5th September 2019
THE IMPENDING FATF CRYPTO ‘TRAVEL RULE’ OBLIGATIONS
On 29th August, ACFCS said that several powerful regulatory and economic bodies have issued guidelines, guidance and statements in recent months that could fundamentally change the nature of crypto transactions and how virtual currency exchanges and other related entities share information on users with each other in a bid to counter financial crime. This included the FATF guidance that includes a “Funds Travel Rule,” for crypto exchanges, which is its name for virtual asset service providers (VASP). It says that CipherTrace has issued a whitepaper offering a potential solution in the form of a Travel Rule Information Sharing Architecture, or TRISA, the goal of which is to “enable compliance with the FATF and FinCEN Travel Rules for transaction identity information without modifying the core blockchain and cryptocurrency protocols”. ACFCS says that the new FATF requirement mimics so-called Travel Rules that have for years required financial institutions to share sender and beneficiary information when executing bank wire transfers and SWIFT electronic funds transfers.
The white paper is at –
The whitepaper proposes a peer-to-peer mechanism for complying with new regulations, with minimal cost impact to participants, and with consideration for preserving high performance transaction processing at cryptocurrency virtual asset service providers.
ISRAELI PRIVATE INTELLIGENCE COMPANY SAID TO HAVE FOUND WIDESPREAD CORRUPTION IN PANAMA
The Times of Israel on 5th September reported that agents working for the private intelligence company Black Cube are said to have uncovered evidence of widespread corruption in panama, according to reports in the La Prensa newspaper. An unidentified Panamanian businessman is said to have tired Black Cube, who recorded a local lawyer boasting of being able to bribe judges and his ties to the judiciary. Black Cube posed as Russians planning to bring women to Panama for prostitution (where this is legal) and lured the lawyer to Spain.
IMMIGRATION CONSIDERATIONS FOR FINANCIAL SERVICES AND INSURANCE EMPLOYERS IN THE US
An article from Faegre Baker Daniels on 4th September was intended as a primer to provide an overview of several employment and immigration compliance topics affecting the financial services and insurance industries operating in the US. It notes also that there are several additional visa considerations that apply to foreign-owned companies and those with subsidiaries or affiliates outside the US. It also a says that there is a special concern for financial services employers using sensitive technologies – saying that this issue could affect any company that hires foreign workers or that interacts with foreign visitors or business partners. Disclosures of export-controlled technology to foreign persons physically located in the US may require an export licence if the technology requires a licence for export to the home country of that person (the “deemed export” rule).
F-GAS REFRIGERANT GAS ENFORCEMENT VARIES WIDELY ACROSS EUROPE
On 4th September, Cooling Post reported that an analysis of the legal implementation and enforcement of the European F-gas regulation has revealed big differences across EU Member States, and is said to have revealed big differences in implementation, ranging from some countries having detailed criminal or civil regulations to others that have not yet fully implemented the 2014 Regulation. The study is also said to show that very few cases against smugglers of HFC have yet been brought before the courts despite several member states making significant seizures of illegal product – though this is expected to change.
HIGH RISK OF MONEY LAUNDERING IN GREEK REAL ESTATE
On 4th September, Ekathirimini reported that the recent FATF mutual evaluation report said that the greatest money laundering risks are involved with professional groups, such as lawyers, notaries, accountants and estate agents, with a high number of unlicensed estate agents.
$1.5 TRILLION GLOBAL TRADE FINANCE GAP SHACKLING ECONOMIC GROWTH
On 5th September, the Big News Network reported on a report from the Asian Development Bank (ADB), which says that SME face the biggest challenges obtaining trade finance, and companies led by women often face additional barriers. The survey is based on responses from banks, companies, and export credit agencies globally and is the world’s leading barometer of trade finance health. Its 6th edition finds that the trade finance gap continues to impede progress toward the UN Sustainable Development Goals, especially targets pertaining to women’s economic empowerment, job creation, and inclusive growth. According to the report, 45% of trade finance applications by surveyed SME are rejected, compared to 39% for mid- and larger-sized companies and 17% for multinational corporations. The rejection rate for women entrepreneurs, meanwhile, is 44% compared to 38% for male-owned companies. AML/CFT requirements are said to be a major obstacle. Around 60% of responding banks expect the trade finance gap to increase over the next 2 years.
