17th July 2019
SWIFT’S BATTLE FOR INTERNATIONAL PAYMENTS
On 16th July, Forbes reported on plans of the organisation for capturing/retaining more of the international payments sector, and 2 days after Facebook announced Libra, SWIFT announced that its “aim is simple: to make cross-border payments real-time, 24/7 and as seamless, convenient, cost-efficient and accessible as domestic payments”. SWIFT sees as the real problem of international payments being the proliferation of self-contained currency systems such as Bitcoin, it also warns that banks must adapt to the changing demands of customers or die – SWIFT counts among its members (and owners) most of the world’s major banks. The article says that SWIFT’s comments hint at the seismic shifts already happening in the payments world – which is undergoing perhaps the most radical change since the 1980s. SWIFT’s proposal builds on the GPI initiative and underlying changes to domestic payments “plumbing” to create an instantaneous, unsleeping, ubiquitous international payments network – but not a blockchain approach, but moving to the open ISO 20022 standard by 2021 is a prerequisite for SWIFT’s plans.
The SWIFT paper is available at –
https://www.swift.com/future-of-payments
US EXTRADITES CARBON FIBRE IRAN SMUGGLING PLOT SUSPECT FROM GERMANY
Urdu Point on 17th July reported that the US has extradited Behzad Pourghannad, an Iranian citizen, from Germany on a charge of exporting carbon fibre from the US to Iran in defiance of sanctions. He is charged with Ali Reza Shokri and Farzin Faridmanesh with exporting carbon fibre from the US to Iran.
https://www.urdupoint.com/en/world/us-extradites-carbon-fiber-iran-smuggling-plo-670947.html
VIDEO: SPANISH POLICE RAID ISLAND DRUG-SMUGGLING BASE ON CHAFARINAS ISLANDS JUST OFF THE COAST OF MOROCCO
Maritime Executive on 17th July carried a video showing Spain’s Guardia Civil arresting 6 members of a hashish-smuggling gang in a massive sting operation on the Chafarinas Islands, a group of small outcroppings just 2 nautical miles off the coast of Ras Kebdana, Morocco. These are Spanish possessions, but only one of the Chafarinas Islands has a constant population – a 19th Century military outpost manned by a handful of soldiers. The gang allegedly used a boat anchored just off one of the islands as a semi-permanent staging base for smuggling, with as many as 11 speedboats at a time stationed at the site. They would pick up hashish on the Moroccan mainland, ferrying as much as 3 tonnes of narcotics at a time for delivering to other trafficking vessels on the high seas.
https://www.maritime-executive.com/article/video-spanish-police-raid-island-drug-smuggling-base
INDONESIA URGES SINGAPORE TO STOP ILLEGAL SHIPMENTS OF LOBSTER LARVAE
Yahoo News on 16th July reported that an Indonesian minister has called on Singapore authorities to reject illegal shipments of lobster larvae that do not have health certificates issued by Indonesia’s Quarantine Management System (QMS). She said that lobster larvae are smuggled into Singapore and then they are exported to Vietnam. Her comments came after Indonesian authorities thwarted a smuggling attempt of lobster larvae from Batam to Singapore – when authorities confiscated over 366,000 lobster larvae estimated to be worth S$5.5 million and stopped an attempt to illegally transport of 570,000 lobster larvae estimated to be worth S$8.5 million.
NEW ZEALAND: VIRTUAL OFFICE PROVIDER REGUS WARNED OVER AML BREACH
The New Zealand Herald reported on 17th July that the virtual office provider has been given a formal warning over its failure to meet obligations under AML/CFT law. Regus New Zealand Management which provides office, co-working and meeting spaces in 24 locations around New Zealand including 13 virtual offices was issued with a formal warning on June 13th about record-keeping and risk assessment failings. Regus was the first non-financial sector company to be acted against for breaches of AML/CFT rules.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12250165
CRIMINAL SILENCE: WHEN SHOULD YOU REPORT WHITE COLLAR CRIME IN IRELAND?
