22nd May 2019
IRAN’S URANIUM STOCKPILE AND THE FUTURE OF THE JCPOA
An article in The Diplomat on 22nd May said that a spokesperson for Iran’s Atomic Energy Organization clarified Tehran’s plans in the next days and weeks, clarifying the measures recently announced by Iranian President Hassan Rouhani pertaining to the country’s commitments under the 2015 Joint Comprehensive Plan of Action. The article considers the implications – the uranium enrichment activity that is ongoing remains compliant with the JCPOA (it is low not highly enriched uranium that is involved); and Iran will determine whether it will resume enrichment to the high enriched uranium levels seen before the JCPOA was put into place and if it will reverse the modernization of the Arak heavy water reaction.
FBI: COMBATING ILLICIT FINANCING BY ANONYMOUS SHELL COMPANIES
On 21st May, the FBI published a Statement made before the US Senate Banking, Housing, and Urban Affairs Committee. It said that the FBI has countless investigations, spanning criminal and national security threats, in which illicit actors, operating both domestically and internationally, use shell and front companies to conceal their nefarious activities and true identities; and noting that, except in very narrow circumstances, current federal laws do not require identification of beneficial owners at account opening with financial institutions. It noted that the FATF’s Guidance on Transparency and Beneficial Ownership states that countries should take measures to prevent the misuse of legal persons [such as shell companies, corporate structures, and other entity structures] for money laundering and terrorist financing by ensuring that legal persons are sufficiently transparent – and that the 2016 Mutual Evaluation Report (MER) of the US AML/CFT regime, the FATF highlighted the lack of beneficial ownership information issue as one of the most critical gaps in the US compliance with FATF standards. It mentioned the 2018 National Money Laundering Threat Assessment, which noted that law enforcement agencies observed that misuse of legal entities posed a significant money laundering risk and that efforts to uncover the true owners of companies can be resource-intensive, especially when those ownership trails lead overseas or involve numerous layers. The assessment further noted that the lack of obligation for certain financial institutions to identify the natural persons who control or own a corporate customer had allowed individuals to access financial services anonymously by acting through shell companies. Mentioning how the EU was addressing the problem, the Statement went on to provide examples of how the use of shell corporations hindered investigations.
NIGERIA: LOSSES TO IRON AND STEEL SMUGGLING
The Guardian in Nigeria on 22nd May reported on the substantial losses faced by the country each year arising from smuggled iron and steel products. It is said smugglers are taking advantages of the weaknesses in systems to smuggle in substandard iron and steel materials into Nigeria.
INDONESIA: FORMER ARMY GENERAL ARRESTED FOR ALLEGEDLY SMUGGLING FIREARMS
On 22nd May, the Jakarta Globe reported that law enforcement had arrested a former commander of the Army Special Forces, a Major general Sunarko, for alleged treason and smuggling of arms, and that police are still conducting further investigation.
PHILIPPINES: 5 RCBC BANK EXECUTIVES CHARGED IN 2016 BANGLADESH MONEY LAUNDERING CASE
On 22nd May, Inquirer.net reported that 5 executives of the Rizal Commercial Banking Corporation had had charges filed against them in the Philippines in connection with $81 million stolen by hackers in 2016. They deny the charges. Previously a junior branch manager had been convicted in connection with the case, sentenced to 7 years imprisonment for each of 7 counts and ordered to repay up to $110 million.
NEW UKRAINE PRESIDENT APPOINTS LAWYER LINKED TO PRIVATBANK TYCOON AS ADMINISTRATION CHIEF
KYC 360 on 22nd May reported that President Volodymyr Zelenskiy picked a lawyer with links to a prominent tycoon as head of the presidential administration. The new President has come under scrutiny for his business ties to Ihor Kolomoisky, who is one of Ukraine’s richest men and who has been at loggerheads with the authorities over control of PrivatBank, the largest lender in the country.
AUSTRALIA: NATIONAL DISABILITY INSURANCE SCHEME FRAUD USED TO BUY LUXURY CARS
On 22nd May, ABC News reported that NSW Police have cracked an organised criminal syndicate they claim defrauded more than 70 people of National Disability Insurance Scheme (NDIS) payments to buy items such as luxury cars – with more than $1.1 million in fraudulent claims for NDIS payments involved. Investigations into the fraud were continuing, with more than 100 other potential victims identified through the 3 entities controlled by this syndicate.
