25 September 2019

UK Export controls: dual-use items, software and technology, goods for torture and radioactive sources 

On 24 September, the Department for International Trade published updated guidance to licensing procedure and other restrictions for export of controlled dual-use items, software and technology, goods for torture and radioactive sources.  It says that you will need an export licence to export any controlled dual-use items from the UK to another country outside the EU; and that most dual-use items do not require a licence if they are exported to the EU or the Channel Islands.

Panama to eliminate income tax on gambling activity as an incentive to attract high-spending tourists to the country

On 24 September, Calvin Ayre reported that the head of the Junta de Control de Juegos (JCJ) gambling regulatory agency announced that the Ministry of Economy and Finance would abolish the 5.5% tax on winnings applied to any withdrawals or conversion of chips or tokens back into cash.  It was introduced in 2015 to boost retirement benefits for senior citizens.

2 Venezuelans arrested with $5 million in gold on private jet at Fort Lauderdale

On 24 September, Kenneth Rijock in his blog reported that 2 Venezuelan nationals were arrested at Fort Lauderdale Executive Airport, when they attempted to smuggle in the gold after arriving on a private aircraft from Caracas.

UK: case the first time a UK court has considered in any detail whether Bitcoin can be regarded as property

An article from Out-Law on 24 September starts by saying that legal certainty is needed on the fundamental question of whether cryptoassets constitute property, money or something else.  It says that some clarity was provided by the High Court in London recently when it considered claims that the cryptocurrency ‘Bitcoin’ could be deemed a person’s property. In the case, the court issued an asset preservation order to prevent Bitcoin allegedly defrauded from a cryptocurrency trader from being dissipated.  The claimant claimed that an investment he made in Bitcoin worth £1.2 million was misdirected to fraudsters after he fell victim to hackers. Some of the Bitcoin was traced to a cryptocurrency wallet in the UK, but the identity of the alleged fraudster had not been determined.

El Salvador’s President Nayib Bukele Tainted by Money Laundering Allegations

On 24 September, Insight Crime carried an article saying that he is at a complex web of financial transactions, which show he received millions of dollars from a subsidiary of Venezuela’s state-owned oil company, PdVSA.  It notes that he had announced plans to create an international anti-corruption commission, similar to the UN-backed International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala – CICIG), but for the moment, this commission only exists on paper and it is unclear what independence it will have.

Drug Seizures Increase in Belize as More Cocaine Flows North

On 24 September, Insight Crime reported that authorities in Belize have made a number of recent drug busts, underscoring that it is grappling with a surge in cocaine moving north from Colombia.

Episode 2 of RUSI Suspicious Transaction Report podcast

On 25 September, RUSI released episode 2 of the Suspicious Transaction Report, in which Isabella Chase is joined by Jo Jenkins and David Carlisle to discuss Wilson’s crypto auction, Swedbank’s admission of money laundering failings, the Dutch banks’ joined-up transaction monitoring solution and the priorities for the current FATF presidency.  In the deep dive, Isabella talks to Florence Keen about her recent report on social media and terrorist financing.

Podcast: Fraud and Lying in Las Vegas

In the latest TRACE podcast, author Jim Rossi discusses the widespread, relatively low-dollar cons he uncovered in his book “Cleantech Con Artists”, set in Las Vegas.

American Airlines Hit With Helms-Burton Lawsuit on 25 September reported that American Airlines is facing a lawsuit for alleged use and profiting from “seized” assets in Cuba.

OFAC new FAQ on COSCO sanctions and new designations for 5 individuals and 6 entities under Iran sanctions

On 25 September, OFAC issued a new FAQ relating to sanctions imposed on COSCO Shipping Tanker (Dalian) Co and COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co.  At the same time it also added the names of 5 Chinese individuals and 6 entities involved in the shipping industry, including the COSCO companies – being Chinese, Hong Kong and BVI companies. 

Australia: Video Game Betting Fraud Busted   

On 25 September, OCCRP reported that Australian authorities have arrested 6 players of an online video game who allegedly lost the matches on purpose, betting against themselves and bringing in up to A$30,000.  It is said that the suspects, all between 19 and 22 years old, were playing Counter-Strike: Global Offensive, an online multiplayer video game, and that the investigation started in March, when police were tipped off by a betting agency.

The $50 million Art Swindle: an astonishing film about an absurd scam

On 25 September, New Statesman America carried an article on a new movie about Michael Cohen – a French-born con man and all-round fantasist who disappeared in 2001, and who had swindled the art world out of some $55 million by the time he finally went on the run.

Venezuelan Money Is No Longer Welcome In Switzerland

On 25 September, Customs Today reported that  Swiss banks have joined the US sanctions against Venezuela, meaning the South American country’s diplomatic missions in Bern and Geneva are running out of funds to do their work and pay their staff.

