OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 4

4th November 2019

AUSTRALIA: POLICE WANT FASTER DATA FROM THE US, BUT ENCRYPTION LAWS COULD SCUTTLE THE DEAL

ABC in Australia on 30th October reported that Australian police could quickly access data held by companies like Google and Facebook under a planned deal with the US and with the beginning of negotiations about the potential data swap, but some US officials and lawyers told the ABC they were sceptical about the deal and its prospects.  The CLOUD Act allows the US to team up with friendly countries and create a streamlined 2-way process for police – and such an agreement has already been signed with the UK.  These deals permit partner countries to ask for data from US companies under their own domestic legal system — so long as it doesn’t concern US citizens or residents.  However, it is said that Australia’s own encryption laws could potentially scuttle the deal — a risk flagged by critics including the Law Council of Australia.

https://www.abc.net.au/news/science/2019-10-31/australias-encryption-laws-could-scuttle-cloud-act-us-data-swap/11652618

Meanwhile, the blog from the New York University School of Law published –

UK AND US SIGN LANDMARK CROSS-BORDER DATA-SHARING AGREEMENT

which provided details of the landmark data-sharing agreement to give law enforcement agencies in one country faster access to digital evidence held by service providers, such as web hosts and social media companies, signed on 3rd October.  It explains the restrictions and safeguards involved, and says that if the request is prevented by any of these, the issuing country will have to resort to the traditional mutual legal assistance (MLAT) procedure.  It also points out that the agreement does not address the challenges posed by increasingly prevalent use of encryption, leaving open the possibility of a data request returning encrypted data.

https://wp.nyu.edu/compliance_enforcement/2019/11/01/u-k-and-u-s-sign-landmark-cross-border-data-sharing-agreement/

WHAT CITIES SHOULD KNOW ABOUT CYBERSECURITY

In the US, the National League of Cities, which claims to act as a resource and advocate for more than 19,000 cities and towns in the US, published a report and guide saying that, despite being a primary target for hackers, local governments continue to integrate technology into their day-to-day operations and are increasingly collecting massive amounts of data – with the pressure on cities to become “smarter” and more connected mounting.  However, it says that every day, a local government is hacked – since 2013, ransomware attacks have impacted at least 170 county, city, or state government systems.  The publication is designed to help local leaders prepare and implement systems to protect their institutions online.  A survey is reported which found that only 17% of respondents say their local elected officials are very engaged in cybersecurity efforts and, in fact, 29% admitted that they were “not engaged” at all.  Over half of those who answered the survey said that elected officials tended not to prioritise cybersecurity budgets and policy.  While 73% said that their body had a cybersecurity plan, only 68% of these plans had been reviewed in the last year.  The report provided 6 strategies for cyber secure cities and examples of cyber disruption plans in place.  It explained the role of cyber insurance and provided recommendations and strategies for local leaders.  An appendix contains a cyber security checklist – for physical security, personnel, data security, account and password management and network security.

https://www.nlc.org/sites/default/files/2019-10/CS%20Cybersecurity%20Report%20Final.pdf

CHINA BANS ONLINE SALES OF E-CIGARETTES

IOL reported on 3rd November that all websites and apps selling e-cigarettes should be shut down and all online marketing campaigns halted, according to a statement by the State Tobacco Monopoly Administration and State Administration for Market Regulation.  Online shopping platforms have to remove e-cigarette products from their sites.

https://www.iol.co.za/business-report/international/china-bans-online-sales-of-e-cigarettes-36442451

Manwhile, the Indian prime minister has repeated his intention of banning e-cigarettes, or ENDS (electronic nicotine delivery systems).

https://citytoday.news/do-not-end-your-life-with-ends/

US: HOW ‘NARCO SUBMARINE’ BOOM IS FUELLED BY BUMPER COCAINE TRADE

9 News in Australia carried a report on 4th November about the apparent boom in semi-submersible speedboats which smuggle the drug from cartel production houses in South America.  The vessels – which can carry tonnes of drugs – have been used by drug cartels since the early 1990s. Sitting about one metre below the waterline, they are able to evade radar used by governments and militaries.

