OTHER THINGS YOU MAY HAVE MISSED – MAY 17

17th May 2019

3 AML FINES IN UK FOR MALTA-BASED GAMING COMPANIES

The Times of Malta on 16th May revealed that 3 of the 4 online gambling operators recently fined by the UK Gambling Commission for failures of AML and consumer protection were from Malta.  Betit Operations will have to pay €1.6 million as, among other failures, it inappropriately offered bonuses and raised the deposit limits of a customer who deposited more than €126,000 over a 24-hour period. MT Secure Trade was found to have no interactions with a player who deposited €44,000 over 4 of its brands, with no source of wealth queries made.  BestBet breached its licence conditions by having insufficiently trained staff in key positions and by having inadequate AML policies in place.

https://www.timesofmalta.com/articles/view/20190516/local/more-anti-money-laundering-fines-for-malta-based-gaming-firms.710114

WHISTLEBLOWING CULTURE “VITAL TO PROTECT JERSEY’S FINANCE INDUSTRY”

On 16th May, the Jersey Evening Post carried an article quoting a local advocate who had attended the annual conference of ICSA, where attendees heard from Martin Moloney, director general of the Jersey FSC say that the control focus was increasingly on individuals – looking for are failures to know source of funds, failures to collect CDD information, with these generating criminal prosecution instead of just a “slap on the wrist”.  It was said in the article that said that it was the increased requirement from for more prosecutions, which was driving the change and this would lead to more transparency and more whistleblowing.

https://jerseyeveningpost.com/news/business/2019/05/15/whistle-blowing-culture-vital-to-protect-jerseys-finance-industry/

ITAR EXEMPTION FOR TRANSFERS BY OR FOR US GOVERNMENT: 6 THINGS YOU NEED TO KNOW

On 22nd April, Arent Fox published an article saying that, after years of waiting, the new International Traffic in Arms Regulations (ITAR) licence exemption for transfers of defence articles and services by or for the US government came into effect on 19th April.  However, it says that while the introduction of the revised exemption is largely positive for exporters, there are a few new boxes to check.  The article highlights 6 aspects an exporter needs to look out for.  It points out that those who export certain countries on behalf of the US government, but deliver to a non-US government party, will need a licence or other approval in most cases; and exporters outside the proscribed countries must obtain a written direction from the right person in the relevant US government agency and check all aspects mentioned in the article.

https://www.arentfox.com/perspectives/alerts/new-1264-itar-exemption-transfers-or-usg-six-things-you-need-know

ARGENTINA CORRUPTION TRIAL AGAINST FORMER PRESIDENT FERNÁNDEZ SET TO PROCEED

KYC 360 on 17th May reported that the Supreme Court says the first corruption trial against former President Cristina Fernández is still scheduled to start shortly, despite a judicial order that her opponents feared could delay the trial into the presidential campaign season or beyond.

https://www.riskscreen.com/kyc360/news/argentina-corruption-trial-against-fernandez-set-to-proceed/

SFO: WHICH WAY FROM HERE?

On 15th April, Carmelite Chambers published an article discussing the future focus and direction of the SFO under its new Director, Lisa Osofsky.  It concludes that the signs point towards Osofsky having a vision of a dynamic SFO, focused on streamlining and channelling its resources to bring successful prosecutions and with an emphasis on company responsibility through the use of DPA.  Whether that vision comes to fruition, remains to be seen.

http://blog.carmelitechambers.co.uk/serious-fraud-office-which-way-from-here/

IRELAND: CORPORATE GOVERNANCE RECORDS – HOW IMPORTANT ARE THEY?

Mason Hayes & Curran on 3rd May published a briefing saying that it is important to have the corporate governance records up to date to comply with Irish Law.   It is also important to be ‘diligence-ready’ should your company be seeking funding from investors or if you are selling the company.  One of the first items on the agenda for potential investors or buyers will be to carry out diligence on your company beginning with the request for and review of the corporate governance records.  It lists the various corporate governance records, and includes a schedule of those entitled to examine or inspect such records.

https://www.mhc.ie/latest/insights/governance-compliance-update-corporate-governance-records-how-important-are-they

RUSSIA TRADE WITH THE MIDDLE EAST AND NORTH AFRICA

This chart shows Russia’s trade turnover with the Middle East and North Africa (MENA) Region, which amounts to 5.46%.

