8th October 2019
UN GRANTS SANCTIONS WAIVERS FOR EQUIPMENT NEEDED FOR WORLD CUP QUALIFIER IN PYONGYANG
The Korea Herald on 8th October reported that the UN had granted sanctions waivers necessary for the football match and travel to North Korea. North Korea is to host the World Cup qualifier between the 2 Koreas October 15th and sports gear and equipment are among luxury goods currently subject to UN sanctions.
FCA 87 INVESTIGATIONS INTO UK CRYPTOCURRENCY BUSINESSES OVER THE LAST 12 MONTHS
Bitcoinist repeated on 7th October a report from the Daily Telegraph and said that the number of cases represented a 74% increase from the number of inquiries recorded between October 2017 and October 2018. The investigations range from early-stage inquiries to full-on law enforcement action and come as fraud involving real or scam cryptocurrency is said to have surged.
US: GAO CALLS ON FinCEN AND LAW ENFORCEMENT TO PROVIDE MORE INFORMATION TO FINANCIAL INSTITUTIONS ON SAR
ACFCS in its blog on 4th October reported that the Governmental Accounting Office has published a report reviewing SAR and the US banking sector. Amongst the recommendations made are that FinCEN and law enforcement should provide financial institutions with more feedback on the value of the SAR they submit.
FREE TRADE ZONES: A PANDORA’S BOX FOR ILLICIT MONEY
On 7th October, pressure group Global Financial Integrity published a report saying that governments around the world are increasingly turning to free trade zones (FTZ) as a means of promoting economic growth and investment, citing examples such as Africa’s largest FTZ in Djibouti. It says that there an estimated 4,300 FTZ worldwide. It warns that criminals see them as perfect places to manufacture and transport illicit goods, as controls and checks by authorities are often irregular or absent. Illegal transactions can be easily disguised as legal, using trade-based money laundering schemes that are notoriously difficult to detect. The report likens an offshore tax haven for illicit finance to an FTZ being a sort of haven for illicit trade (and associated crimes). It says that FTZ remain one of the weakest links in the fight against dirty money because of how easy it is to engage in the 3 stages of money laundering. It then takes a closer look at some of the largest and well-known FTZ in the world – in Paraguay, UAE and Panama.
UK: MINISTERS MULL FORCING ESTATE AGENTS TO HAND OVER CLIENT DETAILS USING “GEOGRAPHICAL TARGETING ORDERS”
On 8th October, The Negotiator reported that the UK Government is mulling plans to force estate agents to hand over information about suspected ‘dirty money’ vendors and buyers. This would be achieved by adopting the ‘geographical targeting orders’ similar to those being used in the US to tackle organised crime.
GIABA LAUDS TOGO’S EFFORTS IN TACKLING MONEY LAUNDERING AND TERRORISM FUNDING
On 7th October, Togo First reported that the FATF-style regional body for West Africa, in its latest annual report on fighting money laundering and terrorism funding, is said to have lauded Togo for its improvements. However, it also noted an increase in corruption level in the country, saying that this impairs effective implementation of policies to fight money laundering.
SINGAPORE: FORMER BANKER TO BE CHARGED WITH CHEATING VICTIMS OF MORE THAN S$1.9 MILLION
On 7th October, Channel News Asia reported that a 33-year-old former personal banker will be charged with cheating, forgery and money laundering offences among other charges. He is accused of cheating victims of more than S$1.9 million 2015 and April 2018, having tricked victims into believing that their money would be put in fixed deposits or investments in financial products.
JAMAICA: WITNESS SAYS MORE THAN $2 MILLION FOUND IN SAFE AT HOME OF ACCUSED IN MANCHESTER MUNICIPAL CORPORATION FRAUD TRIAL
On 8th October, the Gleaner reported that an officer attached to the Financial Investigations Division (FID) revealed that during an operation in 2016 at the home of one of the accused in the multimillion-dollar Manchester Municipal Corporation fraud trial, there was a disclosure of the source of the monies seized.
