On 27th May, the New Yorker magazine published an article describes the business side of European soccer as being more like a painting by Bruegel the Elder, where spending rules are broken; salaries are secret; the best leagues are awash in Russian oligarchs, Middle Eastern sovereign-wealth funds, and Chinese conglomerates; rumours fly; and middlemen thrive.
The US Treasury has published a redacted version of its reasons for the listing of Oleg Deripaska, that he had acted for/on behalf of a senior official of the Russian Federation and operates in the energy sector of the Russian economy. Deripaska has himself issued a statement outlining why he disagrees with these findings.
On 31st May, RUSI published a Commentary saying that more needs to be done about the enforcement of rules that bind cryptocurrency exchanges. May saw the takedown of the Wall Street Market and Silkkitie, 2 Dark Web marketplaces where illicit goods and services had been traded. For some time now, it says, there has been no uniform international approach to the regulation of businesses that exchange cryptocurrency into state-issued, government-backed legal tender, also known as fiat currency – though in October FATF decided that AML/CFT obligations should be extended to ‘virtual asset service providers’, including both crypto-to-fiat and crypto-to-crypto exchanges. But enforcement actions against cryptocurrency businesses remain few and far between. The article identifies 2 reasons for this –
- until states actually implement the FATF’s revised standards, their domestic regulations may not necessarily require cryptocurrency exchanges to undertake AML checks in the same way as, for instance, banks; and
- less responsible exchanges can be located in jurisdictions with less than robust supervisory regimes (as is always the way for those wanting to avoid controls and oversight).
31st May 2019
NEW EXPORT CONTROL PROFESSION LAUNCHED AT LONDON SYMPOSIUM
On 30th May, the Institute of Export and International Trade announced a new “Export Control Profession”’ at the Department for International Trade’s Export Control Symposium in London. The body is the latest membership offering from the IOE&IT and is designed specifically for people involved in export and import control and trade sanctions compliance. The new professional body has been set up in collaboration with HMRC, the Export Group for Aerospace, Defence and Dual-Use (EGADD) and the Export Control Joint Unit (ECJU) of the Department for International Trade (DIT). It seeks to enable and promote excellence in compliance with export and import control, and trade sanction regulations, and its membership body will represent Export Control Professionals and provide them with essential resources, professional points of contact and learning support.
TAIWAN COMPANIES ON US BLACKLIST
On 29th May, Focus Taiwan reported on 8 Taiwanese companies recently added, along with over 60 other companies linked to Huawei of China, were listed on the US Commerce Department export control “entity list” because of violations of US national security and foreign policy interests, or because of suspected violations of the Iranian sanctions. The 8 companies are Xunwei Techonologies (Huawei’s representative in Taiwan), Hivocal Technology Co. (Taipei); Enrich Ever Technologies Co. Ltd.; Kuang-Su Co., Ltd. (Taipei); Infinity Wise Technology (Taoyuan); Arthur Siou (Taipei); Landstar Tech Company Limited (Taipei); and Yi-Lan Chen (Taipei), head of Lu Xing technology.
FORMER GERMAN SOLDIER’S GANG JAILED FOR 77 YEARS AFTER SMUGGLING BULLETS INTO UK
The Metro on 30th May reported that Manfred Kurz, 61, brought suitcases full of bullets into the UK destined for organised crime gangs under the cover of his German firearms licence. He was also caught with explosives and bullet-making equipment when his south London home was raided. The “gang” included his daughter, as part of a nationwide distribution network to sell the bullets.
RIGA HOSTS AN INTERNATIONAL CONFERENCE ON COMPLIANCE WITH SANCTIONS IN THE FIELD OF PROLIFERATION FINANCING
On 30th May, LETA 100, the Latvian Information Agency, published a news release saying that, on 27th-28th May, the Ministry of Foreign Affairs hosted an international conference on how to improve effectiveness in FATF IO.11. It was organised by the Office for Prevention of Laundering of Proceeds Derived from Criminal Activity (FIU Latvia) in co-operation with the Ministry of Foreign Affairs. The topics covered were the legislative framework and compliance with international standards, effective implementation and monitoring of sanctions, and the importance of co-operation between the public and private sectors. 100 exports from 30 countries took part in the event organised in line with the Action Plan for Prevention of Money Laundering and Terrorist Financing until 31st December.
IS SENEGAL A NEW HUB FOR THE TRAFFICKING OF STOLEN CARS?
On 2nd May, ENACT Africa published an article saying that local authorities are scaling up efforts, but car traffickers seem to be one step ahead. Interpol has said that West Africa ‘represents the main hub for stolen vehicles exported from Western Europe and North America’. The capital of Senegal, Dakar, was named as one of the most popular ports to be exploited by criminal syndicates operating in this market in West Africa. Range Rovers and BMW X6 appear to be the most frequently trafficked stolen luxury vehicles in Senegal. Most of them come from Europe, especially from France, and to a lesser extent from North America. The number of stolen cars sent directly to Dakar appears to have decreased considerably – instead, it seems Dakar is increasingly being used as a transit zone for stolen vehicles on their way to the Gambia, Mali and Guinea-Bissau, where the trade appears to have been linked with drug traffickers.
