29th August 2019
FORMER HSBC BANKER BEATS CHARGES IN $1.8 BILLION FRENCH TAX CASE
KYC 360 on 29th August reported that Judah Elmaleh, 60, a former executive at HSBC, has been cleared (in a just-released 4th January decision) of helping wealthy clients hide assets worth at least €1.6 billion in Switzerland, despite his boss having pleaded guilty and the bank paid €300 million to resolve allegations.
US LAWMAKERS WANT TO CREATE OFFICE FOR SUPPLY CHAIN SECURITY
On 28th August, Strategic Sourceror reported on a bipartisan Bill introduced into the US Congress that would create a new government office to help maintain the integrity of the supply chain for products coming into the US – the Manufacturing, Investment, and Controls Review for Computer Hardware, Intellectual Property and Supply (MICROCHIPS) Act. It is said that much of the discussion around the bill centres on China, but other entities that target the US government and military supply chain would also receive plenty of attention. The Bill would provide for a study of potential issues around international supply chain security and how that impacts the US, require a plan to improve supply chain intelligence and would create a new National Supply Chain Security Center under the Office of the Director of National Intelligence, which would gather information about issues that could pose a threat to the national supply chain and report it to appropriate agencies.
AWARDS FOR SEIZURES OF ILLEGAL REFRIGERANTS IN LATIN AMERICA
Cooling Post on 28th August reported that government officers and organisations of 6 Latin American countries have received awards for preventing illegal trade in refrigerants at a training workshop on the illegal trade of environmentally regulated goods controlled under the Montreal Protocol, in Asuncion, Paraguay and organised in conjunction with the UN Environment Programme’s OzonAction Branch. It reports that a total of 9,412 cylinders and 27,024 items of equipment were seized in Latin America by the countries involved.
WHY IS CHINA HIDING ITS OIL TANKERS FROM US TRACKERS?
An article in the Guardian on 29th August poses this question, saying that the deactivation of transponders that generate a unique ID issued to ships by the International Maritime Organisation (IMO) has become increasingly familiar in recent weeks to the companies that track tankers. However, the article says that efforts to evade Iran sanctions imposed by the US have so far been limited. However, it says, China’s change of tack in turn prompted fresh US sanctions in July targeting the Chinese crude oil importer Zhuhai Zhenrong, which accounts for more than 60% of China’s trade with Iran.
JAPAN’S BIGGEST E-COMMERCE PLATFORM TO BAN IVORY SALES
On 28th August, the Boston Globe reported that Yahoo Japan has said it would ban ivory sales, joining other competitors in the largest legal ivory market. This is said to be after multiple cases of smuggled products being detected or reported.
RUSSIA SEIZES OVER 4,000 SMUGGLED ENDANGERED TORTOISES
Macau Business reported on 29th August that Russian border guards have seized more than 4,000 endangered wild tortoises, found in a truck disguised as cabbages, after they were smuggled out of Kazakhstan. Their market value was estimated at about $117,000. After paperwork was prepared and the tortoises were checked for parasites, they were transported in cardboard boxes and released in southern Kazakhstan. Whilst in detention, video footage released by the interior ministry showed the dilapidated sports hall overrun by the brown tortoises chomping on pieces of vegetables.
TRACKING AFRICA’S BILLIONS OF DOLLARS IN SMUGGLED GOLD
On 28th August, Live Trading News reported that high prices are luring Africans into prospecting for gold, and billions of dollars’ worth of gold is being smuggled out of Africa every year through the UAE a gateway to markets in Europe, the US and elsewhere. Much of the gold exported from the UAE was not recorded in the exports of African states, this indicates large amounts of gold are leaving Africa with no taxes being paid to the states that produce them and industrial mining firms in Africa say they did not send their gold to the UAE indicating that its gold imports from Africa come from other, informal sources. The article says that informal methods of gold production, known in the industry as “artisanal” or small-scale mining, are growing globally. Ghana, Tanzania and Zambia complain that gold is now being illegally produced and smuggled out of their countries on a vast scale, sometimes by criminal operations, and often at a high human and environmental cost. UAE has been a prime destination for gold from many African states for several years.