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RUSSIA: HEAD OF FSB SECRETIVE UNIT CHARGED FOR $850,000 BRIBERY

The Moscow Times on 17th May reported that Colonel Kirill Cherkalin was head of the FSB economic security department’s financial counterintelligence support unit.  The department played key roles in investigations surrounding former economy minister Alexei Ulyukayev, deputy prime minister Mikhail Abyzov and the tycoon brothers Ziyavudin and Magomed Magomedov.  He was fired in 2013 after the investigative Novaya Gazeta newspaper uncovered his lavish property in an Italian lakeside resort.  2 of Cherkalin’s former colleagues, Dmitry Frolov and Andrei Vasilyev, have also been apprehended on charges of fraud.

https://www.themoscowtimes.com/2019/05/17/senior-fsb-official-charged-with-850k-bribery-a65617

TRINIDAD & TOBAGO: FORMER POLITICIAN TO PAY $300,000 AFTER LOSING FRAUD CASE

The Trinidad & Tobago Guardian on 16th May reported that for­mer To­ba­go A­sem­bly­man Han­del Beck­les has been or­dered to re­pay $300,000 plus costs to an el­der­ly cou­ple, af­ter they al­leged that he fraud­u­lent­ly in­duced them to hand over cash over a pe­ri­od of time.

http://www.guardian.co.tt/news/extha-secretary-to-pay-3m-after-losing-fraud-case-6.2.847654.8f41da9a0a

AUSTRALIA: RUGBY PLAYER TRADED EXOTIC ANIMALS TO PAY OFF DEBT TO CONVICTED FRAUDSTER

The Daily Mail reported on 17th May that a disgraced rugby player, Martin Kennedy, told a Sydney court that he illegally imported and exported exotic animals to pay off debts owed to a convicted fraudster.

https://www.dailymail.co.uk/news/article-7040115/Martin-Kennedy-imported-exported-exotic-animals.html

BRAZIL STUDIES REDUCTION OF CIGARETTE TAX TO CURB SMUGGLING

Customs Today on 16th May reported that, by the end of June, the Ministry of Justice should decide on a tax reduction on cigarettes manufactured in Brazil. In March, an ordinance established a working group to assess whether tax changes would help “reduce the consumption of low-quality foreign cigarettes”.  The introduction of this group was criticised by health specialists and by sector agencies, including those linked to the Ministry of Health itself.  Professionals in the area affirm that the measure would not be sufficient to repress the illicit cigarette market, would contribute to the increase in the number of smokers and would entail costs.

http://www.customstoday.com.pk/brazil-studies-reduction-of-cigarette-tax-to-curb-smuggling/

CARGO SHIPS STOPPING IN DJIBOUTI MAY BE DENIED ENTRY INTO US

On 17th May, Sandler Travis Rosenberg reported that the US Coast Guard will impose certain conditions of entry on all vessels that visited any port in Djibouti (other than the Doraleh Container Terminal or the Doraleh Oil Terminal) in their last 5 port calls. Any vessel that does not meet these conditions may be denied entry into the US – because it has determined that ports in Djibouti are not maintaining effective anti-terrorism measures and that Djibouti’s designated authority’s oversight, access control, security monitoring, security training programmes, and security plans, drills, and exercises are all deficient.

https://www.strtrade.com/news-publications-Djibouti-cargo-ship-entry-denial-port-051719.html

SOLICITOR STRUCK OFF FOR WEAVING ELABORATE “WEB OF DECEPTION”

Legal Futures on 17th May reported that an experienced partner has been struck off after dishonestly drawing on hundreds of thousands of pounds of client money to top up private investments, and then covering it up.  The ensuing “web of deception” involved faking letters about non-existent investments he had claimed were purchased with the misappropriated money and inventing extensive correspondence to obscure the omission.

https://www.legalfutures.co.uk/latest-news/solicitor-struck-off-for-weaving-elaborate-web-of-deception

COUNTRIES DEPENDENT ON COMMODITIES HIT 20-YEAR HIGH

On 16th May, the UN Conference on Trade and Development (UNCTAD) reported that the number of countries that depend on commodities has reached its highest level in 20 years, says a new UNCTAD report.  UNCTAD defines a country as dependent on commodities when these account for more than 60% of its total merchandise exports in value terms.  Commodity-dependent countries increased from 92 between 1998 and 2002 to 102 between 2013 and 2017.  Commodity dependence affects developing countries almost exclusively, according to the report.  Commodity-dependent developing countries are vulnerable to negative commodity price shocks and price volatility.

https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2086

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UK P+I CLUB 150th ANNIVERSARY