MARANGE DIAMONDS: THE DRAMA NEVER ENDS
Newsday in Zimbabwe reported about the Zimbabwe Consolidated Diamond Company (ZCDC), a State-owned enterprise (SOE). The entity was created in 2015 and started operations in 2016 after 7 diamond mining companies were booted out in the name of bringing transparency and accountability to the Marange diamond mining activities. The trial of the ZMDC acting general manager Luke Akino and former board chairman David Murangari on charges of awarding a $168,000 consultancy services contract to their colleague without due process have begun.
INDIA: CID BUSTS ILLEGAL CALL CENTRE TARGETING AMERICA AND 37 ARRESTED
The Deccan Chronicle on 22nd May reported that 37 people, including 9 women, had been arrested for making fraud calls from an illegal call centre, said to be owned by Avenir Pvt Ltd. A police spokesman said that the call centre had a database of around 7,00,000 American citizens.
CALL FOR REPATRIATION OF AFRICA’S STOLEN FUNDS
On 22nd May, The Sun in Nigeria reported that, in a communiqué issued at the end of the 9th Commonwealth regional conference of anti-corruption agencies in Africa held in Kampala, the heads of anti-corruption agencies in Africa recently urged heads of governments in Europe, America and other jurisdictions to speedily repatriate recovered stolen funds to African countries. The article says that Nigeria has signed agreement with many countries to repatriate the nation’s stolen funds., but that aid and loans to the continent are outweighed by financial flows to tax havens and costs of climate change mitigation – with more wealth leaving Africa every year than enters it, by more than $40 billion.
UK – WHISTLEBLOWING: LIST OF PRESCRIBED PEOPLE AND BODIES
On 21st May, the Department of Business, Energy and Industrial Strategy published an updated list of prescribed people and bodies you can report malpractice to, other than an employer.
SEC FILES ANOTHER OLD MICROCAP FRAUD ACTION
On 21st May, Dorsey & Whitney LLP published an article saying that the SEC had filed one “years old” microcap fraud manipulation action against a band of defendants who were largely recidivists, and where the public had been bilked out of over $11 million in manipulations involving 6 issuers. This was followed by another microcap fraud action involving 4 persons who were not recidivists and 1 issuer – and the investing public lost almost $2 million.
The SEC says that the over-the-counter (OTC) market for securities, often referred to the microcap market, is designed for and comprised of companies with small amounts of assets and low stock prices. It provides information on potential frauds, red flags etc.
SNIFFER DRONES WILL START PATROLLING THE WORLD’S BUSIEST SHIPPING PORTS
Customs Today on 22nd May reported that teams of drones are about to start policing the skies of some of the world’s busiest shipping ports, to target environmental rule-breakers. In the Netherlands, preparations are underway to use a large, unmanned flying vehicle capable of traveling well over 10 miles from the shore to detect emissions from ships. It says that in Hong Kong machines are currently being tested for the same purpose, whilst maritime authorities in Denmark and Norway have also already started using the technology.
SWITZERLAND DEEPENS CUSTOMS CO-OPERATION WITH US
Customs Today on 22nd May reported that Switzerland has signed a “legally non-binding” MoU with the US Department of Homeland Security to allow customs officials to deepen contacts and enhance co-operation. It provides for co-operation in customs matters with the main objective of facilitating trade while ensuring security between the 2 countries.
CHINA: COURT FREEZES SOME OF ANTONG HOLDINGS ASSETS
Lloyds Loading List on 21st May reported that Antong Holdings, a China-based container shipping company and the parent of domestic liner shipping carrier Ansheng Shipping, has had some of its assets frozen by a court in connection with alleged financial misconduct by its controlling shareholder. It is said that former chairman Guo Dongze, who owns about 36% of the Shanghai-listed company, has been involved in alleged unauthorised use of the company’s funds and provision of loan guarantees. Ansheng Shipping has a fleet of 123 ships with a total carrying capacity of 148,264 teu, ranking 15 in Alphaliner’s Top 100 list for container shipping carriers.
THE 3-LIMB TEST THAT CLAIMANTS MUST MEET WHEN SEEKING TO SUE AN OVERSEAS DEFENDANT IN THE ENGLISH COURTS
On 16th May, TLT LLP published an article about a Court of Appeal decision where the Court gave guidance on how to apply a 3-limb test on an application to challenge the jurisdiction of the court. It also considered the impact of an entire agreement clause in the case of undisclosed principals.
