15th February 2019
JP MORGAN CREATES ITS OWN BANK-BACKED CRYPTOCURRENCY
On 15th February, KYC 360 reported that US bank JPMorgan has announced the launch its digital coin representing a fiat currency. Called JMP Coin, the unit is based on blockchain-based technology and will enable the instant transfer of payments between institutional accounts.
CAYMAN ISLANDS COURT DECISION IN LIBYAN SANCTIONS CASE
On 13th February, an article from Appleby reported on a Cayman case involving $700 million of investment from the Libyan Investment Authority and other bodies in Libya, blocked under UN sanctions. The LIA had resolved to remove a local trust company as a director of the Cayman funds involved – for various reasons including a Dutch criminal investigation, proceedings in the US, the lack of transparency in the management of the funds, the high management fees, the trust company’s lack of a track record and concerns regarding the circumstances in which the it had originally been appointed. The trust company had countered, saying that removal was unlawful and void and that the new directors were not entitled to information about what had become of the funds’ assets. The court rejected the claim, emphasising the defendants’ desire to ensure compliance with the sanctions regime.
HONG KONG SEIZES $1 MILLION OF RHINO HORN IN RECORD AIRPORT HAUL
eNCA on 15th February reported that 2 men carrying at least 24 rhino horns worth around $1 million were arrested in Hong Kong airport by customs officers who said it was their largest-ever seizure of rhino contraband smuggled by air passengers.
WRITTEN EVIDENCE FROM FCO TO UK SANCTIONS POLICY INQUIRY
Available online is the written evidence submitted by the Foreign & Commonwealth Office to the UK Parliamentary inquiry, the FCO saying that it is currently conducting a thorough review of all existing EU sanctions designations; and is increasing the size of the FCO Sanctions Unit to carry out the necessary work to prepare for the full operation of the Sanctions Act, and recruiting new staff with relevant expertise, and training staff in new skills including to improve open source intelligence collection.
REMITTANCES FROM OVERSEAS FILIPINOS HIT RECORD, BUT GROWTH SLOWS
The Nikkei Asian Review on 15th February reported that trade tensions and sluggish global growth were affecting the key pillar of the Philippine economy. The amount of cash sent back to the Philippines rose 3.1% to $28.9 billion. Nearly 80% comes from the US, Saudi Arabia, UAE, Singapore, Japan, the UK, Qatar, Canada, Germany, and Hong Kong.
CHINA AND RUSSIA SHIPPED A COMBINED 48,441 TONS OF REFINED OIL TO NORTH KOREA IN 2018
IBT Times on 15th February reported that Russia Sold North Korea 7,000 Tons Of Refined Oil In December – the largest monthly shipped to Pyongyang since the UN mandated member states to report on the supply.
PROPOSED FRONTEX REFORM AND ITS IMPACT: EU BORDER POLITICS AND THE EXTERNAL SECURITY NEXUS IN THE EU
On 15th February, ETH Zurich published an article about plans to expand the capacities and capabilities of Frontex – the European Border and Coast Guard Agency. This would involve a standing corps of 10,000 operational staff; an increase in its migration management and returns role; and an expansion of the agency’s operational area beyond the EU.
FATF PLENARY IN PARIS
On 15th February, FATF announced the agenda for its latest Plenary, to be held in Paris next week. The topics include –
- The regulation of virtual assets
- Developments in the financing of ISIL, Al Qaeda and Affiliates and countries’ disruption strategies
- Mutual evaluations of Finland and China
- Actions taken by Italy and Norway
- Progress by Iran and other countries presenting a risk to the financial system
- Risk-based approach guidance for legal professionals, accountants and trust and company service providers (TCSP)
- reports from organisations including the IMF, World Bank, UN, OECD, OSCE, Egmont Group of FIU, CARIN, EBRD, ECB, Europol, GIFCS, IAIS, the 9 FATF-Style Regional bodies and others
CHINA ENDORSES USE OF ATA CARNETS FOR TEMPORARY IMPORTATION OF GOODS
HKTDC on 15th February reported that ATA carnets (internationally-recognised ‘passports’ for goods) have been deemed an acceptable form of paperwork for the temporary ingress of certain categories of goods to mainland China, following formal endorsement of 2 Convention on Temporary Admission annexes.
