19 November 2019
OFAC ADDS 4 INDIVIDUALS AND 5 ENTITIES TO SANCTIONS LIST
On 18th November, OFAC announced the addition of 4 new names of individuals to its terrorism-related sanctions list. It also added 3 Turkish entities, and 1 each from Syria and Afghanistan. All are reportedly linked to ISIS Financial, Procurement, and Recruitment Networks in the Middle East and South Asia.
APPARENT PIRATE ATTACK ON SHIP IN MEXICO WOUNDS ITALIAN CREWMEN
Homeland Security Today on 14th November reported that 2 Italian crew members were wounded in an attack by armed assailants who boarded their ship from 2 fishing boats in the Gulf of Mexico.
FURTHER US SANCTIONS MEASURES TARGET CUBAN HOTELS AND RESORTS AND ITS MINISTER OF THE INTERIOR
On 15th November, the US State Department announced that 5 sub-entities owned by the Cuban military had been added to the Cuba Restricted List maintained under the Cuban Assets Control Regulations. Direct financial transactions with a number of hotels and resorts in Cuba are affected – Gran Hotel Bristol Kempinski; Grand Aston Varadero Resort; Grand Aston Cayo Las Brujas Beach Resort and Spa; Gran Muthu Imperial Hotel; and Gran Muthu Rainbow Hotel. The State Department also imposed a travel ban on Julio Cesar Gandarilla Bermejo, Cuba’s Minister of the Interior.
THE EUROPEAN SANCTIONS REGIME AND FAIR TRIAL PRINCIPLES
On 15th November, Bright Line Law published an article about a case before the European courts that it says provides an opportunity to consider the regulation of economic sanctions by the rule of law and fair trial rights. At the heart of the case was the legitimacy of the EU Council’s renewed restrictive measures against a member of the former Ukrainian administration where the basis for such sanctions was an ongoing domestic criminal investigation in Ukraine. In the case in question, the CJEU found against the EU Council on the basis that unverified third state information cannot be relied upon, despite Ukraine being a party to the ECHR. It is said that the Court used a test whereby it questions the rule of law in the third state using basic fair trial rights as the benchmark. However, the article notes that the Court had previously accepted unverified information, so that it appears such decisions are on a case by case (or rather, perhaps, a state by state) basis.
EXPORT CONTROLS IN INDIA
On 16th September, L&L Partners in India provided via the Lexology website a structured guide to export controls in India. It explains that Indian law empowers the government of India to formulate the export policy and to issue orders prohibiting, restricting or otherwise regulating the export of goods, and that exports and imports shall be ‘free’ except when regulated by way of ‘prohibition’, ‘restriction’ or ‘exclusive trading through State Trading Enterprises (STE)’. The import and export policies for all goods are indicated against each item in the Indian Trade Classification (Harmonized System) (ITC (HS)) of Exports and Imports, and Schedule 2 to the ITC (HS) lays down the Export Policy regime. It also explains that India has implemented the WCO SAFE Framework of Standards and has an AEO programme for accredited traders. As with most countries, India has specific export controls relating to Da’esh/ISIL, North Korea and Iran, as well as implementing other UN sanctions (such as those on imports of charcoal from Somalia).
MIAMI PROFESSOR WHO WROTE BOOK ON ORGANISED CRIME “LAUNDERED MILLIONS IN DIRTY MONEY”
On 19th November, KYC 360 reported the case of University of Miami professor and author Bruce Bagley, 73, who the FBI says used his knowledge of Latin American crime to launder at least $3 million in Venezuelan money through his own US bank accounts and keeping about $300,000 as a fee for himself. As recently as October he took the stand as an expert witness for the defence at a major drug-trafficking trial in Miami federal court which featured a Colombian syndicate accused of conspiring to ship 20 tons of cocaine into the US.
HACKTIVISTS TARGET CAYMAN NATIONAL BANK IN ISLE OF MAN
On 19th November, KYC 360 reported that Cayman National Bank has announced that its subsidiaries in the Isle of Man were hacked by a well-known hacking group and said the data theft occurred at Cayman National Bank and Cayman National Trust on the Isle of Man.