MAJOR COCAINE SEIZURE IN GUINEA-BISSAU
On 4th September, Defence Web reported that police in Guinea-Bissau seized more than 1.8 tonnes of cocaine hidden in flour bags – the biggest seizure in the country’s history – and arrested 8 people: 4 Bissau-Guineans, 3 Colombians and a Malian. The country is a major crossing point for Latin American cocaine headed to Europe – 800 kg was seized in March. Police said the latest shipment was en route to Islamist militants.
IRELAND: PLAYERS’ MOBILE PHONES SEARCHED DURING MATCH-FIXING INVESTIGATION
On 5th September, the Irish Examiner reported that specialist gardaí from the Garda National Economic Crime Bureau (GNECB) investigating alleged match-fixing and betting fraud timed their searches at a football grounds for when players were having a training session in order to confiscate their mobile phones for possible evidence. Officers have not yet identified who or how many players are suspected of involvement. Officers are examining the mobile phones seized to see if there are any messages — text or online — in relation to the fixing of matches and trace who the contact was with.
FORMER FIRST LADY OF HONDURAS SENTENCED TO 58 YEARS IN JAIL
On 5th September, Reuters reported that Rosa Elena Bonilla, wife of ex-president Porfirio Lobo, who has been in custody since February 2018, has been sentenced to 58 years in jail on charges of fraud and undue appropriation of funds. Also sentenced wasBonilla’s close associate, Saul Escobar, who received a 48-year jail sentence for embezzlement of public funds and fraud (although the maximum sentence anyone can serve is 30 years).
BIFA RAISES DOUBTS OVER NEW UK CUSTOMS TRAINING FUNDING
On 5th September, Lloyds Loading List reported that the freight trade association says latest government money for Brexit preparations comes too late for already-stretched sector to make meaningful preparations for a 31st October departure under Brexit. Its director general is quoted as saying that an analysis of the latest funding by Yahoo Finance UK suggests that the applications process may mean that any finance from the latest range of funding may not be received until after the UK has already left and customs rules change on 31st October.
INTERPOL CONFERENCE TARGETS CURRENCY COUNTERFEITING AND INTRODUCES ITS S-PRINT PROJECT
On 4th September, Interpol published a news release about a conference being held in Lyon, France. Participants will be briefed on the Project S-Print. This initiative brings together law enforcement and the security printing industry to prevent organised criminal networks from gaining access to equipment which could be misused to produce counterfeit currency and security documents. The Project is aimed at preventing criminals from accessing the equipment and materials to print banknotes and security documents and brings together the law enforcement community and the security printing industry to reduce the proliferation of counterfeit currency and security documents worldwide.
2 FORMER LEADERS OF MADRID’S REGIONAL GOVERNMENT CHARGED WITH EMBEZZLEMENT AND ILLEGAL USE OF FUNDS TO PAY BILLS FOR THE PEOPLE’S PARTY
Baker McKenzie on 4th September reported that Esperanza Aguirre and Cristina Cifuentes, who held the post in 2003-2012 and 2015-2018 respectively, were accused of corruption for their role in a case uncovered in 2015, a spokesman for the national criminal court said.
TACKLE FENTANYL LIKE A POISONING OUTBREAK, NOT A DRUG EPIDEMIC
A Commentary on the RAND Corporation website on 3rd September says that America’s fentanyl problem is far deadlier than past crises with other illegal drugs. What is happening with fentanyl is unlike the trajectory of previous drug epidemics. In the case of fentanyl, it is largely the suppliers — not users — who have embraced the drug because it is an ideal cost-cutting substitute. Synthetic opioids are produced in labs, so they are much cheaper than heroin — perhaps as much as 99% cheaper per dose after adjusting for potency. It’s also easy to acquire. The article says that it is better to conceptualise the fentanyl problem like a poisoning outbreak. The poison is out there — but how can exposure to it be minimised? How can its spread to other regions be contained?
