26 September 2019

North Korea evading UN sanctions to cash in on soaring domestic demand for smartphones

On 26 September, the Asahi Shimbun reported that economists estimate as many as 6 million North Koreans–a quarter of the population–now have mobile phones.  The phones are said to feature Taiwanese semiconductors, batteries made in China and a version of Google’s open-source Android operating system. Pyongyang-branded smartphones examined by Reuters are powered by chips from Taiwan’s MediaTek and run a version of Google’s Android operating system.

MONEYVAL: swift action needed to combat money laundering and terrorist financing risks

On 25 September, the Council of Europe published the 2018 Moneyval annual report which calls on states to ensure that they have appropriate measures in place to combat “dirty money”.  It highlights a number of initiatives that MONEYVAL carried out in 2018 to address several pressing challenges: including the need to raise the awareness and effectiveness of prosecutors and judges in the repression of money laundering, associated offences and terrorist financing; as well as to step up efforts to combat the financial flows associated with slavery, human trafficking and forced labour.

California: 8 popular restaurants to close after CEO is accused of $300 million fraud scheme

ABC News in SanDiego reported on 25 September that several popular restaurants run by a well-known San Diego businessperson, Gina Champion-Cain, will close after Champion-Cain and her company, ANI, were sued by the SEC in August over allegations she led a massive scheme to defraud investors.

Chinese media calls on other Asian countries to join fight against gambling

On 26 September, Calvin Ayre reported that media is arguing that “more efforts are still needed from joint law enforcement ”co-operation between China and neighboring countries “for the long-term benefits of local economies”.

Record Cocaine Hauls Confirm Guinea-Bissau’s ‘Narco-State’ Reputation

On 25 September, an article from Insight Crime reported that Guinea-Bissau has failed to contain its role in the international drugs trade, and shipments of cocaine from Latin America are continuing to come across the Atlantic.  It has now seized 1.8 tonnes of cocaine hidden in flour bags and arrested 8 people, including 3 Colombians – the second time in 6 months Guinea-Bissau broke its own record for the largest haul of cocaine in its history.  It says that it is believed these drugs would have found their way to markets in Europe, with the most recent seizure having a street value of between $65 million and $90 million.

Trump to Impose Travel Ban On ‘Senior Iranian Officials’ And Family Members 

Rferl on 26 September reported that President Donald Trump has stepped up pressure on Tehran, authorising the State Department to bar senior Iranian officials and family members from entering the US as immigrants or non-immigrants.  The White House did not specify individuals but listed “senior officials of the government of Iran…and the immediate family members of senior officials of the government of Iran”.

Danske Bank Executive Ensnared in Money Laundering Scandal Found Dead 

On 26 September, KYC 360 reported that Aivar Rehe, the former head of Danske Bank in Estonia, the unit at the centre of a $220 billion money laundering scandal, was found dead after disappearing.  He was CEO of the branch until he left in 2015.

Oil Traders Rattled by US Sanctions on Chinese Shipping

On 26 September, KYC 360 reported that 4 shipping companies were charged with knowingly violating restrictions on handling and transacting Iranian petroleum, with additional sanctions placed against executives and 2 other companies that control them.

Mexico: Unnamed Soccer Teams Investigated for Money Laundering 

KYC 360 on 26 September reported that several Mexican regional soccer teams are being investigated for alleged money laundering, sources from the Mexican Ministry of Finance confirmed.  The FIU Director told reporters that several clubs and athletic promoters are being investigated for money laundering.

OFAC designates 3 Russian individuals, MARITIME ASSISTANCE LLC  of Russia and 5 Russian-flag vessels

On 26 September, OFAC announced the addition of 3 individuals, 1 company and 5 vessels to its sanctions lists.

UK Government encourages food exporters to get ready for post-Brexit animal health regulations

On 26 September, BIFA advised that importers and exporters of animals and animal products are being urged to prepare for Brexit on 31 October, as these will be subject to new requirements if the UK leaves the EU without a deal.  This would include foodstuffs ranging from cuts of meat to cheese, as well as fish and fishery products.  The rules would also apply to the import and export of live animals and other consignments such as germplasm and animal by-products.

New version of the UCC Implementing Act

On 26 September, BIFA advised that the new EU Regulation amends and corrects the Union Customs Code Implementing Act as regards Import (release for free circulation), Exit of excise and non-EU goods, data exchange between Member States and data requirements in declarations.  It will enter into force as of 1 October.

EU divided over implementation of Payments Directive

On 26 September, EurActiv reported that the EU had Commission questioned some Member States’ decision to grant at least 18 months to banks for the full implementation of the European Payments Services Directive 2, which requires stronger authentication procedures for online payments.

Trophy hunting: the UK legal perspective

On 26 September, the House of Commons Library published a briefing which says that there is an ongoing debate about trophy hunting, its contribution to wildlife conservation and links to wildlife trafficking. Those opposed to trophy hunting are calling for a ban on imports of hunting trophies into the UK.  It says that trophy hunting is legal as long as it complies with a country’s existing hunting legislation, including ensuring all proper permits have been obtained. Exports and imports of hunting trophies from endangered species must be licensed under CITES. Control on imports of hunting trophies by the EU were strengthened in 2015 to address concerns about links to wildlife trafficking.

UK: Human Rights and Trade Deals

On 26 September, the House of Lords Library published a briefing prepared in advance of the debate due to take place on 3 October. Lord Harries of Pentregarth (Crossbench) is to move that “this House takes note of the case for ensuring that human rights are respected in any future trade deals with other countries”.  It says that trade agreements worldwide have increasingly included clauses which require the parties to meet certain conditions on human rights. These may include rights relating to labour conditions, political participation, environmental issues and standards in relation to specific goods.