Jersey consultation: implementation of mandatory disclosure rules for CRS Avoidance Arrangements and Opaque Offshore Structures

A consultation from the Jersey Government closes on 1 November and seeks feedback from stakeholders (including businesses, industry associations, practitioners and any other interested parties) on the implementation of the Government’s commitments to the EU Code of Conduct Group (Business Taxation) to introduce Mandatory Disclosure Rules (MDR).

Trends in South Africa’s kidnap-for-ransom and extortion landscape

Control Risks has produced a short podcast and says that some recent high-profile kidnap cases have pushed the issue up the corporate security agenda, and considers the current state of play.

Infographic: Meet the rising stars of trade in our new Trade20 index

Standard Chartered on 23 September says that Côte d’Ivoire, Kenya and Ireland join India and China in the top 5 markets with the greatest potential for future trade growth.

Emerging dual-use technologies in the life sciences: challenges and policy recommendations on export control

A paper from the EU Non-Proliferation and Disarmament Consortium in September 2019 addresses the challenges of regulating emerging dual-use technologies in the life sciences sector and describes the key elements of EU export controls and the key challenges that the sector represent to those controls – and how controls might be improved.

Why are young people continuing to take banned diet drugs that kill?

On 25 September, Illicit Trade carried an article following Facebook and Instagram announcing that they will now prevent users under the age of 18 from viewing posts that promote weight loss products and cosmetic surgery procedures on their platforms, saying that although admirable, the social media giants’ move will likely do little to prevent image-obsessed young people from going to extraordinary lengths to achieve the perfect body.  It focuses on weight loss drugs such as DNP, which is used legally as a dye, wood preserver, herbicide and photographic developer, but helps users lose weight by burning carbohydrates and fat. It has been banned in the UK and US. In 2018, there were 20 reported DNP cases and 6 related deaths attributed to DNP poisoning across the UK.

The growing role the dark web is playing in the counterfeit currency trade

On 5 September, Illicit Trade reported on an Interpol conference on counterfeit currency at its global headquarters in France; examining the latest developments in currency counterfeiting, banknote security innovations and counterfeiting case studies.  It was said that the main concern is that unscrupulous manufacturing companies which produce security features such as holograms and watermarked security paper suitable for counterfeiting could be co-opted into providing them to criminals. It also mentions the Project S-Print network involving over 25 companies that work in the security printing space and associated industries, and which are seeking to combat this risk.

ECJ: “right to be forgotten” rule only applies in EU

A briefing from Paul Hastings on 25 September reports on a European Court of Justice decision that the geographic scope of the European privacy right referred to as “the right to be forgotten” need only extend across EU Member States.

US CFTC: New Whistleblower Initiatives and Rewards Suggest Increased Enforcement in the Virtual Currency, Foreign Corrupt Practices, Insider Trading, and BSA Spaces 

An article from Paul Hastings on 24 September saying that the US Commodity Futures Trading Commission recently issued a series of 4 whistleblower alerts aimed at seeking information from would-be whistleblowers in the areas of virtual currency fraud, foreign corrupt practices, insider trading, and violations of the Bank Secrecy Act (BSA).  It says that these alerts suggest that companies must be aware that the CFTC has no intention of slowing down its enforcement programme and instead seeks to further incentivise whistleblower co-operation to increase the effectiveness of its enforcement. The article provides details of the alerts.

Germany to extend BaFin supervision to “financial investment intermediaries/brokers” (Finanzanlagevermittler) (FIB)

On 25 September, Dentons published an article about German plans to place FIB under BaFin supervision.  FIB are said to be equivalent to what certain common law jurisdictions term an “(independent) financial adviser”.


OFAC new FAQ on COSCO sanctions and new designations for 5 individuals and 6 entities under Iran sanctions

On 25 September, OFAC issued a new FAQ relating to sanctions imposed on COSCO Shipping Tanker (Dalian) Co and COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co.  At the same time it also added the names of 5 Chinese individuals and 6 entities involved in the shipping industry, including the COSCO companies – being Chinese, Hong Kong and BVI companies.

Episode 2 of RUSI Suspicious Transaction Report podcast

On 25 September, RUSI released episode 2 of the Suspicious Transaction Report, in which Isabella Chase is joined by Jo Jenkins and David Carlisle to discuss Wilson’s crypto auction, Swedbank’s admission of money laundering failings, the Dutch banks’ joined-up transaction monitoring solution and the priorities for the current FATF presidency.  In the deep dive, Isabella talks to Florence Keen about her recent report on social media and terrorist financing.



24 September 2019

Global Corruption Barometer 2019 from Transparency International) shows that 56% of Panamanian citizens believe that corruption has increased in the last 12 months

MENA-FN said on 24 September that the report shows that institutions, where Panamanians paid the most bribes, were the police with 29% and in public services with 14%, which coincides with the regional trend; and that in Panama more than $10 billion have been lost due to corruption.