UK: WARNING OVER SHIPPING SCAM TARGETING ARTISTS
The Shropshire Star on 8th October reported warnings from a freight company executive of a significant increase in the number of international fraud cases involving the shipment of valuable art work, which he described as “the biggest scam we’ve seen in the shipping industry for many years”. Fraudsters involved in the scam are contacting artists and, in some cases, placing orders for art work worth thousands of pounds. They are then convincing artists that they have organised shipment of the goods through a genuine freight company and are requesting artists then make an up-front payment to reimburse the transportation costs.
DOMINIC CHAPPELL, FORMER OWNER OF BHS, DENIES AVOIDING PAYING HALF A BILLION POUNDS IN TAX
On 7th October, ICAEW reported that Chappell appeared at Southwark Crown Court for a plea hearing and pleaded not guilty to all 3 charges of cheating the public revenue.
SWITZERLAND AND THE UAE TO BE REMOVED FROM EU TAX HAVEN LISTS
ICAEW on 7th October reported that the blacklist which names countries or jurisdictions that do not co-operate with the EU on tax matters is to be amended – with the UAE dropped together with the Marshall Islands. 9 jurisdictions remain on the blacklist, including 3 US territories – American Samoa, Guam, and the US Virgin Islands – as well as Belize, Trinidad and Tobago, Oman, Samoa, and Fiji. A grey list also names countries that have committed to reform their tax regimes and includes the Cayman Islands, Turkey, Bermuda and the Bahamas. Switzerland will be removed from the grey list.
COSTA RICA ENACTS CORPORATE CRIMINAL LIABILITY FOR ACTS OF BRIBERY
On 7th October, Ropes & Gray published an article saying that Costa Rica is the latest country in Latin America to establish corporate criminal liability for acts of corruption, following the recent implementation of similar legislation in Argentina and Peru, expanded criminal liability in Chile, and enhanced administrative liability in Colombia. It is said that corruption remains a significant issue in the country. It says that, as the country pursues full membership in the OECD, Costa Rican authorities may seek to enforce the new law soon to address the OECD Working Group on Bribery’s criticism regarding the country’s lack of enforcement efforts to date. The law requires that a company take various steps (detailed in the article) in its compliance programme to qualify for a penalty reduction.
US AID GROUP SENDS CANNED MEAT TO NORTH KOREA
On 8th October, the Yonhap News Agency reported that the Mennonite Central Committee, an international Christian relief group, shipped 144,000 cans of meat to North Korea for a year to March to help the nation cope with food shortages. The organization has been providing humanitarian aid to North Korea since 1995.
ASSESSMENT OF RIGHT-WING MILITIA EXTREMISM IN THE US
On 7th October, the Divergent Options website published a report saying that individuals radicalised on the far right-end of the political spectrum remain an awkward elephant in the room for policymakers; and that the rise of alt-right ideology, availability of firearms, and increased militia membership over the past decade creates a unique problem for policymakers.
DON’T FORGET BIOLOGICAL THREATS
On 3rd October, Security Magazine published an article saying that events in the immediate past has elevated issues such as cybersecurity and drones to the top of risk forecasts. These are critical, it argues, but biological threats (or “biothreats”) deserve attention more than ever – and yes, even corporate security professionals should care. The Anthrax attacks of 2001 brought biothreats back to the foreground in the public eye, but nearly 20 years have passed since then, and have since been overshadowed by many kinetic- and cyber-attacks. Hence biothreats have also been low on the list of corporate security priorities because of the very tangible reasons for focusing on concerns such as cybersecurity and drones. The article details why biothreats need more attention, citing numerous recent developments — both natural and man-made — which it says are real causes for worry that security teams need to track. Most worrying is that there is a lack of preparedness – according to the Global Preparedness Monitoring Board, a body convened by the World Bank and WHO. The article then provides advice for finance professionals – first, make sure your organisation is prepared; second, get serious on health and medical intelligence; and finally, corporate security professionals should think big and think far when it comes to biological threats in the same way that they currently do about other emerging issues and technological challenges.