Law firm Arthur Cox has published a briefing which was concerned with the constitutionality of this type of offence was recently upheld by the Supreme Court in a case: Sweeney v Ireland, which concerned the obligation to report to the Garda information about certain serious crimes. Mr Sweeney was interviewed multiple times by the Garda in relation to a murder. He was charged with failure to disclose information in relation to the murder, something that the Supreme Court maintained though it clarified that there is no obligation to report a crime if it would compel a person to self-incriminate. The article lists the types of white collar crime that need to be reported, what might be a reasonable excuse and what might happen if you do not report.
http://www.arthurcox.com/wp-content/uploads/2019/07/Financial-Crime-July-2019.pdf
SWITZERLAND: THE DARK SIDE OF ZUG’S CRYPTO VALLEY WITH ACCUSATIONS OF FRAUD
On 17th July, KYC 360 reported that the Canton of Zug in Switzerland has been positioning itself as the global capital of cryptocurrencies, but accusations of fraud engulfing cryptocurrency markets could curb its ambitions; such as the legal proceedings in the US implicating cryptocurrency exchange platform Bitfinex in a $850 million fraud scandal.
https://www.riskscreen.com/kyc360/news/the-dark-side-of-zugs-crypto-valley/
UK: JURY ACQUITS 3 DESPITE EMPLOYER ENTERING INTO PLEA DEAL WITH SFO
On 17th July, KYC 360 reported that 3 former employees of a company called Sarclad were acquitted of bribery charges, despite the company having accepted a deferred prosecution agreement with the SFO that it failed to prevent corrupt payments over an 8-year period. Sarclad was a British technology business that supplies the metals industry. The 3 were cleared of conspiracy to corrupt and conspiracy to bribe in relation to 27 overseas contracts. The SFO was not able to show that various Sarclad agents actually paid bribes to named and unknown individuals.
VENEZUELA CONSIDERS USING RUSSIAN PAYMENT SYSTEM
On 17th July, KYC 360 reported that Venezuela’s government is studying the possibility of switching to a Russian-operated international payment messaging system as an alternative to SWIFT.
PERU EX-PRESIDENT TOLEDO ARRESTED IN US AS PROSECUTOR SEEKS EXTRADITION
KYC 360 reported on 17th July that Alejandro Toledo has been arrested in the US under an extradition order. Toledo was president from 2001 to 2006, and is a fugitive from Peruvian justice for allegedly receiving $20 million from the Brazilian construction company Odebrecht in exchange for aid to win public works.
MALAYSIA SEIZES $240 MILLION FROM CHINESE COMPANY OVER DELAYED PROJECT
The Nikkei Asian Review on 17th July reported that the Malaysian government has seized roughly $243 million in assets held by a state-backed Chinese company, citing a botched public works project for which the corporation was paid under the previous administration.
HMRC ANNOUNCES NO MORE PRINTED EDITIONS OF THE TARIFF
On 17th July, HMRC reported the end of production of the printed paper tariff in December 2019. The Tariff contains all the necessary information to complete import, export and other customs declarations – the Commodity Codes, Customs Procedure Codes, country identifiers and other information. It is published annually, with monthly amendments.
https://www.gov.uk/guidance/end-of-production-of-the-printed-tariff-tariff-stop-press-notice-24
HMRC LAUNCHES RED DIESEL CONSULTATION
On 16th July, the RYA published an item saying that HMRC is inviting views on, and seeking information about, proposed changes to the rules for red diesel used in private pleasure craft as a result of a judgment of the CJEU that UK rules for diesel used in private pleasure craft contravened the Fuel Marker Directive. The consultation sets out the changes the government intends to make to bring the UK’s practice into line with the Directive and seeks evidence about the impact of the changes on users of diesel-powered craft and their fuel suppliers. It closes on 9th September.
https://www.rya.org.uk/newsevents/news/Pages/hmrc-consultation-diesel.aspx
BREXIT “NO DEAL” CHECKLIST
On 16th July, HFW published an update of a briefing in which it provides a checklist of key items for businesses to consider when planning for a no-deal Brexit.
http://www.hfw.com/downloads/Brexit-Update-No-Deal-Checklist.pdf
10 TURKISH SAILORS KIDNAPPED OFF NIGERIAN COAST IN LATEST PIRATE ATTACK
On 17th July, Defence Web reported that Nigerian pirates have taken hostage 10 Turkish sailors after attacking their cargo vessel, Paksoy-1, off the coast of Nigeria in the latest attack to hit the Gulf of Guinea.
BELT AND ROAD INITIATIVE 2.0: ‘QUALITATIVELY’ DIFFERENT?
