OTHER THINGS YOU MAY HAVE MISSED – MAY 24

24th May 2019

MALAYSIA BUSTS FAMILY SYNDICATE SUSPECTED OF SMUGGLING INDIAN NATIONALS TO EUROPE
Channel News Asia on 24th May reported that Malaysian authorities have arrested a family of 3 – a man, his wife and their son – who are suspected to be masterminds behind a human trafficking syndicate, which has been smuggling Indian nationals into Europe via Thailand for a decade.

https://www.channelnewsasia.com/news/asia/family-syndicate-malaysia-busted-smuggling-indians-europe-11561362

AUSTRALIA: RACEHORSE OWNER DAMION FLOWER ACCUSED OF DRUG SMUGGLING

On 24th may, News.com reported that high-profile Australian racehorse owner Damion Flower has been charged over his alleged role in smuggling cocaine aboard commercial flights from South Africa.  Flower owns horses with high-profile figures including broadcaster Alan Jones, advertising man John Singleton and rugby league legend Phil Gould.  Police had raided 6 properties and about A$8 million in cash was found.

https://www.news.com.au/sport/superracing/racehorse-owner-damion-flower-accused-of-drug-smuggling/news-story/98d79943d8fee0c4ee8e5240fa41eb88

HOW CAN UGANDA EXPORT SO MUCH MORE GOLD THAN IT MINES?

On 23rd May, The Economist carried an article posing this question saying that, according to official statistics, gold exports surged to $514 million in 2018 from less than $10m a decade ago, and last year gold surpassed coffee as Uganda’s biggest earner of foreign currency.

https://www.economist.com/middle-east-and-africa/2019/05/25/how-can-uganda-export-so-much-more-gold-than-it-mines

CHINESE CUSTOMS SENDS BACK 700 TONNES OF WASTE

Urdu Point on 23rd May reported that Customs in the city of Dalian in north-east China has ordered the shipping back of more than 688 tonnes of suspected smuggled solid waste back to where it originated.  Disguised with fake documents, the waste of aluminium dross was seized late last year.

https://www.urdupoint.com/en/world/chinese-customs-sends-back-700-tonnes-of-wast-628391.html

FURTHER ENCOURAGEMENT FROM THE ENGLISH COURTS TO PURSUE INTERNATIONAL DISPUTES IN THE UK

A May 2019 briefing from Dechert LLP says that the recent decision of the Supreme Court in Vedanta Resources PLC v Lungowe and others provides a further example of the willingness of the English courts to assume jurisdiction over cases which have very little connection with England.  It also says that, between 2017 and 2018, 70% of litigants in cases brought before the English Commercial Court were not domiciled in the UK.  Whilst in many cases there will be no dispute between the parties and often the parties will have entered into a pre-existing arbitration agreement which either precludes or at any rate reduces the scope for any dispute about whether the English court has jurisdiction, where there is a dispute, the briefing says, the trend in recent years reveals a willingness in suitable cases to extend the arm of the English courts to cases where there was little or no connection between the parties, the underlying dispute and England.  The briefing concludes by saying that decisions of the English court on whether it is or is not the appropriate forum for the resolution of a dispute will always be fact specific.

https://info.dechert.com/10/12400/may-2019/further-encouragement-from-the-english-courts-to-pursue-international-disputes-there.asp?sid=097990bc-deb8-45f1-a6f2-b502ed172512

APP FRAUD: COMBATING FRAUD WITH PAYEE VERIFICATION

On 20th May, an article from Womble Bond Dickinson looks at what is being done to mitigate the risks of authorised push payment (APP) fraud – where fraudsters use online and mobile systems to trick account holders into sending money to the wrong account.  One of a number of initiatives to combat APP fraud is Confirmation of Payee (CoP).  It explains that, in a nutshell, CoP is an account name checking system, whereby banks require the account name, sort code and name of the intended payee.  A new timeline to implement CoP has not yet been made clear by the Payment Systems Regulator (PSR).

