24th March 2019
SWISS FEDERAL COUNCIL COMMENCES BLOCKCHAIN LAW CONSULTATION PERIOD
Cointrust on 24th March reported that the Council has published a draft consultation report suggesting a range of modifications, including the introduction of electronic rights registration under the Swiss Code of Obligations, as well as the isolation of crypto-assets in the occurrence of bankruptcy under the Federal Debt Collection and Bankruptcy Law. It also proposes that the long-term Financial Institutions Act be adapted to establish a licence to operate a trading platform as a securities company.
PAKISTAN: FAQ ON IMPLEMENTATION OF AML/CFT REGIME
On 24th March, the Pakistan Observer reported that the Securities and Exchange Commission of Pakistan (SECP) has published FAQ on AML/CFT, providing answers to specific questions under the 2018 regulations. The FAQ include information on a range of topics, such as CDD, customer identification and verification, customer risk assessment, UN Sanction Regimes, and details/ information on various other topics to improve compliance with regulations and the FATF Recommendations.
The FAQ are available at –
UP TO $1.32 BILLION LAUNDERED IN PAPUA NEW GUINEA
The Loop on 24th March reported that estimates are that up to $1.32 billion, based on the country’s GDP of $27 billion. This is based on the IMF ratio of 2% to 5% of a country’s GDP. The figure was in the National Risk Assessment 2017, and is in the Anti-Money Laundering and Counter Terrorism Financing Strategic Plan 2017-2020 – both reports made public on 22nd March by the National Coordinating Committee, which was created after PNG was grey-listed and brings together 18 law enforcement and regulatory bodies.
SWEDBANK AML REPORT “AN INCOMPLETE MESS”
ACFCS on 22nd March reported that the highly anticipated Swedbank AML report is heavily censored, incomplete, and doesn’t assuage investors, investigators, regulators. Several groups, including shareholders’ associations in Sweden and banking analysts have called the report by Forensic Risk Alliance (FRA) – an analysis compiled in less than a month – a superficial dive into deeper problems that will do little to stem the growing fears of outsiders, law enforcement and examiners. One of the few definitive conclusions the report made was that all accounts identified as tied to the SVT report were in Sweden and the Baltics were closed by July 10th 2018 – and the last account opening date for any of the entities in Sweden or the Baltics was May 15th 2017 and the last transaction date for any of the unknown number of entities was May 31st 2017.
FORENSIC RISK ALLIANCE REPORT ON SWEDBANK’S BALTIC ACCOUNTS
Kenneth Rijock in his blog has provided a link to a slightly redacted version of the Initial Draft and Preliminary Update, prepared by Forensic Risk Alliance, regarding Swedbank’s Baltic accounts and the related money laundering scandal. The terms of reference for the Phase I report included to ascertain if any of the 50 entities named by broadcaster SVT were or had been customers of the bank, using the bank’s KYC and/or other data systems, if any have been disposed of (“off-boarded”), and carrying out other work in preparation for a planned Phase 2.
CANADA TO CREATE TRADE FRAUD/TRADE-BASED MONEY LAUNDERING TEAM
ACFCS on 22nd March reported that the Canadian Budget includes proposals to create “Team TBML”, a multi-disciplinary Trade Fraud and Trade-Based Money Laundering Centre of Expertise, which will complement the efforts of the Action, Coordination and Enforcement (ACE) Team. This will strengthen capacity at FINTRAC to target these growing threats. The Budget proposes to invest $28.6 million over 4 years, beginning in 2020–21, with $10.5 million per year ongoing to create the multi-disciplinary Centre of Expertise.
2 MAJOR MUSEUMS ARE TURNING DOWN SACKLER DONATIONS – WILL OTHERS FOLLOW?
Chicago Tribune on 24th March reported that the National Portrait Gallery in London has announced that it was forgoing a grant from the Sackler family – owners of the pharmaceutical behemoth Perdue Pharma, which makes OxyContin. Now another British institution has said no to Sackler money. It says that the Sacklers are mired in legal action, investigations and looming congressional inquiries about their role in marketing a drug – OxyContin – blamed for a significant early role in an epidemic of overdose deaths that has claimed the lives of hundreds of thousands of Americans since 1997.
IRELAND: TRANSPORT TYCOONS ACCUSE SOLICITOR AND FINANCIAL ADVISER OF €7 MILLION FRAUD
The Sunday Times in Ireland on 24th March reported that the Nolans, a family that controls Ireland’s biggest trucking company is suing their former solicitor and financial adviser, claiming they were defrauded of €7 million. The family, who control Nolan Transport, allege they transferred €the money from their pension funds to an account in Switzerland, but when they sought the return of the money, their solicitor Ciaran Desmond could not provide it. The family have alleged that most of the money was used as security for a €88 million loan, which was designed to make “a secret profit” for Desmond, then a partner in McGuire Desmond Solicitors, and John Millett, a financial adviser. The case is said to involve an Isle of Man company.
70% OF RANSOMWARE ATTACKS TARGETED SME, BEC ATTACKS INCREASED BY 130%
An article on the Bleeping Computer website on 22nd March concerned a report from a specialist insurer, Beazley Breach Response (BBR) Services in the US, which said that 71% of ransomware attacks targeted small businesses, with an average ransom demand of $116,324 and a median of $10,310, after analysing 3,300 incidents involving its clients in 2018. Small-to-medium sized companies were the most sought over targets because they will usually spend a lot less on securing their computing systems and information than larger firms according to the report, making it a lot easier for malicious actors to compromise their systems. Of all industries targeted by ransomware campaigns, the top 3 organisations who experienced this type of incident are from healthcare (34%), professional services (12%), and financial institutions (12%), while government (6%), real estate (4%), and hospitality (3%) closed the rankings. The reports says that the highest ransom demanded from those its insured was of $8.5 million or 3,000 Bitcoin, while the highest ransom paid by one of its clients was of $935,000. The report also says that business email compromise (BEC) fraud attacks, saw a 133% increase during last year.
FOOTBALL LEAKS HACKER ACCUSED OF BLACKMAILING MALTA-BASED INVESTMENT FUND DOYEN SPORTS
The Malta Independent on 24th March reported that Rui Pinto, the Portuguese hacker linked to the “Football Leaks” whistleblower website, made his first appearance before a judge in Lisbon. He is suspected of hacking Doyen Sports, an investment fund based in Malta, at the heart of the scandal. He also stands accused of asking Doyen for as much as €1 million to stop him publishing compromising documents. He was arrested in Hungary on 16th January and extradited to Portugal. Doyen Sports Investments Limited is a Malta-based subsidiary of the hedge fund Doyen Group, and was founded in 2011, its principal activity being to provide alternative funding directly to football clubs via structured finance. It has been fined €23,000 in Malta for conducting lending activities without having the necessary licence.