2019 marks the 150th anniversary of the foundation of the UK P&I Club founded in 1869.  The website looks at the Club’s history, and plans for tomorrow.

https://www.ukpandi.com/uk-pi-150th-anniversary/?dm_t=0,0,0,0,0

SATELLITE IMAGERY AND VESSEL TRACKING SHOWS DPRK VESSEL MOVING BETWEEN BULK PORTS IN NORTH KOREA AND CHINA

NK Pro on 17th May reported that satellite imagery from Planet Labs and vessel location tracking analysed by NK Pro show a DPRK ship, Jin Hung 8, recently moving between North Korean and Chinese bulk handling ports, facilities capable of processing sanctioned materials like iron and coal.

https://www.nknews.org/pro/satellite-imagery-vessel-tracking-shows-dprk-vessel-moving-between-bulk-ports/

LATEST CONTAINER SHIP FIRE LEADS RO-RO OPERATOR GRIMALDI TO CALL TIGHTER CONTROLS ON GOODS TRAVELLING BY SEA

Loadstar on 17th May reported that the 1998-built Grande Europa was hit by a double blaze on 15th May – the second container ship fire in as many months.  Owner Grimaldi is quoted as saying that preliminary investigations suggest the fires started from 2 different new vehicles on board, and spread to nearby units.  After what it describes as the “umpteenth case” of a fire breaking out in vehicles transported by cargo vessels, Grimaldi has called for tighter regulations on what can be transported at sea.

https://theloadstar.com/latest-containership-fire-leads-grimaldi-to-demand-tighter-regs-on-ocean-cargo

THE MUSLIM BROTHERHOOD IS NOT A TERRORIST ORGANISATION

A article in Foreign Affairs on 17th May argued that designating it would undermine the US.  In late April, President Trump announced that he would seek to have the State Department designate the organisation a Foreign Terrorist Organization (FTO).  It notes that, in 2017, the State Department decided that the group did not meet the legal requirements of an FTO, since it is not a unitary organisation and does not have an established pattern of violence, and the Brotherhood has not change since then.  It is suggested that the departure of Rex Tillerson has allowed Trump to ignore the legal definition of an FTO, and that the move might be to curry favour with Egypt’s President Sisi.

https://www.foreignaffairs.com/articles/2019-05-17/muslim-brotherhood-not-terrorist-organization

PORTUGAL: THE WAY AHEAD FOR ANTI-CORRUPTION

An article from Transparency International on 17th May says that (like many other countries) degrading trust between Portuguese citizens and government institutions is an increasing concern for political and opinion leaders.  In the last several years, citizens have watched as corruption scandals, cases of ethical misconduct and conflicts of interest exploded across Portugal.  New cases of corruption surfaced in Parliament this year, including some Members of Parliament who are accused of pocketing extra money by overcharging taxpayers for trip expenses.  However, it says that there have been small, incremental anti-corruption advances at the national level, including importantly, in the judicial system. The Public Prosecutor’s Office (PPO) seems more determined to fight corruption and the new Attorney General, Lucília Gago, recently reaffirmed this notion.

https://voices.transparency.org/portugal-the-way-ahead-for-anti-corruption-8eb3e2a3b796

4 MORE BANKS NAMED IN DEUTSCHE BANK BRIBERY LAWSUIT IN LONDON

Bloomberg on 17th May reported that the middleman who confessed to paying bribes over trades he helped arrange between Deutsche Bank and a Dutch housing firm said he was also getting commission payments from other major lenders, including Barclays, Citigroup, Societe Generale and BNP Paribas.

https://www.bloomberg.com/news/articles/2019-05-17/four-more-banks-named-in-deutsche-bank-bribery-lawsuit-in-london

MEET THE BRAZZAVILLE FOUNDATION: THE ROYAL-BACKED UK CHARITY ACCUSED OF ‘LAUNDERING’ THE REPUTATION OF AN OIL-RICH AFRICAN AUTOCRAT

Finance Uncovered on 15th May published an article claiming to reveal details about a royal-backed UK charity accused of bolstering the regime that runs one of Africa’s most authoritarian and kleptocratic countries.  It was established in 2014 to tackle environmental challenges, help broker peace in Libya and raise awareness about the scourge of fake medicines in Africa – all causes about which its trustees appear to be sincere and passionate.  But some Congolese experts and opposition activists exiled in Europe have viewed the charity with suspicion, believing some of its activities to be reputation-laundering vehicles for their country’s authoritarian president, Denis Sassou-Nguesso.  Finance Uncovered’s investigation into the charity’s origins is said to have raised new concerns.  It was set up by Jean-Yves Ollivier, a wealthy French commodities trader who has been a friend of Sassou-Nguesso for more than 30 years, with the help of one of Britain’s most controversial PR gurus, Lord Tim Bell, who became a trustee.

