16th May 2019
TURKEY’S CITIZENSHIP BY INVESTMENT PROGRAMME
On 14th May, Bener Law Office published an article intended to an overview of Turkey’s citizenship by investment (CBI) programme, focusing particularly on real estate investments. It says that Turkey’s immigration investment programme provides a very direct and quick path to citizenship, which makes it particularly attractive to citizens from emerging economies looking for a passport will allow them to travel more easily than their current passport. Since January 2017, several categories of investments to qualify for pursuit of Turkish citizenship, including capital investments, government debt instruments, investing in a business that employs at least 50 Turkish nationals, venture capital investments. In September 2018, the required investment threshold amounts were significantly lowered across these categories. For real estate, investments of $250,000 now qualify for the citizenship by investment programme.
CHANGE IS COMING TO AUSTRALIAN PARALLEL IMPORTATION LAW
On 2nd May, Russell Kennedy Lawyers published a update on “parallel importation”. The term refers to the situation where genuine goods, marked with a registered trade mark with the authorisation of the rights holder outside the country, are purchased by a third party – the “parallel importer” – who imports and sells them. The proposed changes in Australia are intended to facilitate parallel importation to the benefit of consumers by limiting the strategic use of such restrictions by trade mark owners, and a new section inserted into the relevant Act in August 2018 comprehensively sets out the circumstances in which the parallel importation of trade marked goods does not infringe a registered trade mark. Trade mark owners will no longer be able to prevent parallel importers from relying on the parallel importation defence through assignments and other corporate and contractual arrangements.
HIGHLY ENRICHED URANIUM FROM UK SENT TO TENNESSEE FOR STORAGE
The Aiken Standard on 15th May reported that nearly 700 kg of HEU is being securely stored at the Y-12 facility, and uranium will eventually be downblended for fuel purposes. The uranium came from the Dounreay nuclear site, which is on the Scottish coast.
OVER 70 ARMIES USE BELARUSIAN DEFENCE PRODUCTS
On 15th May, the Belarussian Telegraph Agency reported a statement made by Chairman of the State Military Industrial Committee of Belarus Roman Golovchenko during the opening ceremony of the international defence technology expo MILEX 2019.
RUSSIA EASES ARMS RESALE RULES TO AVOID SANCTIONS
The Moscow Times on 15th May reported claims that Russia had relaxed rules that required secondary arms buyers to inform Russia in writing that it was the final buyer (or end-user). These countries could then avoid direct contact with Russia by making the primary arms buyer responsible for informing Moscow that the secondary buyer vows not to resell the weapons. It is said that the measures do not target China, India, Egypt, Algeria and Vietnam, which either ignore U.S. sanctions or negotiate exceptions for themselves.
INCA ARTEFACTS RETURNED TO PERU FROM US AND ARGENTINA
Gulf Today on 16th May reported that 134 pre-Columbian treasures including clay idols and textiles from the Inca Empire have been returned to Peru from the US and Argentina. Many were voluntarily returned after being illegally smuggled out of Peru.
UKRAINE: UKROBORONPROM DEFENCE STATE ENTERPRISE HAS 10 DAYS TO PREPARE FOR FINANCIAL AUDIT
On 15th May, 112 UA reported that in February February journalist investigations revealed allegations that the son of a close Poroshenko ally had organised a corruption scheme to smuggle spare military equipment parts from Russia in 2015. State defence facilities purchased the smuggled spare parts from private companies at highly inflated prices, and the organisation knew the origin of the smuggled parts but agreed to purchase them.
GREECE: FORMER CHAIRMAN OF ATHENS’S HENRY DUNANT HOSPITAL AND HIS WIFE GUILTY OF MONEY LAUNDERING
On 15th May, Ekathimerini reported that the conviction relates to the €1.58 million that Martinis was said to have been paid by the company Hospitalia International as part of a deal to upgrade the Dunant’s equipment. In February, Martinis was given a 7-year suspended sentence following his conviction for offering “free medical treatment” to prominent individuals.
