19th April 2019
CRACKDOWN ON PUERTO RICO BANKS FOLLOWING VENEZUELA SANCTIONS
KYC 360 on 19th April reported that US sanctions on Venezuela have led the New York Federal Reserve to crack down on Puerto Rico’s $50 billion offshore banking industry. Offshore banks in Puerto Rico are able to open accounts with the Federal Reserve since the island is a US territory, and that gives them a competitive advantage over other offshore banking jurisdictions like the BVI.
US ANNUAL ASSESSMENT OF FOREIGN TRADE BARRIERS
On 17th April, White & Case published an article about the most recent US Trade Representative (USTR) annual National Trade Estimate (NTE) Report on Foreign Trade Barriers, which “highlights significant foreign barriers to U.S. exports, U.S. foreign direct investment, and U.S. electronic commerce”. This was published on 29th March. The report aims to shed light on these issues by reviewing key developments in this year’s NTE with respect to major US trading partners, namely China, Japan, the EU, Canada, Mexico, Brazil, and Korea.
The report is available at –
THAI SENIOR MONK GETS 26 YEARS FOR MONEY LAUNDERING
Benar News on 18th April reported that a court in Thailand has sentenced Kitti Patcharakun, 55, a senior Buddhist monk to 26 years in prison after finding him guilty of money laundering when he and another monk embezzled almost $1 million of government funds earmarked for temples. The conviction took place 8 months after another court ordered a former jet-setting member of Thailand’s Buddhist clergy to serve 114 years in prison for fraud, money laundering and computer crimes. Prosecutors said Kitti and the former director of the National Buddhism Office (NBO), Nopparat Benjawatananan, siphoned off $903,225 by collaborating and falsifying projects for 12 temples in 4 provinces.
ARMED GROUPS SEIZING WEAPONS AND AMMUNITION FROM NON-UN PEACE OPERATIONS
A report from the Small Arms Survey details efforts to improve weapons and ammunition management in non-UN peace operations in order to enhance force protection and mandate implementation. It says that more than 25 organisations apart from the UN have deployed more than 100 peace operations to date. Thousands of small arms and light weapons as well as millions of rounds of ammunition have been lost in recent years as a result of attacks on fixed sites, patrols, and convoy movements. Forced abandonment of equipment, burglary, theft, corruption, as well as poor discipline and practices also contribute to diversion of materiel.
2 FORMER EXECUTIVES OF A LAS VEGAS INVESTMENT COMPANY EXTRADITED FROM JAPAN OVER A $1.5 BILLION PONZI SCHEME
A news release on Mondo Visione on 18th April reported that Japanese authorities have extradited to the US 2 former executives of a Las Vegas, Nevada, investment company in connection with their alleged roles in a $1.5 billion Ponzi scheme. Junzo Suzuki, 70, and Paul Suzuki, 40, are father and son and are both Japanese nationals, and were each charged in a July 2015 indictment. The alleged fraud involved a company called MRI. MRI purportedly specialised in “factoring,” whereby the company purchased accounts receivable from medical providers at a discount, and then attempted to recover the entire amount, or at least more than the discounted amount, from the debtor.
AMERICAN BUREAU OF SHIPPING (ABS) AND CARGO INCIDENT NOTIFICATION SYSTEM (CINS) JOINT VENTURE TO DEVELOP BEST PRACTICES FOR MOVING DANGEROUS GOODS
On 18th April, Port Technology reported that the American Bureau of Shipping (ABS) and Cargo Incident Notification System (CINS) have joined to make actionable recommendations to shippers and mitigate the risks of stowing dangerous goods aboard container ships. By establishing a comprehensive set of guidelines, ABS and CINS hope to lead a focused application of existing risk assessment processes. This follows a number of recent incidents involving dangerous cargo.
OPERATION CAR WASH – WHAT HAPPENED TO COMPLICIT SWISS BANKS?
On 6th April, Transparency International published an article which was an abridged version of a presentation delivered at ‘Dark Havens: Confronting Hidden Money & Power’, a conference held in Berlin on 5th–6th April. Lava Jato, in Portuguese, was first uncovered by Brazilian prosecutors in 2014 and continues to be the subject of investigations. 2 Swiss banks played a key role in facilitating this scheme: BSI and Julius Baer (formerly Merrill Lynch). The article looks at the role of the Swiss banks, saying that there is no publicly available information indicating that these 2 Swiss Banks were punished by Swiss authorities for their role in these schemes.
ODEBRECHT: GIGANTIC CORRUPTION SCANDAL SHOWS NO SIGN OF WANING
A BBC article on 18th April says that the suicide of former Peruvian president Alan Garcia, just as he was being arrested on allegations, he received bribes from Odebrecht, shows that one of the greatest corporate corruption scandals in the world is not going away. The article examines the background of the company and corruption scandal.
ENGLISH HIGH COURT CASE ON FIDUCIARY DUTIES OF DISSENTING DIRECTORS
On 18th April, Cadwallader published a memorandum about a recent High Court case decision involving a shareholder and executive director of the Stobart Group, and which took a restricted view of the freedom of a dissident director to take his case outside the confines of the boardroom. Simultaneously, the High Court endorsed the freedom of the board to silence that director regarding public statements. The firm concludes that: a dissident director who is also a shareholder must be careful in public communications to make clear that he is writing as a shareholder and not a director; a director should not disclose confidential information without express permission from the Board; and a dissident director should refrain from taking any steps that can subsequently be considered as damaging the company.
OSCE SAYS BOSNIA PROSECUTORS ARE DOING A POOR JOB AGAINST CORRUPTION
Reuters on 18th April reported that the Organisation for Security and Cooperation, in a report on corruption cases in 2017-2018, found the country’s 2 prosecution offices specialising in dealing with the most serious graft cases did not initiate the majority of such cases, but that indictments were filed by lower-level prosecution offices. Only 1 in 3 high-level corruption cases resulted in conviction while the conviction rate in medium level graft cases was still low at 74%, according to the report.
CYPRUS HAS MADE ‘ENORMOUS PROGRESS’ ON MONEY LAUNDERING CLAMPDOWN
The Cyprus Mail and US media on 19th April reported that US Treasury Assistant Secretary for Terrorist Financing Marshall Billingslea has praised Cyprus’ “enormous progress” on issues relating to AML.
ECUADOR ISSUES ARREST WARRANT FOR FORMER MINISTER WHO BACKED ASSANGE
Zero Hedge on 19th April reported that Ecuadorian President Lenin Moreno appears to be cracking down on opposition voices, including outspoken supporters of Julian Assange. Moreno is himself facing a corruption scandal – the revelations contained within the so-called INA papers – which threatens his administration. Ricardo Patino is being sought by the government because of his links to Swedish software developer Ola Bini, arrested on hacking charges related to his alleged relationship with Wikileaks. Patino fled Ecuador, and is believed to be hiding in Peru.
THE PORT OF BUENAVENTURA IN COLOMBIA: COCAINE PATH OF LEAST RESISTANCE
On 19th April, an opinion piece in Insight Crime claimed that drug traffickers are moving record amounts of cocaine through Buenaventura, facilitated by industrial scale corruption. It says that it is claimed that checks on containers could total around 8% (74,000) of the total daily throughput. For a drug trafficker, it says, assuming an 8% risk of seizure is a risk he will gladly take – losing 8% of his shipments is simply the cost of doing business. The truth, however, is that perhaps as little as 3% of all containers are really checked – and this is only if one assumes corrupt staff are not simply waving through containers already “contaminated” with cocaine.