16th August 2019
US REPATRIATES INDIAN ARTEFACTS DURING LONDON CEREMONY
A news release from US Immigration and Customs Enforcement on 15th August announced that a limestone carved relief and Navaneetha Krishna Bronze figure from India were repatriated to their home country, being handed over to the High Commissioner of India in London. The items are linked to one of the most prolific art smugglers in the world, who was recently charged in Manhattan and an individual in the UK who possessed the items came forward expressing a desire to surrender the pieces.
PROLIFERATION SECURITY INITIATIVE (PSI) TABLETOP EXERCISE IN ARGENTINA
Diálogo America on 15th August carried a report on a recent tabletop exercise undertaken in Argentina and involving a number of South American countries and the US. It explains that PSI brings together more than 100 countries to prevent trafficking of WMD, including their components and related material, and that it allows member nations to collaborate and develop legal, diplomatic, economic, land, and maritime tools to combat the flow of WMD that threatens the international community’s security. The exercise involved the theoretical shipment of a large amount of hydrogen cyanide, a poisonous and flammable substance stored in bottles with fake labels and the risk that the compound could be used in terrorist activities. After a combined operation, military and civilian experts from Argentina, Chile, Colombia, Panama, Paraguay, and the US detains the vessel and the raw material, which could have been a great threat for the security of South America.
An article in Stat News (a US health care sector news site) on 15th August commented that the recent relaxation of cannabis prohibitions in the US may promote a public health threat, saying a recent article by a former FDA commissioner raised compelling points about products containing cannabidiol (CBD), a non-intoxicating molecule made by the cannabis plant. The Stat News article says that, for consumers, the confusion over what is legal where is only heightened by the proliferation of CBD balms, potions, and tinctures. It therefore provides what it describes as a brief primer on the differences between cannabis- and hemp-based derivatives – for example, cannabis plants that produce THC at a concentration higher than 0.3% are labelled as cannabis; those that produce less than that are labelled as hemp. It cautions that products are not federally regulated and may not be subject to the same stringent checks as food or medicines, and some products may contain no CBD at all, or levels far different from what the label says.
GERMAN MAN SENTENCED TO TIME SERVED FOR VIOLATING US SANCTIONS ON IRAN
The Kharon Brief on 15th August reported that Mojtaba Biria, a German national who was the technical managing director of Cologne-based Energy Republic GmbH, had been in custody for 21 months in the US awaiting sentencing. He had admitting that he conspired with Olaf Tepper, the founder and managing director of Energy Republic, to acquire about $1 million worth of energy turbine parts from a company based in New York and which would have been shipped to Germany, and then re-shipped to Iran. Mahin Mojtahedzadeh, an Iranian citizen, had pleaded guilty to her part in the scheme in July, by working with companies based in Canada and Germany from 2013 to 2017 to violate and evade US sanctions against Iran.
MIDDLE EAST COMPLIANCE AND RISK CHALLENGES
Payments Source on 15th August carried an article saying not only do geographical proximity to less stable countries inevitably makes members of the Gulf Cooperation Council vulnerable to money laundering and terrorist financing risks, but Arabic names cause particular problems for compliance. They can complicate compliance checks considerably. For example, an Arab Muslim name typically has up to 5 elements, which the article explains – with the potential for duplication or confusion is huge, exacerbated by translation and the fact that Arab spelling can be “fluid”. Some names are also extremely common (Muhammed, in all its various spellings, for example). Furthermore, there are other potential snags – a date of birth may not be available or useful (many people have a birth date registered as 1st January); the use of PO box numbers, rather than a street address, is widespread; tax returns etc are limited in tax-free jurisdictions and reporting practices tend to be less rigid and reliable. The article says all these factors can lead to false positives and problems in customer onboarding.
OVER 600 LATVIA-REGISTERED BUSINESSES FACE SANCTIONS FOR HIDING THEIR OWNERS
China-based Xinhua reported on 16th August that 660 Latvia-registered high-risks companies may soon face sanctions for a failure to disclose their beneficial owners. The Latvian Register of Enterprises is already said to have registered the beneficial owners of some 90,000 companies.