FORMER MEDIA MOGUL CONRAD BLACK GRANTED A PARDON FROM PRESIDENT TRUMP
MSN reported on 16th May that Lord Black of Crossharbour, 74, former proprietor of the Daily Telegraph and a number of other world newspapers, served more than 3 years in prison after being convicted of fraud and obstruction of justice in 2007.
The Week provided a briefing on Black and what he did –
TURKEY IMPOSES TAX ON ALL IMPORTED E-COMMERCE GOODS
Ahval on 15th May reported that Turkey will charge import taxes on all goods ordered from abroad, with the exception of books, dropping an existing waiver for lower-value items. It is said that the government was responding to complaints from local businesses that previous arrangements created unfair competition. Turkey will impose import duties of up to 20% on the e-commerce goods, as well as other items arriving by post, from the end of May.
FIATA PUBLISHES BEST PRACTICES ON QUALITY OF CONTAINERS
On 14th May, Forwarderlaw published an article saying that, in April, the FIATA Working Group on Sea Transport published a guide outlining problems and best practices in “Container Shipping and Quality of Containers”. This follows on from its guide for best practices in respect of demurrage and detention of containers, published last year. It explains that containers standards come under 2 major international agreements:
- the Convention for Safe Containers (CSC), which sets structural certification standards enabling CSC certified containers to enter and move through the global supply chain easily; and
- the rules and policies established by the International Maritime Organization (IMO) in respect of safe packing of Cargo Transport Units (including 2016 changes requiring a Verified Gross Mass statement for all containerised cargoes).
Commenting on the new best practices guide, it points out that containers are owned and provided by the shipping lines, and it is the obligation of the carrier to provide clean and seaworthy containers.
THE DEFINITION OF, AND APPROACH TO, THE TAXATION OF CRYPTOCURRENCIES IN MALTA
Dixcart brief IN 589 said that the Malta Commissioner for Revenue has issued 3 guidelines regarding the tax treatment of distributed ledger technology (DLT) assets. Each of the guidelines relates to a different tax: income tax, VAT, and the duty payable on documents and transfers.
INCREASING DEMAND FOR MALTA FREEPORT SERVICES AND REGULATION OF MALTA FREE ZONES TO PROMOTE FURTHER EXPANSION
A briefing from Dixcart IN588 about Malta’s free zone set-up, says that, as one of the Mediterranean’s key transhipment ports, Malta Freeport represents a strategic platform for shipping lines that have chosen it as their Mediterranean hub port, being located at the crossroads of some of the world’s greatest shipping routes and at the heart of the Europe/Maghreb/Middle East triangle. Since 1988, it says that Malta Freeport has enjoyed remarkable growth and is now a major transhipment port in the Mediterranean region, enjoying positive international recognition, as a reliable and credible port, with global carriers. It says that the Maltese Authorities have created new legislation, the ‘Malta Free Zones Act’ which provides for the regulation and administration of the business of the Free Zones in Malta, with the objective of encouraging economic development and the generation of employment in Malta – it provides a regulatory framework and has introduced the concept of public/private partnerships to operate in the free zones.
HOW IOS GROUP “SUPERSIZED” THE SHELL COMPANY GAME
On 15th May, OCCRP published an article about the Irish-Latvian company. It says that, for almost 30 years, IOS Group created shell companies for international clients, playing a major, though apparently passive, behind-the-scenes role in multiple high-profile money laundering cases. It says that a new investigation show that IOS Group’s shell company business also laid the administrative foundation for the Troika Laundromat, a massive financial scheme set up and controlled by Troika Dialog, once Russia’s largest private investment bank. Companies created by IOS Group have featured in a number of high-level scandals involving tens of billions of dollars in illicit financial activities. The article gives a history and description of the Group, saying that IOS Group was founded in Dublin as IOS Financial Services in 1992, and IOS Group incorporated thousands of shell firms in the U.K. and BVI alone; others were registered in Panama, the United States, Hong Kong, Cyprus, and elsewhere. Its menu of services included registration and fee facilitation, legal services, annual payments for certificates of good standing, and composition of financial statements. In some cases, clients were billed for “ready-made” companies with “full sets” of documentation prepared by IOS Group for use as needed.