DISMANTLING OF ONE OF EUROPE’S MOST PROLIFIC CRIME GROUPS BEHIND €680 MILLION OPERATION
On 22nd May, a news release from Europol said that a highly professional and dangerous international organised crime group was dismantled last week after a complex investigation carried out in the framework of a Joint Operational Task Force, established at Europol, between the Lithuanian Criminal Police Bureau, HMRC, the Polish Police Central Bureau of Investigation, the Estonian Central Criminal Police under the Police and Border Guard Board and the Spanish Guardia Civil and Policia Nacional. Code-named ‘Icebreaker’, the operation is the biggest of its kind to date in Europe against such an organised crime group, comprising nationals of Lithuania and other EU countries, involved in large-scale drug and cigarette trafficking, assassinations and money laundering. The suspected ringleader – a 48-year-old Lithuanian national, was arrested in Spain, and a further 21 suspects were detained in Poland, Lithuania, Spain and the UK.
The crimes included smuggling drugs and cigarettes, and taking the cash back out to Poland.
EUROPOL SUPPORTS OLAF AND BELGIAN CUSTOMS IN INTERNATIONAL CYBER PATROL OPERATIONS AGAINST ONLINE TRAFFICKERS
A news release from Europol on 21st May reported that an international operation, code-named “Postbox II”, took place in March 2019 and involved customs experts from 22 EU Member States and Europol, and focusing on criminals working on both the open and the Dark Web. It led to 2320 seizures, the opening of 50 case files and identification of 30 suspects in Member States. It was carried out in co-operation with customs services from 22 Member States and Europol. In the initial phase of the operation, customs authorities checked mail and courier service packages for prohibited items, with more than 1,200 packages seized.
FRAUD INSURANCE CLAIMS: WHERE ARE WE NOW?
Ince & Co on 16th May published an article, originally a chapter in the Insurance and Reinsurance Law Review, saying that since 2016, the definitions of dishonest, a fraudulent claim and the remedies available
to insurers battling against such claims have been radically reformed through a combination of legislation and guidance from the highest court in the UK.
AUSTRALIAN TERRORIST FINANCING INVESTIGATION RESULTS IN DISRUPTION OF MAJOR CIGARETTE SMUGGLING CONSPIRACY
Illicit Trade on 21st May carried an article saying that an investigation into terrorist financing conducted by law enforcement agencies in Australia has led to the arrest of 8 men on suspicion of involvement in an illicit cigarette importation conspiracy run from Sydney.
POLICE SCOTLAND ASKS FOR PEER REVIEW OF FORMER UNDERCOVER POLICING UNIT
Police Professional on 21st May reported that Police Scotland Chief Constable Iain Livingstone has asked for an external force to examine “unsatisfactory and unprofessional” conduct by the former Scottish Crime and Drug Enforcement Agency (SCDEA).
FinCEN CONSOLIDATES SEVERAL YEARS OF CRYPTOCURRENCY GUIDANCE
On 21st May, King & Spalding published a briefing saying that FinCEN has issued the latest and perhaps the clearest guidance yet. Released on May 9th, FinCEN’s guidance consolidates current FinCEN regulations, and related administrative rulings and guidance issued since 2011, and then applies these rules and interpretations to other common business models.
FINANCIAL CRIME AND CRIMINAL PROSECUTIONS IN THE UK
On 21st May, an article from Richard Kovalevsky QC on the website of Stewarts considered the difficulties facing prosecutors of financial crime. He says that the simple truth is that cases involving multiple jurisdictions, with huge volumes of exhibits and information, are difficult and complex, and looks at 3 of the largest cases since the Bribery Act 2010 came into force.
HUMAN TRAFFICKING IN THE US HOSPITALITY INDUSTRY
Jones Day has published a comprehensive white paper looking at what industry participants should do to protect themselves and their customers. It says that data from the National Human Trafficking Hotline shows that at least 7.7% of human trafficking cases reported in 2016 were based in hotels or motels, the most common “location” for the abuse to occur. Indeed, it says, hotels and motels are common sites of human trafficking — they not only offer an affordable and easily accessible location for commercial sex acts, but they also provide privacy and anonymity for both traffickers and trafficked individuals. It looks at anti-trafficking (federal and state) laws affecting the sector, the role of the sector in recent litigation – criminal prosecutions and civil cases, and looks at the prospects for the future.
