18 November 2019
ECB REVOKES LICENCE OF AUSTRIAN BANK
On 18th November, KYC 360 reported that the Anglo-Austrian Bank (which until June was called Bank Meinl) has had its banking licence from the European Central Bank withdrawn. The near-100 year old bank has faced scrutiny since 2016, when Ukrainian and Austrian officials began investigating its alleged role in the laundering of tens of millions of euros linked to former Ukrainian President Viktor Yanukovich and was fined €500,000 in 2018 for compliance failures.
HEAD OF UKRAINE STATE IMPORT-EXPORT BANK ARRESTED ON MONEY LAUNDERING CHARGES
Rferl on 18th November reported that the chairman of the state-owned Ukreximbank since 2014, Oleksandr Hrytsenko, has been arrested on suspicion of creating an organised crime group, embezzlement, and money laundering; and complicity in laundering stolen assets connected to the inner circle of former President Viktor Yanukovych. He allegedly took part in unfreezing assets belonging to the media empire of the former president’s associate, Serhiy Kurchenko. Ukreximbank is Ukraine’s third-largest bank with more than $7 billion in assets. However, despite the arrest, he continues as chairman of the board of Raiffeisen Bank Aval.
AUSTRALIA: NAB FACES ‘SIGNIFICANT’ PENALTIES FOR MONEY LAUNDERING BREACHES
On 18th November, the Australian Financial Review reported that the bank had self-reported a large number of breaches of AML/CFT laws and says there may be more to come. This comes 2 years after NAB highlighted shortcomings in its KYC processes.
SPANISH COURT CASE BY CUBAN AMERICAN FAMILY CLAIMING COMPENSATION FOR PROPERTY SEIZED IN CUBA
On 14th November, Herbert Smith Freehills reported a court case in a lower court in Mallorca. In this case, a Cuban-American family sought recompense as heirs to formerly Spanish-owned property in Cuba that was seized following the Castro revolution. It is said to be the first such case in a European court following the implementation of the elements of the US Helms-Burton Act that allowed US persons to sue for compensation for the use of US-owned property seized by the regime – Carnival Cruises being one of the prominent companies facing litigation from profiting from such seizures. The claimants sued the Spanish hotel chain, Melia, for receiving the fruits of possession in bad faith and profiting off the confiscated land (as prohibited by the Spanish Civil Code), over its involvement with state-run Gaviota SA in Cuba. The claim was rejected, but an appeal is possible and is expected.
CORPORATE INVESTIGATIONS: DIGITAL EVIDENCE, PRIVATE DEVICES AND COMMUNICATIONS AND DATA PRIVACY QUESTIONS
On 12th November, Control Risks published a briefing saying that in corporate investigations, data is increasingly the primary source of evidence – including mobile phone data, emails, and records in databases and accounting systems. During an investigation, it says, a wide range of methods are used for preserving information from mobile phones, hard drives, databases and cloud services. Gathering the data so that it can be processed, searched and reviewed often involves cross-border data transfers, sometimes electronic and sometimes by carrying hard drives through customs checks at airports. For data-intensive investigations, it is imperative to understand, navigate and comply with the relevant legal boundaries. The briefing provides advice on data privacy concerns, such as where information is held on employees’ personal devices – saying that the proportion of employees who use their own smartphone for work was found to be around 86% according to a survey of 3,500 mobile workers in 2015. The briefing refers to an investigation carried out by the firm on behalf of a US law firm in a case involving European subsidiaries’ activities in Africa. It concludes that data proliferation, and the rules and regulations that have followed, have turned corporate investigations into a data management minefield. As laws in this area grow increasingly complex, investigations teams need to understand what is permitted and what is not, and need an up-to-date assessment of the legal, political and cultural context. The technical capabilities of a digital forensics team must be augmented by sound legal strategy around data privacy and protection, particularly when approaching cross-border investigations.
AML AND FRAUD: RECORD KEEPING, DISCLOSURE AND COMPLIANCE IN BVI
For those of you (us) that thought that there were no such laws and rules, Harneys provided on Lexology on 7th January a structured guide to the framework in the BVI.
IAEA CONDUCTS TRAINING COURSE ON PROTECTING NUCLEAR FACILITIES FROM CYBER-ATTACKS
On 15th November, the International Atomic Energy Agency reported on a training course held in South Korea. This involved a mock scenario that included adversaries taking control of a nuclear research institute’s physical protection system and implanting malware at a nuclear power plant, to compromise security and cause sabotage. 32 participants from 20 countries analysed the fictitious nuclear research institute’s and the nuclear power plant’s computer networks and acted as members of the national computer security incident response team. They worked to identify the attack, contain the infected computer network systems, analyse the threat, remove the malware and restore normal operations.
KIM JONG UN’S PERSONAL JET MAKES FIRST APPEARANCE SINCE SINGAPORE SUMMIT
NK Pro on 17th November reported on the use of Kim’s Ilyushin IL.62 (which looks like a Soviet-built version of the old, much-loved VC.10). ‘Chammae-1’ jet made its first public appearance since last year’s Singapore summit at a military air show held in Wonsan.
