3 May 2019
SANCTIONS ENFORCEMENT TIPS FROM FORMER OFAC OFFICIALS
On 2nd May, Morrison Foerster published an article containing advice from former OFAC officials now working at the firm. The article details what actions contribute to successful outcomes, along with the mistakes companies too often make when appearing before OFAC – if you’re going to disclose, disclose fully; make sure to mention favourable laws and precedents; don’t ignore OFAC’s policy goals; don’t treat OFAC like the SEC or litigation; and take responsibility for compliance gaps.
SPANISH POLICE BREAK UP ASIAN PEOPLE SMUGGLING RING
The Toronto Star on 2nd May reported that police say border officials in Algeria and Morocco conspired with traffickers who smuggled hundreds of people to Spain. It is said that a Bangladesh-based gang obtained visas to Algeria through consular services for 350 people from Bangladesh, Sri Lanka, India and Pakistan – each said to have paid around €20,000. 11 people have been arrested in Spain.
CHINESE POLICE SEIZE 200 TONNES OF SMUGGLED FROZEN FOOD FROM VESSEL
The Global Times on 2nd May reported that a total of 200 tonnes of smuggled frozen food was recently seized by customs in south China’s Guangdong Province, found in an inbound suspected vessel after the police received a tip-off. Without any valid inspection or quarantine certification the cargo comprised semi-finished and unlabelled meat products from New Zealand, Australia and Brazil.
CHINESE FAMILY LOST $6.5 MILLION IN STANFORD UNIVERSITY ADMISSIONS SCAM
The japan Times on 3rd May reported that the mother of a Chinese student has admitted she paid $6.5 million to William “Rick” Singer, the man at the heart of the US college admission scandal, believing the sum was a charitable donation. Singer has pleaded guilty to working with corrupt coaches, university administrators and exam monitors to get the children of wealthy families into prestigious colleges.
AML CRACKDOWN HITS VANCOUVER’S ONCE ROLLICKING CASINOS
The Toronto Star on 3rd April reported that new rules imposed last year to more tightly identify sources of funds have put a damper on the province’s gambling sector.
UK SANCTIONS ON THE DEMOCRATIC REPUBLIC OF THE CONGO
On 3rd May, OFSI published updated guidance on the UK’s sanctions regime on the DRC, if the UK leaves the EU without a deal.
KENYA: TOUGH NEW GAMBLING ADVERTISING RESTRICTIONS
On 3rd May, Calvin Ayre reported that Kenya’s gambling operators are facing strict new limitations on their ability to promote their products, the latest move in the government’s ever-tightening grip on the sector. The Kenya’s Betting Control and Licensing Board (BCLB) has issued a notice detailing its plans to drastically curtail its licensees’ ability to advertise, whether on traditional broadcast outlets, billboards or social media.
FINANCIAL SERVICES INVESTIGATIONS AND ENFORCEMENT MONTHLY ROUND-UP – APRIL 2019
On 29th April, TLT Solicitors published a round-up of recent enforcement actions and investigations in the financial services sector.
2 PROLIFIC DARK WEB MARKETPLACES TAKEN DOWN IN SIMULTANEOUS GLOBAL OPERATIONS
Europol on 3rd May reported that the “Wall Street Market” and the “Silkkitie” (known as the “Valhalla Marketplace”) have been taken down. Wall Street Market – arrests in Germany, and 2 of the highest-selling suppliers of narcotics were arrested in US. Finnish authorities shut down Silkkitie earlier this year, when the same traders moved their activities to another illegal trade site on Tor, German authorities brought their illegal activities to an end.
UAE BANS IMPORT OF UNMARKED CIGARETTES
TJI on 2nd May reported that UAE has banned the importation of any type of cigarettes without digital tax stamps. The stamps store digital information that can be read with a special device to check if the Excise Tax due has been properly paid, and the scheme will be gradually expanded to cover all tobacco products.
COSTA RICA SEES GROWING DEMAND FOR KETAMINE AND SYNTHETIC DRUGS
Insight Crime on 3rd May published an article saying that a bumper seizure of ketamine bottles in Costa Rica shows evidence that the Central American country is seeing growth and diversification of its internal synthetic drug market. It says that Costa Rica has historically been considered a drug trafficking transit spot due to its strategic location. However, the increase of internal usage and recent seizure seem to be changing its landscape from only being a transit route to having an, albeit small, internal market.
VENEZUELA HAS ASSEMBLED ONE OF THE LARGEST STOCKPILES OF WEAPONS IN THE WESTERN HEMISPHERE
An article in Foreign Policy on 2nd May says that, as the security situation in the country continues to worsen, the possibility of its arsenal winding up in the wrong hands presents a grave threat to regional stability. Securing Venezuelan weapons from opportunistic traffickers with well-established smuggling routes and guerrilla groups should be a top priority for the US and its regional partners.
SUDAN: THE END COMES FOR BASHIR
A Policy Notes paper from the Washington Institute looks at the extremely fluid situation in Sudan, where on April 11th the military ousted long time president Omar al-Bashir. The move followed months of peaceful protests, and appeared to mark a major turning point for the country. Still, what comes next remains uncertain.