https://www.womblebonddickinson.com/uk/insights/articles-and-briefings/combatting-fraud-payee-verifications

MALAYSIAN POLICE “RAID DELOITTE OFFICE FOR 1MDB-RELATED DOCUMENTS”

On 24th May, KYC 360 reported that Malaysian police raided the Kuala Lumpur office of audit firm Deloitte as part of a widening probe into a multibillion-dollar scandal at state fund 1MDB.

https://www.riskscreen.com/kyc360/news/malaysian-police-raid-deloitte-office-for-1mdb-related-documents-sources/

UKRAINE’S PRIVATBANK LAUNCHES SUIT AGAINST FORMER OWNER KOLOMOISKY IN US

KYC 360 on 24th May reported that Ukraine’s largest lender has filed a lawsuit against former owner Ihor Kolomoisky in the US – described as the latest in a series of legal battles between Kolomoisky and the Ukrainian authorities which nationalised PrivatBank in 2016 as part of a clean-up of the banking system.

https://www.riskscreen.com/kyc360/news/ukraines-privatbank-launches-suit-against-former-owner-kolomoisky-in-u-s/

LAS VEGAS BUSINESSMAN GETS 50 YEARS PRISON IN $1.5 BILLION PONZI SCHEME

KYC 360 on 24th May reported that Edwin Fujinaga, 72, former CEO of MRI International Inc, was sentenced following his conviction last November on 20 counts of mail fraud, wire fraud and money laundering.  Fujinaga was also ordered to forfeit $813.3 million and make $1.13 billion of restitution.

https://www.riskscreen.com/kyc360/news/las-vegas-businessman-gets-50-years-prison-in-1-5-billion-ponzi-scheme/

AN ALGERIAN SPRING?

On 23rd May, the House of Commons Library published a briefing paper on the situation in Algeria in the light of the ongoing stand-off between demonstrators and the authorities.

https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8578

SANDALS DENIES CLAIM IT OPERATES DECADES-LONG TAX FRAUD SCHEME

The Gleaner in Jamaica on 24th May carried a report saying that Jamaican hotel chain Sandals has dismissed as “downright false” allegations raised in a lawsuit filed in the US that for decades, it “secretly” pocketed fees collected from guests as “local government taxes”.  This followed a lawsuit, which seeks at least $5 million in damages, was filed in the Florida Federal Court.

http://jamaica-gleaner.com/article/lead-stories/20190524/sandals-fights-back-denies-claim-it-operates-decades-long-tax-fraud

TARIFF LEVELS: US AND KEY TRADING PARTNERS

On 23rd May, ETH Zurich published the following chart, outlines the average tariff levels applied on all imports by the US and a selection of its key trading partners –

ST-2019_GR_JT_2

CALLS FOR EUROPE TO REVIEW BORDER CONTROLS AFTER BLACKLISTED RUSSIAN VISITS 70 TIMES

The Guardian on 24th May reported that it emerged that an individual sanctioned over his alleged role in Russia’s biggest-ever tax fraud has visited EU Member States more than 70 times in the past 4 years.  Andrei Pavlov is a Moscow-based lawyer is alleged to have played a central role in the theft of $230 million from the city’s tax office.  A subsequent cover-up involved the imprisonment, torture and killing of the whistleblower Sergei Magnitsky.  Pavlov denies all wrongdoing.

https://www.theguardian.com/world/2019/may/24/calls-for-europe-to-review-border-controls-after-blacklisted-russian-visits-70-times

CMA CGM TO EQUIP 50,000 CONTAINERS WITH TRACKERS

Loadstar on 23rd May reported that the shipping line is to equip the containers to permit digital tracking.

https://theloadstar.com/cma-cgm-set-to-equip-50000-containers-with-digital-tracking/