SOUTH AFRICA: THE IMPLICATIONS OF OFAC SANCTIONS ON THE GUPTAS
On 15th November, an article from ENSafrica looked at the fallout from sanctions imposed by OFAC on Ajay Gupta, Atul Gupta and Rajesh Gupta and their close associate Salim Essa, for their alleged involvement in what was described as a “significant corruption network”. It says that it is important to note that neither the Guptas nor Essa have been found guilty of any crime by a court – but that the implications of being included on the list are severe, as US citizens and entities are prohibited from engaging in any business dealings with the Guptas and Essa. The article also explains that OFAC applies the so-called 50% rule to entities that are owned (or ultimately owned) by sanctioned individuals or entities – all entities that are 50% or more owned by sanctioned individuals or entities will automatically also be blocked. The article says that even non-US companies will likely steer clear to avoid the potential risks, and that banks in particular will likely avoid holding accounts for the Guptas, Essa or any of the blocked entities given that most major banks are exposed to the US.
A PRACTICAL CROSS-BORDER INSIGHT INTO SANCTIONS LAW IN CANADA
On 15th November, Strikeman Elliott LLP published a structured guide detailing the current sanctions regimes in Canada. It starts by explaining that the RCMP, and in some cases the Canadian Border Services Agency, investigate potential criminal violations of Canadian economic sanctions laws. Global Affairs Canada (its foreign ministry), pursuant to authority granted to the Minister of Foreign Affairs, administers permit (licence) applications under certain laws, including those relating to UN measures and the Magnitsky Law. The Minister of Public Safety may authorise specified activities or transactions that would otherwise be prohibited under the Criminal Code. The lists of designated persons can be found at Government of Canada websites or at the UN website (for UN designations). It lists the current sanctions regimes in force.
PANAMA: THE $78.3 MILLION BLUE APPLE SCANDAL
On 18th November, MENA-FN carried an article about a 2-year investigation that is said to have uncovered a corruption scheme that included private sector contractors, lawyers, bankers and former state ministers who used the banking system to launder money from bribes. The investigation opened in 2017 when a shell company was found to have allegedly created in order to receive bribes paid by state contractors in exchange for expediting payments for projects. It is said that, after the Odebrecht case, Blue Apple is perhaps the largest corruption investigation in Panama in recent years.
US COMMERCE DEPARTMENT EXTENDS HUAWEI TEMPORARY GENERAL LICENCE FOR FURTHER 90 DAYS
On 18th November, various media reported that the US Bureau of Industry and Security (BIS) of the Department of Commerce had announced that it will extend for 90 days the Temporary General License (TGL) authorising specific, limited engagements in transactions involving the export, reexport, and transfer of items – under the Export Administration Regulations (EAR) – to Huawei and its non-US affiliates which are subject to the Entity List.
SWISS ROBOTICS APPEAR AT NEW NORTH KOREAN FACTORY IN POTENTIAL SANCTIONS BREACH
On 18th November, NK News reported that industrial robotics manufactured by ABB, a Swiss company, have again appeared in North Korea, potentially in violation of international sanctions, photographs published by state media. At least 3 of what appear to be the “IRB 660” 250 kg-capacity “palletizer” models were shown, being used to pick up and move large objects using specialised attachment arms. ABB has previously been investigated by the UN Security Council (UNSC) Panel of Experts (PoE) on North Korea for the appearance of similar items, but was cleared of direct participation in the shipments. It explains that such robotics are explicitly prohibited for export to North Korea under UN Security Council, and a company which knowingly sent the models seen would be in violation of such sanctions if the shipment was made after March 2016. The article also mentions that similar industrial robotics also recently appeared at another new factory in North Korea.
10 COUNTRIES MAJOR DESTINATIONS FOR BANGLADESHI ILLICIT MONEY, SAYS GOVERNMENT REPORT
An article in the Dhaka Tribune on 18th November said that Government agencies have identified top 10 countries where tainted money is siphoned from Bangladesh – the USA, the UK, Canada, Australia, Singapore, Hong Kong, the UAE, Malaysia, Cayman Islands and BVI. A report – National Strategy for Prevention of Money Laundering and Combating Financing of Terrorism 2019-2021 – was released on17th November. The report says that investment visa, permanent residency, long-term residency, second home project and comfortable foreign exchange control regime are some of the major reasons that led many Bangladeshis to launder money to those countries, and that tainted money involved was generated from crimes like tax evasion, trade proceeds, loan scams, smuggling, drugs, human trafficking. The report says illicit outflow of funds from the country was 17.5% of the country’s total trade during the 2006-2015 period, and says that says Hundi/Hawala, bulk cash smuggling and transfer pricing manipulation are used commonly in draining funds from trade-based money laundering.