HOW IT WAS DISCOVERED THAT THE DAUGHTER OF AFRICAN KLEPTOCRAT HAS £13 MILLION LONDON MANSION
Finance Uncovered on 15th August carried an article on its role in uncovering that in a publicly aired planning dispute over a proposed west London house extension in Kensington it was inadvertently revealed the billionaire daughter of an African kleptocrat – Isabel dos Santos, the daughter of Angola’s former president – to be the owner of a £13 million mansion in one of Britain’s most secretive gated communities. It says that Dos Santos, 46, presents herself as a self-made entrepreneur but there have been questions about the source of her wealth for years. UK Land Registry title deeds record the owner as Wilkson Properties Limited, a company incorporated in the Isle of Man. Wilkson is managed by The Fortress Group, an Isle of Man-headquartered law firm and TCSP.
1MDB: US PROSECUTORS SEEK SALE OF LUXURY HOMES LINKED TO STEPSON OF MALAYSIAN EX-PM
KYC 360 on 16th August reported on plans to sell 3 luxury homes linked to Riza Aziz, the stepson of former Malaysian prime minister Najib Razak, court documents showed, in the latest effort to recover money allegedly stolen from Malaysian fund 1MDB. The properties include a £23.2 million London townhouse, a $17.5 million home in Beverly Hills, and a $35.5 million condominium in New York.
TURKISH BANK ZIRAAT CLOSES DOOR ON VENEZUELA AMID US SANCTIONS
KYC 360 on 16th August reported that Turkey’s largest and state-owned bank by assets, has stopped offering services to Venezuela’s Central Bank in wake of tougher US sanctions.
SWITZERLAND: AMENDMENT OF THE ANTI-MONEY LAUNDERING ACT TO MEET FATF RECOMMENDATIONS
On 10th August, an article from Meyerlustenberger Lachenal says that in June the Federal Council published its report on the amendment of the Anti-Money Laundering Act for the attention of Parliament, taking into account the responses received during a consultation phase. This followed a 2016 FATF report which, while generally favourable, also identified specific weaknesses and made corresponding recommendations. The article summarises and explains the main features of the draft law. The changes proposed are likely to take effect in 2021 and, at the same time, various other measures from the FATF country report on Switzerland are to be implemented as part of further legislative projects.
SWITZERLAND: IMPLEMENTATION OF OECD TAX GLOBAL FORUM TRANSPARENCY OBLIGATIONS WITH CRIMINAL FINES
On 14th August, CMS Law published an article saying that in June 2019, the Swiss parliament passed a law that implemented the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The legislation passed by the Swiss Parliament introduces criminal fines for intentional infringements of both the shareholder obligation to notify the company of the beneficial owners (and any applicable changes) and the obligation of each company to correctly maintain its share register and the register of beneficial owners.
ZIMBABWE LOSES $34 MILLION A YEAR THROUGH ILLICIT FINANCIAL FLOWS
The Independent in Zimbabwe reported on 16th August that Southern Africa loses $30 billion annually as a result of illicit financial flows, with Zimbabwe losing $34 million every year due to trade under-invoicing, while also losing substantial revenue through servicing “illegitimate debt”, a new report by a regional anti-corruption watchdog claims.
CHINA CURBS GOLD IMPORTS
On 16th August, Customs Today reported that China has severely restricted imports of gold since May, in a move could be aimed at curbing outflows of dollars and bolstering China’s yuan currency as economic growth slows. It has cut shipments by some 300 to 500 tonnes compared with last year. China is the world’s biggest importer of gold, taking in around 1,500 tonnes (worth $60 billion) of the metal last year, according to its customs data – equivalent to one-third of the world’s total supply. China’s likely motive for restricting gold shipments was to help limit the amount of money leaving the country amid a plunge in the value of the yuan.
RUSSIA WARNS CHINA IT COULD BAN TIMBER EXPORTS OVER ILLEGAL LOGGING
Customs Today on 16th August reported that Russia could ban timber exports to China unless Beijing takes action to help mitigate the effects of illegal logging, a Russian government minister said. Authorities this month attributed some of the vast wildfires that have engulfed portions of Siberia in recent weeks to arsonists trying to conceal illegal logging activity. Russia exported 17.4 million tons of timber in the first half of 2019, according to data from the Federal Customs Service.
