The Times of Israel on 10th June reported that Wealth Recovery International has closed, 3 months after its owner, Austin Smith (aka Avi Smith), pleaded guilty in the US to conspiracy to commit wire fraud – in connection with previous employment in the binary options industry. It had claimed to have recovered $8.5 million for its clients. It was one of several Israeli businesses that offered to recover funds lost in binary options frauds, for an upfront fee and a percentage of any recovered funds. At its peak, the newspaper says, the binary options sector employed thousands of Israelis in hundreds of companies, duping victims of billions of dollars. It was outlawed in Israel in December 2017 – though some companies are said to continue despite this.
The FACT Coalition on 10th June reported that a bipartisan group of 4 US senators had unveiled draft legislation to update federal AML laws and end the incorporation of anonymous companies in the US, as House of Representatives lawmakers prepare to vote on their own bipartisan proposal to address the abuse of anonymous companies.
On 7th June, specialist firm Boodle Hatfield published a briefing about an EU Regulation recently published in the Official Journal. It says that the EU Regulation aims to crack down on illicit trade and terrorist financing, and intends to stop the import into the EU of cultural goods which have not been lawfully exported from their country of creation or discovery. The Regulation is drafted to fill a gap in EU legislation; although the EU already prohibits imports of cultural goods from Iraq and Syria there is a lack of framework around imports of cultural goods from other countries. The intentions of the Regulation are clearly admirable, but it seems unavoidable that this will have a significant effect on the EU’s art and antiques import markets. The briefing lays out how the Regulation will work.
The June Order Paper for the Tynwald, the Isle of Man’s parliament, includes the Proceeds of Crime Act (Compliance with the International Standards) (No.2) Order 2019. The amendments are said to seek to address 2 issues which have been identified as adversely impacting the Islands progress towards meeting recommendations made in MONEYVAL’s Mutual Evaluation Report (MER) on the Isle of Man in respect of restraint and confiscation of the proceeds of crime. The Order introduces a requirement whereby the High Court can seek update reports from the applicant for a restraint order to ensure that the order is being actively managed and that investigations are progressing. The civilian financial investigators employed by the FIU and Asset Recovery Unit are to have extended activities for which they may have responsibility, specifically within the area of dealing with the proceeds of crime – and i order to undertake this role a financial investigator must be formally authorised in writing to do so by the Attorney General or the Chief Constable. The Act is amended in respect of the restraint of assets to replace the term “reasonable cause to believe” that assets may be linked to crime with a lower standard of proof – “reasonable grounds to suspect”.
On the June Order Paper for the Isle of Man Parliament, Tynwald, the Designated Businesses (Amendment) Order 2019 makes various amendments to definitions in the Designated Businesses (Registration and Oversight) Act 2015. The most important is probably to that of ‘payroll agent’, which was expanded to capture the scope gap identified relating to where the payroll agent is acting as an individual’s employer but the work of the individual is being carried out outside the Island, the work is not directly for the employer (payroll agent) and the work is not the principle trade of the employer (payroll agent). This amendment is intended to capture the businesses that have previously fallen out of scope therefore more businesses may be required to register under the DBROA as a result. The changes have effect from 1st June.
The NSW Supreme Court HAS sentenced an Australian man to 9 years prison for providing technical support to ISIS. The man pleaded guilty to researching rockets and propellant for the group.
On 7th June, ENACT Africa published an article asking how Morocco’s rare fossils end up in auctions and collections as far afield as Paris or Mexico City? The Atlas mountain range contains large quantities of fossils and, traditionally, local populations have exploited these resources, selling ancient fossils to tourists and collectors. However, since the 2000s this activity has transformed into a structured and lucrative business. In early January 2019, Morocco’s Ministry of Energy, Mines and Sustainable Development published a draft decree that addresses the need for the trade in fossils to be regulated.
On 6th June. ENACT Africa published an article saying that Cape Verde is becoming a key location in the transhipment of drugs being trafficked to Europe. In early 2019, Cape Verde police found 9.5 tons of cocaine on a Panama-flagged vessel – the biggest such drug seizure made in the country. The vessel, which was bound for Tangiers, made an emergency stopover in Praia. All 11 crew members were Russian. Drugs are increasingly becoming associated with violence and criminality in Cape Verde, and drug-related violence could affect the booming tourism sector. Drug money is said to be present all over the island, with Cape Verde particularly vulnerable to money laundering related to drug trafficking. A study showed that criminals were using businesses, notaries, NGO and real estate companies to launder the money.
On 10th June, Eversheds Sutherland published a briefing saying that the passage of a year since GDPR came into force has been a marker for the ICO and others to pause, reflect, and (importantly) for the ICO to give some indications as to what lies ahead. In a short briefing the firm focuses in on some key themes relating to enforcement, complaints and personal data breaches as well as the possible direction of travel.
On 7th June, the RAND Corporation published a paper about materials have been developed with increasing multi-functionality and ability to survive in and respond to complex and challenging environments. It contains testimony presented before the US-China Economic and Security Review Commission on June 7th. It compares US and Chinese capabilities for these “metamaterials”, saying that China is pursuing a substantial research and development effort in metamaterials, and comments on US-China research collaborations. It refers to China’s domination of critical materials production and processing. Many of the materials that are critical for manufacturing, include the most well-known examples – metals of the rare earth family, which are essential to many technologies essential to both civilian and defence applications, such as chemical catalysts, lasers, high-power magnets, batteries, light-emitting diodes (LED), night-vision goggles, and computer hard drives. China has more than 50% of world production of 12 different critical materials — antimony, aluminium, bismuth, fluorspar, gallium, germanium, magnesium, rare earths, silicon, tellurium, tungsten, and vanadium.