SMART CONTRACTS: THE SMART WAY FORWARD IN LOGISTICS?
On 2nd September, a briefing from Ince aims to provide an overview of what smart contracts are, their possible uses in the logistics industry and the legal implications of adopting them. It reproduces a definition of a “smart contract” as – computer code, upon the occurrence of a specified condition or conditions, is capable of running automatically according to prespecified functions. The code can be stored and processed on a distributed ledger and would write any resulting change into the distributed ledger.
GERMANY: FEDERAL MINISTRY OF JUSTICE PUBLISHES DRAFT FOR CORPORATE LIABILITY LAW
A Client Alert (in German) from Baker McKenzie on 5th September said that the Federal Ministry of Justice publishes draft of a corporate liability law – it asks what comes next for companies: increasing persecution pressure due to the principle of legality, higher sanctions and incentives for compliance programmes and internal investigations.
3 RICHEST MEN IN AFRICA HAVE MORE WEALTH THAN THE POOREST 650 MILLION PEOPLE
An article on Ekklesia on 5th September said that 3 African billionaires today have more wealth than the poorest 50% – or 650 million people across the continent, according to a new Oxfam report. The report says that while the richest Africans’ fortunes are increasing, extreme poverty is rising in the continent. The report also looks at how unsustainable levels of debt and a rigged international tax system are depriving African governments of billions of dollars in lost revenue each year – money that could otherwise be invested in education, healthcare and social protection. It also reports that 75% of the wealth of African multi-millionaires and billionaires is held offshore, as result the continent is losing $14 billion annually in uncollected tax revenue.
IRELAND: NEW COMPANY OWNERSHIP REGISTER HIT BY A RAFT OF EARLY FILING ERRORS
On 5th September, KYC 360 reported that people using names in their Irish version instead of English, maiden instead of married names, and shortened versions of first names are just a few of the reasons why the Companies Registration Office says it has rejected submissions to the new Register of Beneficial Ownership (RBO).
FCA CHAIR: FINANCIAL CRIME ‘HAS REACHED EPIDEMIC PROPORTIONS’
On 5th September, an article reported that investment fraud is one of the “the most damaging” aspects of financial crime, which “has reached epidemic proportions” with a growing number of investors scammed out of their savings, according to chair of the FCA, Charles Randell. While the figure is uncertain, the Crime Survey for England and Wales puts the total volume of fraud affecting individuals at 3.8 million cases, around one third of the total volume of 11.2 million crimes, but problem is likely worse than that figure suggests, according to the Office for National Statistics (ONS), as fraud is significantly under-reported and under-recorded.
FORMER FOOTBALL ‘SUPER-AGENT’ WILLIE McKAY ON TRIAL FOR ALLEGED NON-PAYMENT OF TAX
The Daily Mail on 5th September reported that McKay, who brokered Emiliano Sala’s transfer to Cardiff City before he died in a plane crash, is facing allegations involving £902,000 owed to HMRC in unpaid tax and interest. He denied buying a £54,000 Jaguar and a £9,000 Rolex for his wife while he was bankrupt and he denies 2 charges under the Insolvency Act and the case was referred to Manchester Crown Court.
CENTRAL REGISTER OF TRUSTS WITH A UK TAX LIABILITY
On 5th September, the Government Digital Service published its service standards review of the central register of trust with a UK tax liability which is required under the 4th EU AML Directive. It says that the existing registration process will be superseded by a service that will allow users to register a trust and estate and carry out all the necessary tasks in relation to a trust or estate.
TRIAL BEGINS OF SWEDISH SOCCER CHAIRMAN ACCUSED OF FRAUD
The Daily Mail on 5th September reported that the man regarded as the mastermind behind the rise of Swedish soccer team Ostersund has appeared in court at the start of a trial in which he is accused of serious financial crimes. Daniel Kindberg is said to have helped funnel millions of kronor in taxpayer money into the club in a scheme that involved 2 other men and 3 companies, one being the Ostersund municipality’s housing corporation for which Kindberg was chief executive.