TRUMP’S DECEPTIVE UN ARMS TRADE TREATY ARGUMENT
On 1st May, FactCheck.org published an article saying that Trump falsely claimed that under the UN ATT, the US would “surrender American sovereignty” and allow “foreign bureaucrats to trample on your Second Amendment freedom”.
UK FORENSIC SCIENCE IS NOW LAGGING BEHIND OTHER COUNTRIES
Police Professional on 2nd May reported that the UK’s forensic science is now lagging behind other countries due to lack of research and funding according to the House of Lords Science and Technology Select Committee. The Committee called for a new forensic science board to be created to deliver strategy and take responsibility in England and Wales.
“THE ELENI P” – OWNERS DENIED HIRE FEE FOR WHEN VESSEL DETAINED BY PIRATES
On 2nd May, Clyde & Co reported that a English High Court case saw a shipowners’ claim for hire fees exceeding $4.5 million in respect of a period of 7 months during which their vessel was detained by Somali pirates in the Arabian Sea rejected.
55 MAKE-OR-BREAK NATIONAL CRITICAL FUNCTIONS VITAL TO THE US
On 30th April, Homeland Security Today reported that the Cybersecurity and Infrastructure Security Agency at the Department of Homeland Security have released a list of 55 National Critical Functions so vital to the US that disruption, corruption, or dysfunction would have a debilitating effect security, national economic security, or national public health or safety.
INDONESIA: HOW THE (ONCE) MOST CORRUPT COUNTRY IN THE WORLD GOT CLEAN(ER)
An Article in The Atlantic on 2nd May says that for decades in Indonesia, the corruption was like the humidity: always there. In Transparency International’s initial ranking, in 1995, of nations’ perceived corruption, Indonesia came in last. Last year, it was 89th out of 180 the first time it ever broke into the top half of the chart. Hardly Denmark (which was first)—but no longer Somalia (last). What lessons can Indonesia teach the rest of us? Highlighted is that, in 2002, the country established the Corruption Eradication Commission (KPK). The new body would run parallel to the police and the attorney general’s office, and was entrusted with the power to investigate and prosecute any public official for any type of corruption.
TRUMP UNSIGNS THE UN ARMS TRADE TREATY: HOW DID WE GET HERE?
On 3rd May, a Commentary from War on the Rocks poses this question, saying that Trump repeated typical gun lobby talking points about the Arms Trade Treaty that demonstrate a wilful mischaracterisation of the treaty’s intent and effect. The article looks at what the ATT actually sets out to do and the background to US involvement with it.
HOW THE IRS GAVE UP FIGHTING POLITICAL DARK MONEY GROUPS
An article in ProPublica on 18th April said that the IRS has largely given up on regulating an entire category of non-profits and, as a result, more “dark money” gushes into the political system. It says that, shielded by the cloak of anonymity, typically wealthy interests are permitted to pass limitless pools of cash through non-profits to benefit candidates or political initiatives in the US without contributing directly to campaigns. Such spending is legal because of a massive loophole, and IRS attempts to police this class of non-profits have almost completely broken down. It says that the IRS is aware of the problems, but its attempts to address them have gone nowhere.
AUSTRALIA CRACKS DOWN ON CRYPTOCURRENCY TAX EVASION
Regulation Asia on 3rd May reported that the Australian Taxation Office is collecting records from digital currency exchange firms as part of an effort to identify investors failing to pay the right amount of tax. For tax purposes, cryptocurrencies are treated as an asset in Australia. Consequently, every time a cryptocurrency amount is bought and sold, there is potential capital gains tax liability.
EU RELEASES ITS PROPOSAL FOR RULES ON GLOBAL ELECTRONIC COMMERCE
On 3rd May, the EU announced that the Commission has made public its proposal for future international rules on e-commerce. The proposals follow the launch of an initiative by WTO members in January that should result in a multilateral legal framework that consumers and businesses could rely on to make it easier and safer to buy, sell and do business online. The rules proposed by the EU would among others guarantee the validity of e-contracts and e-signatures, strengthen consumers’ trust in the on-line environment, introduce measures to effectively combat spam, tackle barriers that prevent cross-border sales and permanently ban customs duties on electronic transmissions.
For details of the initiative launched in January, see –
PERSONAL SERVICE COMPANIES & IR35
On 3rd May, the House of Commons Library published a briefing paper on the ‘IR35’ rules. There were designed to prevent the exploitation of personal service companies for tax avoidance and were introduced in April 2000, following a long and contentious consultation exercise. This legislation remains unpopular among freelancers who use this corporate form to provide services. The paper looks at debates as to the effectiveness of these rules and wider concerns about the use of employment intermediaries to avoid tax, before discussing recent developments as to their application in the public and private sector.