https://www.9news.com.au/world/how-drug-smuggling-narcotics-submarines-boom-is-fuelled-by-colombian-cocaine-boom-world-news/c14f225e-290e-43f4-9d1f-3690ff1b057d

MASSACHUSETTS PLUMBING COMPANY CALLED ‘FRONT’ FOR MARIJUANA BUSINESS

Mass Live on 3rd November reported a court case in Massachusetts and a hearing in which representatives for the family behind Chuck Laverty & Son Inc are seeking to have suppressed evidence obtained during a raid on a warehouse and the family’s home in 2017 as being from illegal searches.  However, mention of the company as a “front” for a large-scale marijuana distribution business was mentioned in the investigation into a large-scale growing operation in Canada several years ago, according to records filed in federal court.  Charles “Chuck” Laverty, his wife, Andrea Laverty, and their son, Thomas Laverty, are all facing federal charges in connection with the discovery of $6 million in marijuana inside the warehouse.

https://www.masslive.com/worcester/2019/11/millbury-plumbing-company-called-front-for-marijuana-business-was-mentioned-in-canadian-marijuana-smuggling-case-federal-records-say.html

SMUGGLED FROZEN PETTITOES (PIG FEET) SEIZED IN SW CHINA BORDER PROVINCE

On 3rd November, Xinhua reported the arrest of 3 suspects in connection with smuggling of 6 tonnes of frozen pettitoes from Vietnam into China, with 2 vehicles detained.  The province, which borders Vietnam, has cracked down on several cases of smuggling frozen pettitoes, chicken feet and beef in recent years, according to the local police.

http://www.xinhuanet.com/english/2019-11/03/c_138525427.htm

MALTA: COURT THWARTS BID TO STOP SATABANK €1.5 MILLION RELEASE TO ‘DIRTY OIL’ SUSPECT

Malta Today on 4th November reported that Malta’s financial regulator has lost a bid to stop the shuttered Satabank from releasing funds from the bank account of an offshore company belonging to ‘Dirty Oil’ suspect Gordon Debono, who is facing criminal charges related to a €30 million oil-smuggling ring in Sicily.  The Appeals Court believes there is no grounds to stop the withdrawal, because the money will still have to be scrutinised for money laundering purposes.

https://www.maltatoday.com.mt/news/national/98413/court_thwarts_bid_to_stop_satabank_15m_release_to_dirty_oil_suspect

JHO LOW LINKS TO CYPRUS

The Malaysia Chronicle on 4th November carried an article detailing the 1MDB fugitive’s links to Cyprus, including a Cypriot passport (additional to his St Kitts and Nevis passport), and plans to build a “mansion” there.

https://www.malaysia-chronicle.com/?p=178726

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/11047-malaysian-1mdb-fugitive-became-cypriot-citizen-in-2015

UK: OFFICE OF TAX SIMPLIFICATION PUBLISHES UPDATED VAT REPORT

On 31st October, RPC reported that the OTS had published an update on its VAT review, which outlines and evaluates responses by the government, HM Treasury and HMRC to the report it published in November 2017.  It is said to note that there has been substantial progress on guidance and communication, partial exemption and the capital goods scheme, and penalties, alongside wide ongoing consideration of the approach to the VAT threshold.

https://www.rpc.co.uk/perspectives/tax-take/vat-update-october-2019/#page=1

HMRC ‘DOESN’T HAVE TIME’ TO INVESTIGATE OFFSHORE ACCOUNT TIP-OFFS

KYC 360 on 4th November carried reports of a story in The Times that HMRC has been “swamped” with 5.7 million pieces of information about overseas bank accounts held by 3 million British citizens from countries under OECD common reporting standards (CRS).  HMRC investigators last year also made 540 requests to overseas authorities for information on the highest-net-worth individuals through Tax Information Exchange Agreements (TIEA), with the number of requests is up 24% in a year.