CHINA TO HELP CAMBODIA DEAL WITH CHINESE GANG
OCCRP on 15th May reported that the Chinese embassy in Phnom Penh has promised assistance to Cambodian police after a video surfaced in which a Chinese gangster declares he will seize control of a major Cambodian city while 20 other men, shirtless and tattooed, cheer him on. A Cambodian government report recently said that Chinese nationals were the most criminally active foreigners in Cambodia. Cambodia’s immigration department estimates 78,000 Chinese nationals live in Sihanoukville alone–only a fraction of whom have work permits.
SPANISH CUSTOMS INTERCEPT BOAT WITH 5 TONNES OF HASH
The Majorca Daily Bulletin on 14th May reported that Customs Service agents in Palma were involved in intercepting a boat on which 5 tonnes of hashish had been hidden.
CHINESE CUSTOMS SEIZES OVER 1,000 HUMAN PLACENTA EXTRACT INJECTIONS
Xinhua on 14th May reported that Customs officers in the city of Qingdao, east China’s Shandong Province, said they have seized a large amount of human placenta extract injections from an inbound flight from Japan. Human placenta extract injections are biological products, which need special quarantine certificates and approval.
PAKISTAN AGREES TO AML REFORMS AS PART OF $6 BILLION IMF BAILOUT DEAL
On 15th May, Baker McKenzie reported that Pakistan will implement fiscal and regulatory reforms, including strengthening its controls against financial crime, as part of a 3-year, $6 billion bailout agreement reached with the IMF, the organisation said.
UK: POSSESSION AND SUPPLY OF NITROUS OXIDE AND POWERS OF SEIZURE
On 15th May, PNLD published a Q&A asking what legislation do police need to consider in relation to this issue? Do police have a power to seize such substances?
IMPOSTER WEBSITES PROMPT REGULATORY WARNING TO FINANCIAL INDUSTRY IN US
King & Spalding on 15th May reported that on April 29th, FINRA published an Information Notice alerting to a potential increase in member firms falling victim to imposter websites – websites designed to appear legitimate but that actually serve as a vehicle to compromise users’ personally identifiable information (PII) or login credentials for the purpose of effecting financial fraud. FINRA warns that member firms are increasingly being targeted regardless of whether they have an existing online presence.
IT’S THE LUXURIES THAT GIVE IT AWAY – TO FIGHT CORRUPTION, FOLLOW THE GOODS
On 16th May, KYC 360 carried an article saying that it is almost certain that some of the profits made by all sellers of luxury goods come from criminals who have siphoned off government funds. The author says that, using data for 32 high-income and emerging economies, research have found a strong correlation between luxury item expenditure and societal corruption – including substantially higher luxury car sales in OECD countries with higher perceived corruption levels.
MEMBER STATES SHOULD STEP UP EFFORTS TO TACKLE FRAUD IN EU COHESION SPENDING, SAY AUDITORS
A news release from the European Court of Auditors said that, despite improvements over recent years, EU Member States’ efforts to tackle fraud in cohesion spending remain too weak, according to a new report from the European Court of Auditors. Member States’ assessments of the effectiveness of their anti-fraud measures are too optimistic, say the auditors. Detection, response and co-ordination still need substantial strengthening to prevent, detect and deter fraudsters effectively. Over 4,000 potentially fraudulent irregularities affecting the EU’s financial interests were identified between 2013 and 2017.
The report is at –
UK OFFENSIVE WEAPONS BILL 2018 RECEIVES ROYAL ASSENT
On 16th May, the Home Office published updated documents relating to this Bill, which will introduce new powers to tackle knife crime, acid attacks and the risk that criminals could obtain powerful firearms. Amongst other things, it will prohibit high energy and rapid firing firearms and a device known as a bump stock which increases the rate of fire of rifles and provide for compensation for owners of such weapons. The Bill received Royal Assent on 16th May.
