Day: February 23, 2019

23^rd February 2019

EU TO AMEND UNION GENERAL EXPORT AUTHORISATION IN THE EVENT OF A NO DEAL BREXIT

On 29^th January, an informative blog post on World Trade Controls about the proposal by the EU Commission to add the UK to the list of destinations covered by the Union General Export Authorization (EU001) for dual-use goods if there is a no deal Brexit on 29^th March.  EU001 currently covers Australia, Canada, Japan, New Zealand, Norway, Switzerland (including Lichtenstein), and the USA.  It explains that general licences merely require timely registration, usually at least 2 weeks before actual export takes place.  They are not completely without administrative burden, however. Use of general licenses needs to be expressly stated in Box 44 of the respective customs declarations and national regulators will normally require periodical reports on the exports that have taken place under a general licence.  EU001 includes all dual-use goods listed on Annex I to EU Dual-Use Regulation 428/2009, but excludes the goods listed on its Annex IIg (e.g. certain software and technology for the design, production or use of specified nuclear-related goods; and certain pathogens and toxins hazardous for humans and animals).

http://www.worldtradecontrols.com/eu-to-amend-union-general-export-authorization-in-the-event-of-a-no-deal-brexit/

MONEY LAUNDERING CASES UP 94% IN MALTA LAST YEAR

Xinhua on 23^rd February reported that the “Reported Crime Annual Report 2018” also said that the number of reported cases of fraud in Malta have increased by 31% over the past year.  The police force’s economic crimes unit would be strengthened following the rise in reported cases of financial crime.

http://www.xinhuanet.com/english/2019-02/23/c_137843463.htm

EU VISA POLICY: COMMISSION WELCOMES AGREEMENT TO STRENGTHEN EU VISA RULES

On 20^th February, an EU news release advised that Member States had endorsed the agreement reached by the European Parliament and the Council on the Commission’s proposal to modernise the EU’s common visa policy, adapting the rules to evolving security concerns, challenges linked to migration and new opportunities offered by technological developments.  The agreed changes are intended to make it easier for legitimate travellers to obtain a visa to come to Europe, facilitating tourism, trade and business, whilst strengthening security and reducing irregular migration risks.

http://europa.eu/rapid/press-release_IP-19-721_en.htm

https://ec.europa.eu/home-affairs/sites/homeaffairs/files/what-we-do/policies/european-agenda-migration/20190220_eu-visa-policy_en.pdf

NIGERIA: GOVERNMENT WINS RIGHT TO PROSECUTE JP MORGAN CHASE OVER OIL FRAUD

All Africa on 23^rd February reported that the High Court in London has granted Nigeria’s plea to allow it proceed with the trial involving JPMorgan Chase.  The bank is alleged to have enabled the misappropriation of state funds totalling $875 million over the Oil Prospecting Licence, OPL 245.  JPMorgan Chase had failed to halt the prosecution brought against it by the Federal Government.

https://allafrica.com/stories/201902230026.html

WIFE OF GUATEMALAN PRESIDENT INVESTIGATED FOR CASHING ILLEGAL CHEQUES

Reuters reported on 22^nd February that the wife of Guatemalan President Jimmy Morales will be investigated on suspicion of cashing illicit cheques made out to her and her husband totalling more than $30,000, the country’s top prosecutor said.

https://in.reuters.com/article/guatemala-investigation/wife-of-guatemalan-president-investigated-for-cashing-illegal-checks-prosecutor-idINKCN1QB2PS

https://www.insightcrime.org/investigations/fentanyl-trade-mexico-explained-8-graphs/

ALBANIAN MAFIA FLOODING BRITAIN WITH DRUGS AS IT GRASPS £5 BILLION COCAINE MARKET

The Mirror reported on 22^nd February that violent gangs from Albania have reportedly taken control of the UK drugs trade.

https://www.mirror.co.uk/news/uk-news/albanian-mafia-flooding-britain-drugs-14038772

US DOJ CIVIL FORFEITURE COMPLAINTS SEEKING THE FORFEITURE AND RECOVERY OF APPROXIMATELY $38 MILLION IN ASSETS IN 1MDB CASE

