22nd January 2019
GERMANY BANS IRANIAN AIRLINE, MAHAN AIR, FROM ITS AIRPORTS
Euronews and others on 21st January reported that Germany has banned Iran’s second-largest airline, Mahan Air from operating in the country’s airports following US pressure.
https://www.euronews.com/2019/01/21/germany-bans-iranian-airline-mahan-air-from-its-airports
RUSSIAN CUSTOMS REVEALED 3 SCHEMES FOR GETTING MONEY OUT OF RUSSIA
Crime Russia on 21st January said that the main schemes for illegal removals of currency are the use of forged documents, the repeated transfer of the same goods across the border and the creation of one-day firms for contracts performance.
PROFESSOR BLAMES CHINESE COUNTERFEITS FOR CAUSING $3.1 TRILLION LOSS FOR GLOBAL WINE INDUSTRY
The Epoch Times on 21st January reported that an international legal expert has urged more effective anti-counterfeiting measures to ensure fake winemakers in countries like China do not keep costing the global wine industry trillions of dollars in lost business. It is said that Chinese viticulture produced 14,000 bottles of fake Australian Penfolds wine in November last year, and has become the world’s second-biggest wine consumer market following the US. It is alleged that sometimes counterfeit winemakers will use a cheap substitute for ethanol, including nail polish remover, windscreen cleaning fluid, methanol, and isopropanol, which is used in anti-freeze.
TURKISH ACADEMIC DISCOVERS SMUGGLED ARTEFACTS AT LONDON MUSEUM
Daily Sabah in Turkey on 21st January reported that Hayal Güleç, an art historian from Turkey’s Süleyman Demirel University, was touring Victoria and Albert Museum when she took an elevator by mistake and ended up in a storage room. She found out 44 glazed tiles in the storage room which it appeared were taken from historical buildings in Turkey. She made more visits to the museum and examined tiles dating back to the 16th Century, taking photos of 67 tiles from Ottoman times, and managed to prove that 44 were taken on separate dates from buildings in Turkey. It reports that, since 2003, the Culture and Tourism Ministry has obtained 4,311 artefacts that were illegally exported from Turkey and is currently tracking down another 55 pieces in 17 countries.
MALTA’S CRYPTO ASSETS PLAN MEANS GREATER AML RISKS, IMF WARNS
Risk.net on 21st January reported that Malta’s drive to become a crypto asset hub will increase the chances of its financial system being used for money laundering, an IMF has warned. It also said that Malta’s financial authorities must make rapid progress with planned AML reforms, and that the country’s regulator was underfunded and struggling to cope.
AUSTRALIA LITHIUM OUTPUT SET TO SOAR AS ELECTRIC CARS GATHER STEAM
Nikkei Asian Review on 22nd January said that glut concerns loom as Chinese money drives a flurry of mine expansions, as miners in Australia are ramping up output of the raw materials that underpin lithium, a key ingredient in electric vehicle batteries, with hefty backing from Chinese producers and demand is expected to surge, with so many lithium projects underway at once, some are warning that the industry is only a few years away from a supply glut.
CONSULTATION ON CODE FOR PRIVATE PROSECUTORS
Accountancy daily on 22nd January reported that the UK Private Prosecutors’ Association (PPA) – founded in 2017 and having around 140 members – is consulting on a draft code for anyone who carries out private prosecutions, which allow individuals, businesses or organisations who have been the victims of crime to bring a criminal case themselves, without the involvement of law enforcement agencies. The consultation closes on 6th March.
https://www.accountancydaily.co/consultation-code-private-prosecutors
FOR OLIGARCHS OR MAFIOSI, OBTAINING A BULGARIAN PASSPORT IS EASY AND CHEAP
An article on EurActiv on 22nd January says that the case of Russian oligarch Sergei Adoniev is a good example of the obscure ways Bulgarian citizenship is being granted to paying clients. It says that Adoniev was granted Bulgarian citizenship, which he kept for 10 years, before the authorities finally discovered that he had been sentenced for money laundering in the USA in 1998 and was therefore ineligible for such a benefit. According to Bulgarian law, a candidate for Bulgarian nationality needs to make proof of a clean criminal record. Adoniev is a billionaire who appears on the Forbes rich list and belongs to a very select circle of businessmen regularly invited in the Kremlin by Vladimir Putin. His business is in the field of telecommunications and he is sometimes called the “inventor of the Russian iPhone”.