PHILIPPINES: 2 BOGUS CUSTOMS BROKERS NABBED FOR ALLEGED EXTORTION

The Manila Bulletin on 23rd May reported that 2 individuals, who posed as Customs brokers, were arrested in an entrapment operation after allegedly demanding half-a-million peso from a consignee for the release of a shipment, the Bureau of Customs said.  It is alleged that that the 2 demanded 500,000 pesos in exchange for the release of the shipments consigned to SHACKA Guns and Ammo which was held at the Ninoy Aquino International Airport.

https://news.mb.com.ph/2019/05/23/two-bogus-customs-brokers-nabbed-for-alleged-extortion/

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https://www.rferl.org/a/not-so-much-foreign-direct-investment-in-russia/29958685.html

BANKER INDICTED FOR ALLEGEDLY GIVING LOANS TO PAUL MANAFORT FOR HELP GETTING TRUMP JOB

The Wall Street Journal reported on 23rd May Stephen M. Calk, who ran the Federal Savings Bank in Chicago and served as a former campaign adviser to President Trump has been indicted for allegedly giving $16 million in loans to former Trump campaign chairman Paul Manafort in exchange for Mr. Manafort’s help in soliciting a high-level post in the Trump administration.

https://www.wsj.com/articles/bank-executive-indicted-for-allegedly-giving-loans-to-paul-manafort-in-exchange-for-soliciting-trump-job-11558623956

OECD: FREIGHT DEMAND WILL TRIPLE BY 2050

On 24th May, BIFA reported that the OECD predicts air cargo will see the most rapid growth by mode, and all transport lanes will face major challenges.  Global freight demand is set to surge in the coming decades but will also be subject to multiple disruptive factors.  ITF Transport Outlook 2019 outlines a range of transport demand scenarios through to 2050 and concludes global freight demand will triple between 2015 and 2050, based on current demand growth rates.  It contains several interesting actual or potential scenarios – such as the effect of Chinese factories relocating inland.  Air freight, while representing a marginal share of total freight transport, will have the highest compound annual growth rate of all modes through 2030 (5.5%) and 2050 (4.5%).

https://www.bifa.org/news/articles/2019/may/freight-demand-will-triple-by-2050-new-report?l=y

The report is available at –

https://read.oecd-ilibrary.org/transport/itf-transport-outlook-2019_transp_outlook-en-2019-en#page1

LAUNDERED RED DIESEL CRIMINAL NETWORK DISMANTLED IN BELGIUM

The Brussel Times on 24th May reported that over a dozen people belonging to a criminal organisation known to police for fabricating and selling fake red diesel in the province of Limburg have been arrested and the operation dismantled, and several gas stations in the area have been shut down. The gang bleached heating oil and sold it as fuel, in a large-scale fraud operation worth an estimated ten of millions of euros every year.

http://www.brusselstimes.com/belgium/justice/15844/fake-diesel-criminal-network-dismantled-in-limburg

SOUTH AFRICA: IMMIGRATION LAWYER’S FRAUD AND FORGERY CASE

On 24th May, Times Live reported that immigration lawyer Craig Smith faces up to 1,125 charges.  He and his co-accused will face trial in the Cape Town High Court in October on hundreds of counts.  He was arrested in March with his wife, Cornelia, and an employee, Shafieka Salie.  The trio is accused of fraud, forgery, racketeering and money laundering through the legal practice, Craig Smith and Associates, and his immigration consultancy between October 2011 and July 2014.  He is accused of bribing home affairs officials to “legalise” his clients by granting them temporary and permanent residence.

https://www.timeslive.co.za/news/south-africa/2019-05-24-immigration-lawyers-massive-fraud-and-forgery-case-moved-to-high-court

DUTCH COMPANY IN BIODIESEL FRAUD EARNED MILLIONS

On 24th May, Dutch News reported allegations that Biodiesel Kampen, which makes fuel from old cooking oil, was involved in fraud through misdescription of its product.  The investigation is linked to that of Greenergy in the UK, and trading at Greenergy and various third parties.

https://www.dutchnews.nl/news/2019/05/dutch-company-embroiled-in-biodiesel-scandal-earning-millions-vk