REGULATOR SENDS “BENEFICIAL OWNER” GUIDANCE TO LATVIAN BANKS
On 28th August, LSM in Latvia reported that Latvia’s financial regulator, the Financial and Capital Market Commission (FKTK) has sent information to banks about what constitutes “best practice” in knowing who their clients are. The intention was to prevent complex ownership and management structures from hiding the true owners of assets, with such schemes often being used to hide criminal activity and attempts to get around sanctions.
NEW ZEALAND: POLICE SEIZE LUXURY CARS, $250,000 CASH AND FIREARMS IN $7.3 MILLION RAID
The Driven website on 29th August that 6 people have been arrested and millions in assets seized following a significant money laundering investigation in Auckland. Operation Menelaus – which targeted money laundering – has been underway since the beginning of the year and, as part of the operation, police put a restraint on 3 properties worth more than $7.3 million in total. Police have also seized a number of luxury European vehicles including a $280,000 Bentley Bentayga, a $120,000 Mercedes GLS, a Porsche Cayenne and a Mercedes C-Class. All those arrested had lived in New Zealand for a number of years, and some had citizenship, and several of the accused were related.
JERSEY: ONLINE BETTING INDUSTRY NEEDS STATES SUPPORT
An article on Jersey Evening Post on 29th August said that the Jersey Gambling Commission in its 2018 annual report has called for the government to do more to expand the Island’s online gambling industry. The report also reveals in its section on social responsibility that in the 6 years since making an online therapy service available not one person has accessed it. It is estimated that less than 1% of Jersey’s GDP was generated from online gambling, compared to around 20% in the Isle of Man.
PODCAST: WHAT IS ILLEGAL OR ‘GREY CHARTER’?
The Air Charter Association has launched a new podcast series, the Association being focussed on the safety of the travelling public. One of the first is concerned with “grey charters”. In order to legally hire an aircraft, it must be operating on a charter licence (known by a variety of names such as an “Air Operator’s Certificate”, a “Part 135 Certificate”) and flown by Commercial Pilots. The Association says that illegal Charters are invariably managed solely by 1 or 2 pilots with no organisational depth behind them, no oversight, reduced training and no independent safety checking of how they are operating. The best analogy, it says, is a licensed taxi-cab versus an unlicensed minicab, only without the ability to stop on the side of the road when you’re not comfortable.
PLASTIC WASTE IN THE UK
On 28th August, the House of Commons Library produced a briefing paper on plastic waste in the UK, including statistics on plastic waste and information on UK Government and devolved Government plans and ambitions to reduce avoidable plastic waste and examples of voluntary initiatives from the plastics industry, environmental groups and retailers. It says that it is estimated that 5 million tonnes of plastic is used every year in the UK, nearly half of which is packaging, and demand is rising. It notes that, at the EU level there is a European Strategy for Plastics in a Circular Economy. This includes a recently agreed Single Use Plastic Directive which, when transposed in 2021, will ban specified types of single use plastic. The UK an “ambition” of zero avoidable waste by 2050, and a “target” of eliminating avoidable plastic waste by end of 2042.
MALAYSIA: MACC SEIZES ASSETS FROM FORMER MINISTER, AKADEMI PEMUDA, IN FORFEITURE SUIT
On 29th August, The Edge Markets reported that the Malaysian Anti-Corruption Commission (MACC) has seized assets from former ministers Datuk Hasan Malek and Akademi Pemuda in relation to a forfeiture suit to recover funds allegedly misappropriated from 1Malaysia Development Bhd (1MDB).