IRISH SUPREME COURT DISPELS DOUBTS ON POSSIBLE UNCONSTITUTIONALITY OF MANDATORY REPORTING OBLIGATIONS
On 30th May, McCann Fitzgerald published an article about the mandatory reporting obligations in relation to many white-collar offences with criminal liability for failure to do so. The constitutionality of the provision had been called into question by a 2018 High Court judgment in relation to an almost identical provision in the Offences Against the State (Amendment) Act 1998.
PROSECUTORS SEEK SALE OF 2 NEW YORK CONDOS LINKED TO MALAYSIAN FUGITIVE
On 31st May, KYC 360 reported that US prosecutors are seeking to sell 2 luxury condominiums in New York City linked to fugitive financier Low Taek Jho, court documents showed, the latest effort to recover money allegedly stolen from Malaysia’s state fund 1MDB.
GUYANA STATE AGENCY GIVES DETAILS ABOUT OIL BLOCKS CORRUPTION PROBE
On 31st May, KYC 360 reported that Guyana’s State Assets Recovery Agency has said that it has launched an investigation into whether corruption played a role in the previous government’s 2015 decision to award two oil blocks to little-known companies days after ExxonMobil signalled it had found large deposits of oil and gas.
BRITISH COLUMBIA PROBES SUSPICIOUS CASH PAYMENTS TO SCHOOLS
KYC 360 on 31st May reported that the government of British Columbia has asked public colleges and universities and private post-secondary schools to bar large cash payments from students as part of a broad crackdown on money laundering in the Canadian province.
AUSTRALIA: SENIOR FIREFIGHTER JAILED FOR CORRUPTION AFTER RECEIVING NEARLY $200,000 IN KICKBACKS
On 31st May, ABC News reported that a former senior firefighter has been sentenced to three years’ prison for receiving $194,500 in kickbacks for helping companies secure contracts with Queensland Fire and Emergency Services (QFES).
TELEPHONE AND ONLINE SCAMS
In advance of a Westminster Hall debate on 4th June, the House of Commons Library has produced a briefing paper which provides information about the incidence of scams, types of scams (including 3 case studies, including fake lotteries) and what can be done to stop them.
There is also available a briefing paper from 15th March on nuisance calls: unsolicited sales and marketing, and silent calls –
THE BOOM IN “BENJAMINS” – WHAT MAKES THE US $100 BILL SO POPULAR?
In the June 2019 edition of the Finance & Development magazine from the IMF, an article points out that, in 2017, the $100 bill overtook the ubiquitous $1 bill in circulation volume, for the first time in history. In other words, the most valuable US banknote became the most widely circulated (the $20 bill is in third place). There are more $100 bills circulating now than ever before, roughly doubling in volume since the global financial crisis. It suggests that geopolitical instability could be one reason behind the surge in $100 bills, but says that there are other plausible explanations for the phenomenon. For example, the underground economy, the informal economy, the criminal economy — all of it contributes certainly to the appeal of large denomination bills. An IMF chief economist is quoted as saying that, worldwide, high-value currency notes are mainly used to avoid taxes and regulation, and for illegal activity.
3 PUERTO RICO SENATE OFFICIALS CHARGED IN “GHOST WORKERS” CORRUPTION SCHEME
The Daily Mail on 31st May reported that 3 officials with Puerto Rico’s Senate were arrested by FBI agents and later charged by the US territory’s federal prosecutor with alleged corruption for a case involving a scheme to defraud the legislature using “ghost employees”.
LEEDS FRAUDSTER CHRISTOPHER WOODHEAD ARRESTED IN SPAIN AFTER 15 YEARS ON RUN
The Yorkshire Evening Post on 30th May reported that Christopher Woodhead disappeared in 2004, shortly before he was due to stand trial over a £400,000 swindle involving his Leeds-based housing repair businesses.
CHINA’S CUSTOMS REJECTS STEEL SCRAP FROM SOUTH KOREA
Customs Today on 31st May reported that East China’s Ningbo Customs District refused to clear nearly 200 tonnes of steel scrap materials in 8 containers and shipped from South Korea – returning the scrap to its despatch point – as over a half of the weight of the consignment was actually soil rather than scrap.
MALAYSIA: 265 CONTAINERS FILLED WITH PLASTIC WASTE STUCK AT BUTTERWORTH PORT
Customs Today on 31st May reported that 265 containers filled with plastic waste imported from foreign countries have been held up at the North Butterworth Container Terminal, said state Environment Committee chairman. Each weighing 28 metric tonnes, they arrived in the port in the last 6 months from Belgium, Hong Kong, France, Germany – with more than half of the containers from Canada, with a total weight of 7,420 metric tonnes, also included household waste. But only 149 of the containers were declared.
HONG KONG REJECTS US WARNING RE TANKER PACIFIC BRAVO
Insurance Maritime News on 31st May reported that the Hong Kong government has rejected a warning from the US Department of State relating to tanker Pacific Bravo (IMO 9206035), which is believed to be heading for China. A US official told Reuters that the real owner of the Bravo was the Bank of Kunlun, a subsidiary of China National Petroleum Corp’s banking division CNPC Capital. Bank of Kunlun is believed to be the main financial institution for business transactions between China and Iran.