US PREPARES CHARGES AND SANCTIONS OVER VENEZUELA’S FOOD-AID PROGRAMME
On 22nd May, the Wall Street Journal reported that the US is preparing measures ranging from criminal charges to sanctions against people it believes to be involved in Venezuela’s military-run emergency food programme, part of an effort to target what they describe as a large-scale money laundering operation run by the government. Venezuelan officials and private contractors, including a Colombian businessman, are said to be implicated.
UK: AUTHORISED PUSH PAYMENT SCAM VOLUNTARY CODE COMES INTO USE ON 28th MAY
Financial Reporter on 22nd May reported that a new voluntary industry code comes into effect on 28th May which aims to give better protection against transfer fraud and ensure those who have lost money through no fault of their own are reimbursed. 8 banks have currently signed the voluntary Code: Barclays, Lloyds Banking Group, HSBC, Metro Bank, Royal Bank of Scotland, NatWest, Santander and Nationwide.
LAWYERS URGED TO CRACK DOWN ON MONEY LAUNDERING BEFORE GOVERNMENTS INTERVENE
The Law Society Gazette on 22nd May reported that lawyers must take a tougher stance on money laundering and be better self-regulators, according to a joint report by the International Bar Association (IBA) and the OECD. It says that the report on the Role of Lawyers and International Commercial Structures, prompted by the Panama and Paradise Papers leaks, sets out 8 principles lawyers must stick to, to avoid facilitating illegal acts.
ISRAELI COURT RULES BITCOIN IS AN ASSET IN FEUD OVER TAX PAYMENT
Coindesk on 22nd May reported that an Israeli court has ruled that bitcoin is an asset and not a currency, and thus subject to capital gains tax (CGT). The Central District Court made the ruling in a case involving a blockchain start-up founder and the Israel Tax Authority.
MALTA GAMING AUTHORITY AND POLICE TASK FORCE TO TACKLE ILLEGAL GAMBLING
Calvin Ayre on 22nd May reported that the MGA is going to work hand-in-hand with local law enforcement to push out illegal gambling on the island. The MGA has signed a MoU with the Malta Police to help eradicate the problem.
MALAYSIA STEPS UP EFFORTS AGAINST ILLEGAL GAMBLING
On 22nd May, Calvin Ayre reported that Malaysian law enforcement offices have stepped up their efforts to rid the streets of the activity, helping the legal gambling houses to enjoy better success. The efforts are just getting underway and more action is expected as police momentum builds. Law enforcement is primarily going to start going after so-called illegal number forecast operators (NFO). An NFO is essentially the same thing as a multi-number lottery. According to some studies, the illegal NFO market is about 2 to 3 times larger than the legal market, but has seen a decline already this year thanks to the work of law enforcement and government agencies.
MALAYSIA DETAINS 123 VIETNAMESE AS FISHING TENSIONS RISE
OCCRP on 22nd May reported that Malaysian authorities have detained 123 Vietnamese fishermen in the first half of May in a campaign that Vietnamese press has called Malaysia’s toughest move yet to curb illegal fishing. The article says that the reason for the surge in illegal fishing is that Vietnam is running out of fish near its shores, driving its fishermen farther afield.
‘DISCOVERY’ DECISION MAY MAKE IT HARDER TO OBTAIN UK TAX RETURN CERTAINTY
An article from Out-Law on 22nd May said that it may be harder to obtain certainty that HMRC cannot go back and challenge a tax return after comments made by Court of Appeal judges in a UK case relating to ‘discovery’ assessments, a tax disputes expert has said. The Court had decided that HMRC did not a make a ‘discovery’ when it realised as a result of a Supreme Court decision that it had opened an enquiry into a taxpayer’s return under the wrong statutory provision, and this meant that HMRC was out of time to assess the tax.
UK FCA WINS CASE AGAINST UNAUTHORISED FOREX FIRM
On 22nd May, a report on Mondo Visione reported that the High Court, on 14th May declared that Xcore Capital Limited (Xcore) and Jonathan Chitty had carried on an unauthorised investment scheme. The scheme took in at least £1 million from investors but only a small amount of the investors’ money was ever used for trading.