GUERNSEY FSC DIRECTOR SEEKS JUDICIAL REVIEW OVER POLICE COMPLAINT
On 29th August, Guernsey Press carried an article about a case in which a director of the financial regulator’s enforcement division is seeking a judicial review of decisions made by the Guernsey Police Complaint’s Commission and the Committee for Home Affairs. Simon Gaudion wants to know the circumstances that led to a police investigation being conducted against him and his employer, the Guernsey FSC, and the reasons why complaints he made against 2 senior police officers, including a former chief officer, were dismissed without explanation. The matters date from 2015, when the GFSC imposed sanctions on a regulated company, Confiance, after significant failings were found in its AML/CFT systems. There followed a failed bid to challenge the GFSC decision to release a public statement on the sanctions, and this led in turn to company ofiicers making allegations of fraud against Mr Gaudion and the GFSC to Guernsey Police. Subsequently, in 2018, Gaudion filed a complaint and alleged that the police investigation been commenced and pursued in bad faith; was not concluded in a reasonable time, and that confidential information relating to it had been leaked into the public domain by Guernsey Police. The complaint was directed against 2 senior officers. Ultimately, it was held that there was no case to answer, and earlier this year Gaudion filed an appeal against this decision. The article mentions that, prior to taking up his current post at the GFSC in July 2013, Mr Gaudion was employed in law enforcement for 30 years, primarily with the Guernsey Border Agency and as a senior investigation officer with what was formerly the FIU. Now seeking judicial review, Gaudion alleges that the complaint made against him was contrived, and he wants the decision of the complaints body quashed on grounds that it acted beyond its beyond its powers and was unreasonable. He is also seeking costs.
UK: NICE CONSULTS ON DRAFT GUIDELINE ON PRESCRIBING MEDICINAL CANNABIS
On 28th August, Allen & Overy reported that, on 8th August, the National Institute for Health and Care Excellence (NICE) published a draft guideline on prescribing cannabis-based medicinal products for consultation. It would replace interim clinical guidance issued by specialist medical societies, makes recommendations regarding prescribing cannabis-based medicines for people with intractable nausea and vomiting, chronic pain, spasticity, and severe treatment-resistant epilepsy. The article looks at the guideline. The consultation period runs until 5th September. The NICE committee will then consider and respond to stakeholder comments, and make any necessary revisions to the Draft Guideline. The final Guideline is expected to be published in early November 2019.
CORK DOUBLES SIZE OF CUSTOMS FACILITIES AHEAD OF OCTOBER 31st BREXIT DATE
Insurance Marine News on 29th August reported that the Port of Cork has announced that it had doubled the size of its customs facilities in preparation for the likelihood that the UK would be departing the EU with a no-deal Brexit on October 31st. The Port had concluded that if the UK were to leave the EU single market and customs union without an agreement it was likely that more intensive checks and declarations would be required and that such an outcome was likely to increase substantially the processing times at the border. The Port of Cork is the second-largest port in the Republic of Ireland in terms of turnover.
ISLE OF MAN CONFIRMS AMENDMENT TO 1 ENTRY ON AL-QAIDA/ISIL SANCTIONS LIST
On 29th August, a news release confirmed the amendment of the entry relating to Bah Ag Moussa, following EU Regulation 2019/1375/EU.
US OFFICIALS SEEKING TO BLOCK UNDERSEA CABLE WITH CHINESE PARTNER
The Wall Street Journal on 29th August reported that officials are trying to block the cable because of concerns over its Chinese investor, Beijing-based Dr. Peng Telecom & Media Group Co., and the direct link to Hong Kong the cable would provide. The cable project was backed by Google and Facebook to improve internet connectivity.
US: TSA AGENTS TO WARN TRAVELLERS ON REAL ID DEADLINE
On 27th August, Homeland Security Today reported that the Transportation Security Administration has instituted a new policy requiring its agents who check photo ID at airports to advise travellers without Real ID-compliant US driver’s licences that they have just 13 months to get one. The Real ID Act, passed in the wake of 9/11 terrorist attacks, requires licences to be marked with a special insignia or star, indicating that ID holders have gone through extra steps to prove their identity. The TSA has warned that if travellers don’t comply, it could lead to long lines, confusion and extra waiting time at airports come October 2020.
