIGATION INTO TYPHOON AND HELICOPTER PROCUREMENT
On 10th January, Janes.com reported that the Kuwaiti Defence Minister has decided to set up a committee of inquiry into certain military procurement contracts.