https://www.financeuncovered.org/uncategorized/prince-michael-brazzaville-foundation-bell-pottinger-jean-yves-ollivier-congo-sassou-nguesso-denies-reputation-laundering/

UK: MEDICAL CANNABIS UNDER PRESCRIPTION

On 17th May, the House of Commons Library published a briefing pack prepared ahead of the debate to be held in the Commons Chamber on 20th May medical cannabis under prescription.  The subject for the debate has been selected by the Backbench Business Committee.  It also produced a briefing paper on the medical use of cannabis.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CDP-2019-0128

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8355

UK: THE RETENTION AND DISCLOSURE OF CRIMINAL RECORDS

On 17th May, the House of Commons Library published a briefing which sets out the rules in England and Wales governing the retention and disclosure of conviction and non-conviction information held on the Police National Computer (PNC) and the Police National Database.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06441

EU SHRINKS TAX HAVEN BLACKLIST AND REMOVES UK, DUTCH TERRITORIES

Reuters on 17th May reported that the EU has removed the British overseas territory of Bermuda, the Dutch Caribbean island of Aruba and Barbados from the bloc’s blacklist of tax havens, leaving no EU territory still on the list.

https://www.reuters.com/article/us-eu-tax-blacklist/eu-shrinks-tax-haven-blacklist-removes-uk-dutch-territories-idUSKCN1SN12M

https://oxfamapps.org/media/press_release/reaction-eu-blacklist-review-de-lists-tax-havens-including-bermuda

https://www.oxfam.org/en/pressroom/reactions/eu-lets-tax-havens-bermuda-barbados-and-aruba-hook-blacklist-review-says-oxfam

https://www.applebyglobal.com/insights/insights-2019/eu-confirms-bermuda-s-status-as-a-cooperative-jurisdiction-in-international-tax-transparency.aspx

EU STARTS NEW PROGRAMME TO FIGHT GRAFT AND ORGANISED CRIME IN BOSNIA

OCCRP on 17th May reported that the EU has launched a €2.2 million initiative to fight corruption and organised crime in Bosnia and Herzegovina.  EU4Justice aims to increase co-operation between facets of the defragmented criminal justice system in Bosnia – including law enforcement agencies, prosecutors, and judges – in order to improve the country’s responses to serious crime.  Over the next 2 years the project will work to strengthen the supervision and control of prosecution offices and to increase the capacity, resources, and control of the Office of the Disciplinary Council, and will also hold joint training on fighting organised crime, corruption, and various economic crimes (such as tax evasion and fraud). It will improve the results of seizures of illegally acquired assets.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9755-eu-starts-new-program-to-fight-graft-and-organized-crime-in-bosnia

NEW ZEALAND DRUG SYNDICATE HAD INSIDERS AT AUCKLAND AIRPORT TO IMPORT US METH, COURT HEARS

Stuff on 17th May reported that the prosecution says a syndicate that was importing methamphetamine into New Zealand from the US, had contacts working for them inside Customs or New Zealand Post at Auckland International Airport.

https://www.stuff.co.nz/national/crime/112794823/nz-drug-syndicate-had-insiders-at-auckland-airport-to-import-us-meth-court-hears

DANISH GAMBLING AUTHORITY LAUNCHES NEW AML INITIATIVE

Baker McKenzie on 17th May reported that the Spillemyndigheden, announced the official launch of a whistleblower programme that aims to combat money laundering within the nation’s regulated gambling industry, to report violations or potential violations of Denmark’s anti-money laundering laws taking place at their companies.

http://www.riskandcompliancehub.com/danish-gambling-authority-launches-new-aml-initiative/

HONDURAN PRESIDENT’S BROTHER ADMITS TO KNOWING DRUG LORDS

Baker McKenzie on 17th May reported that a brother of the president of Honduras admitted to US federal agents that he’d accepted presents from violent drug traffickers he’d known for years and once asked Honduran officials about money the government allegedly owed the traffickers.  Recently unsealed documents show what Juan Antonio “Tony” Hernández told agents last November, after he was arrested at Miami International Airport on his way back to Honduras.