COLOMBIA EX-FARC REBEL ISSUES CALL TO ARMS, 3 YEARS AFTER PEACE DEAL ENDED CONFLICT
On 29th August, Reuters and the BBC reported that a dissident leader has called for renewal of the armed conflict.
THE FUTURE OF FENTANYL AND OTHER SYNTHETIC OPIOIDS IN THE US
A Research Report from the RAND Corporation says that deaths involving synthetic opioids in the United States increased from roughly 3,000 in 2013 to more than 30,000 in 2018. In fact, synthetic opioids like fentanyl are now involved in twice as many deaths as heroin. The report offers a systematic assessment of the past, present, and possible futures of synthetic opioids in the US intended to improve understanding of the synthetic opioid problem and how to respond to it. The authors conclude that –
- fentanyl and other synthetic opioids are becoming dominant in some parts of the US and Canada, but remain less common in other parts of these countries;
- a confluence of factors, including the dissemination of simplified and novel synthesis methods and increasing e-commerce, helps explain the surge in synthetic opioids;
- much can be learned from other countries’ experiences with synthetic opioids;
- supplier decisions, not user demand, drive the transition to fentanyl;
- fentanyl’s spread is episodically fast and has ratchet-like persistence;
- synthetic opioids drive up deaths rather than the number of users;
- problems with synthetic opioids are likely to worsen before they improve, and states west of the Mississippi River must remain vigilant;
- improving surveillance and monitoring is crucial; and
- limiting policy responses to existing approaches seems unlikely to reverse this tide.
The report makes 3 general recommendations to research, limit and combat the use of synthetic opioids.
REPORT: GUATEMALA ‘’CAPTURED’’ BY CORRUPTION
On 29th August, OCCRP carried an article about a report that a UN Commission compiled after a 12 years-long presence in the country that ends soon since President Jimmy Morales has refused to extend its mandate. The report claims that there was a ’’mafia coalition’’ among government members and private individuals who are “willing to sacrifice Guatemala’s present and future to guarantee impunity and preserve the status quo”. Investigations further revealed more than 70 highly complex criminal structures with significant economic, political and media power, and some of these people are former presidents, former vice-president, ministers, deputies, drug traffickers and mayors.
UK: GOALS SOCCER PUTS ITSELF UP FOR SALE AMID FRAUD PROBE
The BBC reported on 29th August that 5-a-side football pitch operator Goals Soccer Centres has put itself up for sale, as it continues to face the fallout from an accounting scandal. The struggling company, which is part-owned by Sports Direct’s Mike Ashley, said it was now inviting bids for its business and assets. Its former chief executive and finance chief are now under investigation. It operates 45 centres in the UK and 4 in Los Angeles.
EXPORTING ROUGH DIAMONDS FROM THE UK
On 29th August, the FCO issued updated guidance about the need for a special certificate (under the Kimberley Process) for the export of rough diamonds.
DRUG SMUGGLING HAULIERS ORDERED TO PAY BACK MORE THAN £312,000
A news release from the NCA on 29th August advised that 2 men from Liverpool who used their haulage firm as a front for heroin trafficking have been told to pay back £312,232.37 in criminal profits. They were jailed for 15 and 8 years respectively in April 2018. Both men have been given 3 months to pay after NCA officers obtained confiscation orders under the Proceeds of Crime Act 2002. Should they fail to pay within the time period, Aitchison and Noble will have their sentences extended by 12 months and 26 months respectively, while still being liable for the money.