UK PLANS TO INTRODUCE UKCA SYMBOL TO REPLACE CE MARKING IN CASE OF A “NO DEAL” BREXIT
HKTDC on 14th February reported that the new symbol “UKCA” (which stands for “UK Conformity Assessed”) is still subject to UK parliamentary approval. It would replace the CE product marking used in the EU.
LOOT BOXES IN VIDEO GAMES
On 15th February, a House of Commons Library research paper provides a brief overview of concerns about loot boxes in video games – an in-game purchase consisting of a virtual container that awards players with items and modifications based on chance. They often appear as chests, crates or card-packs. Concerns have been raised that loot boxes may encourage children to gamble and lead to addictive behaviour.
SWEDEN: 3 EX-TELIA EXECUTIVES ACQUITTED IN UZBEK BRIBERY CASE
Rferl on 15th February reported that 3 former executives of telecom giant Telia have been acquitted in Sweden in a high-profile bribery case involving the eldest daughter of late Uzbek President, Islam Karimov. They were suspected of paying $350 million to Gulnara Karimova in return for a mobile-phone licence in Uzbekistan for their company, which was then called TeliaSonera.
SOUTH AFRICA WARRANT FOR BUSINESSMAN AJAY GUPTA CANCELLED
The BBC reported on 15th February that South African authorities have said that controversial businessman Ajay Gupta is no longer wanted by police. Gupta is a close friend of ex-President Jacob Zuma. A former deputy finance minister told the commission investigating state corruption that Mr Gupta had offered him a $42 million bribe to take up the post of finance minister.
US EXECUTIVE DETAINED IN MOSCOW: BARING VOSTOK FOUNDER IS ACCUSED OF EMBEZZLING $37.4 MILLION
On 15th February, TASS news agency in Russia reported that Michael Calvey, an investment fund director Ivan Zyuzin, financial sector partner Philippe Delpal, as well as Vagan Abgaryan, Alexey Kordichev and Maxim Vladimirov are suspected of large-scale fraud involving a fraudulent scheme involving the First Collection Agency. Baring Vostok is one of the largest private equity firms focusing on Russia and the CIS.
CHINESE IN SPAIN STAGE PROTEST OVER BLOCKED BANK ACCOUNTS
The Tri-City herald on 15th February reported that hundreds of Chinese have protested outside a BBVA bank in Madrid, claiming they are being unfairly denied access to their accounts while the bank insists it’s merely complying with money laundering laws.
ARMENIA MAJOR CORRUPTION SCHEMES IN WATER SYSTEM?
On 15th February, News AM reported the theory of the country’s prime minister that major corruption schemes have operated in the water system, resulting in a huge debt.
BaFin TO DEEPEN DEUTSCHE BANK MONEY LAUNDERING INVESTIGATION
Finance Magnates on 15th February reported that the German regulator has extended the remit of an independent auditor examining the lender’s role in the Danske Bank money laundering scandal. The German bank acted as Danske Bank’s main correspondent bank.
DUTCH INVESTIGATE ALLEGED CORRUPTION IN SAUDI METRO PROJECT
Reuters on 15th February reported that prosecutors raided the offices of construction company Strukton as part of an investigation into alleged bribery relating to a $7.8 billion Saudi Arabian metro project. They searched the offices of Strukton International BV and Strukton Civiele Projecten BV, and it is said that it was not immediately clear if the investigation included other companies.
ITALIAN CRIMINAL NETWORK RESPONSIBLE FOR FAKE WINE DISRUPTED ON VALENTINE’S DAY
A Europol news release on 15th February reported action that action dismantled a sophisticated criminal network involved in counterfeiting trademarks and distinctive labels of a famous winery in Florence, as well as counterfeiting at least 11,000 bottles of red wine. The bottles, claiming to belong to the high-quality group of IGT wines protected by the Italian government, actually contained a lower quality wine.