UK: DISQUALIFIED DIRECTOR JAILED FOR SECOND TIME FOR ILLEGALLY RUNNING COMPANY
On 7th October, the Insolvency Service reported that John Cotton, 70, a disqualified director, has been jailed for a second time after he illegally ran a Dudley-based manufacturing company soon after leaving prison. He was given a 14-month prison sentence and a 10-year directorship disqualification. Michael Clarke, 57, was given a 12-month prison term and a 5-year directorship disqualification after for assisting John Cotton carry out his criminal activities. The court heard that John Cotton had a history of convictions for obtaining credit while bankrupt dating back to 1988 before being jailed for 61 months in July 2011. He was convicted of running a company with the intention to defraud and was also banned from running companies for 15 years. He left prison in 2014 but, in direct breach of his 15-year directorship disqualification, began illegally managing a company, of which a fellow inmate, Michael Clarke, was the registered director.
3 MULTI-MILLION-POUND PENSION LIBERATION BOSSES BANNED FOR TOTAL OF 34 YEARS
A news release from the Insolvency Service on 3rd October reported that 3 directors – Kevin John Kirkwood (39), Gary Quillan (48), and Gregory Gerard Garrett (49) – who liberated just under £12 million worth of pension funds have been disqualified for a total of 34 years. The companies at the centre of the case were G Loans and KJK Investments.
PODCAST: VANUATU – PASSPORT TO PARADISE
In the second part of a BBC World Service series on the purchase of passports and citizenship this episode says that in Vanuatu, a tiny Pacific nation, a booming passport sale scheme has locals asking why their citizenship is up for sale, so soon after a hard-won battle for independence. Over 30% of state revenue comes from passport sales. Growing Chinese influence in the region is also becoming a concern.
US: ANCIENT CAMBODIAN ARTEFACT SEIZED FROM PROMINENT AUCTION HOUSE AND PREPARED FOR REPATRIATION
A news release from Immigration and Customs Enforcement on 8th October advised that agents had seized an ancient Cambodian sandstone sculpture dating back to 921-945 AD and valued at approximately $350,000. Originally purchased by a private collector in California, the statue was discovered for sale at a prominent San Francisco auction house following the collector’s death in 2015. It will be returned to the Cambodian people.
US DEPARTMENT OF COMMERCE ADDS 28 CHINESE ORGANISATIONS TO ITS ENTITY LIST
A news release from the Commerce Department on 7th October advised that the Bureau of Industry and Security of the Department had announced that it will add 28 Chinese governmental and commercial organisations to the Entity List for engaging in or enabling activities contrary to the foreign policy interests of the US. It explains that this action constricts the export of items subject to the Export Administration Regulations (EAR) to entities that have been implicated in human rights violations and abuses in China’s campaign targeting Uighurs and other predominantly Muslim ethnic minorities in the Xinjiang Uighur Autonomous Region (XUAR). The 8 companies affected (along with 20 government bodies) included Hikvision Digital Technology, Megvii Technology Inc and SenseTime Group Ltd, Dahua Technology Co, IFLYTEK, Xiamen Meiya Pico Information Co , Yitu Technologies and Yixin Science & Technology Co. However, the Wall Street Journal said that the action is unlikely to have a major practical impact on the Chinese firms, which rely on plenty of non-US suppliers and have had months of advance warning to diversify their supply chains away from US companies, and do not prevent American companies from selling certain goods made outside the US to these firms, as they have been doing with Huawei.