http://www.riskandcompliancehub.com/honduran-presidents-brother-admits-to-knowing-drug-lords/

NEW PIRATES OF THE CARIBBEAN DRIVEN BY VENEZUELA CRISIS, HURRICANES, CLIMATE CHANGE

Homeland Security Today carried an article on 17th May saying that the risk of pirates in the Caribbean is expected to grow over the next few years for “cruisers and cargo ships alike,” fuelled by corrupt governments in countries bordering the sea that don’t have the capacity to fight the pirates and the escalating ruin in Venezuela, factors similar to what drives piracy in Somalia and Nigeria.  This is according to a new report from a UK company called Intelligence Fusion.  Climate change and extreme weather could also drive up the pirate population, as well as pollution, overfishing or any other factors that harm the fishing industry.

https://www.hstoday.us/subject-matter-areas/maritime-security/new-pirates-of-the-caribbean-driven-by-venezuela-crisis-hurricanes-climate-change/

UK: 42 BUSINESSES IDENTIFIED AS HAVING POTENTIAL COMPLIANCE FAILINGS IN CUSTOMER CHECKS, RECORD-KEEPING AND IDENTIFYING RISK, AS PART OF ONGOING WORK BY THE UK’S AML REGULATORY BODIES TO COMBAT CRIMINAL ACTIVITY

A news release from the NCA on 17th May advised that the National Economic Crime Centre (NECC) brought together regulators in the legal, finance and property sectors to make sure businesses’ supervisory systems to identify potential money laundering activity were fully up to scratch.  A total of 250 visits and compliance reviews were carried out, which will be followed up with assessments or disciplinary action in some cases.  Regulators are continuing to analyse the visit reports to identify any further breaches.  The NECC is also in the process of referring 3 suspected professional enablers to regulatory bodies in connection with ongoing investigations into illicit finance.

https://www.nationalcrimeagency.gov.uk/news/national-economic-crime-centre-leads-push-to-identify-money-laundering-activity

UK ADDS ISLAMIC STATE IN IRAQ AND THE LEVANT – KHORASAN (ISIL-K) TO SANCTIONS LIST

A Notice from HM Treasury on 17th May announced that the ISLAMIC STATE IN IRAQ AND THE LEVANT – KHORASAN (ISIL-K) had been added to the ISIL/Al-Qaida sanctions lists, following the decision of the UN and EU.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/802727/Notice_ISIL_2019_791_2_.pdf

MONEYVAL OFFICIALS IN CYPRUS FOR FINANCIAL-SECTOR REVIEW

The Cyprus Mail on 17th May reported that a team from the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism has arrived in Cyprus for a comprehensive review of Cyprus’ corporate, legal and financial sectors.  The final report and conclusions are expected by the end of this year.

https://cyprus-mail.com/2019/05/17/moneyval-officials-in-cyprus-for-financial-sector-review

OFAC DESIGNATES MEXICAN CORRUPTION SUSPECTS, INCLUDING A MAGISTRATE AND FORMER GOVERNOR

On 17th May, the US Treasury announced that OFAC had designated a Mexican magistrate judge and a former Mexican governor, among others, due to their involvement in corruption activities.  Magistrate judge Isidro Avelar Gutierrez is said to have links to Cartel de Jalisco Nueva Generacion (CJNG) and the Los Cuinis Drug Trafficking Organization (Los Cuinis).  Roberto Sandoval Castaneda, the former governor of the Mexican state of Nayarit, is said to have engaged in an array of corruption activities, such as the misappropriation of state assets and the receipt of bribes from Mexican drug trafficking organisations, including CJNG.  6 other Mexican individuals and 6 Mexican entities linked to CJNG or Los Cuinis have been designated, as well as 3 other Mexican individuals and 4 Mexican entities because of their links to Sandoval Castaneda.

https://home.treasury.gov/news/press-releases/sm692

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190517.aspx

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MARIJUANA, TARIFFS AND E-COMMERCE WREAKING HAVOC IN US WAREHOUSE SECTOR

Loadstar on 17th May reported that e-commerce and tariffs are continuing to deplete warehouse availability worldwide, with parts of the US also seeing space eaten up following states’ legalisation of marijuana – for it to be grown in internal “controlled spaces”.   Recently, Addidas announced that it would use more air freight in the next 2 quarters as it struggles to find warehouse space. 

https://theloadstar.com/marijuana-tariffs-and-e-commerce-wreaking-havoc-with-us-warehousing