On 17th July, ETH Zurich published an article saying that President Xi Jinping used the Belt and Road (BRI) Forum in April to set the agenda for the next 5 years of his hallmark project. The article highlights some analytical pointers on how BRI 2.0 is likely to be different from version 1.0, especially keeping in mind what Chinese Minister of Foreign Affairs Wang Yi referred to as a “high-quality” shift from “big freehand” to “fine brushwork” in planning BRI’s future projects. It says that the factors of BRI 2.0 combined could make it qualitatively different, which the world at large, and the US in particular, needs to be prepared for.
https://isnblog.ethz.ch/economy/belt-and-road-initiative-2-0-qualitatively-different
RUSSIAN SANCTIONS AGAINST GEORGIA: HOW DANGEROUS ARE THEY FOR COUNTRY’S ECONOMY?
Emerging Europe carried an article on 17th July saying that in July, declaring Georgia as a dangerous country for Russian visitors, Vladimir Putin banned Russian airlines from flying to Georgia for an indefinite period, as relations between Georgia and Russia hit a new low point. However, Putin has (so far) rejected calls from the Duma to ban imports of Georgian wine and mineral water, as well as restrict money transfers between the countries. It says that the Georgian economy is increasingly dependent on Russia and vulnerable to the effects of any prospective sanctions, with Russia using access to its market as leverage to achieve political ends. Russia imposed an embargo on Georgian wine and mineral waters in 2006 – and the article notes that Georgia now has a free trade agreement with the EU and China, which indicates that new Russian sanctions should not be as painful as in 2006. However, the ban on flights from Russia to Georgia – and on Georgian airlines flying to Russia – while ostensibly introduced due to security concerns was in fact a way of pressuring the Georgian economy by means of reducing tourist inflows – though Russians can still visit Georgia, either travelling by car or flying through a third country. The article looks at the possible effects of other restrictive measures, such as on money transfers and foreign direct investment by Russia in the country. It concludes that new Russian sanctions pose a considerable danger to the Georgian economy as they target all channels through which Georgia receives over 95% of money from Russia – exports, tourism, and remittances – 10.3% of Georgia’s GDP.
HEADS OF 2 OF PAPUA NEW GUINEA’S STATE-OWNED COMPANIES ARRESTED
Radio New Zealand reported on 17th July that the heads of 2 of PNG state-owned companies have been arrested on unrelated charges. Augustine Mano, who is the managing director of the state entity in charge of managing landowner dividends, was arrested on allegations under the cybercrime Act, and the chief executive of the National Gaming Board, Imelda Agon, was arrested.
CEO OF VANUATU HEALTHCARE PROVIDER ARRESTED IN US
On 17th July, Radio New Zealand reported that a controversial US drug company, Phoenix Life Sciences International, contracted by Vanuatu’s government has replaced its CEO, Martin Tindall, after he was arrested at the US border. As well as providing diabetes healthcare services in Vanuatu, the company plans to produce and export its cannabis products from there.
BULGARIA TAX AGENCY HACK EXPOSES PERSONAL DATA OF ‘ALMOST ALL’ CITIZENS
The Inquirer reported on 17th July that, according to a local cybersecurity researcher, personal records belonging to every citizen in the country have been compromised following a cyber attack against the servers belonging to the country’s National Revenue Agency which, according to local media, lead to personal data of between 5 and 7 million Bulgarians being exposed.
https://www.theinquirer.net/inquirer/news/3079112/bulgaria-hack-five-million-compromised
SPAIN TO CREATE COMMISSION TO COMBAT SPORTS MATCH-FIXING
On 17th July, Calvin Ayre reported that legislators have approved the creation of a commission whose sole responsibility will be to tackle match-fixing activity in the country. It will develop action plans and recommendations or diagnoses to detect, prevent and combat illegal actions in the field of sports competitions and fraud in betting. It has already been tasked with the development of a new early warning system as a type of communications platform to help in the prevention of sports fraud and match-fixing.
https://calvinayre.com/2019/07/17/business/spain-to-create-commission-to-combat-match-fixing/
“FIRST SALE” RULE CAN MITIGATE IMPACT IF US HITS EU WITH NEW IMPORT TARIFFS
An article from Sandler Travis Rosenberg on 17th July, in the face on ongoing and growing trade disputes, the “first sale rule” is a proven tool that can be used to not only mitigate the impact of any such tariffs but also lower costs well into the future. It explains that, using the rule, the dutiable value of a qualifying transaction may be based on the purchase price between the middleman/vendor and the manufacturer rather than the price paid by the importer to the middleman/vendor, resulting in a lower duty bill.
