22nd July 2019
BOSNIAN UNDER INVESTIGATION FOR ARMS SMUGGLING TO NETHERLANDS
On 21st July, the Sarajevo Times reported that a suspect is under investigation for smuggling of a larger quantity of hand grenades, automatic rifles, pistols, and other types of weapons and ammunition, from Bosnia and Herzegovina to the Netherlands. He is named as Alen Hrvatović, 40. The weapons were discovered and seized in Dresden.
PANAMA CONFIRMS TANKER DETAINED BY IRAN WAS SMUGGLING OIL
Prensa Latina on 21st July reported that the Panamanian Maritime Administration (AMP) had confirmed that the oil tanker RIAH was detained by Iran because it was smuggling oil. It is reported that the vessel changed its name 4 times between 2009 and 2019, and is owned by Prime Tankers LLC, with headquarters in Dubai, but that company told reporters that it had sold it to the Mouj Al-Bahar company, also based in Dubai.
VIRTUAL CURRENCY AND CANADA’S AML FRAMEWORK
On 26th June, Dentons published part 1 of a planned 3-part series of articles on the proposed amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFA), announced by the Department of Finance on June 9th. Part 1 discusses amendments relating to virtual currency, Money Services Businesses (MSB) and foreign MSB. Part 2 will look at the amendments made to the Regulations to address money laundering concerns regarding open-loop prepaid cards, and part 3 other notable amendments.
MACAU IS “STILL A MAJOR CENTRE FOR MONEY LAUNDERING DUE TO JUNKET OPERATIONS”
Macau Business on 22nd July carried an article saying that the Regional Representative of the United Nations Office on Drugs and Crime (UNODC) for SE Asia and the Pacific has said that Macau’s gaming sector still remains a centre for money laundering in the region, with junket operators having a considerable contribution. This followed a UNODC report that warned that many criminal organisations based in Hong Kong, Macau, Taiwan, and Thailand, are outpacing the ability of law enforcement to respond and were major players in meth trafficking in SE Asia. The article says that several junket operators established in Macau have expanded operations to several SE Asian countries, especially, the Philippines, Vietnam, and Cambodia.
NOW EL CHAPO IS BACK IN JAIL, THE HUNT IS ON FOR THE DRUG BARON’S MONEY
On 21st July, the Guardian/Observer carried a feature on the aftermath of the conviction of Guzmán in the US. It is said that prosecutors will not disclose how and where they will seek this fortune, but the former head of AML for the Manhattan DA office gave the Observer an insight into how they might proceed.
https://www.theguardian.com/world/2019/jul/21/el-chapo-back-in-jail-hunt-for-his-money
UNION RAISES CONCERN ABOUT UK FLAG EXPANSION POLICIES
Malta Winds on 21st July reported that Nautilus International fearful that latest changes from the UK Shipping Register could undermine quality. The UK Registry revealed earlier this month that it has amended its ownership eligibility criteria and now also accepts owners and companies from the Commonwealth and those also permitted by the other flags of the Red Ensign Group, which consist of Bermuda, BVI, Cayman Islands, Gibraltar, Isle of Man and the UK, for vessels of unlimited size; with owners and companies from Panama, Marshall Islands, Liberia, Japan, the US and other nations will be qualified to register with the UK flag. The union’s general secretary is quoted as saying that he is keen to hear how the Maritime and Coastguard Agency will ensure that only “exceptional‟ shipping companies can use the Registry and whether any measures will be taken against those who demonstrably jeopardise the good record of UK-registered vessels in port state control inspections. Nautilus is also worried about the Registry’s decision to allow vessels to temporarily flag in before de-flagging again and to delegate surveying to recognised organisations, such as classification societies, while carrying out inspections and certifications “designed to suit customer needs”.
http://maltawinds.com/2019/07/21/union-raises-concern-about-uk-flag-expansion-policies/
THE IMPORTANCE OF TRANSPARENCY BY PUBLIC AUTHORITIES IN A JUDICIAL REVIEW
A post on Harney’s Offshore Litigation Blog on 18th July reported that, in an important judgment, the Judicial Committee of the Privy Council emphasised the importance of transparency by public authorities in a judicial review of a decision they have made, and the need for them to respond to the application with “all the cards face upwards on the table”. The Privy Council emphasised that the “presumption of regularity” which applies to official acts cannot override the duty of a public body to co-operate with the Court on a judicial review application to make available to the Court all relevant facts and reasoning underlying the decision under challenge.