https://www.riskscreen.com/kyc360/news/hmrc-doesnt-have-time-to-investigate-offshore-account-tip-offs/

RUSSIAN IN GERMANY CHARGED WITH ILLEGALLY EXPORTING MILITARY TECH

Deutsche Welle on 1st November reported that Vladimir D, 68, is on trial in Hamburg.  He was arrested in late 2018 and is accused of having sold technical equipment worth €1.7 million to “military agents” in Russia between 2014 and 2018, and such equipment is “particularly suited for use in military missile technology” as it is often used specifically “in aviation and aerospace technology”.  The charges relate to hot isostatic pressing equipment, a dual-use technology, i.e. that can be used for civilian or military purposes, used to manufacture products including aircraft and rocket engines.  He is also said to have sold decaboranes — chemical compounds found in rocket fuel and explosives, and which contain boron and hydrogen, are highly flammable and extremely toxic.

https://www.dw.com/en/russian-in-germany-charged-with-illegally-exporting-military-tech/a-51078147

UK: ROMANIAN WINS RIGHT TO APPEAL EUROPEAN ARREST WARRANT, ARGUING PROSECUTION WAS POLITICAL

6 KBW College Hill on 3rd November reported on the case of Adamdescu, where the applicant sought leave to appeal against extradition to Romania.  The European arrest warrant of 2016 related to the alleged bribery of a judge in Romania.  The applicant was born in Bucharest in 1978 and was a German national who had resided in the UK since 2012.  His father, Dan Adamescu, had founded a significant business conglomerate in Romania, the Nova Group, in which the applicant was involved.  He was arrested in London in 2016.  Originally, a district judge at a magistrates’’ court had ordered his extradition, but the applicant argued this violated his human rights.  The High Court, however, granted the applicant right to appeal that decision.

https://blog.6kbw.com/posts/weekly-digest-4-november-2019

HOW EASTERN EUROPE OLIGARCHS AND POPULISTS MILK THE EU FOR MILLIONS THROUGH FARMING SUBSIDIES

An article in the New York Times on 3rd November claims that large parts of the EU’s $65 billion a year subsid, intended to support farmers and sustain rural communities, are instead flowing into the hands of a corrupt, well-connected few – as populist governments in Central and Eastern Europe control how subsidies are distributed.  It says that, in Hungary, Viktor Orbán uses subsidies as a system of patronage to enrich his friends and family, protect his political interests and punish his rivals; and subsidies have underwritten Mafia-style land grabs in Slovakia and Bulgaria.  However, despite objections from internal auditors, the EU is planning to give national leaders more say in how they spend money.

https://www.nytimes.com/2019/11/03/world/europe/eu-farm-subsidy-hungary.html

US OPENS NATIONAL SECURITY INVESTIGATION INTO TIKTOK

On 1st November, in an exclusive, Reuters reported that the US government has launched a national security review of TikTok owner Beijing ByteDance Technology Company’s $1 billion acquisition of US social media app Musical.ly – although completed 2 years ago – concerned that the Chinese company may be censoring politically sensitive content, and raising questions about how it stores personal data.

https://www.reuters.com/article/us-tiktok-cfius-exclusive/exclusive-u-s-opens-national-security-investigation-into-tiktok-sources-idUSKBN1XB4IL

US SUPREME COURT TO HEAR CHALLENGE TO A KEY SEC ENFORCEMENT TOOL: THE ABILITY TO CLAW BACK ILL-GOTTEN GAINS FROM THOSE WHO COMMIT FINANCIAL FRAUD

On 1st November, the Wall Street Journal reported that the SEC annually obtains orders that require wrongdoers to disgorge billions of dollars in revenue generated by fraudulent activity, including $2.5 billion in the past fiscal year.  Its powers have come under attack from the bar, especially after a 2017 Supreme Court ruling that placed time limits on SEC disgorgement actions.  Opponents of the SEC’s enforcement approach say the logic of that decision suggests that the SEC doesn’t have disgorgement authority at all, a position the SEC has vigorously disputed.