ISLE OF MAN FSA ANNUAL REPORT 2018/19
On 5th September, the FSA published its latest annual report. It says that consumer protection, deterring financial crime and instilling confidence in the island’s financial sector continues to be at the heart of what it does and is featured in this year’s report. On the consumer protection and financial crime front, it reports on – amendments to the AML/CFT Code in order to address certain issues identified by MONEYVAL and the FATF Joint Group in their Post Observation Period Report; a comprehensive review of the Island’s AML/CFT framework including a public consultation on the proposed new framework; and the commencement of work on the reform of the regulatory framework for private pensions and their providers.
SOUTH AFRICA TOUGHENS ITS STOWAWAY POLICY
On 5th September, Hellenic Shipping News reported that South Africa has once again toughened its stowaway policy and at the time of writing, no stowaways will be permitted to be landed in South Africa. Any person declared a stowaway in a South African port will have to sail with the vessel and be disembarked on route or at the next port of call. The article says South African ports are hot spots for stowaway activity, particularly Durban as it is one of the busiest ports in Africa, and this is supported by the most recent data on stowaway cases.
HOW DIGITAL SIGNATURES WORK USING BLOCKCHAIN
On 14th July, a blog post from Cryptopurview provided a user-friendly guide to digital signatures using the blockchain. It explains that a digital signature is a cryptographic technique that binds a person to the digital data, i.e. provide verification that message was created by a known person and the message was intact and not altered in transit.
US AGENCIES EDUCATE EMPLOYEES FOR INSIDER THREAT MONTH
On 4th September, Homeland Security Today reported that throughout September, the Office of the Director of National Intelligence, the Department of Defense, the FBI, the Department of Homeland Security, the Department of State and other federal agencies will be holding events to emphasise the importance of safeguarding the nation from insider threats and to share best practices for mitigating those risks. The first National Insider Threat Awareness Month aims to educate federal employees, private sector stakeholders and other audiences about the serious risks posed by insider threats, while encouraging employees to recognise and report anomalous activities so early intervention can occur, leading to positive outcomes for at-risk individuals and reduced risks to organisation. According to the Director of the DoD insider threat programme, workplace vigilance is the key to early detection of potential insider threats.
US JUDGE: TERROR WATCHLIST VIOLATES CONSTITUTIONAL RIGHTS
On 5th September, AP reported that a US federal judge has ruled that government’s watchlist of more than 1 million people identified as “known or suspected terrorists” – aka the Terrorist Screening Database, maintained by the FBI and shared with a variety of federal agencies – violates the constitutional rights of those placed on it violates their constitutional rights, granting summary judgment to nearly 2 dozen Muslim US citizens who had challenged the watchlist with the help of a Muslim civil-rights group, the Council on American-Islamic Relations.
TACTICAL NUCLEAR WEAPONS 2019
On 30th August, the Bulletin of the Atomic Scientists published the latest edition of its Nuclear Notebook which examines tactical nuclear weapons in world nuclear arsenals. It says the US, Pakistan, and Russia are modernising their tactical nuclear arsenals, adding new types to the inventory and increasing the role and salience of tactical nuclear weapons in their military strategies. Moreover, tactical nuclear weapons are being used to undermine existing arms control agreements. It refers to the US DoD definition of such tactical weapons from 2016: non-strategic or tactical nuclear weapons refer to nuclear weapons designed to be used on a battlefield in military situations. This is opposed to strategic nuclear weapons, which are designed to be used against enemy cities, factories, and other larger-area targets to damage the enemy’s ability to wage war.
HMRC: STATUTORY INSTRUMENTS RELATING TO BREXIT – CUSTOMS, EXCISE AND VAT
On 5th September, issued updated orders and regulations relating to Brexit.