UK BRIBERY ACT RECEIVES GLOWING REPORT WHILE OTHER AREAS OF ECONOMIC CRIME PREVENTION “COULD TRY HARDER”
On 21st May, an article from Dechert said that the Parliament in the UK had recently published 2 important post-legislative assessments of the effectiveness of the UK’s financial crime legislative framework, as well as an insight into future areas of focus. The March 2019 report by the House of Lords Select Committee on the Bribery Act 2010 considered that the Act was successful, but set out some important recommendations for the future. Also in March 2019, the House of Commons Treasury Committee examined the UK’s AML and sanctions regimes, and here the view was not as positive, but the article says that given the current reforms to the systems which are taking place, this is perhaps not surprising. The article goes on to separately consider the reports, saying that It is clear that despite uncertainty around Brexit, economic and corporate crime legislation and enforcement mechanisms will continue to be at the forefront of the Government’s agenda.
US ASSISTS FINLAND IN INVESTIGATION OF PAYMENT CARDHOLDERS FOR UNREPORTED INCOME VIA JOHN DOE SUMMONS – WILL THE USE OF LLC AND TRUSTS CONCEAL THEIR IDENTITIES?
This article from Duane Morris on 10th May about summonses that seek information about persons residing in Finland who have payment cards linked to bank accounts located outside of Finland. The action is said to be necessary because Finland has advised the IRS that when a card connected to a foreign financial institution is used only in ATM machines in Finland, or when the authorisation of the payment is done by PIN code without identification of the cardholder, the cardholder(s) cannot be identified from information sources in Finland. It is said that the cardholder’s identity may be shielded by means of an LLC or a trust. For example, in the case of a Delaware LLC, the article says that only in recent years (but not in the years for which the Finnish government is seeking assistance) does the US require that names of the single-owned LLC be furnished to the IRS.
23rd May 2019
GERMAN REGULATOR ORDERS ONLINE BANK N26 TO STEP UP CONTROLS AGAINST MONEY LAUNDERING
On 23rd May, KYC 360 reported that the online bank, launched in 2013, made negative headlines in March when German newspapers reported that a customer’s account had been hacked and emptied of €80,000. BaFin said N26 must take measures including re-identifying some existing customers, catching up on a backlog of IT monitoring and documenting workflows.
FRENCH PROSECUTORS LAY OUT ALLEGATIONS AGAINST FORMER IAAF CHIEF DIACK
On 23rd May, KYC 360 reported that French prosecutors have described a web of corruption once rife in world athletics, including bribes paid to cover up athletes’ positive drugs tests, in an indictment recommending that Lamine Diack, the Senegalese former head of the IAAF, and his son stand trial.
DHS WARNS OF DATA THREAT FROM CHINESE-MADE DRONES
Defence Web on 22nd May reported that the US Department of Homeland Security has warned US businesses of the risks to company data from Chinese-made drones, according to a notice reviewed by Reuters. It says that US officials have “strong concerns about any technology product that takes American data into the territory of an authoritarian state that permits its intelligence services to have unfettered access to that data or otherwise abuses that access”.
CANADA STRIPPING CITIZENSHIP FROM MAN ACCUSED OF MARRIAGE FRAUD
On 22nd May, The Star reported that the Canadian government was taking the rare step of revoking citizenship of a man of Chinese origin because he was involved in a bogus marriage.
MARSHALL ISLANDS CANCELS COMPANIES IMPLICATED IN RUSSIAN SCANDAL
On 23rd May, Radio New Zealand reported that 2 Marshall Islands-registered corporations associated with the Danske Bank affair – Formond Inc and Primecross Inc – and which has been reported as possibly the “biggest money-laundering scheme in history”, have had their corporate registrations revoked by the Trust Company of the Marshall Islands.
UK DOMESTIC COUNTER-TERRORISM SANCTIONS
One of the series of guidance documents on the various sanctions regimes published by the FCO, OFSI and ECJU is this, issued in updated form on 22nd May. The guidance will (would) apply (if or when) Brexit goes ahead.
42 COUNTRIES ADOPT NEW OECD PRINCIPLES ON ARTIFICIAL INTELLIGENCE (AI)
A news release from the OECD on 22nd May advised that the OECD and partner countries formally adopted the first set of intergovernmental policy guidelines on Artificial Intelligence (AI), agreeing to uphold international standards that aim to ensure AI systems are designed to be robust, safe, fair and trustworthy. 36 OECD member countries, along with Argentina, Brazil, Colombia, Costa Rica, Peru and Romania, signed up. The AI Principles have the backing of the European Commission. While not legally binding, existing OECD Principles in other policy areas have proved highly influential in setting international standards and helping governments to design national legislation.