UK: EXPORT CONTROL (SANCTIONS) (AMENDMENT) ORDER 2019
This Order has come into force in the UK, making amendment to various existing subordinate legislation concerned with export controls. It adds Eritrea to the list of countries subject to transit controls for Category B goods (which include small firearms and light weapons). It also makes technical amendments to the 2014 Order concerned with sanctions in respect of Crimea and Sevastopol, as well as creating a specific exemption to allow certain activities necessary for certain flights within the ExoMars 2020 Mission Framework. Technical amendments are also made to the 2014 Regulations concerned with sanctions on Sudan, South Sudan and the Central African Republic, and adding a new offence for contravention of restrictive measures in respect of South Sudan. The Order also create a new offence and penalty for failure to comply with a requirement or condition included in an authorisation granted under the Venezuela Sanctions Regulation, and offences in connection with the trade restrictions on North Korea.
FBI WARNS ABOUT ATTACKS THAT BYPASS MULTI-FACTOR AUTHENTICATION
ZD Net reported on 7th October that in September the FBI issued a security advisory to private industry partners about the rising threat of attacks against organisations and their employees that can bypass multi-factor authentication (MFA) solutions. The FBI listed recent incidents where hackers had used these techniques to bypass MFA and steal money from companies and regular users alike.
STATE-OWNED CHINESE OIL COMPANY PULLS OUT OF IRAN DEAL DUE TO US SANCTIONS
On 7th October, the South China Morning Post reported that state-owned CNPC had pulled out of $5 billion South Pars field deal, this coming after 6 Chinese companies and 5 executives were sanctioned by the US for transporting oil out of Iran.
CONTRACT MANAGER FLEX DISCLOSES POTENTIAL US SANCTIONS VIOLATION
On 8th October, it was revealed that California-based Flex Limited had disclosed that certain company-affiliated operations outside of the US may have violated US sanctions. An internal investigation is said to be underway, and the potential violations are said not to involve Syria, Sudan or North Korea.
SHORTAGE OF VETS FOR UK EXPORTS COULD BE HIGHLIGHTED BY NO-DEAL BREXIT
On 8th October, Loadstar reported that a shortage of veterinary surgeons in the UK could provide a serious obstacle to exports of live animals and animal products to the EU in the event of a no-deal Brexit.
UK’S ‘BIGGEST DRUG SMUGGLING GANG’ SMASHED
On 8th October, various media reported that Britain’s biggest-ever drug smuggling gang has been smashed after billions of pounds worth of narcotics was brought into the UK. NCA officers arrested 13 men across the country in dawn raids. The NCA had seized 351 kg of cocaine, 92 kg of heroin, 250 kg of cannabis and 1,850 kg of hemp/hashish, with a total street value of more than £38 million, in 3 consignments in September 2018. Investigators believe more than 50 tonnes of drugs worth billions of pounds were imported from the Netherlands, between February 2017 and October 2018, hidden in lorries carrying vegetables and juice. 4 men and 2 women from the Netherlands, who were arrested in April this year as part of the same investigation, are awaiting extradition to the UK.
A YEAR AFTER SWITZERLAND BEGAN EXCHANGING BANK ACCOUNT INFORMATION PROBLEMS APPEAR
On 8th October, Private Banker carried an article saying that a year ago the Federal Tax Administration began sharing bank account information with tax authorities in other countries. Switzerland has shared financial account information with a further 63 partner countries, the FTA said. These include India, and it is estimated that India deposits account for 0.07% of the total aggregate foreign client funds held with Switzerland-based banks. The shared information includes identification data, account and financial information, as well as information concerning the financial institution, account balance and capital. However, the FTA said that it had suspended the information exchange with Bulgaria following a leak of financial account details, and it withheld information from 12 other states which either did not meet required standards or chose not to receive information (these include the BVI, Cayman Islands, Cyprus).
16 DOMAINS ADDED TO SWITZERLAND’S ONLINE GAMBLING BLACKLIST
On 8th October, Calvin Ayre reported that the Swiss Lottery and Betting Board (Comlot) has issued an updated blacklist of international online gambling operators who continue to serve local punters without local permission. The original list in September contained 65 domains while the new list has increased that number up to 81. The article highlights that Bet365’s main .com domain appeared on September’s list, while October’s list added the company’s Italian-licensed site. Calvin Ayre also commented that the Federal Gaming Commission (ESBK) issued its own online gambling blacklist in September and it contained numerous domains not included on Comlot’s chart – but has yet to update its blacklist this month.