US CRIMINAL INVESTIGATION INTO SUSPECTED NORWEGIAN SALMON PRICE-FIXING
On 19th November, Fish Farmer reported that shares on the Oslo Stock Exchange dropped sharply after it was revealed that 3 of Norway’s largest salmon companies – Mowi, SalMar and Grieg Seafood – are facing a criminal investigation in the US over allegations of price fixing on the Atlantic salmon market. It is said that the US has taken the action following a similar European Commission investigation, which included the trio’s Scottish interests, earlier this year.
UK: APP FRAUD REIMBURSEMENT PLAN STALLS WITH LACK OF INDUSTRY CONSENSUS
On 19th November, Fintech Futures reported that Pay.UK, the independent payment scheme operator, had launched a call for information from major UK banks following a proposal from a group of 7 payment providers, seeking to amend the Faster Payments Scheme rules, but banks failed to reach a consensus on how victims of authorised push payment (APP) fraud should be reimbursed. A voluntary code was introduced in May.
KENYA’S FORMER ATTORNEY GENERAL BANNED BY US
On 19th November, various media reported that the US State Department had imposed sanctions on Kenya’s former attorney general, Amos Sitswila Wako, accusing him of involvement in “significant” corruption. He is barred from entering the US under the sanctions, as are his wife and son. The US criticised Wako several times while attorney general from 1991 to 2011 for not doing enough to crack down on corruption, and in 2009, banned him from travelling to the US, accusing him of obstructing the fight against corruption in Kenya.
YEMENI HOUTHI REBELS SEIZE 2 SOUTH KOREAN VESSELS AND 1 FROM SAUDI ARABIA
Bloomberg reported on 19th November that South Korea said it had sent navy ships to a region of the Red Sea where Yemeni Houthi rebels seized 2 of its vessels and 1 from Saudi Arabia, in the latest attacks on sea lines vital to oil shipping. A US-led maritime coalition formally launched operations in the region earlier this month, following a series of attacks on vessels and onshore facilities that some coalition members blamed on Iran.
FATF: CONSOLIDATED PROCESSES AND PROCEDURES FOR MUTUAL EVALUATIONS AND FOLLOW-UP (UNIVERSAL PROCEDURES)
On 19th November, FATF published an updated version of this guidance which sets out the core elements that form the basis for all AML/CFT evaluations, and are based on the Procedures for the FATF 4th Round of AML/CFT evaluations. It sets out and explains the set of core elements which should apply to all AML/CFT assessment bodies (FATF, FATF-style regional bodies, IMF and World Bank).
BRITISH LAWMAKER BLAMES 3 BANKS IN SOUTH AFRICA CORRUPTION
On 19th November, OCCRP reported that British MP peter Hain told officials that HSBC, Standard Chartered and India’s Bank of Baroda were “directly culpable” in the looting of the South African Treasury. He said this to a corruption inquiry in Johannesburg – the Judicial Commission of Inquiry into Allegations of State Capture, which is looking at links between Zuma’s administration and the well-connected Gupta family.
BRAZILIAN POLICE SEEK ARREST OF PARAGUAY EX-PRESIDENT CARTES
On 19th November, the Miami Herald reported that Brazilian police are seeking the arrest of Paraguay’s ex-President Horacio Cartes as part of the so-called “Car Wash” investigation into corruption and money laundering. The police say that he provided $500,000 to a criminal organisation at the request of Dario Messer, a Brazilian associate who was then a fugitive facing corruption charges. Cartes, 63, president to 2018, made his fortune with companies acting in all sorts of industries, including tobacco, banking, soccer and soft drinks.
JOINT OPERATION IN NORTHERN IRELAND NETS “HUGE” FIREARMS AND AMMUNITION HAUL
A news release from the NCA advised that 24 firearms and thousands of rounds of ammunition have been seized in a joint operation between the NCA and the Police Service of Northern Ireland. The investigation commenced following the interception of an AR-15 semi-automatic rifle and 2 hand guns by Border Force officers at an international parcel hub in the Midlands earlier this month.