LAUNCH OF JUDICIAL COUNTER-TERRORISM REGISTER AT EUROJUST
On 5th September, Eurojust, the EU judicial co-operation body, issued a news release advising that a Counter-Terrorism Register (CTR) has been launched at Eurojust to reinforce the judicial response in Member States to terrorist threats and to improve security for citizens. The CTR centralises key judicial information to establish links in proceedings against suspects of terrorist offences and is managed by Eurojust in The Hague on a 24-hour basis and provides proactive support to national judicial authorities. This centralised information will help prosecutors to co-ordinate more actively and to identify the suspects or networks that are being investigated in specific cases with potential cross-border implications.
ROMANIA’S FORMER RULING PARTY LEADER BANNED FROM ENTERING THE US FOR CORRUPTION
On 5th September, the US State Department barred the former president of Romania’s Social Democratic Party (PSD) and Chamber of Deputies speaker Liviu Dragnea from entering the US – and the ban also applies to Dragnea’s 2 children Valentin Stefan Dragnea and Maria Alexandra Dragnea. The basis of such a ban is that the Department has credible information that officials of foreign governments have been involved in significant corruption.
SAHARA COMPUTERS: A LESSON IN MONEY LAUNDERING?
On 5th September, Fin24 in South Africa carried an article saying that Sahara Computers was always the Guptas’ flagship company – the one the family cited to show they ran a legitimate business, not dependent on their political connections. However, court papers appear to show that documents showing that more than 98% of Sahara’s profits for June 2015 came from a series of illicit payments.
CORRUPT DOCK WORKER HELPED MOVE COCAINE SHIPMENTS THROUGH TILBURY PORT
A news release from the NCA on 5th September reported that Michael Fowler, 60, a corrupt agency worker at the Port of Tilbury has been jailed for 14 years and 5 months after pleading guilty to assisting offenders to import or supply cocaine.
CUSTOMS OFFICIALS FROM 9 COUNTRIES CHECK LORRIES IN LUXEMBOURG
On 5th September, Customs Today reported that over 2 days lorries with dangerous goods were stopped and checked at the border with France and at the Howald Customs Centre. This was in the context an international collaboration project which has been running through Europe for 2 years. This year, it was Luxembourg’s turn. A team of 40 customs officials, including colleagues from countries such as France, the Netherlands, and Spain, stopped and searched lorries carrying chemical or physical objects which could be dangerous to humans or the environment.
THAI POSTAL CUSTOMS DIVISION FINDS RARE SNAKES IN PARCELS MAILED FROM CHINA’S TAIWAN
On 5th September, Customs Today reported that Thai customs officers intercepted parcels containing 12 small, colourful snakes of various species mailed from Taiwan. They were hidden inside piggy banks in different parcels. Other parcels found contained 4 Mexican black kingsnakes, 4 hognose snakes, 3 Californian kingsnakes and a python regius.
5 FOREIGNERS TRIED TO SMUGGLE $500,000 OUT OF DELHI AIRPORT
Customs Today on 5th September reported that 5 Hong Kong-bound foreign nationals were held at the Delhi airport for allegedly trying to smuggle out of India nearly half-a-million US Dollars. They had arrived at New Delhi from Hong Kong and confessed to be a part of a larger syndicate involved in smuggling of foreign origin gold into India and smuggling out of sale proceeds (foreign currency) out of India.
CANNABIS-BASED COSMETIC AND BEAUTY PRODUCTS
On 5th September, Clifford Chance published an article saying that the commercialisation of cannabis in consumer products across Europe has grown significantly in recent years, and in the article, turns its attention to the use of cannabis in cosmetic and beauty products. It looks at the legal background , asking if such products are/would be lawful in the UK.
3 PEOPLE JAILED FOR ASSISTING ILLEGAL IMMIGRATION INTO UK THROUGH IRELAND
The Irish Times on 5th September reported that 3 members of an organised crime gang were jailed for 9 years and 5 months for assisting the illegal immigration of Georgian nationals into the UK through Ireland. The gang sought to abuse the Common Travel Area that allows free movement to smuggle people into the UK.
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