Public designation of Raul Castro by US State Department due to involvement in gross violations in human rights

On 26 September, the State Department publicly designated Raul Modesto Castro Ruz, the First Secretary of the Central Committee of the Cuban Communist Party and First Secretary of the Cuban Revolutionary Armed Forces.  As a result, he and his immediate family members are ineligible for entry into the US. The Department is also publicly designating his children, Alejandro Castro Espin, Deborah Castro Espin, Mariela Castro Espin, and Nilsa Castro Espin.

Regulator warns Kenyans to avoid forex platform

On 26 September, The Star in Kenya reported that the Capital Markets Authority had warned Kenyans had raised concerns over Interweb Global Fortune and its director.

Italy declares war on tax dodgers in bid to fix finances, cut taxes

On 26 September, Reuters reported that Italy’s government has announced a new crackdown on tax evasion as part of its 2020 budget.

Former first lady of El Salvador on trial for money laundering

On 26 September, Prensa Latina reported that the trial of former Salvadoran First Lady Ana Ligia Mixco came closer t with a commitment to return $17 million dollars allegedly embezzled during the presidency of Antonio Saca.  Mixco is already serving 10 years in prison for embezzling more than $300 million.  

Woman at centre of ‘McMafia order’ will not be extradited back to Azerbaijan 

The Evening Standard on 26 September reported that Zamira Hajiyeva, 55, had won her extradition battle after a judge at Westminster Magistrates’ Court ruled she would not get a fair trial in Azerbaijan.  She is alleged to have been a member of an “organised criminal group” of 37 people involved in embezzling $97 million from the International Bank of Azerbaijan (IBA) 2009-2015. Her husband, Jahangir Hajiyev, 57, was the chairman of the state-controlled bank 2001-2015, and was subsequently sentenced to 15 years in prison for fraud and embezzlement.

SEC Charges PwC LLP with Violating Auditor Independence Rules

On 26 September, an article from Kilpatrick Townsend and Stockton LLP concerned reports that PricewaterhouseCoopers LLP, along with one of its partners, Brandon Sprankle, was charged by the SEC with violating the auditor independence provisions of the federal securities laws. Both PwC and Mr. Sprankle agreed to settle the charges with the SEC for over $7.9 million.

Apple and Google purge “hidden” gambling apps

On 26 September, Calvin Ayre reported that Asian-facing gambling apps are disguising themselves as non-gambling products to circumvent restrictions in both Apple and Google app marketplaces.  It is reported that that Apple’s iOS App Store and Google Play had purged “hundreds of fake apps” said to be gambling apps masquerading as apps dealing with far less controversial subjects, such as weather, travel or wine.

US to remain a member of Universal Postal Union

On 26 September, Lloyds Loading List reported that a compromise deal will allow the US Postal Service to declare its own rates for imported small parcels from China and rest of world – the US had accused China of enjoying unfair advantages in mail imports into the US, effectively undervaluing its products versus US rivals.

Jersey drops 12 places in global finance centre rankings

On 26 September, the Jersey Evening Post reported that the latest Global Financial Centre Index, compiled by the London-based Z/Yen think tank every 6 months, has ranked Jersey in position 59.  It was at 13 in the list in 2009, was still well ahead of the other Crown Dependencies, Guernsey (92) and the Isle of Man (89), which also slid down the rankings by 17 and 5 places respectively.

Swedish Ericsson Set to Pay Record Settlement in US Corruption Probe

On 26 September, OCCRP reported that telecom equipment producer Ericsson AB expects to pay a record $1 billion to settle a US corruption probe concerning its conduct in 6 different countries.

Pakistan: Ex-City Official Arrested for Fixing Parks that Don’t Exist

OCCRP on 26 September reported that Pakistani authorities had arrested Liaquat Ali Qaimkhani, the former head of Karachi’s parks and horticulture, who is suspected of having embezzled $6.4 million through fake companies he had established to repair 71 non-existent parks over the past 2 decades.

66 suspected of arranging illegal adoptions and surrogacies, and human egg trafficking in Greece

A news release from Europol on 26 September advised that Greek law enforcement authorities, supported by Europol, had dismantled an organised crime group involved in the trafficking of human beings (selling ova), illegal adoption and money laundering. Since 2016, the criminal network recruited vulnerable pregnant women from Bulgaria and transported them to Thessaloniki in Greece where they were placed under medical observation and sent to private hospitals to deliver their children. The newborns were then illegally adopted for between €25,000 and €28,000 each.

FBI Plans Wave Of Money Mule Arrests

On 26 September, Baker McKenzie reported that the FBI is preparing to apprehend dozens of money mules who appear to have ignored the bureau’s warnings to cease opening and using bank accounts to launder the proceeds of fraud.  In March that the FBI and US Postal Service targeted as many as 600 money mules with warning letters, civil forfeiture, and even criminal prosecution as part of a nationwide crackdown on attempts to defraud elderly citizens out of their savings.

Why Hong Kong is China’s Sanctions Hot Spot

On 26 September, an article from Clifford Chance says that FATF in the recent evaluation report encourages Hong Kong to closely monitor its exposure to proliferation financing, especially from North Korea.  It is also said to be the latest reminder that there are sanctions risks lurking under Hong Kong’s compliant surface that are bigger than you might think.

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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