ETHIOPIAN POLICE ARRESTS 5 BRAZILIAN NATIONALS IN CONNECTION WITH SMUGGLING OF 47 KG COCAINE
Xinhua on 17th November reported an alleged attempt to smuggle about 47.4 kg of cocaine to different countries via Ethiopia. The drugs were seized at the country’s main international hub at the Bole International Airport in Addis Ababa. 4 of the 5 Brazilians are said to be women. 3 of the suspects were en route to the Rwandan capital, Kigali, the others were heading to Johannesburg and Bangkok.
INDIA: ILLEGAL CANCER DRUGS FROM BANGLADESH FLOOD LOCAL MARKET
The Times of India and others on 18th November reported that studies, confirmed by companies, suggest a thriving ‘grey’ market of fake and unapproved copies of Big Pharma’s oncology and hepatology medicines. It also says that a study in Indian Journal of Medical Sciences says certain Bangladesh companies are blatantly targeting doctors and patients using WhatsApp, email, social media etc.
MALTA: MFSA LAUNCHES CONSULTATION ON COMPANY SERVICE PROVIDERS
On 15th November, MAMO TCV Advocates reported that the MFSA has recently issued a consultation document on Company Service Providers. The scope of the proposed enhanced requirements is to raise the standard of the sector in the light of Moneyval comments, and to raise awareness of obligations and expectations. Responses are due by 22nd November.
The consultation document is at –
NEPAL: DEPARTMENT OF MONEY LAUNDERING RAIDS 3 MEDICAL COLLEGES
The Himalyan on 17th November reported that the DMLI had raided Nobel Medical College, Biratnagar, National Medical College, Birgunj, and Chitwan Medical College, Chitwan. These had allegedly been collecting extra fees from students. It is said that a fraud case will be filed if the colleges fail to return the money taken from the students.
UK: RICS REASSURES AGENTS THAT AML GUIDANCE IS COMPLIANT
On 18th November, Property Industry Eye reported that estate agents who belong to the RICS and follow its AML code have been reassured that it does not breach HMRC requirements, despite recent headlines to the contrary.
SOUTH AFRICA: CAPE LAWYER ACQUITTED OF 51 CHARGES AS WITNESSES WERE AFRAID TO TESTIFY
IOL on 18th November reported that City lawyer Anthony Broadway, who faced 51 charges which included money laundering, racketeering and storing of abalone without a permit, was acquitted in the Western Cape High Court – after 2 key witnesses, Michael Norman and David Bannister, said that they were afraid to testify because their family members were threatened. Broadway had earlier denounced the deal offered to the would-be witnesses, and claimed that his prosecution was “retaliatory and defensive”.
GREEK GOVERNMENT DENIES ‘BACKTRACKING’ ON MONEY LAUNDERING FIGHT
Tornos News on 17th November reported that a government spokesman had refuted claims made in a recent Financial Times article.
BIOLOGICAL WEAPONS CONVENTION PROTOCOL SHOULD BE REVISITED
On 15th November, the Bulletin of the Atomic Scientists carried an article saying that since its appearance in 1975, one criticism of the major international treaty banning biological weapons, the Biological Weapons Convention, was that it had no provisions for enforcing compliance – though, as it points out, in the middle of the Cold War it was unlikely that the Soviet Union would allow international inspectors to visit its biodefence facilities. The article says that it is time to revisit a long-abandoned protocol that would address flaws in a treaty that some have even derided as a gentleman’s agreement. The planned protocol was dropped in 2001.
US DEPARTMENT OF STATE PROPOSES AMENDING ITAR EXPORT CONTROL DEFINITIONS, CREATING ENCRYPTION CARVE-OUT
On 18th November, Torres Law issued a news release saying that the Department of State proposes an amendment to the International Traffic in Arms Regulations (ITAR) provisions defining activities that are not exports, re-exports, or retransfers – including launching items into space, providing technical data to US persons within the US or within a single country abroad, and moving defence articles between US states, possessions, and territories. Amendments will also will allow for the electronic storage and transmission of unclassified technical data through foreign communications infrastructure without requiring ITAR licensing when the technical data is sufficiently secured to prevent access by foreign persons.
TRACE GLOBAL ENFORCEMENT REPORT 2018
Available to download online, this report which contains a graphic and textual analyses of all known investigations and enforcement actions involving transnational commercial bribery since the passage of the US Foreign Corrupt Practices Act. The latest report is TRACE’s 9th annual compilation, provides anti-bribery enforcement data from 2018 and summarizes 42 years of anti-bribery enforcement activity.
CORRECTION TO ENTRY ON EU IRAN SANCTIONS LIST
On 18th November, the EU notified an amendment to the entry for Mehr Bank (aka Mehr Finance and Credit Institute; Mehr Interest-Free Bank), saying the correct address should be No. 182, Shahid Tohidi St, 4th Golsetan, Pasdaran Ave, Tehran 1666943, Iran.