MALAYSIA: LAW TO BE AMENDED TO EXPOSE REAL BENEFICIARIES OF CORRUPT ACTIVITIES
On 22nd July, Bernama reported that the Malaysian Anti-Corruption Commission (MACC) Act 2009 will be amended to include a provision on beneficial ownership to ensure that the real owners of enterprises cannot escape lawsuits and enforcement action.
http://www.bernama.com/en/general/news.php?src=ilaw&id=1749015
UK GOVERNMENT TO LEGISLATE FOR LEGAL ADVICE ON NON-DISCLOSURE AGREEMENTS (NDA)
On 22nd July, Legal Futures reported that the UK government has pledged to change the law to ensure that employees signing non-disclosure agreements (NDA) receive independent legal advice. The Solicitors Regulation Authority (SRA) has also pledged to update its guidance to the profession.
https://www.legalfutures.co.uk/latest-news/government-to-legislate-for-legal-advice-on-ndas
NEW CLAIM AGAINST STANDARD CHARTERED BANK ALLEGING SANCTIONS VIOLATIONS
On 22nd July, the always useful EU Sanctions blog reported that the bank is subject to a new civil claim, brought by a former senior employee and one other person, which alleges that it “used its resources to help terrorists to kill and wound American, British, and other coalition military personnel and thousands of innocent civilians” by breaching US sanctions on Iran and allowing it to access the international financial system.
NEW FORM OF EU CUSTOMS DECLARATION FOR LOW-VALUE CONSIGNMENTS
On 22nd July, BIFA issued a reminder that, from 1st January 2021, the existing VAT exemption for goods up to €22 disappear. In order to allow VAT to be levied, all imports into the EU will have to be declared at the border using an electronic customs declaration. To help cope with the far greater number of declarations expected (many of which will have no customs duty liability due to their low value), the European Commission has amended the UCC Delegated Regulation to provide for a lower, more manageable but still adequate level of data. The new EU Regulation takes effect from 25th July and provides for a customs declaration that requires 3 times less data than a standard declaration.
The EU Regulation 2019/1143/EU is available to see at –
MITIGATING INSOLVENCY EFFECTS IN THE SUPPLY CHAIN
On 22nd July, in the light of failures in the UK construction industry, Dentons published a briefing which explains the knock-on effects of insolvencies and the mitigating steps that can be taken, saying that early warning signs of looming insolvency can be spotted.
THE STORY BEHIND THE SEIZURE OF A SOUTH KOREAN TANKER FOR VIOLATING NORTH KOREAN SANCTIONS
On 4th April, the Windward blog published a post relating the story behind the seizure of a tanker in October 2018, the first of 4 detained for alleged violation of sanctions on North Korea.
https://wnwd.com/dprk-sanctions-the-s-korean-connection/
UK HIGH COURT TO HEAR CHALLENGE TO IVORY ACT ON EVE OF BREXIT
On 22nd July, the Art Law & More blog from Boodle Hatfield reported that a judicial review hearing challenging provisions of the Ivory Act 2018 dealing with trade in pre-1947 worked ivory is to be heard in London in October. The challenge has been brought by a company of dealers and collectors called the Friends of Antique Cultural Treasures Ltd (FACT). FACT alleges that the Act is contrary to EU law which permits trade in worked antique ivory as this is not considered a threat to elephant conservation. The basic intention of the Act was to introduce what was, in effect, an outright ban (subject to some narrow exceptions) on the trade in worked ivory in the UK, as well as being imported into or exported from the UK.
https://artlawandmore.com/2019/07/22/high-court-to-hear-challenge-to-ivory-act-on-brexit-eve/
RUSSIA’S FSB HACKED EXPOSING DESCRIPTIONS OF DOZENS OF PRIVATE PROJECTS
On 19th July, the BBC Russian Service reported that hackers had hacked the server of a major contractor of the Russian security services and departments. They managed to steal around 7.5 TB of data at SyTech, a major FSB contractor working on a range of projects. These projects themselves appear to be a mix of social media scraping, targeted collection against internet users, data collection targeting Russian enterprises and projects that seem to relate to Russia’s ongoing initiative to build an option to separate the internal internet from the world wide web. According to the BBC, SyTech’s projects were mostly contracted with Military Unit 71330, part of FSB’s 16th Directorate which handles signals intelligence, the same group accused of emailing spyware to Ukrainian intelligence officers in 2015.
https://www.bbc.com/russian/features-49050982
LEAK REVEALS HUAWEI INVOLVEMENT IN BUILDING NORTH KOREA’S WIRELESS NETWORK
On 22nd July, the Washington Post carried an exclusive article claiming that Huawei has worked with another Chinese firm to funnel equipment across the border for nearly a decade.
EU-US CO-OPERATION ON TACKLING TERRORIST FINANCING CONTINUES TO PRODUCE RESULTS
On 22nd July, a news item from the EU said that, according to a Joint Report published that day, the EU Commission is satisfied with EU-US co-operation under the Terrorist Finance Tracking Programme (TFTP) and the essential safeguards and controls, such as data protection, continue to be properly implemented. The TFTP is said to have generated over 70,000 leads between 2016 and 2018 – some of which were instrumental in bringing forward investigations relating to terrorist attacks on EU soil, including those in Stockholm, Barcelona and Turku. TFTP is a US government programme to access the SWIFT transaction database, in 2010 the EU Parliament approved an agreement allowing US authorities access to European financial transactions data.