https://www.strtrade.com/news-publications-first-sale-EU-tariffs-trade-071719.html
MOROCCAN CUSTOMS TO CRACKDOWN ON ILLEGAL CURRENCY TRAFFICKING
Morocco World News on 16th July reported that Moroccan Customs and Excise at the northern borders has seized several large sums of money from travellers attempting to illegally divert funds out of Morocco. To control excess currency diversion, a specific annual allowance is allocated to each citizen – set in January 2019, at MAD 45,000 (nearly €4,200) per year. Moroccan citizens can legally carry this sum outside Morocco after notifying the authorities – any additional or undeclared sums are considered illegal. Now the Ministry of Finance has issued a circular urging the Customs and Indirect Tax Administration to strengthen control mechanisms to prevent foreign currency smuggling.
https://www.moroccoworldnews.com/2019/07/278321/moroccan-customs-illegal-currency-trafficking/
HONG KONG CUSTOMS SMASH 2 COUNTERFEIT COSMETICS RINGS
Inside Retail on 17th July reported that Hong Kong Customs officers have smashed 2 counterfeit-cosmetics rings selling makeup and skincare products in a 5-day anti-counterfeiting operation. 12 people were arrested after 7 retail stores and 3 warehouses were raided across the territory, with some 6,400 items of suspected counterfeit cosmetics seized.
https://insideretail.hk/2019/07/17/hong-kong-customs-smash-two-counterfeit-cosmetics-rings/
UK: ONLINE LAWYER IMPERSONATION TO NATIONAL CYBER SECURITY CENTRE (NCSC) “HIT LIST”
On 17th July, Legal Futures reported that the impersonation of lawyers to commit advance fee frauds has been added to the list of large-scale cyber-attacks from which the NCSC is trying to protect the public.
https://www.legalfutures.co.uk/latest-news/crime-agency-adds-online-lawyer-impersonation-to-hit-list
WHY WEST AFRICA IS BECOMING THE WORLD’S PIRACY HOTSPOT
On 17th July, the Hellenic Shipping Report carried an article saying that West Africa is turning into the world’s piracy hotspot according to One Earth Future, which produces an annual State of Maritime Piracy report. 2018 statistics show a decline in the number of incidents of hijacking, kidnapping and robberies in East Africa – West Africa, on the other hand, recorded an alarmingly increase in pirate attacks from 54 incidents in 2015 to 112 in 2018. In total, there were 60 failed attacks, 18 kidnapping cases, 15 arm robberies, 9 robberies, 5 hijackings, 5 hijackings and kidnapping. Most of these incidents were recorded in Brass (Bayelsa, Nigeria), Bonny (Rivers, Nigeria), Lagos state (Nigeria), Benin, Ghana, Congo, and Cameroon. The report cited several reasons for the increase in attacks on shipping on high seas.
https://www.hellenicshippingnews.com/heres-why-west-africa-is-becoming-the-worlds-piracy-hotspot/
DOCKWORKERS IN EUROPE ARE FIGHTING THE ARMS TRADE
An article in Hellenic Shipping News on 17th July says that a series of actions by trade unions and community organisations in European ports has been blockading arms shipments on the ground.
https://www.hellenicshippingnews.com/how-dockworkers-are-fighting-the-arms-trade/
HOW WALMART “OUTGREW” ITS COMPLIANCE PROGRAMME
A post on FCPA Blog on 17th July said that by 2015 Walmart International had become an empire unto itself, operating in 26 countries and accounting for over a quarter of the retail giant’s net sales. However, it says, the recent conclusion of a multi-year investigation into its international operations underscores the risks of such a single-minded focus on growth. Walmart has agreed to pay $282 million in fines following a civil suit and criminal charges filed by the US DoJ alleging violations of the books and records provision of the FCPA by the company’s subsidiaries in Mexico, India, China, and Brazil. The post says that criminal charges brought against Walmart’s Brazilian subsidiary provide a useful cautionary tale when thinking through the possible hazards of expansion into high-risk territories without clearly defined and adhered to anti-bribery policies and procedures.
