One again, off on wanderings, so the blog postings might be a bit hit and miss over the next 2 weeks…
18th June 2019
FORGED TRANSFER ORDERS: TYPOLOGIES
On 14 June, Elvinger Hoss & Prussen published an article saying that the FIU of the Luxembourg Prosecutor’s office published a note in April on forged transfer orders which particularly addresses their typologies and indicators. The note also advises on what steps should be taken when a forged transfer order has been executed or is about to be. The typologies described in the note are: CEO fraud; falsified invoices; “man in the middle attack”; and the use of hacked emails.
The note itself, in French, is available at –
US: BATTLE LINES DRAWN OVER NAVAL REACTOR FUEL
On 17th June, an article from the Federation of American Scientists was concerned with the debate in the US over the future fuel type for its nuclear-powered submarines and aircraft carriers – highly-enriched uranium (HEU) or low-enriched uranium (LEU) – and to reduce or eliminate the use of highly enriched uranium (HEU) in nuclear reactors aboard US Navy vessels. HEU can be used in nuclear explosives, reducing the production, use and inventory of this material is a primary objective of nonproliferation policy. But, it says, choices that are made in the next few years will determine, or foreclose, the possibility of phasing out the production of HEU reactor cores for decades to come. A House of Representatives Committee encouraged the pursuit of LEU fuel in the interests of nuclear non-proliferation, whilst a Republican-led Senate Committee cited increased costs for developing and converting to LEU fuel along with possible reductions in reactor performance.
ITALY: LEONARDO UNVEILS DRONE FREE OF US EXPORT CONTROL RESTRICTIONS
Defense World on 18th June reported that Leonardo’s Falco Xplorer drone unveiled at the Paris Air Show 2019 is free from US International Traffic in Arms Regulations (ITAR) regulations being entirely designed and manufactured in Europe. It also says that its technical characteristics place it within the Missile Technology Control Regime (MTCR) Class II category which together with the ITAR-free status make the Falco Xplorer readily exportable around the world.
TO BOOST DEFENCE EXPORTS, INDIA TO LAUNCH ‘OPEN GENERAL EXPORT LICENSE’ SCHEME
Defence Aviation Post and others on 18th June reported that the Indian Government is working to boost Indian defence exports and towards this it plans to launch a new ‘Open General Export License’ scheme. Using the new licence, the industry will be able to access international market and make the products more competitive, a spokesman said.
THE WORLD BANK IS WILLING TO ASSIST ST. MAARTEN WITH AML MEASURES
The Daily Herald in St Maarten reported on 17th June that the World Bank has agreed to provide assistance to St Maarten, a fact confirmed by a Dutch Government minister, with the Netherlands also providing support. In May, the St. Maarten Parliament adopted a few laws to combat money laundering and financing of terrorism, but the regional FATF-style body, CFATF, has decided to maintain St. Maarten’s status quo in enhanced due diligence because of shortcomings.
EX-BHS OWNER DOMINIC CHAPPELL FACES COURT OVER TAX EVASION CHARGES
ITV News reported that former BHS owner Dominic Chappell is to appear in court accused of tax evasion and buying 2 yachts to launder money. It says that the money laundering allegations relate to funds from the company being used to buy a vessel called Maverick 5 for £182,500 in April 2015, just a month after the acquisition of BHS. Another £230,000 was allegedly used to buy a second yacht called Maverick 6, 5 months later.
CAYMAN ISLANDS: ENHANCED AML SUPERVISORY POWERS GIVEN TO CIMA UNDER MONEY LAUNDERING LEGISLATION
A Legal Update from Harneys reports that the powers of the Cayman Islands Monetary Authority (CIMA), as the supervisory authority for AMLg in the Cayman Islands, have been enhanced to allow CIMA to obtain information in relation to any relevant financial business from a broader category of persons than was previously the case.
UK HAS SETTLED A CLAIM BROUGHT BY IRAN’S BANK MELLAT FOR DAMAGES FROM SANCTIONS
The EU Sanctions Blog on 18th June reported that the UK government has settled a claim brought by Iran’s Bank Mellat for £1.25 billion in damages arising from the UK’s imposition of nuclear-related sanctions in 2009, which were declared unlawful by the UK Supreme Court in 2013.