UK: CHINESE NATIONAL USED FALSE IDENTITIES TO SOURCE HUNDREDS OF PROPERTIES FOR ORGANISED CRIME
A news release from the NCA on 8th October advised that Fenu Xu, 43, a Chinese national who was responsible for operating a network of properties used by organised crime groups for prostitution or cannabis farms, has pleaded guilty to 22 fraud, false ID and money laundering offences.
BELGIUM: ALMOST 500 FIREARMS SEIZED IN RAIDS
Focus WTV in Belgium on 8th October reported on an investigation in West Flanders into the illicit trafficking of licensed and banned firearms. This led to 11 searches and 7 arrests. In one raid no less than 4 vans were loaded with heavy weapons, grenades and ammunition. Banned or license-barred firearms were seized, including fully automatic machine guns and historical weapons from the Second World War, especially German and Russian. A dozen grenades were also seized. Police also came across a large arsenal of weapon parts. Not all the weapons were destined for criminals, but were sold to amateurs and non-licensed collectors.
US COMMODITY FUTURES TRADING COMMISSION ENFORCEMENT ACTIONS AGAINST 2 AFFILIATE MARKETERS OF BINARY OPTIONS TRADING
A release on 8th October reported that the CFTC had announced that it had filed enforcement actions against two affiliate marketers, David Sechovich and Peter Szatmari for creating and disseminating millions of fraudulent solicitations to open and fund retail binary options trading accounts on websites operated by unregistered, off-exchange brokers.
The CFTC has also issued a Fraud Advisory on binary options schemes and their trading platforms –
US: AIR CHARTER OPERATOR GUILTY OF COCAINE DISTRIBUTION
On 8th October, AIN Online reported that Khamraj Lall of New Jersey, has been found guilty by a federal jury in New Jersey of conspiracy to distribute cocaine and money laundering, among other crimes. He owned a now-defunct private jet charter business called Exec Jet Club based in Florida, and used the proceeds of his cocaine empire to purchase jets, houses and cars, as well as paying more than $2 million in cash to a Florida contractor to build a hangar in Guyana. In 2014, a search of the aircraft in Puerto Rico uncovered $470,000 in cash in a suitcase hidden in the tail of the airplane, and another $150,000 in cash hidden under a passenger seat. Lall has also been subject to confiscation of his interest in 2 jets, 2 airplane hangars, and multiple properties, as well as a monetary penalty of $9.3 million.
NEW BIMCO CYBER SECURITY CLAUSE FOR THE OFFSHORE OIL AND GAS INDUSTRY
On 8th October, Ince Law published a briefing saying that BIMCO has released its new Cyber Security Clause 2019 for inclusion in contracts. It sets out the cyber security arrangements that should be in place, the parties should use reasonable endeavours to ensure that any third party contractors adopt the same arrangements. It also requires a notification regime and contains a standard provision to limit liability in the absence of gross negligence or wilful misconduct.
HOW ISIS CREATED A CURRENCY
An article in Yahoo Finance on 6th October said that the ISIS self-declared caliphate created its own currency consisting of 10 coins ranging in value from nearly a thousand dollars to pennies, as it sought to replace US, Iraqi and Syrian banknotes with purpose-built coins backed by the gold, silver and copper standard. It says that the currency, the dinar, was modelled on coinage from a medieval Islamic empire named the Umayyad Caliphate, the leader of which – a man named Abd al-Malik ibn Marwan – issued coins to economically connect Muslims who were scattered across the Middle East. In 2015, the dinar was made compulsory for civilians living under ISIS control – and at its peak, ISIS controlled 10 million people across Iraq and Syria.
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