CLAIM THAT IRANIAN STEEL “FLOODING” INTO LEBANON
On 3rd April, The National in the UAE reported that traders in Lebanon are said to be angry over a surge in imports of cheap Iranian steel and iron this year, which no one is admitting to bringing in for fear of US sanctions imposed for doing business with Tehran. It is said that the Lebanese minister of economy and trade tried to cover up the Iranian origin of the steel in a meeting with a senior US Treasury official.
UKRAINIAN “MALVERTISER” EXTRADITED FROM THE NETHERLANDS TO FACE HACKING CHARGES IN NEW JERSEY
A DoJ news release on 3rd May announced that Oleksii Petrovich Ivanov, 31, a Ukrainian national, charged with participating in a years-long, international scheme to infect computers with malware through online advertisements – so-called “malvertising” has been extradited from the Netherlands to the US.
2 INDIVIDUALS ALLEGEDLY SOLICITED $4.8 MILLION TO TRADE BINARY OPTIONS
Finance Magnates on 3rd May reported that tThe US Commodity Futures Trading Commission (CFTC) has charged 2 individuals with fraud related to a binary options investment pool. The individuals founded a company called Berkley Capital Management, LLC. This Wyoming-based company with offices in Ohio and the Netherlands operated as Delaware limited partnership, and claimed it was going to trade binary options at the North American Derivatives Exchange (NADEX), but it is said that only part of the funds was used at NADEX with at least $2.3 million being misappropriated.
TAIWAN: POLICE DETAIN 350 IN CRACKDOWN ON ORGANISED CRIME
On 3rd May, the Taipei Times reported that police in major sweeps nationwide over a week have detained 350 people for alleged participation in illicit activities related to organised crime, as well as loan sharks and underground money dealers. The sweeps targeted members of major crime syndicates — including the Bamboo Union, the Four Seas Gang and the Heavenly Way Alliance — who have allegedly been involved in street violence, blackmail, larceny, drug trafficking and illegal firearms possession. Officials said that they seized $9.06 million in funds transferred by unlicensed money dealers, as well as cash and 6 properties.
BULGARIA: 5 ARRESTED, 2 WANTED FOR EU FUNDS FRAUD
On 3rd May, the Bulgarian news agency BTA reported that 5 persons have been detained for 72 hours and 2 others (a woman in Turkey and another person in a EU Member States) are wanted in connection with EU funds fraud.
KENYA: HOME-GROWN HACKERS HAVE LOOTED MILLIONS FROM BANKS
All Africa on 3rd May reported that a cyber security firm has successfully traced the home-grown Kenyan cartel, a hacker group called SilentCards, behind the looting of billions from several banks. It is said to have taken €3.54 million from a single bank last year, and is said to be an offspring of Forkbombo the group that syphoned €3.5 million from the country’s banks in 2017 before being closed down.
UK CHARITY LINKED TO MADRID BOMBER FOUND RESPONSIBLE OF FRAUD IN UK
The National in the UAE reported on 3rd May that a London-based Syria aid group linked to one of the accused in the 2004 Madrid train bombings has been found responsible of serious mismanagement by the UK Charity Commission. It says that Mouhannad Almallah Dabas, who was suspected of involvement in the 2004 Madrid railway bombings and was killed in late 2013 near the Syrian city of Homs, was appointed as one of the trustees in February 2013. His brother, Moutaz Almallah Dabas – also a trustee of the charity – was also arrested in connection to the terrorist attack. The Charity Commission is quoted as saying that there was no evidence that any funds reached the people they were purportedly raised for, and that this is clearly an abuse of public trust and what it means to be a charity.
CUSTOMS SEIZES 8 KG OF HIGH GRADE SAFFRON AT AIRPORT BEING SMUGGLED FROM INDIA
The Hindu on 3rd May reported that customs officers seized 8 kg of the expensive commodity hidden in the baggage of a passenger headed for Dubai.
EGYPT: CUSTOMS AUTHORITY THWARTS ATTEMPT TO SMUGGLE OTTOMAN ERA DOOR
Egypt Independent reported on 2nd May that the wooden door, in 2 parts, was revealed to date back to the Ottoman era of the late 18th and early 19th Centuries. Officers had suspected some carpets, statues, frames, pictures, copper antiques and an old wooden door as being antiquities.
WORRYING NEW TYPE OF CRIMINAL GROUP FOR COSTA RICA
On 3rd May, Insight Crime reported that a new criminal group in Costa Rica, Los Moreco, is causing concern as their tactics, reach and admiration for Mexico’s Zetas make them a far more powerful gang than the country is used to dealing with.
MYSTERIOUS DEATHS, THREATS AND SKULDUGGERY SURROUND ODEBRECHT INVESTIGATION
Insight Crime on 3rd May published a report saying that a number of whistleblowers in South America involved in the Odebrecht corruption scandal have died under mysterious circumstances, and now a prosecutor in Peru says that a witness who reported a million-dollar bribe to a former president has received death threats.
US TO RETURN $200 MILLION IN 1MDB FUNDS TO MALAYSIA
Baker McKenzie reported on 3rd May that US authorities are said to be about to return $200 million stolen from Malaysia’s state fund 1MDB, including money from a stake in a luxury New York hotel and from a Hollywood movie producer.