14th June 2019
EXPEDIA FINED OVER $300,000 FOR BREACHING US SANCTIONS WITH CUBA TOURS
USA Today, Wall Street Journal and others carried reports of settlements with OFAC of travel/holiday-related companies for Cuba tourism and travel operations.
THE EVOLVING ROLE OF SMUGGLERS IN WEST AFRICA’S MIGRATION ECONOMY
Relief Web on 13th June carried a briefing paper which focuses on the evolving role of smugglers in West Africa’s migration economy, as well as migration and smuggling patterns in West Africa and between West and North Africa. It is based on survey data that provides a unique insight into the role of smugglers and their interaction with refugees and migrants. The survey data was complemented by semi-structured interviews and focus groups, and a literature review. It says that the so-called migration economy involves not only those facilitating the movement of people across borders, but also other aspects of the economy, such as hotels, restaurants, businesses offering phone calls, mobile credit and internet access, as well as food and water vendors.
BUSINESS AND PLEASURE: HOW RUSSIAN OIL GIANT ROSNEFT USES ITS CORPORATE JETS
In an article tagged as an exclusive, on 14th June Reuters carried a report on the business jets used for corporate travel by Russian state-owned oil major Rosneft and the apparent use by CEO Igor Sechin or people from his social circle for leisure travel. It says that of 290 Rosneft flights between January 2015 and May 2019, 96 round trips took place during Russian public holidays or at weekends. Reuters said it found public information from Rosneft or the Russian authorities about official events corresponding to 42 of the 290 flights. Sechin’s use of corporate aircraft for travel to holiday destinations – regardless of whether his contract permits it or not – is part of a pattern of wasteful spending by Rosneft, said Vladimir Milov, Russian deputy energy minister until 2002. Between January 2015 and May 2019 Rosneft used a fleet of 6 business jets registered in Austria and the Isle of Man. They were owned by Rosneft subsidiaries, chartered by Rosneft, used for official Rosneft corporate trips, or in most cases all 3. It gives as one example of the aircraft involve, Isle of Man-registered M-YOIL, operated by a Singapore-registered company called AV Asia Developments Pte Ltd, which is said to be 100% controlled by Rosneft. That company stated the company received $1.86 million for the charter of the sole jet it operated at the time, and more than $2 million for services related to the same plane.
CAN FOREIGN LITIGANTS BE BOUND BY ENGLISH JURISDICTION CLAUSES IN CONTRACTS TO WHICH THEY ARE NOT PARTIES?
On 13th June, Bird & Bird published an article about a recent Court of Appeal case where competing jurisdiction clauses and the question of whether foreign litigants can be bound by English jurisdiction clauses contained in contracts to which they are not a party were involved. The decision is said to give guidance as to the approach taken where there are several different contracts between the parties each with their own dispute resolution clause, and shows the extent to which a party’s entitlement to dispute resolution in England will be protected. Essentially, it seems that if a third party seeks entitlement to any benefit under a contract it has to accept the burden as well.
SHOPS SHOULD LABEL ISRAELI SETTLER GOODS, ADVISES EU ADVOCATE GENERAL
EU Observer on 13th June reported an Advocate General Opinion that advised that European shops ought to label Israeli settler exports so that consumers can boycott them for “ethical” reasons the same way they did South African ones under apartheid. The non-binding advice, given in advance of a case before the European court, says that EU law requires for a product originating in a territory occupied by Israel since 1967, the indication … that the product comes from an Israeli settlement if that is the case.
https://euobserver.com/foreign/145152
EUROPOL HIGHLIGHTS RUSSIAN MONEY AS BIGGEST LAUNDERING THREAT
On 14th June, KYC 360 reported that Pedro Felicio, who is responsible for fighting money laundering at European police agency Europol, told Reuters that “huge inflows of criminal money” are mainly coming into Europe from Russia and China.