https://www.wsj.com/articles/supreme-court-weighs-sec-clawback-challenge-11572645881

10 ACTIONS THAT WILL PROTECT PEOPLE FROM FACIAL RECOGNITION SOFTWARE

On 31st October, the Brookings Institute in the US published a report from its Artificial Intelligence and Emerging Technology (AIET) Initiative.  In the absence of an outright ban, the paper proposes 10 actions that will protect people from the greatest risks associated with facial recognition software; these include limiting data storage and sharing, mandating accuracy standards, instituting third-party assessments, and more.

https://www.brookings.edu/research/10-actions-that-will-protect-people-from-facial-recognition-software

AFRICAN DRUG TRAFFICKING NETWORK DISMANTLED

A news release from Eurojust on 4th November advised that, with the support of Eurojust and Europol, 19 key suspects, the alleged heads of an organised crime group suspected of large-scale drug trafficking from Ivory Coast and Nigeria to Italy, were arrested in Italy and several other European countries in execution of European arrest warrants. 150 suspects were arrested, the network of intermediate suppliers having used false bottoms in shoes and suitcases, and hidden pockets in clothing, to smuggle heroin (and other drugs) to the south of Italy.  The suspects apprehended in Italy raised no suspicions, as they lived a modest life, working as local entrepreneurs.  The couriers departed directly from the places of production of narcotics, such as East Africa, Pakistan, China, Laos and Latin America.

http://www.eurojust.europa.eu/press/PressReleases/Pages/2019/2019-11-04.aspx

NCA SEIZE £8 MILLION IN PROPERTY FROM SAME FAMILY SAID TO BE FUNDED BY ILLEGAL DRUGS AND FRAUD

The Daily Mail reported on 4th November that property seized includes a Tenerife villa, 16 properties in Bath and a Range Rover Evoque.  The property portfolio had raked in rental and commercial income over £2 million.  The properties were bought on the proceeds of mortgage fraud and the sale of controlled drugs between 1998 and 2007, and 2004 and 2009.  Shane Davies, his wife Rhianna, his mother Sheila and sister Tracey, agreed to surrender the properties.

https://www.dailymail.co.uk/news/article-7648119/Familys-8-1m-fortune-seized-admit-drugs-fraud-paid-it.html

https://www.nationalcrimeagency.gov.uk/news/nca-secures-multi-million-pound-asset-portfolio-after-proceeds-of-crime-investigation

$2 MILLION FRAUD IN DUBAI: HOW 2 MEN CONNED BAK CUSTOMERS

The Khaleej Times on 4th November reported that an Emirati bank manager and a Canadian investor have both been convicted by a Dubai court on charges of fraud and forgery after they swindled 2 bank customers of $2 million.

https://www.khaleejtimes.com/news/crime-and-courts/2m-fraud-in-dubai-how-two-men-conned-bank-customers

BAHAMAS: ATTORNEY GENERAL SEEKS PRIVY COUNCIL APPEAL OVER ACQUITTAL OF SENATOR ON BRIBERY AND EXTORTION CHARGES

The Nassau Guardian on 4th November reported that the Office of the Attorney General has launched its bid to appeal the acquittal of Progressive Liberal Party (PLP) Senator Frank Smith on bribery and extortion charges before the Privy Council.  The Court of Appeal in August unanimously refused to order that Smith be retried, as it dismissed an “unsustainable” appeal by the Crown.  The Chief Magistrate had acquitted Smith in February because she found his accuser, Barbara Hanna, was an unreliable witness.