GEORGIA’S BACKSLIDING ANTI-CORRUPTION REFORMS
On 14th February, an article from Transparency International said that the country’s anti-corruption progress has stalled over the last decade, and Georgia was listed as a “country to watch” in the latest corruption index, due to growing concerns about high-level corruption as well as broader worries about the health of democratic governance. Anti-corruption reforms, which began after the peaceful Rose Revolution in late 2003 produced tangible improvements in important areas of public administration, including public services, education and police. However, it says, reforms were unsuccessful or absent in other important areas, including the judicial system. It warns that, Instead of addressing the issues, the government has opted to attack civil society organisations that expose corruption, questioning their impartiality and engaging in a smear campaign against their leaders.
UK: REVIEW INTO CANNABIS-BASED PRODUCTS FOR MEDICINAL USE IN HUMANS
On 15th February, the Home Office announced that it had commissioned the ACMD advisory body to conduct a longer-term review of cannabis-based products for medicinal use.
UK: LITHUANIAN FUGITIVE CIGARETTE SMUGGLER BEHIND BARS
On 15th February, Talking Retail said that Kristupas Strasunskas was part of a 5-man gang who brought more than 12 million illegal cigarettes into the North East between 2013 and 2015. He was arrested but fled to Lithuania before a trial hearing in May 2018 where he was convicted and sentenced in his absence to 18 months in prison. However, HMRC officers tracked him down and extradited him back to the UK to serve his prison sentence – but 3 other members of the gang also failed to attend trial and are wanted by HMRC.
US FUND MANAGER FACES 20 YEARS IN JAIL FOR $22 MILLION CARIBBEAN AIRPORT SCAM
Global Construction Review on 15th February reported that Brent Borland, 48, from New York pleaded guilty to falsely claiming that he was collecting funds to be used to build an airport in Belize. He collected $22 million from his victims over a 4-year period between 2014 and 2017.
EX-MOZAMBIQUE FINANCE MINISTER DENIED BAIL IN SOUTH AFRICA
Reuters on 15th February reported that former Mozambican finance minister Manuel Chang was denied bail, meaning he will remain in custody for now pending an extradition hearing over charges relating to $2 billion in fraudulent loans. He was arrested at the request of the US. The case involves loans guaranteed by the Mozambican government, which it failed to disclose, signed off by Chang during his term as finance minister.
BENEFICIAL OWNERSHIP REGISTER IN BELGIUM – EXTENSION OF THE DEADLINE UNTIL 30th SEPTEMBER
On 15th February, Field Fisher reported that the first returns for the central UBO register, originally due by 31st March, has now been extended until 30th September. From then the accuracy of the information must be confirmed each year and, in the event the information is modified, an update must be made within a month.
1.5 TONNES COCAINE FOUND AT ROTTERDAM PORT – CUSTOMS OFFICER ARRESTED
The NL Times on 15th February reported that the cargo came from Brazil, and that a 37 year old customs officer had arrested in connection with the case.
SOUTH AFRICA: COMMUNICATIONS AUTHORITY HEAD SENTENCED TO 20 YEARS FOR FRAUD AND MONEY LAUNDERING
Baker McKenzie on 15th February reported that Independent Communications Authority of SA chairperson Rubben Mohlaloga has been sentenced to 20 years in prison for fraud and money laundering, alongside former acting head of the Land Bank Philemon Mohlahlane and attorney Dinga Rammy Nkwashu. They were convicted of defrauding the Land Bank when Mohlaloga was chairperson of Parliament’s Portfolio Committee on Agriculture.
CHINA CRACKING DOWN ON ILLEGAL UNDERGROUND FOREX TRADING IN BID TO CONTROL CAPITAL FLIGHT
Hellenic Shipping News on 15th February reported that China is cracking down on individuals and corporations who buy or sell foreign currency on the black market as the government seeks to control capital flight and maintain the stability of the yuan exchange rate and its slowing economy. With effect from the start of February, illegal forex trading activities would be a criminal offence, with those involved charged with engaging in an illegal business operation.