UK MODERN SLAVERY ACT 2015 REVIEW: SECOND INTERIM REPORT
On 22nd January, the Home Office published the 2nd report from the independent review of the Modern Slavery Act 2015 covering transparency in supply chains. As part of the review, the members were invited to give their views on transparency in supply chains. The report includes findings and a summary of recommendations.
https://www.gov.uk/government/publications/modern-slavery-act-2015-review-second-interim-report
ALLEGED BRIBERY OF A FORMER CENTRAL BANK GOVERNOR IN EXCHANGE FOR HIS COLLUSION IN THE TAKEOVER OF LAIKI BANK IN 2006
The Cyprus Mail on 22nd January reported on the Focus corruption case where Michalis Zolotas, a Greek shipowner, is accused of using his Focus Maritime Corp to transfer €1 million to pay former central bank governor Christodoulos Christodoulou. It is alleged that it was done on behalf of Andreas Vgenopoulos in exchange for the former governor’s collusion during the Greek financier’s 2006 takeover of Laiki, which closed in 2013. The defendants face a total of 24 charges including corruption, bribery, abuse of authority, abuse of trust, and money laundering.
https://cyprus-mail.com/2019/01/22/disputed-evidence-can-be-submitted-in-focus-trial-court-rules
SCOTTISH COMPANY ACCUSED OF ROLE IN €3 BILLION AZERI MONEY LAUNDERING SCHEME HAD PILATUS BANK ACCOUNT IN MALTA
The Malta Independent on 22nd January reported that a Scottish limited partnership which has been accused of playing a key role in a €3 billion scheme to launder money out of Azerbaijan is said to have had an account with the controversial Pilatus Bank in Malta. Hilux Services is one of 5 companies under investigation by the Prosecutor’s Office in Milan. Luca Volontè – an Italian politician who was part of the Council of Europe and was named as having been suspected of engaging in “activities of a corruptive nature” – and is claimed to be the ultimate beneficial owner of Hilux and was investigated on suspicion of taking €2.39 million in bribes from Azerbaijan and had already been acquitted on separate charges of money laundering.
GARDAÍ INVESTIGATING SUSPECTED ISIS TERRORIST FINANCING ARREST 4 PEOPLE IN DUBLIN
On 22nd January, the Irish Examiner reported that 3 men and a woman are being questioned in connection with the suspected funding of IS groups in Syria in what senior sources described as a “very significant” terror financing operation. It is said to be suspected that the family-based group was sending funds through a bank to people in Syria who are suspected of being affiliated to the so-called Islamic State. They are believed to be from Uzbekistan, and are thought to have legal residence in Ireland.
https://www.irishexaminer.com/breakingnews/ireland/–899326.html
DOES INFORMATION BREAK THE POLITICAL RESOURCE CURSE? EXPERIMENTAL EVIDENCE FROM MOZAMBIQUE
A Working Paper from the IFS on 22nd January says that the “political resource curse” is the idea that natural resources can lead to the deterioration of public policies through corruption and rent-seeking by those closest to political power; and one prominent consequence is the emergence of conflict. This paper looks at this theory in the case of Mozambique, where a substantial discovery of natural gas recently took place.
https://www.ifs.org.uk/publications/13819
TAX TREATIES AND RELATED DOCUMENTS BETWEEN THE UK AND GUERNSEY
On 22nd January, HMRC published a collection, including TIEA and the new comprehensive Double Taxation Agreement and Protocol which was signed in London on 2nd July 2018. It entered into force on 7th January.
https://www.gov.uk/government/publications/guernsey-tax-treaties
WILL TAX SIMPLIFICATION STILL BE NEEDED AS TECHNOLOGY ADVANCES?
On 17th January, the UK Office of Tax Simplification published a discussion paper on the implications of using technology to simplify tax and that looks at the challenges, as well as the opportunities, that these emerging technologies pose. The report suggests key points for the government to consider.
