13th April 2019
PROLIFERATION OF ISLAMIC STATE-PRODUCED WEAPONS: HOW IT MADE ITS OWN MILITARY INDUSTRIAL COMPLEX
An article in Eurasia Review on 13th April saying that, during the short-lived existence of their self-declared caliphate, the Islamic State (IS) developed an extensive weapons programme. They carried out research and development to innovate new weapons, and then produced them on an almost industrial scale. While the loss of their territory has limited their ability to run their weapons production lines at the same rate, there is a concern that weapon innovations they have made may proliferate to other terrorist groups.
NEW ZEALAND RESTRICTIONS ON SEMI-AUTOMATIC FIREARMS EXTEND TO EXPORTS
Newsise on 12th April reported that a minister has welcomed law changes prohibiting certain semi-automatic weapons, magazines and parts in New Zealand, and announced that the new restrictions on these items will also extend to most exports. From 12th April the criteria for the export of strategic goods will change.
For full details of the changes and transitional arrangements see:
https://www.mfat.govt.nz/en/trade/trading-weapons-and-controlled-chemicals/
CANADA PREPARES TO IMPLEMENT NEW EXPORT CONTROLS AND BROKERING REQUIREMENTS
On 11th April, McCarthy Tetrault published an article saying that on March 16th, the Canadian government published proposed regulations supporting amendments to Canada’s Export and Import Permits Act (EIPA) that, among other things, create a new control regime for Canadians engaged in “brokering” related to transactions involving the movement of certain controlled goods, services or technology from one foreign country to another. It says that this is the first time Canada has imposed such controls and companies that may be potentially involved in such transactions should be reviewing the new regulations carefully. Changes to law also implement other changes required as a result of Canada’s accession to the UN Arms Trade Treaty (ATT), including new permit and reporting requirements for certain goods and technology transfers to the US. Matters to be considered before a licence is granted include potential for violations of international humanitarian or human rights law or international conventions relating to terrorism or transnational organised crime, and acts of gender-based violence or violence against women and children. The amended Act will prohibit unauthorised brokering by any Canadian company or individual whether in Canada or abroad. In practice, the broad application of these prohibitions means that unauthorised brokering will be a criminal offence, and that brokering obligations will be applicable both domestically and on an extra-territorial basis.
MACAU SEES DROP IN SUSPICIOUS TRANSACTION REPORTS
Calvin Ayre on 12th April reported that the Macau’s Financial Intelligence Office (FIO), over the first quarter of 2019, received a total of 507 suspicious transaction reports (STR) from casinos and gaming operations, which represents a 6.7% decline from the 541 seen during the same quarter in 2018. The total number of STR, from all sources in the city, reached 699, which was a massive 30% drop from the 909 seen during the first quarter last year. Macau maintains a required STR threshold of about $62,500 (the US has called for a reduction to $3,000). Macau laws impose AML/CFT requirements on all financial institutions, including currency exchanges, money transmitters, casinos, pawnshops, and property agents, for solicitors, accountants, and dealers in precious metals, gems, luxury vehicles, and other high-value goods.
https://calvinayre.com/2019/04/12/casino/macau-sees-drop-in-suspicious-financial-transactions/
LUXEMBOURG: HAVILLAND BANK HIT WITH €4 MILLION FINE FOR MONEY LAUNDERING FLAWS
On 12th April, the Luxembourg Times reported that Luxembourg’s financial watchdog has imposed a €4 million fine on Banque Havilland for AML failures, saying that it is a sign the regulator is starting to hand out tougher sanctions. The news of the fine – which was imposed in December – comes after the bank was sued in Qatar for allegedly attempting to manipulate its currency. Qatar filed lawsuits in London and New York against banks based in Abu Dhabi, Saudi Arabia and Luxembourg over the alleged manipulation of its currency in 2017 – Banque Havilland, First Abu Dhabi Bank PJSC and Samba Financial Group.
https://luxtimes.lu/economics/37042-havilland-hit-with-4m-fine-for-money-laundering-flaws
DoJ: WIRE ACT OPINION DOESN’T COVER LOTTERIES
On 12th April, an article from Sheppard Mullin said that, in an effort to side-step the lawsuit filed against it by the New Hampshire Lottery (and others), the US DoJ asserts that its recent reinterpretation of the Wire Act doesn’t apply to lotteries. In January 2019, the DoJ reversed the position it took in 2011 that the entirety of the Wire Act is limited to sports betting. The new opinion concluded that only 1 of 4 parts of the Wire Act apply to sports betting, while the other 3 apply to any online betting.
https://www.jdsupra.com/legalnews/doj-asserts-wire-act-opinion-doesn-t-93714/
FORMER VENEZUELAN MAJOR GENERAL, AND HEAD OF ITS MILITARY INTELLIGENCE, ARRESTED IN SPAIN ON DRUG CHARGES
On 12th April, Kenneth Rijock in his blog reported that Hugo Carvajal Barrios, who was designated by OFAC in 2008, had been arrested in Spain.
http://rijock.blogspot.com/2019/04/hugo-carvajal-former-venezuelan-g-2.html
MAURITIUS FSC RECOGNISES SECURITY TOKEN OFFERINGS IN ITS LEGISLATION
Appleby reported that, after having issued a Guidance Note in September 2018 on its position regarding investment in digital assets, including cryptocurrencies and tokens, in which it explained that digital assets are recognised as an asset class for investment by specific sophisticated and expert investors, the Financial Services Commission in Mauritius has now issued a Guidance Note to explain its regulatory approach to Security Token Offerings (STO).
ESTONIA REOPENS MONEY LAUNDERING PROBE LINKED TO MAGNITSKY CASE
On 13th April, OCCRP reported that Estonian authorities re-launched a 2013 investigation to see how much of the money suspected of having been laundered through Danske and Swedbank is tied to the infamous Magnitsky affair – where the theft of public funds in Russia and a money laundering scheme that was discovered in 2008 by Moscow lawyer Sergei Magnitsky, who was arrested after he reported his findings to the authorities, and died in jail a year later, allegedly due to mistreatment.
https://www.occrp.org/en/daily/9568-estonia-reopens-money-laundering-probe-linked-to-magnitsky-case
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