LIBYA: CUSTOMS SEIZE TURKISH MILITARY VEHICLES AT PORT
Hellenic Shipping News on 6th February reported that Customs authorities at Khoms port, located 120 km east of Tripoli, seized 9 military spec 4×4 vehicles which had been shipped from Turkey. The vehicles were discovered inside 5 shipping containers on the storage area of the port. Relations between Libya and Turkey have been further strained over the exclusion of Turkey from talks between Libya, Egypt, Italy and Greece over migrants and maritime security in the Mediterranean Sea.
PAKISTAN: AUTHORITIES ARREST FORMER PORTS MINISTER ON CORRUPTION CHARGES
On 8th February, Hellenic Shipping News reported that former federal ports and shipping minister Kamran Michael had been arrested by a national anti-corruption body on charges of receiving $7.1 million in bribes. He was accused of illegally allocating commercial and residential plots in a housing society in exchange for money.
TURKEY: CUSTOMS SEIZE 500,000 PACKS OF CONTRABAND CIGARETTES AT IZMIR PORT
On 12th February, Hellenic Shipping News reported that Turkish border authorities confiscated 500,000 packs of contraband cigarettes worth around $1 million.
SINGAPORE: FORMER SHIPYARD OFFICER ACCEPTED S$700,000 IN BRIBES OVER 14 YEARS
Channel News Asia on 15th February reported that a former senior procurement office with Keppel Shipyard pleaded guilty to 54 charges of corruption and money laundering
COMPANY AGREED TO PAY $25 MILLION TO SETTLE FCPA CHARGES WITH THE SEC AND 2 FORMER EXECUTIVES CHARGED BY DOJ FOR PAYING BRIBES TO AN INDIAN GOVERNMENT OFFICIAL
A post on the FCPA Blog on 15th February reported that Cognizant Technology Solutions Corporation in the US settled civil SEC charges related to violations of the anti-bribery, books and records, and internal accounting controls provisions of the FCPA without admitting or denying the allegations. The company agreed to pay disgorgement and pre-judgment interest of around $19 million and a penalty of $6 million. The SEC said that in 2014, a senior government official in Tamil Nadu demanded a $2 million bribe from the construction firm responsible for building Cognizant’s 2.7 million square foot campus in Chennai. The president and chief legal officer approved the payment by the company that provides IT services, including digital, technology, consulting, and operations services.
CHINA’S 21st CENTURY MARITIME SILK ROAD: IMPLICATIONS FOR THE UK
An Occasional Paper from RUSI on 14th February explores China’s Maritime Silk Road in economic and political terms, its maritime routes, its key destinations and example projects, – with a focus on ports, and considers its potential strategic implications for the UK, particularly as it prepares to leave the EU. It says that the routes involved start from China’s eastern coastal provinces and move through the following target corridors: south-east across SE Asia and the Pacific (including Central and South America); towards East Africa (connecting to West Africa via rail and road routes, but potentially also connecting to West African ports); through the Gulf of Aden and the Red Sea and into the Mediterranean via the Suez Canal; and across the Arctic Ocean to Russia (the so-called Polar or Ice Silk Road). While the MSR does not yet include the UK, this should not be excluded as a future possibility.
FALSIFIED MEDICINES DIRECTIVE IS YET ANOTHER CASUALTY OF BREXIT
On 11th February, the Pharmaceutical Journal reported that ‘FMD-Day’ was 9th February, and across the EU, the entire pharmaceutical sector, from manufacturers to frontline pharmacists, will be expected to comply with what will be the world’s first continent-wide scheme to eliminate fake or falsified medicines from the supply chain. The Directive requires pharmacists to verify the authenticity of medicines dispensed and to check that medicine packs haven’t been tampered with. However, if the UK leaves the EU without a deal, FMD compliance will be impossible: a no-deal Brexit would see the UK lose access to EU databases, including the European Medicines Verification System (EMVS), which will be used for the FMD.