EU FINES 5 MAJOR BANKS OVER $1 BILLION FOR CURRENCY COLLUSION
On 16th May, Al Jazeera reported that traders from 5 banks colluded to rig the foreign exchange market, European anti-trust regulators have found. Barclays, RBS, Citigroup and JPMorgan were fined €811.2 million in one settlement, while a second saw a further €257.7 million fine levied on Barclays, RBS and MUFG Bank (formerly the Bank of Tokyo-Mitsubishi).
UK NOTICE TO EXPORTERS 2019/07: OGEL FOR EXPORT OF DUAL-USE ITEMS TO EU MEMBER STATES UPDATED
On 16th May, the Export Control Joint Unit published this Notice saying that the Department for International Trade has updated the open general export licence for export of dual-use items to EU Member States.
SFO FREEZES £12 MILLION PROPERTY IN LCF PROBE
On 16th May, the Evening Standard reported that the SFO has frozen more than £12 million worth of property belonging to people linked to the collapse of London Capital & Finance. Restraint orders prevent the men or their families from selling the assets, and were made under section 41 of the Proceeds of Crime Act 2002.
4 ARRESTED AS UK, DUTCH AUTHORITIES LAUNCH JOINT BIODIESEL INVESTIGATION AT GREENENERGY
Reuters reported on 16th May that 4 people were arrested and addresses raided in the UK, the Netherlands and Belgium in a joint Anglo-Dutch investigation into biodiesel trading at British road fuel supplier Greenergy, the SFO said.
JOSU TERNERA – LONG-TIME LEADER OF ETA, THE SPANISH BASQUE TERRORIST GROUP – ARRESTED
Kenneth Rijock in his blog on 16th May reported that Josu Ternera, a fuguive since 2002, has been arrested in a joint French-Spanish law enforcement operation, in Sallanches in the French Alps, near the Swiss and Italian borders.
UN RECOGNISES JERSEY’S ASSET RECOVERY WORK
A news release from Jersey on 16th May reported that officials of the United Nations Office on Drugs and Crime (UNODC) have recognised Jersey’s good practice in returning stolen assets to their rightful country, at an international meeting in Addis Ababa. It says that there was significant international interest in the FRACCK signed between Jersey and Kenya – Governments of Kenya, Jersey, Switzerland and the UK have co-operated in developing the Framework for Return of Assets from Crime and Corruption in Kenya (FRACCK).
GOZNYM MALWARE: CYBERCRIMINAL NETWORK DISMANTLED IN INTERNATIONAL OPERATION
A news release from Europol on 16th May reported that an unprecedented, international law enforcement operation has dismantled a complex, globally operating and organised cybercrime network. The criminal network used GozNym malware in an attempt to steal an estimated $100 million from more than 41,000 victims, primarily businesses and their financial institutions. A criminal Indictment returned by a federal grand jury in Pittsburgh has charged 10 members of the GozNym criminal network with conspiracy. Searches were conducted in Bulgaria, Georgia, Moldova and Ukraine, and criminal prosecutions have been initiated in Georgia, Moldova, Ukraine and the US. The GozNym network exemplified the concept of “cybercrime as a service,” with different criminal services such as bulletproof hosters, money mules networks, crypters, spammers, coders, organisers, and technical support.
2 CHARGED WITH GANGMASTER OFFENCES IN MERSEYSIDE – WITH 41 ROMANIANS UNCOVERED
A news release from the Gangmasters and Labour Abuse Authority (GLAA) on 14th May reported that 41 Romanian workers were found by GLAA officers during a multi-agency operation in March 2018 tackling suspected labour exploitation in Liverpool.
GERMAN AND ITALIAN POLICE BREAK UP GANG BEHIND FAKE EXTRA VIRGIN OLIVE OIL CONSPIRACY
Illicit Trade on 16th May reported that an international operation coordinated by Europol has resulted in the dismantling of an organised criminal network behind the fraudulent sale of huge quantities of counterfeit extra virgin olive oil in Germany and Italy. The operation that targeted the gang, which involved police investigators, from both countries, resulted in the arrest of 20 suspected gang members, as well as the seizure of 150,000 litres of fake extra virgin olive oil. Investigators participating in the operation conducted raids at 20 properties in multiple locations, and impounded five lorries that were intercepted while carrying 23,000 litres of counterfeit oil each.