SANCTIONED NORTH KOREAN OIL TANKER SPOTTED CONDUCTING RELAY SHIP-TO-SHIP TRANSFERS
NK News on 18th June reported that a sanctioned North Korean oil tanker has been photographed in the process of conducting suspected illegal ship-to-ship (STS) transfers at sea in relay fashion with 2 unidentified ships, the Japanese Ministry of Foreign Affairs (MOFA) said. t is the third such instance the North Korean-flagged An San 1 has been observed conducting STS transfers by Japanese Maritime Self-Defense Forces since the ship was designated in March 2018 by the UN.
ALBANIA APPROVES LAWS AGAINST MONEY LAUNDERING
KYC 360 on 18 June reported that Albania’s parliament approved a series of laws aimed at plugging holes in legislation against money laundering as part of efforts to persuade the EU to launch accession talks. Under the new laws, businesses must declare new partners, transactions by politicians will be monitored for 5 years, and an agency will be set up to administer properties seized by the state in the fight against money laundering.
BRAZIL’S ODEBRECHT FILES FOR BANKRUPTCY PROTECTION AFTER YEARS OF GRAFT PROBES
KYC 360 on 18 June reported that Brazilian conglomerate Odebrecht SA filed for bankruptcy protection, aiming to restructure $13 billion of debt. Odebrecht, the biggest of the Brazilian engineering groups, has been caught in a sweeping political corruption investigation that has rippled across Latin America.
EU REGULATION CONFIRMING LIFTING OF MALDIVES SANCTIONS
EU Regulation 2019/985/EU has been published, confirming that the EU has removed the sanctions regime that would have targeted persons in the Maldives. See also Council Decision 2019/993/CFSP.
PERSONAL SERVICE COMPANIES & IR35
On 18 June, the House of Commons Library published a briefing paper which looks at debates as to the effectiveness of these rules and wider concerns about the use of employment intermediaries to avoid tax, before discussing recent developments as to their application in the public and private sector.
US REGULATOR ACCUSES HEAD OF DEFUNCT BRITISH BITCOIN COMPANY OF $147 MILLION FRAUD
Reuters on 18 June reported that the CFTC accuses Control-Finance Ltd and Benjamin Reynolds, head of the defunct British bitcoin company, of $147 million fraud – saying that their “expert” traders could generate profits of 1.5% a day, or 45% a month, from it.
ADDRESSING THE RISK OF DISSIPATION IN FREEZING INJUNCTIONS
A briefing from Mishcon de Reya on 18 June about a recent decision of the High Court in England which re-emphasises the importance of fully and properly addressing the issue of the risk of dissipation when seeking a freezing injunction. It says that the Court will be slow to conclude that a respondent is likely to dissipate their assets without well-supported and credible evidence. Dishonesty alone is not sufficient.
‘LOW QUALITY’ SUSPICIOUS ACTIVITY REPORTS SWAMPING SYSTEM, SAYS UK LAW COMMISSION
The Law Society Gazette on 18 June reported that, in a report ‘Anti-money Laundering: the SARs regime’, the Commission reveals that a record 470,000 SAR were sent in 2018-2019, 10% more than in 2016-2017. But it says that businesses are sending thousands of low quality SAR that contain little or no useful intelligence and enforcement agencies are struggling with a significant number of low-quality reports and criminals could be slipping through the net.
EUROPOL OPERATION SEES OVER 550 TONNES OF ILLEGAL PESTICIDES SEIZED
A news release from Europol reported that Operation Silver Axe began in 2012 to target the illegal trade of pesticides. Since its launch, 1,222 tonnes of illegal and fake counterfeit products have been seized. In 2019, 550 tonnes of goods have been confiscated in Europe and 3 individuals arrested. Production and repackaging facilities were also checked in the 29 participating countries.
MAN SENTENCED TO 22 MONTHS FOR MONEY LAUNDERING SCHEME WITH SLOT MACHINES IN CALIFORNIA
Baker McKenzie on 18 June reported that Atir Dadon, 34, conspired to launder the cash revenue of an illegal gambling business run by 2men in the Bay Area, according to a news release from the DoJ.
SANCTIONS WITH CHINESE CHARACTERISTICS
A briefing from Clifford Chance on 18 June about the announcement of its new “Unreliable Entity List” (UEL) by the Ministry of Commerce. The UEL will include foreign enterprises, organizations or individuals that fail to abide by market rules and discriminate against Chinese companies for non-commercial purposes. Examples given include boycotts, cutting off supplies, or restricting or blocking trade transactions in ways that cause serious damage to Chinese enterprises.