A news release on Mondo Visione on 22^nd February said that the DoJ had announced further filing of civil forfeiture complaints seeking the forfeiture and recovery of approximately $38 million in assets allegedly associated with an international conspiracy to launder funds misappropriated from 1Malaysia Development Berhad (1MDB), a Malaysian sovereign wealth fund.   They identify additional assets traceable to the 2012 and 2013 bond offerings – including luxury real estate in London, proceeds from the sale of luxury real estate in New York City, and converted equity in a facilities management company headquartered in Kentucky.    A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime.  These allegations are not proven until a court awards judgment in favour of the US.

http://www.mondovisione.com/media-and-resources/news/department-of-justice-us-seeks-to-recover-approximately-38-million-allegedly/

FATF GIVES IRAN UNTIL JUNE TO PASS MONEY LAUNDERING LAWS

Reporting on the recent FATF Plenary, Rferl reports that FATF has given Iran 4months to pass AML/CFT rules or face increased international scrutiny of its banks.

https://www.rferl.org/a/terrorism-finance-watchdog-gives-iran-until-june-to-pass-money-laundering-laws/29785642.html

IRELAND: WITHDRAWAL OF THE UNITED KINGDOM FROM THE EUROPEAN UNION (CONSEQUENTIAL PROVISIONS) BILL 2019

On 22^nd February, law firm Matheson released an article about this just-published Bill in Ireland.  It deals with changes to Irish laws that will be needed in the event of the United Kingdom leaving the European Union without an agreement on 29^th March.  The Bill consists of 15 different parts which fall under the remit of 9 different government ministers.  It is due before the parliament for review the week commencing 11^th March.

The Bill’s Explanatory Memorandum states that a key part of Ireland’s planning and preparations is protecting and maintaining the Common Travel Area (CTA) and the associated rights and privileges.  Both the Irish and British Governments are committed to maintaining the CTA in all circumstances, and have committed to undertaking all the work necessary, including through legislative provision, to ensure that the CTA rights and privileges are protected.

https://www.matheson.com/news-and-insights/article/withdrawal-of-the-united-kingdom-from-the-european-union-consequential-prov

US CONGRESS COMMITTEE: “GRAVE CONCERNS” CONCERNING NUCLEAR TECH TRANSFERS TO SAUDI ARABIA

World ECR reported that a US House of Representatives’ committee has published a report following, it said, ‘multiple whistleblowers [having come forward] to warn about efforts inside the White House to rush the transfer of highly sensitive US nuclear technology to Saudi Arabia in potential violation of the Atomic Energy Act and without review by Congress as required by law – efforts that may be ongoing to this day’.  The report includes leaked memos, and a timeline suggesting an inner circle formed in part by retired generals who have been advancing a plan to sell nuclear power to Saudi since Donald Trump took office.

https://www.worldecr.com/news/house-committees-grave-concerns-concerning-tech-transfers-to-saudi-arabia/

https://oversight.house.gov/news/press-releases/multiple-whistleblowers-raise-grave-concerns-with-white-house-efforts-to

FORMER ENRON CEO RELEASED FROM PRISON

On 22^nd February, Jurist reported that Jeffrey Skilling, founder and ex-CEO of Enron, imprisoned for his involvement in the high-profile corporate fraud scandal publicised in 2001, was released from US federal custody after serving more than 12 years in prison.  It says that more than $40 million of Skilling’s fortune, which has been frozen since his conviction in 2006, will be distributed to victims of Enron’s collapse.

https://www.jurist.org/news/2019/02/former-enron-ceo-skilling-released-from-custody/

THE COMMON FACTOR IN OFAC PENALTY ACTIONS THIS YEAR

A blog post in the Trade Sanctions Blog from Holland & Hart on 22^nd February says that there is one principle similarity in the violations involved in all 4 OFAC penalties cases so far this year, and that reveals OFAC’s highest enforcement priorities.  In all 4 cases, the violating companies ignored warning signs which clearly indicated increased risk of sanctions violations.  OFAC expects companies to have compliance programmes commensurate with their overall risk.

https://www.tradesanctions.com/how-companies-should-address-increasingly-aggressive-ofac-sanctions-enforcement/#more-337