BIOMETRIC RESIDENCE DOCUMENTS: INFORMATION FOR FINANCIAL INSTITUTIONS IN UK
On 19th November, UK Visas and Immigration published updated guidance about Biometric Residence Permits (BRP) and Biometric Residence Cards (BRC). It explains that foreign nationals from outside the EEA making certain applications to the Home Office must apply for a BRP and successful applicants receive a biometric residence permit as evidence of their status in the UK. Foreign nationals from outside the EEA who are able to live and work in the UK based on rights derived from EU law can choose to apply for a BRC. The guidance provides detailed, illustrated information on the documents, and how they can be checked for authenticity.
The guidance also explains the situation for nationals of Australia, Canada, Japan, New Zealand, Singapore, South Korea and the USA (known as “B5JSSK nationals”), explaining that the use of eGates mean that such persons may not have a passport endorsed by a UK entry stamp. The guidance advises on the type of evidence that a financial institution etc might want to see as proof of valid entry into the UK.
AUSTRALIA AND CANADA ISSUE ONLINE GAMBLING DOMAIN BLOCKING ORDERS
On 19th November, Calvin Ayre reported that Australia has ordered its first set of unauthorised online gambling domains blocks, while a Canadian court has just issued the country’s first-ever domain-blocking order. The Australian Communications and Media Authority (ACMA) issued its first ‘request’ to local ISP to block the domains of internationally licensed online gambling operators – aimed at 2 Curacao-based operators. In Canada, an order blocks a family of websites operated by GoldTV, a ‘pirate’ video streaming service.
OVER 1,500 KG OF COCAINE DESTINED FOR VLISSINGEN SEIZED AT ROTTERDAM PORT
Customs Today on 18th November reported that authorities had seized a total of 1,550 kg of cocaine in 2 shipments destined for Vlissingen, a prot in southern Netherlands, at the port of Rotterdam in October. In both cases the drugs were hidden in banana shipments from Ecuador.
ASIAN GOVERNMENTS ACT AGAINST SKY-ROCKETING METH TRADE
On 19th November, OCCRP reported that SE Asian nations have reached agreement to jointly combat a rising methamphetamine trade in the region that has reached “unprecedented levels”. Senior officials from Thailand, Myanmar, Laos, Cambodia, China, and Vietnam concluded a 2-day meeting with representatives from UNODC with an agreement on stemming rising traffic of the drug through border zones in their region.
BREXIT SPARKS STAGGERING DEMAND FOR CUSTOMS EXPERTS
On 19th November, Global Cold Chain News reported that there has been a “staggering” 183% rise in demand for customs professionals, according to WR Logistics, UK transport and logistics recruiter.
UK: LOCAL AUTHORITIES DETECT 22% MORE COUNCIL TAX FRAUD CASES IN LAST YEAR
On 19th November, Local Government Lawyer reported that research by CIPFA reveals such fraud now accounts for 78% of all local government fraud. UK local authorities identified and/or prevented 71,000 cases of council tax fraud worth over £30 million in 2018/19, up from 57,894 cases in 2017/18.
SEC HALTS ALLEGED PONZI SCHEME AIMED AT ELDERLY PEOPLE
On 19th November, Mondo Visione carried a release advising that the SEC had announced that it has filed an emergency action and obtained a temporary restraining order and asset freeze against 2 individuals and 2 companies they control in connection with an alleged $6 million Ponzi scheme that defrauded at least 55 investors, many of whom are senior citizens or small business owners. Neil Burkholz of Boca Raton, Florida, and Frank Bianco, of Pembroke Pines, Florida, through their companies Palm Financial Management LLC and Shore Management Systems LLC were named.
The release also provides links to the SEC guidance on Ponzi “red flags” –
SWEDEN: INVESTIGATIVE JOURNALISTS SUBMIT LIST OF 194 “SUSPECT” CUSTOMERS TO SEB BANK
On 19th November, LRT in Lithuania reported that Swedish investigative journalists, who are looking into suspicions of money laundering, have submitted to the Baltic banking group SEB a list with 194 people – and the majority of the names are former customers in Estonia.
TRINIDAD’S ISLAMIC STATE PROBLEM
On 17th November, an article from Lawfare says that, in proportion to its size, Trinidad was one of the largest providers of volunteers for the IS caliphate, a development that seems to come out of nowhere. It looks in detail at the volunteers from Trinidad, assessing their motivations and the danger they pose should they return.
FBI RELEASES REPORT ON LONE OFFENDER TERRORISM
On 14th November, Lawfare reported that the FBI had released a report on lone offender terrorism, which is commonly referred to as “lone wolf” terrorism. The report examines lone offender attacks in the US 1972-2015. The report is available at –
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