ITALIAN ARCHAEOLOGICAL TRAFFICKING GROUP DISMANTLED
A joint news release from Europol and Eurojust on 18th November reported that an international police operation, supported by Eurojust and Europol, has dismantled an international organised crime group involved in large-scale trafficking of Greek archaeological items looted from Calabria, Italy, resulting in 23 arrests and 103 searches and seizures, yielding approximately 10,000 archaeological goods.
MAN ACCUSED OF £8 MILLION RENEWABLE ENERGY SWINDLE BANNED FROM RUNNING INVESTMENT SCHEMES
The Belfast Telegraph on 18th November reported that a 50-year-old man accused of a multi-million pound investment fraud is to be banned from running any new schemes. Paul Dougan was granted bail on charges linked to a renewable energy initiative with more than 130 alleged victims – many of whom are from Northern Ireland. He was arrested last month by detectives from the PSNI economic crime unit investigating alleged offences covering period between 2011 and 2016.
VENEZUELA ADOPTS US DOLLAR AS ALTERNATIVE TO ITS OWN BOLIVAR
On 18th November, Kenneth Rijock in his blog reported that Venezuela has adopted the US dollar alongside its own national currency, warning that this causes a potential headache for compliance.
SHIPPING MUST COLLABORATE TO AVOID CARGO-RELATED FIRES
Lloyds Loading List on 18th November reported calls made by industry stakeholders to be more reactive when it comes to tackling container fires, with a revision to the IMO Cargo Transport Units code a step in the right direction.
$136,000 CIVIL PENALTY FOR US COMPANY FOR EXPORTING ELECTRIC CATTLE PRODS TO VENEZUELA, MEXICO, SOUTH AFRICA, AND THE CZECH REPUBLIC WITHOUT THE REQUIRED EXPORT LICENCES
On 18th November, Sandler Travis Rosenberg reported that the Bureau of Industry and Security states that while the unnamed company had previously applied for and received a number of export licences for such items, including to some of the destinations and end-users at issue, it failed to do so on each required occasion and also failed to properly monitor the expiration dates of the licenses it was granted. Electric cattle prods are controlled on the grounds they can be used for riot and crowd control.
10 INDIVIDUALS WHO STOLE FROM MOVING LORRIES IN FRANCE ARRESTED WITH HELP OF EUROPOL
A news release from Europol on 18th November advised that an international police operation, known as Operation Diligence, supported by Europol, led to the arrest of 10 suspects believed to be behind a number of cargo thefts from moving lorries in France. Romania nationals stole goods amounting to over €3,5 million, stealing electronics, cosmetics, perfumes, expensive clothes and bags from delivery lorries.
ICO UPDATES GUIDANCE FOR DATA CONTROLLERS ON PROTECTING ‘SPECIAL CATEGORY DATA’
On 15th November, Local Government Lawyer reported that the Information Commissioner’s Office in the UK had published updated guidance on this category of data, which concerns a person’s health, sex life or their sexual orientation, racial or ethnic origin, political opinions, religious or philosophical beliefs or membership to a trade union. It is said that special category data is the most sensitive personal data a controller can process.
The new guidance is found at –
MEXICO SEEKS DAMAGES IN ALLEGED BRIBERY CASE LONG AFTER FCPA RESOLUTION IN US
On 14th November, an article from Paul Hastings reported that, although the current Mexican administration took control less than one year ago, it is already suggesting that it intends to be more aggressive about anti-corruption enforcement than the prior administration. This, it says, includes the implementation of Mexico’s National Anti-Corruption System, which provides for independent anti-corruption agencies and stricter anti-corruption laws. The example cited is detailed in the article, and concerns a lawsuit filed in Mexico against Michigan-based medical technology firm Stryker Corporation – relating to matters settled in 2013, when the company had agreed to pay $13.2 million to resolve a civil FCPA action by the SEC, without admitting or denying the allegations, which were that employees of Stryker made improper payments to foreign officials in 5 countries, including Mexico.
VATICAN: TOP AML OFFICIAL LEAVES POST
France 24 reported on 18th November that Rene Bruelhart, a Swiss lawyer, and the Vatican’s top financial investigator charged with investigating money laundering and other such crimes has left his post after the non-renewal of his contract. He had worked at the FIA agency since 2012. The number 2 official at the FIA, Tommaso Di Ruzza, whom Bruelhart had strongly defended, was suspended from his functions last month along with 4 others, his office raided and his computer and documents seized by police, as part of an ongoing probe into a transaction involving the purchase of a luxury building in London financed by church donations.
ORGANISERS OF UNREGISTERED ICO OFFERING SETTLE SEC CHARGES
On 18th November, Cadwalader reported another case where organisers of an allegedly unregistered offering of digital asset securities have settled SEC charges of defrauding investors out of millions of dollars – without admitting liability. Reginald Middleton (a “self-described financial guru”) and his company Veritaseum faced SEC allegations relating to their VERI tokens. The agreed penalties include disgorgement of over $7 million, plus prejudgment interest. In addition, Mr. Middleton agreed to pay a $1,000,000 civil penalty and will be permanently banned from serving as an officer or director of a publicly-traded company.
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