VIETNAM: CRACKDOWN ON 2 ILLEGAL ONLINE GAMBLING RINGS

On 24th May, Calvin Ayre reported that Vietnam’s crackdown on illegal gambling rings continue, with 2 major operations recently, and more than 30 people have been arrested or brought in for questions over 2 online gambling rings.  Online gambling remains illegal in the country – although casinos are still legal.  One ring had accepted bets worth over $86 million, and the other is said to have accepted bets worth trillions of dong (where 1 trillion dong = $43 million).

https://calvinayre.com/2019/05/24/business/vietnam-cracks-down-on-two-multi-million-gambling-rings/

https://e.vnexpress.net/news/news/police-bust-two-multimillion-dollar-online-gambling-rings-3928332.html

BOSNIA’S TOP JUDICIAL OFFICIAL SUSPECTED OF TAKING BRIBES

On 24th May, OCCRP reported that Bosnia’s top judicial official became embroiled in a corruption scandal after a secretly-filmed video from November 2018 was released showing him allegedly taking bribes through a middleman.

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9804-bosnia-s-top-judicial-official-suspected-of-taking-bribes

ILS: GUERNSEY’S NEW HYBRID VEHICLE

On 1st April, We Are Guernsey published an article by a partner at Carey Olsen about the creation of what is called the world’s first hybrid vehicle for Insurance Linked Securities (ILS) fund managers.  The Guernsey hybrid is a protected (PCC) or incorporated cell company (ICC) which is both a licensed insurance company and a regulated investment fund, bringing a new level of simplicity and efficiency for ILS managers. No other jurisdiction in the world offers such a unique combination, the article says.

https://www.weareguernsey.com/news/2019/guernseys-new-hybrid-vehicle-get-even-closer-to-the-risk/

https://www.careyolsen.com/briefings/guide-guernseys-new-ils-hybrid-vehicle

MAPPING ARMED GROUPS IN MALI AND THE SAHEL

The European Council on Foreign Relations has a project that maps jihadist and non-jihadist groups and pinpoints the presence of external actors in the region as at May 2019.

https://www.ecfr.eu/mena/sahel_mapping

CHINA: SEIZURES OF IVORY TRAFFICKED FROM JAPAN ESCALATE

China Dialogue on 22nd May claimed in an article that legal markets like those in Japan enable traders to launder illegal elephant ivory and frustrate enforcement.  It says that this year a steady trickle of ivory products hidden in mail parcels and shipped from Japan has been seized by Chinese customs.  China banned its domestic ivory trade in January 2018, turning Japan into the largest legal ivory market in the world. Ivory traders are taking advantage of Japan’s vast legal market and minimal government enforcement to traffic ivory to China for resale.

https://www.chinadialogue.net/article/show/single/en/11261-Seizures-of-ivory-trafficked-from-Japan-escalate

GULF OF GUINEA: NIGERIA AND OTHERS LOSE $777 MILLION ANNUALLY TO PIRACY SAYS UN

On 24th May, Insurance Marine News reported that a report by the UN Office on Drugs and Crime (UNODC) has shown that that Nigeria and other countries in the Gulf of Guinea lost $777.1 million annually in recent years to piracy and other maritime crimes.

https://insurancemarinenews.com/insurance-marine-news/gulf-of-guinea-nigeria-others-lose-777m-annually-to-piracy-says-un/

LNA ANNOUNCES NAVAL BLOCKADE OF WESTERN LIBYA

Janes.com on 23rd May reported that the Libyan National Army (LNA) faction has announced it will impose a naval blockade on ports in west Libya to prevent any more shipments of military equipment reaching forces aligned with the internationally recognised Government of National Accord (GNA).

https://www.janes.com/article/88731/lna-announces-naval-blockade-of-western-libya?socialmedia=twitter