Additional Huawei Affiliates Added to Entity List and other developments

On 23 September, an article from Baker Hostetler reported on additional actions by the US targeting Huawei Technologies Co Ltd  and its affiliates. These add more non-U.S. affiliates of Huawei to the Entity List – causing export and related controls, revise and extend the Temporary General License (TGL) issued in May, and provide additional clarification on the licensing policy of the Bureau of Industry and Security of the Department of Commerce (BIS) as it relates to exports to Huawei and its designated affiliates.  In August, another measure prohibits federal agencies from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system or service that uses telecommunications or video surveillance equipment or services produced by certain Chinese companies (including Huawei, any Huawei subsidiary or any Huawei affiliate) as a substantial or essential component of any such system, or as a critical technology that is part of any such system, unless an exception applies or a waiver has been granted.

13 people arrested for money laundering in New Zealand over “sophisticated” phone scam

Indian Newslink on 24 September reported that since July police have arrested 13 people for money laundering and are actively searching for 3 more people of Indian origin thought to be involved, as investigations continue into an ongoing sophisticated phone scam that has seen New Zealander’s lose millions of dollars.

IMF: tax havens accumulate 8% of world GDP   

ANF News on 24 September reported that a recent report of the IMF says that the capital accumulated in the so-called tax havens amounts to approximately $7 billion, the equivalent of 8% of the global GDP.

SEC Charges Adult Entertainment Token Platform With 2017 ICO Fraud   

On 24 September, Coindesk reported that the SEC had charged Jonathan Lucas, 27, the CEO of online adult entertainment marketplace – Fantasy Market (described as a role-playing performance marketplace for live, client-controlled digital performances), with running a fraudulent initial coin offering (ICO) scheme.  It says that all the team members in the company are fictional except for Lucas, according to the complaint, which listed many false statements made by the company in promoting its ICO. It says that, in a 6-week period, Fantasy Market raised about $63,000 in cryptocurrency from more than 100 investors in its fraudulent offer and sale of unregistered digital securities — CEO Lucas actually claimed to the press he had raised $2 million towards the $25 million goal.

Bulgarian-French human trafficking network exploiting vineyard workers

On 23 September, a news release from Europol reported that Bulgarian and French law enforcement authorities, supported by Europol, dismantled an organised crime group involved in trafficking human beings for labour exploitation and money laundering. More than 80 investigators from Bulgaria and France were involved in the action day. Investigations led to the identification of 167 potential victims, employed by 4 different winegrowing companies near the French city of Lyon.  An organised crime group operated behind a legal business, an employment agency based in Bulgaria and recruited Bulgarian nationals from disadvantaged regions as seasonal workers for the French agricultural sector.

Philippines Customs Bureau Declares Tough Crackdown on Imported Steel

Scrapmonster on 23 September reported that the Philippines Bureau of Customs has announced implementation of tough crackdown on steel imports into the country, and that the move comes in the midst of reports that undervalued and substandard steel imports are flooding the country’s local market – and with stringent inspection of all steel shipments into the country through the Port of Manila (PoM) and the Manila International Container Port (MICP).

South Korea Justice Minister’s Home Raided In Corruption Investigation

Baker McKenzie on 23 September reported that South Korean prosecutors raided the home of Justice Minister Cho Kuk, the Yonhap News Agency reported, as part of a widening corruption investigation that has already dented support for President Moon Jae-in.

US Treasury Further Targets Entities and Vessels Moving Venezuelan Oil to Cuba – while delisting others

On 24 September, OFAC added 4 entities and 4 vessels to its sanctions lists.  Caroil Transport Marine Ltd, based in Cyprus, and its 3 vessels – Carlota C, Sandino; Petion; Trocana World Inc, based in Panama and registered owner of the Petion; Tovase Development Corp, based in Panama and registered owner of Sandino; Bluelane Overseas SA, based in Panama and registered owner of Giralt.  

OFAC also delisted Serenity Maritime Limited, Lima Shipping Corporation, the vessels Leon Dias and New Hellas, and an aircraft, N133JA.

London-based TechnipFMC Agrees to Pay $5.1 Million in Foreign Bribery Case 

The Wall Street Journal on 24 September reported that London-based oil-and-gas services company also agreed to improve its compliance with anti-corruption laws in a deal with the SEC.  The charges stem from $794,000 in payments made between 2008 and 2013 by FMC Technologies Inc., a predecessor company to TechnipFMC, to an unnamed third-party consultant.