PETROBRAS IGNORED WARNINGS FOR 6 YEARS ABOUT SINGAPORE FUEL BROKER IMPLICATED IN GRAFT PROBE
KYC 360 on 14th June reported claims that Brazil’s Petrobras found suspicious activity in its oil trading business – and failed to stop it – in 2012, 6 years before an alleged bribery scandal erupted in the Singapore unit in 2018 and involving Seaview Shipbroking Ltd, named in the “Car Wash” investigation. It is alleged that 4 of the world’s largest commodities trading firms – Vitol SA, Trafigura, Glencore PLC and Mercuria Energy Group – used Seaview or other intermediaries to funnel at least $31 million in bribes to corrupt Petrobras employees. This allowed those involved to buy oil and derivatives at inflated prices or sell at discounted prices, thus delivering outsized profits to the parties on the other end of those trades.
ROMANIA’S INTELLIGENCE SERVICES TO SCREEN TAXPAYERS FOR TAX EVASION
Romania Insider on 14th June reported that the Romanian Intelligence Service (SRI) has put into operation an IT system – to quickly identify companies whose shareholders or directors are listed in more than one company and have a criminal record, as well as individuals for whom there are discrepancies between declared income and spending.
https://www.romania-insider.com/sri-system-tax-evasion
UK: FORMER DRUG SMUGGLER LOSES O-LICENCE APPEAL AS HAULAGE OPERATOR
On 13th June, Commercial Motor reported that a man convicted of drug smuggling in 2003 (using a lorry fitted with a false air tank), and released in 2009 after serving part of his 14-year sentence, had applied for an O-licence to run 4 HGV and 4 trailers but was refused after a public inquiry in October 2018 found he did not have good repute. He has now lost his appeal against that decision. He had appealed against inclusion of evidence from a previous hearing where he had appeared as a witness and in which adverse views were expressed in respect to his veracity.
https://www.commercialmotor.com/news/compliance/former-drug-smuggler-loses-o-licence-appeal
FCA RELEASES NEW RULES FOR CROWDFUNDING PLATFORMS
On 13th June, Gowling WLG published an article saying that the FCA published its in Policy Statement (PS19/14) on 4th June, outlining new rules for loan based (P2P) platforms and which follow on from, and are broadly in line with, the FCA’s proposals in the consultation it launched in July 2018. It outlines the key changes for platforms. For most platform types the new rules apply from 9th December, though those that offer home finance products came into force on 4th June.
REPORT DETAILS CLAIMED RUSSIAN ACTIVITY TO INFILTRATE WESTERN INSTITUTIONS AND LEGAL SYSTEMS
Jurist on 13th June reported on a report from the Free Russia Foundation (a US-based non-profit claiming to speak for the Russian diaspora), whose authors warn that individual nations need to take steps to protect their institutions, governments and court systems from the Kremlin. The report includes reference to the activity of the Russian mafia in Spain, and Russian involvement in a money laundering case linked to the investigation of interference in the 2016 Presidential elections in the US. It mentions Yukos and apparent misuse of Interpol facilities. Part 2 of the report is concerned with attempts by the Russian government to interfere with the domestic affairs of Western countries, including the use of NGO.
https://www.4freerussia.org/misrule-of-law/
AN AML SUPERVISOR “SHOULD PRACTISE WHAT IT PREACHES”
In Legal Futures on 14th June, it is reported that the Bar Council in the UK has accused the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) of a lack of communication and transparency. This came after OPBAS published its first-year assessment of regulators’ performance without warning them advance. It said it was also vital that professional body supervisors were notified in advance of any “public commentary” by OPBAS that related to them, including in official reports, and were granted a reasonable right to reply.
E-BANKING CONTINUES TO BE TARGETED BY CRIMINALS – HONG KONG ALERT TO BANKS ON RECENT CYBER SECURITY INCIDENTS
On 13th June, Eversheds Sutherland published an article saying that on 24th May the Hong Kong Monetary Authority (HKMA) issued an Alert regarding 8 cyber security incidents. The Alert is said to be a timely reminder to banks and the public to stay vigilant, and to not assume that lightning cannot strike twice. The article considers the incidents involved, saying that they serve as a good reminder for banks to review their existing cyber resilience and recovery plans; and that it would be unwise for senior management of banks to regard this as an IT issue only and simply pass the Alert to the banks’ IT Department to handle.