http://www.fcpablog.com/blog/2019/7/17/how-walmart-outgrew-its-compliance-program.html
PRIVATE SECURITY GUARDS NOT ENCOURAGED FOR SHIPS IN PERSIAN GULF
Insurance Maritime News on 17th July reported that shipping companies sailing through the Gulf were being urged to avoid having private armed security guards on board as the risk of escalation in the region rose. An advisory issued by leading shipping associations warned against using private armed guards in the critical areas – pointing out that there were stringent restrictions on the use of armed guards in the Gulf. UK security companies that were licensed to carry and move firearms in the region were restricted to counter-piracy activity, and to counter the forces of a state like Iran would be in breach of a licence and therefore breaking the law.
GUATEMALA INVESTIGATES $7 MILLION CORRUPTION SCANDAL
On 17th July, AP reported that prosecutors in Guatemala are investigating more than 100 people for their alleged involvement in a corruption ring that took kickbacks for rebuilding public hospitals and padded payrolls in the health sector.
https://www.apnews.com/6e7fb677218449ae9358e5a69213b75b
VIETNAM AND CHINA IN SOUTH CHINA SEA STANDOFF
On 17th July, Reuters reported that Vietnamese and Chinese ships have been involved in a weeks-long standoff near an offshore oil block in disputed waters of the South China Sea, which fall within Vietnam’s exclusive economic zone. Recently a ship operated by the China Geological Survey completed a 12-day survey of waters near the disputed Spratly Islands – was shadowed by Vietnamese vessels, and protected by Chinese Coast Guard ships. One of the oil blocks it surveyed is licensed by Vietnam to Spanish energy firm Repsol, which was forced last year and in 2017 to cease operations in Vietnamese waters because of pressure from China. In 2014, tension between Vietnam and China rose to its highest levels in decades when a Chinese oil rig started drilling in Vietnamese waters. The incident triggered boat ramming by both sides and anti-China riots in Vietnam.
WHEN THE SOVIET UNION PAID PEPSI IN WARSHIPS
This fascinating, and hitherto little or unreported story appeared in Atlas Obscure on 12th January 2018. In 1972, Pepsi managed to negotiate a cola monopoly locking out Coca-Cola until 1985, with bottling in the Soviet Union. But there was one issue: money. Roubles were worthless and anyway Soviet law also prohibited taking the currency abroad – so the USSR and Pepsi resorted to barter. Pepsi received Stolichnaya vodka in return. However, a US boycott in response to the Soviet-Afghan war meant that Pepsi needed something else to trade. In 1989, Pepsi and the Soviet Union signed a remarkable deal. Pepsi became the middleman for 17 old submarines and 3 warships – a frigate, a cruiser, and a destroyer – which the company sold for scrap. Pepsi also bought new Soviet oil tankers and leased them out or sold them in partnership with a Norwegian company. The value of the deal was estimated at $3 billion. However, when the Soviet Union collapsed Pepsi’s partially-built ships were stranded in newly-independent Ukraine. Even worse for Pepsi was the collapse also led to Coca Cola entering the market in strength.
https://www.atlasobscura.com/articles/soviet-union-pepsi-ships
PODCAST: MH17, EPISODE 1: THE PEOPLE WHO FELL FROM THE SKY
On 17th July, Bellingcat published its first podcast, about the downing of a Malaysian airliner in Ukraine, the aftermath and reactions.
https://www.bellingcat.com/resources/podcasts/2019/07/17/mh17-episode-guide-1/
PRESIDENT OF INTERNATIONAL BOXING ASSOCIATION (AIBA) RESIGNS – TOO BUSY TO WORK DUE TO LEGAL PROBLEMS
OCCRP reported on 17th July that Gafur Rakhimov says he doesn’t have time to do the job as he is overwhelmed with lawsuits, being accused of organized crime and drug trafficking. The Uzbek former boxer and coach is the subject of US sanctions due to his alleged involvement in heroin production and drug trafficking. He became president of AIBA at the end of 2018.
US WILL PERMANENTLY BAN COMMERCIAL TRUCK DRIVERS CONVICTED OF HUMAN TRAFFICKING OFFENCES
Baker McKenzie reported on 17th July that the Federal Motor Carrier Safety Administration has announced a final rule that will permanently ban drivers convicted of human trafficking from operating a commercial motor vehicle.
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