UK: BANKS PROPOSE PAYMENTS LEVY TO FUND FRAUD REIMBURSEMENT
On 29th August, an article from Out-Law reported that UK Finance, which represents the UK’s largest banks and payment service providers, has raised the possibility of plans to impose a fee on certain payments made directly from bank accounts, the proceeds of which would be used to reimburse victims of fraud, with the introduction of a ‘contingent reimbursement model’ (CRM) fee, to be charged on ‘faster payment’ transactions of £30 or more. It made the proposal to Pay UK, which is seeking views on the proposal by 1st October and will report on it in November. The proceeds would be held in what the policy paper describes as a ‘No Blame Fund Trust’, and would be used to compensate customers who had been victims of authorised push payment (APP) fraud in circumstances where neither the bank nor the customer was at fault under the terms of the APP fraud code of practice.
The consultation is at –
THAI CUSTOMS ADOPTS BLOCKCHAIN SHIPMENT TRACKING AND INFORMATION SHARING PLATFORM
On 29th August, the Bangkok Post reported that Thai Customs had become the second government agency in the ASEAN group of countries to adopt a blockchain-based shipment tracking and information sharing platform to streamline procedures. The platform is called TradeLens, and has already been introduced in Singapore. The platform will let customs authorities receive shipping data as soon as containers leave the port of origin, giving officials more time to prepare to receive shipments. It is said that some 200 documents are exchanged in each shipment, and 300 people are involved in each shipment, at present.
BUSINESSMAN CONVICTED OF BRIBING FORMER ISRAELI DEFENSE MINISTER
On 29th August, Baker McKenzie reported that Georgian-Israeli businessman Avraham Nanikashvili has been convicted in Tel Aviv District Court of bribery and money laundering. However, the court acquitted businessman Roy Mussaffi. He and Nanikashvili had been charged with bribing the former minister and presidential candidate Benjamin Ben-Eliezer, who died during the trial.
SEC CHARGES DALLAS COMPANY AND FOUNDERS WITH ALLEGEDLY DEFRAUDING INVESTORS IN SECURITIES OFFERINGS OF 2 DIGITAL ASSETS
A release on Mondo Visione on 29th August reported that the SEC has announced settled charges with Bitqyck Inc. and its founders (Bruce Bise and Sam Mendez), who allegedly defrauded investors in securities offerings of 2 digital assets, Bitqy and BitqyM, and operated an unregistered exchange to permit trading in one of them, a digital token called Bitqy, and raising more than $13 million.
NIGERIA PARTIALLY CLOSES BORDER WITH BENIN TO STEM RISING TIDE OF RICE SMUGGLING
Illicit Traffic on 29th August reported that the Nigerian government has sealed parts its western border with neighbouring Benin in order to prevent widespread rice smuggling that is thwarting the country’s efforts to support domestic production of the foodstuff. A spike in rice prices across the country that have come about as a result of the government’s agricultural policies has had the knock-on effect of increasing the illegal importation of smuggled rice from neighbouring nations.
LATVIAN BANK PNB CLOSED DOWN
On 29th August, the Baltic Times reported that the Financial Capital and Market Commission (FCMC) has decided to halt the operations of PNB Banka (formerly Norvik Banka) to prevent the outflow of bank’s funds.
US SANCTIONS HONG KONG COMPANY POSING AS BACK DOOR TO IRAN
On 29th August, American Shipper published an article about the listing of Green Industries (Hong Kong) Ltd, owned by Hamed Dehghan, CEO and chairman of Gostar Boshra LLC (PKGB), which, according to OFAC and the FBI, operated as a front since 2017 to procure technology for Iran’s WMD manufacturing programme.
US: TANKER OWNER, OPERATOR FINED $3 MILLION FOR AIR POLLUTION
On 29th August, American Shipper reported that the owner (Lily Shipping Ltd) and operator (Ionian Shipping & Trading) of a tanker, Ocean Princess, have been convicted and fined $3 million for pollution violations, including the use of fuel that exceeded the maximum allowable sulphur concentration in the US-Caribbean emission control area (ECA) 2017-18 and then attempting to deceive US Coast Guard inspectors about the source of the fuel being used aboard the ship. 3 ship officers were also were convicted and sentenced for various pollution, recordkeeping and obstruction of justice crimes.
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