“SHISHA BARS NEED LICENSING” TO TACKLE SERIOUS CRIME AND WEAK SMOKE-FREE LAWS

The Local Government Association in the UK on 23^rd February said that licensing powers are needed to help councils tackle shisha bars that repeatedly flout smoking and fire safety laws, and in the worst cases are linked to organised crime.  The number of shisha bars has more than trebled in recent years with more than half of councils now having a bar or café open in their area.

https://www.local.gov.uk/about/news/lawless-shisha-bars-need-licensing-tackle-serious-crime-and-weak-smoke-free-laws

PRIVATE EYE QUESTIONS DERIPASKA’S HONESTY, AND HENCE THE VALUE OF THE RELAXATION OF US SANCTIONS MEASURES

In its 22^nd February print edition, Private Eye magazine questioned the lifting of US sanctions on Rusal and its parent, En+, after Oleg Deripaska seemingly reduced his shareholding to 44%, leaving the boards and handing voting controls to independent trustees.  It does by recalling the comments of a judge in a case before the High Court in London, where he was less than impressed by the honesty and evidence of both Deripaska and the claimant in the case, fellow Russian Vladimir Chernukhin.  The judge said that it was a “depressing fact…there is good reason to doubt the honesty of each of the principal actors in the case”.  Specifically about Deripaska, the judge said that after he gave evidence that deripaska “did not appear…to be a witness who wished to assist the court in ascertaining the truth,,,It would be wholly unsafe to rely upon his evidence save where it was not disputed…”.  The judge also referred to Deripaska making “dishonest attempt” to provide “false evidence”.  Mind you, the judge’s comments about the other party to the case lead the magazine to comment that Chernukhin is just the type of “questionable” Russian money accepted by successive UK governments.

 

Homeland Security Today on 23^rd February reported that Canada has listed Harakat Sawa’d Misr (HASAM) as a terrorist entity under its Criminal Code – there are now 55 terrorist entities listed under the Code.  HASAM portrays itself as a nationalist movement attempting to overthrow the government of Egyptian President Abdel Fattah Al-Sisi and has generally targeted the Egyptian security apparatus, using methods such as assassinations, attacks on convoys and the detonation of IED.  HASAM does not have a known connection to Canada but its assists security, intelligence and law enforcement agencies by helping to facilitate the prosecution of perpetrators and supporters of terrorism, and plays a key role in countering terrorist financing.  It also helps obstruct assistance from sympathisers in Canada by criminalising certain support activities including those related to terrorist travel and recruitment.

https://www.hstoday.us/subject-matter-areas/counterterrorism/canada-lists-hasam-as-terrorist-organization/

https://geopoliticalfutures.com/kashmir-history-violence/

On 19^th February, Bellingcat carried a further article about a poisoning incident in Bulgaria in April 2015, where an individual named Emilian Gebrev was poisoned.  It considers examining the various chemicals mentioned in the analysis report of the possible chemicals used, as these chemicals are poisonous and have potential for deliberate use to make people ill or even kill them.  The report includes a list of organophosphate pesticides that the testing institute believes might have been responsible for this particular poisoning, and all of which attack the human nervous system in ways similar to military nerve agents.  Any of these chemicals could have been used to poison food or drink.

https://www.bellingcat.com/resources/articles/2019/02/19/pesticides-as-poisons-analysis-of-the-debrev-case/

World ECR reported that a US House of Representatives’ committee has published a report following, it said, ‘multiple whistleblowers [having come forward] to warn about efforts inside the White House to rush the transfer of highly sensitive US nuclear technology to Saudi Arabia in potential violation of the Atomic Energy Act and without review by Congress as required by law – efforts that may be ongoing to this day’.  The report includes leaked memos, and a timeline suggesting an inner circle formed in part by retired generals who have been advancing a plan to sell nuclear power to Saudi since Donald Trump took office.

https://www.worldecr.com/news/house-committees-grave-concerns-concerning-tech-transfers-to-saudi-arabia/

https://oversight.house.gov/news/press-releases/multiple-whistleblowers-raise-grave-concerns-with-white-house-efforts-to

Swissinfo on 21^st February reported that an inability to account for a Swiss shipment of weapons exported to Lebanon has resulted in a freeze of arms exports.  Exports of war materiel to Lebanon would no longer be allowed until further notice.  This decision is linked to post-shipment verification last year of 10 assault rifles and 30 sub-machine guns that were exported to Lebanon in 2016.  Swiss inspectors were only able to verify and inspect 9 of the 40 small arms.