ECUADOR: ROBBERS ATTEMPT TO BOARD VESSEL OFF CABO PASADO
Hellenic Shipping News reported that 10 robbers on 2 speed boats approached an underway bulk carrier. The crew on duty spotted the robbers and sounded the alarm, and the bulk carrier increased the speed, commenced evasive manoeuvres and started to spray the speed boats with fire hoses. The assailants aborted the robbery attempt.
EBA TIGHTENS OUTSOURCING REGIME FOR WIDER RANGE OF FIRMS UNDER NEW GUIDELINES
On 16th May, Osborne Clarke published an article saying that the European Banking Authority issued updated outsourcing guidelines for financial institutions on 26th February, a single regime encompassing both outsourcing and cloud outsourcing has been introduced, and far more expansive, detailed and prescriptive for financial institutions caught within its remit. Rather than only applying to credit institutions, as the previous 2006 guidelines did, the new guidelines also apply to investment firms and payment and e-money institutions. The article says that one of the main aims of the guidelines is to ensure that the outsourcing of functions by institutions does not result in the delegation of the management body’s responsibility for the activities of the institution and compliance with its regulatory obligations. Management bodies need the ability to appropriately oversee and manage the outsourcing of functions by the institution.
IS DHS DOING ENOUGH TO SECURE KEY US CITIES FROM NUCLEAR TERRORISM?
Homeland Security Today on 13th May reported that the DHS’s Securing the Cities (STC) programme seeks to give state and local agencies the ability to detect and deter nuclear terrorism, including dirty bombs. It provides funding for equipment, such as radiation detectors, and training for up to 5 years. However, it says that the Government Accountability Office found DHS does not fully track programme spending and performance, and has not addressed challenges to sustaining these programmes. A law enacted in December 2018 requires DHS to develop an implementation plan for the STC programme.
FINCEN ANNUAL AWARDS PROGRAMME TO RECOGNISE IMPORTANCE OF BANK SECRECY ACT REPORTING BY FINANCIAL INSTITUTIONS
A news release from FinCEN on 16th May said that its Director hosted the 5th annual FinCEN Director’s Law Enforcement Awards Program, during which he recognised the efforts of several law enforcement agencies that used Bank Secrecy Act (BSA) reporting to successfully pursue and prosecute criminal investigations. It says that the BSA’s record-keeping and reporting requirements help to create a financial trail that law enforcement agencies use to track criminals, their activities, and their assets. It recognised actions by several agencies, including the IRS (including for a US-Mexico operation targeting third party launderers) and the SAR Review Team at ICE.
MAN ACCUSED OF $98 MILLION FRAUD SCHEME IN PUERTO RICO
The Daily Mail on 16th May reported that Federal officials in Puerto Rico say Gopalkrishna Pai has been indicted in a $98 million fraud scheme after taking advantage of a law designed to attract wealthy investors to the US territory.
SINGAPORE-BASED BUSINESSMAN JAILED FOR ROLE IN MONEY LAUNDERING SCHEME
The Straits Times on 16th May reported that Paul Gabriel Amos, a Singapore-based company director, has admitted in court his connection with a 2008 case in which Citibank in New York was duped into transferring $27.2 million from the corporate account of the National Bank of Ethiopia (NBE) to various beneficiaries worldwide. Amos had received a call from a friend asking him for an account into which to transfer ill-gotten gains. According to court documents, that friend told Amos about his involvement in various projects with the Ethiopian government and how he had helped cheat it of money, and Amos agreed to take part in the plan on condition that he would receive a cut of the criminal proceeds.
HOW ONE MAN UNCOVERED A MONEY LAUNDERING SCHEME INVOLVING $230 BILLION
On 16th May, CBS News published an article and video about Howard Wilkinson, whose suspicions led to the uncovering of an enormous money-laundering case involving approximately $230 billion, maybe the largest such scheme ever found, as he was working for Danske Bank’s branch in Tallinn.