The Principles are at –
SCOTLAND YARD PROBES 9 EMPLOYEES OF ITS ANTI-CORRUPTION UNIT
OCCRP on 22nd May reported that 8 officers and 1 member of staff in Scotland Yard’s anti-corruption unit are under investigation for abusing their positions to affect ongoing investigations, and inquiries will focus on 21 allegations of misconduct relating to 25 internal investigations at Scotland Yard. The officers being investigated range in rank from Chief Inspector and Chief Superintendent.
THE UPCOMING ITALIAN TAX CONTROVERSY AMNESTY DEADLINE
On 22nd May, Field Fisher published an article saying that May 31st is the current deadline to elect for Italian tax controversy amnesty. The amnesty allows for settling any qualifying ongoing tax controversy pending before any Italian tax court. All pending cases on tax claims against Italian Revenue Service appealed as of October 24th 2018 may be settled. Income and regional taxes (IRAP), transfer tax, and any further tax, including abolished levies, and VAT are within the scope of the tax amnesty program, with the exception of custom duties and VAT on importation.
MULTI-MILLION EURO CRYPTOCURRENCY LAUNDERING SERVICE BESTMIXER.IO TAKEN DOWN
On 22nd May, a news release from Europol advised that the Dutch Fiscal Information and Investigation Service (FIOD), in close co-operation with Europol and the authorities in Luxembourg, have clamped down on one of the world’s leading cryptocurrency mixing service – Bestmixer.io.
A GUATEMALA MAYOR AND HALF A TON OF COCAINE
On 22nd May, Insight Crime carried an article about allegations about a mayor who is said to have used his office to run a criminal enterprise that benefited a notorious drug trafficking group.
MADURO IS TURNING OIL TANKERS INTO WARSHIPS TO EVADE US BLOCKADE
Hellenic Shipping News on 23rd May reported that Nicolás Maduro has launched a new plan to convert oil tankers into warships, guarding them with active personnel of the Venezuelan Armed Forces (FANB), faced with the possibility that the US may try to block the shipment of crude oil to Cuba.
WORLD BANK DEBARS CHINESE FIBRE OPTIC CABLE MANUFACTURER AND DISTRIBUTOR FOR “FRAUDULENT PRACTICES” INVOLVING A PROJECT IN ZAMBIA
A blog post on The FCPA Blog on 22nd May reported that the World Bank debarred a Chinese fibre optic cable manufacturer and distributor for 20 months for “fraudulent practices” involving a project in Zambia. Nantong-based Jiangsu Zhongtian Technology Co., Ltd. (ZTT) is ineligible to participate in World Bank-financed projects during the 20-month debarment.
THE UNCERTAIN FUTURE OF SHIP ACCUSED OF BEING ENGAGED IN ILLEGAL OIL TRANSFERS TO NORTH KOREA
On 23rd May, NK News reported that the future of the Lighthouse Winmore, an oil tanker registered in Hong Kong, remains unclear after a Hong Kong court declined a request by the vessel’s owner to compel the Marine Department in the South Korean port where it is detained to intervene in its future. It was seized in December 2017. Win More Shipping, the Hong Kong owners of the ship pursued legal action in an attempt to require Hong Kong’s Marine Department to assist in the recovery of the vessel. However, The court said that since this was a matter of foreign affairs such a request should be made through the central government in Beijing, and not handled in Hong Kong.
DEUTSCHE BANK FINDS FLAW IN SYSTEM THAT TRACKS SUSPICIOUS ACTIVITY
The Wall Street Journal on 22nd May reported that Deutsche Bank AG has found a glitch in computer systems that retroactively scan corporate clients’ transactions for suspicious activity. The glitch may have been in place for close to a decade, hampering a programme that scans payments involving corporate clients after they pass through the bank so it can flag suspicious patterns to regulators. Deutsche Bank found the problem during its latest revamp of money laundering systems, which it started late last year.
THE ROLE OF PAKISTAN’S FINANCIAL INSTITUTIONS IN DETECTING AND PREVENTING THE TRANSFER OF CORRUPTION PROCEEDS
On 23rd May, RUSI published an Occasional Paper saying that Pakistan’s financial system is a key conduit for moving value in and out of the country. It is therefore the first line of defence against the exfiltration of corruption proceeds from Pakistan. This relates to both the formal financial system, including banks and licensed exchange companies, and the informal value-transfer systems, better known as hawala or hundi – these being technically illegal but widely available in the country. The Paper focuses on the role of Pakistan’s financial institutions in detecting and preventing the transfer of corruption proceeds – and international aspects affecting the situation.