https://www.swissinfo.ch/eng/politics/risk-of-abuse_switzerland-halts-arms-exports-to-lebanon-due-to-missing-weapons/44775366#.XHABjAsS8RU.twitter

The Nation on 23^rd February reported that the US has placed travel ban on some top government officials of the Democratic Republic of the Congo over their roles in alleged electoral fraud in the December 2018 general election in the country – Corneille Nangaa, President of the DRC National Independent Electoral Commission (CENI); Norbert Basengezi Katintima, Vice President of CENI; Marcellin Mukolo Basengezi, Advisor to the President of CENI; Aubin Minaku Ndjalandjoko, President of the DRC National Assembly; and Benoit Lwamba Bindu, President of the DRC Constitutional Court.

http://thenationonlineng.net/us-places-travel-ban-on-congos-officials-over-electoral-fraud

Radio Free Asia on 22^nd February reported that Cambodia was put on a watch list by FATF after it found “significant deficiencies” that left the country vulnerable to flows of hidden illegal money.  Cambodia has a never prosecuted a money laundering case and its judicial system had “high levels of corruption”, FATF said.  NGO activists who monitor corruption in Cambodia said the reinstatement of Cambodia on the grey list suggested backsliding since 2015 and suggested that China’s huge flow of investment in the country’s casinos, real estate and banks and stock exchanges include a lot of laundered cash.

https://www.rfa.org/english/news/cambodia/money-laundering-02222019173012.html

On 5^th February, a blog post on World Trade Controls posed the question: do I need to check all US denied parties lists?  It explains that restricted party screening is used to identify whether a party to a transaction is subject to specific export control or sanctions restrictions imposed by the US Department of Commerce, US Department of State, and/or US Treasury.  Each of these Departments maintains lists of restricted parties and imposes various restrictions on certain activities involving those listed parties (and under certain circumstances, activities involving any entity owned or controlled by such parties).  The list(s) on which a party appears determines the specific export control or sanctions restrictions concerning that party, and thereby signals the compliance risks a non-US company may face when dealing with such a listed party, it says.  A useful reference table is provided –

Agency	Name	Description
Commerce	Denied Persons List	Parties that have been denied export privileges involving items subject to the EAR
Commerce	Entity List	Parties that may trigger specific EAR licensing requirements
Commerce	Unverified List	Parties whose involvement in a transaction presents “red flags” (additional compliance risks)
State	Nonproliferation Sanctions List	Parties sanctioned under various non-proliferation statutes
State	ITAR Debarred Parties List	Parties prohibited from engaging in transactions involving ITAR-regulated activities
OFAC	Specially Designated Nationals and Blocked Persons List (SDN List)	Parties subject to property blocking pursuant to various US sanctions programmes
OFAC	Sectoral Sanctions Identifications List (SSI List)	Parties sanctioned for operating in certain sectors of the Russian economy
OFAC	Foreign Sanctions Evaders List	Non-US parties determined to have violated certain US sanctions programmes
OFAC	Non-SDN Palestinian Legislative Council (PLC) List	Individuals of the PLC associated with certain terrorist organisations
OFAC	List of Foreign Financial Institutions Subject to Part 561	Foreign financial institutions subject to certain US sanctions

 

It also explains how EAR and ITAR export controls interplay with the lists.  The Export Administration Regulations (EAR) are administered by the Department of Commerce and prohibit the export, reexport, or transfer of items subject to the EAR to parties on the Entity List, the Denied Persons List, and in some cases, the OFAC SDN List.  In addition, though not subject to these prohibitions, parties on the Unverified List are subject to certain restrictions and requirements and may not receive items subject to the EAR by means of a licence exception.

The International Traffic in Arms Regulations (ITAR) prohibit the export, reexport or re-transfer of ITAR-controlled items to parties on the Debarred List, and there are restrictions on the import into the US involving, or transfer of US-origin items under certain circumstances to, parties on the various non-proliferation sanctions lists published by the Department of State.

http://www.worldtradecontrols.com/there-are-so-many-us-restricted-party-lists-do-i-really-need-to-search-them-all/