https://thenassauguardian.com/2019/11/04/privy-council-bid-in-frank-smith-case

SUSPECTS IN $165 MILLION BANK FRAUD IN IRAN FLED TO BRITAIN AND SWITZERLAND

Radio Farda on 4th November reported that a Revolutionary Court judge in Iran says that 3 suspects in a legal case involving financial corruption and alleged sanctions evasion at Bank Mellat have fled Iran and currently live in London and somewhere in Switzerland.  The total amount alleged involved by 3 suspects in the case was $165 million, out of which $105 million belonged to Bank Mellat and $60 million to Bank Parsian.

https://en.radiofarda.com/a/suspects-in-165-million-bank-fraud-in-iran-fled-to-britain-switzerland/30251918.html

ITALIAN POLICE BREAK UP COUNTERFEIT RING PRODUCING FORGED MODIGLIANI AND LUCIAN FREUD PAINTINGS

The Daily Telegraph on 4th November reported that police said that if the fake paintings and drawings been accepted as genuine on the open market, they would have been worth “hundreds of millions of euros”.  They were seized by police as part of a complex operation that centred on Florence, Venice and Modena.  Police arrested a painter, aged in his sixties, and charged him with counterfeiting.  The discovery of the workshop stemmed from an investigation in March, when police seized 2 allegedly counterfeit Modigliani paintings from an exhibition in Palermo in Sicily.

https://www.telegraph.co.uk/news/2019/11/04/italian-police-break-counterfeit-ring-producing-forged-modigliani/

TURNING AFRICA’S WASTE INTO ENERGY – OPPORTUNITIES AND CHALLENGES

On 4th November, Field Fisher published an article arguing that waste-to-energy (WtE), also known as energy-from-waste (EfW), is probably the world’s least discussed form of sustainable power generation – attracting much less attention than wind, solar, hydro, geothermal or even tidal energy.  However, WtE projects in Europe has not escaped the notice of ambitious investors who believe the technology could also work for Africa, where energy demand in the continent is predicted to rise by 127% by 2040.  A handful of WtE developers have already tested their footing by constructing and operating waste-fed power projects in countries including Ethiopia, South Africa, Nigeria and Kenya.  The article concludes that anecdotal evidence suggests that there is an increasing appetite for WtE in the larger African cities; and while progress is likely to be slow, at least for the next few years, and the risks remain considerable, but the potential benefits of WtE to all stakeholders could ultimately outweigh the frustrations.

https://www.fieldfisher.com/publications/2019/11/tipping-point-turning-africas-waste-into-energy

DATA SUBJECT ACCESS REQUEST SERIES: PERSONAL DATA

On 31st October, law firm Shoosmiths published the latest edition in a series of articles.  This explains what “personal data” is and provides tips for businesses.

https://www.shoosmiths.co.uk/client-resources/legal-updates/data-subject-access-request-series-personal-data.aspx

BAT FACES LEGAL CASE OVER POVERTY WAGES IN MALAWI

On 1st November, TJI reported that British American Tobacco is facing a landmark legal case brought against them by human rights lawyers on behalf of hundreds of impoverished children and their families over child labour in the tobacco fields of Malawi.  BAT is accused of “unjust enrichment” with most of the claimants earning as little as £100 to £200 for 10 months of work for a family of 5.

http://www.tobaccojournal.com/BAT_faces_legal_case_over_poverty_wages_in_Malawi.55542.0.html

THE POWERS OF THE EUROPEAN PARLIAMENT

On 4th November, the European Parliament published a briefing paper saying that, since its inception in 1951, the European Parliament has come a long way. Initially a consultative body composed of delegations of national parliaments, it became a directly elected institution, obtained budgetary and legislative powers, and now exercises influence over most aspects of EU affairs.  The briefing explains the current role and powers of the Parliament.

http://www.europarl.europa.eu/RegData/etudes/BRIE/2019/642278/EPRS_BRI(2019)642278_EN.pdf

CHEMICALS IN USE IN IRAQI DISTURBANCES – IS IT NERVE AGENT?