US CUSTOMS STOPS ATTEMPT TO SMUGGLE $3.4 MILLION WORTH OF COUNTERFEIT PRODUCTS AT LAX
A news release from US Customs & Border Protection on 14th August reported that handbags, belts, shoes, watches, electronics and other items in violation of Hermes, Louis Vuitton, Fendi, Gucci, Versace, Nike, Casio and Samsung protected trademarks were amongst goods detained by officers assigned to Cargo Operations at Los Angeles International Airport (LAX).
UK SUPREME COURT DETERMINES THE RIGHTS OF NON-PARTIES TO DOCUMENTS USED IN COURT PROCEEDINGS
An article from Ince on 14th August concerning a recent case before the Supreme Court is said to be useful in reminding parties that litigation is a public matter. This is an important consideration not only for the parties to a dispute, but also for any non-party evaluating their chances of obtaining access to documents. Following the Supreme Court’s clarification as to the legal framework of such access, non-parties may now find it easier to obtain court documents. The legitimate interest of the non-party in accessing the document is to be balanced against the legitimate interests of those who wish to retain confidentiality – examples of interests which would go towards denying access are national security, the protection of children or mentally disabled adults, the protection of privacy, and the protection of trade secrets and commercial confidentiality – and proportionate cost is also relevant. The case involved saw the Asbestos Victims Support Groups Forum UK make an application for access to various documents used during a trial to which it was not a party. The trial was of a contribution claim by EL insurers against Cape Intermediate Holdings Ltd, a company involved in the manufacture and supply of asbestos. After the High Court and Court of Appeal considered the matter, the Supreme Court had to decide whether the court has an inherent jurisdiction to order third-party access to court documents, and (if it exists) the scope of that jurisdiction.
OFAC SETTLEMENT WITH ATRADIUS TRADE CREDIT INSURANCE INC OVER FOREIGN NARCOTICS KINGPIN SANCTIONS REGULATIONS VIOLATIONS
On 16th August, OFAC announced a settlement with Atradius Trade Credit Insurance Inc. (ATCI) of Maryland, a trade credit insurer and a subsidiary of Atradius NV under which it has agreed to pay a penalty of $345,315. OFAC describes the apparent violations as “non-egregious”. The case related to the collection of a debt in Panama assigned to it by a US cosmetics company from Grupo Wisa SA, which was on the OFAC SDN List, and in 2017 received a payment of $4,043,174.25 from the liquidation of Grupo Wisa’s assets in Panama.
US ADDS STATE-OWNED CHINA GENERAL NUCLEAR POWER GROUP (CGN) AND 3 OF ITS SUBSIDIARIES TO THE COMMERCE DEPARTMENT’S ENTITY LIST
On 16th August, the EU Sanctions Blog reported that the Bureau of Industry and Security had, w.e.f. 14th August, added the Chinese company and subsidiaries to the Entity List having alleged the companies stole US technology for military use. Those on the List are regarded as posing a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the US. The effect is to impose additional licence requirements on, and limits the availability, of most licence exceptions for, exports, re-exports, and transfers (in-country) to those listed.
ISRAEL MINISTER RESIGNS AFTER BEING HANDED GRAFT INDICTMENT
Middle East Monitor on 16th August reported that Israeli government minister and member of the ruling Likud party, Haim Katz, has resigned over his recent indictment on charges of fraud and breach of trust.
ERITREA TO WELCOME ITS FIRST SUPERYACHT
Superyacht News on 15th August carried an article on how a company engaged in the arduous process of making Eritrea a viable superyacht destination.
UK: COURT OF APPEAL CONSIDERS LEGAL BASIS FOR CONTRACT RECTIFICATION
An article from Out-Law on 16th August said that a recent judgment by the Court of Appeal of England and Wales could make it more difficult for parties to use the rectification process to amend legal documents which arguably do not reflect their true intentions. It says that the decision acts as a warning that, for a rectification action to succeed, careful consideration will need to be given to the precise sources from which the alleged common intention emerges, given what has been said. In the case documents that were actually signed committed the claimant party to undertake additional, onerous obligations, which the trial judge found that neither party had intended.
FIFA BANS EX-BOLIVIAN FOOTBALL CHIEF FOR LIFE FOR BRIBERY
Tucson.com reported on 16th August that FIFA has banned a Bolivian official, Romer Osuna, for life from football for being involved in bribery while serving on its audit and compliance committee, being part of a bribery scheme from 2012-15 while awarding contracts for the media and marketing rights to South American competitions.