DISCUSSION ON MITIGATING FRAUD AND CORRUPTION IN LATIN AMERICA
Financier Worldwide has a special report in which it moderates a discussion on mitigating fraud and corruption in Latin America.
https://www.financierworldwide.com/qa-mitigating-fraud-and-corruption-in-latin-america#.XEePePZ2t9B
ONE STEP AT A TIME: LIMITED REFORM OF UK’S LIMITED PARTNERSHIPS
A Commentary from RUSI on 22nd January said that the UK government is proposing to tighten procedures for establishing limited partnerships, in an effort to close an avenue for money laundering. This is a welcome move, it says, but perhaps not sufficient. It says that the proposed reforms are focused narrowly on addressing the apparent misuse of Scottish Limited Partnerships, and that these are thus not only a ‘threat du jour’ that elicits glaring newspaper headlines, but also the one legal entity whose incorporation is uniquely amenable to regulation.
https://rusi.org/commentary/one-step-time-limited-reform-uk’s-limited-partnerships
UK: 49-YEAR-OLD MAN HAS BEEN ARRESTED ON SUSPICION OF MODERN SLAVERY OFFENCES WITHIN THE CONSTRUCTION INDUSTRY
An NCA news release on 22nd January said that the 49-year-old, a Romanian national, was detained and 11 people, all Romanian males who were living at the property, were treated as potential victims of modern slavery and will now be offered support.
GLOBAL SHIPPING INSURER TT CLUB WANTS MORE CARRIERS TO FOLLOW ITS EXAMPLE AND DO RANDOM SAFETY CHECKS ON CONTAINERS
On 22nd January, Loadstar reports that TT Club is lobbying the IMO to make changes to its inspection programme, which despite the low number of governments partaking has made compelling finds. Maersk hopes its inspection programme can help prevent fires that break out inside boxes during transit and shipments being damaged because boxes are not correctly lashed, and the carrier said initially the project would focus on shipments in and out of the US.
https://theloadstar.co.uk/other-carriers-should-copy-maersk-and-spot-check-containers-says-tt-club/
CLAIM THAT SOUTH AFRICA CABINET MINISTER WAS PAID BRIBES
Baker McKenzie on 22nd January reported that South African Environmental Affairs Minister Nomvula Mokonyane was paid bribes and given numerous other gifts and favours to try and enlist her support to further the interests of services company Bosasa, according to its former chief operating officer.
http://www.riskandcompliancehub.com/south-africa-cabinet-minister-was-paid-bribes-probe-told/
TOTAL US ARMS SALES NOTIFIED TO CONGRESS FOR THE MIDDLE EAST AND NORTH AFRICA IN 2018
https://mailchi.mp/ciponline/s4355mg9zh-973443?e=028b886498
NEW LEGISLATION IN CHILE TO FIGHT CORRUPTION
Baker McKenzie on 22nd January reported that on 20th November a new law was published which introduced various modifications to Chilean criminal law on crimes against corruption, increasing the punishment of certain existing crimes, and incorporating new criminal offences to Chilean legislation.
https://globalcompliancenews.com/chile-new-law-fight-corruption-20190118/
A PLAN TO END GLOBAL MONEY LAUNDERING
On 22nd January, Risk Screen published a White Paper saying that we need to develop an effective global initiative to attack this problem on a continuing basis, and lays out what it considers is a plan to do so, with a joint money laundering task force (JMLTD); a global AML initiative. It would be a blueprint for a highly effective AML programme that will serve as a model for any nation seeking to dramatically reduce the laundering of illicit funds and corruption in their countries.
https://www.riskscreen.com/kyc360/downloadamlwhitepaper/
https://www.rferl.org/a/not-flying-to-the-eu/29724415.html
CANADIAN LEGALISATION OF CANNABIS REDUCES BOTH CASH USAGE AND THE ‘BLACK’ ECONOMY
The CEPR portal VOX has published an article which argues that movements in cash in circulation around the time of legalisation seem to provide early evidence that Prime Minister Trudeau’s policy has already been successful in crimping the black economy. If around a quarter of the cannabis market remains illegal, as recently estimated by Statistics Canada, over time legalisation could reduce the size of the total underground economy by around 4% or 5%.
https://voxeu.org/article/canadian-legalisation-cannabis-reduces-both-cash-usage-and-black-economy
PRE-EVALUATION OF URUGUAY’S AML/CFT SYSTEM BEGINS
On 22nd January, GAFILAT, the regional FATF-style body, reports that began the pre-evaluation process for Uruguay in November. The mutual evaluation process will be completed in December 2019.
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