An article on Bellingcat on 3rd November focuses on riot control agents being used in Iraq.  It says that some people have suffered from medical problems, possibly as a result of exposure to chemicals used by security forces.  It asks if the term “nerve agent” being used incorrectly to describe signs and symptoms?  The article includes a simple worksheet of questions which can be asked, of victims, witnesses, and medical providers, both in the field and in clinical settings, to help determine if a “nerve agent” was involved.  The article says that there is basically no history of nerve agents being used in grenade-type devices, and the injuries in Iraq are not consistent with the effects of such agents.

https://www.bellingcat.com/news/mena/2019/11/03/chemicals-in-use-in-iraqi-disturbances-is-it-nerve-agent/

BALKAN GANGS CENTRAL TO GLOBAL TRADE IN ILLICIT DRUGS

On 4th November, Balkan Insight published a report saying that, judging by a spate of drugs busts over the past 12 months, Balkan crime gangs are major players in the trafficking of heroin, cocaine, marijuana and synthetic drugs around the world.

https://balkaninsight.com/2019/11/04/balkan-gangs-central-to-global-trade-in-illicit-drugs/

NORWEGIAN VESSEL BOARDED BY PIRATES AND 9 CREW MEMBERS KIDNAPPED OFF BENIN

On 4th November, Hellenic Shipping News reported that 9 of the crew members on the MV Bonita, owned by J.J. Ugland company, were kidnapped by criminals off the coast of Benin.  Norwegian media reports, citing the Norwegian Shipowners’ Association, that all of those kidnapped are Filipino nationals.

https://www.hellenicshippingnews.com/norwegian-vessel-boarded-by-pirates-9-crew-members-kidnapped-norwegian-shipping-firm/

UN AGENCY AND PARTNERS MAKE PROGRESS ON MEASURING ILLICIT FINANCIAL FLOWS

On 31st October, the UN Conference on Trade & Development said that UNCTAD has worked with the UN Economic Commission for Africa (UNECA) and the UN Office on Drugs and Crime (UNODC) over the past 18 months to prepare a methodological approach for the measurement of the flows to address the relevant UN Sustainable Development Goal (SDG) indicator.  The indicator attempts to measure the total value of inward and outward illicit financial flows as part of efforts to significantly reduce them to unleash resources for SDGs.

https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2222

SECOND MASTERCARD-PRODUCED COMPLIANCE TRAINING VIDEO NOW AVAILABLE TO EVERYONE

On 4th November, a post on the FCPA Blog reported that, following the success of its first compliance training video, Mastercard has issued a second release, this time about the perils of getting too close and comfortable with third-party suppliers, agents, and other intermediaries.  The 13-minute video is co-narrated by Keith Slotter, former chief of the FBI’s Global Financial Crimes Program, and Angélique Parisot-Potter, a compliance leader with decades of experience in regions as diverse as South America, Europe, the Caribbean and the Middle East.

https://fcpablog.com/2019/11/04/second-mastercard-produce-training-video-now-available-to-everyone/

ART WORLD CAUGHT UP IN UK’S ‘BIG PROBLEM WITH DIRTY MONEY’

The Art Newspaper on 4th November reported on the Transparency International report, where analysis of spending in corruption cases reveals role of art and antiques.  The article says that the findings arrive at a challenging time for the UK art world, which faces new AML regulations in January 2020, aimed at improving transparency.

https://www.theartnewspaper.com/news/art-caught-up-in-uk-s-big-problem-with-dirty-money

US NAVY OFFICER AND WIFE FACE CHARGES OF ATTEMPTED ILLEGAL EXPORT OF BOATS AND ENGINES TO CHINA

American Shipper on 4th November reported that (in a real life NCIS case) the submission of false shipment information in the US Automated Export System helps sink scheme to smuggle military-style inflatable boats and engines to China.  A Florida-based US Navy lieutenant based in Jacksonville, Florida, and his wife are among 4 people who face federal charges of attempting to illegally export 7 inflatable, military-style boats and their outboard engines to China.

https://www.freightwaves.com/news/us-navy-officer-wife-face-charges-of-attempted-illegal-export

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y

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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