MARRIED EX-IRA BOMBERS GIVEN JAIL TERMS OVER SPAIN CASH SCAM LINKED TO UK SMUGGLING
The Belfast Telegraph on 14th June reported that Leonard ‘Bap’ Hardy, and his wife Donna Maguire, (once dubbed the “Angel of Death”) were each given a 2-year jail term by the National High Court in Madrid. They were found guilty of laundering the profits from “illicit activity” through property purchases in the provinces of Alicante and Malaga between 2005 and 2008 which totalled more than £850,000, following a HMRC investigation into large-scale tobacco and alcohol smuggling.
DRUG CARTELS’ TIES TO POLITICS IN SPOTLIGHT AS GUATEMALA VOTES
Reuters on 14th June reported on the elections in Guatemala where a handful of candidates blocked from the upcoming municipal, legislative and presidential polls for alleged links to drug trafficking, and drug trafficking has become a major issue in the elections.
US ACCUSES IRAN PREMATURELY OF VIOLATING NUCLEAR DEAL
On 14th June, the Arms Control Association said that tensions over the 2015 multilateral nuclear deal with Iran continue to rise after the Trump administration accused Tehran of violating one of its commitments under the agreement, but Iran’s decision to install additional advanced centrifuges appears to fall into a grey area not covered by the JCPOA. It points out that the US has urged Iran to return to compliance even though President Trump violated the deal by re-imposing sanctions in May 2018 and Washington is no longer party to the agreement. The US allegations centres around Iran’s installation of additional advanced IR-6 centrifuges but, the organisation says, Iran is still abiding by the JCPOA’s limits on heavy water and low-enriched uranium (LEU), according to an IAEA report at the end of May.
REASSESSING CBRN THREATS IN A CHANGING GLOBAL ENVIRONMENT
On 14th June, the Stockholm International Peace Research Institute published a report saying that threats related to chemical, biological, radiological and nuclear (CBRN) use are evolving rapidly alongside changes in the political environment and developments in technology. The continued use of chemical weapons (CW) in armed conflict has, in particular, underlined the fragile nature of existing arms control agreements. In the light of recent use, it is imperative to identify the threats posed by the use of CBRN and to understand the obstacles that impede cooperation at both the regional and international levels. This report follows from an expert workshop ‘Reassessing chemical, biological, radiological and nuclear (CBRN) threats and their implications for East Asia’, held by SIPRI in January. Its content include – Trends in recent CBRN incidents; Reassessing CBRN terrorism threats; Reassessing chemical weapon threats; and How the OPCW can develop its cooperation with states parties.
The report’s conclusions include that –
- the threat posed by CBRN terrorism is still considered relevant, driven by political, ideological, social, economic and technological factors, although threats should not be unnecessarily exaggerated;
- the strong international reactions to each instance of chemical weapons use have demonstrated that the taboo against chemical weapons remains strong; and
- trends in recent use is that the targets are individuals rather than masses. CBRN agents have been increasingly used for assassinations or assassination attempts in some high-profile cases.
EU DRUGS AGENCY EMCDDA PUBLISHES ITS LATEST GENERAL REPORT OF ACTIVITIES
On 14th June, the European Monitoring Centre for Drugs and Drug Addiction published its annual report which includes news of new products and services, and support to policy and practice in the fields of health and security. This includes its role in co-ordinating the EU Early Warning System (EU EWS) on new psychoactive substances or NPS (this role being strengthened in 2018 under a new legal framework – this framework provides the EMCDDA with increased responsibilities and new formal partnerships with other EU agencies). The EWS was formally notified for the first time of 55 NPS during the year, bringing the total number of NPS currently monitored to around 730.
http://www.emcdda.europa.eu/news/2019/emcdda-publishes-general-report-of-activities-2018_en
SPANISH LAW ENFORCEMENT ARRESTS 35 SUSPECTS FOR BANK FRAUD AND BITCOIN MONEY LAUNDERING
The Coin Telegraph on 14th June reported that 35 people for allegedly counterfeiting bank cards and laundering the proceeds through bitcoin. The report says the gang obtained over €600,000 and laundered over €1 million using bitcoin. The suspects were from Equatorial Guinea, Spain, Nigeria, Cameroon and Morocco, with victims mostly in Spain. They allegedly used phishing via email, cloning the physical cards, or obtaining credentials from credit card receipts by means of “credit card bin attack fraud”.
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