LESSONS FROM 2 YEARS OF INVESTIGATING CORRUPT LAND DEALS IN INDONESIA

A guest post on the Transparency International website from the Gecko Project, which was established in 2017, dedicated to reporting on the intersection of corruption, land rights and the environment.  It examined the corruption underpinning Indonesia’s land rights and climate crisis in unparalleled depth and, in this final commentary explores how tackling corruption is an essential precondition for Indonesia to meet its climate targets and resolve land conflicts, and the role of government and civil society in doing so, and the environmental and social crises unfolding in Indonesia.

https://voices.transparency.org/lessons-from-two-years-of-investigating-corrupt-land-deals-in-indonesia-6e96f9672d2b

MALDIVES: WHAT 100 DAYS OF A NEW PRESIDENCY TELLS US ABOUT THE FIGHT AGAINST CORRUPTION

On 21st May, an article from Transparency International looks at the top 10 anti-corruption commitments in the first 100 days of the new government.  It says that, despite some positive strides, the deep roots of corruption within the political and accountability institutions of the state present significant challenges in the fight against corruption, and that this is particularly evident in cases of grand corruption.

https://voices.transparency.org/maldives-what-100-days-of-a-new-presidency-tells-us-about-the-fight-against-corruption-d8c712fcdc76

IAEA LAUNCHES PROJECT TO HELP COUNTRIES FIGHT FOOD FRAUD

On 22nd May, the International Atomic Energy Agency reported that it has launched a 5-year research project with experts from 16 countries to refine methods to apply nuclear-derived techniques to test for accuracy in food labels.  The outcome of the project, carried out in cooperation with the Food and Agriculture Organization of the UN (FAO), will assist countries in combating fraud in high-value food products, such as premium honey, coffee and speciality rice varieties.  The project will help countries apply stable isotope techniques to protect and promote foods with added-value, and works by looking at the ratio of stable isotopes in elements – such as hydrogen, oxygen and carbon – and the concentration of elements in a sample of the product. These can provide a unique fingerprint that links a crop to the place where it is cultivated.

https://www.iaea.org/newscenter/pressreleases/iaea-launches-project-to-help-countries-fight-food-fraud

US: A THIRD OF COMPANIES GOT MAIL THREATS IN PAST YEAR WHILE BIOLOGICAL SCREENING DOUBLED

Homeland Security Today on 19th May reported that a third of security and mail room professionals surveyed reported receiving a threat by mail over the past year while nearly half of all organisations still only screen some or none of their incoming letters and packages.  The rate of entities screening for biological agents nearly doubled from the previous year, to 33%.  37% of the survey’s respondents working in government or as contractors, just 42% said all of the incoming mail at their organisation is screened.

https://www.hstoday.us/subject-matter-areas/surveillance-protection-detection/third-of-companies-got-mail-threats-in-past-year-while-biological-screening-doubled/

ACTORS TRYING TO REFLAG NORTH KOREAN SHIPS IN EFFORTS TO EVADE INTERNATIONAL SANCTIONS – AND PANAMA LINKS

In the second report of its Project Sandstone, this article from RUSI uncovers further links between Chinese nationals involved in the Jie Shun incident and North Korea’s illicit networks.  This second report looks at Fan Mintian, Dong Changqing and Zhanq Qiao – 3 Chinese nationals who have appeared in the UN Panel of Experts investigations into North Korea’s sanctions evasion activities and several other reports linking them to flag registries, and oil, coal and iron ore smuggling networks.  Both Fan and Zhang were also described as key players in the Jie Shun incident by the Panel of Experts.  The report indicates that Chinese nationals with close links to North Korea’s illicit shipping networks have acted as surveyors for vessels registered under the Panamanian flag – and possibly the Mongolian flag – thereby potentially providing an avenue for North Korean-linked vessels to obtain flags of convenience and other maritime services prohibited under UN Security Council resolutions.  It is also said to reinforce the conclusion that several individuals with extensive links to North Korea’s illicit shipping networks have operated across a wide number of roles in the maritime industry, from directly owning and managing vessels, to the provision of international safety management services, as well as flagging and certification services required to operate a foreign-flagged vessel in international waters.  Fan Mintian and another man worked as authorised officials for Panama Maritime Documentation Services, an organisation empowered by the Panamanian Maritime Authority to conduct surveys and certification of Panamanian-flagged vessels.