LONDON: CRIMINAL GANG FOUND GUILTY OF £10 MILLION ONLINE FRAUD
On 23rd May, South London News reported on a gang that stole the log-in details of more than 69 businesses and set up special fake bank accounts they controlled, where the victims were told to send their genuine payments. 10 members of the gang have been convicted after a 6-month trial.
SPAIN’S ‘CHARTER LICENCE’ PROCESS TO BE SIMPLIFIED AND UNIFIED
On 23rd May, Superyacht News carried an article saying that, for a long time, the Spanish National Yachting Association (ANEN) has been expressing dissatisfaction about the inconsistencies between the different Spanish harbour master offices in issuing clearance (misnamed ‘charter licence’) for yachts authorised for charter in Spain, especially for foreign-flagged yachts. However, an agreement was announced on 17th May to simplify and unify the process across the Spanish territory.
INVESTIGATION INTO COLLAPSE OF LONDON CAPITAL & FINANCE (LCF)
On 23rd May, an announcement from HM Treasury said that an independent investigation into the circumstances surrounding the collapse of investment firm London Capital & Finance (LCF) and the FCA supervision of the firm has been formally launched.
IRELAND: NEW TOBACCO TAX STAMP HELPS TO COMBAT SUPPLY OF ILLEGAL CIGARETTES
On 23rd May, the Irish Revenue Commissioners advised on the introduction of a new tobacco tax stamp for cigarettes and fine cut tobacco for the rolling of cigarettes. The new stamp replaces the current stamp, in existence since 2015, and will be on packets from June 2019 onwards.
OFAC DESIGNATES ARGENTINIANS AND ARGENTINE CRIMINAL ORGANISATION
On 23rd May, a news release from OFAC listed 8 individuals, the GOLDPHARMA DRUG TRAFFICKING & MONEY LAUNDERING ORGANIZATION, and a number of businesses in various countries, including the UK – SMILE PROPERTY & TRAVEL LTD (aka QUARTIERLATINAPARTMENTS; aka SMILE BITCARD; aka SMILE PROPERTY AND TRAVEL LTD).
ICE WANTS TO TRACK ELECTRONIC DEVICES — THROUGH TIME
Defense One reported on 22nd May that US Immigration and Customs Enforcement (ICE) is looking for a cloud-based subscription service that can pinpoint the exact locations of cellphones, laptops and other connected devices — even going back in time. It says that ICE is searching for geolocation services technology that can give an accurate location — either pinpoint or a designated polygonal area — for connected devices within a specific time window. The service should be able to identify locations going back at least 2 years or more. However, the article says that it is unclear if the service could be used to pull geolocation data from confiscated devices
CHINA’S BAN ON FENTANYL DRUGS WON’T LIKELY STEM AMERICA’S OPIOID CRISIS
The RAND Corporation on 23rd May published a blog post saying that synthetic opioids such as fentanyl are driving drug overdose deaths in the US, and it is unlikely this will end soon. But unlike prescription pain relievers, the vast majority of synthetic opioid overdoses involve illicit imports from China and Mexico – and increasing amounts of synthetic opioids arrive by mail or cargo from China, many from online vendors who offer a wide range of chemicals at very low prices. It says that China has some 5,000 pharmaceutical manufacturers, but regulators scrutinize a small share of companies. Fentanyl is not prohibited in China, though its unauthorised manufacture and handling is banned. The post explains why it might not be possible to control production in China, and anyway other countries besides China have the capacity to supply America’s insatiable appetite for opioids – arrests for illicit manufacture and exportation of fentanyl were reported in India in 2018. The post concludes that America needs to have less talk about what China can do to address our problem and more discussion about what America can do at home.
NORTH KOREA SAYS “BIGGEST ISSUE” IN US TIES IS IMPOUNDED SHIP
Reuters on 23rd May reported that the recent US seizure of a North Korean cargo ship is the biggest stumbling block to improving bilateral relations, a senior North Korean official has said. The bulk carrier (IMO 8905490) was been detained by the Indonesian authorities in 2018, and has recently been formally seized and is reportedly en route for American Samoa. The ship had a crew of 25, all North Koreans, and was said to have been loaded with coal from Vladivostok, which was to be transferred onto another ship.