The report is available at –
AN EU Staff Working Document supporting the (rather short) report is at –
UK: 5 MEN INVOLVED IN RARE EARTH METAL BOILER ROOM SCAM ORDERED TO PAY BACK ILL-GOTTEN GAINS
A news release from the Surrey Police on 22nd July advised that the 5 men were all jailed for conspiracy to commit fraud by false representation in November 2018 for their part in an organised crime group which groomed at least 24 elderly victims, convincing them to pay in to bogus investment opportunities – using a company ‘The Commodities Link’ which appeared legitimate with offices in Canary Wharf, glossy brochures and slick marketing videos. They boasted of celebrity links, and would send cars to collect high value victims and take them out for meals. They have been ordered to repay a total of £370,634.80 which had been identified in assets.
HUNGARY SUBSIDIARY OF MICROSOFT CORPORATION AGREES TO PAY $8.7 MILLION IN CRIMINAL PENALTIES TO RESOLVE FOREIGN BRIBERY CASE
A news release from the DoJ on 22nd July advised that Microsoft Magyarország Számítástechnikai Szolgáltató és Kereskedelmi Kft. (Microsoft Hungary), a wholly-owned subsidiary of Microsoft Corporation, has agreed a non-prosecution agreement and to pay a criminal penalty of more than $8.7 million to resolve an investigation into violations of the FCPA arising out of a bid-rigging and bribery scheme in connection with the sale of Microsoft software licences to Hungarian government agencies in 2013-15.
A post on the FCPA Blog on 22nd July pointed out that the parent Microsoft company also disgorged $13.78 million to the SEC, plus prejudgment interest of $2.78 million, said to be linked to alleged bribery in Saudi Arabia, Thailand, and Turkey. Microsoft first disclosed the FCPA-related investigation in an SEC filing in July 2016.
GERMAN AML REGULATOR HEIGHTENED PROGRAMME FOR 2019, INCLUDING CORRESPONDENT BANKING
On 19th July, S&P Global reported on the latest annual report from the German financial supervisory authority BaFin, in which it says it plans to focus its 2019 money laundering reviews on the correspondent banking relationships of domestic lenders, after doubling the number of financial crime inspections in 2018. In 2018 it carried out nearly twice as many AML inspections as in 2017.
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/52970569
PUTIN GIVES ORDER TO LIFT RUSSIAN SANCTIONS AGAINST ERITREA
The TASS news agency on 22nd July reported that President Putin had ordered the lifting of economic sanctions and arms embargo on Eritrea, which have been in place for a number of years in support of US sanctions.
https://tass.com/economy/1069832
2 FORMER CONVOY EXECUTIVES CHARGED IN HONG KONG
International Adviser on 22nd July reported that the former CFO and one of the former executive directors of Convoy Financial have been jointly charged by the Hong Kong Independent Commission Against Corruption. The firm was raided in December 2017, when 4 executives were arrested.
https://international-adviser.com/two-former-convoy-executives-charged-in-hong-kong/
SFO NEEDS CULTURE CHANGE SAYS HM CROWN PROSECUTION SERVICE INSPECTORATE
The Law Society Gazette on 22nd July reported that the SFO is blighted by poor management, favouritism and ‘unacceptable’ behaviour, according to a leadership review undertaken by HMCPSI, and that its ‘sharp focus’ on casework delivery had ‘in many instances, led to tolerance of neglectful approaches to management or, in some cases, of unacceptable behaviours’.
https://www.lawgazette.co.uk/news/sfo-needs-culture-change-says-watchdog/5071082.article
The report is available at –
KYIV CUSTOMS OFFICE DETAINS TRUCK WITH 98 PAINTINGS FROM FRANCE
The Kiyv Post on 22nd July reported that the customs service had found 98 paintings, which were hidden away from customs control among wooden frames in a truck that arrived from France. One of the paintings dates back to 1842. A Frenchman, who acquired Ukrainian citizenship in 2017, is listed as the recipient of this cargo, but that person had still not appeared at the Kyiv city customs office.
ARGENTINA ASSET SEIZURE DECREE INTRODUCED – WITH MIXED REVIEWS
On 22nd July, an article in Insight Crime reported that, for the first time, authorities in Argentina are using a criminal asset seizure programme — a legal mechanism that strips criminal groups of their wealth but, the article says, comes with potential pitfalls – with nearly $19 million in assets from members of the Loza clan, a large criminal organisation with international connections. Under the decree, cases involving crimes such as drug trafficking, corruption, organised crime, terrorism and people trafficking would be liable to asset seizure; and authorities can look at crimes that go back as far as 20 years. The article details the criticism of the new programme, including how it could be hijacked to involve political retribution.
https://www.insightcrime.org/news/analysis/argentina-asset-seizure-decree-mixed-reviews/
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