https://rusi.org/sites/default/files/project_sandstone_sailors_of_panama_final_for_web.pdf

https://rusi.org/publication/other-publications/project-sandstone-report-2-sailors-panama

UK SANCTIONS PENALTY – BREACH OF EGYPT SANCTIONS BY TRAVELEX

On 24th May, HM Treasury issued a Notice saying that, on 8th March, OFSI issued a penalty against Travelex (UK) for contravention of the Egypt financial sanctions regulations.  The penalty, for a £204 transaction, was £10,000.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/804021/Travelex_monetary_penalty.pdf

PSG FOOTBALL CLUB PRESIDENT NASSER AL-KHELAIFI CHARGED WITH CORRUPTION

CNN reported on 24th May that the president of French football champion Paris Saint-Germain has been charged by Parisian prosecutors with corruption in relation to a $3.5 million payment over the organisation of the World Athletics Championships in Qatar.

https://us.cnn.com/2019/05/24/sport/nasser-al-khelaifi-psg-president-iaaf-world-championships-athletics-spt-intl/index.html

REPORTS: UK BANKING SCAMS AND FRAUDS

On 24th May, the House of Commons Library published a briefing paper which seeks to answer frequently asked questions about banking scams, and describes: the scale of the problem; the types of scam; what help is available for victims; and, government and industry action, saying that criminals successfully stole £1.2 billion through banking fraud and scams in 2018.

https://researchbriefings.files.parliament.uk/documents/CBP-8545/CBP-8545.pdf

The briefing paper refers to a March 2019 report from UK Finance – “FRAUD THE FACTS 2019: The definitive overview of payment industry fraud”.  This refers to the various types of fraud –

  • Card frauds – Unauthorised debit, credit and other payment card fraud; Remote purchase (Card-not-present) fraud; Counterfeit Card Fraud; Lost and Stolen Card Fraud; Card ID theft; Card not-received fraud; Internet/e-commerce card fraud losses; Card fraud at UK cash machines; and Card fraud abroad.
  • Cheque fraud.
  • Unauthorised remote banking fraud.
  • Authorised Push Payment (APP) fraud

https://www.ukfinance.org.uk/system/files/Fraud%20The%20Facts%202019%20-%20FINAL%20ONLINE.pdf

UNDERSTANDING FREE PORTS – TAX-EXEMPT WAREHOUSES FOR HIGH-VALUE GOODS

A briefing from Eversheds Sutherland on 23rd May is the first of a series of articles considering different areas of the UK government’s consultation on the transposition of the EU’s 5th Money Laundering Directive (5MLD).  It takes a look at free ports, being brought into scope for AML checks on art transactions.  This article considers what a free port is, what money laundering risks attach to their use, and the future of EU free ports in the light of 5MLD. 

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Litigation_Support/freeports

MALTA: DRAFT EU REPORT ON THE GALIZIA ASSASSINATION AND RULE OF LAW

A draft report dated 20th May from the EU Parliament’s Committee on Legal Affairs and Human Rights on the assassination of Daphne Caruana Galizia, the rule of law in Malta, and ensuring that the “whole truth” emerges.  It contains a draft Resolution that could laid before the Parliament.  It refers to the fundamental weaknesses have allowed numerous major scandals to arise and go unchecked in Malta in recent years.  The report says it is proven that Malta’s government institutions, criminal justice system and law enforcement bodies do not comply with European standards on the rule of law; and that the Maltese authorities must implement all of the recommendations of the Venice Commission and GRECO, and those of MONEYVAL once made, as a matter of urgency.

https://prdcdns3.newsbook.com.mt/wp-content/uploads/2019/05/omtizgt-parliamentary-assembly.pdf