Iran to bring charge at International Court of Justice over sanctions on space agency

On 24 September, the EU Sanctions blog reported that Iran is to bring a case before the ICJ over OFAC targeting ISA, the Iran Space Research Centre and the Astronautics Research Institute on the grounds that Iranian space technology can be used for the advancement of a ballistic missile programme.

New Relief Procedure for Certain Expats Who Have Relinquished, or Intend to Relinquish, Their US Citizenship

On 16 September, law firm Dickinson Wright published an article about the procedures for certain persons who have relinquished, or intend to relinquish, their US citizenship and who wish to come into compliance with their US income tax and reporting obligations and avoid being taxed as a “covered expatriate” under the Internal Revenue Code – if they satisfied the other conditions and criteria involved.

Will the country evaluation by FATF recognise the South African judiciary’s contribution regarding effectiveness?

On 4 September, an article from Cliffe Dekker Hofmeyer discussed if a case in August before the High Court would affect the onsite FATF inspection scheduled for October/November, and with the possible Plenary discussion regarding the Mutual Evaluation Report (MER) scheduled for June 2020.  It also discussed the possible effects of the evaluation and corruption in more general terms, given the country’s recent performance and scandals. The article concludes that recent developments, like the recent case, may not affect the outcome of the evaluation.  However, it says that the country has an opportunity to prove effectiveness in producing the required outcomes that FATF seeks. In doing so, returning to the rule of law and eradicating corruption, and thus that South Africa will resume its place as a leading African state.

Finland: Croatian millionaire’s Afarak Group fined over insider trading

On 24 September, Uutiset reported that Finland’s Financial Supervisory Authority (FIN-FSA) has fined the Afarak Group nearly €1.5 million for violations related to insider trading.  The Finland-based company is a specialty alloys producer which has operations in Germany, Malta, Turkey and South Africa. It reports that FIN-FSA has intervened in Afarak’s operations in the past, and fined its COO and principal owner, and former CEO, before, most recently in June, when it ordered him to pay accrued supplementary fines of €110 million.

Esposito brothers running US Coin Bullion agree to plead guilty to wire fraud

Finance Feeds on 24 September reported that brothers Salvatore Esposito and Joseph Esposito have agreed to plead guilty to conspiracy to commit wire fraud and mail fraud.  It says that instead of using the customers’ funds to purchase precious metals as had been promised, the Espositos used customer funds to pay other customers, to pay commissions and other business expenses, and to purchase silver for the company itself.

AML compliance burden on UK financial institutions intensifies as new rules on third country local law conflicts bite 

On 24 September, Eversheds Sutherland published an article saying that additional EU rules have come into force requiring UK credit and financial institutions with branches and subsidiaries in third countries to identify local law conflicts with group-wide AML policies and procedures, and taking a look at these new technical standards including application, scope, and FCA notification requirements.  This was under a new EU Regulation which came into effect on 3 June.

Anti-Corruption Enforcement in Mexico:  A Possible Turning Point?

A blog post from the Program on Corporate Compliance and Enforcement at New York University said that Mexico adopted a new National Anti-Corruption System in mid-2016, when many hoped Mexico would seize the opportunity and shortly thereafter pursue significant anti-corruption enforcement.  But key posts within the anti-corruption system remained unfilled, and no significant enforcement ensued. When a new President took office in December 2018 and filled a number of significant positions, including appointing Mexico’s first-ever independent Attorney General, who in turn appointed a Special Anti-Corruption Prosecutor, notwithstanding lofty campaign promises, an absence of immediate enforcement along with some of President López Obrador’s public statements tempered expectations about full implementation of the new regime.  The post considers new developments relating to Mexico’s fledgling anti-corruption system, relatively new administration, and recent enforcement developments – as the indication from the Attorney General’s Office is that it will pursue vigorously acts of potential corruption already within that office’s investigative pipeline, but otherwise will focus its investigative efforts on future misconduct.

IMF Predicts Boom Time for Guyana Economy

On 24 September, the St Kitts & Nevis Observer reported that the IMF has projected 4.4% economic growth for Guyana this year, as oil production is on schedule to begin in early 2020, with the oil sector projected to grow rapidly, accounting for around 40% of GDP by 2024.  The IMF also noted the Guyanese authorities’ progress in strengthening the AML/CFT framework and called for further efforts.

Former Danske Bank boss vanishes in wake of billion kroner money laundering scandal

CPH Post online on 24 September reported that Estonian police are concerned that a key figure in the billion-kroner Danske Bank money laundering scandal has disappeared.  Aivar Rehe, 56, headed Danske Bank’s branch in Estonia from 2006 to 2015. Police fear for his well-being and have been searching a wooded area near his house.

Isle of Man-based e-gaming giant Stars Group has been fined €400,000 by Dutch gambling regulator

On 24 September, Manx Radio reported that the owner of Pokerstars was fined after it offered online gaming in the jurisdiction but did not have the required licence.