UK RECEIVES REPORT DOCUMENTING SAUDI COVER-UP OF UNLAWFUL YEMEN AIRSTRIKES
The Guardian on 15th August reported that an international law group has submitted new evidence to the UK government alleging that the Saudi-led coalition in Yemen has covered up evidence of its unlawful airstrikes on civilian targets. It says that the allegations will put pressure on the UK government as it prepares its response to a court order directing it to reconsider all existing British government licences to export arms to Saudi Arabia for use in Yemen, after the Court of Appeal said the previous method of granting new licences was inadequate.
ALGERIA TO DEVELOP MORE OF OWN WEAPONS AND AMMUNITION
Defence Web on 15th August reported that the Algerian military aims to indigenously develop its complex weapons, according to a Presidential decree, and create a Technical System Development Establishment responsible for the studies, the design, engineering and manufacturing of weapons and specific ammunition. It already produces small arms, ammunition, hand grenades, anti-tank mines and explosives, as well as vehicles and light aircraft under licence and patrol boats and corvettes.
ORGANISED CRIME POLICE IN AUSTRALIA SEIZE 1.5 TONNES OF SMUGGLED TOBACCO WORTH A$1.5 MILLION LINKED TO BIKER GANGS
On 16th August, Illicit Trade reported that officers from the force’s Strike Force Raptor, which is dedicated to targeting organised criminal activity connected with the country’s motorcycle gangs, found the huge haul after conducting a raid on an industrial unit in Sydney.
GUYANA NEEDS TO LEARN QUICKLY HOW TO MANAGE OIL WEALTH
Hellenic Shipping News on 16th August reported that Exxon Mobil has found so much oil that by the mid-2020s Guyana, with a population of about 778,000, will probably produce more crude per citizen than any other country. 5 years after the discovery, the country still hasn’t finished crafting relevant new laws or even established a regulatory body to oversee exploration and production. Last year the government set up a sovereign wealth fund to soak up as much as $5 billion in oil revenue per year by 2025, but there are no plans for how to spend it.
MOLOTOV COCKTAILS AND ACID ATTACKS: THE RISKY LIFE OF AN INDONESIAN CORRUPTION FIGHTER
On 16th August, the Sydney Morning Herald carried an article on challenges facing Indonesia’s Corruption Eradication Commission (KPK). It says that, with a team of about 400 investigators, the KPK attempts to stamp out graft in a country of 260 million people where state corruption has been endemic for decades, and public faith in institutions such as the police and the courts system is low. It regularly secures high-profile convictions, such as that of former parliament speaker, Setya Novanto. Then there are Trade Minister Enggartiasto Lukita, Youth and Sports Minister Imam Nahrawi and Religious Affairs Minister Lukman Hakim Saifuddin – all 3 of which deny wrongdoing, and have not been officially named as suspects by the Commission.
‘I WILL EVENTUALLY GET KILLED’: BRYAN KRAMER, PAPUA NEW GUINEA’S ANTI-CORRUPTION TSAR
On 10th August, the Guardian carried an article of a man under no illusions as to the dangers he faces as police minister. It says that Kramer is determined to clean up PNG – which ranks 138th out of 175 countries in the Corruption Perception Index. He has introduced a social media reporting system, encouraging people around the country to report crimes directly to him on Facebook, which he then passes on to police to investigate. The article says that Kramer welcomes Australia’s commitment to give PNG $135.9 million by the end of 2022 for a new policing programme and says it is in Australia’s interest to ensure the country thrives.
AZERBAIJAN NATIONAL IN US PLEADS GUILTY TO PROVIDING SUPPORT TO ISIS
A news release from the DoJ on 15th August advised that Azizjon Rakhmatov, 32, a citizen of Uzbekistan and resident of New Haven, Connecticut, had pleaded guilty to conspiring to provide material support to a designated foreign terrorist organisation, i.e. ISIS. Rakhmatov’s co-defendants planned to travel to Syria to fight on behalf of ISIS. Rakhmatov and a co-defendant discussed providing their own money to cover travel expenses and to purchase a firearm for one of the co-defendants once he arrived in Syria. Rakhmatov also agreed to collect money from others to fund his travel. The co-defendants had previously also pleaded guilty.
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